REG - RTC Group PLC - Final Results for the year ended December 2022
27/03/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230327:nRSa2191Ua&default-theme=true
RNS Number : 2191U RTC Group PLC 27 March 2023
27 March 2023
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 2021
RTC Group Plc (AIM: RTC.L) is pleased to announce its audited results for the year ended 31 December 2022.
Highlights
· Group revenue from continuing operations £71.9m (2021: £77.7m).
· EBITDA £0.6m (2021: £1.1m).
· Improvement in cash generation from operating activities of
£2.35m versus 2021.
· Net assets £6.2m (2021: £6.6m).
· Basic loss per share 2.45p (2021: earnings per share 0.04p).
· No final dividend is proposed. Total dividend in respect of the
year to 31 December 2022: Nil (2021: Nil).
Commenting on the results Andy Pendlebury, CEO said:
"2022 was a year of two very contrasting halves for RTC Group. Like many other
companies, the early part of the year continued to be impacted by the effects
of covid. Additionally, the new maintenance and renewals contract with Network
Rail which saw Ganymede Rail successfully awarded another long-term programme
of work, was heavily biased towards upfront cost and investment activities.
Whilst the combined effect of these two events impacted our first half
profitability, the fundamental capabilities underpinning all our trading
entities remained robust. The second half of the year saw much improved
trading across the Group. With the exception of Ganymede Rail, all of our
businesses enjoyed second half run rates last seen prior to the onset of covid
in 2020.
Our overall financial position sees the Group with no long-term debt, a
working capital facility with significant headroom for growth, and strong cash
and treasury management supporting predominately blue chip and government
backed clients. RTC Group has a strong balance sheet which hasn't necessitated
any form of recapitalisation which befell many larger players in the sector
and a very strong and lengthy order book with many leading clients across a
number of our sectors. I believe we are well positioned to capitalise on
growth opportunities as they emerge."
Enquiries:
RTC Group Plc Tel: 0133 286 1842
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
SPARK Advisory Partners Limited (Nominated Adviser)
Tel: 0203 368 3550
Matt Davis / Mark Brady
www.Sparkadvisorypartners.com (http://www.Sparkadvisorypartners.com)
Panmure Gordon (Broker) Tel: 020 7886 2500
Hugh Rich
www.panmure.com (http://www.panmure.com)
About RTC
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 Recruitment 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 and international
clients. 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 clients with the benefit of a national network of skilled
personnel combined with local expertise.
ATA Recruitment 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 Recruitment has a
strong track record of attracting and recruiting the best engineering talent
for our clients. ATA's regional offices which are strategically located in
Leicester and Leeds each have dedicated market-experts to ensure ATA delivers
excellence to both our clients 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
Through its GSS brand the Group works with customers across the globe that are
focused on delivering projects in a variety of engineering 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's statement
For the year ended 31 December 2022
I am pleased to present the final report for the year.
Group
The Group overall delivered revenues of £71.9m (2021: £77.7m) and overall
gross profit was £11.8m (2021: £11.8m).
Ganymede Energy markedly increased volumes, our branch general manufacturing
and engineering recruitment performance was buoyant, led by increased
permanent placement volumes and our UK technical and engineering operations
produced a much-improved contribution. Our international business continued
to make steady progress from an already sound base and achieved results
comparable to the final year of our service in Afghanistan despite reduced
volumes. The difficult trading conditions experienced in the rail business in
2021 continued through 2022, exacerbated by ongoing industrial action,
although the year ended with most of the challenges being addressed. Within
Central services the Derby Conference Centre recovered strongly to generate a
trading profit on markedly better business levels in both the conferencing
area and the hotel and events activities.
Dividends
In the conditions which have unfolded this year it remains prudent not to pay
a dividend in respect of 2022 and to concentrate future efforts on balance
sheet improvement in preparation for the expected need to invest in business
changes and developments in the future. It is unlikely that we will be
recommending a return to dividend payments in the near future.
Our people
I should like to thank all our people for their loyalty, hard work, and
enthusiasm during the course of the year.
