REG - FDM Group plc - Half-year Report
31/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240731:nRSe4779Ya&default-theme=true
RNS Number : 4779Y FDM Group (Holdings) plc 31 July 2024
FDM Group (Holdings) plc
Interim Results
FDM Group (Holdings) plc ("the Company") and its subsidiaries (together "the
Group" or "FDM"), today announces its results for the six months ended 30 June
2024.
Highlights
30 June 2024 30 June 2023 % change
Revenue £140.2m £179.9m -22%
Adjusted operating profit(1) £17.4m £25.5m -32%
Profit before tax £15.5m £29.8m -48%
Adjusted profit before tax(1) £17.7m £26.0m -32%
Basic earnings per share 10.3p 19.7p -48%
Adjusted basic earnings per share(1) 11.7p 16.8p -30%
Cash flows generated from operations £15.9m £24.3m -35%
Cash conversion(2) 104% 83% +25%
Adjusted cash conversion(2) 103% 95% +8%
Cash position at period end £36.9m £38.1m -3%
Share-based payment expense/ (credit) £0.1m (£3.8m) n/a
Exceptional administrative expenses £2.1m - n/a
Effective income tax rate 27.5% 27.5% -
Interim dividend per share 10.0p 17.0p -41%
· A resilient performance in the first half of 2024 against
ongoing challenging market conditions, in line with the Board's expectations.
· Revenue decreased by 22% to £140.2 million (2023: £179.9
million) and profit before tax decreased by 48% to £15.5 million (2023:
£29.8 million).
· Consultants assigned to clients at week 26(3) were 25% lower
than the corresponding period at 3,469 (week 26 2023: 4,602, week 52 2023:
3,892). The split by region was: UK 1,284 (week 26 2023: 1,743); North America
1,162 (week 26 2023: 1,563); EMEA 326 (week 26 2023: 359); and APAC 697 (week
26 2023: 937).
· Consultant utilisation rate(4) for the six months to 30 June 2024
decreased to 91.5% (2023: 93.4%). Throughout the period steps were taken to
align, as far as practicable, available resource to market demand. Consultant
recruitment and the number of Consultants in our Skills Lab (previously known
as our Academy) reduced and coaching completions (previously called training
completions) in the first half were 466 (first half 2023: 911).
· We remain focused on managing our cost base. In the first half
we incurred exceptional costs of £2.1 million (2023: £nil) as we better
aligned our internal staff and undeployed Consultants with current market
dynamics. The annualised internal staff cost saving is over £4 million. The
number of internal employees at 30 June 2024 was 594 (30 June 2023: 802).
· Successful launch of a new Consultant coaching methodology, to
enable us to respond better to clients' needs.
· We secured 29 new clients globally (2023: 26), 18 of which were
outside the financial services sector.
· We maintain a robust balance sheet, with £36.9 million cash at
30 June 2024 (2023: £38.1 million) and no debt.
· Cash conversion was 104% during the first six months of 2024
(2023: 83%). Adjusted cash conversion(2) was 103% (2023: 95%).
· On 30 July 2024, the Board declared an interim dividend of 10.0
pence per ordinary share (2023: 17.0 pence), which will be payable on 1
November 2024 to shareholders on the register on 11 October 2024.
( )
(1 )The adjusted operating profit and adjusted profit before tax are
calculated before; i) Share Plan expenses of £0.1 million (2023: credit of
£3.8 million); and ii) exceptional costs of £2.1 million (2023: £nil) as we
better aligned our internal staff and undeployed Consultants with Consultant
headcount. The adjusted basic earnings per share is calculated before the
impact of; i) Share Plan expenses (including associated deferred tax); and ii)
exceptional costs of £2.1 million (2023: £nil).
(2) Cash conversion is calculated by dividing cash flows generated from
operations by operating profit. The adjusted cash conversion is calculated by
dividing cash flows generated from operations by operating profit adjusted for
Share Plan expenses of £0.1 million (2023: credit of £3.8 million).
(3 ) Week 26 in 2024 commenced on 24 June 2024 (2023: week 26 commenced on 26
June 2023).
(4) The business uses the metric 'Consultant utilisation' to monitor all
deployed Consultants. Utilisation rate is calculated as the ratio of the cost
of deployed Consultants to the total Consultant payroll cost.
Rod Flavell, Chief Executive Officer, commented:
"The Group traded in line with the Board's expectations during the first half
of the year. The softer trading conditions which we reported in our AGM
Trading Statement on 14 May 2024 persist, with clients continuing to defer
decisions.
While we continue to manage the level of unallocated Consultants and our
internal cost base in the light of market conditions, we remain committed to
maintaining appropriate levels of resource and capacity to meet clients' needs
as and when markets improve.
The mix of tenure of Consultants deployed with clients has changed over recent
periods, such that we now have an increased proportion of Consultants
remaining with FDM beyond two years. This has delivered a progressive slowing
in headcount decline across each of our territories. We anticipate that this
trend, taken with sustained levels of encouraging client engagement, should
see a more stable backdrop for the Group in the second half of this financial
year as we begin to increase the number of recruits to our Skills Labs.
We have a robust balance sheet and experienced Board and management, and are
focused on delivering against our objectives, both short and medium term. The
Board anticipates that the Group's financial performance for the full year
will be in line with its current expectations."
Enquiries
For further information:
FDM Rod Flavell - CEO 0203 056 8240
Mike McLaren - CFO 0203 056 8240
Nick Oborne 07850 127526
(financial public relations)
Forward-looking statements
This Interim Report contains statements which constitute "forward-looking
statements". Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable at the time they are made, it
can give no assurance that these expectations will prove to be correct.
Because these statements involve risks and uncertainties, actual results may
differ materially from those expressed or implied by these forward-looking
statements. Subject to any requirement under the Disclosure Guidance and
Transparency Rules or other applicable legislation, regulation or rules, the
Group does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. Neither shareholders nor prospective shareholders should
place undue reliance on forward-looking statements, which speak only as of the
date of this Interim Report.
We are FDM
FDM Group (Holdings) plc ("the Company" or "FDM") and its subsidiaries
(together "the Group" or "FDM") form a global professional services provider
with a focus on IT.
We are a global consultancy powering the people behind tech and innovation.
For over 30 years we have helped our clients stay ahead of the latest tech
trends and thrive in a rapidly changing world.
Our business model is focused on coaching and deploying passionate, energetic
and self-motivated Consultants equipped with skills across five Practices:
· Software Engineering;
· Change & Transformation;
· Data & Analytics;
· IT Operations; and
· Risk, Regulation & Compliance ("RRC").
