HAYS PLC
HALF YEAR REPORT
SIX MONTHS ENDED
31 DECEMBER 2012
28 February 2013
RESILIENT PROFIT PERFORMANCE DELIVERED THROUGH SELECTIVE INVESTMENT & STRONG
COST CONTROL
Six months ended 31 December Actual LFL(1)
(In £'s million) 2012 2011 growth growth
Net fees 360.3 373.8 (4)% (1)%
Operating profit from continuing operations 60.3 63.1 (4)% (2)%
Cash generated by operations(3) 49.2 60.1 (18)%
Profit before tax 56.7 60.3 (6)%
Basic earnings per share(4) 2.43p 2.76p (12)%
Dividend per share 0.83p 0.83p 0%
All numbers are from continuing operations only.
Highlights
· Solid Group results in the context of more fragile and
fast-changing conditions in
several key markets
· Resilient profit performance due to our selective investment
approach and strong
cost control
· UK returned to profit through successful delivery of
significant cost reduction
programme
· Strong performance in Continental Europe & Rest of World,
net fees increased 14%(1);
markets mixed
- Germany up 19%(1),
Canada up 36%(1) Russia up 37%(1); but 7 countries saw net
fees decrease
· Asia Pacific net fees
decreased 11%(1); markets overall more challenging
- Australia down 13%(1)
including a step-down in Resources & Mining activity in Q2
- Asia down 6%(1) with markets
tough but broadly stable
· UK & Ireland net fees
decreased 6%(1); markets remained challenging but sequentially
stable overall in H1
- Private sector net fees down 12%(1); Public sector up 15%(1)
due to increased
perm job churn
· Consultant headcount down 3% year-on-year, up 1% in the last
six months
· Solid cash performance, with 82% conversion of operating
profit into operating cash flow(3)
· 12% decrease in EPS(4) reflecting the Group's higher net
finance charge and effective
tax rate
Commenting on these results Alistair
Cox, Chief Executive, said:
"I am pleased we have delivered such a resilient profit performance considering
the fragile and rapidly changing environment we faced in the half. We have
returned the UK business to profit, continued to invest for growth where
markets are good such as in Germany or Canada, and taken rapid action to reduce
costs in markets which deteriorated in the half such as Australia or France.
What sets us apart in today's more volatile market is the scale and strength of
the business model we have built. Our business is well balanced across temp and
perm recruiting, has market leadership positions in both structural-growth and
more mature markets, and has a sectoral diversity which is unrivalled in our
industry. All of this is underpinned by our unique technology systems which not
only help us improve our own productivity and efficiency but also allow us to
capitalise on new evolutions in the market such as social media platforms.
Looking ahead we expect overall conditions to remain fragile, but we have seen
an encouraging return to work in our key temp and contractor businesses.
Several markets are likely to remain challenging, but these will sit side by
side with clear opportunities for growth. To be successful in this environment,
we will continue to react quickly to the world as it changes, investing in
stronger markets while reducing costs in tougher areas. Our focus is on
long-term growth while driving profits along the way."
(1) LFL (like-for-like) growth represents organic growth of
continuing activities
at constant currency.
(2) The underlying temporary placement gross margin is
calculated as temporary
placement net fees divided by temporary placement gross revenue
and relates
solely to temporary placements in which Hays generates net fees
and specifically
excludes transactions in which Hays acts as agent on behalf of
workers supplied
by third party agencies.
(3) Before exceptional items and excludes exceptional cash
cost.
(4) Earnings per share from continuing operations only before exceptional items.
Enquiries
Hays plc
Paul Venables Group Finance Director + 44 (0) 20 7383 2266
David Walker Head of Investor Relations + 44 (0) 20 7383 2266
Maitland
Liz Morley / Brian Hudspith + 44 (0) 20
7379 5151
Results presentation & webcast
The results presentation will take place at UBS offices at 100
Liverpool Street, London at
10:00am on 28
February 2013 and will also be available as a live webcast
on our website, hays.com/investors. A recording of the webcast will
be available on our website from 1:00pm on 28 February
2013.
Reporting calendar
Interim Management Statement for quarter ending 31 March 2013 11 April
2013 Trading Update for quarter ending 30 June 2013
11 July 2013
Preliminary Results for year ending 30 June 2013 29 August 2013
Interim Management Statement for quarter ending 30 September 2013 10 October 2013
Hays Group Overview
Hays has 7,810 employees in 240 offices in 33 countries. In many of our global
markets, the vast majority of professional and skilled recruitment is still
done in-house, with minimal outsourcing to recruitment agencies which presents
substantial long-term structural growth opportunities. This has been a key
driver of the rapid diversification and internationalisation of the Group, with
the International business representing 70% of the Group's net fees as at 31
December 2012, compared with around 15% just 10 years ago.
Our 5,038 consultants work in a broad range of sectors with no sector
specialism representing more than 25% of Group net fees. While Accountancy &
Finance, Construction & Property and IT represent 64% of Group net fees, our
expertise across 20 professional and skilled recruitment specialisms gives us
opportunities to rapidly develop newer markets by replicating these
long-established, existing areas of expertise.
In addition to this international and sectoral diversification, the Group's net
fees are generated 59% from temporary and 41% permanent placement markets, and
we believe that this balance gives our business model relative resilience in
the current environment.
This well diversified business model continues to be a key
driver of the Group's financial performance.
Introduction
We have delivered a solid performance in the first half, despite more
challenging conditions in many of our markets. Net fees decreased by 1% on a
like-for-like basis(1) and 4% on a headline basis. Operating profit decreased
by 2% on a like-for-like basis(1) and 4% on a headline basis.
The first half saw continued market uncertainty in several parts of the Group,
with sentiment amongst our clients and candidates remaining subdued. Against
this backdrop, market conditions were prone to rapid change and varied
significantly between our geographies and specialisms. As such, our approach to
managing the business remained nimble and responsive throughout the half.
