Company name CPL Resources PLC
Headline Half Yearly Report


RNS Number : 4345D
CPL Resources PLC
29 January 2015
 

Cpl Resources plc

Results for the Half Year Ended 31 December 2014

Cpl Resources plc ('Cpl', the 'Group' or the 'Company'), Ireland's leading employment services group, today announced results for the half year ended 31 December 2014.

Chairman's statement

I am pleased to report that in the six months to 31 December 2014 the Group delivered a growth in revenues and gross profit.  We have also made significant investment in our operations during the period.

 

Highlights

 

 

§ 5% increase in revenue to €193.2 million

 

§ 5% increase in gross profit to €28.2 million

 

§ 13% decrease in operating profit and earnings per share as we invest in operations

 

§ Interim dividend unchanged at 4.75 cent per share 

 

Half Year Highlights

6 months ended

6 months ended

% change


31 December 2014

31 December 2013



€ 000's

€ 000's


Revenue

193,218

184,327

5%

Gross profit

28,227

27,002

5%

Operating profit

5,970

6,855

(13%)

Profit before tax

6,051

6,956

(13%)

Earnings per share

17.2 cent

19.8 cent

(13%)

Dividend per share

                    4.75 cent

             4.75 cent

Conversion Ratio*




Operating profit

21.1%

25.4%


Profit before tax

21.4%

25.8%






Permanent gross profit

11,162

10,043

11%

Temporary gross profit

17,065

16,959

1%





Permanent gross profit  as % of the total gross profit

40%

37%


Temporary gross profit as % of the total gross profit

60%

63%


 

* as % of gross profit.



 

 

During the six months to 31 December 2014 the Group delivered growth across the business, resulting in revenues of €193.2 million for the half year. Our gross profit grew by 5% against the same period last year to €28.2m. The Group's operating profit of €6.0 million for the six months to 31 December 2014 is 13% lower than the same period last year. Profit before tax decreased by €0.9 million to €6.1 million as the Group invested in its operations during the period. The Group delivered earnings per share of 17.2 cent for the six months to 31 December 2014.

 

We have made significant investment in our people, operations, infrastructure and facilities, and much of the associated cost has been charged against profits.  As a consequence, our conversion rate of gross profit to operating profit has fallen to 21.1%, from 25.4% in the same period last year.

 

We are experiencing gradual improvements in market conditions, although significant pricing challenges and economic headwinds are being experienced in a number of sectors and locations. The Cpl team has 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 31 December 2014 was €11.2 million, an increase of 11%.  Permanent fees generated outside of Ireland represented 42% of total permanent fees in the period.

 

In the six months to 31 December 2014 revenue generated from temporary assignments was €182.0 million, representing 5% growth over same period last year. The gross profit on these fees was €17.1 million, 1% higher than the six months to 31 December 2013.

 

Margin pressure continues across the temporary staffing market and this market segment remains highly competitive. We have an average number of people placed with our clients of 11,079 for the period ended 31 December 2014.

 

We continue to employ talented and energetic people within the Group.  On behalf of the Board I wish to express my gratitude for the continuing hard work and dedication of our people and for their commitment to the Group.

 

Cash

 

The Group has a cash balance of €24.2 million as at 31 December 2014. In the six months to 31 December 2014 €6.3 million was generated in cash flow from operating activities before changes in working capital. Our temporary business requires significant investments in working capital and this, together with our investments in our operations, has given rise to a net cash outflow from cash and cash equivalents of €6.3 million in the period.

 

Dividend

 

The Board has decided that the Company will pay an interim dividend of 4.75 cent per share.  The dividend will be payable on 6th March 2015 to shareholders on the company's register at the close of business on the record date of 6th February 2015. The Group has a progressive dividend policy which reflects underlying earnings growth and the continued strength of the Group's balance sheet.

 

Outlook

 

In the six month period to 31 December 2014 we have increased significantly our investment in the Group's operations.  We have done so in order to be well positioned to take advantage of expected improvements in our key markets.  Although we still face challenges in several markets and sectors arising from economic uncertainty and continuing competitive and client pressures, our strong financial position will provide us with the resources to capitalise on growth opportunities as they arise.  While the pace of recovery remains uncertain in many markets, we expect the remainder of the financial year to show profitable growth on the previous six months for the Group.

 

 

John Hennessy

Chairman

29 January 2015



 

 

Condensed Group Statement of Comprehensive Income

for the period ended 31 December 2014

















Revenue

193,218

184,327

369,273

 

Cost of sales

(164,991)

(157,325)

(314,601)





Gross profit

28,227

27,002

54,672

 

Distribution expenses

(1,852)

(1,650)

(3,423)

Administrative expenses

(20,405)

(18,497)

(37,032)





Operating profit

5,970

6,855

14,217

Financial income

81

107

170

Financial expenses

 -  

(6)

(3)

 

 

Profit before tax

6,051

6,956

14,384

Income tax expense

(787)

(904)

(1,937)

 

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

 

6,052

 

Other Comprehensive Income

Foreign currency translation differences - foreign operations

(91)

(70)

(101)

 

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

 

 

5,173

 

5,982

12,346





 

