Company name CPL Resources PLC
Headline Half Yearly Report


RNS Number : 1457V
CPL Resources PLC
26 January 2017
 

Cpl Resources Plc

Results for the six months ended 31 December 2016

 

CPL delivers revenue, gross profit and earnings growth in

the first half of financial year 2017

 

Cpl Resources Plc ('Cpl' or the 'Group'), Ireland's leading employment services group, today announced results for the half year ended 31 December 2016.

 

Chairman's Statement

 

I am pleased to report that in the six months to 31 December 2016 the Group delivered continued growth in revenues, net fee income and profits.

 

Half year highlights

 

·      6% increase in revenues to €228.7 million

 

·      6% increase in gross profit (net fee income) to €36.2 million

 

·      Profit before tax of €8.1m a 7% increase

 

·      Earnings per share increases 8.5% to 23.0 cent

 

·      10% increase in interim dividend to 5.75 cent per share

Half year highlights

Half year ended

Half year ended

% change

 €000s except where indicated

31-Dec-16

31-Dec-15






Revenue

228,717

216,364

5.7%

Gross Profit

36,188

33,999

6.4%

Adjusted Operating profit*

8,971

8,475

5.9%

Adjusted Profit before tax*

8,979

8,481

5.9%





Operating profit

8,088

7,565

6.9%

Profit before tax

8,096

7,571

6.9%

Earnings per share

23.0 cent

21.2 cent

8.5%

Dividend per share

5.75 cent

5.25 cent

9.5%





Conversion ratio **




Adjusted Operating Profit

24.8%

24.9%


Adjusted Profit before tax

24.8%

24.9%


Operating Profit

22.3%

22.3%


Profit before tax

22.4%

22.3%






Net fee income - permanent placements

13,279

13,640

(2.6%)

Net fee income - temporary and contract

22,909

20,359

12.5%





Permanent net fee income as a %




of total gross profit

37%

40%


Temporary and contract net fee income as a %




of total gross profit

63%

60%


* Adjusted operating profit and adjusted profit before tax exclude non-cash charges relating to the Group's Long-Term Incentive Plan (LTIP) and foreign exchange

** As a % of gross profit.

 

During the six months ended 31 December 2016, we experienced further improvements in trading conditions in certain of our markets.  Revenues for the six months to 31 December 2016 increased by 6% to €228.7 million. Our gross profit increased by 6% against the same period last year to €36.2 million. The Group's adjusted operating profit, which excludes non-cash foreign exchange and LTIP charges, was €9.0 million for the six months to 31 December 2016, a 6% increase on the same period last year.  Our conversion rate of gross profit to operating profit (excluding LTIP & foreign exchange) was 24.8% in the period.

The foreign exchange charge of €0.5 million in the period was mainly due to the accounting translation of sterling into euro, as a result of fluctuations in the sterling exchange rate following the Brexit vote. The foreign exchange charge was €0.1 million for the period to 31 December 2015. The non-cash LTIP charge was €0.4 million in the six months to 31 December 2016 and €0.9 million in the six months to 31 December 2015. The LTIP charge for the six months to 31 December 2016 reflects current expectations in relation to the achievement of performance targets included in the LTIP awards.

The Group delivered a 9% increase in earnings per share to 23.0 cent for the six months to 31 December 2016.

The Group continues to work with clients to understand their specific requirements and with our candidates in order to match their skills to those client requirements. The proportion of our net fee income that is made up of permanent fees has reduced from 40% in the same period last year to 37%, mainly as a result of longer lead times in appointing nursing staff in the UK following regulatory changes.  The temporary staffing market remains highly competitive but we have seen some margin improvement.

We continue to grow and develop our people within the Group and on behalf of the Board I wish to express my gratitude for the continuing hard work and dedication of all of our people and for their commitment to the Group.

Cash

The strength of our Balance Sheet reflects the positive cash-generating capability of Cpl. The Group has a cash balance of €35.2 million as at 31 December 2016 (December 2015: €27.6 million). In the six months to 31 December 2016 €9.0 million was generated in cash flow from operating activities before tax and changes in working capital. Although our business requires significant investment in working capital, we recorded a net cash inflow of €2.2 million in the period.

Dividend

The Board proposes to pay an interim dividend of 5.75 cent per share, an increase of 10% on last year's interim dividend, reflecting the Group's strong performance in the period.  The interim dividend will be payable on 3rd March 2017 to shareholders on the register at the close of business on the record date of 3rd February 2017.

Outlook

In the six month period to 31 December 2016 we have seen continued organic growth across many of our key business sectors. Political and economic events globally during the period to 31 December 2016 have had limited impact on our key sectors, except for foreign exchange translations. During calendar year 2017 we expect the outcome of these events to become clearer, and consequent opportunities and challenges to present themselves.

We remain confident in the outlook for the business and expect to deliver continued profitable growth for the remainder of the financial year.