Outlook
It is more than usually difficult to assess the likely economic backdrop which
will provide the stage for business management and performance in 2023.
Continuing high levels of inflation, albeit varying throughout the world,
coupled with the war between Russia and Ukraine and alarming increases in
tension between China and the West do not augur well for stability. Although
any slide into recession in the UK could adversely affect general permanent
recruitment, other elements of our portfolio of activities are in areas not so
directly affected by economic factors and should offer a more stable
investment environment. Although it is possible that inflation will continue
to abate and remain lower, history casts some doubt on the likelihood of that
being the case. Nonetheless the RTC Group has a strong balance sheet and
management in depth and your directors are cautiously optimistic of a
continuing improvement in our financial performance.
W J C Douie 26 March 2023
Chairman
Chief Executive's operational and strategic review
For the year ended 31 December 2022
Overview
2022 was a year of two very contrasting halves for RTC Group. Like many other
companies, the early part of the year continued to be impacted by the effects
of covid and the health, safety, and well-being of both our permanent and
contract workforce remained our highest priority as we cautiously transitioned
to a more normalised trading environment. Additionally, the new maintenance
and renewals contract with Network Rail which saw Ganymede Rail successfully
awarded another long-term programme of work, albeit on new operating routes,
was heavily biased towards upfront cost and investment activities. Whilst the
combined effect of these two events impacted our first half profitability
resulting in only a marginal EBITDA for the period, the fundamental
capabilities underpinning all our trading entities remained robust. This was
evidenced in the second half of the year which saw much improved trading
across the Group. With the exception of Ganymede Rail, all of our businesses
enjoyed second half run rates last seen prior to the onset of covid in 2020.
Furthermore, and whilst we are early in the new financial year with much
global and domestic uncertainty clouding the visibility businesses and
investors desire, I am optimistic that these run-rates can maintain momentum
and continue in a positive direction.
Whilst 2022 full year sales of £71.9m were down around 7.5% from 2021
reflecting the difficult start to the year, our gross profit held constant at
£11.8m with the margin gaining some ground to 16% reflecting changes to our
sales mix and operational changes to our international contracts with fewer
low margin administration activities performed on behalf of our client.
Additionally, and of significance to the financial performance of our Ganymede
Rail business and the Group, it should be noted that having endured elevated
operating costs in the early part of the year to comply with the tail end of
covid, constantly escalating fuel prices and wage-based inflation due to
supply shortages, the business was further heavily impacted in the second half
of the year by industrial action across the whole of the rail network. This
was naturally hugely disappointing and costly to our rail business having
invested significantly in the preparation of personnel and new route
management/deployment activities in the early part of the year. To give some
financial context, the business, with minimal ability to offset operational
cost, lost around 75,000 billable hours in the second half of the year due to
the disruption which in turn equated to missed revenue of around £2m along
with the associated gross margin and profit contribution. A significant sum
which if recognised would have had a positive impact on the outcome of the
Group's results.
Furthermore, and taking account of our medium to long-term view of growth
across the industries and sectors we operate in, we have continued throughout
the year to invest in and increase the number of recruitment consultants
employed across the Group and alongside this have committed to investing in a
new front end, cloud based CRM recruitment system which will provide a unified
platform across the Group and integrate with all financial, payroll and
accounting systems. Also, as we cooperate and integrate more closely alongside
and within our clients' businesses our technology platform will enable us to
seamlessly enhance and grow the value of key client relationships. Naturally,
the nature of these investments, especially the costs attached to finding,
training, and developing new consultants, are forward loaded with delayed
revenue streams and we expect a positive return on these investments from 2023
onwards.
Taking all of this into account and considering our overall financial position
which sees the Group with no long term debt, a working capital facility with
significant headroom for growth, strong cash and treasury management
supporting predominately blue-chip and government backed clients, a strong
balance sheet which hasn't necessitated any form of recapitalisation, which
befell many larger players in the sector and a very strong and lengthy order
book with many leading clients across a number of our sectors, I believe we
are well positioned to capitalise on growth opportunities as they emerge.
