REG - RTC Group PLC - Interim Results
26/07/2023 07:00
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RNS Number : 1673H RTC Group PLC 26 July 2023
This announcement contains inside information as stipulated under The Market
Abuse Regulation (EU No. 596/2014).
26 July 2023
RTC Group Plc
("RTC", "the Company" or "the Group")
Interim Results for the Six Months Ended 30 June 2023
RTC Group Plc (AIM: RTC.L), the engineering and technical recruitment Group,
is pleased to announce its unaudited results for the six months ended 30 June
2023.
Summary:
· Group revenue from continuing operations increased 33%
to £45.6m (2022: £34.4m);
· Contract revenues increased to £43.0m (2022: £32.1m)
and a strong order book in excess of £200m;
· EBITDA increased by £1.5m to £1.6m (2022: £0.1m);
· Profit before tax increased by £1.4m to £1.0m (2022:
loss of £0.4m);
· Net assets grew by £0.7m to £6.9m (2022: £6.2m);
· Net cash inflow from operating activities £2.1m (2022
outflow: £0.6m);
· No term debt; and
· Basic earnings per share 5.20p (2022: loss per share
2.43p).
No dividends were paid in the period (2022: Nil). The Directors propose an
interim dividend of 1.0p per share (2022: Nil). The interim dividend will be
paid on 1 September 2023 to shareholders on the register on 4 August 2023.
Commenting on the results, Bill Douie, Chairman, said:
"In our Annual Report and Accounts 2022 our general message was that our Rail
business, which had successfully secured a further long term strategic supply
contract with Network Rail, was impacted by the combination of: the tail end
of enhanced costs to comply with covid restrictions; escalating fuel prices;
upfront costs; and other investment activities to establish appropriate
management and operational structure for our new operating routes. In
addition, there was significant disruption due to industrial action across the
whole rail network. I am pleased to report that, whilst industrial action
remains disappointingly prevalent, albeit with less impact, our Rail business
is back trading strongly and in line with our expectations. Our other
businesses are also showing strong recovery and have progressed well as
anticipated.
I am therefore pleased to be able to report that the Group has enjoyed a
buoyant first half and that we have posted a pre-tax profit of £1.0m for the
period.
Whilst I have been reluctant in recent years, especially given such turbulent
times for the global economy, to propose the payment of dividends, given these
excellent results, which represent our best-ever first half, I am proposing to
make a cautious return to payment of dividends with an interim dividend of 1p
per share.
Outlook
We remain cautiously confident that our progress will continue in the second
half of 2023. We continue to invest in our businesses and to further
strengthen our balance sheet through retained profits."
The interim report is available on the Company's website www.rtcgroupplc.co.uk
(http://www.rtcgroupplc.co.uk) .
ENDS
Enquiries:
RTC Group Plc Tel: 0133 286 1835
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
www.rtcgroupplc.co.uk (http://www.rtcgroupplc.co.uk)
SPARK Advisory Partners Limited (Nominated Adviser) Tel: 0203 368 3550
Matt Davis / James Keeshan
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
RTC Group Plc is an AIM listed 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 technical and engineering talent and
providing complete workforce solutions to help build and maintain
infrastructure and transportation for a wide range of 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 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 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.
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.
UK Central Services
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.
Chairman's statement
Six months ended 30 June 2023
In our Annual Report and Accounts 2022 our general message was that our Rail
business, which had successfully secured a further long term strategic supply
contract with Network Rail, was impacted by the combination of: the tail end
of enhanced costs to comply with covid restrictions; escalating fuel prices;
upfront costs; and other investment activities to establish appropriate
management and operational structure for our new operating routes. In
addition, there was significant disruption due to industrial action across the
whole rail network. I am pleased to report that, whilst industrial action
remains disappointingly prevalent, albeit with less impact, our Rail business
is back trading in line with our expectations. Our other businesses are also
showing strong recovery and have progressed well as anticipated.
Ganymede Rail and Recruitment divisions are benefitting from the increasing
demand for high-quality engineering personnel in the UK, driven by the growth
in infrastructure expenditure. In 2021, the UK government made a funding
commitment of £100 billion to support economic infrastructure, specifically
aimed at strengthening the infrastructure sector and fostering its
development.
