REG - Staffline Group PLC - 2024 Audited Results
08/04/2025 07:00
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RNS Number : 0134E Staffline Group PLC 08 April 2025
8 April 2025
STAFFLINE GROUP PLC
("Staffline", the "Company" or the "Group")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
- Strong performance with underlying operating profit exceeding
market expectations(1)
- Net cash (pre-IFRS 16) significantly ahead of market
expectations(1) reflecting balance sheet strength
- £12m disposal of PeoplePlus to create pure-play recruitment
platform, underpinning further share buybacks and providing working capital
for growth
Staffline, the recruitment group, announces its audited results for the year
ended 31 December 2024 ('FY 2024' or the 'Period').
Financial Highlights(2)
FY 2024 FY 2023 Change
Revenue £992.9m £871.3m +14.0%
Gross sales value(3) £1,122.3m £988.8m +13.5%
Gross profit £70.8m £64.2m +10.3%
Gross profit margin % 7.1% 7.4% -0.3%pts
Underlying operating profit(4) £10.1m £7.2m +40.3%
Gross profit to operating profit conversion % 14.3% 11.2% +3.1%pts
(Loss) after tax (total activities) £(8.3)m £(11.0)m -24.5%
Underlying EBITDA £12.6m £10.0m +26.0%
Net cash (pre-IFRS 16) (5) £9.6m £3.8m +£5.8m
(1)Company-compiled consensus for FY 2024 underlying operating profit, and net
debt (pre-IFRS 16), based on the mean average of two analyst estimates, stands
at £10.1m and £(0.6)m, respectively.
(2)Except where otherwise stated, all results disclosed relate to continuing
activities, and comparatives have been restated where necessary. This excludes
PeoplePlus, which was divested in February 2025.
Alternative performance measures
(3)Gross sales value represents the value of the consideration received or
receivable for the supply of services, including agency sales, (excluding
fees) which are subject to an IFRS 15 agency adjustment, net of value added
tax, rebates and discounts.
(4)Underlying results exclude goodwill impairment, amortisation of intangible
assets arising on business combinations, reorganisation costs and other
non-underlying charges.
(5)Presented on a pre-IFRS16 basis which excludes lease liabilities and also
excludes refinancing costs.
· 14.0% increase in revenue due to market share gains and the increase
in the National Living Wage
· 10.3% increase in gross profit driven by strong performances across
both Recruitment GB and Recruitment Ireland
· Permanent fees increased 4.7% in Recruitment GB and 38.2% in
Recruitment Ireland in contrast to the declining recruitment market
· 40.3% increase in underlying operating profit to £10.1m (2023:
£7.2m)
· Conversion ratio of gross profit to operating profit improved to
14.3% (2023: 11.2%) through tight control of costs
· Net cash (pre-IFRS 16) significantly ahead of expectations at £9.6m
(2023: £3.8m) due to debtor day reduction and tight control of working
capital following peak trading during Q4
· Strong cashflow facilitated a £2.5m share buyback programme during
FY 2024
Operational Highlights
· Delivered an excellent trading and cashflow performance across FY
2024 against a challenging macroeconomic backdrop
· In Recruitment GB, hours worked during FY 2024 were 10% ahead of FY
2023
· Increased volumes came from key food retailers; Tesco, Sainsbury's,
Morrisons and Marks & Spencer, combined with increased market share from
the logistics sector
· In Recruitment Ireland, permanent fees were up 38% on the prior year
due to new customers and expanded HR assessment and consulting services
· The An Garda contract secured in 2023 (Republic of Ireland Police
Service) was fully operational by the end of the year despite starting slower
than expected and is now performing in line with management expectations
Post Period End Highlights
· £7.5m Share buyback programme launched on 25 February 2025
· Creation of a pure-play recruitment platform following the strategic
disposal of PeoplePlus for a cash consideration of £12.0m, of which £2.0m is
deferred, and subject to a deduction of £5.1m of advanced payments received
for future revenue
· Cash proceeds from the disposal to be used for a combination of share
buybacks and increasing funding for organic growth
Current Trading and Outlook
· Headwinds caused by the proposed increases in employers national
insurance rates have reduced business confidence, which has made us cautious
about prospects for the year
· Contributing to this caution around trading are interest rate levels,
which remain higher than originally anticipated
· We anticipate continued growth in essential workforce solutions
offered by the Group's blue-collar temporary recruitment service driven by a
strong pipeline and good momentum in new business
· The Board expects trading to remain in line with current management
expectations for FY 2025
Albert Ellis, Chief Executive Officer of Staffline, commented:
"I am delighted with Staffline's outstanding performance in 2024, with the
ongoing commitment of the Group's staff and leadership team central to
achieving these results, alongside tight control of our cost base. In
addition, our success in maintaining excellence in delivery over the crucial
Pre-Christmas peak trading period in the food retailing and logistics sectors
remains a key feature of our impressive financial performance.
There is no question that the recruitment market remains challenging but the
combination of Staffline's extensive scale and reach, market leadership and
strong brand has ensured we continue to outperform in an uncertain market,
remaining the trusted partner of choice.
Our strategy is now firmly focused on our recruitment activities, and the
disposal of PeoplePlus allows us to dedicate greater focus and resources on
continuing to deliver the organic growth strategy and accelerating value
creation for our shareholders."
For further information, please contact:
Staffline Group plc via Vigo Consulting
www.stafflinegroupplc.co.uk (http://www.stafflinegroupplc.co.uk/)
Albert Ellis, Chief Executive Officer
Daniel Quint, Chief Financial Officer
020 3100 2222
Panmure Liberum (Nominated Adviser and Broker)
www.panmureliberum.com (http://www.panmureliberum.com)
Nick How / Satbir Kler
Zeus (Joint Broker) 020 3829 5000
www.zeuscapital.co.uk (http://www.zeuscapital.co.uk/)
David Foreman (Investment Banking)
Nick Searle (Sales)
Vigo Consulting (Financial PR) 020 7390 0230
www.vigoconsulting.com (http://www.vigoconsulting.com/) Staffline@vigoconsulting.com
Jeremy Garcia / Verity Snow
About Staffline - Recruitment
Staffline is one of the UK's market leading Recruitment groups. It has two
divisions:
Recruitment GB
The Recruitment GB business is a leading provider of flexible blue-collar
workers, supplying up to c.35,000 staff per day on average from around 400
sites, across a wide range of industries including supermarkets, drinks,
driving, food processing, logistics and manufacturing.
Recruitment Ireland
The Recruitment Ireland business is a leading end to end solutions provider
operating across multiple industries, ten branch locations and ten onsite
customer locations, supplying c.4,500 staff per day on average, and offering
RPO, MSP, temporary and permanent solutions across public and private sectors
throughout the island of Ireland.
Chairman's Statement
Introduction
I would like to extend my sincere gratitude to our staff and management teams
for their outstanding contributions in 2024. Their achievements stem from a
combination of skilled expertise, dedication, and the strength of our market
position.
Despite operating in a challenging market, our economies of scale and trusted
relationships with key customers enabled us to defy the trend. Thanks to the
tireless efforts of our people, we increased market share, delivering 14.0%
year-on-year revenue growth and a 10.3% increase in gross profit. Our goal for
the year ahead is clear: to drive further progress, improve operating profit,
and ultimately enhance net profit after tax - a challenging but essential
mission.
At Staffline, our core principle is simple: creating value for our clients
translates into positive results for our shareholders. As Henry Ford once
said, "I hold it is better to sell a large number of cars at a reasonably
small margin than to sell a few cars at a large margin of profit." Replace
"sell" with "place" and "cars" with "people," and you'll understand our
approach.
A Strategic Focus on Value Creation
Since joining the Board, we have taken significant steps to strengthen
Staffline's financial position. We have transitioned to a cash-positive
business, grown operating profits, sold a non-core asset, and taken a
disciplined approach to capital allocation.
Our primary objective is increasing per-share intrinsic value. While
short-term results may not always be immediately apparent, our responsibility
lies in the long-term value we create.
Intrinsic value is determined by the total future cash flows we expect to
return to investors (either directly or through retained earnings), discounted
at an appropriate rate. Market volatility often creates discrepancies between
price and value. When our shares trade at a significant discount to their
intrinsic value, we will act decisively - reducing shares outstanding and
increasing each shareholder's claim on future cash flows. Conversely, when no
such discount exists, we will preserve capital and allocate it prudently.
With this disciplined approach in mind, we were pleased to announce a net cash
balance (pre-IFRS 16) of
£9.6 million at 31 December 2024 (2023: £3.8 million), exceeding
expectations. Following the sale of PeoplePlus, we have further strengthened
our financial position, enabling us to initiate an initial share buyback
programme of up to £7.5 million.
For those interested in a deeper understanding of our capital allocation
philosophy, I encourage you to refer to my previous Chairman's Statement.
Thinking Like Owners
For a business to be run with an ownership mindset, its leaders must first be
significant owners themselves. With a major shareholder at the helm, we are
committed to reshaping Staffline's culture from the top down.
Our strategy is to transform the business into a cash-generating machine
rather than a cash-consuming one. Given our inherently thin margins, success
requires a relentless focus on efficiency - reducing expenses, improving cost
structures, and embedding a culture of financial discipline. Incentives must
be aligned with value creation because, as the saying goes: "Show me the
incentive, and I will show you the outcome."
Board changes
I am delighted to announce that Amanda Aldridge, Independent Non-Executive
Director, will assume the role of the Senior Independent Director with
immediate effect.
Looking Ahead
As we navigate the inevitable challenges of 2025 and beyond, I am confident in
Staffline's resilience and ability to seize opportunities, even in a difficult
macroeconomic environment.
We are not just a people business; we are a people-focused business -
dedicated to matching talented individuals with meaningful employment
opportunities. Our enduring relationships with key customers and our ability
to secure top-tier contracts demonstrate our ongoing commitment to excellence.
We look forward to continuing this momentum in the year ahead.
Thank you for your continued trust.
Tom Spain
Chairman
7 April 2025
Chief Executive Officer's Review
Introduction
The Group delivered an outstanding trading and cash flow performance across FY
2024, reflecting the resilience of our organic growth strategy and business
model. We continued to strengthen our balance sheet, which enabled us to carry
out a £2.5m share buyback programme during FY 2024 and, with the sale of
PeoplePlus we are well positioned to continue to deliver growth through our
market-leading, recruitment focused Group.
In FY 2024, revenue from our continuing activities (excluding PeoplePlus) grew
14.0% to £992.9m (2023: £871.3m), driven mainly by market share gains across
our recruitment divisions. Underlying operating profit was 40.3% higher than
last year at £10.1m (2023: £7.2m), exceeding expectations. Cash flow
performance was also significantly ahead of market expectations reflecting the
strength and resilience of our cash-generative business model. These results
were achieved despite a subdued recruitment market and a challenging
macroeconomic backdrop.
