Company name CPL Resources PLC
Headline Half Yearly Report


RNS Number : 2457W
CPL Resources PLC
24 January 2013
 

Cpl Resources plc

Results for the Half Year Ended 31 December 2012

Cpl Resources plc, Ireland's leading employment services group, today announced results for the half year ended 31st December 2012.

Chairman's statement

I am pleased to report that in the six months to 31 December 2012 the Cpl Group ('Cpl' or the 'Group') delivered a strong operating performance, with improved revenues, gross profits and earnings per share.

 

Highlights

 

" Strong operating performance

 

" 13% increase in revenue to €161.7 million

 

" 37% increase in operating profit to €5.8 million

 

" 31% increase in profit before tax to €5.9 million

 

" 55% increase in earnings per share to 16.96 cent

 

" Interim dividend per share of 4.0 cent (2011: 3.0 cent)

 

Half Year Highlights

Half Year Ended

Half Year Ended

% change


31-Dec-12

31-Dec-11



€ 000's

€ 000's


Revenue

161,671

142,718

13%

Gross profit

23,713

20,837

14%

Operating profit

5,811

4,237

37%

Profit before tax

5,954

4,528

31%

Earnings per share

16.96 cent

10.91 cent

55%

Dividend per share

                      4.0 cent

             3.0 cent

33% 

Conversion Ratio**




Operating profit

24.5%

20.3%


Profit before tax

25.1%

21.7%






Permanent gross profit

7,521

6,241

21%

Temporary gross profit

16,192

14,596

11%





Permanent gross profit  as % of the total gross profit

32%

30%


Temporary gross profit as % of the total gross profit

68%

70%


 

** as % of gross profit.



 

 

In our Annual Report for June 2012 I said that the Group continued to grow profitably through a combination of innovative service offerings, organic expansion and the delivery of high quality service to clients and candidates.  I am very pleased to report that in the six months to 31 December 2012 the continued application of these strategies delivered another strong performance for the Group. Cpl again delivered record revenues, amounting to €161.7 million for the half year ended 31 December 2012, an increase of 13% over the same period last year. The Group's operating profit of €5.8 million for the six months to December 2012 is 37% higher than the same period last year. Profit before tax increased by 31% to €6.0 million. Earnings per share of 16.9 cent for the six months to 31 December 2012, represents a 55% increase when compared to 10.9 cent for the half year to 31 December 2012.  This increase reflects both improved net profits and the reduced average number of shares in issue. 6,666,666 shares were cancelled in December 2011 following the successful tender offer.

 

We continued our policy of controlling costs tightly and improving productivity across the Group in order to maximise profitability. This has delivered an improvement in the Group's conversion ratio of gross profit to operating profit to 24% in the six months to December 2012, compared with 20% for the same period in 2011.

 

Although our principal markets remain difficult, many employers in these markets continue to experience mismatches between the skills they need and those that are available. There is a general oversupply of people available for work, but at the same time there is an undersupply of specific skills that are in demand. During the six months to 31 December 2012 the Cpl team continued to work closely with our clients to understand their specific requirements and with our candidates in order to match their skills to those client requirements.  As a result our gross profit generated from permanent placements in the six months to December 2012 was €7.5 million, an increase of 21%. 38% of permanent fees are generated outside of Ireland.

 

Alongside this improvement in permanent placements, we continue to see many companies relying on innovative temporary employment solutions that allow them to recruit personnel based on the variable demands of the business.  In the six months to 31 December 2012 the Group has continued to develop our competence in the provision of fully outsourced services that are complex and difficult to replicate, and which usually require a combination of a European language and a technical skill.  Revenue generated from temporary assignments was €154.2 million representing 10% growth over last year. The corresponding gross profit was €16.2 million, 11% higher than the six months to December 2011. 9% of temporary fees are generated outside of Ireland.

 

 

The temporary staffing market is highly competitive. Against this backdrop we are very pleased to have increased the number of people placed with our clients from 7,853 in June 2012 to 8,500 in December 2012.

 

I am very proud of the Cpl team.  They continue to demonstrate their skills, talents and abilities daily, for the benefit of our clients and our candidates, and I thank them for their on-going hard work and commitment to the Group.

 

Cash

 

The Group has a cash balance of €26.6 million at 31st December 2012. In the six months to December 2012 €6.0 million was generated in cash flow from operating activities before changes in working capital and provisions. We are encouraged by the increase in demand for our services. However, we remain cognisant of the investment in working capital required to drive organic growth in our temporary business.



