REG - Robert Walters PLC - FY23 results
07/03/2024 07:00
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RNS Number : 9165F Robert Walters PLC 07 March 2024
7 March 2024
ROBERT WALTERS PLC
(the "Company", or the "Group")
Results for the year ended 31 December 2023
Resilient performance underpinned by international diversification
Robert Walters plc (LSE: RWA), the international specialist professional
recruitment group, today announces its results for the year ended 31 December
2023.
Financial summary
2023 2022 Change Constant currency change*
Gross profit (net fee income) £386.8m £428.2m (10%) (8%)
Operating profit £26.3m £58.2m (55%) (52%)
Conversion rate %** 6.8% 13.6% (680) bps n/a
Profit before taxation £20.8m £55.6m (63%) (60%)
Basic earnings per share 20.1p 56.2p (64%) n/a
Ordinary dividend per share 23.5p 23.5p - n/a
Net cash £79.9m £97.1m (18%) n/a
* Constant currency is calculated by applying prior year exchange rates to
local currency results for the current and prior years.
**Conversion rate is calculated by expressing operating profit as a proportion
of net fee income.
Group highlights
§ Group net fee income down 8%* to £386.8m against a record prior year
comparative, driven by softening macro-economic conditions in many of the
Group's markets as the year progressed.
§ In recruitment, contract and interim (together "Temporary") demonstrated
good resilience (up 2%*) and accounted for 27% of net fee income (2022: 24%).
Permanent performance (down 10%*) was more impacted as organisations sought
out greater flexibility in their talent needs.
§ In outsourcing (delivered through Resource Solutions), net fee income was
down 15%*, reflecting account losses as greater focus applied to driving
required financial returns.
§ Highly internationally diversified fee income, with no single country
accounting for more than a sixth of Group net fee income and 84% of Group net
fee income derived outside of the UK (2022: 83%).
§ Operating profit down to £26.3m (2022: £58.2m), reflecting the operating
leverage impact of lower net fee income.
§ Conversion rate improved to 8.2% during the second half (H1: 5.5%),
reflecting management actions taken to manage the Group's cost base.
§ Headcount down 9% year-on-year to 3,980 at period end (31 December 2022:
4,356), reflecting balanced approach to maintain core consultant capacity in
most resilient markets.
§ Continued progress in the rollout of the Group's customer relationship
management ("CRM") solution, which was live across 50% of the Group's markets
(by number of countries) as at the year end.
§ Year-end net cash of £79.9m (31 December 2022: £97.1m), driven by cash
conversion(1) of 207% (2022: 102%) and after returning c.£26m to shareholders
during the year in ordinary dividends and share buybacks.
§ Proposed final dividend of 17.0p per share, taking the total dividend for
the year to 23.5p per share (2022: 23.5p), underpinned by internationally
diversified business model, good cash generation and balance sheet strength.
Regional highlights
§ Asia-Pacific (43% of Group net fee income): net fee income down 9%*.
Resilient performance in Japan (down 1%*), while conditions remained
challenging in Australia (down 19%*). Performance in Mainland China stabilised
in the second half of the year.
§ Europe (33% of Group net fee income): net fee income flat*. Belgium
performed extremely well with a second consecutive record net fee income
performance (up 21%*), and good growth also delivered in Germany (up 8%*).
Meanwhile, hiring markets were weaker in France (down 3%*) and the Netherlands
(down 5%*), albeit against a record comparative in both countries.
§ UK (16% of Group net fee income): net fee income down 18%. London
recruitment (down 29%) impacted by financial services and technology
retrenchment, whilst recruitment in the regions (down 7%) was more resilient.
§ Rest of World (8% of Group net fee income): net fee income down 12%*.
Weakness in North America (down 40%*) driven by technology sector, partially
offset by growth in Mexico (up 68%*) and South Africa (up 38%*).
Toby Fowlston, Chief Executive, said:
"In what was a challenging year right across our industry, I'm very proud of
the contributions of our people over the last 12 months. The international
diversification of our business underpinned our resilient performance in 2023,
despite labour demand contracting sharply across our markets. We have begun to
undertake initiatives to significantly strengthen our business, which we
expect to gain further traction over the medium-term.
Our collective experience trading through previous market cycles tells us that
when conditions do improve, the inflection can be rapid, and we therefore have
strong conviction in our decision to maintain our core consultant capacity,
whilst sensibly managing our cost base."
Results presentation
The Company will host a results presentation webcast at 10:30am today. The
live webcast of the presentation will be available at the following link:
https://brrmedia.news/RWA_FY23 (https://brrmedia.news/RWA_FY23)
A recording of the presentation and accompanying conference call will be
available on the Company's website within 24 hours of the event.
Next news flow
The Company will publish a trading update for the first quarter ending 31
March 2024 on Tuesday 16 April 2024.
(1)Cash conversion expressed as cash generated from operating activities
divided by operating profit
Enquiries
Robert Walters plc
Toby Fowlston - Chief Executive Officer
David Bower - Chief Financial Officer
Dami Tanimowo - Head of Investor Relations +44 (0) 7340 660 425
dami.tanimowo@robertwalters.com (mailto:dami.tanimowo@robertwalters.com)
Williams Nicolson (Media enquiries)
Steffan Williams +44 (0) 7767 345 563
Ashia Razzaq +44 (0) 7979 324 998
rw@williamsnicolson.com (mailto:rw@williamsnicolson.com)
About Robert Walters Group
The Robert Walters Group is a market-leading international specialist
professional recruitment group with over 3,900 staff spanning 31 countries. We
specialise in the placement of the highest calibre professionals across the
disciplines of accountancy and finance, banking, engineering, HR, healthcare,
IT, legal, sales, marketing, secretarial and support and supply chain,
logistics and procurement. Our client base ranges from the world's leading
blue-chip corporates and financial services organisations through to SMEs and
start-ups. The Group's outsourcing business, Resource Solutions, serves the
recruitment process outsourcing and managed services markets.
www.robertwaltersgroup.com (http://www.robertwaltersgroup.com)
Forward looking statements
This announcement contains certain forward-looking statements. These
statements are made by the directors in good faith based on the information
available to them at the time of their approval of this announcement and such
statements should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any such
forward-looking information.
Robert Walters plc
Results for the year ended 31 December 2023
Chief Executive's Statement
2023 was a challenging year in most hiring markets globally. For a talent
partner with a presence in such a breadth of geographical markets as Robert
Walters, this perhaps made the last year unlike any other that has preceded it
in terms of the sharp correction in market conditions. 2022 had already seen
geopolitical volatility and uncertainty, combined with pent-up consumer demand
following the lifting of most Covid-19 restrictions globally, start to drive
significantly higher inflation. In 2023 we saw the anticipated bounce-back in
the Chinese economy fail to materialise, and consolidation of a sharply rising
interest rate cycle across many countries, with a resultant cooling in global
labour markets.