A 10.3% increase in gross profit was reported as a result of good volumes from
key food retailers, increased market share in the logistics sector and an
excellent performance in permanent fees despite the widely reported challenges
for permanent hires in the wider recruitment sector.
In February 2025, we completed the strategic disposal of the PeoplePlus
division for £12m, which includes a deferred consideration of £2m. This
followed a successful run of contract wins. The transaction has enabled us to
focus on our pure-play recruitment platform, with greater focus and resources
deployed across recruitment activities.
Results for FY 2024 have seen the delivery of almost all of the operational
targets set at the end of 2020, after which the Group was recapitalised and
the transformation implemented, with Staffline now evolving a number of
strategic growth targets.
Strategy
The Group's strategy is to simplify the business model by focusing on organic
growth in recruitment and continued market share gains across the UK and
Ireland. The leverage our market-leading position within the recruitment
sector gives is particularly pertinent during this time of macro uncertainty
where scale and reach are key to attracting and retaining customers. The
disposal of PeoplePlus sharpens our operational focus on recruitment and has
resulted in increased cash resources available to deliver further shareholder
value.
Our strategic focus remains constant across FY 2025, namely:
· Maintain and increase the Group's market-leading positions by
leveraging Staffline's scale and reach and excellence in delivery to
organically grow market share in blue-collar temporary recruitment.
· Broaden our portfolio by growing, where appropriate, white-collar and
adjacent recruitment activities, including managed services.
· Continue to invest in the strong economy of the Republic of Ireland
by securing material new contracts and investing in new branches.
· Increase shareholder returns whilst maintaining a healthy balance
sheet and returning excess cash to shareholders in the form of share buybacks
from strong trading cash flows.
A key part of our strategy is ensuring that we remain disciplined in our
allocation of capital, with the main objective being to enhance shareholder
value. Across FY 2024, we undertook a £2.5m share buyback programme, and in
February 2025 launched a further £7.5m share buyback programme. Our strategy
provides a solid foundation for continued investment and providing cash
returns to shareholders.
Operational review
Recruitment GB
Revenue for the division was up 15.9% compared with 2023. Gross profit
increased 9.2% to £56.7m and operating profit at £11.1m was up 29.1% year on
year. Operational efficiency, measured by gross profit to operating profit
conversion, reached a record 19.6% (2023: 16.6%) increase, and double the
conversion achieved in 2020. This was driven by operational gearing, combined
with tight overhead cost control.
Hours worked during the December peak outstripped the 2023 peak by 12% and on
a full-year basis, hours were 10% ahead of FY 2023. Worker headcount grew,
peaking at 35,372 workers, with a full-year average of 29,151.
Despite weaker like-for-like retail sales and declining demand in many
sectors, Recruitment GB's growth continues to be driven by market share gains
in third-party outsourcing and large supermarket customers, marking the fifth
consecutive year of revenue and gross profit growth for Recruitment GB. Strong
volumes from our key food retailers including Tesco, Sainsbury's, Morrisons
and Marks & Spencer, combined with strong demand from the logistics sector
underpinned the division's performance across 2024.
Significant growth was secured across major retailers, logistics providers,
and food manufacturers, with several opportunities won which will continue to
progress in 2025. Automotive performed well compared to 2023 but a slowdown in
new car sales and reduced production toward the end of the year has resulted
in a slightly weaker outlook for 2025 in this market. Logistics saw strong
demand post-Black Friday, and supermarkets performed well with improved
operating profit due to efficiency measures. Whilst like-for-like demand is
expected to be flat or declining in some areas in logistics, customers are
indicating increased appetite for greater agency workforce share as part of
their strategy to counteract expected headwinds, influenced by changes to
employer National Insurance contributions.
Mandates secured with new customer G4S in H1 2024 delivered a 5.7% growth in
permanent recruitment during the year, further expanding our permanent
placement service within the sector and reinforcing our strategy to increase
the proportion of permanent recruitment.
To further improve efficiency and update the Group's technology advantage, a
project to implement performance and security improvements on the main
database platform including replacing adjacent finance and payroll remains on
track.
Finally, operational and financial stability remain a priority, with ongoing
strategic reviews on cost efficiency and system optimisation continuing into
2025.
Recruitment Ireland
In Recruitment Ireland, gross profit increased by 14.6% mainly due to the
increase in permanent recruitment with underlying operating profit increasing
by 55.6%. Permanent placement fees were up 38% on the prior year due to new
customers and expanded HR assessment and consulting services. The previously
reported An Garda contract win (Republic of Ireland Police Service) started
slower than expected which held back the final result for the year, but and is
now performing as expected.
A longer-term shift in the mix of services resulted in revenues marginally
lower than prior year. This has been the consequence of a successful strategy
to focus on higher margin recruitment services particularly in the Republic of
Ireland. Investment in increased fee-earning capacity and general office and
technology infrastructure was substantially completed during 2024.
This highly creditable performance was set against the backdrop of the wider
economic headwinds, weak results reported from peers in the sector, and the
power sharing impasse at Stormont persisting during the first half of the
year. With power sharing now resolved, we believe this will support demand for
recruitment services in Northern Ireland's core public services sector.
PeoplePlus
On 25 February 2025, we announced the sale of PeoplePlus, for cash
consideration of £12.0m, which includes £2.0m of deferred consideration and
is partially offset by a deduction of £5.1m of advanced payments received in
respect of future revenue. PeoplePlus has been an important part of our
service offering for a number of years but following our renewed strategic
focus on our recruitment divisions, 2025 was an opportune moment to implement
this change. Cash proceeds from the disposal will be used for a combination of
share buybacks and increasing funding capacity for the Group's successful
organic growth strategy.
Looking back at FY 2024, the financial performance of PeoplePlus was slightly
ahead of expectations, which were reset at the beginning of 2024. This was
mainly as a result of a focus on overheads and restructuring.
Whilst the UK general election created significant uncertainty and delays in
PeoplePlus's bid pipeline, an extension to the Restart (employability)
contract was secured to 2028. In addition, a c.£49 million agreement to
provide education and industry services at the newly built HMP Millsike over a
10-year period, in support of Mitie Care & Custody was secured. Results
for the Prison Education Services bid, representing a c.£190m revenue
opportunity, remain outstanding.
Board changes
The Group announces that Amanda Aldridge, Independent Non-Executive Director,
will assume the role of the Senior Independent Director with immediate effect.
Current trading and outlook
Staffline's recruitment business delivered outstanding results for FY 2024,
exceeding expectations in both underlying operating profit and cash flow. The
ongoing macroeconomic headwinds particularly affecting permanent recruitment,
and the increases in employer National Insurance rates will reduce visibility
in the sector as customers continue to respond to the increase in labour
costs.
Nevertheless, the recent divestment of PeoplePlus has strengthened the Group's
balance sheet, providing additional working capital to support further share
buybacks and ongoing organic growth. The Group's focus remains on market share
growth and delivering shareholder value. We anticipate continued growth in
blue-collar recruitment across Great Britain, driven by good momentum in new
business, and sustained demand for essential workforce solutions.
Accordingly, the Board expects trading to remain in line with current
management expectations for the year ending 31 December 2025.
Albert Ellis
Chief Executive Officer
7 April 2025
Financial Review
Introduction
The Group delivered a strong trading and cash flow performance for the year in
both recruitment divisions, against a challenging macroeconomic and market
sector backdrop in the UK. Underlying operating profit on continuing
activities of £10.1m (2024: £7.2m), was ahead of market expectations and
strong cashflow was well ahead of market expectations, resulting in net cash
of £9.6m (2023: £3.8m).
The disposal of PeoplePlus, which is described more fully below, led to a
write down of its net asset value to the expected net consideration after
costs. The write down, which amounted to £14.5m, is included within the
overall loss on discontinued operations of £12.4m. This item contributed to a
reported loss for the year of £8.3m (2023: loss £11.0m).
Discontinued operation
On 24 February 2025, the Group disposed of its wholly owned subsidiary
PeoplePlus Group Ltd, which encompassed the whole of the PeoplePlus division.
The consideration for the sale was £12.0m, including £2.0m of deferred
consideration. The consideration was on a cash free, debt free basis, subject
to a deduction of £5.1m of advanced payments received for future revenue. The
net proceeds of the disposal (including the deferred consideration) are
expected to be £6.9m. The £2.0m of deferred consideration is contingent on
the commencement of potential new contracts expected to take place within the
next 12 months.
During the year, partly as a result of the general election, the pipeline for
new contracts and the timing of tender results stalled considerably, impacting
the prospects for the division. As a consequence, recognising a likely
downturn in future profitability, an impairment charge of £12.9m was
recognised at 30 June 2024. The annual impairment charge was increased to
£14.5m based on the expected disposal proceeds.
Negotiations for the disposal had commenced during H2 of 2024 and,
accordingly, the division is reported as held for sale in the statement of
financial position, and as a discontinued operation in the statement of
comprehensive income. Except where otherwise stated, all results disclosed in
this review relate to continuing activities and comparatives have been
restated where necessary.
Continuing activities
Gross sales for 2024 increased by 13.5% to £1,122.3m (2023: £988.8m)
reflecting significant new business growth in the Recruitment GB division.
Total revenue for the year of £992.9m (2023: £871.3m) was higher than the
previous year by 14.0%.
Gross profit across the recruitment businesses increased by 10.3% to £70.8m
(2023: £64.2m), with gross profit margin reducing slightly to 7.1% from 7.4%.
The Group continued to control overhead costs tightly, despite considerable
inflationary pressures. This contributed towards underlying operating profit
increasing by 40.3% to £10.1m (2023: £7.2m).
Net underlying finance charges were £4.9m (2023: £3.7m), reflecting the
ongoing high interest rate environment during the year. The Group's purchase
of a 3-year interest rate cap in October 2021, in order to manage its debt
financing costs, meant that the impact of the high interest rate was partly
mitigated.
The Group has continued to pursue its policy of organic growth with a focus on
cost control and tight working capital management, conserving cash reserves,
and further strengthening the balance sheet, while also carrying out share
buybacks.
The Group ended the year with pre-IFRS 16 net cash of £9.6m (2023: £3.8m),
after returning £2.5m to shareholders via a share buyback programme as well
as buying shares for the EBT to the value of £1.9m. This means that the Group
generated an underlying improvement in net cash of £10.2m.
The Group's balance sheet and its significant financing headroom have enabled
a strong performance, despite the significant global macroeconomic headwinds,
and remain a strong platform to enable the Group to capitalise on market share
growth opportunities.