These five core areas of specialism include multiple interconnected sprints
within our Skills Labs, building a versatile and adaptable Consultant
workforce.
Our purpose
We aim to deliver client-led, sustainable, profitable growth on a consistent
basis, through our well-established Consultant model:
· Identify talented individuals - through our programmes:
Graduates, Ex-Forces, Returners and Apprentices.
· Develop individuals through our Skills Labs - where our
Consultants access expertise, up-skilling and re-skilling as part of their
continual learning and career development.
· Grow our client presence profitably - we look to create new
opportunities to deploy our Consultants amongst our developing client base and
into other markets and territories.
· Identify and fill our clients' skills gaps - we focus on
understanding and anticipating our clients' requirements and market trends, to
ensure that we can add value in the areas where our clients need it most,
provide opportunities to our Consultants, and deliver sustainable profitable
growth for our shareholders.
· Create a long-term sustainable global business - we aim to have
a beneficial impact on the communities in which we operate. We are aware of
our responsibility towards our clients, our suppliers, and all of our other
stakeholders, whilst working to minimise our impact on the environment.
· Engage, retain, recognise and energise internal employees - to
support, enhance and grow the business to deliver our Consultant model.
Interim Management Review
Overview
Against a background of continued challenging global market conditions, the
Group delivered a resilient performance for the first half of 2024, in line
with Board expectations. Revenue for the six-month period ending 30 June 2024
was 22% lower (21% lower on a constant currency basis) at £140.2 million
(2023: £179.9 million) and we delivered adjusted profit before tax for the
first half of £17.7 million, down 32% on the equivalent period in 2023 of
£26.0 million.
The number of Consultants placed with clients at week 26 was 3,469, 25% lower
than week 26 2023 and 11% lower than week 52 2023. To ensure our available
resource is aligned with client demand, levels of experienced Consultant
resource, Consultant recruitment and the numbers of Consultants in our Skills
Lab (previously known as our Academy) were closely managed during the first
half, resulting in a reduction in recruitment and coaching completions in
comparison with the period to 30 June 2023 and an increase in the proportion
of Consultants remaining with FDM beyond two years.
We continue our focus on managing the Group's cost base. During the first
half, the Group incurred exceptional costs of £2.1 million (2023: £nil), as
a result of the Group taking measures to align better the number of undeployed
Consultants and internal staff with current market dynamics while allowing for
the Group to respond to increased demand as and when it returns.
The Group's balance sheet remains robust with cash balances at 30 June 2024 of
£36.9 million (30 June 2023: £38.1 million). The Group has no debt.
Strategy
FDM's strategy remains to deliver customer-led, sustainable, profitable growth
on a consistent basis through our established and proven business model,
helping clients to stay ahead of the latest tech trends and unlocking
opportunities to help them thrive in a rapidly changing world. Our business
model has been developed to ensure the successful delivery of our strategy.
(i) Attract and develop talented Consultants
With challenging market conditions continuing, our levels of Consultant
recruitment remain under close scrutiny to ensure that our available resource
aligns, as far as practicable, with client demand across our operating
locations. A key strength of our business model is that it allows us to flex
recruitment and coaching and react quickly to changing levels of client
demand, while at the same time continuing to invest in our workforce so that
we are well positioned to capitalise on opportunities when conditions improve.
We delivered a reduced 466 coaching completions in the first half of the year
(2023: 911).
The strength of our University Partner relationships and our Ex-Forces and
Returners Programmes will enable us to increase recruitment and training when
market conditions and client demand improve. We continued to generate high
numbers of applications across all our operating locations with applicants
seeking the benefits of FDM's market-leading, flexible coaching. We have an
excellent pipeline of assessed candidates, looking to join our Skills Labs as
and when we see an uptick in market demand.
(ii) Invest in state-of-the-art Skills Labs to provide expert
training
The first half of the year saw a major change in the delivery of our training,
with the launch of the new FDM Practices methodology. This methodology, which
is outlined below, enhances our ability to respond to clients' needs as they
look for more specific, detailed and nuanced skillsets within each job role.
In conjunction with the implementation of the Practices, we have moved away
from the more traditional methods of training to a dynamic, skills-based,
experiential model which is central to our new Skills Lab. Consultants are
subject to continuous assessment as they complete core and specialised sprints
(designed with the knowledge of client requirements) which are led by our
highly-skilled coaches within our Pods.
We are confident that the FDM Practices methodology will enable our
Consultants to develop into experienced professionals with skills across
multiple capabilities, delivering maximum value to our clients as they seek to
stay ahead of the latest tech trends.
FDM Practices
Software Engineering Change & Transformation Data & IT Operations Risk, Regulation & Compliance
Analytics
Our Software Engineers are skilled in using the latest tech and methods to Our Change and Transformation specialists learn to guide organisations through Our Data and Analytics specialists excel at finding valuable insights in data, Our IT Operations specialists are focused on keeping complex IT systems Our RRC specialists develop skills in managing risk and ensuring compliance
create, test and maintain software that is strong, scalable, and tailored to significant changes, mastering project management, problem-solving and agile using advanced tools such as business intelligence and machine learning, running smoothly and securely, mastering tasks such as system administration, with rules and standards, protecting organisations' reputation and trust with
clients' needs. methods to ensure success. helping clients to make smart decisions and stay competitive. network management, and cybersecurity. stakeholders.
(iii) Grow and diversify our client base
We continue to deliver the highest level of service to our clients and work
closely with them to meet their requirements. Client diversification remains a
key part of our strategy and we secured 29 new clients in the period (2023:
26), of which 14 were in the UK, 5 in North America, 4 in EMEA and 6 in APAC.
Of these new clients, 18 were secured from outside the financial services
sector (2023: 18 outside the financial services sector).
(iv) Expand and consolidate our geographic presence through
sustainable and efficient means
The expansion and consolidation of our geographic presence remains a key
growth driver for the Group. While the move to remote delivery of our Skills
Lab coaching allows us to reduce the size and cost of our physical footprint
worldwide (at the same time enabling us to reduce our greenhouse gas emissions
from the use of physical premises), we retain a strong management and sales
presence across all our main operating regions, as we focus on delivering
sustainable growth across the Group.
Our Markets
UK
Revenue for the six-month period to 30 June 2024 decreased by 23% to £54.0
million (2023: £69.7 million). Consultants deployed at week 26 were 1,284, a
decrease of 26% from 1,743 at week 26 2023 (week 52 2023: 1,411). Adjusted
operating profit decreased by 36% to £7.8 million (2023: £12.2 million).
