REG - Hays PLC - Half Yearly Report <Origin Href="QuoteRef">HAYS.L</Origin> - Part 2
24/02/2016 07:10
- Part 2: For the preceding part double click ID:nRSX9281Pa
Operating profit from continuing operations 2 86.3 81.5 164.1
Finance income 3 0.3 0.3 0.5
Finance cost 3 (4.2) (4.5) (8.5)
Profit before tax 82.4 77.3 156.1
Tax 4 (25.5) (25.9) (50.7)
Profit from continuing operations after tax 56.9 51.4 105.4
Profit from discontinued operations - - 0.2
Profit attributable to equity holders of the parent Company 56.9 51.4 105.6
Earnings per share from continuing operations
- Basic 6 3.99p 3.64p 7.44p
- Diluted 6 3.94p 3.59p 7.31p
Earnings per share from continuing and discontinued operations
- Basic 6 3.99p 3.64p 7.46p
- Diluted 6 3.94p 3.59p 7.33p
(1) Net fees comprise turnover less remuneration of temporary workers and other recruitment agencies.
Condensed Consolidated Statement of Comprehensive Income
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Profit for the period 56.9 51.4 105.6
Items that will not be reclassified subsequently to profit or loss:
Actuarial remeasurement of defined benefit pension schemes (29.3) (54.5) (25.8)
Tax relating to components of other comprehensive income 5.7 11.1 6.3
(23.6) (43.4) (19.5)
Items that may be reclassified subsequently to profit or loss:
Currency translation adjustments 11.6 (7.8) (31.3)
Mark to market valuation of derivative financial instruments - 0.1 0.1
Other comprehensive income for the period net of tax (12.0) (51.1) (50.7)
Total comprehensive income for the period 44.9 0.3 54.9
Attributable to equity shareholders of the parent Company 44.9 0.3 54.9
Condensed Consolidated Balance Sheet
31 December 31 December 30 June
2015 2014 2015
(In £'s million) Note (unaudited) (unaudited) (audited)
Non-current assets
Goodwill 204.3 206.2 198.4
Other intangible assets 24.5 32.6 29.8
Property, plant and equipment 18.0 17.1 15.6
Deferred tax assets 36.3 44.8 36.4
283.1 300.7 280.2
Current assets
Trade and other receivables 628.6 533.6 600.5
Cash and cash equivalents 64.4 56.5 69.8
693.0 590.1 670.3
Total assets 976.1 890.8 950.5
Current liabilities
Trade and other payables (435.2) (394.9) (478.7)
Current tax liabilities (20.1) (23.2) (19.5)
Bank loans and overdrafts (0.5) (0.7) (0.5)
Provisions 8 (2.9) (3.1) (3.0)
(458.7) (421.9) (501.7)
Non-current liabilities
Bank loans (120.0) (135.0) (100.0)
Acquisition liabilities (9.7) (8.2) (8.6)
Retirement benefit obligations 7 (82.7) (92.9) (58.7)
Provisions 8 (11.9) (12.0) (11.9)
(224.3) (248.1) (179.2)
Total liabilities (683.0) (670.0) (680.9)
Net assets 293.1 220.8 269.6
Equity
Called up share capital 14.7 14.7 14.7
Share premium 369.6 369.6 369.6
Capital redemption reserve 2.7 2.7 2.7
Retained earnings (123.3) (206.6) (138.2)
Cumulative translation reserve 13.7 25.6 2.1
Other reserves 15.7 14.8 18.7
Total shareholders' equity 293.1 220.8 269.6
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2015
(In £'s million) Share capital Share premium account Capital redemption reserve Retained earnings Cumulative translation reserve Other reserves Total
At 1 July 2015 14.7 369.6 2.7 (138.2) 2.1 18.7 269.6
Currency translation adjustments - - - - 11.6 - 11.6
Remeasurement of defined benefit pension schemes - - - (29.3) - - (29.3)
Tax relating to components of other comprehensive income - - - 5.7 - - 5.7
Net expense recognised in other comprehensive income - - - (23.6) 11.6 - (12.0)
Profit for the period - - - 56.9 - - 56.9
Total comprehensive income for the period - - - 33.3 11.6 - 44.9
Dividends paid - - - (26.9) - - (26.9)
Share-based payments - - - 8.5 - (3.0) 5.5
At 31 December 2015 (unaudited) 14.7 369.6 2.7 (123.3) 13.7 15.7 293.1
For the six months ended 31 December 2014
(In £'s million) Share capital Share premium account Capital redemption reserve Retained earnings Cumulative translation reserve Other reserves Total
