REG - RTC Group PLC - Final results for the year ended 31 December 2023
25/03/2024 07:00
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RNS Number : 0498I RTC Group PLC 25 March 2024
25 March 2024
Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.
RTC Group Plc
("RTC", "the Company" or "the Group")
Final results for the year ended 31 December 2023
RTC Group Plc (AIM: RTC.L) is pleased to announce its audited results for the year ended 31 December 2023.
Highlights
· Group revenue from continuing operations £98.8m (2022: £71.9m).
· EBITDA £3.8m (2022: £0.6m).
· Cash generated from operating activities £4.6m (2022: cash
outflow of £54,000).
· No gearing. Cash and cash equivalents £1.1m (2022: net
borrowings £2.7m).
· Net assets £7.9m (2022: £6.2m).
· Net asset value per share (fully diluted) 54p (2022: 41p)
· Basic earnings per share 12.75p (2022: loss per share 2.45p).
· Interim dividend 1p per share paid (2022: Nil)
· 4.5p final dividend proposed (2022: Nil).
The Directors propose a final dividend for the year of 4.5p (2022: Nil) per
share, subject to approval of shareholders at the Annual General Meeting on 5
June 2024. If shareholders approve the recommended final dividend, it will
be paid on 8 July 2024 to all holders of shares who are on the register of
members at the close of business on 7 June 2024, with an ex-dividend date of 6
June 2024. If approved this will bring the total dividend paid out in respect
of 2023 to £804,266 (5.5p per share).
Commenting on the results Andy Pendlebury, Chairman and Chief Executive said:
"I am delighted to announce that 2023 was an outstanding year for RTC with the
Group delivering a record set of results.
All subsidiary businesses performed exceptionally well which, given the
difficulties being faced by many companies across the recruitment sector, is
sound reassurance for our shareholders that our business model delivers
sustainable revenue generation and profit capture across each of our market
sectors.
Our balance sheet is in a very healthy position with no term debt and no
borrowings other than lease liabilities. Cash generation has been strong,
doubling our opening cash position during the year and we ended the year with
net assets of £7.9m representing a healthy and fully diluted net asset per
share of 54p.
There is no doubt that we are facing further uncertainties and challenges due
to local and international events. However, we remain confident that the
investments we have made in our people, systems, workforce, and customers will
enable us to capture further profitable business opportunities across the
industries and sectors we support. This coupled with our financial competence
and effective corporate governance will form the foundation for continued
growth and shareholder value which remains the key priority of the Group.
Finally, I know everybody in the organisation would have liked to have our
founder and longstanding Chairman, Bill Douie, alongside us as we celebrate
our best ever results. Bill would not have wanted his passing to overshadow
the success that the people in the Group have achieved, it just wasn't his
way. However, it cannot and should not go without saying that Bill was
instrumental in setting the culture of the Group and was encouraging of
everything we did and everybody who did it. There would be no one prouder of
what we have achieved together in 2023.
In memory of our colleague and friend Bill Douie."
Enquiries:
RTC Group Plc Tel: 0133 286 1842
Andy Pendlebury, Chairman and Chief Executive
SPARK Advisory Partners Limited (Nominated Adviser)
Tel: 0203 368 3550
Matt Davis / Mark Brady
www.Sparkadvisorypartners.com (http://www.Sparkadvisorypartners.com)
SI Capital (Broker) Tel: 0148 341 3500
Nick Emerson
Sam Lomanto
www.sicapital.co.uk (http://www.sicapital.co.uk)
About RTC
Group at a glance
RTC Group Plc is an AIM listed recruitment business that focuses on white and
blue-collar recruitment, providing temporary and permanent labour to a broad
range of industries and customers, in both domestic and international markets,
through its geographically defined operating divisions.
UK division
Through its Ganymede and ATA brands the Group provides a wide range of
recruitment services in the UK.
Ganymede specialise in recruiting the best technical and engineering talent
and providing complete workforce solutions to help build and maintain
infrastructure and transportation for a wide range of UK customers. Ganymede
is a market leader in providing a diverse range of people solutions to the
rail, energy, construction, highways, and transportation sectors. With offices
strategically located across the country, Ganymede provides its customers with
the benefit of a national network of skilled personnel combined with local
expertise.