Uncertainty in the market continued into the first half of 2024 and the mix of
our Consultant population shifted towards more experienced resource as clients
managed reduced budgets which restricted them from both taking on new
Consultants and internalising our Consultants as permanent hires. Our
experienced Consultants have higher sell rates and this contributed towards
the reduction in revenue being less than the reduction in headcount.
During the period we incurred £1.3 million of exceptional costs associated
with the measures taken to align better the number of benched Consultants and
internal staff with current market dynamics. These additional costs
contributed towards operating profit decreasing by more than the reduction in
headcount. We also carried a higher than normal number of undeployed
Consultants into the period and adjusted our training schedules to reflect
this, resulting in fewer coaching completions (2024: 129; 2023: 259).
We gained 14 new clients in the period (2023: 14).
North America
Revenue for the six-month period to 30 June 2024 decreased by 24% to £53.9
million (2023: £70.6 million). Consultants deployed at week 26 were 1,162, a
decrease of 26% from 1,563 at week 26 2023 (week 52 2023: 1,322). Adjusted
operating profit decreased by 17% to £8.7 million (2023: £10.5 million).
As in the UK, uncertainty in the market continued in 2024 and resulted in
reduced demand for new Consultants and our Consultant mix becoming more
experienced as clients lacked the budget to internalise the Consultants as
their permanent staff. The shift in tenure mix contributed towards the
reduction in revenue being less than the reduction in headcount.
During the period we incurred £0.5 million of exceptional costs associated
with the measures taken to align better the number of benched Consultants and
internal staff with current market dynamics. These measures were taken early
in the year and, compared with the prior period, we ran with a lower number of
benched Consultants, and reduced the number of Consultants we coached to 133
(2023: 299). The savings in these costs resulted in operating profit
decreasing by less than the reduction in headcount.
During the period we gained 5 new clients (2023: 5).
EMEA (Europe, Middle East and Africa, excluding UK)
Revenue for the six-month period to 30 June 2024 decreased by 10% to £11.0
million (2023: £12.2 million). Consultants deployed at week 26 were 326, a
decrease of 9% from 359 at week 26 2023 (week 52 2023: 327). Adjusted
operating profit decreased by 85% to £0.2 million (2023: £1.3 million).
EMEA Consultant headcount was somewhat less impacted by market uncertainty
than the other regions, with growth in Germany and Ireland offsetting a
reduction in headcount in Poland and the Netherlands. During the period we
carried a higher than typical number of undeployed Consultants which
contributed towards adjusted operating profit decreasing by more than
headcount. We incurred £0.1 million of exceptional costs associated with the
measures taken to align better the number of benched Consultants and internal
staff with current market dynamics.
In the six months, we coached 57 Consultants (2023: 143) and gained 4 new
clients (2023: 4).
APAC (Asia Pacific)
Revenue for the six-month period to 30 June 2024 decreased by 22% to £21.3
million (2023: £27.4 million). Consultants deployed at week 26 were 697, a
decrease of 26% from 937 at week 26 2023 (week 52 2023: 832). Adjusted
operating profit decreased by 53% to £0.7 million (2023: £1.5 million).
Across APAC we experienced similar market conditions to the UK and North
America. We adjusted our training schedules to reflect reduced demand and
during the period we coached 147 Consultants (2023: 210). We incurred £0.2
million of exceptional costs associated with the measures taken to align
better the number of benched Consultants and internal staff with current
market dynamics.
We opened 6 new clients in the period (2023: 3).
Financial Review
Summary income statement
Six months to Six months to % change
30 June 2024 30 June 2023
Revenue £140.2m £179.9m -22%
Exceptional administrative expenses £2.1m - n/a
Adjusted operating profit (1) £17.4m £25.5m -32%
Operating profit £15.3m £29.3m -48%
Adjusted profit before tax (1) £17.7m £26.0m -32%
Profit before tax £15.5m £29.8m -48%
Adjusted basic EPS(1) 11.7p 16.8p -30%
Basic EPS 10.3p 19.7p -48%
Overview
Revenue was 22% lower at £140.2 million (2023: £179.9 million) (21% lower on
a constant currency basis(2)), while adjusted operating profit(1) decreased by
32% to £17.4 million (2023: £25.5 million).
Consultants assigned to clients at week 26 2024 totalled 3,469, a decrease of
25% from 4,602 at week 26 2023 and a decrease of 11% from 3,892 at week 52
2023. Our Returners Programme had 204 deployed at week 26 2024 (week 26 2023:
239; week 52 2023: 219) and our Ex-Forces Programme accounted for 146
Consultants deployed worldwide (week 26 2023: 201; week 52 2023: 163).
The Consultant utilisation rate decreased to 91.5% (2023: 93.4%) due to higher
than normal numbers of undeployed Consultants across the period.
An analysis of revenue and Consultant headcount by region is set out in the
table below:
Six months to 30 June Six months to 30 June Year to 2024 2023 2023
2024 2023 31 December 2023 Consultants Consultants Consultants
Revenue Revenue Revenue assigned to assigned to assigned to
£m £m £m clients clients clients
at week 26(2) at week 26(2) at week 52(2)
UK 54.0 69.7 127.8 1,284 1,743 1,411
North America 53.9 70.6 130.2 1,162 1,563 1,322
EMEA 11.0 12.2 24.1 326 359 327
APAC 21.3 27.4 51.9 697 937 832
140.2 179.9 334.0 3,469 4,602 3,892
Administrative expenses decreased to £46.8 million (2023: £54.3 million).
Included within administrative expenses are £2.1 million of exceptional
costs, as we continued our focus on the management of our cost base. The
annualised internal staff cost saving is over £4 million. Adjusted Group
operating margin(1) decreased to 12.4% (2023: 14.2%) reflecting the higher
proportion of experienced Consultants remaining with FDM beyond two years and
the cost of carrying a higher than normal number of undeployed Consultants.
(1 ) The adjusted operating profit and adjusted profit before tax are
calculated before; i) Share Plan expenses of £0.1 million (2023: credit of
£3.8 million); and ii) exceptional costs of £2.1 million (2023: £nil) as we
better aligned our internal staff and undeployed Consultants with Consultant
headcount. The adjusted basic earnings per share is calculated before the
impact of; i) Share Plan expenses (including associated deferred tax); and ii)
exceptional costs of £2.1 million (2023: £nil).