 

 

Dividend

 

The Board has decided that the Company will pay an interim dividend of 4 cent per share, an increase of 33% on the corresponding period last year.  The dividend will be payable on 8 March 2013 to shareholders on the company's register at the close of business on the record date of 1 February 2013. The Group has a progressive dividend policy which reflects underlying earnings growth and the continued strength of the Group's balance sheet.

 

Outlook

 

As we move into the second half of our financial year we are closely monitoring activity levels in all of our markets. Overall, we expect conditions to remain challenging but we continue to see opportunities for growth in key parts of our business. Although medium term visibility remains difficult in current market conditions, we expect our performance for the second half of our financial year to be similar to the first six months.

 

 

 

 

John Hennessy

Chairman                                                                                                                                              

24 January 2013



 

 

Condensed Group Statement of Comprehensive Income

for the period ended 31 December 2012






Half Year ended

Half Year ended

Year ended


31 Dec 2012

31 Dec 11

30 Jun 2012


€'000

€'000

€'000


(Unaudited)

(Unaudited)

Audited









Revenue

161,671

142,718

290,240

 

Cost of sales

(137,958)

  (121,881)

(246,702)





Gross profit

23,713

20,837

43,538

 

Distribution expenses

(1,399)

(1,366)

(2,555)

Administrative expenses

(16,503)

(15,234)

(30,968)





Operating profit

5,811

4,237

10,015

Financial income

145

292

501

Financial expenses

(2)

(1)

(762)

 

 

Profit before tax

5,954

4,528

9,754

Income tax expense

(773)

(589)

(1,364)

 

Profit for the financial period / year - all attributable to equity shareholders

 

5,181

3,939

8,390

 

Other Comprehensive Income

Foreign currency translation differences - foreign operations

(11)

                         -

49

 

Total comprehensive income for the period / year all attributable to equity shareholders

 

5,170

3,939

8,439





 

 

Basic earnings per share

16.9 cent

10.9 cent

25.6 cent

 

Diluted earnings per share

16.9 cent

10.9 cent

25.6 cent

 

 

 

 

 

 

 

Condensed Group Statement of Changes in Equity

For the period ended 31 December 2012

 

 

 




Capital

Capital





 




redemption

conversion


Currency




Share

Share

reserve

reserve

Merger

translation

Retained

Total


Capital

Premium

fund

fund

reserve

reserve

earnings

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000



















Balance at 1 July 2011

3,720

1,705

-

57

(3,357)

28

66,179

68,332

 

Total comprehensive









 income for the period









Profit for the financial period

-

-

-

-

-

-

3,939

3,939



















Transactions with owners

Capital redemption

(667)

-

667

-

-

-

(20,000)

(20,000)

Dividends paid

-

-

 -

-

-

-

(930)

(930)


         

         


         

         


          

          

Balance at 31 December 2011

3,053

1,705

 667

57

(3,357)

28

49,188

51,341










Balance at 1 July 2012

3,053

1,705

667

57

(3,357)

77

52,722

 

54,924

 

Total comprehensive income for the period









 

Profit for the financial period

-

-

-

-

-

-

5,181

5,181

Foreign currency translation






(11)


(11)

Transactions with owners

Dividends paid

-

-

 -

-

-

-

(1,069)

(1,069)


         

         


         

         


          

          

Balance at 31 December 2012

3,053

1,705

667

57

(3,357)

66

56,834

59,025




























 



 

Condensed Group Balance Sheet




at 31 December 2012





31 Dec 2012

31 Dec 2011

30 Jun 2012

 

 

 

€'000

€'000

€'000

 

(Unaudited)

(Unaudited)

(Audited)

 

Assets




 

Non-current assets




 

Property, plant and equipment

1,250

1,111

1,233

 

Goodwill and intangible assets

12,880

11,682

12,752

 

Deferred tax asset

483

467

483

 

 

Total non-current assets

14,613

13,260

14,468

 





 

Current assets




 

Trade and other receivables

58,034

51,443

52,012

 

Cash and cash equivalents

22,416

13,543

23,871

 

Short-term bank deposits

4,176

8,000

4,176

 

Current tax recoverable

727

-

719

 

 

Total current assets

85,353

72,986

80,778

 

 