Underlying(1) divisional performance - continuing activities
Recruitment GB Recruitment Ireland Group costs 2024 Continuing activities Discontinued operations Recruitment Recruitment Group costs Continuing activities Discontinued operations
2024 2024 £m 2024 2024 GB Ireland 2023 2023 2023
£m £m £m £m 2023 2023 £m £m £m
£m £m
Revenue 884.4 108.5 - 992.9 65.6 763.0 108.3 - 871.3 66.9
Year-on-year revenue increase/(decline) 15.9% 0.1% - 14.0% (1.9)% 1.5% (2.1)% - 10.3% 1.8%
Gross sales value(3) 1,013.8 108.5 - 1,122.3 65.6 880.5 108.3 - 988.8 66.9
Year-on-year gross sales value increase 15.1% 0.1% - 13.5% (1.9)% 4.5% (2.1)% - 3.7% 1.8%
Gross profit 56.7 14.1 - 70.8 17.3 51.9 12.3 - 64.2 16.6
Year-on-year gross profit increase/(decline) 9.2% 14.6% - 10.3% 4.2% 0.2% (4.7)% - (0.8)% (4.0)%
Gross profit as a % of revenue 6.4% 13.0% - 7.1% 26.4% 6.8% 11.4% - 7.4% 24.8%
Underlying operating profit before tax 11.1 2.8 (3.8) 10.1 1.3 8.6 1.8 (3.2) 7.2 3.1
Underlying operating profit as a % of revenue 1.3% 2.6% - 1.0% 2.0% 1.1% 1.7% - 0.8% 4.6%
Underlying operating profit as a % of gross profit 19.6% 19.9% - 14.3% 7.5% 16.6% 14.6% - 11.2% 18.7%
Pre-IFRS 16(2) net cash excluding unamortised refinancing costs - - - 9.6 - - - - 3.8 -
Post-IFRS 16 net cash excluding unamortised refinancing costs - - - 4.9 - - - - (0.2) -
Key performance indicators - continuing activities
Recruitment GB Recruitment Ireland Total Recruitment GB Recruitment Ireland Total Group
2024 2024 Group 2023 2023 2023
2024
Hours worked by temporary workers(4) 45.6m 5.6m 51.2m 41.4m 6.2m 47.6m
Gross profit per fee earner(5) £86.6k £107.2k £90.0k £76.5k £98.8k £79.9k
Alternative performance measures
1 Underlying results exclude goodwill impairment, amortisation of
intangible assets arising on business combinations, reorganisation costs and
other non-underlying charges.
2 Presented on a pre-IFRS 16 basis, which excludes lease liabilities, and
also excludes refinancing costs.
3 Gross sales value represents the value of consideration received or
receivable for the supply of services, including agency sales, (excluding
fees) net of VAT.
4 Hours worked by temporary workers is the number of hours worked by
temporary workers and charged to customers in the year.
5 Gross profit per fee earner is the gross profit for the year divided by
the average number of operational staff responsible for revenue generation.
For management reporting purposes the Recruitment GB division presents its
'gross sales', which includes sales under agency arrangements. The reporting
of gross sales gives an indication of the full level of activity undertaken by
the division. This value is adjusted for reporting revenue in accordance with
IFRS 15. The adjustment relative to reported revenue for the Group is as
follows:
2024 2023
£m £m
Restated
Gross sales value 1,122.3 988.8
Agency sales excluding fees (129.4) (117.5)
Revenue as reported 992.9 871.3
Recruitment GB
Revenues in the Recruitment GB division increased by £121.4m to £884.4m. The
division benefitted from its strategy of driving organic growth, by the
expansion of key strategic partnerships and renewed contracts with key
customers during 2023 and in 2024.
Increased gross profit of £56.7m (2023: £51.9m) was accompanied by a gross
profit margin reduction to 6.4% (2023: 6.8%), reflecting the sector-wide
reduction in permanent recruitment activity. Increases in general pay rates
combined with the increase in the National Minimum Wage in April 2024, from
£10.42 to £11.44 per hour for over 21s (previously over 23s), do not impact
absolute gross profit, as they are passed through to customers, but do
negatively impact gross margin percentage achieved.
Gross profit generated from temporary recruitment increased slightly as a
proportion of the total to 93.6% (2023: 93.3%), with the remaining 6.4% (2023:
6.7%) of gross profit generated from permanent recruitment. Permanent
recruitment fees increased by 5.7% to £3.7m (2023: £3.5m). Hours worked
increased by 10.1% to 45.6m (2023: 41.4m), reflecting increased year-over-year
supermarket and online retail volumes and new third-party logistics business.
The division's revenues are traditionally weighted toward the second half of
the year due to increased 'peak' workload during the run up to Christmas.
Revenues in H2 2024 were 16.5% higher than H2 2023 at £491.4m (2023:
£421.8m). This was driven by organic growth from contracts won in H2 2023 and
H1 2024.
Notwithstanding the combined effect of growth and inflationary pressures,
particularly on staff costs, causing an increase in overheads, gross profit to
underlying operating profit conversion rate increased from 16.6% to 19.6%.
This delivered a 29.1% increase in underlying operating profit to £11.1m
(2023: £8.6m).
Recruitment Ireland
Revenues in the Recruitment Ireland division increased slightly to £108.5m
(2023: £108.3m), reflecting a stagnant market across the island. Temporary
worker hours reduced to 5.6m (2023: 6.2m). This was offset by a 38.1% increase
in permanent recruitment fees from £2.1m to £2.9m. Despite the difficulties
in the local market, the division achieved a significant improvement in
profitability after the reduction experienced in 2023.
Gross profit increased to £14.1m (2023: £12.3m) and gross profit margin
increased to 13.0% (2023: 11.4%), in part due to an increase in permanent
recruitment income from new customers and expanded HR assessment and
consulting services. Gross profit generated from temporary recruitment
accounted for 79.5% (2023: 83.2%) of the total, with the remaining 20.5%
(2023: 16.8%) of gross profit generated from permanent recruitment.
The division successfully commenced operations on its significant contract
with An Garda in the Republic of Ireland, albeit later than expected.
Underlying operating profit for the year was £2.8m (2023: £1.8m).
Group costs
Group costs, which include Directors' remuneration costs, have increased to
£3.8m (2023: £3.2m) reflecting previously held back inflationary pressures
on all areas of corporate spend and increased bonus provision.
Group result
Underlying operating profit, which was ahead of market expectations, was
£10.1m (2023: £7.2m), an increase of 40.3%. Total non-underlying charges on
continuing activities before tax, which are described below, were £0.2m
before taxation (2023: £5.1m).
The underlying profit before taxation on continuing activities for 2024 was
£5.2m (2023: £3.5m) and the underlying profit after tax on continuing
activities for the year was £4.3m (2023: £2.7m).
The Group's reported profit on continuing activities before taxation was
£5.0m in the year (2023: loss £2.1m).
Net finance charges
Net underlying finance charges incurred in the year amounted to £4.9m (2023:
£3.7m), reflecting the increased overnight SONIA rates averaging c.5.1% in
the year. The Group limited its exposure to the interest rate through the use
of an interest rate cap, which was purchased in October 2021. This reduced
exposure to interest rates above 1% of SONIA is on an aggregated two-thirds of
the combined Receivables Finance Agreement ("RFA") and Customer Financing
borrowings. The instrument, which expired on 13 October 2024, delivered
receipts totalling £1.3m (2023: £1.9m).
On 20 September 2024, the Group entered into an amortising interest rate
collar agreement, comprising a cap element to reduce exposure to a SONIA
interest rate above 4.75% and a floor element to pay a fixed rate of 2.51%.
The instrument has a term of 5 years effective from 14 October 2024, based on
quarterly nominal amounts varying between £39.5m and £62.5m based on
forecast borrowings over the term.
Taxation
The total tax charge for the year was £0.9m (2023: credit £0.9m), which
relates principally to the movement of deferred tax balances. The estimated
current corporation tax liability for the year amounts to £0.2m. Remaining
tax losses of £12.1m carried forward in both divisions have been recognised
as a deferred tax asset.
The amortisation charge in 2023, relating to intangible assets arising on
business combinations and the goodwill impairment charge, which are not
deductible under UK corporation tax, have been added back to taxable profits.
Alternative Performance Measures
In the reporting of its financial performance, the Group uses a limited number
of alternative performance measures that are not defined under IFRS, the
Generally Accepted Accounting Principles ("GAAP") under which the Group
reports. The Directors believe that these non-GAAP measures assist with the
understanding of the performance of the business and are not given undue
prominence in these financial statements. These non-GAAP measures are not a
substitute for, or superior to, any IFRS measures of performance, but they
have been included as an additional means of comparing performance year on
year. The alternative performance measures used are described in Note 3.
Non-underlying items
Non-underlying items of income or expenditure are items that are either
non-recurring or of a particular size or nature such that they require
separate identification. Non-underlying items are included in total reported
results but are excluded from underlying results. Certain items can vary
significantly from year to year and therefore create volatility in reported
earnings. It should be noted that whilst the amortisation of intangible assets
arising on business combinations has been added back, the revenue from those
acquisitions has not been eliminated.
Non-underlying charges on continuing activities before tax amounted to £0.2m
in the year (2023: £5.1m), which is analysed below.
Non-underlying expenses - continuing activities 2024 2023
£m £m
Reorganisation, rationalisation and restructuring costs - 1.8
Strategic consultancy 0.2 -
Amortisation of intangible assets arising on business combinations - 3.3
0.2 5.1
Tax credit on above non-underlying expenses - (1.2)
0.2 3.9
During the year the Group incurred costs for strategic consultancy.
In 2023, the Recruitment GB division undertook a reorganisation,
rationalisation and restructuring programme in response to the impact of
economic and inflationary cost pressures on customers' permanent and temporary
worker requirements. The scope of the activities included a reduction in
administration headcount, a streamlining of the property portfolio and the
consolidation of selected third-party spends.
The charge in 2023 for amortisation of intangible assets arising on business
combinations related to the following acquisitions: Vital Recruitment (charge
of £0.7m: asset was fully amortised by February 2023); Passionate about
People (charge of £1.7m: asset was fully amortised by October 2023); and
Grafton (charge £0.9m: asset was fully amortised by June 2023). The
intangible assets on business combinations were fully amortised at the end of
2023.
Share buyback programme
On 1 August 2023, the Group announced the launch of a share buyback programme
to repurchase Ordinary Shares in the capital of the Company up to an aggregate
value of £4.0m. The 12,672,174 Ordinary Shares purchased at an average price
of 31.6p, pursuant to the share buyback, were immediately cancelled.
On 4 October 2023, the Group announced the launch of a further share buyback
programme to repurchase up to 3,904,598 Ordinary Shares in the capital of the
Company. The 3,904,598 Ordinary Shares purchased at an average price of 26.4p,
pursuant to the share buyback, were immediately cancelled. As a result of the
programmes in 2023, the Company reduced the Ordinary Shares in issue from
165,767,728 to 149,190,956.