(2) The constant-currency basis is calculated by translating current period
and prior period reported amounts into comparable amounts using the 2024
average exchange rate for each currency. The presentation of the
constant-currency basis provides a better understanding of the Group's trading
performance by removing the impact on revenue of movements in foreign
exchange.
(3) Week 26 in 2024 commenced on 24 June 2024 (2023: week 26 commenced on 26
June 2023 and week 52 commenced on 25 December 2023).
Adjusting items
The Group presents adjusted results, in addition to the statutory results, as
the Directors consider that they provide a useful indication of underlying
trading performance and cash generation. The adjusted results are stated
before; i) share-based payment credit/ expense including associated taxes and
social security costs; and ii) exceptional administrative expenses relating to
terminating the employment of internal staff and undeployed Consultants.
Share-based payment
The share-based payment charge is based on estimates relating to a vesting
which may occur up to three years after the date of grant and the assumptions
underpinning those estimates can change from year to year. An expense of £0.1
million was recognised in the six months to 30 June 2024 relating to the
share-based payments including social security costs, all of which was in
respect of the Buy As You Earn ('BAYE') Plan (2023: credit of £3.8 million,
including expenses of £0.2 million in respect of the BAYE Plan).
The credit recognised in 2023 arose as a result of a change in the adjusted
earnings per share performance vesting assumptions with the outstanding awards
anticipated to vest at a lower quantum. Details of the share-based payments
are set out in note 14 to the Condensed Consolidated Interim Financial
Statements.
Exceptional administrative expenses
During the first half, the Group incurred exceptional administrative expenses
of £2.1 million (2023: £nil), as a result of the Group taking measures to
align better the number of undeployed Consultants and internal staff with
current market dynamics while allowing for the Group to respond to increased
demand as and when it returns.
Net finance income/ (expense)
Interest on cash balances of £0.8 million (2023: £0.7 million) was
recognised as finance income in the period. Finance expense includes lease
liability interest of £0.6 million (2023: £0.2 million). The Group continues
to have no debt.
Taxation
The Group's total tax charge for the half year was £4.3 million, equivalent
to an effective tax rate of 27.5%, on profit before tax of £15.5 million
(2023: effective rate of 27.5% based on a tax charge of £8.2 million and a
profit before tax of £29.8 million). The effective rate is higher than the
underlying UK tax rate of 25% primarily due to Group profits earned in higher
tax jurisdictions.
Earnings per share
Basic earnings per share decreased in the period to 10.3 pence (2023: 19.7
pence), while adjusted basic earnings per share was 11.7 pence (2023: 16.8
pence). Diluted earnings per share was 10.3 pence (2023: 19.7 pence).
Dividend
On 30 July 2024, the Directors declared an interim dividend of 10.0 pence per
ordinary share (2023: 17.0 pence) which will be payable on 1 November 2024 to
shareholders on the register on 11 October 2024.
The Group continues to operate its dividend policy, to retain sufficient
capital to fund ongoing operating requirements, while maintaining an
appropriate level of dividend cover and sufficient funds to invest in the
Group's longer-term growth.
Cash flow and Statement of Financial Position
The Group's cash balance was £36.9 million as at 30 June 2024 (2023: £38.1
million).
Dividends paid in the half year totalled £20.7 million (2023: £20.8
million). Net capital expenditure was £0.1 million (2023: £0.6 million) and
tax paid was £3.8 million (2023: £7.1 million).
The Group delivered a robust working capital performance. Cash conversion for
the period was 104% (2023: 83%) and adjusted cash conversion was 103% (2023:
95%).
Days sales outstanding at the period end were in line with Group targets, as
they were in the prior period.
Related party transactions
Details of related party transactions are included in note 16 of the Condensed
Interim Financial Statements.
Principal risks facing the business
The Group faces a number of risks and uncertainties which could have a
material impact upon its performance. The principal risks and uncertainties
faced by the Group are set out in the Annual Report and Accounts for the year
ended 31 December 2023 on pages 28 to 35.
Economic uncertainty
A combination of factors, including geopolitical stress, continues to
contribute to an uncertain macro-economic environment and a dampening of
confidence in the global banking and finance sector against a backdrop of
lower global growth rates. This uncertainty remains the Group's principal
risk.
Uncertain conditions affect the spending decisions of clients, causing them to
delay the commencement of projects. This, in turn, slows down the rate at
which the Group's Consultants are onboarded, making it more challenging for
FDM to balance the supply and demand of resource (which is one of the Group's
other principal risks).
While certain scenarios are outside the Group's control, we believe that FDM's
business model is flexible, and the agile resource represented by our
Consultants can be attractive to clients during times of economic, political
and social uncertainty. The Board will continue to review the measures which
it has in place to identify and react to changes in macro-economic conditions,
and takes appropriate measures to adjust recruitment and coaching to ensure
alignment of supply with the demand for Consultants. These mitigations,
together with FDM's strong cash and financial position, give the Board
confidence that FDM can continue to respond appropriately to ameliorate the
effect of any adverse economic conditions which may arise.
Cyber security
The UK government and the UK's National Cyber Security Centre continue to warn
that the cyber security threat to the UK's infrastructure and UK companies
remains heightened. This risk remains an area of high focus for the Board, and
we continue to enhance our cyber security and information safeguarding
capabilities.
Climate change and other Environmental, Social and Governance ("ESG") risks
The Board considers that the risk of the direct physical effects of climate
change impairing the Group's ability to continue its business activities is
low. The Group's operating model is agile and adaptable, and the Board is
confident that the Group is able to continue operating effectively if any of
its centres become unavailable because of climate-related impacts such as fire
or flood.
We are aware that our clients in some sectors could be adversely affected by
future climate change and there is a risk that this could affect our business
indirectly as clients' spending decisions are constrained by such challenges.
We look to mitigate this risk by diversifying the sectors and geographies in
which we operate.
FDM remains a constituent of the FTSE4Good Index Series and is a leader in the
field of corporate social responsibility and good governance. FDM is a strong
advocate of diversity, equity, inclusion and social mobility in the workplace.
Further information about our work in this area is contained in our
Sustainability Report on pages 36 to 63 of our Annual Report and Accounts for
the year ended 31 December 2023.
The Board
In line with the Board's plans announced in our Annual Report for the year
ended 31 December 2023, Peter Whiting (Senior Independent Director and Chair
of the Remuneration Committee) retired from the Board with effect from 14 May
2024, having served more than nine years since his appointment. On the same
date, Jacqueline de Rojas (Non-Executive Director) was appointed as Senior
Independent Director, and Rowena Murray (Non-Executive Director) was appointed
Chair of the Remuneration Committee.
