TIDMFDM
RNS Number : 9907S
FDM Group (Holdings) plc
15 March 2023
FDM Group (Holdings) plc
Preliminary Results
FDM Group (Holdings) plc ("the Company") and its subsidiaries
(together "the Group" or "FDM"), today announces its results for
the year ended 31 December 2022.
31 December 31 December % change
2022 2021
Revenue GBP330.0m GBP267.4m +23%
------------ ------------ ---------
Adjusted operating profit(1) GBP52.2m GBP47.3m +10%
------------ ------------ ---------
Profit before tax GBP45.7m GBP41.4m +10%
------------ ------------ ---------
Adjusted profit before
tax(1) GBP52.0m GBP46.7m +11%
------------ ------------ ---------
Basic earnings per share 32.0p 29.1p +10%
------------ ------------ ---------
Adjusted basic earnings
per share(1) 37.3p 33.2p +12%
------------ ------------ ---------
Cash flow generated from
operations GBP49.7m GBP52.1m -5%
------------ ------------ ---------
Cash conversion(2) 108.3% 124.1% -13%
------------ ------------ ---------
Adjusted cash conversion(1) 95.1% 110.3% -14%
------------ ------------ ---------
Cash position at period
end GBP45.5m GBP53.1m -14%
------------ ------------ ---------
Dividend per share 36.0p 33.0p +9%
------------ ------------ ---------
-- Good performance by FDM in 2022, in line with the Board's expectations.
-- Consultants assigned to clients at week 52(3) stood at 4,905
(2021: 4,033), up 22% against the prior year.
-- North America delivered excellent growth, with both US and
Canada performing well; Consultant headcount grew by 48%.
-- Good progress in APAC, where FDM is gaining the critical mass
to take advantage of the upfront investment committed over recent
years; Consultant headcount grew by 15%.
-- The UK delivered an 8% increase in Consultant headcount; more
challenging market conditions later in the year, following the
September mini-budget and subsequent changes in government.
-- Global Consultant utilisation rate(4) was 97.5%, in line with the prior year (97.3%).
-- Global Consultant training completions during the year were
3,179 (2021: 2,410), up 32% and the highest in FDM's history.
-- We secured 74 new clients globally (2021: 78), of which 59%
were outside the financial services sector, with good progress made
in the e nergy and utilities , insurance and commercial and
professional services sectors.
-- We made a number of significant investments during the year
in recruitment, training and other mid to long-term programmes
which will help underpin the future growth of the business.
-- Group revenue increased 23% against the prior year (up 19% on
a constant currency basis); adjusted operating profit(1) increased
by 10% to GBP52.2 million (2021: GBP47.3 million).
-- We maintain our robust balance sheet, with GBP45.5 million of
cash at year end (2021: GBP53.1 million) and no debt.
-- Cash conversion of 108.3% (2021: 124.1%), is in line with the
Board's expectations and reflects the continued close management of
working capital.
-- We propose a Final Dividend of 19.0 pence per share,
following an interim dividend of 17.0 pence per share declared in
July 2022, which would give a total dividend for the year of 36.0
pence per share (2021: 33.0 pence per share).
-- We are committed to reducing our carbon footprint; annual
Scope 1, 2 and 3 greenhouse gas emissions per employee were 0.48
tCO(2) e (2021: 0.49 tCO(2) e) .
-- 2023 has started positively, with encouraging levels of
client engagement against an uncertain macro-economic backdrop.
(1) Adjusted operating profit and adjusted profit before tax are
calculated before Performance Share Plan expenses (including social
security costs) of GBP6,356,000 (2021: GBP5,261,000). Adjusted
basic earnings per share are calculated before the impact of
Performance Share Plan expenses (including social security costs
and associated deferred tax). The adjusted cash conversion is
calculated by dividing cash flow generated from operations by
adjusted operating profit.
(2) Cash conversion is calculated by dividing cash flow
generated from operations by operating profit.
(3) Week 52 in 2022 commenced on 19 December 2022 (2021: week 52 commenced on 20 December 2021).
(4) Utilisation is calculated as the ratio of cost of utilised
Consultants to the total Consultant payroll cost.
Rod Flavell, Chief Executive Officer, said:
"We delivered a good performance in 2022, with strong growth in
Consultant numbers and accelerated investment in recruitment,
training and other programmes that will help to underpin the future
of the Group.
The early months of 2023 have seen continued macro-economic
uncertainty in many of the regions in which we operate. Against
this background, I am pleased that we continue to see encouraging
levels of client engagement and that we continue our client-led
expansion with the recent openings of offices in Tampa, Florida;
Melbourne, Australia; and Limerick, Ireland.
In all of the geographies in which we operate there remain
structural and systemic skills-shortages, which we are well placed
to assist our clients in overcoming.
Our scalable and flexible business model and diversified
portfolio of clients, sectors and operating regions mean that we
are appropriately positioned to weather current global
uncertainties and to continue to deliver long-term growth for all
of our stakeholders."
Enquiries
For further information:
FDM Rod Flavell - CEO 0203 056 8240
Mike McLaren - CFO 0203 056 8240
Nick Oborne
(financial public relations) 07850 127526
Forward-looking statements
This Annual Report contains statements which constitute
"forward-looking statements". Although the Group believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will
prove to be correct. Because these statements involve risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We are FDM
FDM Group (Holdings) plc ("the Company" or "FDM") and its
subsidiaries (together " the Group" or "FDM") form a global
professional services provider with a focus on IT. Our mission is
to bring people and technology together, creating and inspiring
exciting careers that shape our digital future.