Selective, targeted investment to capitalise on stronger markets
and deliver profitable fee growth
We have continued to prioritise areas of investment to maximise fees in more
buoyant markets such as IT and Engineering around the world, and our global
Life Sciences and Oil & Gas specialisms. Equally, we have continued to invest
appropriately in order to capitalise on structural growth markets such as
Germany, Canada and Russia. At the same time, we have taken appropriate action
to defend the profit of the Group by focussing on strong cost control in more
challenging markets such as the UK, which returned to profitability in the
half, and markets which saw a step-down in activity levels such as Australia or
France.
Movement in consultant headcount
Our consultant headcount ended December at 5,038, up 1% in the half but down 3%
year-on-year, reflecting our more selective, targeted investment approach. In
our Continental Europe & Rest of World (RoW) division, we increased consultant
headcount by 10% in the half and 8% year-on-year to 2,154. Asia Pacific
consultant headcount was reduced by 7% in the half. This was led by a reduction
of 13% in Australia as we reacted to more challenging market conditions,
partially offset by continued investment in specific parts of Asia, notably
Japan, China and our recently opened Malaysian business. Year-on-year Asia
Pacific consultant headcount was down 9%. In the UK & Ireland consultant
headcount reduced by 4% in the half and 11% year-on-year, all through natural
attrition, and is now down 41% from peak levels.
31 Dec Net 31 Dec
Consultant headcount 2012 change 2011
Asia Pacific 1,035 (103) 1,138
Continental Europe & RoW 2,154 164 1,990
United Kingdom & Ireland 1,849 (222) 2,071
Group 5,038 (161) 5,199
Office network changes & global specialism roll-out
We continue to build a stronger, broader-based and more efficient business and
through the first half we continued to selectively invest to grow our
International platform and focussed on developing new specialisms in existing
locations. In addition to opening a new office in Essen, Germany, specific
areas of focus in the half were the development of our Oil & Gas focussed
business in Houston, USA, which opened in June 2012, and the roll-out of our
successful IT contractor model across Canada.
In the UK, we continued the consolidation of our office network in London as
well as focussing on any offices which are consistently failing to make a
positive contribution. We ended the half with 105 offices, a reduction of five
since 30 June 2012 and down from a peak level of 235 in 2009. Given current
market conditions we are now broadly happy with the office footprint of our
UK
business.
31 Dec Net opened/ 30 June
Office network 2012 (closed) 2012
Asia Pacific 48 0 48
Continental Europe & RoW 87 0 87
United Kingdom & Ireland 105 (5) 110
Group 240 (5) 245
Investing in technology, building relationships and responding
to change
Over the last five years we have significantly upgraded our core
technology platforms and now benefit from the most advanced
integrated systems in our industry allowing our consultants to very
quickly identify the best people for our clients' vacancies and
thereby raise their productivity.
The power of our global database is further enhanced by our unique
relationships with Google and LinkedIn. For example, our systems now allow us
to integrate with LinkedIn and exploit that platform alongside our own to build
relationships with more professionals worldwide. As a result of this
investment, we are now the 50th most followed company worldwide on LinkedIn,
facilitating access to the profiles of over 60 million professionals. This
combination of our expertise and the most effective technology available is now
creating real differentiation of our services for our clients and candidates
around the world.
Temp market shows relative resilience in more challenging areas
and areas of skills shortage, perm markets volatile and tough
overall
Net fees in the temp business, which represent 59% of Group fees, increased by
4%(1). This comprised a volume decrease of 1% more than offset by a favourable
increase in mix/hours worked of 4%. Underlying temp margins(2) were flat at
14.9% (2011: 14.9%).
Net fees in the perm business decreased by 7%(1). This was
volume driven as the average fee per placement was broadly
flat.
The higher level of growth in temp relative to perm reflects the greater
resilience of the temp and contractor business in more challenging, uncertain
markets. It also reflects the changes we are seeing in the behaviours of both
candidates and clients to embrace more flexible working arrangements, notably
in areas of high technical skills and skills shortages such as IT, Engineering
and Energy, Oil & Gas. We saw lower levels of activity in perm, particularly in
the second quarter, as client and candidate confidence in many markets
worsened.
Asia Pacific
Markets more challenging overall; Q2 saw a step-down in activity in Australian
Resources & Mining; the rest of Australia and Asian markets were tough but
stable throughout
Growth
Six months ended 31 December
(In £'s million) 2012 2011 Actual LFL(1)
Net fees 111.2 124.6 (11)% (11)%
Operating profit 36.3 48.0 (24)% (25)%
Conversion rate 32.6% 38.5%
Period end consultant headcount 1,035 1,138 (9)%
In Asia Pacific, net fees decreased by 11% (11% on a like-for-like basis(1)) to
£111.2 million and operating profit decreased by 24% (25% on a like-for-like
basis(1)) to £36.3 million. The conversion rate of the division was 32.6% (H1
2011: 38.5%) and we reacted to fast-changing market conditions across the
various geographies and sectors in the division to control our cost base and
adjust consultant numbers, particularly in the second quarter.
In our market-leading Australia business, net fees decreased by 13%(1). Temp
net fees decreased by 5%(1) and perm net fees decreased by 22%(1). In New South
Wales and Victoria (which together represent 47% of our Australia business) net
fees decreased by 18%(1) collectively as market conditions were challenging but
broadly stable through the half. We saw a step-down in activity in the
resource-based regions in the second quarter and responded to this rapid change
in market conditions by reducing headcount in relevant parts of our business to
best protect the financial performance going forward. New Zealand delivered
further strong net fee growth of 14%(1).
In our Asian business, which comprises 5 countries and accounted for 15% of the
division's net fees in the half, net fees decreased by 6%(1). In Japan, net
fees were flat(1) as banking and financial services markets remained tough.
Elsewhere in Asia, market conditions remained challenging but broadly stable
through the half.
Consultant headcount in the division decreased by 7% through the half, led by a
13% decrease in Australia as we responded quickly to more challenging market
conditions to best defend the financial performance of the business. In Asia,
consultant headcount increased by 10%, primarily as a result of investment in
our recently opened business in Malaysia and increased headcount in China.
Going forward, we expect headcount in the division to be broadly flat.