Against this context I'm very proud of the resilience our business has
demonstrated, with Group net fee income down 8%* on a record prior year
comparative, and profit before tax of £20.8m. One of the great strengths of
this business is the extent of our international diversification. This
diversification has meant that, even in a tough year such as this one, we've
seen some strong performances in our portfolio. Europe held net fee income
flat* versus the prior year. Within this, our Belgian business was the
standout performer. In Belgium we have strong contract and interim
businesses alongside permanent in the mix, and Belgium not only recorded
double-digit* year-on-year growth in each quarter of 2023, it also grew
sequentially quarter-on-quarter through the year - a fantastic performance. We
continue to have a very strong position in Japan, the second largest hiring
market globally. The hyper-specialisation of that business means we are able
to pivot to serve the most appealing sectors of the market as and when we
detect signs of growth, and that contributed to a resilient performance, with
net fee income marginally down (by 1%*) on a record prior year.
Continued focus on people
I cannot overstate how much a business like ours is, fundamentally, powered by
our people. We are, of course, inextricably tied to global macro-economic
shifts, and a key competency for our business is anticipating, understanding
and exploiting those. However, more than any other source of intelligence, we
rely on our consultants, and the close relationships they have with clients
and candidates, to help us achieve success year after year. Furthermore, the
centricity of people to our business model is seen when you step back and
consider what specialist recruitment is: being a trusted partner to clients
and candidates, supporting them through some of the most consequential events
in their professional lives - moments that really matter.
That explains our conviction as a business, proven through historical market
cycle troughs, that maintaining our core consultant capacity, of course
balanced against sensible management of our cost base, continues to be the
right strategy. In particular, we have maintained our core 'muscle' in those
markets that excite us most, and we have let natural attrition flow through on
those fee earner cohorts that are typically less productive. Looking out over
the rest of 2024, we will continue to maintain this balanced and data-driven
approach, ensuring we remain rightsized to capture opportunities as and when
they are presented.
Continued focus on technology
2023 has also been a year in which, as a society, perhaps more than ever in
the recent past, we've started to look ahead to the potential changes that
technology, in particular, generative artificial intelligence ("AI"), can
unleash.
We are clear that, for a business like ours, application of AI is all about
helping our people do what they do best - build strong relationships that
enable them to be trusted partners to their clients and candidates. It's been
exciting to gauge the growing awareness that our people have of the potential
of AI to make them even more effective partners. That has seen over 1,000 of
our people join together as "AI trailblazers", engaging with our own private
version of Microsoft Azure Open AI Studio to propose, test and refine specific
AI use cases for our business. Increasingly, our consultants are incorporating
AI to enhance job adverts and assist with sales outreach to name just a few
examples. This is only set to gain further traction over 2024.
The other key technology focus during the year has been on our internally
developed CRM solution. Following its initial deployment on a minimum viable
product basis in the UAE in 2021, and the learnings from that deployment then
being taken on in 2022, it was great to see the rollout gather momentum in
2023 such that the new CRM is now being used in 50% of the Group's markets.
The new CRM solution is specifically built for how we function as a business
and gives us a greater degree of future flexibility compared to an "off the
shelf" solution. Additionally, it is supporting our consultants in completing
core CRM activities, on average, two-and-a-half times quicker than on the
legacy system. Everything we've learnt so far is being incorporated into
future rollouts, and this stands us in excellent stead as we target having the
majority of our consultants migrated onto the new CRM by the end of 2024.
Looking further ahead
My 25 years with the Group, both in the UK and across the Asia-Pacific region,
as a consultant and then at increasing levels of leadership, has enabled me to
see what a fantastic platform we have. We have a strong long-run track record
of growth ahead of that of our key markets, we are amongst the most
internationally diversified of our peer group - with no single country market
accounting for more than a sixth of Group net fee income, and we benefit from
incredibly strong brand equity that is synonymous in our clients' minds with
the specialist professional segment that we serve.
In my new role as Group CEO, and with this great platform in place, what
really excites me are the opportunities to drive an improvement in
performance, ensuring the business is well-positioned for the shifts in the
world of work that are already underway. We are clear there is more value we
can add for our clients and candidates by leveraging the Robert Walters brand
further across our three key offerings of recruitment, outsourcing and
advisory - and we will start to grasp this opportunity in 2024. Additionally,
and reflecting the desire of the talent they need to attract, organisations
will increasingly require products and solutions from a trusted talent partner
like Robert Walters to help them successfully navigate and win in the
sustainable world of work. As such, it was highly satisfying for our
pioneering 'ESG for HR' consultancy solution to be recognised at the TALiNT
International Annual Recruitment Awards. Furthermore, bringing greater focus
to bear on our conversion of net fee income to operating profit, and beginning
to execute against a set of initiatives to deliver this, is a key focus for
the medium-term. Underpinning all of this will be an unwavering commitment to
keeping the needs of clients and candidates firmly at the heart of what we do.
In summary, I couldn't be prouder to lead such a great business and, together
with all of our people, I'm excited by the opportunity we have to deliver for
our clients and candidates in the year ahead.
2024 outlook
During the first few weeks of 2024, trading conditions across the Group's
markets have, consistent with the end of 2023, remained muted - albeit with
some isolated pockets of growth. We have begun to undertake initiatives to
significantly strengthen our business, which we expect to gain further
traction over the medium-term and which we will set out in more detail at a
Capital Markets Day in the autumn.
Our collective experience trading through previous market cycles tells us that
when conditions do improve, the inflection can be rapid, and we therefore have
strong conviction in our decision to maintain our core consultant capacity,
whilst sensibly managing our cost base.
Toby Fowlston
Chief Executive Officer
7 March 2024
Operating review
Asia Pacific (43% of Group net fee income)
The Group's Asia-Pacific business comprises the recruitment offering in
North-East Asia (Japan and South Korea), Australia & New Zealand,
South-East Asia (Indonesia, Malaysia, Philippines, Singapore, Thailand and
Vietnam) and Greater China (Mainland China, Hong Kong and Taiwan), as well as
the region-wide outsourcing and advisory offering through Resource Solutions.
Resource Solutions accounted for 11% of Asia-Pacific 2023 net fee income.
£m 2023 2022 % Change % Change (constant currency*)
Net fee income 167.9 193.8 (13%) (9%)
Of which Resource Solutions 18.8 22.0 (14%) (13%)
Operating profit 19.3 37.5 (48%) (45%)
Conversion rate 11.5% 19.3% (780) bps n/a
Net fee income was down 9%* year-on-year, most notably driven by Australia
(-19%*) and Greater China (-19%*). North-East Asia (flat*) delivered a more
resilient performance.
The Australia business was impacted by the notable cooling through the year in
the wider Australian hiring market - a more material drop-off versus the 2022
peak activity levels than seen in other regional markets. Lower levels of
client confidence drove some larger clients to markedly slow or even pause
hiring during the year, leading to lower activity levels as a result.
