TIDMNWKI
RNS Number : 1515B
Networkers International PLC
12 April 2012
12 April 2012
NETWORKERS INTERNATIONAL PLC
(AIM: NWKI)
Final Results
for the YEAR ENDED 31 DECEMBER 2011
The Board of Networkers International Plc ('Networkers' or 'the
Group'), the AIM-listed international recruitment company, is
pleased to announce final results for the year ended 31 December
2011.
Financial Highlights
-- Revenues up 24.2% to GBP190m (2010: GBP153m)
-- Net fee income (gross profit) increased by 24.7% to GBP30.31m (2010: GBP24.31m);
-- Pre-tax profits of GBP6.60m (2010: GBP4.28m);
-- Adjusted* pre-tax profits for the year increased by 43.6% to GBP6.62m (2010: GBP4.61m);
-- Adjusted* EPS (basic earnings per share) increased by 28.7% to 4.22p (2010: 3.28p);
-- Conversion ratio improved to 22.8% (2010: 20.3%)
-- Contract net fee income has shown growth of 21.3% on prior
year, with permanent placements showing growth of 15.3%. Permanent
placements represent 17.6% of net fee income.
-- Strong balance sheet and good liquidity with net assets of
GBP20.0m and net current assets of GBP13.0m; and
-- A recommended final dividend of 0.55p per share giving a
total of 1.00p per share for the year (2010: 0.662p per share)
being a 51% increase on prior year.
Operational Highlights
-- Share of net fee income derived from markets outside of the
UK increased to 70% (2010: 64%) with the majority coming from the
emerging markets of Africa, Asia and Latin America;
-- The Group has now rolled out its Energy & Engineering and
IT recruitment offerings into nine of the 10 countries it has
offices in;
-- Group headcount totalled 367 as at year end with employees
located in overseas offices now representing 40% of Group total
headcount;
-- Offices operational in UK, South Africa, UAE, India, China,
Malaysia, Mexico, USA and Canada; and
-- A change in bank to HSBC with improved banking facilities to
assist growth in emerging markets;
Commenting on today's results, Spencer Manuel, CEO, said "I am
pleased to report that 2011 has been a year of record profits for
the Group with pre tax profits up 54% to GBP6.6m. We have made
excellent progress in our strategy of international expansion,
particularly in expanding our IT and Energy offerings into our
international offices that had previously only focussed on telecoms
recruitment.
"The Group has made an encouraging start to 2012. Following the
very strong growth in trading and contractor numbers throughout
2011, as the current year progresses our comparative numbers will
become stronger which may have a bearing on our rate of growth when
compared to the rate achieved in 2011.
"Whilst we are mindful of the fragile economic environment in
some regions of world, with our strong balance sheet, experienced
management team and geographical diversification, we are able to
continue to invest wisely in markets and geographies that present
growth opportunities within our core markets of Telecom, Specialist
IT and Energy & Engineering."
* adjusted for the add back of amortisation of intangible assets
and share based payments and the deduction of unrealised profits
arising on business combinations. For the adjusted EPS calculation,
the year end number of shares of 89,053,953 (2010: 88,922,914) have
been used.
Enquiries:
Networkers International
Spencer Manuel, CEO 020 8315 9000
Jon Plassard, CFO
Numis Securities Limited
David Poutney, Corporate Broking 020 7260 1000
Richard Thomas, Nominated Adviser
Networkers International Plc
Chairman's Statement
I am pleased to report on our results for the year ended 31
December 2011.
2011 Review
2011 has proved to have been a year of very strong growth which
has resulted in the Group achieving record pre-tax profits of
GBP6.60m (2010: GBP4.28m). This exceptional performance has taken
place against the back drop of an uncertain and volatile economic
environment. A pleasing aspect of 2011 is that the Group's
performance continued to improve as the year progressed with the
second half of the year generating 55% of operating profits.
The increase in the Group's revenues and gross profit continues
to be driven by our strategy of international expansion and a focus
on specialist areas within our core sectors. This strategy has led
to a 24.7% increase in gross profit ("net fee income") in the year
to GBP30.31m (2010: GBP24.31m) together with a slight improvement
in overall margins to 16.0% (2010:15.9%) despite a slightly lower
mix of permanent placements.