Continental Europe & Rest
of World
Strong growth and record results, driven by Germany; market conditions elsewhere mixed and
fragile but stable overall
Growth
Six months ended 31 December
(In £'s million) 2012 2011 Actual LFL(1)
Net fees 139.7 132.8 5% 14%
Operating profit 23.5 18.2 29% 45%
Conversion rate 16.8% 13.7%
Period end consultant headcount 2,154 1,990 8%
In Continental Europe & RoW, we delivered net fee growth of 5% (14% on a
like-for-like basis(1)) to £139.7 million, driving excellent operating profit
growth of 29% (45% on a like-for-like basis(1)) to £23.5 million. Both net fees
and operating profit represented first-half records for the division. The
difference between actual growth and like-for-like growth was due to currency
fluctuations, primarily the depreciation in the Euro. The conversion rate of
the division increased to 16.8% in 2012 from 13.7% in 2011 driven by strong net
fee growth in the more buoyant markets, strong cost control in more challenging
areas and more selective headcount investment across the division.
Our Germany business, which represented 54% of the division's net fees,
delivered further strong net fee growth of 19%(1) and posted several record
monthly performances as momentum remained strong through the half. Growth was
broad-based across our contracting, temp and perm businesses, particularly in
our core specialisms of IT and Engineering. We also delivered strong growth in
Accountancy & Finance, Construction & Property, Sales & Marketing, Legal and
Life Sciences and these specialisms now account for 24% of total net fees. Our
market-leading position and our well diversified business mean we are ideally
positioned to benefit from the continuing rapid development of the specialist
recruitment market in Germany and the clear structural growth opportunities
this presents.
In France, our second largest country in the division, net fees were flat(1) as
perm momentum slowed, particularly in the second quarter. Seven countries saw
net fees decline in the half, including Italy, Spain and Portugal which
together account for 4% of the division. Elsewhere, 10 businesses across the
division increased net fees by 10%(1) or more and we delivered notable
performances in Belgium, Poland and Russia which each achieved record monthly
net fee performances in the half.
We continue to develop our business in Latin America, recognising the
structural growth opportunities in these markets. Having opened Hays Colombia
and Chile in 2012, we now operate in four countries across seven offices in the
region. In Brazil, we delivered good net fee growth of 10%(1), although this
market remains volatile. In North America, Canada delivered excellent net fee
growth of 36%(1) and our business in the US continues to perform well, more
than doubling net fees versus this time last year.
Consultant headcount in the division increased by 10% during the half, led by
increases of 17% in Germany and 27% in Canada. We are continuing to invest in
consultant headcount in markets which demonstrate clear growth, while being
more cautious across the rest of the division to maximise our financial
performance.
United Kingdom & Ireland
Back to profit due to successful delivery of cost reduction
plans. Markets sequentially stable; private sector tough, public
sector growing
Growth
Six months ended 31 December
(In £'s million) 2012 2011 Actual LFL(1)
Net fees 109.4 116.4 (6)% (6)%
Operating profit 0.5 (3.1) 116% 116%
Conversion rate 0.5% (2.7)%
Period end consultant headcount 1,849 2,071 (11)%
In the United Kingdom & Ireland, net fees decreased by 6%(1) to £109.4 million
and we made an operating profit of £0.5 million (compared to an operating loss
of £3.1 million in 2011). Net fees decreased by 10%(1) in the perm business and
by 2%(1) in the temp business and are now down 50% versus peak levels.
Although trading conditions in the UK remain challenging, the business has been
sequentially stable through the half. In the private sector, net fees declined
by 12%(1). Markets were particularly difficult in our Banking and City-related
and Construction & Property specialisms, but we saw good growth in several
areas including Life Sciences, Human Resources and Energy, Oil & Gas. Overall
sentiment amongst clients and candidates in the UK remains subdued.
In our public sector business, which represented 27% of UK net fees, we
delivered net fee growth of 15%(1). Activity in this market remains subdued and
is primarily driven by job-churn on the perm side of the business. In addition,
we delivered especially good performances in our Education and Healthcare
businesses.
The return to profitability in the UK business was primarily the result of the
successful delivery of a range of cost reduction measures throughout our UK
Back Office and support functions, following the completion of the
implementation of our Front Office and Back Office systems, and our dedicated
shared service centre in India. We have now reduced our UK cost base by over
30% from peak levels and we continue to review all aspects to seek further
efficiency savings focussed on Back Office and overhead costs.
Consultant headcount in the division declined 4% during the half through
natural attrition, as we reacted to changes in market conditions to maximise
the financial performance of the business. We delivered improved consultant
productivity in the half and at the same time our focus remained on growing
market share and taking full advantage of those segments of the UK recruitment
market which continue to present growth opportunities.
Current trading
Markets remain mixed and overall fragile, with encouraging
return to work in key temp markets
Overall candidate and client confidence remains fragile,
particularly in perm markets. In temp and contractor markets, the
return to work has been encouraging to date.
We will continue to react quickly to changing conditions in each
market, investing selectively to capitalise on growth where
conditions are good, and defending the financial performance in
more challenging areas.
AsiaPacific
Australia remains challenging. Conditions are stable in the core markets of New
South Wales and Victoria, and although we have seen encouraging return to work
trends across the business, the mining regions of Western Australia and
Queensland remain difficult following the marked step-down we experienced in
Q2. In Asia, markets are stable overall.
Continental Europe &
RoW
The return to work in our Germany contractor and temp business was good and we
see continued good growth. Conditions across the rest of the division are mixed
and overall fragile. We see continued good growth in markets such as Canada and
Russia, but slowing growth across much of the rest of the division and net fee
declines in certain countries including Brazil and France.
United Kingdom &
Ireland
The market remains challenging but sequentially stable overall
and the return to work in our temp business has been good.
FINANCIAL REVIEW
Summary Income Statement
Growth
Six months ended 31 December
(In £'s million) 2012 2011 Actual LFL(1)
Turnover 1,731.7 1,863.2 (7)% (5)%
Net fees
Temporary 212.3 209.9 1% 4%
Permanent 148.0 163.9 (10)% (7)%
Total 360.3 373.8 (4)% (1)%
Operating profit from continuing operations 60.3 63.1
(4)% (2)%
Conversion rate 16.7% 16.9%
Underlying temporary margin (2) 14.9% 14.9%
Temporary fees as % of total 59% 56%
Period end consultant headcount 5,038 5,199
(3)%
(1) LFL (like-for-like) growth represents organic growth of
continuing activities at constant
currency.