Performance in Greater China did contrast slightly between H1 and H2, with
notably impacted performance in the first half stabilising somewhat in the
second half. The anticipated bounce back in activity in the wider economy from
the late 2022 relaxation of Covid-19 control measures did not materialise, as
evidenced by three consecutive months of contracting manufacturing activity
(measured by PMI surveys) as the first half came to a close. The rate of
decline moderated in the second half, with Mainland China H2 net fee income
down 10%* year-on-year (H1: -40%*).
North-East Asia, the majority of which is the Japan business, registered the
most resilient performance throughout Asia-Pacific, with H1 net fee income
down 2%*, improving to growth of 1%* in the second half. Well-positioned to
serve the needs of the highly developed Japanese hiring market - the second
largest hiring market globally - and reflecting the competitive
differentiation of the Robert Walters brand, the Japan business has a breadth
of discipline specialisms, enabling it to pivot to service parts of the market
seeing the most attractive growth.
Europe (33% of Group net fee income)
The Group's Europe business largely comprises the recruitment offering in
Northern Europe (Belgium, France, Germany, Republic of Ireland, the
Netherlands and Switzerland) and Southern Europe (Italy, Portugal and Spain).
Outsourcing and advisory services through Resource Solutions accounted for 1%
of 2023 Europe net fee income.
£m 2023 2022 % Change % Change (constant currency*)
Net fee income 126.3 124.1 2% 0%
Of which Resource Solutions 1.4 1.9 (28%) (31%)
Operating profit 11.4 17.6 (35%) (37%)
Conversion rate 9.0% 14.2% (520) bps n/a
Net fee income was flat* year-on-year, with an outstanding result in Belgium
(up 21%*), strong performance in Germany (up 8%*) and good momentum in the
nascent Italy business (office opened Q2 2022) offset by a more challenging
market backdrop in the Group's largest European businesses of France (down
3%*) and the Netherlands (down 5%*), particularly during the second half of
the year.
Belgium was the standout performer in Europe, and the Group, during 2023, with
trading momentum accelerating as the year progressed (H1: up 14%*, H2: up
28%*) notably driven by its interim business which places mid to senior-level
talent. The German business also performed strongly, recording its highest
ever net fee income performance (against an already record 2022) and taking
opportunities to grow its coverage following the opening of the Berlin office
during 2022.
Meanwhile, in France and the Netherlands, good first half net fee income
growth (up 3%* in France, up 4%* in the Netherlands) gave way to a weaker
second half performance (France: H2 down 9%*, Netherlands: H2 down 13%*). The
combination of higher inflation and a lower growth macro-economic outlook
served to increase caution and hesitancy among both clients and candidates.
Nevertheless, as is true of other developed hiring markets globally, the
French and Dutch labour markets remain very tight and extremely favourable for
the highest skilled candidates who continue to be sought after.
UK (16% of Group net fee income)
The Group's UK business comprises the recruitment offering in London and the
regions, and outsourcing and advisory through Resource Solutions. The Resource
Solutions segment is the most material in the UK of any of the Group's
reportable segments, accounting for more than 50% of 2023 net fee income.
£m 2023 2022 % Change
Net fee income 60.9 74.0 (18%)
Of which Resource Solutions 34.3 41.1 (16%)
Operating (loss)/ profit (0.4) 3.4 n/m
Conversion rate (0.7%) 4.6% (530) bps
Net fee income was down 18% year-on-year, with recruitment in London (down
29%) having the most challenging performance, recruitment in the regions
seeing more resilience (down 7%) and Resource Solutions down 16%.
London recruitment was not immune to the more challenging sectoral backdrop
for the financial services and technology industries. Much lower levels of
venture capital funding for technology start-ups acted as both a headwind on
new vacancies, as well as driving job losses - with both client and candidate
confidence severely impacted as a result. The legal and accounting disciplines
held up better in London, albeit both saw some further softening in the second
half compared to the first.
Performance in the regions was fairly even across the year, underpinned by
accounting - where the Robert Walters brand has a long-developed specialism
and is recognised as such by clients.
Under new leadership as 2023 closed, the UK business will sharpen focus on
productivity and cost management, whilst seeking to take further share across
its key disciplines as market conditions continue to favour stronger players.
Rest of World (8% of Group net fee income)
The Group's Rest of World business comprises the recruitment offering in North
America (Canada and USA), South America (Brazil, Chile and Mexico), the Middle
East and South Africa, as well as the region-wide outsourcing and advisory
offering through Resource Solutions. Resource Solutions accounted for 40% of
Rest of World 2023 net fee income.
£m 2023 2022 % Change % Change (constant currency*)
Net fee income 31.7 36.3 (13%) (12%)
Of which Resource Solutions 12.6 14.4 (13%) (11%)
Operating profit (4.0) (0.3) n/m n/m
Conversion rate (12.6%) (0.8%) (1180) bps n/a
Net fee income was down 12%* year-on-year, with challenging conditions in
North America (down 40%*) and as faced by Resource Solutions (down 11%*)
partially offset by growth in Mexico (up 68%*) and South Africa (up 38%*).
Hiring markets were weak in North America, particularly in technology where
the Q1 failure of Silicon Valley Bank dented confidence in funding the sector.
As the year progressed, job losses at larger and more established technology
firms added to much reduced levels of venture capital funding available to
fledgling technology companies, acting to dampen sector sentiment amongst both
clients and candidates.
In Mexico, a more benign macro-economic backdrop (growing employment levels,
inflation falling towards low-single digits) combined with market share gains
to drive a strong, profitable performance. Meanwhile in South Africa, which
also serves markets in west and east Africa, the business continued to benefit
from the strong Robert Walters brand and candidate networks built over the
last several years, driving a double-digit conversion rate.
Our Rest of World segment gives us good positions in some of the most
attractive hiring markets of the future which, over time, have the potential
to become good profit contributors.
*Constant currency is calculated by applying prior year exchange rates to
local currency results for the current and prior years.
Financial review
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the United Kingdom.
Group statutory results
The headline statutory financial results for the Company are presented below.
£m 2023 2022
Revenue 1,064.1 1,099.6
Cost of sales (677.3) (671.4)
Gross profit (net fee income) 386.8 428.2
Administrative expenses (360.5) (370.0)
Operating profit 26.3 58.2
Net finance costs (4.2) (3.1)
(Loss)/gain on foreign exchange (1.3) 0.5
Profit before tax 20.8 55.6
Taxation (7.4) (16.5)
Profit for the year 13.4 39.1
Attributable to:
Equity holders of the Company 13.4 39.1
Revenue
Revenue for the Group is the total income from the placement of permanent and
temporary (comprising contract and interim) staff, and therefore includes the
remuneration costs of temporary candidates and the total cost of advertising
recharged to clients. It also includes outsourcing fees, consultancy fees and
the margin derived from payrolling contracts charged by Resource Solutions to
its clients.