There have been no other changes to the composition of the Board or its
Committees during the period.
Summary and outlook
The Group traded in line with the Board's expectations during the first half
of the year. The softer trading conditions which we reported in our AGM
Trading Statement on 14 May 2024 persist, with clients continuing to defer
decisions.
While we continue to manage the level of unallocated Consultants and our
internal cost base in the light of market conditions, we remain committed to
maintaining appropriate levels of resource and capacity to meet clients' needs
as and when markets improve.
The mix of tenure of Consultants deployed with clients has changed over recent
periods, such that we now have an increased proportion of Consultants
remaining with FDM beyond two years. This has delivered a progressive slowing
in headcount decline across each of our territories. We anticipate that this
trend, taken with sustained levels of encouraging client engagement, should
see a more stable backdrop for the Group in the second half of this financial
year as we begin to increase the number of recruits to our Skills Labs.
We have a robust balance sheet and experienced Board and management, and are
focused on delivering against our objectives, both short and medium term. The
Board anticipates that the Group's financial performance for the full year
will be in line with its current expectations.
By order of the Board
Rod Flavell Mike McLaren
Chief Executive Officer Chief Financial Officer
30 July 2024
30 July 2024
30 July 2024
Condensed Consolidated Income Statement
for the six months ended 30 June 2024
Six months to 30 June 2024 Six months Year ended
to 30 June 31 December 2023
2023
(Unaudited) (Unaudited) (Audited)
Note £000 £000 £000
Revenue 6 140,187 179,888 333,975
Cost of sales (78,138) (96,278) (177,449)
Gross profit 62,049 83,610 156,526
Administrative expenses (46,759) (54,307) (101,500)
which includes:
Exceptional items 7 (2,064) - -
Operating profit 15,290 29,303 55,026
Finance income 847 709 1,396
Finance expense (626) (243) (796)
Net finance income 221 466 600
Profit before income tax 15,511 29,769 55,626
Taxation 8 (4,266) (8,187) (14,861)
Profit for the period 11,245 21,582 40,765
Earnings per ordinary share
pence pence pence
Basic 10 10.3 19.7 37.3
Diluted 10 10.3 19.7 37.2
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2024
Six months to 30 June 2024 Six months to 30 June 2023 Year ended
31 December 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Profit for the period 11,245 21,582 40,765
Other comprehensive expense
Items that may be subsequently reclassified to profit or loss
Exchange differences on retranslation of foreign operations (net of tax) (60) (1,203) (1,329)
Total other comprehensive expense (60) (1,203) (1,329)
Total comprehensive income for the period 11,185 20,379 39,436
Condensed Consolidated Statement of Financial Position
as at 30 June 2024
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
Note £000 £000 £000
Non-current assets
Right-of-use assets 17,337 7,897 18,215
Property, plant and equipment 2,191 3,399 2,616
Intangible assets 19,512 19,552 19,571
Deferred income tax assets 366 951 552
39,406 31,799 40,954
Current assets
Trade and other receivables 11 36,434 48,291 32,613
Income tax receivable 3,190 5,048 3,384
Cash and cash equivalents 12 36,942 38,074 47,226
76,566 91,413 83,223
Total assets 115,972 123,212 124,177
Current liabilities
Trade and other payables 13 27,344 31,535 25,638
Lease liabilities 4,257 3,504 4,512
Current income tax liabilities 1,572 2,467 1,428
33,173 37,506 31,578
Non-current liabilities
Lease liabilities 15,097 6,412 15,669
Provisions 381 - 228
Deferred income tax liability - - 31
15,478 6,412 15,928
________ _______ _______
Total liabilities 48,651 43,918 47,506
Net assets 67,321 79,294 76,671
Equity attributable to owners of the parent
Share capital 1,096 1,095 1,096
Share premium 9,705 9,705 9,705
Capital redemption reserve 52 52 52
Own shares reserve (2,605) (1,366) (3,016)
Translation reserve 1,002 1,188 1,062
Other reserves 3,023 5,564 3,469
Retained earnings 55,048 63,056 64,303
Total equity 67,321 79,294 76,671
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 2024
Six months Six months Year ended 31 December 2023
to 30 June 2024 to 30 June 2023
(Unaudited) (Unaudited) (Audited)
Note £000 £000 £000
Cash flows from operating activities
Profit before income tax for the period 15,511 29,769 55,626
Adjustments for:
Depreciation and amortisation 2,759 2,952 5,742
(Profit)/ loss on disposal of non-current assets (167) 19 155
Finance income (847) (709) (1,396)
Finance expense 626 243 796
Share-based payment expense/ (credit) (including associated social security 99 (3,701) (5,340)
costs)
(Increase)/ decrease in trade and other receivables (3,799) (4,792) 11,386
Increase/ (decrease) in trade and other payables 1,685 567 (5,470)
Cash flows generated from operations 15,867 24,348 61,499
Interest received 847 709 1,396
Income tax paid (3,782) (7,127) (12,741)
Net cash flow from operating activities 12,932 17,930 50,154
Cash flows from investing activities
Acquisition of property, plant and equipment (56) (581) (651)
Net cash used in investing activities (56) (581) (651)
Cash flows from financing activities
Proceeds from issue of ordinary shares - 3 4
Proceeds from sale of own shares - 16 16
Proceeds from sale of shares from EBT 171 254 468
Payment for shares bought back - (500) (2,525)
Principal elements of lease payments (1,895) (2,844) (4,807)
Interest elements of lease payments (605) (222) (718)
Finance expenses paid (21) (20) (72)
Dividends paid 9 (20,749) (20,794) (39,320)
Net cash used in financing activities (23,099) (24,107) (46,954)
Exchange losses on cash and cash equivalents (61) (691) (846)
Net (decrease)/ increase in cash and cash equivalents (10,284) (7,449) 1,703
Cash and cash equivalents at beginning of period 47,226 45,523 45,523
Cash and cash equivalents at end of period 12 36,942 38,074 47,226
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2024
Share Share Translation Retained Total
capital premium Capital redemption reserve Own shares reserve reserve earnings equity
Other reserves
£000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2024 1,096 9,705 52 (3,016) 1,062 3,469 64,303 76,671
(Audited)
Profit for the period - - - - - - 11,245 11,245
Other comprehensive expense for the period - - - - (60) - - (60)
Total comprehensive income for the period - - - - (60) - 11,245 11,185
Share-based payments - - - - - 108 - 108
(note 14)
Transfer to retained earnings - - - - - (554) 554 -
Own shares sold (note 15) - - - 266 - - (95) 171
Recharge of net settled share options - - - 145 - - (210) (65)
Dividends (note 9) - - - - - - (20,749) (20,749)
Total transactions with owners, recognised directly in equity - - - 411 - (446) (20,500) (20,535)
Balance at 30 June 2024 (Unaudited) 1,096 9,705 52 (2,605) 1,002 3,023 55,048 67,321
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2023