John Hennessy

Chairman

26 January 2017

 



 

Condensed Group Statement of Comprehensive Income

for the period ended 31 December 2016

                                                                                                                              


6 months ended

6 months ended

Year ended


31-Dec-16

31-Dec-15

30-Jun-16


€'000

€'000

€'000


(Unaudited)

(Unaudited)

(Audited)





Revenue

228,717

216,364

433,391

Cost of sales

(192,529)

(182,365)

(363,338)


_______

_______

_______

Gross profit

36,188

33,999

70,053





Distribution expenses

(2,190)

(2,091)

(4,059)

Administrative expenses

(25,910)

(24,343)

(50,610)


_______

_______

_______

Operating profit

8,088

7,565

15,384

Financial income

8

6

61

Financial expenses

-

-

(55)


_______

_______

_______

Profit before taxation

8,096

7,571

15,390





Income tax expense

(1,052)

(984)

(1,968)


_______

_______

_______

Profit for the financial period/year

7,044

6,587

13,422


_______

_______

_______

Other comprehensive income




Foreign currency translation differences -




foreign operations

(43)

33

(198)


_______

_______

_______

Total comprehensive income for the




period/year

7,001

6,620

13,224


_______

_______

_______




 

Profit attributable to:




Owners of the Parent

7,024

6,482

13,434

Non - controlling interests

20

105

(12)


_______

_______

_______


7,044

6,587

13,422


_______

_______

_______

Total comprehensive income attributable to




Owners of the Parent

(107)

(51)

(64)

Non - controlling interests

64

84

(134)


_______

_______

_______


(43)

33

(198)


_______

_______

_______





Basic earnings per share (cent)

23.0

21.2

43.9





Diluted earnings per share (cent)

23.0

21.2

43.9


Condensed Group Balance Sheet

as at 31 December 2016


31-Dec-16

31-Dec-15

30-Jun-16


€'000

€'000

€'000


(Unaudited)

(Unaudited)

(Audited)

Fixed Assets




Non current assets




Property, plant and equipment

1,980

1,933

1,994

Goodwill and intangible assets

17,185

18,701

17,489

Deferred tax asset

786

444

786


_______

_______

_______

Total non-current assets

19,951

21,078

20,269


_______

_______

_______

Current assets




Trade and other receivables

93,071

90,689

90,333

Cash and Cash equivalents

36,014

28,591

34,843


_______

_______

_______

Total current assets

129,085

119,280

125,176


_______

_______

_______

Total assets

149,036

140,358

145,445


_______

_______

_______

Capital and reserves




Issued share capital

3,053

3,053

3,053

Share premium

1,705

1,705

1,705

Other reserves

(1,181)

(2,052)

(1,462)

Retained earnings

95,712

85,096

90,444


_______

_______

_______

Equity attributable to owners of the Company

99,289

87,802

93,740

Non - controlling interests

55

172

(29)


_______

_______

_______

Total equity

99,344

87,974

93,711


_______

_______

_______

Liabilities




Non current liabilities

400

1,285

1,601


_______

_______

_______

Total non current liabilities

400

1,285

1,601


_______

_______

_______

Current liabilities




Trade and other payables

48,076

49,724

50,133

Provisions

1,216

1,375

-


_______

_______

_______

Total current liabilities

49,292

51,099

50,133


_______

_______

_______

Total liabilities

49,692

52,384

51,734


_______

_______

_______

Total equity and liabilities

149,036

140,358

145,445


_______

_______

_______


Condensed Group Statement of Changes in Equity

for the period ended 31 December 2016

                                                                                                            




Other




Share








denominated


Currency

Put

based



Non -

Total


Share

Share

capital

Merger

translation

option

payment

Retained


controlling

Shareholders


Capital

Premium

fund

reserve

reserve

reserve

reserve

earnings

Total

interests

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000













Balance at 1 July 2015

3,053

1,705

724

(3,357)

(395)

-

177

80,141

82,048

(89)

81,959

Total comprehensive income for the period












Profit for the financial period

-

-

-

-

-

-

-

6,482

6,482

105

6,587

Foreign currency translation

-

-

-

-

(51)

-

-

-

(51)

84

33

Transactions with shareholders












Share based payment charge

-

-

-

-

-

-

850

-

850

-

850

Dividends paid

-

-

-

-

-

-

-

(1,527)

(1,527)

-

(1,527)


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

Total contributions and distribution

3,053

1,705

724

(3,357)

(446)

-

1,027

85,096

87,802

100

87,902


______

_______

_______

_______

_______


_______

_______

_______

_______

_______

_______



Changes in ownership interests












Non controlling interest on acquisition in year

-

-

-

-

-

-

-

-

-

72

72


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

Total changes in ownership interests

-

-

-

-

-

-

-

-

-

72

72


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

Balance at 31 December 2015

3,053

1,705

724

(3,357)