The Group's telecoms division performed exceptionally well
during 2011 having exploited the buoyant conditions within the
emerging markets of Africa, Asia and Latin America. The strong
growth in this sector means that it now represents 59% of the
Group's net fee income compared to 47% two years ago.
As detailed further in the CEO Review, the Group continues to
transition its IT offerings into specialist technology markets and
into overseas markets. This transition is going very well with
specialist IT now being carried out from offices in seven
countries.
The Group's Energy & Engineering sector has also shown good
growth with net fee income increasing by 22%. We continue to invest
in headcount in this sector and are optimistic for its growth
potential and feel the sector compliments our international,
emerging market bias.
In terms of headcount, the Group ended the year with 367
employees with over 40% of our workforce now located in our
international offices. Despite the increase in headcount, I'm
pleased to report that the Group has become more operationally
efficient as evidenced by its conversion ratio (the ratio of
operating profits before amortisation of intangible assets arising
on business combinations and share based payments to net fee
income) which has improved to 22.8% (2010: 20.3%).
The Group's net debt position has reduced by GBP0.5m since the
Interim Report date of 30 June 2011 and as at year end totalled
GBP9.1m. Whilst this is an increase of GBP3.1m from 2010, the debt
consists entirely of drawdown on invoice discounting to fund the
GBP37m annual increase in revenues.
Our balance sheet remains strong with net assets increasing to
GBP20.0m, with net current assets of GBP13.0m clearly demonstrating
the financial stability of the Group.
A final dividend of 0.550p per share (2010: 0.338p) has been
recommended by the Board bringing the total for the year to 1.00p
per share, an increase of 51% on 2010.
Strategy, current trading and outlook
There has been no change to the Group's stated strategy of
international growth by utilising its existing international office
network together with new office openings to expand the specialist
markets within the core Telecoms, IT and Energy & Engineering
divisions. This strategy has contributed to an increase in the
share of net fee income derived from markets outside of the UK,
primarily in emerging markets to 70% (2010: 64%).
The growth rate achieved in 2011 was impressive especially as it
was achieved in a difficult global economic environment. We have
had a good start to 2012, although market sentiment remains
volatile.
Networkers International Plc
Chairman's Statement (continued)
Finally, I would like to thank all of our staff across the globe
for their hard work, enthusiasm and loyalty which has contributed
so much in making 2011 such a successful year and laying further
foundations for future growth.
N R Goodman
Chairman
12 April 2012
Networkers International Plc
CEO's Review
Review of the business
I am extremely pleased with the Group's performance in 2011,
having recorded our highest annual profits since inception almost
12 years ago. This is particularly pleasing coming so soon after
the financial crisis of 2008/09 and in an economic environment that
is some way short of a full recovery. This performance supports the
strategic steps that we have taken during recent years in
internationalising our business and adapting our services into
specialist niche recruitment areas.
As a result of the strong performance, the Group's adjusted* pre
tax profit increased by 43.6% to GBP6.62m (2010: GBP4.61m). In
terms of reported pre-tax profit, the increase was 54% to GBP6.60m
(2010: GBP4.28m).
2011 started off well with market conditions in the specialist
sectors that the Group operates in, much improved. For us, these
improved conditions gained traction throughout the year
particularly in our telecoms business, despite the wider economic
conditions slowing down as the year progressed. This is evidenced
by the fact that 55% of our net fee income was achieved during the
second half of the year. Permanent placements also picked up
throughout the year with 57% of permanent fees earned in the second
half of the year. Whilst permanent placements grew by 15%
year-on-year, its share of net fee income declined to 17.6% (2010:
19.0%) due to contract net fee income growing at a faster rate.
Our telecoms business stream has performed exceptionally well
during the year and has been responsible for the majority of the
Group's growth, having increased net fee income by 46%. The
telecoms marketplace remains an exciting, global industry with an
extremely fluid and portable workforce with high demand for experts
across the world but particularly in emerging markets. We consider
this sector to have solid long term growth prospects for the Group
albeit with an inevitable slowing of growth rates over the short
term when compared to 2011.
Within our IT business stream we continue to successfully
transition the business towards more specialist technologies where
there is a higher demand for the relevant skill sets and which can
be rolled-out to our network of international offices. Whilst the
overall IT business has shown only modest growth in the period, the
specialist technology markets of Trading Systems and Digital Media
have performed well as has our international and cross border IT
offerings which has shown net fee income growth of 16% and is well
positioned for further growth in the future.