Share Share Translation Retained Total
capital premium Capital redemption reserve Own shares reserve reserve earnings equity
Other reserves
£000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2023 1,092 9,705 52 (1,494) 2,391 12,576 58,881 83,203
(Audited)
Profit for the period - - - - - - 21,582 21,582
Other comprehensive expense for the period - - - - (1,203) - - (1,203)
Total comprehensive income for the period - - - - (1,203) - 21,582 20,379
Share-based payments (note 14) - - - - - (3,091) - (3,091)
Transfer to retained earnings - - - - - (3,921) 3,921 -
Own shares sold (note 15) - - - 128 - - (360) (232)
Recharge of net settled share options - - - - - - (174) (174)
Dividends (note 9) - - - - - - (20,794) (20,794)
Issue of new shares 3 - - - - - - 3
Total transactions with owners, recognised directly in equity 3 - - 128 - (7,012) (17,407) (24,288)
Balance at 30 June 2023 1,095 9,705 52 (1,366) 1,188 5,564 63,056 79,294
(Unaudited)
Condensed Consolidated Statement of Changes in Equity (continued)
for the year ended 31 December 2023
Share Share Capital redemption reserve Own Translation Retained Total
capital premium shares reserve reserve Other reserves earnings equity
£000 £000 £000 £000 £000 £000 £000 £000
Balance at 1 January 2023 1,092 9,705 52 (1,494) 2,391 12,576 58,881 83,203
(Audited)
Profit for the year - - - - - - 40,765 40,765
Other comprehensive expense for the year - - - - (1,329) - - (1,329)
Total comprehensive income for the year - - - - (1,329) - 40,765 39,436
Share-based payments (note 14) - - - - - (4,434) - (4,434)
Transfer to retained earnings - - - - - (4,673) 4,673 -
Own shares sold (note 15) - - - 1,003 - - (496) 507
Own shares purchased - - - (2,525) - - - (2,525)
Recharge of net settled share options - - - - - - (200) (200)
Dividends (note 9) - - - - - - (39,320) (39,320)
Issue of new shares 4 - - - - - - 4
Total transactions with owners, recognised directly in equity 4 - - (1,522) - (9,107) (35,343) (45,968)
Balance at 31 December 2023 (Audited) 1,096 9,705 52 (3,016) 1,062 3,469 64,303 76,671
Notes to the Condensed Consolidated Interim Financial Statements
1 General information
The Group is a global professional services provider focusing principally on
IT, specialising in the recruitment, development and deployment of its own
permanent Consultants.
The Company is a public limited company incorporated and domiciled in the UK
and registered as a public limited company in England and Wales with a Premium
Listing on the London Stock Exchange. The Company's registered office is 3rd
Floor, Cottons Centre, Cottons Lane, London SE1 2QG and its registered number
is 07078823.
These Condensed Interim Financial Statements were approved for issue by the
Board of Directors of the Group on 30 July 2024. They have not been audited,
but have been subject to an independent review by PricewaterhouseCoopers LLP,
whose independent report is included on pages 31 and 32.
These Condensed Interim Financial Statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. The
Annual Report and Accounts for the year ended 31 December 2023 was approved by
the Board of Directors of the Group on 19 March 2024 and delivered to the
Registrar of Companies. The report of the auditors on those accounts was
unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under section 498 of the Companies Act 2006.
2 Basis of preparation
This Condensed Consolidated Interim Financial Report for the half-year
reporting period ended 30 June 2024 has been prepared in accordance with the
UK-adopted International Accounting Standard 34, "Interim Financial Reporting"
and the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period, except for the
estimation of income tax, which is determined in the Interim Financial
Statements using the estimated average annual effective income tax rate
applied to the pre-tax income of the interim period.
The following amendments to accounting standards, that became applicable for
annual reporting periods commencing on or after 1 January 2024, have been
considered and did not have a material impact on the Group:
a) Classification of Liabilities as Current or Non-current (Amendments
to IAS 1)
b) Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
c) Supplier finance arrangements (Amendments to IAS 7 and IFRS 7)
Exceptional items
The separate reporting of exceptional items helps to provide a better
understanding of the Group's underlying business performance. The Group
exercises judgement in assessing whether items should be classified as
exceptional items. Exceptional items are disclosed and described separately in
the financial statements where it is necessary to do so to provide a better
understanding of the financial performance of the Group. They are items of
expense or income that are material and one-off in nature and are shown
separately due to the significance of their nature or amount.
Going concern basis
The Group's business activities, operating cash flows and liquidity position,
together with its distinctive business model, have enabled it to manage its
business risks. The Group's forecasts and projections show that it will
continue to operate with adequate cash resources and within the current
working capital facilities for at least twelve months from the date of
approval of these Condensed Interim Financial Statements.
Having reassessed the principal risks, the Directors consider it appropriate
to adopt the going concern basis of accounting in preparing the interim
financial information.
3 Significant accounting policies
These Condensed Interim Financial Statements have been prepared in accordance
with the accounting policies, methods of computation and presentation adopted
in the financial statements for the year ended 31 December 2023.
4 Other accounting estimate
The preparation of the Group's financial statements requires management to
make estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the disclosure of contingent
liabilities, at the end of the reporting year. However, uncertainty about
these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of the asset and liability affected
in future periods. The estimates and assumptions applied in the Condensed
Interim Financial Statements, including the key sources of estimation
uncertainty, were the same as those applied in the Group's Annual Report for
the year ended 31 December 2023, with the exception of changes in estimates
that are required in determining the provision for income taxes, which is
determined in the interim financial statements using the estimated average
annual effective income tax rate applied to the pre-tax income of the interim
period.
No individual judgements have been made that have a significant impact on the
financial statements.
The following estimate is not considered to be a significant estimate as it is
considered there is not a significant risk of the estimate resulting in a
material adjustment to the carrying amounts of assets and liabilities in the
next financial year.