Our strategy is very clear and will continue to centre around our business
model of growing industry leading, independent subsidiary businesses capable
of competing in each of their respective sectors and offering clients
significant opportunities for greater value add and high-level cost savings
through working collaboratively across all RTC Group companies.
Finally, I believe our commitment to the highest levels of corporate,
commercial, and operational governance has been a significant distinguishing
factor in building the strong and long-term relationships we have with our
client base. This coupled with the financial health of the Group, our ability
to attract strong management teams in each of our businesses and a Group board
with the necessary experience and proven track record to steer the business
through what has been an unprecedented few years for the sector with
significant companies having to seek additional shareholder funds to survive,
is evidence that the Group is in very solid and strong position for its
shareholders.
Business review
UK Division
2022 was a year of recovery for our UK recruitment business with very strong
demand returning for both permanent and temporary recruitment pushing vacancy
levels to post pandemic highs. However, whilst client requirements for
permanent staff were running at all-time highs, a shortage of candidates due
to skill availability, candidate reluctance to change employer during the
prevailing economic uncertainties and counter offers by employers to retain
'hard-to-replace' employees, created a challenging recruitment environment.
Despite this our white-collar recruitment teams in Ganymede and ATA enjoyed a
25% increase in permanent fees for the period. The growth was driven by a
combination of increased fees as salary levels rose to attract key hires and
an overall increase in volume in line with market growth. The focus we have
achieved through combining our white-collar rail and infrastructure
recruitment business alongside our Ganymede Rail business has continued to
provide opportunities across the sector with many clients choosing to leverage
the combined capability. Having been awarded several preferred supplier status
contracts we have been able to secure additional revenue and reduce external
recruitment costs for many rail and infrastructure clients. Also, during the
year, following encouragement from a number of rail specific clients, a rail
signalling business was established, and this is now delivering a new and
profitable business stream with growing demand as we enter the new year.
Whilst candidate caution due to economic and political uncertainty dominated
the permanent marketplace, the temporary sector excluding rail had an
extremely buoyant year. Ganymede and ATA's white collar recruitment teams saw
revenue from temporary activity increase significantly across both businesses
resulting in increased gross profit of 38%. This is a hugely impressive
performance, especially for the ATA business which lost over 90% of temporary
workers out on assignment during the height of covid. ATA's current run-rate
is now tracking back at pre-covid levels and demand as we enter the new year
is showing positive signs of encouragement.
During 2022 Ganymede Energy finally began to fulfil its full potential
following successive years of setbacks. Over 5 years ago the business
established itself as a partner to major utility companies to provide
personnel to support the Government's smart meter roll out strategy. Having
recruited, trained, and begun to deploy smart meter installers it quickly
became apparent that issues with the technology would have to halt the
programme pending technology improvements. This was followed by delays caused
through client redundancy programmes and then a complete suspension of
activity as covid restrictions prohibited workers from attending private
residences. This was still the case in quarter one 2022 but once all
restrictions were finally lifted activity recommenced. I am delighted to
report that during the rest of the year demand for our smart meter installers
has hit record highs with the year ending with over 200 Ganymede personnel out
on daily assignment and this is expected to rise during 2023. Outside of the 6
major utility companies our energy business is now one of the largest
providers of smart meter installers in the country. A remarkable achievement
given the multiple hurdles the business has faced during its growth journey.
The Government is currently legislating to extend its powers in relation to
the smart meter roll-out until November 2028. Based on data published at the
end of September 2022 there are some 24 million smart meters awaiting fitment.
Given current installation rates across the industry it is estimated that it
will take between 6-8 years (excluding enhancements to existing meters) to
replace the remaining traditional meters. We are confident that given our
current performance and dominant positioning our energy business has a
significant and sustainable revenue potential revenue for the foreseeable
future. In addition, in collaboration with our conference business, the Derby
Conference Centre, our energy partners are using our inhouse facility to
induct direct personnel alongside the Ganymede smart meter installers which is
generating broader revenue for the Group.