Total assets

99,966

86,246

95,246

 





 

Equity




 

Issued share capital

3,053

3,053

3,053

 

Share premium

1,705

1,705

1,705

 

Other reserves

(2,567)

(2,605)

(2,556)

 

Retained earnings

56,834

49,188

52,722

 

 

Total equity

59,025

51,341

54,924

 

 

Liabilities




 

Non-current liabilities




 

Financial liabilities

8

40

25

 

Provisions

1,740

625

1,740

 

 

Total non-current liabilities

1,748

665

1,765

 

 

Current liabilities




 

Financial liabilities

5

97

8

 

Bank overdraft

17

26

17

 

Trade and other payables

38,633

33,696

37,181

 

Current tax payable

256

116

521

 

Provisions

282

305

830

 

 

Total current liabilities

39,193

34,240

38,557

 

 

Total liabilities

40,941

34,905

40,322

 

 

Total equity and liabilities

99,966

86,246

95,246

 

 

 

 

Condensed Group Cash Flow statement

 

for the period ended 31 December 2012

 

 


Half year ended

31 Dec 2012

Half year ended

31 Dec 2011

Year ended

30 Jun 2012


€'000

€'000

€'000


(Unaudited)

(Unaudited)

(Audited)

Cash flows from operating activities




Profit for the financial period / year

5,181

3,939

8,390

Adjustments for:




Depreciation on property, plant and equipment

165

239

330

Amortisation of intangible assets

59

62

255

Financial income

(145)

(292)

(501)

Financial expense

2

1

762

Income tax expense

773

589

1,364





Operating cashflows before changes in working




capital and provisions

6,035

4,538

10,600

(Increase) in trade and




other receivables

(6,547)

(10,079)

(10,655)

Increase in trade and other payables

 and provisions

1,452

2,461

5,622





Cash generated from operations

940

(3,080)

5,567

 

Interest paid

(2)

(1)

(12)

Income tax (paid)

(517)

                    (594)

(1,724)

Interest received

                   130

-

465

Net cash from operating activities

551

(3,675)

4,296





Cash flows from investing activities




Acquisition of business, net of cash acquired

                         -

                             -

(204)

Deferred consideration paid

(548)

(100)

(100)

Purchase of property, plant and equipment

(182)

(114)

(334)

Purchase of intangible assets

(187)

(1)

(14)

Transfer from short term deposits

-

                            -

3,824

Net cash (used in) / from investing activities

(917)

(215)

3,172





Cash flows from financing activities




(Decrease) / increase in finance leases

(20)

13

(91)

Dividends paid

(1,069)

(930)

(1,847)

Repurchase of own shares

-

(20,000)

     (20,000)

Net cash (used in) financing activities

(1,089)

(20,917)

(21,938)





Net decrease in cash and cash equivalents

(1,455)

(24,807)

(14,470)

Cash and cash equivalents at beginning of

 period / year

23,854

38,324

38,324

Cash and cash equivalents end of period / year

22,399

13,517

23,854









 

Notes supporting condensed interim financial statements

 

1. Basis of preparation

 

The consolidated financial information of the Group has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS), including interpretations issued by the International Accounting Standards Board ("IASB") and its committees and adopted by the EU.

 

The figures for the half year ended 31 December 2012 are unaudited. The comparative figures for the half year ended 31 December 2011 are also unaudited. The amounts for the year ended 30 June 2012 represent an abbreviated version of the Group's full financial statements for the year on which the auditors issued an unqualified audit report. The financial statements for the year ended 30 June 2012 have been filed with the registrar of companies.

 

The preparation of financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

 

 

2. Dividends to equity shareholders

 


Half Year ended

Half Year ended

Year ended


 31 Dec 2012

 31 Dec 2011

30 June 2012


€'000

€'000

€'000

Ordinary dividends:




Interim dividends paid

-

-

917

Final dividend paid

1,069

930

930


1,069

930

1,847

 

 

3. Earnings per ordinary share

 

The earnings per ordinary share is calculated on the basis that the weighted average number of shares in issue for the half year ended 31 December 2012 is 30,545,159 (period ended 31 December 2011 - 36,100,714; year ended 30 June 2012 - 32,767,381).  It has been calculated based on the profit for the financial period ended 31 December 2012 of €5,170,000 (period ended 31 December 2011 - €3,939,000; year ended 30 June 2012 - €8,390,000).


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