The Group's principal business activities involve recruiting,
training and deploying its own permanent IT and business
Consultants to clients, either on site or remotely. FDM specialises
in a range of technical and business disciplines including
Development, Testing, IT Service Management, Project Management
Office, Data Engineering, Cloud Computing, Risk, Regulation and
Compliance, Business Analysis, Business Intelligence,
Cybersecurity, AI (Artificial Intelligence), Machine Learning and
Robotic Process Automation.
The FDM Careers Programme bridges the gap for graduates,
ex-Forces, returners to work and apprentices, providing the
training and experience required to make a success of launching or
relaunching their careers. We have dedicated training centres and/
or sales operations located in London, Leeds, Glasgow, Limerick,
New York NY, Arlington VA, Charlotte NC, Austin TX, Tampa FL,
Toronto, Montreal, Frankfurt, Kraków, Singapore, Hong Kong,
Shanghai, Sydney and Melbourne. We also operate in Luxembourg, the
Netherlands, Switzerland, Austria, Spain, South Africa, and New
Zealand.
The physical and mental wellbeing of our people and stakeholders
is central to who we are and what we do. As such, our outreach
programmes for our Consultants and in-house staff have grown and
broadened during 2022, becoming key to our support and care for all
of our people globally.
FDM is a collective of around 7,000 people, with a multitude of
differing backgrounds, life experiences and cultures. We are a
strong advocate of diversity, equity and inclusion in the workplace
and the strength of our brand arises from the talent within.
INTRODUCTION
The Group performed well in 2022, with strong levels of trading
from all our principal regions and high levels of client demand.
North America in particular delivered good growth, with pleasing
contributions from both the US and Canada. We made good progress in
APAC, where we are now gaining the critical mass to take advantage
of our upfront investment over recent years.
The Group delivered an adjusted profit before tax(1) of GBP52.0
million (2021: GBP46.7 million). The balance sheet remains robust
with closing cash balances of GBP45.5 million (2021: GBP53.1
million) and no debt. The Group made dividend payments during the
year of GBP38.2 million (2021: GBP46.8 million).
During the year we continued with our plan of accelerating and
enhancing investment in recruitment of both Consultants and
internal staff, and in our complementary development programmes.
These initiatives reflect the high level of client demand during
the year and will help underpin the future growth of our business.
3,179 Consultants were trained during the year (2021: 2,410
training completions), the highest in the Group's history.
We ended the year with 4,905 Consultants placed with clients
(2021: 4,033), recorded revenue of GBP330.0 million (2021: GBP267.4
million) and delivered an adjusted operating profit(1) of GBP52.2
million (2021: GBP47.3 million).
We maintain a strong focus on cash management and collection,
ending the year with GBP45.5 million of cash (2021: GBP53.1
million) and no debt.
(1) The adjusted operating profit and adjusted profit before tax
is calculated before Performance Share Plan expenses (including
social security costs).
Our strategy
FDM's strategy is straightforward: to deliver customer-led,
sustainable and profitable growth on a consistent basis through our
well-established and proven business model. This model has enabled
us to deliver a strong performance in the year by working to fulfil
our four key strategic objectives: attract, train, and develop
high-calibre Consultants; invest in leading-edge training
capabilities; grow and diversify our client base; and expand and
consolidate our geographic presence through sustainable and
efficient means.
Our strategy requires that all activities and investments
produce the appropriate level of return on investment, that they
deliver sustained and measurable improvements for all our
stakeholders including customers, staff and shareholders, and that
they further our objective of launching the careers of talented
people worldwide, which remains core to everything we do.
Strategic objectives
Attract, train and develop high-calibre Consultants
Recruitment was a key area of focus during the year as we
responded to high levels of client demand across all our regions.
The overall number of recruitment events decreased as we changed
the mix of events to attend more face-to-face and fewer virtual
events in 2022. Face-to-face events are more personal to potential
candidates and more impactful. We generated a marked increase in
the number of applications across all our operating locations, most
notably in the UK, with applicants seeking the benefits of FDM's
market-leading, flexible training. We believe our training and
deployment offering d ifferentiates us from our competitors and is
more attractive than ever to candidates. We use recruitment and
assessment processes which are designed to spot a candidate's full
potential. This helps us to build an inclusive workforce and to
increase social mobility by opening doors to careers in tech with
our blue-chip clients for individuals from the broadest range of
backgrounds.
Our new global applicant tracking system, Eploy, was rolled out
in 2022, enabling us to process applications more efficiently while
offering a much improved user experience.
We delivered a record year of training completions. In total,
there were 3,179 training completions in 2022, an increase of 32%
on the previous year (2021: 2,410).
Our Group-wide spend on paid training in 2022 totalled over
GBP21.5 million (2021: GBP12.5 million), an investment that will
help underpin our targets for 2023 and beyond. In response to the
higher inflationary operating conditions, we increased salary
packages for Consultants across all regions.
We continue to invest in our Ex-Forces and Returners programmes,
which remain an important source of talent for the business, and
increased our investment in our apprenticeships and school leavers
programmes, to further diversify our talent pipeline.
Invest in leading-edge training capabilities
During the year we continued to advance our Academy
Transformation Programme, as detailed in our Annual Report 2021,
and enhanced our hybrid training model as we work to identify the
best training delivery solution for the post pandemic world of
work.