(2) The underlying temporary placement gross margin is
calculated as temporary placement net
fees divided by temporary placement gross revenue and relates
solely to temporary placements
in which Hays generates net fees and specifically excludes
transactions in which Hays acts as
agent on behalf of workers supplied by third party agencies.
(3) Before exceptional items and excludes exceptional cash
cost.
(4) Earnings per share from continuing operations only before
exceptional items.
Turnover decreased by 7% (5% on a like-for-like basis(1)) and net fees
decreased by 4% (1% on a like-for-like basis(1)). Operating profit decreased by
4% (2% on a like-for-like basis(1)). The difference in growth rates between
turnover and net fees was primarily driven by a reduction in pass-through
revenues payable to third party agencies. Exchange rate movements decreased net
fees and operating profit by £9.7 million and £1.8 million respectively,
primarily the result of depreciation in the rate of exchange of the Euro.
Fluctuations in exchange rates remain a significant sensitivity for the Group,
notably the Euro and the Australian Dollar.
Operating costs decreased by 1%(1) versus prior year. This was
primarily due to the successful delivery of reductions to our
operating cost base in the UK, which decreased by 9%, and reflected
our focus on cost control in more challenging markets, and more
selective, targeted investment approach.
Conversion rate, which is the proportion of net fees converted into operating
profit, reduced to 16.7% from 16.9% in the prior year as our strong control of
operating costs, largely focussed on Back Office and overheads, was more than
offset by a reduction in net fees.
Consultant headcount ended December at 5,038, up 1% in the half but down 3%
year-on-year. In our International business, we increased consultant headcount
by 4% in the half but this was largely offset by a 4% reduction in the UK &
Ireland. This reflects our more selective, targeted investment approach to
ensure we capitalise on more buoyant markets and clear structural growth
opportunities, but react to defend financial performance in more volatile or
challenging markets.
Net finance charge
The net finance charge for the half was £3.6 million (2011: £2.8 million). The
average interest rate on gross debt during the half was 2.7% (2011: 2.7%),
generating net bank interest payable, including amortisation of arrangement
fees, of £3.9 million (2011: £3.6 million). The net interest charge on the
defined benefit pension scheme obligations was £0.3 million (2011: credit of £
1.1 million) with the movement being primarily due to lower expected asset
returns than in the prior year. The Pension Protection Fund levy was a £0.6
million credit (2011: £0.3 million charge) which included a £0.8 million credit
arising on the release of an accrual related to the settlement of historic
issues. It is expected that the net finance charge for the year ending 30 June
2013 will be around £7 million; £3 million lower than previously guided.
Taxation
Taxation for the half was £22.9 million, representing an effective tax rate of
40.4% (2011: 37.0%). The effective tax rate reflects the Group's geographical
mix of profits, and the impact of unrelieved UK and overseas tax losses and
costs incurred in the UK for which no tax deduction is currently available. We
expect the Group's effective tax rate to be around 40% for the year to June
2013 (2012: 38.3%).
Earnings per share
Basic earnings per share(4) decreased 12% to 2.43 pence (2011: 2.76 pence). The
decrease in earnings per share reflects the Group's lower operating profit, the
higher net finance charge and effective tax rate.
Cash flow and balance sheet
Cash flow in the half was solid with 82% conversion of operating profit into
operating cash flow(3). This was lower than the prior year (2011: 95%)
primarily as a result of an increase in trade debtor days to 40 days (2011: 38
days), resulting from the timing and phasing of cash flows, and strong growth
in our Germany temp and contractor business, which is relatively more working
capital intensive.
Net capital expenditure was lower at £5.9 million (2011: £9.8
million). Capital expenditure is expected to be around £12 million
for the year to June 2013.
Dividends paid in the half totalled £23.2 million and pension deficit
contributions were £6.4 million. Net interest paid was £5.4 million interest
which included the upfront arrangement fee in relation to the renewal during
the half of the Group's £300 million unsecured revolving credit facility, which
expires in October 2017 (more details of which are included in the Treasury
Management section below).
Net debt increased from £132.9 million at the start of the year
to £145.4 million at the end of the first half primarily due to the
timing of working capital outflows at the end of the calendar year.
We expect a reduction in net debt in the second half, as previously
guided.
Retirement benefits
The Group's pension liability under IAS19 at 31 December 2012 of £2.7 million
decreased by £12.7 million compared to 30 June 2012. The movement was due
primarily to employer contributions and higher than expected asset returns,
partially offset by the net impact of changes to the assumptions in respect of
the discount rate and inflation.
During the half, the Company contributed £6.4 million of cash to the defined
benefit scheme (2011: £7.7 million) all of which represented funding towards
the pension deficit in line with previous guidance.
Capital structure and dividend
The Board's priorities for our free cash flow are to fund the Group's
investment and development, maintain a strong balance sheet and deliver asustainable
dividend at a level which is both affordable and appropriate. We target a dividend
cover range of 2.0x to 3.0x(4) earnings and in line with this policy, the Board
proposes to pay an unchanged interim dividend of 0.83p per share (2011: 0.83p).
The Board remains committed to paying a sustainable and
progressive dividend. It is our intention to grow the dividend when
dividend cover sustainably reaches c.2.5x(4).
The interim dividend payment date will be 15 April 2013 and will be paid to shareholders on
the register at close of business on 8 March
2013.
Board changes
As previously announced, Paul Stoneham retired as a non-executive director at
the Group's Annual General Meeting in November 2012. The process to appoint a
new non-executive director is progressing well.
Treasury management
The Group's operations are financed by retained earnings and bank borrowings.
The Group completed the re-financing of our £300 million revolving credit
banking facility on 2 October 2012 at interest rates similar to the previous
deal. The new 5-year-facility provides considerable headroom versus current and
future expected levels of Group debt. The covenants, which are unchanged on the
Group's previous facility, require the Group's interest cover ratio to be at
least 4:1 and its leverage ratio (net debt to EBITDA) to be no greater than
2.5:1. The Group has significant headroom within these covenants.