On 10 June 2024, the Group announced the launch of a share buyback programme
to repurchase Ordinary Shares in the capital of the Company up to an aggregate
value of £2.5m. The 6,860,792 Ordinary Shares purchased at an average price
of 36.4p, pursuant to the share buyback were immediately cancelled. As a
result of this programme, the Company reduced the Ordinary Shares in issue
from 149,190,956 to 142,330,164.
The share buybacks were operated in accordance with the terms of the Company's
general authority to repurchase Ordinary Shares granted by shareholders at its
Annual General Meetings, held on 12 June 2023 and 22 May 2024.
Cancellation of share premium account
At the Company's Annual General Meeting held on 12 June 2023, the shareholders
approved a special resolution to cancel the entire amount standing to the
credit of the Company's share premium account, subject to the approval of the
High Court of England and Wales. Approval was granted by the Court on 18 July
2023 and as a result the Company had distributable reserves of £85.8m with
effect from 20 July 2023, being the date that the Court's decision was
registered at Companies House.
Earnings per share
Statutory basic earnings per share on continuing activities in 2024 was 3.0p
and diluted earnings per share was 2.9p (2023: both (0.8)p restated).
Following the share buyback programme, under which the shares purchased were
cancelled, the weighted average number of shares (basic) is 138,868,494 (2023:
157,247,639).
Removing the non-underlying charges, and their respective taxation impacts,
results in underlying basic and diluted earnings per share of 3.1p (2023: both
2.0p) on continuing activities.
Earnings before interest, taxation, depreciation and amortisation, "EBITDA"
The table below reconciles underlying EBITDA on continuing activities to
operating profit.
Reconciliation of operating profit to EBITDA 2024 £m 2023
£m
Restated
Operating profit 9.9 2.1
Non-underlying costs 0.2 5.1
Underlying operating profit 10.1 7.2
Depreciation and loss on disposals 3.1 3.1
Underlying EBITDA 13.2 10.3
Share-based payments 0.7 0.6
Lease rental payments (1.3) (0.9)
Underlying EBITDA (pre-IFRS 16) 12.6 10.0
Note: Underlying operating profit is before goodwill impairment, amortisation
of intangible assets arising on business combinations, reorganisation costs
and other non-underlying expenses. EBITDA represents earnings before interest,
taxation, depreciation and amortisation.
Statement of financial position, cash generation and financing
The Group has continued to deliver strong trading cash flows with net cash
(pre-IFRS 16) at the end of the year significantly ahead of market
expectations, maintaining ongoing balance sheet strength.
The movement in net debt is shown in the table below. Strong trading cash
flows were offset by the outflows from increased finance charges, the share
buyback programme and capital expenditure investment.
Movement in net debt 2024 2023
£m £m
Opening net cash (pre-IFRS 16) 3.8 5.0
Cash generated before change in working capital and share options 16.9 10.5
Principal repayment of lease liabilities (2.0) (1.8)
Change in trade and other receivables (20.0) (9.5)
Change in trade, other payables and provisions 23.9 10.8
Taxation and interest (4.9) (3.6)
Capital investment (net of disposals) (4.4) (2.7)
Own shares purchased (4.4) (5.5)
Other 0.7 0.6
Closing net cash (pre-IFRS 16) 9.6 3.8
IFRS 16 lease liabilities (4.7) (4.0)
Closing net cash/(debt) (post-IFRS 16) 4.9 (0.2)
Note: Underlying operating profit is before goodwill impairment, amortisation
of intangible assets arising on business combinations, reorganisation costs
and other non-underlying expenses. EBITDA represents earnings before interest,
taxation, depreciation and amortisation.
The Group's headroom relative to available committed banking facilities as at
31 December 2024 was £75.9m (2023: £62.4m) as set out below:
2024 £m 2023
£m
Cash at bank 14.6 13.3
Undrawn receivables finance agreement 61.3 49.1
Banking facility headroom 75.9 62.4
Working capital financing
The Group manages its working capital requirements using a Receivables Finance
Agreement and a number of separate, non-recourse, customer financing
arrangements whereby specific customers' invoices are settled in advance of
their normal settlement date via a funding intermediary.
The RFA leverages the Group's trade receivables with sufficient headroom and
flexibility to manage the variability and size of weekly cash outflows. The
key terms of the facility are set out below:
I) maximum receivables financing facility of £60.0m (previously
£90.0m) over a four-year term, with a one-year extension option;
ii) an Accordion option of up to an additional £20.0m (previously
£15.0m), subject to lender approval;
iii) security on all of the assets and undertakings of the Company and
certain subsidiary undertakings;
iv) interest accruing at a maximum of 2.25% (previously 2.75%) over
SONIA, with a margin ratchet downward to 1.5% (previously 2.0%), dependent
upon the Group's leverage reducing to less than 1.00x;
v) a non-utilisation fee of 0.35% (previously 0.7% during 2023);
vi) maximum net debt (averaged over a rolling three months) to EBITDA
leverage covenant of 4.0x; and
vii) minimum interest cover covenant of 2.25x the last 12 months EBITDA to
finance charges.
The balance outstanding on the RFA at 31 December 2024 was £5.0m (2023:
£9.5m).
The balance funded under the customer financing arrangements at 31 December
2024 was £74.1m (2023: £63.1m).
Dividends
The Board is not proposing a final dividend payment for 2024 (2023: £nil).
Going concern
For the period to 31 December 2026, the Group's cash flow forecasts indicate
ongoing headroom in the RFA and also full compliance with the financial
covenants contained therein. The Group has sufficient day-to-day liquidity to
ensure that short-term liabilities can be satisfied as and when they fall due.
The financial statements have been prepared on a going concern basis. The
Directors have reviewed this basis and have made full disclosure in Note 3,
concluding that there is a reasonable expectation that the Group and Company
have adequate resources to continue in operational existence for the
foreseeable future.
Daniel Quint
Chief Financial Officer
7 April 2025
Consolidated statement of comprehensive income
For the year ended 31 December 2024
Note 2024 2023
£m £m
Restated*
Continuing operations
Revenue 4 992.9 871.3
Cost of sales 5 (922.1) (807.1)
Gross profit 70.8 64.2
Administrative expenses 5 (60.9) (62.1)
Operating profit 9.9 2.1
Underlying operating profit before non-underlying administrative expenses 10.1 7.2
Administrative expenses (non-underlying) 5 (0.2) (5.1)
Operating profit 9.9 2.1
Finance income 6 1.5 1.9
Finance charges - underlying 6 (6.4) (5.6)
Finance charges - non-underlying 6 - (0.5)
Net finance charges (4.9) (4.2)
Profit/(loss) for the year before taxation 5.0 (2.1)
Tax (expense)/credit 7 (0.9) 0.9
Profit/(loss) from continuing activities 4.1 (1.2)
Loss from discontinued operations (12.4) (9.8)
Loss for the year (8.3) (11.0)
Items that will not be reclassified to profit and loss - actuarial (0.3) 0.2
(loss)/gain, net of tax
Items that will be reclassified to profit and loss:
- effective portion of loss on hedging instrument measured at fair value (0.7) (0.8)
- foreign exchange translation loss (0.2) (0.4)
Other comprehensive income for the year net of deferred tax (1.2) (1.0)
Total comprehensive income (9.5) (12.0)
Earnings per ordinary share 8
Continuing operations: Basic 3.0p (0.8)p
Continuing operations: Diluted 2.9p (0.8)p
Discontinued operations: Basic and diluted (8.9)p (6.2)p
Total earnings per share: Basic and diluted (5.9)p (7.0)p
* Comparative values have been restated to exclude discontinued operations,
refer to Note 9.
All profits and losses are attributable to the owners of the Company.
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2024
Share Own Share Capital redemption reserve Share- Cost of hedging reserve Foreign exchange translation reserve Profit Total
capital shares premium £m based £m £m and loss equity
£m £m £m payment account £m
reserve £m
£m
At 1 January 2023 16.6 (4.5) 111.8 - 0.6 1.7 (0.2) (54.3) 71.7
Share-based payments - equity-settled - - - - 0.6 - - - 0.6
Transfer of share premium - - (111.8) - - - - 111.8 -
Issue of shares to management - 0.3 - - - - - (0.2) 0.1
Shares purchased and cancelled (1.7) - - 1.7 - - - (5.0) (5.0)
Own shares purchased - (0.5) - - - - - - (0.5)
Transactions with owners (1.7) (0.2) (111.8) 1.7 0.6 - - 106.6 (4.8)
Loss for the year - - - - - - - (11.0) (11.0)
Other comprehensive income - - - - - (0.8) (0.4) 0.2 (1.0)
Total comprehensive income for the year, net of tax - - - - - (0.8) (0.4) (10.8) (12.0)
At 31 December 2023 14.9 (4.7) - 1.7 1.2 0.9 (0.6) 41.5 54.9
Share-based payments - equity-settled - - - - 0.7 - - - 0.7
Issue of shares to management - 0.2 - - (0.4) - - (0.1) (0.3)
Shares purchased and cancelled (0.7) - - 0.7 - - - (2.5) (2.5)
Own shares purchased - (1.9) - - - - - - (1.9)
Transactions with owners (0.7) (1.7) - 0.7 0.3 - - (2.6) (4.0)
Loss for the year - - - - - - - (8.3) (8.3)
Other comprehensive income - - - - - (0.7) (0.2) (0.3) (1.2)
Total comprehensive income for the year, net of tax - - - - - (0.7) (0.2) (8.6) (9.5)
At 31 December 2024 14.2 (6.4) - 2.4 1.5 0.2 (0.8) 30.3 41.4
The accompanying notes form an integral part of these financial statements.
Consolidated statement of financial position
As at 31 December 2024
Note 2024 2023
£m £m
Assets
Non-current
Goodwill 10 27.1 50.7
Other intangible assets 10.0 6.7
Property, plant and equipment 11 3.2 5.5
Deferred tax asset 2.5 4.4
Retirement benefit net asset - 0.5
Derivative financial instruments 13 1.0 1.7
43.8 69.5
Current
Trade and other receivables 141.5 129.4
Cash and cash equivalents 14 14.6 13.3
Assets included in disposal group classified as held for sale 9 19.7 -
175.8 142.7
Total assets 219.6 212.2
Liabilities
Current
Trade and other payables 153.2 140.8
Borrowings 15 5.0 9.5
Current tax liability 0.2 0.2
Provisions 0.2 1.8
Lease liabilities 12 1.0 1.4
Liabilities included in disposal group classified as held for sale 9 13.9 -
173.5 153.7
Non-current
Provisions 0.3 0.5
Lease liabilities 12 3.7 2.6
Derivative financial instruments 13 0.6 -
Deferred tax liabilities 0.1 0.5
4.7 3.6
Total liabilities 178.2 157.3
Equity
Share capital 16 14.2 14.9
Own shares (6.4) (4.7)
Capital redemption reserve 2.4 1.7
Share-based payment reserve 1.5 1.2
Cost of hedging reserve 0.2 0.9
Foreign exchange translation reserve (0.8) (0.6)
Profit and loss account 30.3 41.5
Total equity 41.4 54.9
Total equity and liabilities 219.6 212.2
The accompanying notes form an integral part of these financial statements.