We are focussed on optimising both the appeal of our training
programmes to candidates and of our Consultants to clients. For
example, through our partnership with TechSkills, we have now
achieved Tech Industry Gold standard accreditation for eight
programmes, through which a total of 548 trainees attained their
certification in 2022. Accreditation provides to candidates and
clients external validation of FDM's programme content, delivery,
approach and assessment.
During the year many of our trainers enhanced their
qualifications by gaining industry certifications such as AWS Cloud
Practitioner, Agile Scrum Master, SAFe Scrum, and certifications in
Google Cloud. We also have trainer certifications with CompTIA CTT+
Certified Technical Trainer, Scrum.org PSM, IIBA ECBA&CBAP and
ITIL. These certifications demonstrate that we can offer high
quality training in the technologies which are of key importance to
our clients.
Grow and diversify our client base
We continue to deliver the highest level of service to our
clients and have worked closely with them to meet their
requirements. We se cured 74 new clients in the year (2021: 78), of
which 38 were in the UK, 14 in North America, 14 in APAC and 8 in
EMEA. Of these new clients, 59 % were secured from outside the
financial services sector, as we made good progress in the e nergy
and utilities , insurance and commercial and professional services
sectors. The number of new clients does not include those clients
re-engaging with us during 2022, post pandemic.
Expand and consolidate our geographic presence through
sustainable and efficient means
Our North America operations increased headcount by 48% to 1,618
(2021: 1,095) with excellent growth delivered in both the US and
Canada. The UK increased headcount by 8% to 1,958 (2021: 1,806)
with a very strong performance in the first half of 2022 followed
by a slower second half, reflecting political and economic
uncertainties. APAC Consultant headcount increased to 1,011
compared to 880 in 2021, an increase of 15%. EMEA closed with 318
Consultants deployed, up 26% compared to 252 in 2021 with strong
activity levels in our newer location, Poland.
We will continue to grow our international footprint in 2023 and
to consolidate our operations in our existing territories.
Our service offerings
We continually enhance our service offerings in response to our
clients' current and future requirements, developing a partner-led
consultancy that provides clients with scalable and sustainable
support. Extensive collaboration with clients has led to the
co-creation of programmes to provide better solutions to complex
challenges, such as a multi-year global internal audit programme
for a banking client and a specialist test team supporting the
rollout of a complex global platform for a media client. We have
seen the first deployment of both "Robotic Process Automation As A
Service" and "Business Analysis As A Service" specialist Data and
Business Analysis teams to public sector customers undertaking
significant transformation programmes. Each Consulting project is
now underpinned by experienced Delivery Consultants who provide a
management capability to reduce the burden on our clients. Having
successfully deployed significant numbers of Consultants to work on
KYC (Know Your Customer) projects with our clients in the banking
sector, we have built on our experience to begin working with
clients with similar requirements in the charity, insurance and
consultancy sectors.
In 2022 we continued strengthening our strategic alliances with
some of the world's most innovative organisations to fuel the
growth of our client services and ensure that we are at the
forefront of technological advancements. This further adds to the
support we now provide to clients, particularly with technologies
that are increasingly in demand and with
hard-to-source-skillsets.
Our strategic alliances ecosystem includes:
-- Microsoft - Workforce Development & Learn Career Connected Partner
-- Salesforce - Workforce Development & Trailhead Academy Authorised Learning Partner
-- ServiceNow - Placement & Authorised Training Partner
-- AWS - AWS Approved Training Partner & AWS reStart Collaboration
-- Appian - Education Partner
-- nCino - Workforce Development Partner
GROUP RESULTS
Summary income statement
Year ending Year ending
31 December 31 December
2022 2021 % change
GBP 330.0
Revenue m GBP 267.4m +23%
------------- ------------- ---------
Adjusted operating
profit(1) GBP52.2 m GBP 47.3m +10%
------------- ------------- ---------
Operating profit GBP45.8 m GBP42.0 m +9%
------------- ------------- ---------
Adjusted profit
before tax(1) GBP52.0 m GBP 46.7m +11 %
------------- ------------- ---------
Profit before
tax GBP45.7m GBP41.4m +10 %
------------- ------------- ---------
Adjusted basic
EPS(1) 37.3 p 33.2p +12%
------------- ------------- ---------
Basic EPS 32.0 p 29.1p +10%
------------- ------------- ---------
Overview
The Group delivered a good performance in 2022. Revenue
increased to GBP330.0 million, up 23% (2021: GBP 267.4 million),
adjusted operating profit(1) increased by 10% to GBP52.2 million
(2021: GBP47.3 million), with adjusted basic earnings per share(1)
up 12%, to 37.3 pence (2021: 33.2 pence). On a constant-currency
basis (2) revenue increased by 19%, or GBP52.3 million, with GBP7.7
million of the GBP10.3 million exchange differences relating to the
North American operations. We ended the year with a robust balance
sheet, including cash balances of GBP45.5 million (2021: GBP53.1
million), having converted 108% of our operating profit into
operating cash flow. We remain well positioned for future growth
with a proven and agile business model that allows us to respond
rapidly and effectively to market fluctuations.
Consultants assigned to clients at week 52 of 2022 increased by
22 %, totalling 4,905 (week 52 of 2021: 4,033). At week 52 of 2022
our Ex-Forces Programme ac counted for 211 Consultants dep loyed
worldw ide (week 52 of 2021: 196 ). Our Returners Programme had 220
Consultants deployed at week 52 of 2022 (week 52 of 2021: 156). The
Consultant utilisation rate settled at 97.5% (2021: 97.3%).