Ganymede tailors its solutions to suit its customers' needs. Whether it's
recruiting permanent and temporary technical, engineering and safety-critical
roles or providing fully managed workforce solutions of recruitment, training,
account management, contingent labour and fleet provision, Ganymede works
closely with its customers to understand their requirements, keeping their
goals in mind every step of the way.
ATA provide high-quality technical recruitment solutions to the manufacturing,
engineering, and technology sectors. Working as an engineering recruitment
partner supporting businesses across the UK, ATA has a strong track record of
attracting and recruiting the best engineering talent for its customers. ATA's
regional offices which are strategically located in Leicester and Leeds each
have dedicated market experts to ensure ATA delivers excellence to both its
customers and candidates.
The Group headquarters are located at the Derby Conference Centre which also
provides office accommodation for its operating divisions in addition to
generating rental and conferencing income from space not utilised by the
Group.
International division
Internationally, through our GSS brand we work with customers across the globe
that are focused on delivering projects in a variety of sectors. GSS has a
track record of delivery in some of the world's most hostile locations.
Working closely with its customers GSS provides contract and permanent
staffing solutions on an international basis, providing key personnel into new
projects and supporting ongoing large-scale project staffing needs. GSS
typically recruit across a range of disciplines and skills from operators and
supervisors, through to senior management level.
www.rtcgroupplc.co.uk (http://www.rtcgroupplc.co.uk)
Chairman and Chief Executive's operational and strategic review
For the year ended 31 December 2023
Overview
I am delighted to announce that 2023 was an outstanding year for RTC with the
Group delivering a record set of results.
All subsidiary businesses performed exceptionally well which, given the
difficulties being faced by many companies across the recruitment sector, is
sound reassurance for our shareholders that our business model, (of
establishing long term strategic partnerships with blue chip domestic and
international customers), delivers sustainable revenue generation and profit
capture across each of our market sectors.
Year on year trading has seen the Group generate revenue approaching £100m,
an increase of over 37%, gross profit exceeding £17m up 48%, and profit from
operations at £2.7m beating the previous 2019 pre-covid record of £2m by
35%. Furthermore, our 2023 EBITDA, at just under £4m, is greater than the
combined total of the three previous years. Finally, our earnings per share at
12.75p are the highest ever by over 25% and importantly for our shareholders
carry no significant accompanying dilution through share options. A very
promising set of trading results for our shareholders.
Our balance sheet is in a very healthy position with no term debt and no
borrowings other than lease liabilities, which is no mean feat given the
financial challenges facing many organisations and rising bad debt risk. Cash
generation has been strong, doubling our opening cash position during the year
and we ended the year with net assets of £7.9m representing a healthy and
fully diluted net asset per share of 54p.
We are now positioned with a healthy balance sheet with significant net assets
and no term debt; a proven Group strategy and business model centred around
profitable subsidiary businesses with visible revenue and profit streams with
long term strategic partners; and an order book commitment of around £200m to
reinforce our long-term investment strategy. All this is underpinned by sound
financial controls and systems at both Group level and across each of our
subsidiary businesses.
There is no doubt that we are facing further uncertainties and challenges due
to local and international events. However, we remain confident that the
investments we have made in our people, systems, workforce, and customers will
enable us to capture further profitable business opportunities across the
industries and sectors we support. This coupled with our financial competence
and effective corporate governance will form the foundation for continued
growth and shareholder value which remains the key priority of the Group.
Therefore, given these results, the health of the Group's balance sheet and
our overall confidence in the Group's ability to keep delivering sustainable
and profitable business growth, the board are recommending a very healthy
dividend of 4.5p per share as we believe it is affordable, fair and a just
reward to our shareholders who have supported the Group through what has
unquestionably been the most turbulent and worrying trading environment of
recent times.
Business review
UK Division
2023 was a year of robust growth for our UK recruitment division despite
challenging macro-economic conditions, with a notable 41% year-on-year
increase in revenue to £91.2m (compared to £64.8m in 2022) and a
corresponding 55% growth in gross profit to £15.3m (from £9.9m in 2022).