Ganymede Energy benefits from growing demand from major energy providers for
dual-fuel meter installers to support the Government's smart-meter roll-out
programme. The initial programme has a target completion date of 2025 which
involves the installation of 53m smart gas and electricity meters across the
UK, with follow on works to replace first generation meters and to upgrade the
second-generation meters to 4G capability expected to continue until 2033.
I am therefore pleased to be able to report that the Group has enjoyed a
buoyant first half and that we have posted a pre-tax profit of £1.0m for the
period.
Whilst I have been reluctant in recent years, especially given such turbulent
times for the global economy, to propose the payment of dividends, given these
excellent results, which represent our best-ever first half, I am proposing to
make a cautious return to payment of dividends with an interim dividend of 1p
per share.
Outlook
We remain cautiously confident that our progress will continue in the second
half of 2023. We continue to invest in our businesses and to further
strengthen our balance sheet through retained profits.
W J C Douie
Chairman
26 July 2023
Finance Director's statement
Six months ended 30 June 2023
Highlights
For the six months ended 30 June 2023, the Group delivered revenues of £45.6m
(2022: £34.4m) an increase of 33% on the same period in 2022. EBITDA
increased by £1.5m to £1.6m (2022: £0.1m) and profit before tax was £1.0m
(2022: loss before tax: £0.4m) an increase of £1.4m versus the same period
in 2022.
The key driver of the increase being contract revenue which was £43.0m (2022:
£32.1m). The growth predominantly coming from our Rail and Energy divisions.
Overall gross profit from contract revenues increased to £6.1m (2022:
£3.7m).
UK recruitment
The UK Recruitment segment delivered increased revenues of £41.8m (2022:
£31.1m) which were converted to significantly improved profit from operations
of £2.2m (2022: £0.6m).
Ganymede Rail has worked with Network Rail to successfully address issues that
severely impacted the division in 2022, such as fuel and general price
increases coupled with the significant disruption caused by Network Rail's
decision to award all suppliers new contract delivery areas in 2022. This,
together with growth with other clients, has resulted in a significantly
improved performance both in terms of revenues and profits in the first half
of 2023. Revenues increased to £28.4m (2022: £21.1m). Gross profit was
£3.7m (2022: £2.2m) and gross margin was improved at 13% (2022: 10%). The
division delivered a £1.5m increase in profit compared to the same period in
2022. Within the Rail division, Ganymede's signalling labour supply business
continued to grow with a new regional office being opened to support that
growth.
Ganymede Energy continued its growth trajectory in the first half of 2023. It
increased first half revenues by 47% to £8.4m (2022: £5.7m), delivered gross
profits of £1.8m (2022: £1.2m) and its gross profit margin increased to 22%
(2022: 20%). The division further delivered a 75% uplift in profit compared to
same period in 2022 £0.7m (2022: £0.4m).
The division's white-collar recruitment, serviced by its ATA brand continued
to perform well with client demand remaining strong across permanent and
temporary UK recruitment. The division delivered revenues of £4.3m (2022:
£3.5m) with the increase mainly coming from growth in temporary recruitment.
Gross profits overall grew to £1.5m (2022: £1.3m). As a result of the
increased proportion of temporary revenues the gross margin reduced to 34%
(2022: 38%). Profit for the period was maintained at £0.3m (2022: £0.3m) as
the division continued to invest in staff numbers for future growth.
International recruitment
International recruitment delivered revenues of £2.6m (2022: £2.5m),
slightly higher than the same period in 2022 as they steadily have increased
revenues under new framework agreements. Profit from operations also showed a
slight improvement at £238,000 (2022: £169,000).
UK Central Services
Within UK Central Services, our hotel and conference centre business delivered
revenues of £1.2m (2022: £0.9m) as the good levels of activity relating to
conferences, events and bedroom sales seen throughout 2022 continued in the
first half of 2023. Gross profit increased to £0.6m (2022: £0.5m) and gross
margin was maintained at 54%. Our hotel and conference centre in Derby
benefits from a long lease that was taken out in 2018 and has 10 years left to
run. Rents for the entire lease period were fixed at inception and as such are
now even more competitive.
Taxation
The total tax charge for the period is estimated at £254,000 (2022:
£59,000). This is higher than would be expected if the standard tax rate was
applied to the result for the period, as explained in note 3.
Earnings per share
The basic earnings per share figure is 5.20p (2022: loss per share of
2.43p). The diluted earnings per share is 5.19p (2022: loss per share of
2.43p).