An analysis of revenue and headcount by region is set out in the
table below:
Year ending Year ending 2022 2021
31 December 31 December Consultants Consultants
2022 2021 assigned assigned
Revenue Revenue to clients to clients
GBPm GBPm at week 52(3) at week 52(3)
UK 139.6 121.8 1,958 1,806
------------- ------------- --------------- ---------------
North America 116.9 81.4 1,618 1,095
------------- ------------- --------------- ---------------
EMEA 19.7 25.0 318 252
------------- ------------- --------------- ---------------
APAC 53.8 39.2 1,011 880
------------- ------------- --------------- ---------------
330.0 267.4 4,905 4,033
------------- ------------- --------------- ---------------
Adjusted Group operating profit margin decreased to 15.8 %
(2021: 17.7%) with administrative expenses increasing to GBP 109.8
million (2021: GBP 84.7 million). The decrease in adjusted
operating margin is due primarily to the costs associated with
record levels of paid training in the period (including the impact
of the first full year of paid training costs for the UK),
investments in our Train the Trainer programme, our Sales
Development Programme; and upgrades to a number of our IT
systems.
(1) Adjusted operating profit and adjusted profit before tax are
calculated before Performance Share Plan expenses (including social
security costs). Adjusted basic earnings per share are calculated
before the impact of Performance Share Plan expenses (including
social security costs and associated deferred tax).
(2) The constant-currency basis is calculated by translating
current year and prior year reported amounts into comparable
amounts using the 2022 average exchange rate for each currency. The
presentation of the constant-currency basis provides a better
understanding of the Group's trading performance by removing the
impact on revenue of movements in foreign exchange.
(3) Week 52 in 2022 commenced on 19 December 2022 (2021: week 52
commenced on 2 0 December 2021).
Adjusting items
The Group presents adjusted results, in addition to the
statutory results, as the Directors consider that they provide a
useful indication of underlying trading performance. The adjusted
results are stated before Performance Share Plan expenses including
associated taxes which totalled GBP6,356,000 (2021: GBP5,261,000 ).
The Directors believe that excluding these costs provides a more
meaningful comparison of the trading performance. These expenses
are based on estimates relating to a vesting which occurs up to
three years in advance and the assumptions underpinning those
estimates can change from year to year.
Net finance expense
The finance expense costs include lease liability inter est of
GBP0.5 million (2021: GBP0.6 million). The Group has no debt.
Taxation
The Group's total tax charge for the year was GBP10.8 million,
equivalent to an effective tax rate of 23.5%, on profit before tax
of GBP45.7 million (2021: effective tax rate of 23.2% based on a
tax charge of GBP 9.6 million and a profit before tax of GBP41.4
million). The effective tax rate in 2022 is higher than the
underlying UK tax rate of 19% primarily due to Group profits earned
in higher tax jurisdictions. The effective tax rate reflects the
Group's geographical mix of profits and the impact of items
considered to be non-taxable or non-deductible for tax purposes,
with the increase year-on-year primarily due to changes in these
factors.
Earnings per share
Basic earnings per share increased in the year to 32.0 pence
(2021: 29.1 pence), whilst adjusted basic earnings per share were
37.3 pence (2021: 33.2 pence). Diluted earnings per share were 31.8
pence (2021: 28.8 pence).
Dividend
During the year, the Group paid two dividends totalling GBP 38.2
million, representing in aggregate 35.0 pence per share.
At the AGM held on 24 May 2022, a final dividend of 18.0 pence
per share for 2021 was approved by shareholders and was paid on 10
June 2022. On 27 July 2022, an interim dividend of 17.0 pence per
share for 2022 was declared and was paid on 30 September 2022.
The Board has recommended a final dividend of 19.0 pence per
share, subject to shareholder approval at the 2023 AGM, taking the
total dividend arising from the 2022 financial year to 36.0 pence
per share .
The Board has set a minimum consistent cash buffer at a Group
level and will always consider the ongoing needs for the funding of
organic growth across the business and the distributable reserves
available to the Group when considering dividend levels. As at 31
December 2022, the Company had distributable reserves of GBP59.4
million. This statement does not form part of the audited financial
statements and the distributable reserves figure of GBP59.4 million
is therefore not audited by PwC or otherwise.
Cash flow and Statement of Financial Position
The Group's cash balance decreased to GBP45.5 million (2021 :
GBP53.1 million). Cash conversion was 108.3 % (2021: 124.1%)
reflecting good working capital management and is in line with our
normal parameters. Dividends paid in the year totalled GBP 38.2
million (2021: GBP46.8 million, including the deferred 2019 Final
Dividend of GBP16.3 million arising from the pandemic). Net capital
expenditure was GBP1.2 million (2021: GBP0.4 million) and tax paid
was GBP13.7 million (2021: GBP10.6 million).
SEGMENTAL PERFORMANCE
UK
UK Consultant headcount at week 52 of 2022 was 1,958, an
increase of 152 (8%) on the prior year (2021: 1,806). Revenue
increased by 15% to GBP139.6 million (2021: GBP121.8 million); this
increase was higher than the 8% increase in Consultant headcount at
week 52 due to the phasing of headcount, more challenging market
conditions later in the year following uncertainty arising from
September's mini-budget and the subsequent changes in UK
government, which impacted certain customers' decision-making.