In last year's annual report, I emphasised the strategic value and
significance that the Group board attributed to the rail business, especially
following the challenges encountered in 2022. I am delighted that this
confidence was justified, as evidenced by a 49% increase in rail revenues,
accompanied by enhanced profitability. This achievement is attributable to a
blend of factors, including expansion within our existing long-term contract
with Network Rail, as well as the successful acquisition of new framework
contracts with tier 1 contractors operating within the rail infrastructure
sector. Although some industrial action persists within the rail industry, its
effects are primarily felt by train operators and the resolution of union
disputes with Network Rail at the end of Q1 2023 enabled a return to
normalised demand levels across our rail infrastructure contracts.
The exceptional performance of our rail business, combined with our long-term
order book, estimated at around £150m further solidifies Ganymede's position
as one of the leading and most successful labour providers in the rail
industry. As we look ahead to the next five-year investment plan (Control
Period 7), starting in April 2024, with an expected programme of investment of
approximately £43 billion, our business is exceptionally well-positioned to
secure further growth opportunities and associated contract awards.
Throughout 2023 and like many others in the sector, Ganymede and ATA's
white-collar permanent recruitment teams navigated a challenging economic
landscape marked by a slowdown in vacancy numbers across various sectors and a
softening of confidence levels among both customers and candidates. Despite
these uncertainties, the teams delivered a resilient performance, with
permanent fees for the period only experiencing a modest decline of 5% from
the strong performance seen in 2022.
Whilst permanent recruitment posed challenges in 2023, this provided growing
demand within the contract recruitment sector, as many customers favoured
flexible temporary solutions over expanding internal headcount. Our
white-collar Ganymede and ATA businesses capitalised on this and delivered
significant contract growth, across our customer portfolio in the
infrastructure, manufacturing, and transportation sectors. This led to a
noteworthy 35% increase in contract revenues year-on-year. The technical and
signalling division, which was only established as a new revenue stream last
year, delivered significant growth in 2023, has established a growing
reputation with key sector customer, and is well positioned for further
expansion in 2024. This growth also further validates our decision to merge
our white-collar rail and infrastructure recruitment business with our
Ganymede Rail division. By doing so, we have been able to offer comprehensive
recruitment solutions across the sector, allowing customers to benefit from a
complementary range of services for personnel at all levels.
Following a review of our business operations in Q3 of 2023, we will no longer
focus on minor rail works and social housing refurbishments, in order to focus
on our core recruitment offering. This decision was influenced by inflationary
pressures on labour and materials costs, reducing the attractiveness of
opportunities in these sectors compared to others.
Ganymede Energy also delivered exceptional results in 2023, boasting a
year-on-year revenue growth of 50%, which underscores the robust demand for
our smart meter workforce. This achievement is especially gratifying given the
hurdles the business has navigated in recent years, including the challenges
caused by product and software capability issues, the pandemic and customer
restructuring.
Based on government statistics, at the end of September 2023, there were 33.9
million smart and advanced meters installed in homes and small businesses
across Great Britain, constituting 59% of the overall count of 57.1 million
meters. The extension of government powers concerning the smart meter roll-out
until November 2028, as stipulated in the Energy Act 2023, reinforces our
confidence in the significant and sustainable revenue potential of our energy
business. Given our current performance, positioning and secured order book of
around £30m, we are firmly established as a leading primary labour supply
company to the sector, and we believe there is visibility of continued success
for the foreseeable future.
In 2023, we established an energy training and assessment centre at our Milton
Keynes facility. The primary objectives of the facility being to firstly
source, train and deploy our own inhouse resource capability to meet the
projected demand in the smart meter market, and secondly to help mitigate the
expected skills short falls necessary to deliver the government's proposed
policy to decarbonise household heating and transportation which will bring
supply opportunities to a new range of customers. The training and assessment
centre will also play a crucial role in upskilling our current workforce,
nurturing new entrants into the industry, and offer training and assessment
services to our customers who are looking for full life-cycle solutions from
strategic partners in exchange for long term supply opportunities. In
addition, and in conjunction with the Group's conference centre (DCC), we are
providing our energy partners with a multi-purpose solution giving them a one
stop facility to induct direct personnel alongside the Ganymede workforce and
this is another example of group subsidiary companies combining capabilities
to generate additional revenue streams for the Group.