Our emerging energy & engineering business stream has
performed well. The division's net fee income having increased by
22% year-on-year, albeit from a relatively small base and now
represents approximately 5% of the Group's total. The market
dynamics for the sector share many similarities with our telecoms
division with good growth prospects, particularly in the emerging
markets where we already have a long history of successful
trading.
Our focus on international expansion continued throughout 2011
where the priority was to obtain scale within our existing overseas
offices. As detailed in the Chairman's Statement, 70% of our net
fee income is now generated from clients based outside of the UK
and 40% of our workforce is based outside of the UK. In fact, the
vast majority of our headcount growth has been through staff
augmentation of our existing overseas offices.
Group revenues
The effect of the improved trading environment particularly
within our telecoms sector and the increase in sales headcount has
resulted in our revenues increasing by 24%, following on from an
18% increase last year. Group revenues for the year totalled
GBP190.0m (2010: GBP153.0m). In terms of net fee income, the
increase was 24.6% to GBP30.3m (2010: GBP24.3m).
Overall gross profit margins have marginally improved to 16.0%
(2010: 15.9%) despite a lower sales mix of permanent placements.
This improvement is due to a greater share of net fee income being
attributed to our international, cross border business which
typically yields higher average margins than domestic
recruitment.
Networkers International Plc
CEO's Review (continued)
Group Revenues (continued)
The table below sets out the split of net fee income:
% of NFI
Divisions 2011 2010
Telecommunications 59% 50%
IT (Specialist Markets) 28% 34%
IT (Strategic Accounts) 5% 9%
Energy & Engineering 5% 5%
Other (including Payroll services) 3% 2%
100% 100%
Profit from operations
The Group's profit from operations before amortisation of
intangible assets arising on business combinations and before share
option charges totalled GBP6.90m (2010: GBP4.95m). The Group's
profit from operations totalled GBP6.49m (2010: GBP4.62m).
The Group's conversion ratio has improved to 22.8% (2010:
20.3%). This is a positive performance achieved at a time when the
Group has significantly invested in headcount. This efficiency
improvement has been achieved through tight control of overhead
expenditure, benefits of scale as the Group expands and an improved
mix of business generated from our offices based in lower cost
countries.
Profit before taxation
Net finance costs for the year totalled of GBP0.37m (2010:
GBP0.39m). Whilst there was an overall higher level of indebtedness
in 2011 caused by the increase in working capital used to fund the
growth of the business, interest payments reduced as a result of
the repayment of the term loan during 2010 and therefore no related
interest for 2011. The term loan carried a higher interest rate
than the Group's working capital facility.
The Group's acquisition of the remaining 50% share of its UAE
joint venture occurred during June 2011. Prior to the acquisition,
our share of the joint venture contributed GBP90,000 to Group
profits. By acquiring the remaining shares in the joint venture, a
fair value adjustment of GBP0.39m was recognised in the
consolidated income statement. This represents the book gain on the
fair value attributed to the carrying value of the investment when
the remaining 50% share was acquired.
After finance expenses and the share of profit and book gain on
the purchase of the remaining shares of our UAE joint venture,
profit before taxation for the year totalled GBP6.60m (2010:
GBP4.28m).
Profit after taxation
Due to the international nature of our business, the Group works
within a variety of different tax regimes, some of its overseas
subsidiaries, particularly in the United States of America, incur
corporate tax at rates higher than that of the UK. In addition, a
number of countries where we operate impose a withholding tax on
services performed by the Group.
This withholding tax is not always fully recoverable and as such
the effective tax rate of the Group is 35.8% (2010: 37.9%). This
decrease in the effective tax rate is reflective of the reduction
in revenue that has been subject to irrecoverable withholding taxes
and the one-off book gain from the purchase of the UAE joint
venture that is not subject to taxation.
Networkers International Plc
CEO's Review (continued)
Profit after taxation (continued)
Profit after taxation totalled GBP4.24m (2010: GBP2.66m).
Non-controlling interests
In some of the Group subsidiary companies, a minority stake is
held by its key staff members in order to reward and incentivise
them. This has proved successful and where there has been employee
ownership of subsidiary companies, the performance has noticeably
improved. The Group also has local ownership in its South Africa
subsidiary as part of that country's Black Economic Empowerment
program.
As a result of the strong performance of the subsidiaries with
management ownership, the post tax profit attributable to
non-controlling interests totalled GBP0.47m (2010: GBP0.07m).