At 1 July 2014 14.7 369.6 2.7 (197.7) 33.4 18.0 240.7
Currency translation adjustments - - - - (7.8) - (7.8)
Mark to market valuation of derivative financial instruments - - - - - 0.1 0.1
Remeasurement of defined benefit pension schemes - - - (54.5) - - (54.5)
Tax relating to components of other comprehensive income - - - 11.1 - - 11.1
Net expense recognised in other comprehensive income - - - (43.4) (7.8) 0.1 (51.1)
Profit for the period - - - 51.4 - - 51.4
Total comprehensive income for the period - - - 8.0 (7.8) 0.1 0.3
Dividends paid - - - (25.6) - - (25.6)
Share-based payments - - - 8.7 - (3.3) 5.4
At 31 December 2014 (unaudited) 14.7 369.6 2.7 (206.6) 25.6 14.8 220.8
For the year ended 30 June 2015
(In £'s million) Share capital Share premium account Capital redemption reserve Retained earnings Cumulative translation reserve Other reserves Total
At 1 July 2014 14.7 369.6 2.7 (197.7) 33.4 18.0 240.7
Currency translation adjustments - - - - (31.3) - (31.3)
Mark to market valuation of derivative financial instruments - - - - - 0.1 0.1
Remeasurement of defined benefit pension schemes - - - (25.8) - - (25.8)
Tax relating to components of other comprehensive income - - - 6.3 - - 6.3
Net expense recognised in other comprehensive income - - - (19.5) (31.3) 0.1 (50.7)
Profit for the period - - - 105.6 - - 105.6
Total comprehensive income for the period - - - 86.1 (31.3) 0.1 54.9
Dividends paid - - - (37.9) - - (37.9)
Share-based payments - - - 10.5 - 0.6 11.1
Deferred tax on share-based payment transactions - - - 0.8 - - 0.8
At 30 June 2015 (audited) 14.7 369.6 2.7 (138.2) 2.1 18.7 269.6
Condensed Consolidated Cash Flow Statement
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) Note (unaudited) (unaudited) (audited)
Operating profit from continuing operations 86.3 81.5 164.1
Adjustments for:
Depreciation of property, plant and equipment 3.9 4.4 8.7
Amortisation of intangible fixed assets 7.6 7.0 13.7
Profit on disposal of property, plant and equipment (0.1) - -
Net movements in provisions and other items (0.3) (0.3) (0.5)
Share-based payments 6.0 6.0 10.8
17.1 17.1 32.7
Operating cash flow before movement in working capital 103.4 98.6 196.8
Changes in working capital (69.5) (20.1) (7.1)
Cash generated by operations 33.9 78.5 189.7
Pension scheme deficit funding (7.2) (7.0) (14.0)
Income taxes paid (19.6) (19.7) (43.6)
Net cash inflow from operating activities 7.1 51.8 132.1
Investing activities
Purchase of property, plant and equipment (6.1) (4.1) (7.8)
Proceeds from sales of business and related assets 0.1 - 0.2
Purchase of intangible assets (2.0) (2.9) (4.3)
Acquisition of subsidiary - (29.3) (35.7)
Cash paid in respect of acquisitions made in previous years - (1.7) (1.6)
Interest received 0.2 0.3 0.5
Net cash used in investing activities (7.8) (37.7) (48.7)
Financing activities
Interest paid (1.7) (2.8) (5.7)
Equity dividends paid (26.9) (25.6) (37.9)
Proceeds from exercise of share options 0.6 0.3 1.8
Increase/(decrease) in bank loans and overdrafts 20.0 25.0 (10.2)
Net cash used in financing activities (8.0) (3.1) (52.0)
Net (decrease)/increase in cash and cash equivalents (8.7) 11.0 31.4
Cash and cash equivalents at beginning of period 69.8 48.0 48.0
Effect of foreign exchange rate movements 3.3 (2.5) (9.6)
Cash and cash equivalents at end of period 9 64.4 56.5 69.8
(In £'s million) Note
Bank loans and overdrafts at beginning of period (100.5) (110.7) (110.7)
(Increase)/decrease in period (20.0) (25.0) 10.2
Bank loans and overdrafts at end of period (120.5) (135.7) (100.5)
Net debt at end of period 9 (56.1) (79.2) (30.7)
Condensed Consolidated Statement of Changes in Equity - Other Reserves
For the six months ended 31 December 2015
Own Equity Hedging
(In £'s million) shares reserve reserve Total
At 1 July 2015 - 18.7 - 18.7