In summary, 2023 was a highly successful and pleasing year for the UK
recruitment business with all divisions combining to deliver enhanced revenue
and profit contribution to the Group. We are now positioned strongly to
capture additional long-term revenue opportunities with several blue-chip
organisations investing in the future of the UK's infrastructure,
transportation, engineering, and manufacturing sectors. This coupled with our
existing long-term contracts, provides the group with an essential platform
for continued growth which will provide the necessary confidence for
shareholders that our strategic plans and long-term prospects are based on
solid foundations.
International division
Our international business continues to identify new growth opportunities
within its existing overseas customer base and add new customers in new and
existing territories. Whilst the business saw only marginal growth in sales
during the year the change in business mix brought an increase in gross profit
by over 10%. Whilst an increase in overheads was necessary to provide the
increase in business development activity, operational profits were relatively
stable. The business remains a major partner to blue chip customers supporting
NATO and we are growing our headcount on projects in Poland and exploring
further growth opportunities with customers across Europe. Our Middle East
presence remains strong with workers placed in the United Arab Emirates,
Bahrain, Iraq, and in Mogadishu. In Diego Garcia, a British International
Overseas Territory, the business has now provided some 500 permanent staff to
our customer supporting the United States Naval base activities. We are
confident that our international business which is both unique in its
capabilities and unrivalled in the United Kingdom recruitment space, is well
placed to capture significant long-term and diversified opportunities for the
Group and provide a diversified revenue stream outside of our mainstream
domestic business.
Central services
The Derby Conference Centre (DCC) had another significant year of growth as it
continues to rebound from the devastation impacted on the sector by covid.
Revenue continued to grow by an impressive 17% and this resulted in a
corresponding increase in gross profit of 13% which is extremely encouraging
given the increases in input costs through energy and food inflation and
pricing competition, which dominated the regions hospitality sector during the
year. The DCC is now firmly established as a leading events and conferencing
business in the East Midlands and continues to work with other Group
businesses to provide external facilities for customers engaged in both large
recruitment campaigns and induction programmes and to also offer facilities
for offsite training with accommodation.
Outlook
We share the view that there is still much uncertainty across both domestic
and international economies, and it is difficult to deny that this has fuelled
the presence of demand-side headwinds through customer reticence to recruit
new head count and supply-side concerns as candidate availability is becoming
a potential major barrier to business growth. However, we believe our
well-established strategy of investing alongside blue-chip customers
supporting large scale infrastructure projects is proven, becoming more
prevalent as the growth in strategic partnering is becoming both a vital
source of project cost reduction and greater profit capture and we believe
that this will continue to generate long term opportunities for the Group to
deliver significant future order book security for our shareholders.
Furthermore, we believe our investment model of recruiting, training and
upskilling individuals has proven a key differentiator for the Group and will
ensure we mitigate against candidate migration which is a major contributor to
both increased costs through skill continuity loss and the accompanying
productivity drain being experienced across many industries. Therefore,
notwithstanding the uncertainties facing the recruitment sector per se, we
remain extremely encouraged and cautiously confident about our short, medium,
and longer-term prospects.
Our two key strategic objectives moving into 2024 are to concentrate on
increased value capture and further order book investment. The first being
essential to ensure we continue to trade profitably and deliver a consistent
annual return on investment for shareholders, and the second to drive
longer-term enterprise value which will help attract appropriate investors
with the appetite and belief in our Group's strategic capability.
Our people
The results we have achieved in 2023 are outstanding and clear testament to
the talent, enthusiasm, appetite for hard work, and resilience of everyone
employed across the Group. It is also very evident to the board that both in
terms of managing during, and in recovering from the covid crisis that the
executive teams leading each of our subsidiaries, demonstrated that they have
the necessary strength of character to compete and differentiate in highly
competitive and saturated markets. We have continued to attract highly
ambitious and capable people into the Group, many of whom come directly from
competitor organisations or the broader recruitment sector, and their
acknowledgement and recognition of our dedication to creating an environment
of individual and team success for all team members is an encouraging
endorsement as we build our future growth plans.