Revenue was down 3% to £1,064.1m. In recruitment, net fee income on temporary
placements was flat year-on-year, with the associated higher remuneration
costs of temporary candidates that is included in revenue partially offsetting
the lower net fee income (down 12% in reported terms) on permanent placements.
Gross profit (net fee income)
Net fee income is the total placement fees of permanent candidates, the margin
earned on the placement of temporary candidates and the margin from
advertising. It also includes the outsourcing, consultancy and payrolling
margin earned by Resource Solutions. Net fee income is the primary financial
top-line metric used to evaluate business performance.
Net fee income was down 10% year-on-year, driven by the lower volume of
permanent placements as hiring markets globally corrected from the record
activity levels seen in 2022. At 52% of the 2023 total, H1 net fee income
accounted for a higher proportion than seen in the prior year (2022 H1 net fee
income: 49% of total), reflecting the more pronounced slowdown across the
Group's markets as the year progressed.
Operating profit
Operating profit was down 55% to £26.3m, driven by the operating leverage
impact whereby the lower net fee income (down 10%) was not matched, in the
short-term, by proportionately lower operating costs (down 3%).
The majority of the Group's operating costs (c.70%) relate to staff, being fee
earners (recruitment consultants) and non-fee earners (support staff across
various corporate functions such as marketing, HR, IT, legal and finance).
Though period end headcount of 3,980 was down 9% year-on-year (31 December
2022: 4,356), the average headcount during 2023 was up 6% year-on-year as the
adjustment in headcount to match activity levels in more challenging markets
was second half weighted. In addition, there was a limited amount of
restructuring in some leadership roles, and all of the related costs were
charged to the income statement in the ordinary course, as opposed to being
recognised as exceptional costs.
Interest and financing costs
The Group incurred a net interest charge for the year of £4.2m (2022:
£3.1m), of which £3.4m (2022: £2.5m) relates to the interest charge on
lease liabilities, being predominantly office leases.
The Group has a £60.0m financing facility, currently due to expire in March
2027. At the year-end date, £15.8m (31 December 2022: £26.1m) was drawn down
under this facility.
A foreign exchange loss of £1.3m (2022: £0.5m gain) arose during the year on
translation of the Group's intercompany balances and external borrowings.
Taxation
The tax charge in 2023 was £7.4m (2022: £16.5m) which gives an effective tax
rate ("ETR") of 36.0% (2022: 29.7%). On 1 April 2023, the main UK corporation
tax rate increased from 19% to 25%. The ETR is higher than the 2023 blended
average UK rate of 23.5% primarily as a result of higher rates of taxation in
some of the Group's major overseas markets such as Japan, France and the
Netherlands and the impact of adjustments to accounting profits in the tax
calculation and the movement in the deferred tax asset.
Over the medium term, other than governmental changes to corporation tax
rates, the key factor affecting the ETR is likely to be the mix of profits
generated across various tax jurisdictions.
Earnings per share
Basic earnings per share for the year fell to 20.1p (2022: 56.2p), reflecting
the underlying trading performance. The weighted average number of shares
decreased to 66.8m (2022: 69.6m), as a result of the Company's share buyback
programme.
Cash flow and financing
The Group's business model continues to be highly cash generative with cash
conversion in 2023 of 207% (2022: 102%).
£m 2023 2022
Operating profit 26.3 58.2
Depreciation and amortisation charges 24.0 21.7
Other non-cash items (2.3) 6.7
Decrease/(increase)in working capital 6.5 (27.0)
Cash generated by operations 54.5 59.6
Net interest and associated borrowing costs (0.8) (3.1)
Repayment of lease principal (15.9) (16.8)
Taxation (9.0) (21.5)
Capital expenditure - Intangibles (7.6) (7.1)
Net capital expenditure - property, plant & equipment (7.2) (8.8)
Free cash flow 14.0 2.3
Purchase of own shares - (12.7)
Share buyback (10.0) (10.0)
Equity dividends paid (15.8) (15.2)
Other 1.2 0.3
Net movement in cash (exc. financing facility) (10.6) (35.3)
Impact of foreign exchange (6.6) 5.8
Opening net cash 97.1 126.6
Closing net cash 79.9 97.1
Working capital
The working capital net inflow of £6.5m (2022: net outflow of £27.0m) was
principally driven by the lower net fee income compared to the prior year, and
consequently lower trade receivables balance.
Capital expenditure
Intangibles capital expenditure of £7.6m (2022: £7.1m) principally comprises
spend to further develop the Group's in-house CRM system.
Property, plant and equipment net capital expenditure of £7.2m (2022: £8.8m
spend, nil sale proceeds) comprises spend of £8.3m, principally on the
Group's office estate, partially offset by sale proceeds of £1.1m.
Dividend
Given the strength of the Group's balance sheet and the Board's confidence in
the medium to long term outlook and performance of the business, the Board is
proposing a final dividend of 17.0p per share. Together with the interim
dividend of 6.5p per share paid in September 2023, this takes the total
dividend for the year to 23.5p, in-line with that for the prior year.
Share buyback
During the first half of the year, the Company purchased 0.8m shares at an
average price of £4.15 per share for £3.4m and subsequently cancelled those
shares. During the second half of the year, the Company purchased a further
1.7m shares at an average price of £3.87 per share for £6.6m and cancelled
those shares. In aggregate, the Company therefore repurchased £10.0m of
shares for cancellation (2022: £10.0m).
Capital allocation
During the year, the Group has reviewed its capital allocation strategy to
ensure alignment with maximising shareholder value and providing clarity to
all stakeholders. The Group's business model remains highly cash generative,
enabling investment opportunities to be funded through the free cash flow of
the Group.
The Board continues to recognise the value of a strong balance sheet, and
targets net cash (excluding IFRS 16 leases) of at least £50m. As noted
elsewhere, we believe in the fundamental growth drivers of the Group's
strategy and hence will consider all investment in those opportunities that
provide sufficient headroom above the Group's cost of capital. These
investments will focus on improving the efficiency and productivity of our
people, improving the candidate and client experience, and increasing the
geographic penetration and discipline diversification of the Group.
We will seek to maintain a dividend cover ratio of 1.75-2.25x through the
cycle, however the Group may allow cover to fall outside this range at points
in the cycle, such as at present. Where this is the case, the Group will seek
a clear route to return to this range, balancing the continued development of
the business and the needs of all the Group's stakeholders.
Finally, should the Group hold cash in excess of its target, and should the
Board expect this position to continue for the medium term, then consideration
will be given to returning the excess capital to shareholders through either a
share buyback programme, special dividends, or a combination of the two.
Foreign exchange impact
The Group's primary overseas functional currencies are the Japanese Yen, the
Australian Dollar and the Euro.
The impact of foreign exchange movements between 2023 and 2022 resulted in a
£5.5m decrease in reported net fee income and £1.4m decrease in operating
profit for the Company.