(446)

-

1,027

85,096

87,802

172

87,974


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

Balance at 1 July 2016

3,053

1,705

724

(3,357)

(593)

(400)

2,164

90,444

93,740

(29)

93,711

Total comprehensive income for the period












Profit for the financial period

-

-

-

-

-

-

-

7,024

7,024

20

7,044

Foreign currency translation

-

-

-

-

(107)

-

-

-

(107)

64

(43)

Transactions with shareholders












Share based payment charge

-

-

-

-

-

-

388

-

388

-

388

Dividends paid

-

-

-

-

-

-

-

(1,756)

(1,756)

-

(1,756)


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

Balance at 31 December 2016

3,053

1,705

724

(3,357)

(700)

(400)

2,552

95,712

99,289

55

99,344


_______

_______

_______

_______

_______

_______

_______

_______

_______

_______

_______


Condensed Group cash flow statement

for the period ended 31 December 2016


6 months ended

6 months ended

Year ended


31-Dec-16

31-Dec-15

30-Jun-16


€'000

€'000

€'000


(Unaudited)

(Unaudited)

(Audited)

Cash flows from operating activities




Profit for the financial period/year

7,044

6,587

13,422

Depreciation on property, plant and equipment

308

274

590

Share based payment charge

388

850

1,987

Amortisation of intangible assets

212

145

343

Financial income

(8)

(6)

(61)

Financial expense

-

-

55

Income tax expense

1,052

984

1,968


_______

_______

_______

Operating cash flows before changes in working capital

8,996

8,834

18,304





(Increase) in trade and other receivables

(2,368)

(5,347)

(4,849)

(Decrease)/increase in trade and other payables and provisions

(1,429)

487

1,092


_______

_______

_______

Cash generated from in operations

5,199

3,974

14,547





Interest (paid)

-

-

(55)

Income tax (paid)

(914)

(464)

(2,485)

Interest received

4

60

110


_______

_______

_______

Net cash provided by operating activities

4,289

3,570

12,117


_______

_______

_______

Cash flows from investing activities




Acquisition of business, net of cash acquired

-

(4,471)

(5,083)

Purchase of property, plant and equipment

(313)

(307)

(684)

Purchase of intangible assets

(63)

(132)

(602)


_______

_______

_______

Net cash (outflow) from investing activities

(376)

(4,910)

(6,369)


_______

_______

_______





Cash flows from financing activities




Dividends paid

(1,756)

(1,527)

(3,131)


_______

_______

_______

Net cash (used in) financing activities

(1,756)

(1,527)

(3,131)


_______

_______

_______





Net increase/(decrease) in cash and cash equivalents

2,157

(2,867)

2,617





Cash and cash equivalents at beginning of period/year

33,092

30,475

30,475


_______

_______

_______

Cash and cash equivalents at end of period/year

35,249

27,608

33,092


_______

_______

_______


Notes supporting condensed interim financial statements

 

1.       Basis of preparation

The condensed consolidated interim 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 committee and adopted by the EU. There are no new standards, amendments to standards or interpretations which are mandatory for the first time for financial periods commencing on 1 July 2016 which have a significant impact on the Group's accounting policies or on the reported results.  The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the Annual Report for the financial year ended 30 June 2016.     

 

The figures for the half year ended 31 December 2016 are unaudited. The comparative figures for the half year    ended 31 December 2015 are also unaudited. The amounts for the year ended 30 June 2016 represent an    abbreviated version of the Group's full financial statements for the year on which the auditors issued an    unqualified audit report. The Group is not subject to significant seasonal factors.

The Annual Report and financial statements for the year ended 30 June 2016 have been filed with the Registrar of Companies and are publically available. 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                                            


6 months ended

6 months ended

Year ended


31-Dec-16

31-Dec-15

30-Jun-16


€'000

€'000

€'000

Ordinary dividends:




Interim dividends paid

-

-

1,604

Final dividends paid

1,756

1,527

1,527


_______

_______

_______


1,756

1,527

3,131


_______

_______

_______


 

3.       Earnings per 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 2016 is 30,545,159 (period ended 31 December 2015 - 30,545,159; year ended   30 June 2016 - 30,545,159). It has been calculated based on the profit attributable to the owners of the Company for the financial period ended 31 December 2016 of €7,024,000 (period ended 31 December 2015 - €6,482,000; year ended 30 June 2016 - €13,434,000).

4.       Share Based Payments

 The LTIP charge for the six months to 31 December 2016 was €388k and €850k in the six months to 31 December 2015. This reflects current expectations on achieving the performance targets included in the LTIP awards which may result in the vesting of these instruments. Full details of the scheme are outline in Note 29 of the 2016 Annual Report.

5.       Events after the reporting date

There have been no significant events since the period end 31 December 2016 that would require disclosure in the interim financial statements.

 [END]


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