Towards the second half of 2022 our projects business which had traditionally
focused on rail projects began exploring the opportunity to enter the social
housing market given the scale of property refurbishment which was forecast
across many district councils. Following a pilot scheme which saw some upfront
investment to gain skills, capability and experience the team began working as
a secondary provider of labour to a prime contractor. Over the past 6 months
and following successful inclusion as a direct provider our projects business
has now refurbished in excess of 100 council properties. Whilst it is early
days, we believe the scale of properties requiring renovation or upgrade as
part of the Government's heating and building strategy to decarbonise homes,
offers another long-term opportunity for two RTC business units to combine
capabilities and offer a single point solution to a significant and growth
dominated sector. In preparation and readiness for this the Group is funding
the establishment of a training and assessment centre within our energy
business premises.
As has been alluded to Ganymede Rail experienced a very challenging year in
2022 mainly due to the tail end of covid, disruption to its operational route
management through significant industrial action, escalating fixed and
variable costs through excessive fuel prices and high wage inflation, and the
impact of route changes which resulted in reduced revenue and additional set
up costs for the newly awarded long term Network Rail contract. Whilst this
has proved an extremely difficult period for the business, its management, and
its permanent and contract workforce, I cannot emphasise enough the strategic
value and importance that the Group board place on this business. The business
has a long term, multimillion-pound order book with a minimum 4-year tenure
which will see Ganymede continue as one of Network Rail's largest and
historically best performing maintenance and renewals labour suppliers. In
addition to its long-term direct relationship with Network Rail Ganymede Rail
is partner with numerous blue-chip prime contractors and has a first-class
track record in safety management in the sector and is one of the largest
apprentice training funders across labour supply companies. We remain
extremely confident in the business's ability deliver an extremely high value
service on one of the country's most important and strategic assets and we
look forward to seeing it rebound in 2023.
Central services
The Derby Conference Centre which forms part of the central services division
had a much-improved year culminating in a significant increase in volume for
all its service offerings. Following a long period of closure to comply with
government restrictions in 2020 and 2021 the business like many in the
hospitality sector was plagued with uncertainty at the beginning of 2022.
However, its performance due to its strong reputation in the East Midlands
quicky regained momentum and December delivered one of its best festive
results. Furthermore, as we enter 2023 the business achieved its best January
result and the whole team is encouraged about its long-term future in the
sector.
International
Whilst GSS no longer provides personnel to Afghanistan following the
demobilisation of all international personnel, the business remains very
active in supporting overseas clients and territories and has secured new
clients providing exciting new opportunities for the business. We still
provide a wide-ranging workforce to many other overseas locations including,
Dubai, Bahrain, Iraq, Mogadishu, and Poland. During 2022 the business secured
a significant new contract with its largest client to provide large volumes of
permanent personnel to British Overseas Territories. The team are also
currently working with several NATO supply partners in support of emerging
mobilisation contracts in various locations.
Outlook
Following a vastly improved performance in the second half of the year and
early signs of a continuation of this trajectory into the early part of this
year, I remain cautiously optimistic about our future revenue and profit
generation. Whilst naturally there is considerable and justified concern about
both international and domestic events which serve to destabilise both market
and customer demand, I believe the services being provided by many of our
domestic clients, especially our utility and transportation clients where
maintenance and enhancement programmes to key infrastructure assets have work
programmes spanning many years offering significant growth potential to add to
our already well established orderbook. In addition to this, the broad
generalist capability being offered by our permanent and temporary recruitment
business serving the UK's growing manufacturing, industrial and engineering
companies, and our expanding geographic presence through our international
business will ensure that we are well placed to take capture new business
opportunities across all our Group recruitment businesses.
Our people
The energy and enthusiasm showed by our people across the RTC Group is, as
always, exceptional. Given how tough the last few years have been on our
people and their families it is has been humbling to see their resilience,
ambition, and desire to see RTC continue to differentiate itself in highly
populated markets.
The Board of directors could not be prouder of the collective team effort and
would like to thank everybody across the Group.