During the year we added 38 new clients compared with the 33 that
we added in 2021.
The tenure profile of our Consultants has now rebalanced to more
normal levels, with the proportion of Consultants who have
completed their first two years with FDM having been unusually high
through the pandemic. We ended the year with 46% (2021: 49%) within
their first year, 36% (2021: 19%) within their second year and 18%
(2021: 33%, 2020: 41%) having completed more than two years.
Adjusted operating profit(1) increased 7% to GBP30.3 million
(2021: GBP28.4 million). Training completions were broadly in line
with the prior year as we trained 1,063 Consultants (2021: 1,035).
In July 2021 we introduced paid training, paying trainees from
their first day in training, in line with our operations elsewhere
in the world. The full year cost of trainee wages pre-deployment
was GBP7.2 million in 2022 (2021: GBP3.8 million).
North America
North America experienced strong growth in Consultant headcount
closing the year on 1,618, an increase of 523 (48%) on the prior
year (2021: 1,095). Revenue increased by 44% to GBP116.9 million
(2021: GBP81.4 million). We saw strong Consultant growth in both
Canada and the US, with the initiatives we introduced to help us
meet growing demand proving successful.
Adjusted operating profit(1) increased by 18% to GBP15.4 million
(2021: GBP13.1 million), less than the increase in headcount and
revenue, a reflection of our upfront investment in training and
salaries to deliver the Consultant headcount growth. During the
year we trained a record 1,319 Consultants, almost double the
number we trained in 2021 (661).
EMEA
EMEA Consultant headcount at week 52 of 2022 was 318, an
increase of 66 (26%) on the prior year (2021: 252). Revenue
decreased by 21% to GBP19.7 million (2021: GBP25.0 million) and
adjusted operating profit(1) decreased by 32% to GBP2.3 million
(2021: GBP3.4 million). The reduction in revenue and operating
profit reflects the phasing of Consultant headcount and the
regional mix of Consultant placements. In 2021, headcount decreased
towards the end of the year, whereas in 2022 headcount increased
towards the end of the year. The mix of locations has changed; in
2022, we saw strong growth in Poland and South Africa, two markets
with lower sell-rates; whilst in 2021 we completed a large project
delivery in Luxembourg. Training completions were 223, an increase
of 26 (13%) on prior year (2021: 197).
APAC
APAC Consultant headcount exceeded 1,000, closing the year on
1,011, an increase of 131 (15%) on the prior year (2021: 880).
Revenue increased by 37% to GBP53.8 million (2021: GBP39.2 million)
and adjusted operating profit(1) increased by 75% to GBP4.2 million
(2021: GBP2.4 million) as the region benefited from strong
headcount growth. During the year we hit milestones in two of the
regions, with Australia surpassing 400 Consultants and Singapore
surpassing 300 Consultants. Across the region, we continued to grow
our client base, adding 14 new clients in the year (2021: 17).
During the year we trained 574 Consultants, an increase of 57 (11%)
on the prior year (2021: 517).
(1) The adjusted operating profit is calculated before
Performance Share Plan expenses (including social security
costs).
THE BOARD
There have been no changes to the Board or any of its Committees
since the publication of our last Annual Report.
OUR PEOPLE AND OTHER STAKEHOLDERS
FDM is a people business, and I am very proud of the passion and
commitment demonstrated by our people across all of our operating
regions. Our results reflect their dedication, hard work and
commitment.
Our people strategy has been designed to enable FDM to maintain
its position as a high-performing and impactful global organisation
with a clear orientation towards sustainability, scalability,
commercial efficiency and flexibility. Our people strategy aims to
ensure we deliver the following measures: successful deployments;
an inclusive culture; a proactive business whereby we are
constantly reviewing the needs of our people and clients; quality
and clarity of purpose, ensuring all our employees embody and
promote our values; and recognised leadership.
We remain committed to embracing diversity, equity and inclusion
in the workplace. I am pleased to report that in 2022 we
established a new Consultant Experience team whose purpose is to
deliver a desirable, inclusive and engaging experience to all our
Consultants whilst focussing on career enhancement. This initiative
will help ensure our Consultants continue to progress, develop and
have a positive experience throughout their time at FDM.
The Board extends its thanks to every FDM employee for the
quality of their work during 2022, which has enabled us to continue
to deliver for all our stakeholders.
THE ENVIRONMENT
During the year we published our Carbon Reduction Plan, which
aims to reduce our carbon footprint in all appropriate areas whilst
building carbon efficiencies into our ways of working. We have
committed to:
-- reduce our absolute Scope 1 and 2 greenhouse gas emissions by
50% by 2030 from a 2020 base year; and
-- reduce Scope 3 greenhouse gas emissions by 62% per employee within the same timeframe.
In June 2022, SBTi validated that these targets conform with the
SBTi Criteria and Recommendations (version 4.2). The SBTi's Target
Validation Team has determined that our targets are in line with
seeking to keep a rise in global temperature to below 1.5(o) C.
CURRENT TRADING AND OUTLOOK
The early months of 2023 have seen continued macro-economic
uncertainty in many of the regions in which we operate. Against
this background, I am pleased that we continue to see good levels
of client engagement and that we continue our client-led expansion
with the recent openings of offices in Tampa, Florida; Melbourne,
Australia; and Limerick, Ireland.