Finally, I know everybody in the organisation would have liked to have our
founder and longstanding Chairman, Bill Douie, alongside us as we celebrate
our best ever results. Bill would not have wanted his passing to overshadow
the success that the people in the Group have achieved, it just wasn't his
way. However, it cannot and should not go without saying that Bill was
instrumental in setting the culture of the Group and was encouraging of
everything we did and everybody who did it. There would be no one prouder of
what we have achieved together in 2023.
In memory of our colleague and friend Bill Douie.
A M Pendlebury
Chairman and Chief
Executive
22 March 2024
Finance Director's report
For the year ended 31 December 2023
Financial highlights
The Group overall delivered its best result to date with increased revenues of
£98.8m (2022: £71.9m). Overall gross profit increased to £17.4m (2022:
£11.8m) and gross margin improved to 17.6% (2022: 16.4%). The profit from
operations of £2.7m (2022: loss of £0.2m) reflects a year that saw good
overall performances across all areas of the Group.
UK Recruitment
Overall, UK Recruitment revenues increased by 41% to £91.2m (2022: £64.8m)
and gross profit increased to £15.3m (2022: 9.9m). Gross margin was also
better at 16.8% (2022: 15.3%). Profit from operations was £5.0m (2022:
£1.5m). The increases largely reflecting a much-improved year in Ganymede
Rail following the challenges faced in 2022 and a very strong performance from
Ganymede Energy.
Ganymede Rail delivered its strongest result to date with revenues increased
by 49% versus 2022 (back to the same levels as in 2021) but with improved
profitability. Likewise, Ganymede Energy continued its growth trajectory,
supporting the Government's smart-meter roll out programme, delivering 50%
growth in revenue compared to 2022. The division's white collar recruitment
arms, serviced by our ATA and Ganymede Recruitment brands both performed well
throughout the year with combined revenues 33% up on 2022 due to a 35% growth
in contract revenues (particularly strong growth in larger customer contract
requirements and the signalling division). This contract growth was offset by
slightly lower permanent fees than 2022. The dip in permanent fees reflecting
market conditions.
International
Revenue increased slightly to £5.3m (2022: £5.2m) with a corresponding
increase in gross profit to £0.9m (2022: £0.8m) and gross margin increasing
to 17.3% (2022: 15.4%). The division delivered a profit from operations of
£0.5m (2022: £0.5m) on a par with 2022 despite the increase in gross profit
due to adverse exchange movements in 2023 versus 2022.
Central Services
Within Central Services, the Derby Conference Centre delivered its best
results to date with good levels of activity relating to conferences, events
and bedroom sales for the majority of 2023 and a very strong finish on festive
activities. Revenue generated by the segment was £2.3m (2022: £2.0m) and
gross profit increased to £1.2m (2022: £1.1m), albeit the impact of wage and
price inflation on direct cost rates resulted in a slight drop in gross margin
percentage to 52.2% (2022: 55%).
Taxation
The tax charge for the year was £0.7m (2022: credit of £0.1m). The variance
between this and the expected charge if a 23.5% corporation tax rate was
applied to the result for the year is explained in note 3.
Dividends
During the year, the Company paid an interim dividend of £145,003 (2022:
£Nil) to its equity shareholders. This represents a payment of 1.0p (2022:
£Nil) per share. (refer to note 20). The directors have proposed a final
dividend of £659,263 (4.5p per share) (2022: £Nil) to be paid on 8 July 2024
to shareholders registered on 7 June 2024. This has not been accrued within
these financial statements as it was not formally approved before the year
end. If approved this will bring the total dividend paid out in respect of
2023 to £804,266 (5.5p per share).
Own shares held
The cost of the Group's own shares purchased through the Employee Benefit
Trust (EBT) is shown as a deduction from equity. 343,615 options were
exercised during the year. The balance of £nil (2022: £235,918) in the own
shares held reserve within equity reflects the fact that 337,027 of the
options exercised were satisfied with the remaining shares in the EBT, as such
no shares (2022: 337,027) remain in the EBT which therefore falls
away.
Statement of financial position and cash flows
The Group's net working capital increased to £6.8m (2022: £4.6m). The ratio
of current assets to current liabilities also increased to 1.6 (2022: 1.4) and
at the 31 December 2023 the Group had no borrowings outside of lease
liabilities (2022: net borrowings excluding lease liabilities £2.7m).