Dividends
No dividends were paid in the period (2022: Nil). The Directors propose an
interim dividend of 1.0p per share (2022: Nil). The interim dividend will be
paid on 1 September 2023 to shareholders on the register on 4 August 2023.
Statement of financial position
Net working capital has increased to £5.4m (2022: £4.7m). There has been an
increase in debtors reflecting the increase in revenues versus the same period
last year and an improvement in key customer aged balances. Net assets have
increased to £6.9m (2022: £6.2m). The Group has no term debt and is financed
using its invoice discounting and overdraft facilities with HSBC. At 30 June
2023 there were no overdrafts in use and invoice discounting funds in use were
significantly reduced at £1.5m (2022: £3.5m).
Cash flow
The cash inflow from operating activities of £2.1m (2022: outflow £0.6m) for
the six-month period reflects increased revenues and the improvement noted
above in key customer balances.
Financing
The Group's current bank facilities comprise an overdraft of £50,000 and a
confidential invoice discounting facility of up to £12m with HSBC at a
discount 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 future needs of the business. The Group
continues to be focussed on cash generation and building a robust statement of
financial position to protect the business.
Own shares held
The cost of the Group's own shares purchased through the Employee Benefit
Trust is shown as a deduction from equity. 193,615 options were exercised
during the period. The balance of £100,388 on the own shares held reserve
within equity reflects 143,412 shares remaining in the EBT that will be used
to satisfy future exercises.
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 £12m, 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.
As a result, the going concern basis continues to be appropriate in preparing
the interim results.
S L
Dye
Group Finance Director
26 July
2023
Consolidated statement of comprehensive income:
Six-month period ended 30 June 2023 Six-month period ended 30 June 2022 Year-ended
31
December 2022
Unaudited Unaudited Audited
Notes £'000 £'000 £'000
Revenue 2 45,561 34,406 71,907
Cost of sales 2 (37,475) (28,852) (60,132)
Gross profit 2 8,086 5,554 11,775
Other operating income 2 - - 6
Administrative expenses 2 (6,958) (5,859) (12,024)
Profit / (loss) from operations 2 1,128 (305) (243)
Finance expense (127) (101) (212)
Profit / (loss) before tax 1,001 (406) (455)
Tax expense 3 (254) 59 104
Total profit / (loss) and other comprehensive income for the period 747 (347) (351)
attributable to owners of the parent
Earnings per ordinary share
Basic 5.20p (2.43p) (2.45p)
Fully diluted 5.19p (2.43p) (2.45p)
Consolidated statement of changes in equity for the six months ended 30 June 2023:
Share capital Share premium Own shares held Capital redemption reserve Share based payment reserve Profit and loss 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 period - - - - - 747 747
Transactions with owners:
Share options exercised - - 135 - (92) (43) -
Total transactions with owners - - 135 - (92) (43) -
At 30 June 2023 (Unaudited) 146 120 (101) 50 30 6,697 6,942
Consolidated statement of changes in equity for the six months ended 30 June 2022:
Share capital Share premium Own shares held Capital redemption reserve Share based payment reserve Profit and loss 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 income for the period - - - - - (347) (347)
At 30 June 2022 (Unaudited) 146 120 (236) 50 146 5,973 6,199
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 -
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 As at As at
30 June 2023 30 June 31 December 2022
Unaudited 2022 Audited
Unaudited
£'000 £'000 £'000
Assets
Non-current
Goodwill 132 132 132
Other intangible assets 18 43 28
Property, plant, and equipment 1,504 1,574 1,544
Right of use assets 2,300 2,627 2,491
Deferred tax asset 8 40 210
3,962 4,416 4,405
Current
Inventories 17 11 15
Trade and other receivables 15,932 13,610 15,388
Cash and cash equivalents 499 681 467
16,448 14,302 15,870
Total assets 20,410 18,718 20,275
Liabilities
Current
Trade and other payables (9,117) (5,926) (7,875)
Lease liabilities (303) (176) (303)
Corporation tax (54) 66 -
Current borrowings (1,525) (3,547) (3,132)
(10,999) (9,583) (11,310)
Non-current liabilities
Lease liabilities (2,277) (2,801) (2,576)
Deferred tax liabilities (192) (135) (194)
Total liabilities (13,468) (12,519) (14,080)
Net assets 6,942 6,199 6,195
Equity
Share capital 146 146 146
Share premium 120 120 120
Capital redemption reserve 50 50 50
Own shares held (101) (236) (236)
Share based payment reserve 30 146 122
Profit and loss account 6,697 5,973 5,993
