REG - Robert Walters PLC - Final Results <Origin Href="QuoteRef">RWA.L</Origin> - Part 2

Robert WaltersAnnouncement

15/03/2017 07:07

- Part 2: For the preceding part double click  ID:nRSO4813Za 

       
                                                                                                                                                                                                                                                                                                                   5,410             4,688             
     Proposed final dividend for 2016 of 6.2p per share  (2015: 5.13p)                                                                                                                                                                                                                                             4,316             3,809             
                                                                                                                                                                                                                                                                                                                   
     The proposed final dividend of £4,316,000 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The final dividend, if approved, will be paid on 9 June 2017 to those shareholders on the register as at 19 May 2017.  
                                                                                                                                                                                                                                                                                                                   
 5.  Earnings per share                                                                                                                                                                                                                                                                                            
     The calculation of earnings per share is based on the profit for the year attributable to equity holders of the Parent and the weighted average number of shares of the Company.                                                                                                                              
     
                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                   2016              2015              
                                                                                                                                                                                                                                                                                                                   £'000             £'000             
     Profit for the year attributable to equity holders of the parent                                                                                                                                                                                                                                              19,897            15,290            
                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                   2016              2015              
                                                                                                                                                                                                                                                                                                                   Number of shares  Number of shares  
     Weighted average number of shares:                                                                                                                                                                                                                                                                                                                
     Shares in issue throughout the year                                                                                                                                                                                                                                                                           86,251,859        85,970,809        
     Shares issued in the year                                                                                                                                                                                                                                                                                     74,666            204,562           
     Shares cancelled in the year                                                                                                                                                                                                                                                                                  (1,652,089)       -                 
     Treasury and own shares held                                                                                                                                                                                                                                                                                  (12,799,910)      (12,018,059)      
     For basic earnings per share                                                                                                                                                                                                                                                                                  71,874,526        74,157,312        
     Outstanding share options and equity                                                                                                                                                                                                                                                                          6,470,656         7,540,850         
     For diluted earnings per share                                                                                                                                                                                                                                                                                78,345,182        81,698,162        
 
 
 6.  Intangible assets                         
                                               Goodwill  Computer software  Total    
                                               £'000     £'000              £'000    
     Cost:                                                                           
     At 1 January 2015                         7,984     8,191              16,175   
     Additions                                 -         2,058              2,058    
     Disposals                                 -         (295)              (295)    
     Foreign currency translation differences  (7)       (26)               (33)     
     At 31 December 2015                       7,977     9,928              17,905   
     Additions                                 -         2,172              2,172    
     Disposals                                 -         (1,170)            (1,170)  
     Foreign currency translation differences  111       265                376      
     At 31 December 2016                       8,088     11,195             19,283   
     Accumulated amortisation and impairment:                                        
     At 1 January 2015                         -         6,598              6,598    
     Charge for the year                       -         838                838      
     Disposals                                 -         (294)              (294)    
     Foreign currency translation differences  -         (25)               (25)     
     At 31 December 2015                       -         7,117              7,117    
     Charge for the year                       -         1,191              1,191    
     Disposals                                 -         (679)              (679)    
     Foreign currency translation differences  -         252                252      
     At 31 December 2016                       -         7,881              7,881    
     Carrying value:                                                                 
     At 1 January 2015                         7,984     1,593              9,577    
     At 31 December 2015                       7,977     2,811              10,788   
     At 31 December 2016                       8,088     3,314              11,402   
 
 
The carrying value of goodwill primarily relates to the acquisition of Talent
Spotter in China (£1,229,000) and the acquisition of the Dunhill Group in
Australia (£6,847,000). The historical acquisition cost of Talent Spotter was
£768,000, with the movement to the current carrying value a result of foreign
currency translation differences. Goodwill is tested annually for impairment,
or more frequently if there are indications that goodwill might be impaired.
The recoverable amount of the goodwill is based on value-in-use in perpetuity.
The key assumptions in the value-in-use are those regarding expected changes
to cash flow during the period, growth rates and the discount rates. 
 
Estimated cash flow forecasts are derived from the most recent financial
budgets and an assumed average growth rate of 5% for years two and three,
which does not exceed the long-term average potential growth rate of the
respective operations.  The forecast for revenue and costs as approved by the
Board reflect the latest industry forecasts and management expectations based
on past experience. 
 
The value of the cash flows is then discounted at a post-tax rate of 10.2%
(pre-tax rate of 14.5%), based on the Group's estimated weighted average cost
of capital and risk adjusted depending on the location of goodwill. The
weighted average cost of capital has also been adjusted for a terminal growth
rate, between 2-3% depending on location, for year four onwards. 
 
Management has undertaken sensitivity analysis taking into consideration the
impact in key assumptions. This included reducing the cash flow growth from
year two onwards by 0%, 10% and 20% in absolute terms. The sensitivity
analysis shows no impairment would arise under each scenario. 
 