The Group generated £4.6m more cash from its operations in 2023 compared to
2022. This improvement versus 2022 reflects increased activity across the
Group (revenues up by 37% versus 2022). The £4.6m cash inflow from operating
activities enabling the Group to pay an interim dividend, propose a
much-improved final dividend, and significantly reduce usage of its invoice
discounting facility generating a corresponding reduction in interest charges.
The Group has no term debt and is financed using its invoice discounting and
overdraft facilities with HSBC. At 31 December 2023 the Group had available
funds to draw down of £10.3m (2022: £5.1m).
Whilst the Group has a very strong credit control function, given the current
economic environment and high rate of business failures we are currently
seeing, the Board deemed it prudent to take out credit insurance for most
customers. This has given us additional input to credit management from the
credit insurer's database and the more confidence to increase business with
certain customers backed by insurance.
Financing and going concern
The Group's current bank facilities include a net overdraft facility across
the Group of £50,000 and an invoice discounting facility with HSBC providing
up to £12.0m, based on a percentage of good book debts, at a margin of 1.6%
above base. The Board closely monitors the level of facility utilisation and
availability to ensure there is enough headroom to manage current operations
and support the growth of the business.
In assessing the risks related to the continued availability of the current
facilities, the Board have taken into consideration the existing relationship
with HSBC and the strength of the security provided, also taking into account
the quality of the Group's customer base. Based on their enquiries, the Board
have concluded that sufficient facilities will continue to remain available to
the Group and therefore the going concern basis of preparation remains
appropriate and no material uncertainty exists.
Liquidity risk
The Group seeks to mitigate liquidity risk by effective cash management. The
Group's policy, throughout the year, has been to ensure the continuity of
funding through a net overdraft facility of £50,000 and an invoice
discounting facility, providing up to £12m based on a percentage of good book
debts. The invoice discounting facility is the Group's core funding line and
is classed as evergreen in that it has no fixed expiry date (although it is
reviewed annually).
S L Dye
Group Finance
Director
22 March 2024
Consolidated statement of comprehensive income
For the year ended 31 December 2023
2023 2022
Note £'000 £'000
Revenue 2 98,781 71,907
Cost of sales (81,337) (60,132)
Gross profit 17,444 11,775
Other operating income - 6
Administrative expenses (14,729) (12,024)
Profit/(loss) from operations 2,715 (243)
Finance expense (180) (212)
Profit/(loss) before tax 2,535 (455)
Tax expense 3 (690) 104
Total profit/(loss) and other comprehensive income/(expense) for the year 1,845 (351)
attributable to owners of the Parent
Earnings per ordinary share
Basic 12.75 (2.45p)
Fully diluted 12.72 (2.45p)
Consolidated statement of changes in equity
For the year ended 31 December 2023
Share capital Share premium Own shares held Capital redemption reserve Share based payment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 146 120 (236) 50 122 5,993 6,195
Total comprehensive income for the year - - - - - 1,845 1,845
Transactions with owners:
Dividends (note 20) - - - - - (145) (145)
Share options exercised - - 236 - (102) (96) 38
Total transactions with owners - - 236 - (102) (241) (107)
At 31 December 2023 146 120 - 50 20 7,597 7,933
The consolidated statement of changes in equity for the prior year was as
follows:
Share capital Share premium Own shares held Capital redemption reserve Share based payment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 146 120 (236) 50 146 6,320 6,546
Total comprehensive expense for the year - - - - - (351) (351)
Transactions with owners:
Share options cancelled - - - - (24) 24 -
Total transactions with owners - - - - (24) 24 -
At 31 December 2022 146 120 (236) 50 122 5,993 6,195
Consolidated statement of financial position
As at 31 December 2023
2023 2022
£'000 £'000
Assets
Non-current
Goodwill 132 132
Other intangible assets - 28
Property, plant, and equipment 1,326 1,544
Right-of-use assets 2,196 2,491
Deferred tax asset 6 210
3,660 4,405
Current
Inventories 14 15
Trade and other receivables 17,422 15,388
Cash and cash equivalents 1,069 467
18,505 15,870
Total assets 22,165 20,275
