REG - Hays PLC - Final Results <Origin Href="QuoteRef">HAYS.L</Origin> - Part 2
31/08/2017 07:07
- Part 2: For the preceding part double click ID:nRSe3666Pa
(In £s million) Called up share capital Share premium Capital redemption reserve Retained earnings Cumulative translation reserve Equity reserve Total equity
At 1 July 2015 14.7 369.6 2.7 (138.2) 2.1 18.7 269.6
Currency translation adjustments - - - - 64.3 - 64.3
Remeasurement of defined benefit pension schemes - - - 35.5 - - 35.5
Tax relating to components of other comprehensive income - - - (7.2) - - (7.2)
Net expense recognised in other comprehensive income - - - 28.3 64.3 - 92.6
Profit for the year - - - 124.5 - - 124.5
Total comprehensive income for the year - - - 152.8 64.3 - 217.1
Dividends paid - - - (39.9) - - (39.9)
Share-based payments - - - 10.2 - 1.5 11.7
Tax on share-based payment transactions - - - (0.7) - - (0.7)
At 30 June 2016 14.7 369.6 2.7 (15.8) 66.4 20.2 457.8
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE
(In £s million) Note 2017 2016
Operating profit from continuing operations 211.5 181.0
Adjustments for:
Depreciation of property, plant and equipment 8.9 7.7
Amortisation of intangible assets 12.8 14.2
Profit on disposal of property, plant and equipment (0.5) -
Net movements in provisions (0.5) (1.2)
Share-based payments 13.0 11.9
33.7 32.6
Operating cash flow before movement in working capital 245.2 213.6
Movement in working capital:
Increase in receivables (111.4) (98.8)
Increase in payables 83.2 44.5
(28.2) (54.3)
Cash generated by operations 217.0 159.3
Pension scheme deficit funding (14.8) (14.4)
Income taxes paid (68.2) (41.7)
Net cash inflow from operating activities 134.0 103.2
Investing activities
Purchase of property, plant and equipment (12.9) (10.3)
Proceeds from sales of business assets 0.6 0.1
Purchase of intangible assets (9.1) (4.7)
Interest received 0.6 0.5
Net cash used in investing activities (20.8) (14.4)
Financing activities
Interest paid (2.5) (4.1)
Equity dividends paid (42.6) (39.9)
Proceeds from exercise of share options 1.0 1.5
Decrease in bank loans and overdrafts (25.8) (74.4)
Net cash used in financing activities (69.9) (116.9)
Net increase/(decrease) in cash and cash equivalents 43.3 (28.1)
Cash and cash equivalents at beginning of year 11 62.9 69.8
Effect of foreign exchange rate movements 5.8 21.2
Cash and cash equivalents at end of year 11 112.0 62.9
(In £s million) Note
Bank loans and overdrafts at beginning of year (26.1) (100.5)
Decrease in year 25.8 74.4
Effect of foreign exchange rate movements (0.1) -
Bank loans and overdrafts at end of year (0.4) (26.1)
Net cash at end of year 11 111.6 36.8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 STATEMENT UNDER S435 - PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary
announcement does not constitute statutory accounts for
the years ended 30 June 2017 or 2016, for the purpose of
the Companies Act 2006, but is derived from those
accounts. The statutory accounts for 2016 have been
delivered to the Registrar of Companies and those for
2017 will be delivered following the Company's Annual
General Meeting. The Group's Auditor has reported on
those accounts; their reports were unqualified, did not
draw attention to any matters by way of emphasis without
qualifying their report and did not contain statements
under Section 498(2) or (3) of the Companies Act 2006.
2 BASIS OF PREPARATION
Whilst the financial information included in this
preliminary announcement has been prepared in accordance
with the International Financial Reporting Standards
(IFRSs) as adopted for use in the European Union and as
issued by the International Accounting Standards Board,
this announcement does not itself contain sufficient
information to comply with IFRS. The accounting policies
applied in preparing this financial information are
consistent with the Group's financial statements for the
year ended June 2016 with the exception of the following
new accounting standards and amendments which were
mandatory for accounting periods beginning on or after 1
January 2016, none of which had any material impact on
the Group's results or financial position.
· IFRS 11 (amendments) Accounting for Acquisitions of Interests in Joint Operations (effective 1 January 2016)
· IAS 1 (amendments) Disclosure Initiative (effective from 1 January 2016)
· IAS 16 and IAS 38 (amendment) Clarification of Acceptable Methods of Depreciation and Amortisation (effective 1 January 2016)
· IAS 27 (amendments) Equity Method in Separate Financial Statements (effective from 1 January 2016)
· Annual Improvements to IFRSs 2014 (effective 1 January 2016)
Going Concern
The Group's business activities, together with the
factors likely to effect its future development,
performance and financial position, including its cash
flows and liquidity position are described in this
preliminary results announcement for the year ended 30
June 2017. The directors have formed the judgement that
there is reasonable expectation that the Group has
adequate resources to continue in operational existence
for the foreseeable future. As a result the directors
continue to adopt the going concern basis in the
preparation of the financial statements.