Consolidated statement of cash flows
For the year ended 31 December 2024
Note 2024 2023
£m £m
Cash flows from operating activities 17 21.5 12.4
Taxation (paid)/received (0.2) 0.1
Net cash inflow from operating activities 21.3 12.5
Cash flows from investing activities - trading
Purchases of property, plant and equipment 11 (0.7) (0.4)
Purchase of intangible assets - software (3.7) (2.3)
Total cash flows arising from investing activities (4.4) (2.7)
Total cash flows arising from operating and investing activities 16.9 9.8
Cash flows from financing activities
Net movements on Receivables Finance Agreement 15 (4.5) (16.5)
Principal repayment of lease liabilities 12 (2.0) (1.8)
Net interest paid (4.7) (3.7)
Own shares purchased (4.4) (5.5)
Net cash flows from financing activities (15.6) (27.5)
Net change in cash and cash equivalents 1.3 (17.7)
Cash and cash equivalents at beginning of year 13.3 31.0
Cash and cash equivalents at end of year 14 14.6 13.3
The accompanying notes form an integral part of these financial statements.
Notes to the financial information
For the year ended 31 December 2024
1 Nature of operations
The principal activities of Staffline Group plc and its subsidiaries ("the
Group") include the provision of recruitment and outsourced human resource
services to industry.
2 General information and statement of compliance
Staffline Group plc, a Public Limited Company limited by shares listed on AIM
("the Company"), is incorporated and domiciled in England, United Kingdom. The
Company acts as the holding company of the Group. The Company's registration
number is 05268636.
The financial information set out in this document does not constitute the
Group's statutory accounts for the years ended 31 December 2024 or 2023 but is
derived from those accounts. Statutory accounts for 2023 have been delivered
to the registrar of companies. The auditors have reported on those accounts;
their reports were (a) unqualified, and (ii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006. Statutory accounts for 2024
will be delivered to the registrar of companies in due course. The auditors
have reported on those accounts; their reports were (i) unqualified, and (ii)
did not contain a statement under section 498 (2) or (3) of the Companies Act
2006.
The financial statements for the year ended 31 December 2024 (including the
comparatives for the year ended 31 December 2023) were approved and authorised
for issue by the Board of Directors on 7 April 2025. This results announcement
for the year ended 31 December 2024 was also approved by the Board on 7 April
2025.
3 Accounting policies
Basis of preparation
The Consolidated financial statements are prepared for the year ended 31
December 2024. The Consolidated financial statements of the Group have been
prepared on a going concern basis using the significant accounting policies
and measurement bases summarised below, and in accordance UK adopted
International Accounting Standards. The financial statements are prepared
under the historical cost convention except for equity-settled share options,
derivative financial instruments and the retirement benefit net asset, which
are measured at fair value.
There are no new accounting pronouncements which have become effective in the
year.
Going concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive Officer's Review. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the
Financial Review.
As described in the Chief Executive Officer's Review, despite the challenging
trading conditions experienced across all divisions in the Group during the
year, the Group reported an underlying operating profit for the year on
continuing activities, which exceeded market expectations. The recruitment
divisions reported resilient results and are targeting further growth in
market share during 2025.
The Directors maintained tight cost control throughout the year, and despite
inflationary pressures have achieved an overall decrease in overheads compared
to the previous year.
The Directors have prepared updated forecasts and cash flow projections to 31
December 2026, which is considered to be a reasonable period over which a
reasonable view can be formed. These forecasts have been used to assess going
concern and have been stress-tested by applying basic sensitivity analysis,
involving a reduction to revenues across all three divisions, over the
forecast period.
In forming their opinion, the Directors have performed a robust assessment of
the principal risks and uncertainties facing the Group. Consequently, the
Directors believe that the Group is well placed to manage its business risks
successfully.
At 31 December 2024, the Group had net cash of £9.6m (2023: net cash of
£3.8m), on a pre-IFRS 16 basis, and has committed debt facilities until 1
December 2027. For the period to 31 December 2026, the Group's cash flow
forecasts indicate ongoing headroom in the Receivables Finance Agreement and
also full compliance with the financial covenants contained therein. The Group
has sufficient day to day liquidity to ensure that short-term liabilities can
be satisfied as and when they fall due. Further details of the financial
position of the Group, its cash flows, liquidity position and borrowing
facilities are described in the Financial Review.
As a result, the Directors have formed a judgement, at the time of approving
the financial statements, that there is a reasonable expectation that the
Group has adequate resources to continue in operational existence and meet its
liabilities as they fall due over the assessment period. The Directors have
not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group's
ability to continue as a going concern for a period of at least 18 months from
when the financial statements are authorised for issue. For this reason, the
Directors continue to adopt the going concern basis in preparing the financial
statements.
Consolidation of subsidiaries
The Group financial statements consolidate those of the parent Company and all
of its subsidiaries as at 31 December 2024 in accordance with IFRS 10.
Subsidiaries are all entities to which the Group is exposed to or has rights
to variable returns and the ability to affect those returns through control
over the subsidiary. The results of subsidiaries whose accounts are prepared
in a currency other than sterling; are translated at the average rates of
exchange during the period and their year-end balances at the year-end rate of
exchange. Translation adjustments are taken to the profit and loss reserves.
Material intra-group balances and transactions, and any unrealised gains or
losses arising from intra-group transactions, are eliminated in preparing
these financial statements.
Non-GAAP measures of performance
In the reporting of its financial performance, the Group uses certain measures
that are not defined under IFRS, the Generally Accepted Accounting Principles
("GAAP") under which the Group reports. The Directors believe that these
non-GAAP measures assist with the understanding of the performance of the
business. These non-GAAP measures are not a substitute, or superior to, any
IFRS measures of performance but they have been included as the Directors
consider them to be an important means of comparing performance year-on-year
and they include key measures used within the business for assessing
performance.
Gross sales value
Gross sales value represents the value of the consideration received or
receivable for the supply of services, including agency sales, (excluding
fees), which are subject to an IFRS 15 agency adjustment, net of value added
tax, rebates and discounts and after eliminating sales within the Group.
Non-underlying items of income and expenditure
These non-underlying charges are regarded as recurring or non-recurring items
of income or expenditure of a particular size and/or nature relating to the
operations of the business that in the Directors' opinion require separate
identification. These items are included in "total" reported results but are
excluded from "underlying" results. These items can vary significantly from
year to year and therefore create volatility in reported earnings which does
not reflect the Group's underlying performance.
Underlying EBITDA
Underlying operating profit before the deduction of underlying depreciation
and amortisation charges. This is considered a useful measure because it
approximates the underlying cash flow by eliminating depreciation and
amortisation charges.
Net debt
Net debt is the amount of bank debt less available cash balances. This is a
key measure as it is one on which the terms of the banking facilities are
based and shows the level of external debt utilised by the Group to fund
operations. Net debt is also presented on a pre-IFRS 16 basis which excludes
lease liabilities.
The Directors acknowledge that the adjustments made to arrive at underlying
profit may not be comparable to those made by other companies and it should
be noted that whilst the amortisation of acquisition-related intangible assets
has been added back, the revenue from those acquisitions has not been
eliminated.
These alternative performance measures are utilised by the Board to monitor
performance and financial position. They show a comparable level of
performance excluding one-off items, with which underlying performance and
ability to service debt can be judged.
Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair value of
assets transferred, liabilities incurred and the equity interests of the
Group, which includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are expensed as
incurred.
Goodwill is stated after separate recognition of identifiable intangible
assets. It is calculated as the sum of a) fair value of consideration
transferred, b) the recognised amount of any non-controlling interest in the
acquiree and c) acquisition-date fair value of any existing equity interest in
the acquiree, over the acquisition-date fair values of identifiable net
assets. If the fair values of identifiable net assets exceed the sum
calculated above, the excess amount (i.e. gain on a bargain purchase) is
recognised in the statement of comprehensive income immediately.
Segment reporting
During the year, the Group had three material operating segments: the
provision of recruitment and outsourced human resource services to industry,
in Great Britain (Recruitment GB) an also in Ireland (Recruitment Ireland),
plus the provision of skills and employment training and support, together
"PeoplePlus". Each of these operating segments is managed separately as each
requires different technologies, marketing approaches and other resources. For
management purposes, the Group uses the same measurement policies as those
used in its financial statements.
On 24 February 2025, the Group sold its wholly owned subsidiary PeoplePlus
Group Ltd, which encompassed the PeoplePlus division. Negotiations for the
sale had commenced before the end of the year and accordingly the division is
reported as held for sale and as a discontinued operation in the statement of
comprehensive income.
4 Segment reporting
During the year, management identified three operating segments: Recruitment
GB, Recruitment Ireland and PeoplePlus. On 24 February 2025 the Group sold its
wholly owned subsidiary PeoplePlus Group Ltd, which encompassed the PeoplePlus
division. Negotiations for the sale had commenced before the end of the year
and, accordingly, the division is reported as held for sale and as a
discontinued operation in the statement of comprehensive income.
The Group's operating segments are determined based on the Group's internal
reporting to the Chief Operating Decision Maker (CODM). The CODM has been
determined to be the Group Chief Executive, with support from the Board.
Whilst there are individual legal entities within the three operating
segments, they are operated and reviewed as single units by the Board of
Directors. Each legal entity within an operating segment has the same
management team, head office and have similar economic characteristics.
Historically and going forward, management will integrate new acquisitions
into the main trading entities within each operating segment.