Share-based payments - (3.0) - (3.0)
At 31 December 2015 (unaudited) - 15.7 - 15.7
For the six months ended 31 December 2014
Own Equity Hedging
(In £'s million) shares reserve reserve Total
At 1 July 2014 (0.2) 18.3 (0.1) 18.0
Mark to market valuation of derivative financial instruments - - 0.1 0.1
Net income recognised in other comprehensive income - - 0.1 0.1
Share-based payments 0.1 (3.4) - (3.3)
At 31 December 2014 (unaudited) (0.1) 14.9 - 14.8
For the year ended 30 June 2015
Own Equity Hedging
(In £'s million) shares reserve reserve Total
At 1 July 2014 (0.2) 18.3 (0.1) 18.0
Mark to market valuation of derivative financial instruments - - 0.1 0.1
Net income recognised in other comprehensive income - - 0.1 0.1
Share-based payments 0.2 0.4 - 0.6
At 30 June 2015 (audited) - 18.7 - 18.7
1 Basis of preparation
The condensed consolidated interim financial statements ("interim financial statements") are the results for the six months ended 31 December 2015. The interim financial
statements have been prepared under International Financial Reporting Standards ("IFRS") as adopted by the European Union, in accordance with International Accounting
Standard 34 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the Financial Conduct Authority. They are unaudited but have been reviewed by the
auditors and their report is attached.
The interim financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006 as they do not include all of the information
required for full statutory accounts. The interim financial statements should be read in conjunction with the statutory accounts for the year ended 30 June 2015, which
were prepared in accordance with IFRS as adopted by the European Union and have been filed with the Registrar of Companies. The auditors' report on those accounts was
unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Accounting policies
The interim financial statements have been prepared on the basis of the accounting policies and methods of computation applicable for the year ended 30 June 2015. These
accounting policies are consistent with those applied in the preparation of the financial statements for the year ended 30 June 2015 except as where stated below.
The fair value of trade receivables, trade payables, financial assets, bank loans and overdraft is not materially different to their book value.
The following are new standards or improvements to existing standards that are mandatory for the first time in the Group's accounting period beginning on 1 July 2015 and
no new standards have been early adopted. The Group's December 2015 interim financial statements have adopted these amendments to IFRS with no significant impact on the
Group's financial performance or position:
Ÿ IAS 19 (amendments) Employee Benefits (EU adoption from 1 February 2015)
Ÿ Annual Improvements to IFRSs 2012 (EU adoption from 1 February 2015)
Ÿ Annual Improvements to IFRSs 2013 (EU adoption from 1 January 2015)
There have been no alterations made to the accounting policies as a result of considering all of the above amendments that became effective in the period.
1 Basis of preparation continued
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 the Half
Year Report.
The Group has an unsecured revolving credit
facility of £210 million that expires in April
2020. The Group uses the facility to manage
its day-to-day working capital requirements as
appropriate. As at 31 December 2015, £90
million of the committed facility was un
-drawn.
The Group's facility, together with internally
generated cash flows, will continue to provide
sufficient sources of liquidity to fund its
current operations, including contractual and
commercial commitments, future growth and any
proposed dividends. Therefore the Group is
well placed to manage its business risks,
despite the current uncertain economic
outlook.