In all of the geographies in which we operate there remain
structural and systemic skills-shortages which we are well placed
to assist our clients in overcoming. Our scalable and flexible
business model and diversified portfolio of clients, sectors and
operating regions mean that we are appropriately positioned to
weather current global uncertainties and to continue to deliver
long-term growth for all of our stakeholders.
Consolidated Income Statement
for the year ended 31 December 2022
Note 2022 2021
GBP000 GBP000
Revenue 3 329,972 267,356
Cost of sales (174,353) (140,641)
Gross profit 155,619 126,715
( 84,700
Administrative expenses (109,772) )
Operating profit 4 45,847 42,015
Finance income 5 418 58
Finance expense 5 (604) (650)
( 592
Net finance expense (186) )
Profit before income tax 45,661 41,423
( 9,594
Taxation 6 (10,753) )
Profit for the year 34,908 31,829
Earnings per ordinary share
2022 2021
pence pence
Basic 7 32.0 29.1
Diluted 7 31.8 28.8
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
2022 2021
GBP000 GBP000
Profit for the year 34,908 31,829
Other comprehensive income/ (expense)
Items that may be subsequently reclassified
to profit or loss
Exchange differences on retranslation of
foreign operations (net of tax) 2,148 (47)
Total other comprehensive income/ ( expense) 2,148 (47)
Total comprehensive income for the year 37,056 31,782
Consolidated Statement of Financial Position
as at 31 December 2022
2022 2021
Note GBP000 GBP000
Non-current assets
Right-of-use assets 10,073 11,631
Property, plant and equipment 3,666 4,069
Intangible assets 19,729 19,597
Deferred income tax assets 2,316 2,484
35,784 37,781
Current assets
Trade and other receivables 8 48,923 35,841
Cash and cash equivalents 9 45,523 53,120
94,446 88,961
Total assets 130,230 126,742
Current liabilities
Trade and other payables 10 32,962 31,235
Lease liabilities 4,643 5,413
Current income tax liabilities 1,172 2,147
38,777 38,795
Non-current liabilities
Lease liabilities 8,250 9,817
Total liabilities 47,027 48,612
Net assets 83,203 78,130
Equity attributable to owners
of the parent
Share capital 11 1,092 1,092
Share premium 9,705 9,705
All Other reserves 13,525 5,126
Retained earnings 58,881 62,207
Total equity 83,203 78,130
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
Note 2022 2021
GBP000 GBP000
Cash flows from operating activities
Group profit before tax for the
year 45,661 41,423
Adjustments for:
Depreciation and amortisation 4 6,423 6,160
Loss on disposal of non-current
assets 130 2
Finance income 5 (418) (58)
Finance expense 5 604 650
Share-based payment charge (including
associated social security costs) 6,727 5,622
Increase in trade and other receivables (11,334) (5,123)
Increase in trade and other payables 1,872 3,471
Cash flows generated from operations 49,665 52,147
Interest received 418 58
Income tax paid (13,665) (10,606)
Net cash inflow from operating
activities 36,418 41,599
Cash flows from investing activities
Acquisition of property, plant
and equipment (1,204) (368)
Net cash used in investing activities (1,204) (368)
Cash flows from financing activities
Proceeds from sale of shares
from EBT 484 450
Principal elements of lease payments (5,470) (5,294)
Interest elements of lease payments (472) (564)
Proceeds from sale of own shares 24 50
Finance costs paid (132) (85)
Dividends paid 12 (38,153) (46,820)
Net cash used in financing activities (43,719) (52,263)
Exchange gains/ (losses) on cash
and cash equivalents 908 (573)
Net decrease in cash and cash
equivalents (7,597) (11,605)
Cash and cash equivalents at
beginning of year 53,120 64,725
Cash and cash equivalents at
end of year 9 45,523 53,120
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Share Share All Retained Total
capital premium Other earnings equity
reserves
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2022 1,092 9,705 5,126 62,207 78,130
Profit for the year - - - 34,908 34,908
Other comprehensive income
for the year - - 2,148 - 2,148
Total comprehensive income
for the year - - 2,148 34,908 37,056
Share-based payments - - 5,844 - 5,844
Transfer to retained earnings - - (454) 454 -
Own shares sold - - 861 (353) 508
Recharge of net settled
share options - - - (182) (182)
Dividends (note 12 ) - - - (38,153) (38,153)
Total transactions with
owners, recognised directly
in equity - - 6,251 (38,234) (31,983)
Balance at 31 December
2022 1,092 9,705 13,525 58,881 83,203
All
Share Share Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2021 1,092 9,705 (57) 77,224 87,964
Profit for the year - - - 31,829 31,829
Other comprehensive expense ( 47
for the year - - (47) - )
Total comprehensive income
for the year - - (47) 31,829 31,782
Share-based payments - - 5,320 - 5,320
Transfer to retained earnings - - (1,530) 1,530 -
Own shares sold - - 1,440 (938) 502
Recharge of net settled
share options - - - (618) (618)
Dividends (note 12 ) - - - (46,820) (46,820)
Total transactions with
owners, recognised directly
in equity - - 5,230 (46,846) (41,616)
Balance at 31 December
2021 1,092 9,705 5,126 62,207 78,130
Notes to the Consolidated Financial Statements
1. General information
The Group is an international professional services provider
focussing principally on IT, specialising in the recruitment,
training and deployment of its own permanent IT and business
Consultants.