Share-based payment charge
A share-based payment charge is recognised in respect of share awards based on
the Directors' best estimate of the number of shares that will vest based on
the performance conditions of the awards, which comprise adjusted EPS growth
and the number of employees that will leave before vesting. In estimating the
number of shares likely to vest, the Directors have based their assessment of
the adjusted EPS growth in the forecasts contained within the Group's
three-year plan, adjusted for the impact of potential scenarios that could
potentially impact EPS growth. The charge is calculated based on the fair
value on the grant date using the Black-Scholes model and is expensed over the
vesting period.
5 Seasonality
The Group is not significantly impacted by seasonality trends. A lower number
of working days in the first half of the year is approximately offset by
increased annual leave in the second half of the year, our lowest number of
billable days occurs in December each year.
6 Segmental reporting
Management has determined the operating segments based on the operating
reports reviewed by the Board of Directors that are used to assess both
performance and strategic decisions. Management has identified that the
Executive Directors are the chief operating decision maker in accordance with
the requirements of IFRS 8 'Operating segments'.
At 30 June 2024, the Board of Directors consider that the Group is organised
into four core geographical operating segments:
(1) UK;
(2) North America;
(3) Europe, Middle East and Africa, excluding UK ("EMEA"); and
(4) Asia Pacific ("APAC").
Each geographical segment is engaged in providing services within a particular
economic environment and is subject to risks and returns that are different
from those of segments operating in other economic environments.
All segment revenue, profit before income tax, assets and liabilities are
attributable to the Group's sole revenue-generating stream, being a global
professional services provider with a focus on IT.
Segmental reporting for the six months ended 30 June 2024 (Unaudited)
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
Revenue 54,003 53,854 11,001 21,329 140,187
Depreciation and amortisation (1,088) (700) (185) (786) (2,759)
Exceptional administrative expenses (1,264) (527) (55) (218) (2,064)
(see note 7)
Segment operating profit 6,456 8,180 157 497 15,290
Finance income(1) 811 143 16 4 974
Finance expense(1) (423) (76) (27) (227) (753)
Profit before income tax 6,844 8,247 146 274 15,511
Total assets 59,497 24,913 14,411 17,151 115,972
Total liabilities (12,397) (9,849) (7,508) (18,897) (48,651)
(1) Finance income and finance expense include intercompany interest which is
eliminated upon consolidation.
Included in total assets above are non-current assets (excluding deferred tax)
as follows:
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
30 June 2024 31,158 2,290 717 4,875 39,040
6 Segmental reporting (continued)
Segmental reporting for the six months ended 30 June 2023 (Unaudited)
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
Revenue 69,714 70,583 12,241 27,350 179,888
Depreciation and amortisation (1,186) (745) (182) (839) (2,952)
Segment operating profit 14,600 11,354 1,491 1,858 29,303
Finance income(1) 696 127 3 4 830
Finance expense(1) (41) (35) (22) (266) (364)
Profit before income tax 15,255 11,446 1,472 1,596 29,769
Total assets 66,299 25,562 11,775 19,576 123,212
Total liabilities (9,442) (9,188) (4,448) (20,840) (43,918)
Included in total assets above are non-current assets (excluding deferred tax)
as follows:
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
30 June 2023 22,611 961 970 6,306 30,848
Segmental reporting for the year ended 31 December 2023 (Audited)
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
Revenue 127,770 130,167 24,093 51,945 333,975
Depreciation and amortisation (2,420) (1,324) (362) (1,636) (5,742)
Segment operating profit 28,608 21,641 2,398 2,379 55,026
Finance income(1) 1,334 260 24 11 1,629
Finance expense(1) (401) (55) (61) (512) (1,029)
Profit before income tax 29,541 21,846 2,361 1,878 55,626
Total assets 71,625 21,147 13,766 17,639 124,177
Total liabilities (11,093) (8,629) (5,479) (22,305) (47,506)
6 Segmental reporting (continued)
Included in total assets above are non-current assets (excluding deferred tax)
as follows:
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
31 December 2023 32,358 1,409 911 5,724 40,402
7 Exceptional administrative expenses
During the period, the Group incurred exceptional costs of £2.1 million
(2023: £nil) as we better aligned our internal staff and undeployed
Consultants with Consultant headcount.
8 Taxation
Income tax expense is recognised based on management's estimate of the
weighted average annual income tax rate expected for the full financial year.
The estimated average annual tax rate used for the six months ended 30 June
2024 is 27.5% (the estimated tax rate for the six months ended 30 June 2023
was 27.5%).
9 Dividends
2024
An interim dividend of 10.0 pence per ordinary share was declared by the
Directors on 30 July 2024 and will be paid on 1 November 2024 to holders of
record on 11 October 2024, the total amount payable will be £10,918,000.
A final dividend of 19.0 pence per share in respect of the year to 31 December
2023 was approved by shareholders at the AGM on 14 May 2024 and paid on 28
June 2024 to shareholders of record on 7 June 2024, the total amount paid was
£20,749,000.
2023
An interim dividend of 17.0 pence per ordinary share was declared by the
Directors on 25 July 2023 and was paid on 13 October 2023 to holders of record
on 22 September 2023, the amount paid was £18,539,000.
In respect of the year to 31 December 2022, a final dividend of 19.0 pence per
share was paid on 30 June 2023, to shareholders of record on 9 June 2023, the
total amount paid was £20,794,000.
10 Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit attributable to
ordinary equity holders of the parent company by the weighted average number
of ordinary shares in issue during the period.
Six months Six months Year ended
to 30 June 2024 to 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
Profit for the period £000 11,245 21,582 40,765
Average number of ordinary shares in issue (thousands) Number 109,164 109,317 109,151
Basic earnings per share Pence 10.3 19.7 37.3
Adjusted basic earnings per share is calculated by dividing the profit
attributable to ordinary equity holders of the parent company, excluding (i)
Performance Share Plan expense (including social security costs and associated
deferred tax) and (ii) exceptional costs relating to terminating the
employment of internal staff and undeployed Consultants (including associated
tax) by the weighted average number of ordinary shares in issue during the
period.
Six months to 30 June Six months to 30 June 2023 Year ended 31 December 2023
2024
(Unaudited) (Unaudited) (Audited)
Profit for the period (basic earnings) £000 11,245 21,582 40,765
Share-based payment expense/ (credit) (including social security costs) (see £000 91 (3,796) (5,449)
note 14)
Tax effect of share-based payment (expense)/ credit £000 (17) 616 563
Exceptional costs (see note 7) £000 2,064 - -
Tax effect of exceptional costs £000 (568) - -
Adjusted profit for the period £000 12,815 18,402 35,879
Average number of ordinary shares in issue (thousands) Number 109,164 109,317 109,151
Adjusted basic earnings per share Pence 11.7 16.8 32.9
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has one type of dilutive potential
ordinary shares in the form of employee share plan awards; the number of
shares in issue has been adjusted to include the number of shares that would
have been issued assuming the exercise of the share options.