Earnings per share
Basic earnings per share totalled 4.24p (2010: 2.82p) and
diluted earnings per share totalled 4.13p (2010: 2.76p). Adjusted*
earnings per share has shown a 28.7% increase to 4.22p (2010:
3.28p).
Dividends
An interim dividend of 0.450p (2010: 0.324p) per share totalling
GBP0.40m (2010: GBP0.30m) was paid during the year.
The directors recommend the payment of a final dividend of
0.550p (2010: 0.338p) per share totalling GBP0.49m (2010:
GBP0.3m).
Acquisitions
As detailed above, during June 2011 the Group acquired the
remaining 50% of the shares of its joint venture based in the UAE
for GBP0.54m and, as it is now under the full control of the Group,
it has since been rebranded under the Networkers International
name.
Previous acquisitions have proved successful for the Group and
as such we continue to look for additional earnings enhancing
acquisitions that will further increase our scale in our core
sectors of Telecoms, IT and Energy.
Balance sheet and cash flow
The financial position of the Group remains strong and the
balance sheet indicates an increase in total assets to GBP49.6m
(2010: GBP40.0m). This is due primarily to the increase in trade
receivables resulting from the increase in Group revenue. Trade and
other receivables have increased by GBP8.5m to GBP40.1m of which
GBP1.1m of the increase is due to the inclusion of trade
receivables relating to the UAE acquisition. Debtors Days for 2011
averaged 53 days. This is an improvement of 1 day from the prior
year.
Total liabilities have shown a corresponding increase to
GBP29.6m (2010: GBP23.4m). This increase is attributable to the
increase in trade and other payables of GBP2.1m and an increase in
borrowings, including draw down on invoice discounting of
GBP3.6m.
Cash flows from operating activities before changes in working
capital totalled GBP7.2m. Due to the Group's high mix of contract
placements (82%), it typically experiences lower operating cash
inflows during periods of high contractor growth (the reverse is
due in periods of negative growth). During 2011 the high growth
resulted in the requirement for GBP6.3m of additional working
capital leading to cash generated from operations of GBP0.8m before
the payment of corporate income taxes of GBP2.1m.
Networkers International Plc
CEO's Review (continued)
Balance sheet and cash flow (continued)
The increased working capital requirement has led to net debt,
consisting of the draw down on invoice discounting, to increase to
GBP9.1m from GBP5.94m. However, since the Interim Report as at 30
June 2011 net debt has reduced by GBP0.5m despite the high growth
rate of 19% achieved during the second half of the year.
Net assets at 31 December 2011 total GBP20.0m (2010:
GBP16.6m).
Banking facilities
As the Group continues to grow internationally, it becomes
increasingly important that the company has the right working
capital facility to fund its expansion. The Group has therefore
changed its banking relationship to HSBC who have provided a GBP22m
working capital facility with improved terms and wider emerging
market coverage than our previous facility.
Current trading and outlook
We have made an encouraging start to 2012. Following the very
strong growth in trading and contractor numbers throughout 2011, as
the current year progresses our comparative numbers will become
stronger which may have a bearing on our rate of growth when
compared to the rate achieved in 2011.
Whilst we are mindful of the fragile economic environment in
some regions of world, with our strong balance sheet, experienced
management team and geographical diversification, we are able to
continue to invest wisely in markets and geographies that present
growth opportunities within our core markets of Telecom, Specialist
IT and Energy & Engineering.
Spencer Manuel
CEO
12 April 2011
* adjusted for the add back of amortisation of intangible assets
and unrealised profits arising on business combinations and share
based payments. For the adjusted EPS calculation, the year end
number of shares of 89,053,953 (2010: 88,922,914) have been
used.