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF
ROBERT WALTERS PLC ON THE PRELIMINARY STATEMENT OF ANNUAL RESULTS
As the independent auditor of Robert Walters plc we are required by UK Listing
Rules to agree to the publication of the Company's preliminary statement of
annual results for the year ended 31 December 2023 which includes the
financial summary, Group and Regional highlights, the Chief Executive's
Statement, Financial review and summarised financial statements.
Use of our report
This report and our auditor's report on the Company's financial statements are
made solely to the Company's members, as a body, in accordance with Chapter 3
of part 16 of the Companies Act 2006 and the terms of our engagement. Our
audit work has been undertaken so that we might state to the Company's members
those matters we have agreed to state to them and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body, for our
audit work, for our auditor's report on the financial statements or this
report, or for the opinions we have formed.
Responsibilities of directors and auditor
The Directors of the Company are responsible for the preparation, presentation
and publication of the preliminary statement of annual results in accordance
with the UK Listing Rules. We are responsible for agreeing to the publication
of the preliminary statement of annual results, having regard to the Financial
Reporting Council's Bulletin "The Auditor's Association with Preliminary
Announcements made in accordance with the requirements of UK Listing Rules".
Status of our audit of the financial statements
Our audit of the annual financial statements of the Company is complete and we
signed our auditor's report on 7 March 2024. Our auditor's report is not
modified and contains no emphasis of matter paragraph.
Our auditor's report on the full financial statements contained the following
information regarding the scope of our audit, our application of materiality
and key audit matters and how they were addressed by us in the audit.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its
environment, including the Group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
We designed an audit strategy to ensure we have obtained the required audit
assurance for each component for the purposes of our Group audit opinion (ISA
600 (UK)). Components were scoped in to address aggregation risk and to ensure
sufficient coverage was obtained of Group balances on which to base our audit
opinion.
Our involvement with component auditors
For the work performed by component auditors, we determined the level of
involvement needed in order to be able to conclude whether sufficient
appropriate audit evidence has been obtained as a basis for our opinion on the
Group financial statements as a whole. Our involvement with component auditors
included the following:
Significant components § We focussed our Group audit scope primarily on the audit work at four
significant components, which were subject to full scope audit procedures.
§ These significant components contribute 26% (2022: 30%) of the Group profit
before taxation, 28% (2022: 30%) of the Group net fee income, and 39% (2022:
41%) of the Group revenue.
§ The four components considered to be significant were Robert Walters plc,
Resource Solutions Limited (UK), Robert Walters Operations Limited (UK) and
Robert Walters Japan KK (Japan).
§ For the Japanese component, following involvement in risk assessment and
setting the overall audit approach and strategy at the planning stage with the
component auditor, we visited the component auditor (a local BDO member firm
in Japan) and performed a detailed review of the testing. We attended in
person meetings with local management and the component auditor to challenge
conclusions reached.
§ The audits of the remaining UK significant components were performed by the
Group audit team.
Full scope audits § Sixteen further components were subject to full scope audit procedures due
to size, geographical coverage and aggregation risk in addition to the four
identified significant components above (twenty in total).
§ These components contribute 29% (2022: 48%) of the Group profit before
taxation, 33% (2022: 43%) of the Group net fee income, and 39% (2022: 46%) of
the Group revenue.
§ Full scope audits on Resource Solutions Europe Limited, Robert Walters
Holdings Limited and Robert Walters Dubai Limited was performed by the Group
audit team.
§ The full scope audits on other components were performed by BDO Member
Firms under direction and supervision of the Group audit team.
§ The Group audit team directed work for all full scope components through
detailed instructions, remote briefings and review of selected working papers
on significant risk areas.
Specified audit procedures § Specified audit procedures were performed by the Group audit team to
address the risk of material misstatement arising from key balances in smaller
components, with testing performed on certain material balances within these
components.
§ This specific scope testing was performed on components that contribute 37%
(2022: 21%) of the Group profit before taxation, 34% (2022: 17%) of the Group
net fee income, and 19% (2022: 8%) of the Group revenue.
Remaining components § All other components were scoped in for analytical review procedures
performed by the Group audit team to confirm our conclusion that there were no
significant risks of material misstatement of the aggregated financial
information.
Parent Company & Consolidation § The Group audit team performed testing of the consolidation and related
consolidation adjustments posted in preparation of the Group financial
statements.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit, and directing the efforts of the engagement team.
This matter was addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on this matter.
Key audit matter How the scope of our audit addressed the key audit matter
Revenue recognition for permanent and temporary placements (Note 1) § The significant risks in revenue recognition lies within: § The operating effectiveness of direct controls in the revenue cycle was
tested where relevant. For permanent placements, we have considered controls
§ For temporary placements, in the existence and accuracy of unbilled revenue over the signing of the contract, evidence of candidate acceptance and
and completeness of revenue at year end; and allocation of cash receipts. For temporary placements we checked that
timecards and the rate applied have been appropriately approved.
§ For permanent placements, in the existence, accuracy, and completeness of
unbilled revenues, due to the high degree of judgement and estimation § Permanent placements recorded around year end were sampled and agreed to
uncertainty. confirmation of candidate acceptance and start date, to ensure that the point
of revenue recognition was supportable.
§ For permanent placements, revenue is recognised when a start date is
confirmed and a candidate has accepted in writing. An Earned But Not § For those permanent candidates that had accepted but had not started at the
Invoiced (EBNI) provision is made based on historical experience, for a year-end, where revenue is recorded in accrued income, we challenged the
proportion of placements where the candidate accepts but are expected to appropriateness of the provision rate applied by reference to the rate of
reverse their acceptance prior to start date. This is calculated as a historical and actual 'back-outs' post year-end.
percentage of the accrued income balance. Whether the percentage applied
remains valid is considered to be a matter of significant management § We tested the operating effectiveness of direct controls around the correct
judgement. application of contract rates to invoicing and agreed a sample of rates used
to contractual documentation.
§ For temporary placements, the Group's policy is to recognise revenue as the
service is provided at contractually agreed rates. There is a risk that § We recalculated the accrued income and associated costs recognised for a
timecards are not appropriately approved or are not submitted on time, or that sample of late timecards or timecards straddling the year end (where the
incorrect rates are applied and therefore that the related revenue does not approved timecard was submitted after the year end but related to services
exist, is inaccurate or is not recognised in the appropriate financial year. provided in the year).
Key observations:
§ We did not identify any material indication that revenue that has not yet
been invoiced does not exist, is incomplete or is not valued appropriately.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Group Parent Company
Materiality £1.7m (2022: £2.7m) £1.5m (2022: £2.4m)
Basis 5.0% of 5-year average profit before taxation (2022: 5.0% of profit before Lower of 3.5% of net assets (2022: 3.5%) or 90% Group materiality
taxation).
Rationale 5-year average profit before taxation is considered to be the most appropriate Net assets is considered to be the most appropriate benchmark as the Parent
benchmark based on market practice, investor expectations and recent Company does not trade.
macro-economic factors.