Liabilities
Current
Trade and other payables (10,915) (7,875)
Lease liabilities (300) (303)
Corporation tax (522) -
Current borrowings - (3,132)
(11,737) (11,310)
Non-current liabilities
Lease liabilities (2,337) (2,576)
Deferred tax liabilities (158) (194)
Total liabilities (14,232) (14,080)
Net assets 7,933 6,195
Equity
Share capital 146 146
Share premium 120 120
Own shares held - (236)
Capital redemption reserve 50 50
Share based payment reserve 20 122
Retained earnings 7,597 5,993
Total equity 7,933 6,195
Consolidated statement of cash flows
For the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Profit/(loss) before tax 2,535 (455)
Adjustments for:
Depreciation, loss on disposal and amortisation 1,070 857
Finance expense 180 212
Change in inventories 1 6
Change in trade and other receivables (2,034) (1,907)
Change in trade and other payables 3,078 1,445
Cash inflow from operations 4,830 158
Interest paid (180) (212)
Net cash inflow/(outflow) from operating activities 4,650 (54)
Cash flows from investing activities
Purchase of property, plant and equipment and intangibles (437) (417)
Net cash outflow from investing activities (437) (417)
Cash flows from financing activities
Movement on invoice discounting facility (3,103) 872
Movement on perpetual bank overdrafts (29) (568)
Dividend paid (145) -
Payment of lease liabilities (334) (312)
Net cash (outflows) from financing activities (3,611) (8)
Net increase/(decrease) in cash and cash equivalents 602 (479)
Cash and cash equivalents at beginning of year 467 946
Cash and cash equivalents at end of year 1,069 467
1. Corporate information and basis
of preparation
RTC Group Plc is a public limited company incorporated and domiciled in
England whose shares are publicly traded.
The announcement of results of the Group for the year ended 31 December 2023
was authorised for issue in accordance with a resolution of the directors on
24 March 2024.
The financial information included in this announcement has been prepared
under the historical cost convention, as modified by measurement of
share-based payments at fair value at date of grant, and in accordance with UK
adopted international accounting standards ("IFRS") and with those parts of
the Companies Act 2006 applicable to companies reporting under IFRS. This
announcement does not itself however contain sufficient information to comply
with IFRS.
The accounting policies adopted are consistent with those described in the
annual financial statements for the year ended 31 December 2022. There have
been no significant changes in the basis upon which estimates have been
determined, compared to those applied at 31 December 2022 and no change in
estimate has had a material effect on the current period.
2. Segment analysis
The business is split into three operating segments, with recruitment being
split by geographical area. This reflects the integrated approach to the
Group's recruitment business in the UK and independent delivery of overseas
business. Three operating segments have therefore been agreed, based on the
geography of the business unit: United Kingdom, International and Central
Services.
This is consistent with the reporting for management purposes, with the Group
organised into two reportable segments, Recruitment and Central Services,
which are strategic business units that offer different products and services.
They are managed separately because each segment has a different purpose
within the Group and requires different technologies and marketing
strategies.
Segment operating profit is the profit earned by each operating segment
defined above and is the measure reported to the Group's Board, the Group's
Chief Operating Decision Maker, for performance management and resource
allocation purposes. The Group manages the trading performance of each segment
by monitoring operating contribution and centrally manages working capital,
financing, and equity.
Revenues within the recruitment operating segment have similar economic
characteristics and share a majority of the aggregation criteria set out in
IFRS 8:12 in particular the nature of the products and services, the type or
class of customers, the country in which the service is delivered, and the
processes utilised to deliver the services and the regulatory environment for
the services.
The purpose of the Central Services segment is to
provide all central services for the Group including the Group's head office
facilities in Derby. It also generates income from the Derby site including
rental of excess space and hotel and conferencing facilities.