Networkers International Plc
Consolidated income statement for the year ended 31 December
2011
Note 2011 2010
GBP'000 GBP'000
Revenue 2 189,966 153,045
Cost of sales 159,655 128,733
_______ _______
Gross profit 30,311 24,312
Administrative expenses
Amortisation of intangible assets arising
on business combinations 311 290
Other administrative expenses 23,509 19,406
--------------------------------------------- ----- -------- --------
Total administrative expenses 23,820 19,696
_______ _______
Profit from operations 6,491 4,616
Finance income 42 118
Finance expense (414) (512)
Share of post tax profits of joint ventures 90 60
Profit on business combination 394 -
_______ _______
Profit before taxation 6,603 4,282
Tax expense 2,365 1,622
_______ _______
Profit for the year 4,238 2,660
_______ _______
Attributable to:
- Equity holders of the parent 3,772 2,593
- Non-controlling interests 466 67
_______ _______
4,238 2,660
_______ _______
Earnings per share
Basic 3 4.24p 2.82p
Diluted 3 4.13p 2.76p
Adjusted* 3 4.22p 3.28p
_______ _______
* adjusted for the add back of amortisation of intangible assets
and unrealised profits arising on business combinations and share
based payments. For the adjusted EPS calculation, the year end
number of shares of 89,053,953 (2010: 88,922,914) have been
used.
Networkers International Plc
Consolidated statement of comprehensive income for the year
ended 31 December 2011
2011 2010
GBP'000 GBP'000
Profit for the year 4,238 2,660
Other comprehensive income:
Exchange gains/(losses) on retranslation
of foreign operations (195) 167
_______ _______
Total comprehensive income for the year 4,043 2,827
_______ _______
Total comprehensive income attributable
to:
- Equity holders of the parent 3,577 2,760
- Non-controlling interests 466 67
_______ _______
4,043 2,827
_______ _______
Networkers International Plc
Consolidated balance sheet as at 31 December 2011
2011 2010
GBP'000 GBP'000
Assets
Non current assets
Intangible assets 6,115 5,563
Property, plant and equipment 405 252
Deferred tax asset 796 818
Investments in equity accounted joint ventures - 60
_______ _______
Total non current assets 7,316 6,693
_______ _______
Current assets
Trade and other receivables 40,140 31,684
Current tax assets - -
Cash and cash equivalents 2,124 1,652
_______ _______
Total current assets 42,264 33,336
_______ _______
Total assets 49,580 40,029
_______ _______
Liabilities
Current liabilities
Trade and other payables (17,175) (15,116)
Loans and borrowings (11,175) (7,595)
Other financial liabilities - (41)
Provisions (381) (83)
Current tax liability (534) (213)
_______ _______
Total current liabilities (29,265) (23,048)
_______ _______
Non-current liabilities
Provisions (217) (299)
Deferred tax liability (76) (102)
_______ _______
Total non-current liabilities (293) (401)
_______ _______
Total liabilities (29,558) (23,449)
_______ _______
Total net assets 20,022 16,580
_______ _______
Networkers International Plc
Consolidated balance sheet at 31 December 2011 (continued)
2011 2010
GBP'000 GBP'000
Equity
Share capital 890 940
Share premium 96 49
Retained earnings 17,659 14,538
Foreign exchange reserve 297 492
Capital redemption reserve 53 -
Reverse acquisition reserve 676 676
_______ _______
Attributable to equity holders of the parent 19,671 16,695
Non-controlling interest 351 (115)
_______ _______
Total equity 20,022 16,580
_______ _______
Networkers International Plc
Consolidated cash flow statement for the year ended 31 December
2011
2011 2010
Cash flow from operating activities GBP'000 GBP'000
Profit before taxation 6,603 4,282
Adjustments for:
Share of profit in joint venture (90) (60)
Profit on business combination (394) -
Depreciation 247 169
Amortisation of intangibles 327 333
Equity settled share based payment expense 100 41
Movement on fair value of derivatives (41) (118)
Finance expense 414 512
______ ______
Cash flows from operating activities before changes
in working capital and provisions 7,166 5,159
Increase in trade and other receivables (8,346) (5,540)
Increase in trade and other payables 2,010 2,962
Decrease in provisions - (10)
______ ______
Cash generated from operations 830 2,571
Income taxes paid (2,058) (1,128)
______ ______
Net cash flows from operating activities (1,228) 1,443
Investing activities
Purchase of property, plant and equipment (313) (54)
Purchase of intangibles (10) (202)
Purchase of shares of non-controlling interest - (11)
Disposal of shares of subsidiary undertakings - 36
Transferred from assets previously classified
as held for resale - 365
Acquisition of subsidiary, net of cash acquired (426) -