All borrowings are raised by the Group's UK-based treasury department, which
manages the Group's treasury risk in accordance with policies set by the Board.
The Group's treasury department does not engage in speculative transactions and
does not operate as a profit centre.
The Board considers it appropriate to use certain derivative financial
instruments to reduce its exposure to interest rate movements under its
floating rate revolving credit facility. The Group holds six interest rate
swaps which exchange a fixed payment for floating rate receipt on a total debt
value of £40 million with an equal mix of two-year and three-year maturities,
which commenced in October 2011. The Group does not hold or use derivative
financial instruments for speculative purposes.
Counterparty risk primarily arises from investment of any
surplus funds. The Group restricts transactions to banks and money
market funds that have an acceptable credit rating and limits
exposure to each institution.
Principal risks facing the business
Hays plc operates an embedded risk management framework, which is monitored and
reviewed by the Audit Committee. There are a number of potential risks and
uncertainties that could have a material impact on the Group's financial
performance and position. These include risks relating to the cyclical nature
of our business, business model risk, talent, compliance risk, reliance on
technology, contract risk, foreign exchange and Eurozone risk. These risks and
our mitigating actions remain as set out in the 2012 Annual Report.
Hays plc
250 Euston Road,
London
NW1 2AF
hays.com/investors
Responsibility Statement
We confirm that, to the best of our knowledge:
· the unaudited condensed consolidated interim financial
statements have
been presented in accordance with IAS 34 "Interim Financial
Reporting" as
adopted by the European Union and gives a true and fair view of
the assets,
liabilities, financial position and profit for the Group;
· the interim management report includes a fair review of the
information
required by DTR 4.2.7R (indication of important events during
the first six
months of the financial year and their impact on the condensed
financial
statements, and description of principal risks and uncertainties
for the
remaining six months of the financial year); and
· the interim management report includes a fair review of the
information
required by DTR 4.2.8R (disclosure of related parties'
transactions in the
first six months of the financial year and any changes in the
related parties
transactions described in the last annual report).
This Half Year Report was approved by the Board of Directors and authorised for
issue on 27 February 2013.
Alistair Cox Paul Venables
Chief Executive Group Finance Director
Cautionary statement
This Half Year report (the "Report") has been prepared in accordance with
the Disclosure Rules and Transparency Rules of the UK Financial Services
Authority and is not audited. No representation or warranty, express or
implied, is or will be made in relation to the accuracy, fairness or
completeness of the information or opinions contained in this Report.
Statements in this Report reflect the knowledge and information available at
the time of its preparation. Certain statements included or incorporated by
reference within this Report may constitute "forward-looking statements" in
respect of the Group's operations, performance, prospects and/or financial
condition. By their nature, forward-looking statements involve a number of
risks, uncertainties and assumptions and actual results or events may differ
materially from those expressed or implied by those statements. Accordingly, no
assurance can be given that any particular expectation will be met and reliance
shall not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities shall not be
taken as a representation that such trends or activities will continue in the
future. The information contained in this Report is subject to change without
notice and no responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this Report shall be construed as a profit forecast. This
Report does not constitute or form part of any offer or invitation to sell, or
any solicitation of any offer to purchase or subscribe for any shares in the
Company, nor shall it or any part of it or the fact of its distribution form
the basis of, or be relied on in connection with, any contract or commitment or
investment decisions relating thereto, nor does it constitute a recommendation
regarding the shares of the Company or any invitation or inducement to engage
in investment activity under section 21 of the Financial Services and Markets
Act 2000. Past performance cannot be relied upon as a guide to future
performance. Liability arising from anything in this Report shall be governed
by English Law, and neither the Company nor any of its affiliates, advisors or
representatives shall have any liability whatsoever (in negligence or
otherwise) for any loss howsoever arising from any use of this Report or its
contents or otherwise arising in connection with this Report. Nothing in this
Report shall exclude any liability under applicable laws that cannot be
excluded in accordance with such laws.
Independent Review Report to Hays plc
Introduction
We have been engaged by the Company to review the condensed set
of financial
statements in the half-yearly financial report for the six months ended 31
December 2012 which comprises the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated balance sheet,
the consolidated cash flow statement, the consolidated statement of changes in
equity and related notes 1 to 12. We have read the other information contained
in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our review work, for this report, or for the conclusions
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure
and Transparency Rules of the United
Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this
half-yearly financial
report has been prepared in accordance with International
Accounting Standard
34, "Interim Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United
Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review
procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be
identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 December 2012 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
27 February 2013
Condensed Consolidated Income Statement
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) Note (unaudited) (unaudited) 2012
Turnover
Continuing operations 1,731.7 1,863.2 3,654.6
Net fees (1)
Continuing operations 2 360.3 373.8 734.0
Operating profit from continuing operations 2 60.3
63.1 128.1
Finance income 3 0.4 0.5 0.9
Finance cost 3 (4.0) (3.3) (6.6)
Profit before tax 56.7 60.3 122.4
Tax 4 (22.9) (22.3) (46.9)
Profit from continuing operations after tax 33.8 38.0 75.5
Profit from discontinued operations - 1.1 11.0
Profit attributable to equity holders of the parent
Company 33.8 39.1 86.5
Earnings per share from continuing operations
- Basic 6 2.43p 2.76p 5.47p
- Diluted 6 2.38p 2.70p 5.37p
Earnings per share from continuing and discontinued
operations
- Basic 6 2.43p 2.84p 6.26p
- Diluted 6 2.38p 2.78p 6.16p
(1) Net fees comprise turnover less remuneration of temporary
workers and other recruitment agencies.