Revenue, gross profit, and operating profit delivery by geography:
2023 2022
UK UK Inter-national Recruitment Total Group UK Recruitment UK Inter-national Recruitment Total Group
Recruitment Central Central
Services Services
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 91,187 2,321 5,273 98,781 64,764 1,979 5,164 71,907
Cost of sales (75,866) (1,110) (4,361) (81,337) (54,878) (912) (4,342) (60,132)
Gross profit 15,321 1,211 912 17,444 9,886 1,067 822 11,775
Other operating income* - - - - 6 - 6
Administrative expenses (9,647) (3,587) (448) (13,682) (7,948) (2,883) (341) (11,172)
Amortisation of intangibles (28) - - (28) (46) - - (46)
Depreciation of right-of-use assets (140) (246) - (386) (144) (240) - (384)
Depreciation (478) (153) (2) (633) (261) (157) (4) (422)
Total administrative expenses (10,293) (3,986) (450) (14,729) (8,399) (3,280) (345) (12,024)
Profit from operations 5,028 (2,775) 462 2,715 1,487 (2,207) 477 (243)
*Other operating income represents Government Grants in respect of a Local
Government Business Support Grant which is not required to be repaid.
The revenue reported above is generated from continuing operations with
external customers. There were no sales between segments in the year (2022:
Nil). For segment reporting purposes in this note, revenue is analysed by the
geographical location in which the services are delivered. Revenue is further
analysed by point of invoicing in note 5.
The accounting policies of the operating segments are the same as the Group's
accounting policies described in notes 1 to 3 of this report. Segment profit
represents the profit earned by each segment, without allocation of Group
administration costs or finance costs.
During 2023, two customers in the UK segment
contributed 10% or more of total revenue being £28.0m (2022: £18.0m) and
£9.7m (2022: £5.4m) respectively, and one customer in the International
segment also contributed 10% or more of total revenue being £5.2m (2022:
£5.1m).
Recruitment revenues are generated from permanent and
temporary recruitment and long-term agreements for labour supply. Within
Central Services revenues are generated from the rental of excess space and
hotel and conference facilities at the Derby site, described as Other below.
Revenue and gross profit by service classification
for management purposes:
Revenue Gross profit
2023 2022 2023 2022
£'000 £'000 £'000 £'000
Permanent placements 2,574 2,706 2,574 2,706
Temporary placements 93,886 67,222 13,659 8,002
Others 2,321 1,979 1,211 1,067
98,781 71,907 17,444 11,775
All operations are continuing. All assets and liabilities are in the UK.
3. Tax expense
2023 2022
Continuing operations £'000 £'000
Current tax
UK corporation tax 522 -
Deferred tax
Origination and reversal of temporary differences 168 (104)
Tax 690 (104)
Factors affecting the tax expense
The tax charge assessed for the year is higher than
(2022: credit lower than) would be expected by multiplying the profit by the
standard rate of corporation tax in the UK of 23.5% (2022: 19%). The
differences are explained below:
2023 2022
Factors affecting tax expense £'000 £'000
Result for the year before tax 2,535 (455)
Profit/(loss) multiplied by standard rate of tax of 23.5% (2022: 19%) 596 (86)
Non-deductible expenses 66 50
Effect of change in tax rate 38 13
Adjustment in respect of previous periods (10) (81)
690 (104)
Factors that may affect future tax charges
Deferred tax has been recognised to the extent that
it will unwind at the currently enacted rate of 25%.
4. Dividends
2023 2022
£'000 £'000
Interim dividend of 1.0p per share (2022: Nil). 145 -
A final dividend of £659,263 (2022: £Nil) has been
proposed but has not been accrued within these financial statements. This
represents a payment of 4.5p (2022: Nil) per share.
5. Report and accounts
The above financial information does not constitute the Company's statutory
accounts for the years ended 31 December 2023 or 2022 but is derived from
those accounts. The auditor has reported on these accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis without
qualifying their report and did not contain statements under s498 (2) or (3)
Companies Act 2006 or equivalent preceding legislation. The statutory accounts
for 2022 have been filed with the Registrar of Companies.
Full audited accounts of RTC Group Plc for the year ended 31 December 2023
will be made available on the Company's website at www.rtcgroupplc.co.uk
(http://www.rtcgroupplc.co.uk) later today and will be dispatched to
shareholders on 30 April 2024.
The Company's Annual General meeting will be held at 12noon on 5 June 2024 at
the Derby Conference Centre, London Road, Derby, DE24 8UX.
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