______ ______
Net cash used in investing activities (749) 134
Net cash before financing activities (1,977) 1,577
Financing activities
Interest paid (414) (512)
Dividends paid (700) (300)
Drawdown of invoice discounting 3,580 3,174
Repayment of bank borrowings - (2,763)
Purchase of shares held in treasury (61) (1,117)
Issue of share capital 50 13
______ ______
Net cash used in financing activities 2,455 (1,505)
Effects of exchange rate changes (6) (107)
______ ______
Net increase / (decrease) in cash and cash equivalents 472 (35)
Cash and cash equivalents at the start of the
year 1,652 1,687
______ ______
Cash and cash equivalents at the end of the year 2,124 1,652
______ ______
Networkers International Plc
Consolidated statement of changes in equity for the year ended
31 December 2011
Total
attributable
Share Reverse Capital Foreign to equity Non-
Share Premium acquisition Redemption Retained exchange holders of controlling Total
Capital Account reserve Reserve earnings reserve parent interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December
2010 940 49 676 - 14,538 492 16,695 (115) 16,580
Total
comprehensive
income for
the year - - - - 3,772 (195) 3,577 466 4,043
Share based
payments - - - - 100 - 100 - 100
Deferred tax
on share
based
payments - - - - 10 - 10 - 10
Dividends paid - - - - (700) - (700) - (700)
Shares issued
in the year 3 47 - - - - 50 - 50
Purchase of
shares held
in treasury - - - - (61) - (61) - (61)
Cancellation
of shares
held in
treasury (53) - - 53 - - - - -
______ ______ ______ ______ ______ ______ ______ ______ ______
As at 31
December 2011 890 96 676 53 17,659 297 19,671 351 20,022
______ ______ ______ ______ ______ ______ ______ ______ ______
At 31 December
2009 938 38 676 - 13,137 325 15,114 - 15,114
Total
comprehensive
income for
the year - - - - 2,593 167 2,760 67 2,827
Share based
payments - - - - 41 - 41 - 41
Deferred tax
on share
based
payments - - - - (33) - (33) - (33)
Dividends paid - - - - (300) - (300) - (300)
Shares issued
in the year 2 11 - - - - 13 - 13
Non -
controlling
interest -
disposal - - - - 217 - 217 (182) 35
Purchase of
shares held
in treasury - - - - (1,117) - (1,117) - (1,117)
______ ______ ______ ______ ______ ______ ______ ______ ______
As at 31
December 2010 940 49 676 - 14,538 492 16,695 (115) 16,580
______ ______ ______ ______ ______ ______ ______ ______ ______
Networkers International Plc
Notes to the accounts
1 Basis of preparation
The principal accounting policies adopted in the preparation of
this preliminary announcement are unchanged from those disclosed in
the interim announcement published on 12 September 2011.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs), this announcement does not itself contain
sufficient information to comply with IFRSs. The Group expects to
publish full financial statements that comply with IFRSs in May
2012.
The Board of Directors approved this preliminary announcement on
12 April 2012.
2 Segment information
The Group has 3 main reportable segments:
-- Information Technology division - This division is involved
in the sourcing, recruitment and supply of IT personnel across a
range of industries both in the UK and globally. This division of
the business generates 54% (2010 - 56%) of the Group's revenue.
-- Telecommunications division - This division is involved in
the sourcing, recruitment and supply of highly skilled telecom
engineers to global telecommunication enterprises. This division of
the business generates 44% (2010 - 38%) of the Group's revenue.
-- All other segments: These areas, detailed below, contribute
2% to the Group's revenue (2010 - 6%).
Other segments totalling 2% of revenues is represented primarily
by Energy and Engineering contributing 2% (2010 - 4%). All segments
are monitored by the board of directors as well as senior
management.
Payroll Services generating 17% (2010 - 9%) of the Group's
revenue, has been re-classified from Other services to IT
services.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that although supplying the same product offerings, operate in
distinct markets and are therefore managed and reported on
separately.
Measurement of operating segment profit or loss, assets and
liabilities
The accounting policies of the operating segments are the same
as those described in the summary of significant accounting
policies.
The Group evaluates performance on the basis of profit or loss
from operations before tax not including overhead costs such as
those incurred by the support centres, goodwill impairment, and
also excluding the effects of share based payments.
The Board does not review assets and liabilities by segment.