Total equity 6,942 6,199 6,195
Consolidated statement of cash flows:
Six-month period ended 30 June 2023 Unaudited Six-month period ended 30 June 2022 Unaudited Year ended 31 December 2022
Audited
£'000 £'000 £'000
Cash flows from operating activities
Profit / (loss) before tax 1,001 (406) (455)
Adjustments for:
Depreciation, loss on disposal and amortisation 450 413 857
Finance expense 127 101 212
Change in inventories (2) 10 6
Change in trade and other receivables (544) (129) (1,907)
Change in trade and other payables 1,242 (504) 1,445
Cash inflow/(outflow) from operations 2,274 (515) 158
Interest paid (127) (101) (212)
Net cash inflow/(outflow) from operating activities 2,147 (616) (54)
Cash flows from investing activities
Purchases of property, plant and equipment and intangibles (209) (250) (417)
Net cash used in investing activities (209) (250) (417)
Cash flows from financing activities
Movement on invoice discounting facility (1,607) 823 872
Movement on perpetual bank overdrafts* - (104) (568)
Payments of lease liabilities (299) (118) (312)
Net cash (outflow)/inflow from financing activities (1,906) 601 (8)
Net increase/(decrease) in cash and cash equivalents 32 (265) (479)
Cash and cash equivalents at beginning of period 467 946 946
Cash and cash equivalents at end of period 499 681 467
*there was no perpetual bank overdraft remaining at 1 January 2023 as a result
of cash inflows in 2022.
Notes to the interim statement for the six months ended 30 June 2023:
1. Accounting policies
a) General information
RTC Group Plc is incorporated and domiciled in
England and its shares are publicly traded on AIM. The registered office
address is The Derby Conference Centre, London Road, Derby, DE24 8UX. The
company's registered number is 02558971. The principal activities of the Group
are described in note 2.
The Board consider the principal risks and
uncertainties relating to the Group for the next six months to be the same as
detailed in our last Annual Report and Accounts to 31 December 2022.
b) Basis of preparation
The unaudited interim Group financial information of RTC Group Plc is for the
six months ended 30 June 2023 and does not comprise statutory accounts within
the meaning of S.435 of the Companies Act 2006. The unaudited interim Group
financial statements have been prepared in accordance with the AIM rules and
have not been reviewed by the Group's auditors. This report should be read in
conjunction with the Group's Annual Report and Accounts for the year ended 31
December 2022, which have been prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act
2006 and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
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 £12m, 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.
As a result, the going concern basis continues to be appropriate in preparing
the interim results.
These unaudited interim Group financial statements
were approved for issue on 26 July 2023. No significant events, other than
those disclosed in this document, have occurred between 30 June 2023 and this
date.
c) Comparatives
The comparative figures for the year ended 31
December 2022 do not constitute statutory accounts within the meaning of S.435
of the Companies Act 2006, but they have been derived from the audited
financial statements for that year, which have been filed with the Registrar
of Companies. The report of the auditor was unqualified and did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006 nor a
reference to any matters which the auditor drew attention by way of emphasis
of matter without qualifying their report.
d) Accounting policies
In preparing these interim financial statements, the Board have considered the
impact of new standards which will be applied in the 2023 Annual Report and
Accounts and there are not expected to be any changes in the accounting
policies compared to those applied at 31 December 2022.
A full description of accounting policies is contained with our 2022 Annual
Report and Accounts which is available on our website.
This interim announcement has been prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act
2006 and with those parts of the Companies Act 2006 applicable to companies
reporting under IFRS as effective for periods beginning on or after 1 January
2023.
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 excess space at the Derby site including rental and
hotel and conferencing facilities.
During the first half of 2023, one customer in the UK Recruitment segment
contributed 10% or more of that segment's revenues being £11.8m (2022:
£9.3m) and one customer in the International Recruitment sector contributed
10% or more of that segment's revenues being £1.0m (2022:
£1.0m).