A M Pendlebury
CEO
26 March 2023
Finance Director's report
For the year ended 31 December 2022
Financial highlights
The Group overall delivered revenues of £71.9m (2021: £77.7m) and overall
gross profit was £11.8m (2021: £11.8m). The loss from operations of £0.2m
(2021: profit of £0.3m) reflects a mixed year that saw good performance
across all areas of the Group other than rail which experienced a perfect
storm of increased costs to supply and lower than anticipated volumes (see
more detail in the UK Recruitment section below).
UK Recruitment
The division's white collar recruitment divisions, serviced by our ATA and
Ganymede recruitment brands both performed well throughout the year, despite
the well-publicised candidate shortages, with strong client demand across both
permanent and contract recruitment. In 2022 these divisions delivered a
combined 25% growth in permanent fees and 38% growth in contract GP compared
to 2021.
Ganymede Energy continued its growth trajectory, supporting the Government's
smart meter roll out programme, delivering 50% growth at GP level compared to
2021. Additionally, 2022 saw the development of training and assessment
facilities at the Ganymede Energy premises in Milton Keynes to support
workforce upskilling.
Ganymede Rail had a challenging year, severely impacted by ongoing industrial
action, escalating fuel prices and wage inflation fuelled by candidate
shortages. Year on year volumes reduced by 35% in comparison to 2021
reflecting the changes in geographical regions of supply to Network Rail under
the revised contract which commenced in Q4 of 2021, combined with the lost
revenue impact of the rail strikes between June and December.
Additionally, the company continued to grow its minor projects capability;
developed a signalling labour supply business and delivered ongoing
improvement in safety performance throughout the year.
Overall, UK Recruitment delivered slightly reduced revenues of £64.8m (2021:
£66.8m) which were converted to profit from operations of £1.5m (2021:
£2.7m). The reduction in profit from operations reflecting strike action
and the increased cost of supply, particularly fuel prices in the Rail
division and increased administrative expenses largely due to higher
commissions on very strong performances in energy and recruitment.
International
Whilst revenue reduced significantly to £5.2m (2021: £9.6m) following the
withdrawal of NATO from Afghanistan, gross profit reduced only slightly to
£0.8m (2021: £0.9m) with gross margin increasing to 15% (2021: 10%) as much
of the revenue relating to Afghanistan related to services (e.g., contractor
travel) that were provided at cost. The division has been successful in
securing work under new framework agreements in addition to existing
arrangements delivering profit from operations of £0.5m (2021: £0.5m) on a
par with 2021 despite the withdrawal from Afghanistan.
Central Services
Within Central Services, the Derby Conference Centre has seen good levels of
activity relating to conferences, events and bedroom sales for the majority of
2022 with a particularly strong finish on festive activities. Revenue
generated by the segment was £2.0m (2021: £1.3m) and gross profit increased
to £1.1m (2021: £0.7m).
Taxation
The tax credit for the year was £0.1m (2021: charge of £0.1m). The variance
between this and the expected charge if a 19% corporation tax rate was applied
to the result for the year is explained in note 9.
Dividends
No dividends were paid during the year (2021: Nil). No final dividend for
the year ended 31 December 2022 has been proposed (2021: Nil).
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. No options were exercised
during the year. The balance of £235,918 (2021: £235,918) in the own shares
held reserve within equity reflects 337,027 (2021: 337,027) shares remaining
in the EBT that will be used to satisfy future
exercises.
Statement of financial position and cash flows
The Group's net working capital reduced slightly to £4.6m (2021: £5.0m). The
ratio of current assets to current liabilities was slightly reduced at 1.4
(2021: 1.5). The Group's gearing ratio, which is calculated as total
borrowings over net assets, increased to 0.5 (2021: 0.4).
The Group generated £2.4m more cash in 2022 compared to. This improvement
versus 2021 reflects increased activity across the majority of the business.
The Group has no term debt and is financed using its invoice discounting and
overdraft facilities with HSBC. At 31 December 2022 the Group's had available
funds to draw down of £5.1m (2021: £4.3m)
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
of 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.