Condensed Consolidated Statement of Comprehensive Income
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Profit for the period 33.8 39.1 86.5
Currency translation adjustments (2.7) (8.8) (16.1)
Mark to market valuation of derivative financial instruments 0.2 (0.4) (0.4)
Actuarial gain/(loss) on defined benefit pension schemes 6.8 (10.6) (24.6)
Tax relating to components of other comprehensive income (3.0) 1.4 2.4
Other net income/(expense) for the period 1.3 (18.4) (38.7)
Total comprehensive income for the period 35.1 20.7 47.8
Attributable to equity shareholders of the parent Company 35.1
20.7 47.8
Condensed Consolidated Balance Sheet
31 December 31 December Year to
2012 2011 30 June
(In £'s million) Note (unaudited) (unaudited) 2012
Non-current assets
Goodwill 175.3 180.4 177.2
Other intangible assets 48.9 58.6 55.5
Property, plant and equipment 23.9
25.0 24.2
Deferred tax assets 24.3 29.2 28.3
272.4 293.2 285.2
Current assets
Trade and other receivables 521.0 538.5 538.6
Cash and cash equivalents 59.8 60.9 38.7
580.8 599.4 577.3
Total assets 853.2 892.6 862.5
Current liabilities
Trade and other payables (382.8) (401.0) (429.0)
Current tax liabilities (28.9) (32.2) (29.2)
Bank loans and overdrafts (0.2) (3.6) (1.6)
Provisions 8 (3.7) (3.5) (2.7)
Derivative financial instruments (0.9)
(1.1) (1.1)
(416.5) (441.4) (463.6)
Non-current liabilities
Bank loans (205.0) (235.0) (170.0)
Trade and other payables - (1.0) -
Retirement benefit obligations 7 (2.7)
(15.3) (15.4)
Provisions 8 (19.9) (31.7) (22.9)
(227.6) (283.0) (208.3)
Total liabilities (644.1) (724.4) (671.9)
Net assets 209.1 168.2 190.6
Equity
Called up share capital 14.7 14.7 14.7
Share premium 369.6 369.6 369.6
Capital redemption reserve 2.7 2.7 2.7
Retained earnings (244.3) (295.7) (270.5)
Other reserves 66.4 76.9 74.1
Total shareholders' equity 209.1 168.2 190.6
Condensed Consolidated Statement of Changes in Equity
For the six months ended 31 December 2012
Share Capital
Share premium redemption Retained Other
(In £'s million) capital account reserve earnings reserves Total
At 1 July 2012 14.7 369.6 2.7 (270.5) 74.1 190.6
Currency translation adjustments - - - - (2.7) (2.7)
Mark to market valuation of derivative
financial instruments - - - - 0.2 0.2
Actuarial gain on defined benefit pension
schemes - - - 6.8 - 6.8
Tax relating to components of other
comprehensive income - - - (3.0) - (3.0)
Net income recognised in other comprehensive
income - - - 3.8 (2.5) 1.3
Profit for the period - - - 33.8 - 33.8
Total comprehensive income for the period - - -
37.6 (2.5) 35.1
Dividends paid - - - (23.2) - (23.2)
Share-based payments - - - 11.8 (5.2) 6.6
At 31 December 2012 14.7 369.6 2.7 (244.3) 66.4 209.1
For the six months ended 31 December 2011
Share Capital
Share premium redemption Retained Other
(In £'s million) capital account reserve earnings reserves Total
At 1 July 2011 14.7 369.6 2.7 (275.6) 85.0 196.4
Currency translation adjustments - - - - (8.8) (8.8)
Mark to market valuation of derivative
financial instruments - - - - (0.4) (0.4)
Actuarial loss on defined benefit pension
schemes - - - (10.6) - (10.6)
Tax relating to components of other
comprehensive income - - - 1.4 - 1.4
Net expense recognised in other comprehensive
income - - - (9.2) (9.2) (18.4)
Profit for the period - - - 39.1 - 39.1
Total comprehensive income for the period - - -
29.9 (9.2) 20.7
Dividends paid - - - (54.3) - (54.3)
Share-based payments - - - 4.3 1.1 5.4
At 31 December 2011 14.7 369.6 2.7 (295.7) 76.9 168.2
For the year ended 30 June 2012
Share Capital
Share premium redemption Retained Other
(In £'s million) capital account reserve earnings reserves Total
At 1 July 2011 14.7 369.6 2.7 (275.6) 85.0 196.4
Currency translation adjustments - - - - (16.1) (16.1)
Mark to market valuation of derivative
financial instruments - - - - (0.4) (0.4)
Actuarial loss on defined benefit pension
schemes - - - (24.6) - (24.6)
Tax relating to components of other
comprehensive income - - - 2.4 - 2.4
Net expense recognised in other comprehensive
income - - - (22.2) (16.5) (38.7)
Profit for the year - - - 86.5 - 86.5
Total comprehensive income for the year - - -
64.3 (16.5) 47.8
Dividends paid - - - (65.8) - (65.8)
Share-based payments - - - 6.6 4.4 11.0
Other share movements - - - - 1.2 1.2
At 30 June 2012 14.7 369.6 2.7 (270.5) 74.1 190.6
Condensed Consolidated Cash Flow Statement
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) Note (unaudited) (unaudited) 2012
Operating profit from continuing operations 60.3 63.1 128.1
Adjustments for:
Exceptional items (1) (0.4) (6.1) (7.0)
Depreciation of property, plant and equipment 5.6 4.4 9.7
Amortisation of intangible fixed assets 7.0 7.5 13.5
(Loss)/profit on disposal of property, plant
and equipment (0.1) (0.1) 0.9
Net movements in provisions (1.6) (1.2) (5.4)
Share-based payments 6.0 6.1 12.2
16.5 10.6 23.9
Operating cash flow before movement in working
capital 76.8 73.7 152.0
Changes in working capital (28.0) (19.7) 3.2
Cash generated by operations 48.8 54.0 155.2
Income taxes paid (22.6) (18.9) (44.2)
Net cash inflow from operating activities 26.2 35.1 111.0
Investing activities
Purchase of tangible and intangible assets (5.9) (9.8) (18.8)
Proceeds from sales of business and related assets - 0.1 0.1
Cash paid in respect of acquisitions made in previous
years - (0.3) (1.0)
Interest received 0.4 0.5 0.9
Net cash used in investing activities (5.5)
(9.5) (18.8)
Financing activities
Interest paid (5.8) (3.7) (7.1)
Equity dividends paid (23.2) (54.3) (65.8)
Purchase of own shares - - (0.7)
Proceeds from exercise of share options 1.6 0.1 2.1
Increase/(decrease) in bank loans and overdrafts 33.6 48.7 (18.3)
Pension scheme funding (6.4) (6.2) (12.4)
Net cash used in financing activities (0.2) (15.4) (102.2)
Net increase/(decrease) in cash and cash equivalents 20.5 10.2 (10.0)
Cash and cash equivalents at beginning of period 38.7 55.1 55.1
Effect of foreign exchange rate movements 0.6 (4.4) (6.4)
Cash and cash equivalents at end of period 9 59.8 60.9 38.7
Bank loans and overdrafts at beginning of period (171.6) (189.9) (189.9)
(Increase)/decrease in period (33.6) (48.7) 18.3
Bank loans and overdrafts at end of period (205.2)
(238.6) (171.6)
Net debt at end of period 9 (145.4) (177.7) (132.9)
(1) The adjustments to the Cash Flow Statement in the current
period of £0.4 million; in the six
months to 31 December 2011 of £6.1
million; and in the year to 30 June
2012 of £7.0 million,
all relate to cash paid in respect of exceptional items
recognised during the financial years
ended 30 June 2010 and 30 June 2011.