The Company is limited by shares, incorporated and domiciled in
the UK and registered as a public limited company in England and
Wales with a Premium Listing on the London Stock Exchange. The
Company's registered office is 3rd Floor, Cottons Centre, Cottons
Lane, London, SE1 2QG and its registered number is 07078823.
2. Basis of preparation
The financial information set out in this preliminary
announcement does not constitute statutory accounts for the years
ended 31 December 2022 and 31 December 2021, for the purpose of the
Companies Act 2006, but is derived from those accounts. The audited
statutory accounts for 2021 have been delivered to the Registrar of
Companies and those for 2022 were approved for issue on 14 March
2023. The Group's auditor reported on the Annual Report and
Accounts for the year ended 31 December 2022 on 14 March 2023.
Their report was unqualified, did not draw attention to any matters
by way of emphasis without qualifying their report and did not
contain statements under Section 498(2) or (3) of the Companies Act
2006.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with UK-adopted
International Financial Reporting Standards, this announcement does
not itself contain sufficient information to comply with UK-adopted
International Financial Reporting Standards. The accounting
policies applied in preparing this financial information are
consistent with the Group's financial statements for the year ended
31 December 2021 with the exception of the following standards and
amendments which were effective from 1 January 2022 and were
adopted by the Group in preparing the financial statements. The
adoption of these standards and amendments has not had a material
impact on the Group's financial statements in the year:
-- Amendment to Annual Improvements to IFRS Standards 2018-2021
-- Amendment to Onerous Contracts - Cost of Fulfilling a
Contract - Amendments to IAS 37 1 January 2022
-- Amendment to Property, Plant and Equipment: Proceeds before
intended use - Amendments to IAS 16
-- Amendment to Reference to the Conceptual Framework (Amendments to IFRS 3)
3. Segmental reporting
Management has determined the operating segments based on the
operating reports reviewed by the Board of Directors that are used
to assess both performance and strategic decisions. Management has
identified that the Executive Directors are the chief operating
decision-maker in accordance with the requirements of IFRS 8
'Operating segments'.
As of 31 December 2022, the Board of Directors consider that the
Group is organised on a worldwide basis into four core geographical
operating segments:
(1) UK;
(2) North America;
(3) Europe, Middle East and Africa, excluding UK ("EMEA"); and
(4) Asia Pacific ("APAC").
Each geographical segment is engaged in providing services
within a particular economic environment and is subject to risks
and returns that are different from those of segments operating in
other economic environments.
All segment revenue, profit before taxation, assets and
liabilities are attributable to the principal activity of the
Group, being a global professional services provider with a focus
on IT .
For the year ended 31 December 2022
North
UK America EMEA APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 139,560 116,937 19,665 53,810 329,972
Depreciation and amortisation 2,599 1,698 291 1,835 6,423
Segment operating profit 25,856 14,111 2,039 3,841 45,847
Finance income(1) 515 152 2 5 674
Finance costs(1) (196) (59) (86) (519) (860)
Profit before income
tax 26,175 14,204 1,955 3,327 45,661
As at 31 December 2022
Total assets 69,706 26,915 11,983 21,626 130,230
Total liabilities (8,602) (9,775) (4,906) (23,744) (47,027)
(1) Finance income and finance costs include intercompany
interest which is eliminated upon consolidation
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK America EMEA APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
31 December 2022 23,124 1,654 1,112 7,578 33,468
For the year ended 31 December 2021
North
UK America EMEA APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 121,846 81,387 24,963 39,160 267,356
Depreciation and amortisation 2,489 1,714 241 1,716 6,160
Segment operating profit 24,570 12,215 3,237 1,993 42,015
Finance income(1) 159 174 - 4 337
Finance costs(1) (231) (60) (88) (550) (929)
Profit before income tax 24,498 12,329 3,149 1,447 41,423
As at 31 December 2021
Total assets 75,995 21,038 11,937 17,772 126,742
Total liabilities (13,053) (8,669) (6,193) (20,697) (48,612)
(1) Finance income and finance costs include intercompany
interest which is eliminated upon consolidation
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK America EMEA APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
31 December 2021 24,839 2,144 1,030 7,284 35,297
Information about major customers
Customers A and B represent 10% or more of the Group's 2022 and
2021 revenues. Revenue from c ustomer A is attributed across all
four operating segments, revenue from customer B is attributed to
North America .
2022 2021
GBP000 GBP000
Revenue from customer A 40,297 35,942
Revenue from customer B 37,227 16,010
4 Operating profit
Operating profit for the year has been arrived at after
(crediting)/ charging:
2022 2021
GBP000 GBP000
Net foreign exchange differences (415) 39
Loss on disposal of property, plant and equipment 95 -
Depreciation of right-of-use assets 4,533 4,294
Depreciation of property, plant and equipment
and amortisation of software and software
licences 1,890 1,866
Expense relating to short-term leases 13 78
5 Finance income and expense
2022 2021
GBP000 GBP000
Bank interest 418 58
Finance income 418 58
2022 2021
GBP000 GBP000
Interest on lease liabilities (472) (564)
Finance fees and charges (132) (86)
Finance expense (604) (650)
6 Taxation
The major components of income tax expense for the years ended
31 December 2022 and 2021 are:
2022 2021
GBP000 GBP000
Current income tax:
Current income tax charge 11,699 9,904
Adjustments in respect of prior periods (592) (418)
Total current income tax 11,107 9,486
Deferred tax:
Relating to origination and reversal of
temporary differences (354) 108
Total deferred tax (354) 108
Total tax expense reported in the income
statement 10,753 9,594
The standard rate of corporation tax in the UK is 19% (2021:
19%). Accordingly, the profits for 2021 and 2022 are taxed at 19%.