 7.  Property, plant and equipment             
                                               Leasehold improvements£'000  Fixtures, fittings and office equipment£'000  Computer equipment£'000  Motor vehicles£'000  Total£'000  
     Cost:                                                                                                                                                                          
     At 1 January 2015                         6,806                        10,120                                        5,748                    18                   22,692      
     Additions                                 668                          2,100                                         1,159                    2                    3,929       
     Disposals                                 (865)                        (1,381)                                       (702)                    (2)                  (2,950)     
     Foreign currency translation differences  (15)                         (431)                                         (56)                     -                    (502)       
     At 31 December 2015                       6,594                        10,408                                        6,149                    18                   23,169      
     Additions                                 281                          1,758                                         802                      -                    2,841       
     Disposals                                 (75)                         (1,084)                                       (498)                    -                    (1,657)     
     Foreign currency translation differences  611                          1,495                                         689                      -                    2,795       
     At 31 December 2016                       7,411                        12,577                                        7,142                    18                   27,148      
                                                                                                                                                                                    
     Accumulated depreciation and impairment:                                                                                                                                       
     At 1 January 2015                         3,707                        6,250                                         4,569                    10                   14,536      
     Charge for the year                       746                          1,828                                         860                      4                    3,438       
     Disposals                                 (398)                        (1,188)                                       (645)                    (1)                  (2,232)     
     Foreign currency translation differences  (2)                          (256)                                         (55)                     0                    (313)       
     At 31 December 2015                       4,053                        6,634                                         4,729                    13                   15,429      
     Charge for the year                       707                          1,218                                         1,061                    2                    2,988       
     Disposals                                 (65)                         (937)                                         (480)                    -                    (1,482)     
     Foreign currency translation differences  502                          1,012                                         516                      (0)                  2,030       
     At 31 December 2016                       5,197                        7,927                                         5,826                    15                   18,965      
                                                                                                                                                                                    
     Carrying value:                                                                                                                                                                
     At 1 January 2015                         3,099                        3,870                                         1,179                    8                    8,156       
     At 31 December 2015                       2,541                        3,774                                         1,420                    5                    7,740       
     At 31 December 2016                       2,214                        4,650                                         1,316                    3                    8,183       
 
 
 8.  Trade and other receivables       
                                       2016     2015     
                                       £'000    £'000    
     Receivables due within one year:                    
     Trade receivables                 183,692  138,869  
     Other receivables                 8,970    12,640   
     Prepayments                       5,468    13,389   
     Accrued income                    38,377   26,951   
                                       236,507  191,849  
 
 
Included within prepayments and accrued income is a provision against the
cancellation of placements where a candidate may reverse their acceptance
prior to the start date. The value of this provision as of 31 December 2016 is
£1,716,000 (31 December 2015: £1,450,000).  The movement in this provision
during the year is a charge to administrative expenses in the income statement
of £266,000 (2015: £39,000). 
 
There is no material difference between the fair value and the carrying value
of the Group's trade and other receivables. 
 
 9.  Trade payables and other payables: amounts falling due within one year  
                                                                             2016     2015     
                                                                             £'000    £'000    
     Trade payables                                                          6,727    8,020    
     Other taxation and social security                                      24,529   19,628   
     Other payables                                                          22,489   19,246   
     Accruals and deferred income                                            124,263  93,012   
                                                                             178,008  139,906  
 
 
There is no material difference between the fair value and the carrying value
of the Group's trade and other payables. 
 
 10.  Bank overdrafts and loans                 
                                                2016    2015    
                                                £'000   £'000   
      Bank overdrafts and loans: current        40,070  25,573  
                                                40,070  25,573  
                                                                
      The borrowings are repayable as follows:                  
      Within one year                           40,070  25,573  
                                                40,070  25,573  
 
 
In January 2017, the Group renewed and extended to four years its committed
financing facility of £45.0m which expires in December 2020. At 31 December
2016, £38.9m (2015: £25.1m) was drawn down under this facility. 
 
The Group has a short-term facility of Renminbi 25m (£2.9m) of which Renminbi
10m (£1.2m) was drawn down as at 31 December 2016. The loan is secured against
cash deposits in Hong Kong. 
 
The Directors estimate that the fair value of all borrowings is not materially
different from the amounts stated in the Consolidated Balance Sheet of
£40,070,000 (2015: £25,573,000). 
 
 11.  Notes to the cash flow statement                                         
                                                                               2016      2015      
                                                                               £'000     £'000     
      Operating profit                                                         26,242    23,103    
      Adjustments for:                                                                             
      Depreciation and amortisation charges                                    4,179     4,276     
      Loss on disposal of property, plant and equipment and computer software  666       719       
      Charge in respect of share-based payment transactions                    4,590     4,656     
      Operating cash flows before movements in working capital                 35,677    32,754    
      Increase in receivables                                                  (29,634)  (25,711)  
      Increase in payables                                                     31,135    16,171    
      Cash generated from operating activities                                 37,178    23,214    
 
 
 12.  Reconciliation of net cash flow to movement in net funds                     
                                                                2016      2015     
                                                                £'000     £'000    
      Increase in cash and cash equivalents in the year         10,428    5,589    
      Cash flow from increase in bank loans                     (14,350)  (1,672)  
      Foreign currency translation differences                  8,649     (415)    
      Movement in net cash in the year                          4,727     3,504    
      Net cash at beginning of year                             17,805    14,301   
      Net cash at end of year                                   22,532    17,805   
 
 
Net cash is defined as cash and cash equivalents less bank loans. 
 
This information is provided by RNS
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