Six months Six months Year ended
to 30 June 2024 to 30 June 2023 31 December 2023
(Unaudited) (Unaudited) (Audited)
Profit for the period (basic earnings) £000 11,245 21,582 40,765
Average number of ordinary shares in issue (thousands) Number 109,164 109,317 109,151
Adjustment for employee share plan awards (thousands) Number 195 371 329
Diluted number of ordinary shares in issue (thousands) Number 109,359 109,688 109,480
Diluted earnings per share Pence 10.3 19.7 37.2
11 Trade and other receivables
Due to their short-term nature, the Directors consider that the carrying
amount of trade receivables approximates to their fair value. The standard
credit terms are 30 days.
30 June 30 June 31 December
2024 2023* 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Trade receivables 28,445 37,975 24,944
Prepayments and accrued income 6,850 9,393 6,717
Other receivables 1,139 923 952
36,434 48,291 32,613
*The 30 June 2023 comparative has been restated as the income tax receivable
balance has been presented individually on the face of the Consolidated
Statement of Financial Position.
Included within prepayments and accrued income is £2,388,000 of accrued
income (June 2023: £3,742,000; December 2023: £2,340,000).
12 Cash and cash equivalents
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Cash at bank and in hand 36,942 38,074 47,226
13 Trade and other payables
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Trade payables 3,200 2,088 1,435
Other payables 1,843 1,908 2,147
Other taxes and social security 6,724 9,679 7,031
Accruals 15,577 17,860 15,025
27,344 31,535 25,638
Included within accruals are volume rebates of £2,231,000 (June 2023:
£2,890,000; December 2023: £2,336,000) and payroll accruals of £3,191,000
(June 2023: £4,409,000; December 2023: £3,182,000). No significant
judgements were made in the estimation of the volume rebate accrual. Any
volume rebates, where the rebate period is non-coterminous with the financial
period, are accrued based on forecast revenue for the remainder of the rebate
period. No individual client rebates were material in value in 2024 or 2023.
14 Share-based payments
During the six-month period ended 30 June 2024, the Group recognised a
share-based payment expense of £108,000 and associated social security credit
of £17,000 (both of which relate to the BAYE Plan (2023: share-based payment
credit of £3,261,000 and associated social security credit of £535,000,
including an expense of £165,000 relating to the BAYE Plan). The credit
arising from equity-settled share-based payment transactions in 2023 reflected
the latest assessment of the forecast adjusted earnings per share.
15 Investment in own shares
During 2018 the FDM Group Employee Benefit Trust was established to purchase
shares sold by option holders upon exercise of options under the FDM
Performance Share Plan. The Group accounts for its own shares held by the
Trustee of the FDM Group Employee Benefit Trust as a deduction from
shareholders' funds. During the period own shares held were used to satisfy
the requirements of the Group's share plans.
16 Related party transactions
Seven family members of Directors are employed by the Group, each at market
rate on an arm's length basis. The total remuneration relating to these staff
in aggregate was £398,000, comprising salary and bonus of £398,000 and
share-based payment expense of £nil (2023: eight individuals, aggregate
remuneration of £166,000, comprising salary and bonus of £496,000 and
share-based payment credit of £330,000).
17 Key management personnel
The key management personnel comprise the Directors of the Group. The
compensation of key management is set out below:
Six months to Six months to Year ended
30 June 30 June 31 December
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Short-term employee benefits 1,479 1,199 2,577
Post-employment benefits 28 27 55
Share-based payments credit - (859) (755)
1,507 367 1,877
18 Financial instruments
There are no material differences between the fair value of the financial
assets and liabilities included within the following categories in the
Condensed Consolidated Statement of Financial Position and their carrying
value:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
19 Post balance sheet event
On 4 July 2024, management signed a ten-year lease agreement for a new office
in Brighton. The net present value of the lease liability is £1.3 million.
The lease on the current Brighton office ends in September 2024.
Statement of Directors' Responsibilities
The Directors confirm that these Condensed Interim Financial Statements have
been prepared in accordance with UK adopted International Accounting Standard
34 "Interim Financial Reporting" and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
· An indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· Material related party transactions in the first six months and
any material changes in the related party transactions described in the last
Annual Report.
Directors who held office during the
period:
Rod
Flavell
Chief Executive Officer
Sheila
Flavell
Chief Operating Officer
Mike
McLaren
Chief Financial Officer
Andy
Brown
Chief Commercial Officer
David
Lister
Non-Executive Chairman
Alan
Kinnear
Non-Executive Director
Jacqueline de Rojas
Non-Executive Director
Michelle Senecal de Fonseca Non-Executive Director
Rowena Murray Non-Executive Director
Peter
Whiting
Non-Executive Director (retired 14 May 2024)
The Executive Directors of FDM were listed in the Annual Report and Accounts
of the Company for the year ended 31 December 2023 and remained the same in
the six months to 30 June 2024.
By order of the Board
Rod Flavell Mike McLaren
Chief Executive Officer Chief Financial Officer
30 July 2024
Independent review report to FDM Group (Holdings) plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed FDM Group (Holdings) plc's condensed consolidated interim
financial statements (the "interim financial statements") in the Interim
Report of FDM Group (Holdings) plc for the six month period ended
30 June 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Statement of Financial Position as at
30 June 2024;
· the Condensed Consolidated Income statements for the period then
ended;
· the Condensed Consolidated Statement of Comprehensive Income for
the period then ended;
· the Condensed Consolidated Statement of Cash Flows for the period
then ended;
· the Condensed Consolidated Statement of Changes in Equity for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report of FDM Group
(Holdings) plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim Report and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Interim Report, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim Report in accordance with the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Interim Report, including the interim
financial statements, the directors are responsible for assessing the group's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim Report based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
•
PricewaterhouseCoopers LLP
Chartered Accountants
London
30 July 2024
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAEXEDEALEAARecent news on FDM (Holdings)
See all newsREG - FDM Group plc - Director/PDMR Shareholding
AnnouncementREG - FDM Group plc - Director/PDMR Shareholding
AnnouncementREG - FDM Group plc - Director/PCA Shareholding
AnnouncementREG - FDM Group plc - Result of AGM
AnnouncementREG - FDM Group plc - Annual General Meeting Statement
Announcement