Segment information for the reporting year is as follows:
Recruitment Recruitment Ireland Group Continuing activities Discontinued operations Recruitment Recruitment Group Continuing activities Discontinued operations
GB 2024 Costs 2024 2024 GB Ireland costs 2023 2023
2024 £m 2024 £m £m 2023 2023 2023 £m £m
£m £m £m £m £m
Sales revenue from external customers 884.4 108.5 - 992.9 65.6 763.0 108.3 - 871.3 66.9
Cost of sales (827.7) (94.4) - (922.1) (48.3) (711.1) (96.0) - (807.1) (50.3)
Segment gross profit 56.7 14.1 - 70.8 17.3 51.9 12.3 - 64.2 16.6
Administrative expenses (43.2) (10.6) (3.8) (57.6) (14.4) (40.8) (9.9) (3.2) (53.9) (11.7)
Depreciation, software & lease amortisation (2.4) (0.7) - (3.1) (1.6) (2.5) (0.6) - (3.1) (1.8)
Segment underlying operating profit* 11.1 2.8 (3.8) 10.1 1.3 8.6 1.8 (3.2) 7.2 3.1
Reorganisation costs - - - - - (1.8) - - (1.8) -
Strategic consultancy costs (0.1) - (0.1) (0.2) - - - - - -
Release of prior year provision - - - - 1.0 - - - - -
Goodwill impairment - - - - (14.5) - - - - (8.9)
Amortisation of intangibles arising on business combinations - - - - - (3.2) (0.1) - (3.3) -
Segment (loss)/profit from operations 11.0 2.8 (3.9) 9.9 (12.2) 3.6 1.7 (3.2) 2.1 (5.8)
Finance income - - 1.5 1.5 - - - 1.9 1.9 -
Finance costs (6.0) (0.1) (0.3) (6.4) - (5.5) (0.1) - (5.6) -
Refinancing costs - - - - - - - (0.5) (0.5) -
Total finance charges (6.0) (0.1) 1.2 (4.9) - (5.5) (0.1) 1.4 (4.2) -
Segment (loss)/profit before taxation 5.0 2.7 (2.7) 5.0 (12.2) (1.9) 1.6 (1.8) (2.1) (5.8)
Tax (expense)/credit (1.4) (0.1) 0.6 (0.9) (0.2) 0.9 (0.2) 0.2 0.9 (1.4)
Segment profit/(loss) from continuing operations 3.6 2.6 (2.1) 4.1 (12.4) (1.0) 1.4 (1.6) (1.2) (7.2)
* Segment underlying operating profit before goodwill impairment,
amortisation of intangible assets arising on business combinations,
reorganisation costs and other non-underlying costs.
Recruitment Recruitment Ireland Staffline Continuing activities Discontinued operations Recruitment Recruitment Staffline Group Continuing activities Discontinued operations
GB 2024 Group 2024 2024 GB Ireland 2023 2023 2023
2024 £m 2024 £m £m 2023 2023 £m £m £m
£m £m £m £m
Total non-current assets 26.0 14.3 1.0 41.3 - 24.7 12.3 - 37.0 26.4
Total current assets 133.7 17.4 5.0 156.1 18.8 112.6 15.7 2.3 130.6 13.8
Total assets (consolidated) 159.7 31.7 6.0 197.4 18.8 137.3 28.0 2.3 167.6 40.2
Total liabilities (consolidated) 154.1 9.6 0.6 164.3 13.9 131.8 9.6 0.1 141.5 15.3
Cash capital expenditure inc. software 3.2 0.8 - 4.0 0.4 1.9 0.6 - 2.5 1.1
The analysis above excludes deferred tax assets and liabilities as required by
IFRS 8, Operating segments.
Revenues for continuing activities can be analysed by country as follows
(97.0% of revenues arising within the UK in 2024, 97.0% in 2023):
Recruitment Recruitment Ireland Total Recruitment Recruitment Total Group
GB 2024 Group GB Ireland 2023
2024 £m 2024 2023 2023 £m
£m £m £m £m
UK 884.4 82.7 967.1 763.0 79.7 842.7
Republic of Ireland - 25.8 25.8 - 28.6 28.6
884.4 108.5 992.9 763.0 108.3 871.3
No customer contributed more than 10% of the Group's revenue during either
2024 or 2023.
5 Expenses by nature
Expenses by nature are as follows:
Underlying expenses
2024 2023
£m £m
Restated
Employee benefits expenses - cost of sales 911.6 802.7
Other cost of sales 10.5 4.4
Employee benefits expenses - administrative expenses 46.7 43.3
Depreciation and software amortisation 3.1 3.1
Operating lease expenses 0.3 0.3
Other administrative expenses 10.6 10.3
982.8 864.1
Disclosed as:
Cost of sales 922.1 807.1
Administrative expenses - excluding non-underlying expenses 60.7 57.0
982.8 864.1
Auditors' remuneration
2024 2023
£'000 £'000
Fees payable to the Company's auditor for the audit of the Company's annual 17 17
accounts
Fees payable to the Company's auditor and its associates for other services:
- Audit of the accounts of subsidiaries 732 748
- Audit of the pension scheme 18 17
- Audit-related assurance services 20 18
- Audit fee expenses 13 13
Total 800 813
Non-underlying expenses - continuing activities
2024 2023
£m £m
Strategic consultancy costs 0.2 -
Reorganisation costs - 1.8
Amortisation of intangible assets arising on business combinations (licences, - 3.3
customer contracts)
Tax credit on above non-underlying expenses - (1.2)
Post taxation effect on above non-underlying expenses 0.2 3.9
During the year, the Group incurred costs relating to strategic consultancy.
During 2023, the Recruitment GB division undertook a reorganisation,
rationalisation and restructuring programme in response to the impact of
economic and inflationary cost pressures on customer permanent and temporary
worker requirements. The scope of the activities included a reduction in
administration headcount, a streamlining of the property portfolio and the
consolidation of selected third-party spends.
The charge for amortisation of intangible assets arising on business
combinations relates principally to the acquisitions of the Endeavour Group,
Passionate About People, Grafton Recruitment and Brightwork.
6 Finance income and charges
Finance income
2024 2023
£m £m
Receipts from derivative 1.3 1.9
Derivative ineffectiveness 0.2 -
Total 1.5 1.9
Finance charges
Underlying finance charges 2024 2023
£m £m
Interest payable on bank and other funding 5.9 5.0
Interest on lease liabilities 0.1 0.1
Derivative ineffectiveness 0.2 0.1
Amortisation of refinancing costs 0.1 0.3
Amortisation of derivative cost 0.1 0.1
Total 6.4 5.6
Non-underlying finance charges 2024 2023
£m £m
Arrangement fees and refinancing costs - 0.5
Net finance charges 4.9 4.2
7 Tax expense
The tax expense on the profit for the year consists of:
Continuing activities 2024 2023
£m £m
Restated
Corporation tax
UK corporation tax at 25.0% (2023: 23.5%) 0.2 -
Adjustments in respect of prior years (0.1) -
UK current tax expense 0.1 -
Deferred tax
Timing differences arising in the year 1.0 (0.5)
Adjustments in respect of prior years (0.2) (0.4)
UK deferred tax expense/(credit) 0.8 (0.9)
Total UK tax expense/(credit) for the year 0.9 (0.9)
The tax expense/(credit) for the year, as recognised in the statement of
comprehensive income, is lower than the standard rate of corporation tax in
the UK of 25.0% (2023: lower than the 23.5% standard rate). The differences
are explained below:
2024 2023
£m £m
Total Total
Restated
Profit/(loss) for the year before taxation 5.0 (2.1)
Tax rate 25.0% 23.5%
Tax on profit/(loss) for the year at the standard rate 1.2 (0.5)
Effect of:
Expenses not allowable - 0.2
Income not taxable (0.4) (0.3)
Adjustments in respect of prior years (0.3) 0.6
Tax losses available 0.4 (0.9)
Deferred tax not recognised - -
Actual tax expense/(credit) 0.9 (0.9)
On underlying profit 0.9 0.3
On non-underlying loss - (1.2)
Actual tax expense/(credit) 0.9 (0.9)
The total tax expense for the year of £0.9m (2023: credit £0.9m) arises
principally from the movement of deferred tax balances. The Group has an
estimated current corporation tax liability for the current year of £0.2m
(2023: £0.2m). Corporation tax losses of £12.1m carried forward in all
divisions and the Company have been recognised as a deferred tax asset.
Previously, a deferred tax liability was recognised in respect of intangible
assets arising on acquired businesses. This asset was fully amortised in 2023
and the associated deferred tax liability was extinguished.
The deferred tax assets and liabilities at 31 December 2024 and at 31 December
2023 have been calculated based on 25%, reflecting the expected timing of
reversal of the related timing differences.
No material tax charges arise on overseas profits or losses and accordingly no
disclosures relating to overseas tax are included within the financial
statements.
8 Earnings per share and dividends
Earnings per share
The calculation of basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year, after deducting the "own shares" held in
the Group's Employee Benefit Trust of 8,535,706 shares (2023: 3,316,391
shares).
The calculation of the diluted earnings per share is based on the basic
earnings per share as adjusted to further take into account the potential
issue of Ordinary Shares resulting from share options granted to certain
Directors and senior staff under long-term incentive schemes and share options
granted to employees under the SAYE scheme.
Details of the earnings and weighted average number of shares used in the
calculations are set out below:
Basic Basic Diluted Diluted
2024 2023 2024 2023
Profit/(loss) from continuing activities (£m) 4.1 (1.2) 4.1 (1.2)
Weighted average number of shares 138,868,494 157,247,639 140,160,630 157,788,528
Earnings per share from continuing activities (p) 3.0p (0.8)p 2.9p (0.8)p
Underlying earnings (post tax) from continuing activities (£m) 4.3 3.2 4.3 3.2
Underlying earnings per share (p)* 3.1p 2.0p 3.1p 2.0p
Loss from discontinued operations (£m) (12.4) (9.8) (12.4) (9.8)
Weighted average number of shares 138,868,494 157,247,639 140,160,630 157,788,528
Loss per share from discontinued operations (p) (8.9)p (6.2)p (8.9)p (6.2)p
Loss for the year (£m) (8.3) (11.0) (8.3) (11.0)
Weighted average number of shares 138,868,494 157,247,639 140,160,630 157,788,528
Total loss per share (p) (5.9)p (7.0)p (5.9)p (7.0)p
* Underlying earnings before goodwill impairment, amortisation of
intangible assets arising on business combinations, reorganisation costs and
other non-underlying costs.
During the year the Company purchased and immediately cancelled 6,860,792
shares (2023: 16,576,772 shares) under its share buyback programme.
The total number of dilutive share options held in LTIP and SAYE schemes is
1,292,136 (2023: 540,889).
After the year-end, and up to the date of this announcement, the Company
purchased and immediately cancelled 8,103,462 Ordinary shares of 10p each.
Dividends
The Board is not proposing a final dividend payment for 2024 (2023: £nil).
9 Disposal group classified as held for sale and discontinued operations
PeoplePlus Group Ltd
On 24 February 2025, the Group sold its wholly owned subsidiary PeoplePlus
Group Ltd, which encompassed the PeoplePlus division, for cash consideration
of £12.0m, which includes £2.0m of deferred consideration. The consideration
is on a cash free, debt free basis and subject to a deduction of £5.1m of
advanced payments received in respect of future revenue. The net proceeds of
the disposal (including the deferred consideration) were £6.9m. The £2.0m of
deferred consideration is contingent on the commencement of potential new
contracts expected to take place within the next 12 months.