Given the uncertainty and mixed opinion about short and medium-term prospects
for the UK economy influenced by the cost-of-living crisis, widespread strike
action, the looming threat of a recession and other geo-political events, in
addition to the established budgeting and forecasting processes, which
considers a range of plausible events and circumstances, a reverse stress test
has been undertaken. This shows that, assuming a continuation of the current
facilities, the Group has access to sufficient cash and facilities to
withstand a 20% reduction against the 2022 revenues without any significant
restructuring or other cost reduction measures.
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 invoicing
discounting facility, providing up to £12m based on a percentage of good book
debts. The invoice discounting facility, which is the Group's core funding
line is classed as evergreen in that it has no fixed expiry date (although it
is reviewed annually).
The strategic report was approved by the Board on 26 March 2023 and signed on
its behalf by:
S L
Dye
26 March 2023
Consolidated statement of comprehensive income
For the year ended 31 December 2022
2022 2021
Notes £'000 £'000
Revenue 2 71,907 77,715
Cost of sales (60,132) (65,928)
Gross profit 11,775 11,787
Other operating income 6 351
Administrative expenses (12,024) (11,864)
(Loss)/profit from operations (243) 274
Finance expense (212) (160)
(Loss)/profit before tax (455) 114
Tax expense 3 104 (109)
Total (loss)/profit and other comprehensive (expense)/income for the year (351) 5
attributable to owners of the Parent
Earnings per ordinary share
Basic (2.45p) 0.04p
Fully diluted (2.45p) 0.03p
Consolidated statement of changes in equity
For the year ended 31 December 2022
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 -
Share based payment charge
Total transactions with owners - - - - (24) 24 -
At 31 December 2022 146 120 (236) 50 122 5,993 6,195
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 2021 146 120 (236) 50 718 6,278 7,076
Total comprehensive income for the year - - - - - 5 5
Transactions with owners:
Share options cancelled - - - - (782) 37 (745)
Share based payment charge - - - - 210 - 210
Total transactions with owners - - - - (572) 37 (535)
At 31 December 2021 146 120 (236) 50 146 6,320 6,546
Consolidated statement of financial position
As at 31 December 2022
2022 2021
Note £'000 £'000
Assets
Non-current
Goodwill 132 132
Other intangible assets 28 74
Property, plant, and equipment 1,544 1,554
Right-of-use assets 2,491 2,779
Deferred tax asset 210 40
4,405 4,579
Current
Inventories 15 21
Trade and other receivables 15,388 13,481
Cash and cash equivalents 467 946
15,870 14,448
Total assets 20,275 19,027
Liabilities
Current
Trade and other payables (7,875) (6,430)
Lease liabilities (303) (294)
Current borrowings (3,132) (2,828)
(11,310) (9,552)
Non-current liabilities
Lease liabilities (2,576) (2,801)
Deferred tax liabilities (194) (128)
Total liabilities (14,080) (12,481)
Net assets 6,195 6,546
Equity
Share capital 146 146
Share premium 120 120
Own shares held (236) (236)
Capital redemption reserve 50 50
Share based payment reserve 122 146
Retained earnings 5,993 6,320
Total equity 6,195 6,546
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
£'000 £'000
Cash flows from operating activities
(Loss)/profit before tax (455) 114
Adjustments for:
Depreciation, loss on disposal and amortisation 857 816
Finance expense 212 160
Employee equity settled share options charge - 210
Change in inventories 6 (14)
Change in trade and other receivables (1,907) (77)
Change in trade and other payables 1,445 (3,271)
Cash inflow/(outflow) from operations 158 (2,062)
Income tax paid - (217)
Interest paid (212) (160)
Net cash outflow from operating activities (54) (2,439)
Cash flows from investing activities
Purchase of property, plant and equipment and intangibles (417) (279)
Net cash outflow from investing activities (417) (279)
Cash flows from financing activities
Movement on invoice discounting facility 872 2,231
Movement on perpetual bank overdrafts (568) (370)
Amounts paid to cancel share options - (745)
Payment of lease liabilities (312) (279)
Net cash (outflow)/inflow from financing activities (8) 837
Net decrease in cash and cash equivalents (479) (1,881)