Performance materiality £1.2m (2022: £1.9m) based on 70% (2022: 70%) of materiality. £1.1m (2022: £1.7m) based on 70% (2022: 70%) of materiality.
Based on history of adjustments and an assessment of the aggregated error Based on history of adjustments and an assessment of the aggregated error
risk. risk.
Measure Application
Component materiality £0.3m - £1.5m (higher of 15% Group performance materiality or 3% net fee Our audit work at each component, excluding the Parent company, was executed
income) at levels of materiality applicable to each individual entity as approved by
the Group audit team and in each case, lower than that applied to the Group.
(2022: £0.3m -£2.4m)
Reporting threshold £70,000 The amount agreed with the Audit and Risk Committee for which all individual
audit differences in excess of this amount will be reported. We also agreed to
(2022: £110,000) report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Qualitative disclosures We also reported to the Audit and Risk Committee on disclosure matters that we
identified when assessing the overall presentation of the financial
statements.
Procedures performed to agree to the preliminary statement of annual results
In order to agree to the publication of the preliminary statement of annual
results of the Company we:
· checked the accuracy of extraction of the financial information in
the preliminary statement from the audited financial statements of the
Company;
· considered whether any "alternative performance measures" and
associated narrative explanations may be misleading; and
· read the management commentary and considered whether it is in
conflict with the information that we have obtained in the course of our
audit.
Sandra Thompson (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
7 March 2024
Consolidated Income Statement
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
Notes £ millions £ millions
Revenue 1 1,064.1 1,099.6
Cost of sales (677.3) (671.4)
Gross profit (net fee income) 386.8 428.2
Administrative expenses (360.5) (370.0)
Operating profit 26.3 58.2
Finance income 0.6 0.4
Finance 2 (4.8) (3.5)
costs
(Loss) gain on foreign exchange (1.3) 0.5
Profit before taxation 20.8 55.6
Taxation 3 (7.4) (16.5)
Profit for the year 13.4 39.1
Attributable to:
Owners of the Company 13.4 39.1
Earnings per share 5
(pence):
Basic 20.1 56.2
Diluted 19.0 53.4
The amounts above relate to continuing operations.
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
£ millions £ millions
Profit for the year 13.4 39.1
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of overseas operations (8.6) 6.0
Total comprehensive income and expense for the year 4.8 45.1
Attributable to:
Owners of the Company 4.8 45.1
Consolidated Balance Sheet
AS AT 31 DECEMBER 2023
2023 2022
Notes £ millions £ millions
Non-current assets
Intangible 6 33.8 29.3
assets
Property, plant and 7 15.3 14.3
equipment
Right-of-use 8 67.5 71.6
asset
Lease receivables 4.0 -
Deferred tax assets 11.8 10.0
132.4 125.2
Current assets
Trade and other receivables 9 182.5 221.4
Lease receivables 0.8 -
Corporation tax receivables 4.3 4.3
Cash and cash equivalents 95.7 123.2
283.3 348.9
Total assets 415.7 474.1
Current liabilities
Trade and other 10 (148.0) (179.6)
payables
Corporation tax liabilities (4.8) (5.0)
Bank overdrafts and borrowings 11 (15.8) (26.1)
Lease liabilities (18.0) (18.3)
Provisions (0.7) (0.8)
(187.3) (229.8)
Net current assets 96.0 119.1
Non-current liabilities
Deferred tax liabilities (0.2) (0.2)
Lease liabilities (61.2) (58.1)
Provisions (2.1) (2.1)
(63.5) (60.4)
Total liabilities (250.8) (290.2)
Net assets 164.9 183.9
Equity
Share capital 15.3 15.8
Share premium 22.6 22.6
Other reserves (70.9) (71.4)
Own shares held (37.8) (40.5)
Treasury shares held (9.1) (9.1)
Foreign exchange reserves 2.5 11.1
Retained earnings 242.3 255.4
Equity attributable to owners of the Company 164.9 183.9
Consolidated Cash Flow Statement
FOR THE YEAR ENDED 31 DECEMBER 2023
2023 2022
Notes £ millions £ millions
Operating profit 26.3 58.2
Adjustments for:
Depreciation and amortisation charges 24.0 21.7
Impairment of right-of-use asset 0.2 -
(Profit) loss on disposal of right-of-use assets, property, plant and (0.2) 0.4
equipment and computer software
Charge in respect of share-based payment transactions 0.7 2.5
Unrealised foreign exchange loss (3.0) 3.8
Operating cash flows before movements in working capital 48.0 86.6
Decrease (increase) in receivables 32.2 (25.0)
Decrease in payables (25.7) (2.0)
Cash generated from operating activities 54.5 59.6
Income taxes paid (9.0) (21.5)
Net cash from operating activities 45.5 38.1
Investing activities
Interest received 0.6 0.4
Investment in intangible (7.6) (7.1)
assets
Purchases of property, plant and equipment (8.3) (8.8)
Sale of property, plant and equipment 1.1 -
Net cash used in investing activities (14.2) (15.5)
Financing activities
Equity dividends 4 (15.8) (15.2)
paid
Interest paid (1.4) (1.0)
Net interest on leases - (2.5)
Principal paid and received on lease liabilities (15.9) (16.8)
Proceeds from financing facility 10.4 37.1
Repayment of financing facility (20.7) (26.7)
Share buy-back for cancellation (10.0) (10.0)
Purchase of own shares - (12.7)
Proceeds from exercise of share options 1.2 0.2
Proceeds from issue of equity - 0.1
Net cash used in financing activities (52.2) (47.5)
Net decrease in cash and cash equivalents (20.9) (24.9)
Cash and cash equivalents at beginning of year 123.2 142.3
Effect of foreign exchange rate changes (6.6) 5.8
Cash and cash equivalents at end of year 95.7 123.2
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium Other reserves Own shares held Treasury shares held Foreign exchange reserves Retained earnings Total equity
Group £ millions £ millions £ millions £ millions £ millions £ millions £ millions £ millions
Balance at 1 January 2022 16.1 22.6 (71.8) (29.9) (9.1) 5.1 241.8 174.8
Profit for the year - - - - - - 39.1 39.1
Foreign currency translation differences - - - - - 6.0 - 6.0
Total comprehensive income and expense for the year - - - - - 6.0 39.1 45.1
Dividends paid - - - - - - (15.2) (15.2)
Credit to equity for equity-settled share-based payments - - - - - - 2.5 2.5
Tax on share-based payment transactions - - - - - - (0.9) (0.9)
Transfer to own shares held on exercise of equity incentives - - - 1.9 - - (1.9) -
Shares repurchased for cancellation (0.4) - 0.4 - - - (10.0) (10.0)
New shares issued and own shares purchased 0.1 - - (12.5) - - - (12.4)
Balance at 31 December 2022 15.8 22.6 (71.4) (40.5) (9.1) 11.1 255.4 183.9
Profit for the year - - - - - - 13.4 13.4
Foreign currency translation differences - - - - - (8.6) - (8.6)
Total comprehensive income and expense for the year - - - - - (8.6) 13.4 4.8
Dividends paid - - - - - - (15.8) (15.8)
Credit to equity for equity-settled share-based payments - - - - - - 0.7 0.7
Tax on share-based payment transactions - - - - - - 0.1 0.1
Transfer to own shares held on exercise of equity incentives - - - 1.5 - - (1.5) -
Share repurchase and cancellation (0.5) - 0.5 - - - (10.0) (10.0)
New shares issued and own shares purchased - - - 1.2 - - - 1.2
Balance at 31 December 2023 15.3 22.6 (70.9) (37.8) (9.1) 2.5 242.3 164.9
Statement of Accounting Policies
FOR THE YEAR ENDED 31 DECEMBER 2023
Accounting Policies
Basis of preparation
Robert Walters plc is a public company limited by shares, incorporated and
domiciled in the United Kingdom under the Companies Act. The financial report
for the year ended 31 December 2023 has been prepared in accordance with the
historical cost convention and with international accounting standards in
conformity with the requirements of the Companies Act 2006 and with UK adopted
International Financial Reporting Standards (IFRSs).