 

Basic earnings per share

 17.2 cent

19.8 cent

 40.7 cent

 

Diluted earnings per share

 17.2 cent

19.8 cent

 40.7 cent

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Group Statement of Changes in Equity

for the period ended 31 December 2014

   

  

 












Capital

Capital



Share






redemption

conversion


Currency

Based




Share

Share

reserve

reserve

Merger

translation

Payment

Retained

Total


Capital

Premium

fund

fund

reserve

reserve

Reserve

earnings

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000





















Balance at 1 July 2013

3,053

1,705

667

57

(3,357)

10

-

61,124

63,259

 

Total comprehensive










income for the period




















Profit for the financial period

-

-

-

-

-

-

-

6,052

6,052











Foreign currency translation

-

-

-

-

-

(70)

-

-

(70)











Transactions with shareholders




















Dividends paid

-

-

 -

-

-

-

-

(1,375)

(1,375)


         

         


         

         



          

          

Balance at 31 December 2013

3,053

1,705

 667

57

(3,357)

(60)

-

65,801

67,866











Balance at 1 July 2014

3,053

1,705

667

57

(3,357)

(91)

54

70,745

 72,833

 

Total comprehensive income for the period




















Profit for the financial period

 

-

-

-

-

-

-

-

5,264

5,264

Foreign currency translation

-

-

-

-

-

(91)

-

-

(91)











Share based payment charge

-

-

-

-

-

-

73

-

73











Transactions with shareholders

 










Dividends paid

-

-

 -

-

-

-

-

(1,527)

(1,527)











Balance at 31 December 2014

3,053

1,705

667

57

(3,357)

(182)

127

74,482

76,552






































































 

Condensed Group Balance Sheet




at 31 December 2014






 

 



Assets





Non-current assets





Property, plant and equipment

1,817

1,268

1,320


Goodwill and intangible assets

12,346

                    11,679

11,984


Deferred tax asset

422

507

386


 

Total non-current assets







Current assets





Trade and other receivables

77,891

71,335

69,978


Cash and cash equivalents

24,226

22,097

30,518


Current tax recoverable

-

702

-


 

Total current assets


 

Total assets







Equity





Issued share capital

3,053

3,053

3,053


Share premium

1,705

1,705

1,705


Other reserves

(2,688)

(2,693)

(2,670)


Retained earnings

74,482

65,801

70,745


 

Total equity

67,866

72,833


 

Liabilities





Current liabilities





Financial liabilities

 -  

-

-


Bank overdraft

-

-

-


Trade and other payables

40,051

39,648

40,892


Current tax payable

99

-

386


Provisions

-

74

75


 

Total current liabilities


 

Total liabilities


 

Total equity and liabilities

107,588




 

 

Condensed Group Cash Flow statement


for the period ended 31 December 2014









 




Cash flows from operating activities




Profit for the financial period/year

5,264

6,052

12,447

Adjustments for:




Depreciation on property, plant and equipment

192

245

415

Share based payment charge

73

-

54

Amortisation of intangible assets

43

40

81

Financial income

(81)

(107)

(170)

Financial expense

-

6

3

Income tax expense

787

904

1,937





Operating cash flows before changes in working




capital

6,278

7,140

14,767

(Increase) in trade and




other receivables

(8,088)

(9,471)

(8,097)

(Decrease)/increase in trade and other payables

and provisions

(841)

(876)

368





Net cash (used in)/generated from operations

(2,651)

(3,207)

7,038

 

Interest paid

-

(6)

(3)

Income tax paid

(1,110)

(900)

(724)

Interest received

                  165

92

108

Net cash (outflow)/inflow from operating activities

(3,596)

(4,021)

6,419





Cash flows from investing activities




Deferred consideration paid

(75)

(76)

(75)

Purchase of property, plant and equipment

(689)

(342)

(567)

Purchase of intangible assets

(405)

(20)

(364)

Net cash (used in) investing activities

(1,169)

(438)





Cash flows from financing activities




Dividends paid

(1,527)

(1,375)

(2,826)

Net cash (used in) financing activities

(1,527)

(1,375)

(2,826)





Net (decrease)/increase in cash and cash equivalents

(6,292)

(5,834)

2,587





Cash and cash equivalents at beginning of

period/year

30,518

27,931

27,931

Cash and cash equivalents end of period/year

24,226

22,097

30,518









 



 

Notes supporting condensed interim financial statements

 

1. Basis of preparation

 

The consolidated financial information of the Group has been prepared in euro 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 2014 are unaudited. The comparative figures for the half year ended 31 December 2013 are also unaudited. The amounts for the year ended 30 June 2014 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 2014 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

 




Ordinary dividends:




Interim dividends paid

1,451

Final dividend paid

 1,527

1,375

1,375


1,527

1,375

2,826

 

 

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 2014 is 30,545,159 (period ended 31 December 2013 - 30,545,159; year ended 30 June 2014 - 30,545,159).  It has been calculated based on the profit for the financial period ended 31 December 2014 of €5,264,000 (period ended 31 December 2013 - €6,052,000; year ended 30 June 2014 - €12,447,000).

 

 

 


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