3 SEGMENTAL INFORMATION
The Group's continuing operations comprise one class of
business, that of qualified, professional and skilled
recruitment.
The Group's Management Board, which is regarded as the
chief operating decision maker, uses net fees by segment
as its measure of revenue in internal reports, rather
than use turnover. This is because net fees exclude the
remuneration of temporary workers, and payments to other
recruitment agencies where the Group acts as principal,
which are not considered relevant in allocating
resources to segments. The Group's Management Board
considers net fees for the purpose of making decisions
about allocating resources. The Group does not report
items below operating profit by segment in its internal
management reporting. The reconciliation of turnover to
net fees can be found in note 4.
(In £s million) 2017 2016
Net fees from continuing operations
Asia Pacific 230.9 176.1
Continental Europe & Rest of World 470.8 362.5
United Kingdom & Ireland 252.9 271.7
954.6 810.3
(In £s million) 2017 2016
Operating profit from continuing operations
Asia Pacific 69.3 50.2
Continental Europe & Rest of World 100.7 78.7
United Kingdom & Ireland 41.5 52.1
211.5 181.0
4 OPERATING PROFIT FROM CONTINUING OPERATIONS
The following costs are deducted from turnover to
determine net fees from continuing operations:
(In £s million) 2017 2016
Turnover 5,081.0 4,231.4
Remuneration of temporary workers (3,930.6) (3,236.5)
Remuneration of other recruitment agencies (195.8) (184.6)
Net fees 954.6 810.3
Operating profit is stated after charging the following
items to net fees of £954.6 million (2016: £810.3
million):
(In £s million) 2017 2016
Staff costs 563.0 476.3
Depreciation of property, plant and equipment 8.9 7.7
Amortisation of intangible assets 12.8 14.2
Operating lease rentals payable 42.1 34.0
Impairment loss on trade receivables 3.2 3.0
Auditor remuneration
- for statutory audit services 1.1 0.9
- for other services 0.7 0.7
Other external charges 111.3 92.5
743.1 629.3
5 NET FINANCE CHARGE
(In £s million) 2017 2016
Interest received on bank deposits 0.6 0.5
Interest payable on bank loans and overdrafts (2.7) (3.4)
Other interest payable (0.8) -
Interest unwind on acquisition liability (1.1) (0.9)
Pension Protection Fund levy (0.5) (0.3)
Net interest on pension obligations (2.4) (3.9)
Net finance charge (6.9) (8.0)
6 TAX
The income tax expense for the year can be reconciled to
the accounting profit as follows:
(In £s million) 2017 2016
Profit before tax from continuing operations 204.6 173.0
Income tax expense calculated at 19.75% (2016: 20.00%) (40.4) (34.6)
Net effect of items that are non-taxable/(non (4.2) (1.4)
-deductible) in determining taxable profit
Effect of unused tax losses not recognised as deferred (1.0) (1.5)
tax assets
Effect of tax losses not recognised as deferred tax 0.9 0.7
utilised in the year
Effect of other timing differences not recognised as (0.8) -
deferred tax assets
Effect of different tax rates of subsidiaries operating (19.3) (14.6)
in other jurisdictions
Effect of share-based payment charges and share options 0.1 (0.9)
(64.7) (52.3)
Adjustments recognised in the current year in relation 1.3 -
to the current tax of prior years
Adjustments to deferred tax in relation to prior years (2.1) 0.4
Income tax expense recognised in the Consolidated Income (65.5) (51.9)
Statement relating to continuing operations
Effective tax rate for the year on continuing operations 32.0% 30.0%
The tax rate used for the 2017 reconciliations above is
the corporate tax rate of 19.75% (2016: 20.00%) payable
by corporate entities in the United Kingdom on taxable
profits under tax law in that jurisdiction.
7 DIVIDENDS
The following dividends were paid by the Group and have
been recognised as distributions to equity shareholders
in the year:
2017 2016
pence per 2017 pence per 2016
share £s million share £s million
Previous year final dividend 1.99 28.7 1.89 26.9
Current year interim dividend 0.96 13.9 0.91 13.0
42.6 39.9
The following dividends have been paid/proposed by the
Group in respect of the accounting year presented:
2017 2016
pence per 2017 pence per 2016
share £s million share £s million
Interim dividend (paid) 0.96 13.9 0.91 13.0
Final dividend (proposed) 2.26 32.8 1.99 28.7
Special dividend (proposed) 4.25 61.6 - -
7.47 108.3 2.90 41.7
The final dividend for 2017 of 2.26 pence per share
(£32.8 million) along with a special dividend of 4.25
pence per share (£61.6 million) will be proposed at the
Annual General Meeting on 15 November 2017 and has not
been included as a liability as at 30 June 2017. If
approved, the final and special dividend will be paid on
17 November 2017 to shareholders on the register at the
close of business on 6 October 2017.