Networkers International Plc
Notes to the accounts (Continued)
2 Segment information (continued)
IT Telco Other Total
2011 2011 2011 2011
GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external customers 103,089 83,458 3,419 189,966
_______ _______ _______ _______
Segment profit before income
tax 2,300 4,470 485 7,255
_______ _______ _______ _______
IT Telco Other Total
2010 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external customers 85,248 58,429 9,368 153,045
_______ _______ _______ _______
Segment profit before income
tax 2,415 2,657 147 5,219
_______ _______ _______ _______
The Group does not report segment assets or liabilities
internally.
Reconciliation of reportable segment profit to the Group's
corresponding amounts:
2011 2010
Profit or loss after income tax expense GBP'000 GBP'000
Total profit or loss for reportable segments 7,255 5,219
Depreciation (247) (169)
Profit on business combination 394 -
Amortisation of intangibles (327) (333)
Share based payments (100) (41)
Interest expense (414) (512)
Interest income 42 118
_______ _______
Profit before income tax expense 6,603 4,282
_______ _______
Corporation taxes (2,365) (1,622)
_______ _______
Profit after income tax expense 4,238 2,660
_______ _______
Networkers International Plc
Notes to the accounts (Continued)
2 Segment information (continued)
Geographical information:
Revenue is recognised based upon where the actual service is
provided.
Revenue 2011 2010
GBP'000 GBP'000
Europe 161,867 132,139
Middle East and Africa 8,180 3,479
Americas 15,533 12,680
Asia Pacific 4,386 4,747
_______ _______
Group 189,966 153,045
_______ _______
3 Earnings per share
2011 2010
GBP'000 GBP'000
Numerator
Earnings used for calculation of basic and
diluted EPS 3,772 2,593
Add back:
Amortisation of intangible assets acquired
through business combinations 311 290
Share based payments net of tax 74 30
Profit on business combination (394) -
_________ _________
Earnings used in calculation of adjusted EPS 3,763 2,913
_________ _________
2011 2010
Number Number
Denominator
Weighted average number of shares used in basic
EPS 88,854,776 92,090,311
Effects of employee share options 2,485,604 1,787,459
_________ _________
Weighted average number of shares used in diluted
EPS 91,340,380 93,877,770
_________ _________
Year end number of shares (excluding shares
held in treasury)
used in adjusted EPS 89,053,953 88,922,914
_________ _________
Basic 4.24p 2.82p
_________ _________
Diluted 4.13p 2.76p
_________ _________
Adjusted 4.22p 3.28p
_________ _________
The number of options excluded from the diluted EPS calculation
is 50,000 (2010 - 50,000).
Networkers International Plc
Notes to the accounts (Continued)
4 Reserves
The following describes the nature and purpose of each reserve
within owners' equity
Share capital:Amount subscribed for share capital at nominal
value.
Share premium: Amount subscribed for share capital in excess of
nominal value.
Foreign exchange:Gains/losses arising on retranslating the net
assets of overseas operations in to sterling.
Capital redemption reserve: The capital redemption reserve of
GBP53,035 exists as a result of the Group cancelling its shares
held in Treasury during the year.
Reverse acquisition reserve:The reverse acquisition reserve of
GBP676,000 exists as a result of the acquisition by Networkers
International Plc of Networkers International (UK) Plc. In
accordance with International Accounting Standards the acquisition
has been accounted for as a reverse acquisition
Retained earnings:Cumulative net gains and losses recognisedin
the consolidated income statement less cost of own shares held in
treasury amounting to GBPnil (2010: GBP1,363,000).
5 Publication of non-statutory accounts
The financial information set out above does not constitute the
company's statutory accounts for 2010 or 2011. Statutory accounts
for the years ended 31 December 2011 and 31 December 2010 have been
reported on by the Independent Auditors. The Independent Auditors'
Report on the Annual Report and Financial Statements for 2011 and
2010 was unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3)
of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2010 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 December 2011 will be posted to shareholders no
later than 30 June 2012 and will be available to the public from
the company's registered office, Hanover Place, 8 Ravensbourne
Road, Bromley, BR1 1HP, from that date.
6 Payment of Dividend
An interim dividend of 0.450p per share totalling GBP0.4m (2010
- GBP0.3m) was paid during the year. The directors recommend the
payment of a final dividend of 0.550p per share totalling GBP0.49m
(2010 - GBP0.3m).
These results are available from the Group's website
www.networkersplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFDFLFFESEFL
Networkers International (LSE:NWKI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Networkers International (LSE:NWKI)
Historical Stock Chart
From Jul 2023 to Jul 2024