The tax charge for the year is higher (2021: higher) than the
standard rate of corporation tax in the UK. The differences are set
out below:
2022 2021
GBP000 GBP000
Profit before income tax 45,661 41,423
Profit before income tax multiplied by UK standard rate of corporation tax of 19% (2021: 19%) 8,676 7,870
Effect of different tax rates on overseas earnings 2,090 1,695
Effect of expenses not deductible for tax purposes 579 143
Adjustments in respect of prior periods (592) (418)
Effect of unused tax losses not recognised for deferred tax assets - 304
Total tax charge 10,753 9,594
7 Earnings per ordinary share
Basic earnings per share are calculated by dividing the profit
attributable to ordinary equity holders of the Parent Company by
the weighted average number of ordinary shares in issue during the
year.
2022 2021
GBP0
Profit for the year 00 34,908 31,829
Average number of ordinary shares in
issue (thousands) 109,192 109,192
Basic earnings per share Pence 32.0 29.1
Adjusted basic earnings per share are calculated by dividing the
profit attributable to ordinary equity holders of the Parent
Company, excluding Performance Share Plan expense (including social
security costs and associated deferred tax), by the weighted
average number of ordinary shares in issue during the year.
2022 2021
Profit for the year (basic
earnings) GBP000 34,908 31,829
Share-based payment expense
(including social security
costs) GBP000 6,356 5,261
Tax effect of share-based
payment expense GBP000 (522) (837)
Adjusted profit for the
year GBP000 40,742 36,253
Average number of ordinary shares in issue
(thousands) 109,192 109,192
Adjusted basic earnings per share Pence 37.3 33.2
Diluted earnings per share
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has one type of dilutive potential ordinary shares in the form of
share options; the number of shares in issue has been adjusted to
include the number of shares that would have been issued assuming
the exercise of the share options.
2022 2021
Profit for the year (basic
earnings) GBP000 34,908 31,829
Average number of ordinary
shares in issue (thousands) 109,192 109,192
Adjustment for share options
(thousands) 594 1,386
Diluted number of ordinary
shares in issue (thousands) 109,786 110,578
Diluted earnings per share Pence 31.8 28.8
8 Trade and other receivables
Due to their short-term nature, the Directors consider that the
carrying amount of trade receivables approximates to their fair
value. The standard credit terms are 30 days.
2022 2021
GBP000 GBP000
Trade receivables 34,892 26,727
Prepayments and accrued
income 9,389 5,650
Tax receivables 3,450 1,997
Other receivables 1,192 1,467
48,923 35,841
Included within prepayments and accrued income is GBP3,862,000
of accrued income (2021: GBP2,883,000).
9 Cash and cash equivalents
2022 2021
GBP000 GBP000
Cash at bank and in hand 45,523 53,120
10 Trade and other payables
Due to their short-term nature, the Directors consider that the
carrying amount of trade payables approximates to their fair
value.
2022 2021
GBP000 GBP000
Trade payables 2,184 1,113
Other payables 1,856 1,725
Other taxes and social
security 9,309 8,444
Accruals 19,613 19,953
32,962 31,235
11 Share capital
Authorised, called-up, allotted and fully-paid
share capital
2022 2022 2021 2021
Number of GBP000 Number GBP000
shares of
shares
Ordinary shares of
GBP0.01 each
At 1 January and 31
December 109,191,669 1,092 109,191,669 1,092
Ordinary shares
All ordinary shares rank equally for all dividends and
distributions that may be declared on such shares. At general
meetings of the Company, each shareholder who is present (in
person, by proxy or by representative) is entitled to one vote on a
show of hands and, on a poll, to one vote per share.
There were no changes in the authorised, called-up, allotted and
fully-paid share capital during the year.
12 Dividends
2022 2021
GBP000 GBP000
Dividends paid
Paid to shareholders 38,153 46,820
2022
An interim dividend of 17.0 pence per ordinary share was
declared by the Directors on 27 July 2022 and was paid on 30
September 2022 to holders of record on 26 August 2022, the amount
payable was GBP18,533,000.
The Board is proposing a final dividend of 19.0 pence per share
in respect of the year to 31 December 2022, for approval by
shareholders at the AGM on 16 May 2023, the amount payable will be
GBP20,746,000. Subject to shareholder approval the dividend will be
paid on 30 June 2023 to shareholders of record on 9 June 2023.
This brings the Company's total dividend for the year to 36.0
pence per share (2021: 33.0 pence per share).
The Board continues to operate a progressive dividend policy;
the Group will retain sufficient capital to fund ongoing operating
requirements, maintain an appropriate level of dividend cover and
sufficient funds to invest in the Group's longer-term growth.
2021
An interim dividend of 15.0 pence per ordinary share was
declared by the Directors on 27 July 2021 and was paid on 3
September 2021 to holders of record on 6 August 2021, the amount
payable was GBP16,327,000.
The Board paid a final dividend of 18.0 pence per share on 10
June 2022, to shareholders on record on 20 May 2022, the amount
payable was GBP19,620,000.
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END
FR NKQBPNBKBBND
(END) Dow Jones Newswires
March 15, 2023 03:00 ET (07:00 GMT)
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