Revenue, gross profit, and operating profit delivery by geography for the
six-month period ended 30 June 2023:
£'000 UK UK International Total Group
Recruitment Central Recruitment
Services
Revenue 41,797 1,163 2,601 45,561
Cost of sales (34,793) (535) (2,147) (37,475)
Gross profit 7,004 628 454 8,086
Administrative expenses (4,587) (1,706) (215) (6,508)
Amortisation of intangibles (12) - - (12)
Depreciation of right of use assets (74) (125) - (199)
Depreciation (162) (76) (1) (239)
Total administrative expenses (4,835) (1,907) (216) (6,958)
Profit from operations 2,169 (1,279) 238 1,128
Segment profit from operations above represents the profit earned by each
segment without allocation of Group administration costs or finance costs.
Segment information for the six months ended 30 June 2022:
£'000 UK UK International Total Group
Recruitment Central Recruitment
Services
Revenue 31,065 866 2,475 34,406
Cost of sales (26,321) (396) (2,135) (28,852)
Gross profit 4,744 470 340 5,554
Administrative expenses (3,933) (1,345) (168) (5,446)
Amortisation of intangibles (12) - - (12)
Depreciation of right of use assets (65) (114) - (179)
Depreciation (124) (95) (3) (222)
Total administrative expenses (4,134) (1,554) (171) (5,859)
Profit from operations 610 (1,084) 169 305
Segment information for the year ended 31 December 2022:
£'000 UK UK International Total Group
Recruitment Central Recruitment
Services
Revenue 64,764 1,979 5,164 71,907
Cost of sales (54,878) (912) (4,342) (60,132)
Gross profit 9,886 1,067 822 11,775
Other operating income* - 6 - 6
Administrative expenses (7,948) (2,883) (341) (11,172)
Amortisation of intangibles (46) - - (46)
Depreciation of right of use assets (144) (240) - (384)
Depreciation (261) (157) (4) (422)
Total administrative expenses (8,399) (3,280) (345) (12,024)
Profit / (loss) from operations 1,487 (2,207) 477 (243)
*Other operating income represents Government Grants.
Recruitment revenues are generated from permanent and temporary recruitment
and long-term contracts for labour supply. Within Central Services revenues
are generated from the rental of excess space and hotel and conferencing at
the Derby site, described as Other below. Revenue and gross profit by
service classification for management purposes:
Revenue Six months ended 30 June 2023 (Unaudited) Six months ended 30 June 2022 (Unaudited) Year ended 31
December
2022
£'000 (Audited)
Permanent placements 1,401 1,414 2,706
Contract 42,997 32,126 67,222
Other 1,163 866 1,979
45,561 34,406 71,907
Gross profit Six months ended 30 June 2023 (Unaudited) Six months ended 30 June 2022 (Unaudited) Year ended 31 December
2022
(Audited)
£'000
Permanent placements 1,401 1,414 2,706
Contract 6,057 3,670 8,002
Other 628 470 1,067
8,086 5,554 11,775
3. Income tax
Continuing operations Six-month period ended 30 June 2023 (Unaudited) Six-month period Year ended 31
ended 30 June 2022 (Unaudited) December 2022
(Audited)
£'000 £'000 £'000
Analysis of tax:
Current tax
UK corporation tax 54 (66) -
(66) -
Deferred tax
Origination and reversal of temporary differences 200 7 (104)
Tax 254 (59) (104)
Factors affecting the tax expense
The tax assessed for the six-month period ended 30 June 2023 is higher than
(2022: higher than) would be expected by multiplying profit by the standard
rate of corporation tax in the UK of 25% (2022: 19%).
The differences are explained below:
Six-month period ended 30 June 2023 Unaudited Six-month period ended 30 June 2022 Unaudited Year ended 31 December 2022
Audited
Factors affecting tax expense £'000 £'000 £'000
Result for the period before tax 1,001 (406) (455)
Profit multiplied by standard rate of tax of 25% (2022: 19%) 250 (77) (86)
Non-deductible expenses 39 18 50
Tax credit on exercise of options (35) - -
Effect of change in deferred tax rate - - 13
Adjustment in respect of previous periods - (81)
Tax charge for the period 254 (59) (104)
4. Borrowings
Included in current borrowings are bank overdrafts and an invoice discounting
facility which is secured by a cross guarantee and debenture over all Group
companies. There have been no defaults or breaches of the terms of the
facility during the current or prior period.
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