Condensed Consolidated Statement of Changes in Equity - Other Reserves
For the six months ended 31 December 2012
Own Equity Cumulative Hedging
(In £'s million) shares reserve translation reserve Total
At 1 July 2012 (2.2) 23.8 53.6 (1.1) 74.1
Currency translation adjustments - - (2.7) - (2.7)
Mark to market valuation of derivative financial
instruments - - - 0.2 0.2
Net expense recognised in other comprehensive income - -
(2.7) 0.2 (2.5)
Share-based payments 1.5 (6.7) - - (5.2)
At 31 December 2012 (0.7) 17.1 50.9 (0.9) 66.4
For the six months ended 31 December 2011
Own Equity Cumulative Hedging
(In £'s million) shares reserve translation reserve Total
At 1 July 2011 (3.4) 19.4 69.7 (0.7) 85.0
Currency translation adjustments - - (8.8) - (8.8)
Mark to market valuation of derivative financial
instruments - - - (0.4) (0.4)
Net expense recognised in other comprehensive income - -
(8.8) (0.4) (9.2)
Share-based payments 0.9 0.2 - - 1.1
At 31 December 2011 (2.5) 19.6 60.9 (1.1) 76.9
For the year ended 30 June 2012
Own Equity Cumulative Hedging
(In £'s million) shares reserve translation reserve Total
At 1 July 2011 (3.4) 19.4 69.7 (0.7) 85.0
Currency translation adjustments - - (16.1) - (16.1)
Mark to market valuation of derivative financial
instruments - - - (0.4) (0.4)
Net expense recognised in other comprehensive income - -
(16.1) (0.4) (16.5)
Share-based payments 1.2 4.4 - - 5.6
At 30 June 2012 (2.2) 23.8 53.6 (1.1) 74.1
1 Basis of preparation
The condensed consolidated interim financial statements ("interim financial
statements") are the results for the six months ended 31 December 2012. The
interim financial statements have been prepared under
International Financial
Reporting Standards ("IFRS") as adopted by the European Union,
in accordance
with International Accounting Standard 34 'Interim Financial Reporting' and the
Disclosure and Transparency Rules of the Financial Services Authority. They are
unaudited but have been reviewed by the auditors and their report is attached.
The interim financial statements do not constitute statutory accounts as
defined in Section 434 of the Companies Act 2006 as they do not
include all of
the information required for full statutory accounts. The interim financial
statements should be read in conjunction with the statutory
accounts for the
year ended 30 June 2012, which
were prepared in accordance with IFRS as adopted by the European
Union and have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified, did not draw
attention to
any matters by way of emphasis and did not contain a statement
under Section
498 (2) or (3) of the Companies Act 2006.
Accounting policies
The interim financial statements have been prepared on the basis of the
accounting policies and methods of computation applicable for
the year ended 30 June 2012. These
accounting policies are consistent with those applied in the
preparation of the financial statements for the year ended
30 June 2012. There
are no new standards or improvements to existing standards that
are mandatory
for the first time in the Group's accounting period beginning on
1 July 2012
and no new standards have been early adopted. The Group's
December 2012 Interim Report has
adopted the following amendments to IFRS with no significant
impact
on the Group's financial performance or position:
· IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for
First-time Adopters
· IFRS 7 Financial Instruments: Disclosures
· IAS 12 Deferred Tax: Recovery of Underlying Assets
There have been no alterations made to the accounting policies
as a result of
considering all of the above amendments that became effective in
the period, as these were not material to the Group's
operations.
Going concern
The Group's business activities, together with the factors
likely to effect its future development, performance and financial
position, including its cash
flows and liquidity position are described in the Half Year Report.
The Group has an unsecured revolving credit facility of £300 million that
expires in October 2017. The Group
uses the facility to manage its day-to-day
working capital requirements as appropriate. As at 31 December 2012, £95
million of the committed facility was un-drawn.
The Group's facility, together with internally generated cash flows, will
continue to provide sufficient sources of liquidity to fund its current
operations, including contractual and commercial commitments,
future growth and any proposed dividends. Therefore the Group is
well placed to manage its
business risks, despite the current uncertain economic outlook.
The directors have formed the judgement, at the time of
approving the interim
financial statements, that there is reasonable expectation that
the Group has
adequate resources to continue in operational existence for the foreseeable
future. For this reason, the directors continue to adopt the going concern
basis in preparing the interim financial statements.
2 Segmental information
IFRS 8, Operating Segments
IFRS 8 requires operating segments to be identified on the basis
of internal
reports about components of the Group that are regularly
reviewed by the chief
operating decision maker to allocate resources to the segment and to assess
their performance.
As a result, the Group continues to segment the business into
three regions,
Asia Pacific, Continental Europe & Rest of World, and United Kingdom &
Ireland. There is no material difference between the segmentation of the
Group's turnover by geographic origin and destination.
The Group's continuing operations comprise one class of business, that of
qualified, professional and skilled recruitment.
Net fees and profit from continuing operations
The Group's Management Board, which is regarded as the chief
operating decision
maker, uses net fees by segment as its measure of revenue in
internal reports.