The Group has a strong balance sheet with net cash as at 31 December 2023 of
£79.9m, a £60.0m four-year committed financing facility until March 2027 (of
which £15.8m was drawn down as at 31 December 2023), a blend of revenue
streams covering permanent, contract, interim and recruitment process
outsourcing and a diverse range of clients and suppliers across 31 countries.
As a consequence, the Directors believe that the Group is well placed to
manage its business risks successfully. After making enquiries, the Directors
have formed a judgement, at the time of approving the financial statements,
that there is a reasonable expectation that the Group has adequate resources
to continue in operational existence and meet its liabilities as they fall due
over the three-year assessment period. The Directors have not identified any
material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the entity's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue. For this reason, the Directors
continue to adopt the going concern basis in preparing the accounts.
The financial information in this announcement, which was approved by the
Board of Directors on 7 March 2024, does not constitute the Company's
statutory accounts for the year ended 31 December 2023 but is derived from
these accounts. Statutory accounts for 2022 have been delivered to the
Registrar of Companies and those for 2023 will be delivered following the
Company's Annual General Meeting. The auditors have reported on these
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.
The Annual General Meeting of Robert Walters plc will be held on 30 April 2024
at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.
1. Segmental information
2023 2022
£ millions £ millions
i) Revenue:
Asia Pacific 484.9 519.6
UK 254.9 259.7
Europe 281.9 276.5
Rest of World 42.4 43.8
1,064.1 1,099.6
ii) Gross profit (net fee income):
Asia Pacific 167.9 193.8
UK 60.9 74.0
Europe 126.3 124.1
Rest of World 31.7 36.3
386.8 428.2
1. Segmental information (continued)
2023 2022
£ millions £ millions
iii) Operating profit and profit before taxation:
Asia Pacific 19.3 37.5
UK (0.4) 3.4
Europe 11.4 17.6
Rest of World (4.0) (0.3)
Operating profit 26.3 58.2
Net finance costs (5.5) (2.6)
Profit before taxation 20.8 55.6
The analysis of revenue by destination is not materially different to the
analysis by origin and the analysis of finance income and costs are not
significant.
The Group is divided into geographical areas for management purposes, and it
is on this basis that the segmental information has been prepared.
2023 2022
£ millions £ millions
iv) Revenue by business grouping:
Robert Walters(1) 836.0 868.5
Resource Solutions (recruitment process outsourcing) 228.1 231.1
1,064.1 1,099.6
(1) Walters People is included within Robert Walters
2023 2022
£ millions £ millions
v) Revenue by service grouping:
Permanent 242.7 281.9
Temporary 628.9 670.5
Interim 128.7 119.9
Other 63.8 27.3
1,064.1 1,099.6
2. Finance costs
2023 2022
£ millions £ millions
Interest on financing facilities 1.4 1.0
Lease interest 3.4 2.5
Total borrowing costs 4.8 3.5
3. Taxation
2023 2022
£ millions £ millions
Current tax charge
Corporation tax - UK - 0.2
Corporation tax - Overseas 9.3 14.7
Adjustments in respect of prior years
Corporation tax - UK (0.2) -
Corporation tax - Overseas 0.2 0.8
9.3 15.7
Deferred tax
Deferred tax - UK 0.1 0.5
Deferred tax - Overseas (2.6) (0.4)
Adjustments in respect of prior years
Deferred tax - UK (0.6) (0.2)
Deferred tax - Overseas 1.2 0.9
(1.9) 0.8
Total tax charge for year 7.4 16.5
Profit before taxation 20.8 55.6
Tax at standard UK corporation tax rate of (23.5%) (2022: 19%) 4.9 10.6
Effects of:
Unrelieved losses 1.6 0.7
Tax exempt income and other expenses not deductible (0.4) (0.4)
Other timing differences (0.1) 0.3
Overseas earnings taxed at different rates 0.8 4.0
Adjustments to tax charges in previous years 0.6 1.5
Impact of tax rate change - (0.2)
Total tax charge for year 7.4 16.5
Tax recognised directly in equity
Tax on share-based payment transactions (0.1) 0.9
The tax charge is based on the expected annual effective tax rate of 36.0%
(2022: 29.7%) on profit before taxation.
The UK Government announced its intention to increase the rate of corporation
tax from 19% to 25% with effect from 1 April 2023. The change in rate from 19%
to 25% has been substantively enacted and therefore the effects of the
increase have been included in the calculation of deferred tax in the
Financial Statements.
The effective tax rate is higher than the standard UK rate of 23.5% primarily
as a result of overseas taxation in Japan, Belgium, France and Netherlands and
the impact of adjustments to accounting profits in the tax calculation and the
movement in deferred tax asset.
On 20 December 2021, the OECD published its proposal in relation to Global
Anti-Base Erosion Rules, which provide for an internationally co-ordinated
system of taxation to ensure that large multinational groups pay a minimum
level of corporate income tax in countries where they operate. On 23 March
2023, the UK government introduced draft legislation in Finance (No.2) Bill
2022-23 to implement Pillar 2 of the OECD/G20 inclusive framework. The new
rules will take effect from 2024 onwards.
There remains a considerable amount of uncertainty with respect to the
detailed operation of the rules and their impact. From an initial review of
the Group's business and tax profile, it is unlikely that the rules will have
a material impact on the Group's tax profile.
4. Dividends
2023 2022
£ millions £ millions
Amounts recognised as distributions to equity holders in the year:
Interim dividend paid of 6.5p per share (2022: 6.5p) 4.3 4.5
Final dividend for 2022 of 17.0p per share (2021: 15.0p) 11.5 10.7
15.8 15.2
Proposed final dividend for 2023 of 17.0p per share 11.2 11.5
(2022: 17.0p)
The proposed final dividend of £11.2m 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 31 May 2024 to those
shareholders on the register as at 1 May 2024.