Negotiations for the sale had commenced before the end of the year and
accordingly the division is reported as held for sale and as a discontinued
operation in the statement of comprehensive income in accordance with IFRS 5.
The results of the division for the year were as follows:
2024 2023
£m £m
Revenue 65.6 66.9
Cost of sales (48.3) (50.3)
Gross profit 17.3 16.6
Administrative expenses (16.0) (13.5)
Underlying operating profit 1.3 3.1
Non-underlying credit - provision reversal 1.0 -
Non-underlying costs - goodwill impairment (14.5) (8.9)
Operating loss (12.2) (5.8)
Tax expense (0.2) (1.4)
Loss for the period (12.4) (7.2)
The cash flows of the business were as follows:
2024 2023
£m £m
Net cash inflow from operating activities 2.3 1.4
Net cash flows from financing activities
Purchases of intangible assets - software (0.2) (0.4)
Purchases of property, plant and equipment (0.2) (0.1)
Principal repayment of lease liabilities (0.8) (0.8)
1.1 0.1
The carrying amounts of assets and liabilities in this disposal group are
summarised as follows:
2024
£m
Non-current assets
Goodwill 9.1
Intangible assets 0.7
Property, plant and equipment 1.0
Deferred tax asset 0.9
Current assets
Trade and other receivables 8.0
Assets classified as held for sale 19.7
Current liabilities
Trade and other payables 13.4
Non-current liabilities
Provisions 0.4
Other payables 0.1
Liabilities classified as held for sale 13.9
Skills training business
On 1 August 2023, the Group announced the restructuring of the PeoplePlus
division's Skills training activities with the closure of in-person training
to focus on digital delivery in other parts of the division. The Skills
training business was subsequently wound down. The results of the Skills
business, which was treated as discontinued in accordance with IFRS5, were as
follows:
2023
£m
Revenue 4.5
Cost of sales (5.3)
Gross (loss)/profit (0.8)
Administrative expenses (0.7)
Underlying operating loss (1.5)
Non-underlying costs - redundancies and property exit (1.6)
Operating loss (3.1)
Tax credit 0.7
Loss for the period (2.4)
The cash flows of the business were as follows:
2023
£m
Net cash outflow from operating activities (3.1)
Portugal operations
During December 2023 the Group closed its operations in Portugal, the results
of which were treated as discontinued in accordance with IFRS5, and were as
follows:
2023
£m
Revenue 0.1
Cost of sales -
Gross profit 0.1
Administrative expenses (0.2)
Underlying operating loss (0.1)
Non-underlying costs - redundancies and property exit (0.2)
Operating loss (0.3)
Tax credit 0.1
Loss for the period (0.2)
The cash flows of the business were as follows:
2023
£m
Net cash outflow from operating activities (0.3)
10 Goodwill
Gross carrying amount by operating segment
Gross carrying amount Recruitment GB Recruitment Ireland PeoplePlus Total
£m £m £m £m
At 1 January 2024 54.5 5.7 57.0 117.2
Transfer to disposal group held for sale - - (57.0) (57.0)
31 December 2024 54.5 5.7 - 60.2
Impairment adjustment
At 1 January 2024 33.1 - 33.4 66.5
Transfer to disposal group held for sale - - (33.4) (33.4)
At 31 December 2024 33.1 - - 33.1
Net book amount at 31 December 2024 21.4 5.7 - 27.1
Net book amount at 31 December 2023 21.4 5.7 23.6 50.7
Impairment - Goodwill
During the year management considered there to be three cash-generating units,
being Recruitment GB, Recruitment Ireland and PeoplePlus, in line with the
operating segments defined in Note 4. The Recruitment GB and Recruitment
Ireland cash-generating units have been tested for impairment. The goodwill
relating to PeoplePlus has been transferred to the disposal group asset held
for sale.
An impairment review was conducted as at 31 December 2024. The recoverable
amount of goodwill for Recruitment GB and Recruitment Ireland was determined
based on a value-in-use calculation, using forecasts for 2025-27, followed by
an extrapolation of expected cash flows over the next two years with a
long-term growth rate of 2% (2023: 2%) for each cash-generating unit. The
forecasts are prepared by the individual operating segments of the Group,
which are considered to be the same as the determined CGUs.
Pre-tax discount rates of 17.3% for Recruitment GB and 15.7% for Recruitment
Ireland (2023: 17.0% for Recruitment GB, 13.8% for Recruitment Ireland and
14.1% for PeoplePlus) were used based on the weighted average costs of capital
for each operating segment. The recoverable amounts of the CGUs, having
considered the higher of value-in-use and fair value less costs to sell, were
£66.1m for Recruitment GB and £6.1m for Recruitment Ireland (2023: £67.3m
for Recruitment GB, £33.9m for Recruitment Ireland) all being value-in-use.
The discount rates used are based on appropriate, current long-term market
rate indicators to give a long-term forward view, whilst also acknowledging
historical information.
The results of the impairment review showed headroom in the Recruitment GB and
Recruitment Ireland cash-generating units but that an impairment adjustment of
£17.2m is required for the PeoplePlus CGU, which is monitored for impairment
at the same level as investment. The same calculations indicated that an
impairment adjustment of £18.8m (2023: £17.0m) is required to the Company's
carrying value of its investment in PeoplePlus, but that no other impairment
adjustments were indicated. In making the assessment of the recoverability of
assets within each CGU a number of judgements and assumptions were required.
In making the assessment of the recoverability of assets within each CGU a
number of judgements and assumptions were required.
The principal judgement relates to the determination of the CGUs, which align
with the operating segments, which each have their own management team and
head office and generate distinct cash flows. The Group's strategy,
historically and going forward, has been to integrate new acquisitions into
the main trading entities within each operating segment.
The key estimates in determining the value of the Recruitment GB and
Recruitment Ireland CGUs are:
1. The discount rate. The impairment calculations use a pre-tax
discount rate of 17.3% for Recruitment GB, 15.7% for Recruitment Ireland and a
terminal growth value of 2%. These rates are based on the latest weighted
average costs of capital for each operating segment. These rates have
decreased this year primarily due to a movement in the risk-free rate and
Corporate Bond yields. The calculations highlighted headroom of £37.9m (2023:
£42.7m) for Recruitment GB and headroom of £6.1m (2023: £22.8m) for
Recruitment Ireland. A 1% increase in the discount rates reduces the headroom
to £33.6m (2023: £38.4m) for Recruitment GB and reduces headroom to £4.9m
(2023: £20.0m) for Recruitment Ireland.
2. The achievability of the forecasted future cash flows. There is an
inherent uncertainty regarding the achievability of forecasts, as there are
macroeconomic factors outside of the Group's control. A sustained
underperformance of 10% reduces the headroom to £31.3m (2023: £37.0m) for
Recruitment GB and reduces headroom to £4.3m (2023: £18.5m) for Recruitment
Ireland.
11 Property, plant and equipment
Gross carrying amount Land and Computer equipment Fixtures and fittings Motor Total
buildings £m £m vehicles £m
£m £m
At 1 January 2023 15.7 11.0 1.4 0.4 28.5
Additions 0.9 0.2 0.1 0.1 1.3
Disposals (0.2) (1.1) - (0.1) (1.4)
At 31 December 2023 16.4 10.1 1.5 0.4 28.4
Additions 0.8 0.2 0.1 0.4 1.5
Disposals (0.3) (2.1) (0.3) (0.1) (2.8)
Transfer to disposal group held for sale (13.1) (1.9) (0.5) (0.1) (15.6)
At 31 December 2024 3.8 6.3 0.8 0.6 11.5
Depreciation
At 1 January 2023 9.6 9.6 1.3 0.4 20.9
Charged in the year - operating 1.9 1.1 0.2 - 3.2
Disposals (0.2) (0.9) - (0.1) (1.2)
At 31 December 2023 11.3 9.8 1.5 0.3 22.9
Charged in the year - operating 1.7 0.7 0.2 0.1 2.7
Disposals (0.3) (2.1) (0.3) - (2.7)
Transfer to disposal group held for sale (11.4) (2.4) (0.7) (0.1) (14.6)
At 31 December 2024 1.3 6.0 0.7 0.3 8.3
Net book value
At 31 December 2024 2.5 0.3 0.1 0.3 3.2
At 31 December 2023 5.1 0.3 - 0.1 5.5
Land and buildings and intangible assets, software include the following
right-of-use assets:
At 31 December 2024
Carrying amount Depreciation expense
£m £m
Office buildings 2.5 (0.9)
Software 2.2 -
4.7 (0.9)
At 31 December 2023
Carrying amount Depreciation expense
£m £m
Office buildings 3.9 (1.7)
12 Leases
Lease liabilities are presented in the statement of financial position as
follows:
2024 2023
£m £m
Current 1.0 1.4
Non-current 3.7 2.6
4.7 4.0
The Group has leases for its operational and administrative offices. With the
exception of short-term leases and leases of low-value underlying assets, each
lease is reflected on the balance sheet as a right-of-use asset and a lease
liability. The Group classifies its right-of-use assets in a consistent manner
to its property, plant and equipment (see note 11).
Unless there is a contractual right for the Group to sublet the asset to
another party, the right-of-use asset can typically only be used by the Group.
Leases are either non-cancellable or may only be cancelled by incurring a
substantive termination fee. Some leases contain an option to extend the lease
for a further term. The Group is prohibited from selling or pledging the
underlying leased assets as security. For leases over office buildings the
Group must keep those properties in a good state of repair and return the
properties in their original condition at the end of the lease. Further, the
Group must insure items of property, plant and equipment and incur maintenance
costs on such items in accordance with the lease contracts.
The table below describes the nature of the Group's leasing activities by type
of right-of-use asset recognised on the balance sheet:
Right-of-use asset No of right-of-use assets leased Range of remaining term (years) Average remaining lease term No of leases with extension options
Office building 30 0.1-10.2 2.8 -
Software 1 7 7 1
The lease liabilities are secured by the related underlying assets. Future
minimum lease payments at 31 December 2024 were as follows:
Minimum lease payments due
Within one year 1-2 years 2-3 years 3-4 years After 5 years Total
£m £m £m £m £m £m
31 December 2024
Lease payments 1.2 1.0 0.9 0.6 1.6 5.3
Finance charges (0.2) (0.1) (0.1) (0.1) (0.1) (0.6)
Net present value 1.0 0.9 0.8 0.5 1.5 4.7
31 December 2023
Lease payments 1.5 0.9 0.6 0.5 0.7 4.2
Finance charges (0.1) (0.1) - - - (0.2)
Net present value 1.4 0.8 0.6 0.5 0.7 4.0
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short-term leases
(leases with an expected term of 12 months or less) or for leases of low-value
assets. Payments made under such leases are expensed on a straight-line basis.
In addition, certain variable lease payments are not permitted to be
recognised as lease liabilities and are expensed as incurred.