This is because net fees exclude the remuneration of temporary workers, and
payments to other recruitment agencies where the Group acts as
principal, which
are not considered relevant in allocating resources to segments.
The Group's
Management Board considers net fees for the purpose of making
decisions about
allocating resources. The Group does not report items below
operating profit
by segment in its internal management reporting. The full detail of these
items can be seen in the Income Statement.
Net fees and profit from continuing operations
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Net fees
Asia Pacific 111.2 124.6 242.2
Continental Europe & Rest of World 139.7
132.8 266.5
United Kingdom & Ireland 109.4 116.4 225.3
360.3 373.8 734.0
Operating profit from continuing operations
Asia Pacific 36.3 48.0 90.9
Continental Europe & Rest of World 23.5 18.2 43.7
United Kingdom & Ireland 0.5 (3.1) (6.5)
60.3 63.1 128.1
3 Finance income and finance cost
Finance income
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Interest on bank deposits 0.4 0.5 0.9
Finance cost
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Interest payable on bank loans and overdrafts (4.3) (4.1) (8.0)
Pension Protection Fund levy 0.6 (0.3) (0.9)
Net interest on pension obligations (0.3)
1.1 2.3
(4.0) (3.3) (6.6)
Net finance charge (3.6) (2.8) (5.7)
4 Tax on ordinary activities
The Group's consolidated effective tax rate in respect of
continuing operations
for the six months to 31 December
2012 is based on the estimated effective tax
rate for the full year of 40.4% (31 December 2011: 37.0%, 30 June 2012: 38.3%).
5 Dividends
The following dividends were paid by the Group and have been recognised as
distributions to equity shareholders in the year:
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Final dividend for the year ended 30 June 2011 of 3.95
pence per share - 54.3 54.3
Interim dividend for the period to 31 December 2011 of 0.83
pence per share - - 11.5
Final dividend for the year ended 30 June
2012 of 1.67
pence per share 23.2 - -
23.2 54.3 65.8
The interim dividend for the period ended 31 December 2012 of 0.83
pence per share is not included as a liability in the
balance sheet as at 31 December
2012.
6 Earnings per share
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Earnings from continuing operations 56.7 60.3 122.4
Tax on earnings from continuing operations (22.9)
(22.3) (46.9)
Basic earnings 33.8 38.0 75.5
Number of shares (million):
Weighted average number of shares 1,390.3 1,378.9 1,381.4
Dilution effect of share options 25.8 27.6 23.4
Weighted average number of shares used for diluted EPS 1,416.1
1,406.5 1,404.8
From continuing operations:
Basic earnings per share 2.43p 2.76p 5.47p
Diluted earnings per share 2.38p 2.70p 5.37p
From continuing and discontinued operations:
Basic earnings per share 2.43p 2.84p 6.26p
Diluted earnings per share 2.38p 2.78p 6.16p
7 Retirement benefit obligations
Six months to Six months to
31 December 31 December Year to
2012 2011 30 June
(In £'s million) (unaudited) (unaudited) 2012
Deficit in the scheme brought forward (15.4) (11.9) (11.9)
Past service cost/curtailment -
- 6.0
Current service cost (0.6) (1.6) (2.7)
Contributions 6.8 7.7 15.5
Net financial return (0.3) 1.1 2.3
Actuarial gain/(loss) 6.8 (10.6) (24.6)
Deficit in the scheme carried forward (2.7)
(15.3) (15.4)
8 Provisions
(In £'s million) Property Other Total
At 1 July 2012 13.0 12.6 25.6
Utilised (1.5) (0.5) (2.0)
At 31 December 2012 11.5 12.1 23.6
Current 3.7
Non-current 19.9
23.6
Provisions relate to continuing and discontinued operations. Property
provisions are for rents and other related amounts payable on
certain leased
properties for periods in which they are not anticipated to be
in use by the
Group. The leases expire in periods up to 2015 and the amounts will be paid
over this period.
Other provisions include potential warranty and environmental
claim liabilities
arising as a result of the business disposals that were concluded in 2004.
9 Movement in net debt
1 July Cash Exchange 31 December
(In £'s million) 2012 flow movement 2012
Cash and cash equivalents 38.7 20.5 0.6 59.8
Bank loans and overdrafts (171.6) (33.6) - (205.2)
Net debt (132.9) (13.1) 0.6 (145.4)
The table above is presented as additional information to show
movement in net
debt, defined as cash and cash equivalents less bank loans and overdrafts.
The Group completed the re-financing of a five year £300 million unsecured
revolving credit facility on 2 October
2012 which expires in October
2017. The
financial covenants, which are unchanged from the Group's
previous facility,
require the Group's interest cover ratio to be at least 4:1 and
its leverage
ratio (net debt to EBITDA) to be no greater than 2.5:1. The
interest rate of
the facility is based on a ratchet mechanism with a margin
payable over LIBOR
in the range of 1.85% to 2.40%.
As at 31 December 2012, £95
million of the committed facility was un-drawn.
10 Events after the balance sheet date
There are no significant events after the balance sheet date to
report.
11 Like-for-like results
Like-for-like results represent organic growth/(decline) of continuing
activities at constant currency.
For the six months ended 31 December 2012 these are calculated as follows:
(In £'s million)
Net fees for the six months ended 31 December 2011 373.8
Foreign exchange impact (9.7)
Net fees for the six months ended 31 December 2011 at constant currency 364.1
Net fee increase/(decline) resulting from organic growth (3.8)
Net fees for the six months ended 31 December 2012 360.3
Profit from operations for the six months ended 31 December 2011 63.1
Foreign exchange impact (1.8)
Profit from operations for the six months ended 31 December 2011 at
constant currency 61.3
Profit from operations increase/(decline) resulting from organic growth (1.0)
Profit from operations for the six months ended 31 December 2012
60.3
12 Like-for-like results H1 analysis by division
Net fee growth/(decline) Q1 Q2 H1
versus same period last year 2013 2013 2013
Asia Pacific (9%) (14%) (11%)
Continental Europe & Rest of World 16%
12% 14%
United Kingdom & Ireland (9%) (3%) (6%)
Group (1%) (1%) (1%)
H1 2013 is the period from 1 July
2012 to 31 December 2012.