Cash and cash equivalents at beginning of year 946 2,827
Cash and cash equivalents at end of year 467 946
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 2022
was authorised for issue in accordance with a resolution of the directors on
26 March 2023.
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 2021. There have
been no significant changes in the basis upon which estimates have been
determined, compared to those applied at 31 December 2021 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:
2022 2021
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 64,764 1,979 5,164 71,907 66,842 1,279 9,594 77,715
Cost of sales (54,878) (912) (4,342) (60,132) (56,703) (622) (8,603) (65,928)
Gross profit 9,886 1,067 822 11,775 10,139 657 991 11,787
Other operating income* - 6 - 6 213 138 - 351
Administrative expenses (7,948) (2,883) (341) (11,172) (7,240) (3,293) (519) (11,052)
Amortisation of intangibles (46) - - (46) (100) - - (100)
Depreciation of right-of-use assets (144) (240) - (384) (129) (239) - (368)
Depreciation (261) (157) (4) (422) (175) (165) (4) (344)
Total administrative expenses (8,399) (3,280) (345) (12,024) (7,644) (3,697) (523) (11,864)
Profit from operations 1,487 (2,207) 477 (243) 2,708 (2,902) 468 274
*Other operating income represents Government Grants in respect of the
Coronavirus Job Retention Scheme and a Local Government Business Support Grant
(none of which are 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 (2021:
Nil). For segment reporting purposes in this note, revenue is analysed by the
geographical location in which the services are delivered.
The accounting policies of the operating segments are the same as the Group's
accounting policies described in notes 1 above. Segment profit represents the
profit earned by each segment, without allocation of Group administration
costs or finance costs.
During 2022, one customer in the UK segment
contributed 10% or more of total revenue being £18.0m (2021: £28.0m) and one
customer in the International segment also contributed 10% or more of total
revenue being £5.1m (2021: £9.1m).
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
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Permanent placements 2,706 2,098 2,706 2,098
Temporary placements 67,222 74,338 8,002 9,032
Others 1,979 1,279 1,067 657
71,907 77,715 11,775 11,787
All operations are continuing. All assets and liabilities are in the UK.
3. Tax expense
2022 2021
Continuing operations £'000 £'000
Current tax
UK corporation tax - (6)
Deferred tax
Origination and reversal of temporary differences (104) 115
Tax (104) 109
Factors affecting the tax expense
The tax credit assessed for the year is lower than
(2021: charge higher than) would be expected by multiplying the loss by the
standard rate of corporation tax in the UK of 19% (2021: 19%). The
differences are explained below:
2022 2021
Factors affecting tax expense £'000 £'000
Result for the year before tax (455) 114
(Loss)/profit multiplied by standard rate of tax of 19% (2021: 19%) (86) 22
Non-deductible expenses 50 68
Tax charge on exercise of options - 28
Effect of change in deferred tax rate 13 (9)
Adjustment in respect of previous periods (81) -
(104) 109
4. Dividends
No final dividend for the year ended 31 December 2022 has been proposed (2021:
Nil). This represents a payment of Nil (2021: 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 2022 or 2021 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 2020 have been filed with the Registrar of Companies.
Full audited accounts of RTC Group Plc for the year ended 31 December 2022
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 25 April 2023 and then be available from the Company's
registered office - The Derby Conference Centre, London Road, Derby, DE24 8UX.
The Company's Annual General meeting will be held at 12.30pm on 31 May 2023 at
the Derby Conference Centre, London Road, Derby, DE24 8UX.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAXDLALEDEFARecent news on RTC
See all newsREG - AIM - AIM Notice - 09/04/2024
AnnouncementREG - RTC Group PLC - Director Dealing, Share Buyback and Cancellation
AnnouncementREG - RTC Group PLC - Final results for the year ended 31 December 2023
AnnouncementREG - RTC Group PLC - Trading update and notice of results
AnnouncementREG - AIM - AIM Notice - 15/11/2023
Announcement