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.
2023 2022
Number Number
of shares of shares
Weighted average number of shares:
Shares in issue throughout the year 78,928,095 80,689,295
Shares issued in the year 631 203,095
Shares cancelled during the year (1,121,137) (529,847)
Treasury and own shares held (11,022,701) (10,784,800)
For basic earnings per share 66,784,888 69,577,743
Outstanding share options 3,700,484 3,687,416
For diluted earnings per share 70,485,372 73,265,159
2023 2022
£ millions £ millions
Profit for the year attributable to equity holders of the Parent 13.4 39.1
6. Intangible assets
Goodwill Computer software Total
£ millions £ millions £ millions
Cost:
At 1 January 2022 8.1 24.7 32.8
Additions - 7.5 7.5
Disposals - (3.6) (3.6)
Foreign currency translation differences - 0.1 0.1
At 31 December 2022 8.1 28.7 36.8
Additions - 7.9 7.9
Disposals - (0.9) (0.9)
Foreign currency translation differences (0.1) (0.1) (0.2)
At 31 December 2023 8.0 35.6 43.6
Accumulated amortisation and impairment:
At 1 January 2022 - 8.1 8.1
Charge for the year - 2.9 2.9
Disposals - (3.5) (3.5)
Foreign currency translation differences - - -
At 31 December 2022 - 7.5 7.5
Charge for the year - 3.3 3.3
Disposals - (0.9) (0.9)
Foreign currency translation differences - (0.1) (0.1)
At 31 December 2023 - 9.8 9.8
Carrying value:
At 1 January 2022 8.1 16.6 24.7
At 31 December 2022 8.1 21.2 29.3
At 31 December 2023 8.0 25.8 33.8
7. Property, plant and equipment
Fixtures, fittings and office equipment Computer equipment Total
£ millions £ millions £ millions
Leasehold improvements
£ millions
Cost:
At 1 January 2022 9.1 17.5 10.9 37.5
Additions 2.3 4.1 3.1 9.5
Disposals (1.0) (2.5) (0.5) (4.0)
Foreign currency translation differences (0.1) 0.7 0.3 0.9
At 31 December 2022 10.3 19.8 13.8 43.9
Additions 0.5 6.2 1.4 8.1
Transfers (1.1) 1.1 - -
Disposals (2.5) (2.7) (2.5) (7.7)
Foreign currency translation differences (0.5) (0.7) (0.5) (1.7)
At 31 December 2023 6.7 23.7 12.2 42.6
Accumulated depreciation and impairment:
At 1 January 2022 7.5 11.5 9.5 28.5
Charge for the year 0.6 1.7 1.6 3.9
Disposals (1.0) (2.3) (0.4) (3.7)
Foreign currency translation differences 0.2 0.5 0.2 0.9
At 31 December 2022 7.3 11.4 10.9 29.6
Charge for the year 0.7 3.1 1.8 5.6
Disposals (2.5) (1.7) (2.5) (6.7)
Foreign currency translation differences (0.4) (0.4) (0.4) (1.2)
At 31 December 2023 5.1 12.4 9.8 27.3
Carrying value:
At 1 January 2022 1.6 6.0 1.4 9.0
At 31 December 2022 3.0 8.4 2.9 14.3
At 31 December 2023 1.6 11.3 2.4 15.3
Leases
8.
Right-of-use assets Equipment Vehicles Total
Buildings £ millions £ millions £ millions
£ millions
Cost:
At 1 January 2022 94.2 0.3 5.7 100.2
Additions 18.0 - 2.3 20.3
Lease modifications 1.3 - - 1.3
Disposals (3.7) (0.2) - (3.9)
Foreign currency translation differences 3.2 - 0.5 3.7
At 31 December 2022 113.0 0.1 8.5 121.6
Additions 11.9 - 2.8 14.7
Lease modifications 3.9 - - 3.9
Disposals (15.0) - (4.1) (19.1)
Foreign currency translation differences (4.4) - (0.2) (4.6)
At 31 December 2023 109.4 0.1 7.0 116.5
Accumulated depreciation and impairment:
At 1 January 2022 33.5 0.2 3.9 37.6
Charge for the year 13.3 0.1 1.5 14.9
Impairment - - - -
Disposals (3.7) (0.2) - (3.9)
Foreign currency translation differences 1.0 - 0.4 1.4
At 31 December 2022 44.1 0.1 5.8 50.0
Charge for the year 13.4 - 1.7 15.1
Impairment 0.2 - - 0.2
Disposals (10.1) - (4.1) (14.2)
Foreign currency translation differences (2.0) - (0.1) (2.1)
At 31 December 2023 45.6 0.1 3.3 49.0
Carrying value:
At 1 January 2022 60.7 0.1 1.8 62.6
At 31 December 2022 68.9 - 2.7 71.6
At 31 December 2023 63.8 - 3.7 67.5
During the year the Group entered into a sublet arrangement for two of its
offices, one in the UK and one in the USA. On signing of the leases, the Group
had transferred the rights to use the office space over to a third party, as
such the Group derecognised the right of use asset relating to the space
accordingly and recognised a lease receivable for the income due from the
lessees. The lease receivable was discounted at the incremental borrowing rate
for the head lease. Any differences arising from the derecognition of the
right of use asset and the value of the lease receivable was recognised as an
impairment in the consolidated income statement for the year ended 31 December
2023.
9. Trade and other receivables
2023 2022
£ millions £ millions
Receivables due within one year:
Trade receivables 116.5 142.9
Other receivables 7.8 6.3
Prepayments 7.8 8.8
Accrued income 50.4 63.4
182.5 221.4
Included within 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 2023 is £1,472,000 (31 December
2022: £1,892,000). The movement in the provision during the year is a credit
to the income statement of £420,000 (2022: credit of £541,000). Contract
assets are expected to convert into contract receivables within three months
of recognition.
10. Trade and other payables: amounts falling due within one year
2023 2022
£ millions £ millions
Trade payables 7.8 8.7
Other taxation and social security 30.4 34.7
Other payables 27.3 25.4
Accruals and deferred income 82.5 110.8
148.0 179.6
There is no material difference between the fair value and the carrying value
of the Group's trade and other payables.
11. Bank overdrafts and borrowings
2023 2022
£ millions £ millions
Bank overdrafts and borrowings: current 15.8 26.1
15.8 26.1
The borrowings are repayable as follows:
Within one year 15.8 26.1
15.8 26.1
In October 2023, the Group renewed its four-year committed financing facility
of £60.0m which expires in March 2027. At 31 December 2023, £15.8m (2022:
£26.1m) was drawn down under this facility.
The Directors estimate that the fair value of all borrowings is not materially
different from the amounts stated in the Consolidated Balance Sheet of £15.8m
(2022: £26.1m).
The Group has not entered into any reverse factoring arrangements during the
year ended 31 December 2023 (2022: none).
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