The directors have formed the judgement, at
the time of approving the interim financial
statements, that there is reasonable
expectation that the Group has adequate
resources to continue in operational existence
for the foreseeable future. For this reason,
the directors continue to adopt the going
concern basis in preparing the interim
financial statements.
2 Segmental information
IFRS 8, Operating Segments
IFRS 8 requires operating segments to be
identified on the basis of internal reports
about components of the Group that are
regularly reviewed by the chief operating
decision maker to allocate resources to the
segment and to assess their performance.
As a result, the Group continues to segment
the business into three regions, Asia Pacific,
Continental Europe & Rest of World, and United
Kingdom & Ireland. There is no material
difference between the segmentation of the
Group's turnover by geographic origin and
destination.
The Group's continuing operations comprise one
class of business, that of qualified,
professional and skilled recruitment.
Net fees and profit from continuing operations
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 full detail of these items can
be seen in the Income Statement.
Net fees and profit from continuing operations
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Net fees
Asia Pacific 84.4 91.4 178.5
Continental Europe & Rest of World 173.1 157.4 313.8
United Kingdom & Ireland 139.4 135.1 271.9
396.9 383.9 764.2
Operating profit from continuing operations
Asia Pacific 23.2 25.2 49.7
Continental Europe & Rest of World 37.8 35.2 68.7
United Kingdom & Ireland 25.3 21.1 45.7
86.3 81.5 164.1
3 Finance income and finance cost
Finance income
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Interest on bank deposits 0.3 0.3 0.5
Finance cost
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Interest payable on bank loans and overdrafts (1.6) (2.7) (4.6)
Interest unwind on acquisition liability (0.5) - (0.4)
Pension Protection Fund levy (0.2) (0.3) (0.5)
Net interest on pension obligations (1.9) (1.5) (3.0)
(4.2) (4.5) (8.5)
Net finance charge (3.9) (4.2) (8.0)
4 Tax on ordinary activities
The Group's consolidated effective tax rate in respect of continuing operations for the six months to 31 December 2015 is based on the estimated effective tax rate for the full year of 31.0% (31 December 2014: 33.5%, 30 June 2015: 32.5%).
5 Dividends
The following dividends were paid by the Group and have been recognised as distributions to equity shareholders in the year:
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Final dividend for the year ended 30 June 2014 of 1.80 pence per share - 25.6 25.6
Interim dividend for the period to 31 December 2014 of 0.87 pence per share - - 12.3
Final dividend for the year ended 30 June 2015 of 1.89 pence per share 26.9 - -
26.9 25.6 37.9
The interim dividend for the period ended 31 December 2015 of 0.91 pence per share is not included as a liability in the balance sheet as at 31 December 2015.
6 Earnings per share
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Earnings from continuing operations 82.4 77.3 156.1
Tax on earnings from continuing operations (25.5) (25.9) (50.7)
Basic earnings 56.9 51.4 105.4
Number of shares (million):
Weighted average number of shares 1,424.7 1,413.5 1,416.4
Dilution effect of share options 18.8 17.0 24.5
Weighted average number of shares used for diluted EPS 1,443.5 1,430.5 1,440.9
From continuing operations:
Basic earnings per share 3.99p 3.64p 7.44p
Diluted earnings per share 3.94p 3.59p 7.31p
From continuing and discontinued operations:
Basic earnings per share 3.99p 3.64p 7.46p
Diluted earnings per share 3.94p 3.59p 7.33p
7 Retirement benefit obligations
Six months to Six months to Year to
31 December 31 December 30 June
2015 2014 2015
(In £'s million) (unaudited) (unaudited) (audited)
Deficit in the scheme brought forward (58.7) (43.9) (43.9)
Current service cost (0.9) (0.6) (1.3)
Employer contributions 7.2 7.0 14.0
Net interest expense (1.0) (0.9) (1.7)
Remeasurement of the net defined benefit liability (29.3) (54.5) (25.8)
Deficit in the scheme carried forward (82.7) (92.9) (58.7)
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