8 EARNINGS PER SHARE
Weighted
average
number of Per share
Earnings shares amount
For the year ended 30 June 2017 (£s million) (million) (pence)
Continuing operations:
Basic earnings per share from continuing operations 139.1 1,440.7 9.66
Dilution effect of share options - 18.1 (0.12)
Diluted earnings per share from continuing operations 139.1 1,458.8 9.54
Weighted
average
number of Per share
Earnings shares amount
For the year ended 30 June 2016 (£s million) (million) (pence)
Continuing operations:
Basic earnings per share from continuing operations 121.1 1,428.4 8.48
Dilution effect of share options - 19.0 (0.11)
Diluted earnings per share from continuing operations 121.1 1,447.4 8.37
Discontinued operations:
Basic earnings per share from discontinued operations 3.4 1,428.4 0.24
Dilution effect of share options - 19.0 (0.01)
Diluted earnings per share from discontinued operations 3.4 1,447.4 0.23
Continuing and discontinued operations:
Basic earnings per share from continuing and 124.5 1,428.4 8.72
discontinued operations
Dilution effect of share options - 19.0 (0.12)
Diluted earnings per share from continuing and 124.5 1,447.4 8.60
discontinued operations
The weighted average number of shares in issue for both
years exclude shares held in treasury.
9 RETIREMENT BENEFIT OBLIGATIONS
(In £s million) 2017 2016
Deficit in the scheme brought forward (14.3) (58.7)
Effect of settlement - (1.6)
Administration costs (2.2) (1.9)
Employer contributions (towards funded and unfunded 14.8 14.4
schemes)
Net interest expense (0.2) (2.0)
Remeasurement of the net defined benefit liability 1.7 35.5
Deficit in the scheme carried forward (0.2) (14.3)
10 PROVISIONS
(In £s million) Discontinued Continuing Total
At 1 July 2016 6.9 2.4 9.3
Utilised (0.3) (0.2) (0.5)
At 30 June 2017 6.6 2.2 8.8
(In £s million) 2017 2016
Current 2.6 3.1
Non-current 6.2 6.2
8.8 9.3
Discontinued provisions comprise potential exposures
arising as a result of the business disposals that were
completed in 2004, together with deferred employee
benefits relating to former employees.
Of the continuing and discontinued provisions that
remain, £2.6 million is expected to be paid in the next
12 months and it is not possible to estimate the timing
of the payments for the other items.
11 MOVEMENT IN NET CASH/(DEBT)
1 July Cash Exchange 30 June
(In £s million) 2016 flow movement 2017
Cash and cash equivalents 62.9 43.3 5.8 112.0
Bank loans and overdrafts (26.1) 25.8 (0.1) (0.4)
Net cash 36.8 69.1 5.7 111.6
The table above is presented as additional information
to show movement in net cash/(debt), defined as cash and
cash equivalents less bank loans and overdrafts.
The Group has a £210 million unsecured revolving credit
facility which expires in April 2020. The financial
covenants require the Group's interest cover ratio to be
at least 4:1 and its leverage ratio (net debt to EBITDA)
to be no greater than 2.5:1. The interest rate of the
facility is based on a ratchet mechanism with a margin
payable over LIBOR in the range of 0.90% to 1.55%.
At 30 June 2017, £210 million of the committed facility
was un-drawn.
12 LIKE-FOR-LIKE RESULTS
Like-for-like results represent organic growth of
continuing activities at constant currency.
For the year ended 30 June 2017 these are calculated as
follows:
(In £s million)
Net fees for the year ended 30 June 2016 810.3
Foreign exchange impact 93.7
Net fees for the year ended 30 June 2016 at constant 904.0
currency
Net fee increase resulting from organic growth 50.6
Net fees for the year ended 30 June 2017 954.6
Profit from operations for the year ended 30 June 2016 181.0
Foreign exchange impact 28.9
Profit from operations for the year ended 30 June 2016 209.9
at constant currency
Profit from operations increase resulting from organic 1.6
growth
Profit from operations for the year ended 30 June 2017 211.5
13 LIKE-FOR-LIKE RESULTS H1 VERSUS H2 ANALYSIS BY DIVISION
Net fee growth/(decline) Q1 Q2 H1 Q3 Q4 H2 FY
versus same period last year 2017 2017 2017 2017 2017 2017 2017
Asia Pacific 5% 7% 6% 12% 11% 11% 9%
Continental Europe & Rest of World 13% 8% 10% 18% 11% 15% 12%
United Kingdom & Ireland (10%) (10%) (10%) (4%) (5%) (4%) (7%)
Group 3% 2% 3% 10% 7% 8% 6%
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