The expense relating to payments not included in the measurement of the lease
liability is as follows:
2024 2023
£m £m
Short-term leases 0.3 0.3
Leases of low-value assets 0.4 0.4
0.7 0.7
The Group had not committed to any leases that had not yet commenced.
Total cash outflow for leases for the year ended 31 December 2024 was £1.9m
(2023: £1.8m).
13 Derivative financial instruments
2024 2023
£m £m
Cash flow hedges - net value 0.4 1.7
Effective from 14 October 2024, the Group entered into an amortising interest
rate collar instrument, comprising:
· a cap element to reduce exposure to interest rate increases above
4.75% above SONIA on an aggregated two-thirds of the RFA and the customer
finance arrangements, and,
· a floor element, based on the same nominal values and over the same
period as the cap, to pay the issuer the differential if the SONIA interest
rate falls below 2.51%.
The instrument, which has a term of five years from 14 October 2024, is based
on quarterly notional amounts varying between £58.9m and £77.3m, with an
average of £68.6m. The instrument was acquired for no upfront premium.
During 2021, the Group entered into an amortising interest rate cap
instrument, which reduced exposure to interest rate increases above 1% of
SONIA on an aggregated two-thirds of the RFA and the customer finance
arrangements. The instrument, which expired on 13 October 2024, was based on
quarterly notional amounts varying between £39.5m and £62.5m, with an
average of £51.9m.
The Group designates its financial instruments as hedged instruments in a cash
flow hedge relationship. All derivative financial instruments used for hedge
accounting are recognised initially at fair value and reported subsequently at
fair value in the statement of financial position. To the extent that the
hedge is effective, changes in the fair value of derivatives designated as
hedging instruments in cash flow hedges are recognised in other comprehensive
income and included within the cash flow hedge reserve in equity. Any
ineffectiveness in the hedge relationship is recognised immediately in profit
or loss.
The fair value of the derivative is based on market data to calculate the
present value of all estimated flows associated with it at the balance sheet
date. The interest rate cap is classed as a level 2 financial instrument in
accordance with IFRS 13 classification hierarchy. Level 2 financial
instruments are not traded in an active market, but the fair value is based on
quoted market prices, broker/dealer quotations, or alternative pricing sources
with reasonable levels of price transparency.
The movements on the fair value of the derivative financial asset and on the
cost of hedging reserve are as follows:
Cost of hedging reserve Derivative financial asset
£m £m
At 31 December 2022 1.7 3.0
Movement through comprehensive income - hedge ineffectiveness - (0.1)
Movement through cost of hedging reserve (1.2) (1.2)
Deferred taxation 0.4 -
At 31 December 2023 0.9 1.7
Movement through comprehensive income - hedge ineffectiveness - -
Movement through cost of hedging reserve (0.4) (1.3)
Deferred taxation (0.3) -
At 31 December 2024 0.2 0.4
14 Cash
2024 2023
£m £m
Cash and cash equivalents 14.6 13.3
Cash and cash equivalents consist of cash on hand and balances with banks
only. The majority of cash on hand and balances with banks are held by
subsidiary undertakings; however, the balances are available for use by the
Group.
Long-term credit ratings for the Group's banks are currently as follows:
Fitch Standard Moody's
& Poor's
Royal Bank of Scotland plc A BBB+ A3
National Westminster Bank plc A BBB+ A3
The Group's headroom versus available committed bank facilities is as follows:
2024 2023
£m £m
Cash at bank (as above) 14.6 13.3
Undrawn receivables finance agreement 61.3 49.1
Banking facility headroom 75.9 62.4
15 Borrowings
Borrowings are repayable as follows:
2023 2023
£m £m
In one year or less or on demand 6.0 10.9
In more than one year but not more than two years 0.9 0.9
In more than two years but not more than five years 1.3 1.4
In more than five years 1.5 0.3
Total borrowings 9.7 13.5
2024 2023
£m £m
Split:
Current liabilities:
Receivables Finance Agreement 5.0 9.5
Lease liabilities 1.0 1.4
6.0 10.9
Non-current liabilities:
Lease liabilities 3.7 2.6
Total borrowings 9.7 13.5
Less: Cash (note 14) (14.6) (13.3)
Net (cash)/debt (4.9) 0.2
On 14 December 2023, the Group and its lenders agreed to a modification of the
existing Receivables Finance Agreement.
The key terms of the facility, which, during the year, was provided jointly by
RBS Invoice Finance Limited and ABN AMRO Asset Based Finance N.V., UK Branch,
are set out below:
a) Maximum receivables financing facility of £60.0m (previously
£90m) over a four-year term, with a one-year extension option;
ii) An Accordion option of up to an additional £20m (previously
£15.0m), subject to lender approval;
iii) Security on all of the assets and undertakings of the Company and
certain subsidiary undertakings;
iv) Interest accruing at a maximum of 2.25% (previously 2.75%) over
SONIA, with a margin ratchet downward to 1.5% (previously 2.0%), dependent
upon the Group's leverage reducing to less than 1.00x;
v) A non-utilisation fee of 0.35% (previously 0.7% during 2023);
vi) Maximum net debt (averaged over a rolling three months) to EBITDA
leverage covenant of 4.0x; and
vii) Minimum interest cover covenant of 2.25x the last 12 months EBITDA to
finance charges.
EBITDA is defined as earnings before interest, taxation, depreciation and
amortisation.
On 12 March 2025, ABN AMRO withdrew from the banking syndicate and were
replaced by Leumi ABL Limited.
The Group uses Customer Financing arrangements whereby specific customer
invoices are settled on a weekly basis, in advance of their normal settlement
date. The value of invoices funded under the Customer Financing arrangements
was £74.1m at 31 December 2024 (2023: £63.1m). Costs incurred in relation to
these arrangements are charged to profit and loss as finance charges when
incurred. The amounts settled under each customer's agreement are limited to
the amounts invoiced to that customer each week. The total finance charges
incurred during the year amounted to £4.7m (2023: £3.0m).
For the period to 31 December 2026, the Group's cash flow forecasts indicate
ongoing headroom in the RFA and full compliance with the financial covenants
described above. The likelihood of a breach of the financial covenants is
considered to be remote.
16 Share capital
2024 2023
£m £m
Allotted and issued
142,330,164 (2023: 149,190,956) ordinary 10p shares 14.2 14.9
2024 2023
Number Number
Shares issued and fully paid at the beginning of the year 149,190,956 165,767,728
Shares cancelled during the year (6,860,792) (16,576,772)
Shares issued and fully paid at the end of the year 142,330,164 149,190,956
All Ordinary Shares have the same rights and there are no restrictions on the
distribution of dividends or repayment of capital with the exception of the
8,535,706 shares held at 31 December 2024 (2023: 3,316,391 shares) by the
Employee Benefit Trust where the right to dividends has been waived.
On 10 June 2024, the Group announced the launch of a share buyback programme
to repurchase Ordinary Shares in the capital of the Company up to an aggregate
value of £2.5m. The 6,860,792 Ordinary Shares purchased pursuant to the share
buyback, were immediately cancelled.
On 1 August 2023, the Group announced the launch of a share buyback programme
to repurchase Ordinary Shares in the capital of the Company up to an aggregate
value of £4.0m. The 12,672,174 Ordinary Shares purchased pursuant to the
share buyback, were immediately cancelled.
On 4 October 2023, the Group announced the launch of a further share buyback
programme to repurchase up to 3,904,598 Ordinary Shares in the capital of the
Company. The 3,904,598 Ordinary Shares purchased pursuant to the share buyback
at a cost of £1.0m, were immediately cancelled.
The share buybacks were operated in accordance with the terms of the Company's
general authority to repurchase Ordinary Shares granted by shareholders at its
Annual General Meetings, held on 12 June 2023 and 22 May 2024.
17 Cash flows from operating activities
Reconciliation of profit/(loss) before taxation to net cash inflow from
operating activities
2024 2023
£m £m
Restated
Profit/(loss) before taxation from:
Continuing activities 5.0 (2.1)
Discontinued operations (12.2) (8.9)
(7.2) (11.0)
Adjustments for:
Finance income (1.4) (1.9)
Finance charges 6.3 6.1
Depreciation and amortisation - underlying 4.7 5.0
Amortisation - non-underlying - 3.2
Goodwill impairment 14.5 8.9
Loss on disposal of property, plant and equipment - 0.2
Cash generated before changes in working capital and share options 16.9 10.5
Change in trade and other receivables (20.0) (9.5)
Change in trade, other payables and provisions 23.9 10.8
Cash generated from operations 20.8 11.8
Share-based payments expense 0.7 0.6
Net cash inflow from operating activities 21.5 12.4
Movement in net debt
2024 2023
£m £m
Net (debt)/cash at 1 January (0.2) 0.1
Net drawdowns from Receivables Finance Agreement 4.5 16.5
Lease payments, additions, disposals and interest (0.7) 0.9
Change in liabilities arising from financing activities 3.6 17.5
Change in cash and cash equivalents 1.3 (17.7)
Net cash/(debt) at 31 December 4.9 (0.2)
Represented by:
Current borrowings (note 15) (5.0) (9.5)
Lease liabilities (note 12) (4.7) (4.0)
(9.7) (13.5)
Cash and cash equivalents 14.6 13.3
Net (debt)/cash at 31 December 4.9 (0.2)
The movements in net debt can be further summarised as follows:
Lease Receivables Finance Agreement Movements from financing activities Cash Total
Liabilities £m £m £m £m
£m
Net debt as at 1 January 2023 (4.9) (26.0) (30.9) 31.0 0.1
Cash flows during the year 1.8 16.5 18.3 (17.7) 0.6
Non-cash movements in leases (0.9) - (0.9) - (0.9)
Net cash/(debt) at 31 December 2023 (4.0) (9.5) (13.5) 13.3 (0.2)
Cash flows during the year 2.5 4.5 7.0 1.3 8.3
Non-cash movements in leases (3.2) - (3.2) - (3.2)
Net cash/(debt) at 31 December 2024 (4.7) (5.0) (9.7) 14.6 4.9
18 Changes in accounting policies
There were no new accounting pronouncements requiring adoption in the year.
19 Post balance sheet events
On 24 February 2025, the Group sold its wholly owned subsidiary PeoplePlus
Group Ltd, which encompassed the PeoplePlus division, for cash consideration
of £12.0m, which includes £2.0m of deferred consideration. Further details
are provided in Note 9.
On 25 February the Group announced the commencement of a share buyback
programme to purchase Ordinary Shares of 10p each in the Company for up to a
maximum consideration of £7.5m. The Ordinary Shares purchased pursuant to the
buyback will be cancelled.
There were no other events between the balance sheet date of 31 December 2024
and the approval of these accounts on 7 April 2025, that are required to be
brought to the attention of shareholders.
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