TIDMNAK
RNS Number : 4263J
Nakama Group Plc
07 August 2012
For release 0700 7 August 2012
Nakama Group PLC (AIM: NAK)
("Nakama" or "the Group")
"The AIM quoted recruitment consultancy working across UK,
Europe, Asia and Australia providing staff for the Web,
Interactive, IT and Digital media sectors"
Preliminary Results
For the year ended 31 March 2012
Highlights
Financial
-- Group revenue increased by 47per cent. to GBP13.3m (2011:
GBP9m) primarily reflecting additional revenue following the
acquisition of Nakama in Oct 2011
-- Operating profit before exceptional items, amortisation and
depreciation was GBP232,000 (2011: GBP321,000)
-- Group loss before taxation GBP180,000 (2011: Profit GBP303,000)
-- Net fee income (NFI) improved by 68 per cent. to GBP2.74m (2011: GBP1.63m)
-- Profit margins increased again to 20 per cent. (2011: 18 per cent.)
-- No dividend recommended, but a resumption in future dividend
payments will be kept under review
Operational
-- Acquisition of Nakama and name change - integration progressing well
-- Locations in Asia and Australia added through acquisition
-- New specialisation in online and digital markets added through acquisition
-- Contractors on site and permanent placements increasing overall
-- Increase in new clients in specialist areas.
-- Integration of both companies' back office functions
completed and will show cost savings in the current year
Ken Ford, Chairman of Nakama, commented:
"I am pleased by the merger of Highams and Nakama and the
substantial progress seen during the year in terms of integration
and increased sales to create the Nakama Group plc and the
subsequent appointment of Stefan Ciecierski as Group Chief
Executive. The next year will see a full year contribution from
Nakama and a contribution from recently opened businesses such as
Singapore and Nakama Search, as well as many new staff, recently
recruited. We look forward to continuing progress over the coming
financial year, which should be reflected in an improved financial
performance."
Current Trading
The Board would also like to comment on current trading. As at
the end of July 2012, Nakama has seen strong progress across a
number of fronts during this new financial year and the Board is
pleased to report that operating profit before exceptional items,
amortisation and depreciation during the first 4 months of the
current period is predicted to be close to that achieved during the
whole of the last financial year (operating profit before
exceptional items, amortisation and depreciation 2012:
GBP232,000).
With our new office opening in Singapore in April this year and
with the Group seeing much of its growth coming from successful
hiring early in the period, the Board believes that the company's
infrastructure can support many more consultants than it currently
does at present, but without a corresponding and marked increase in
its cost base. The current year has started positively and in spite
of the poor general economic outlook, the Group looks to the future
with growing confidence.
The increase in the demand for social media site development and
content as well as the growth of social media on mobile is driving
recruitment volumes in all Nakama locations and will help drive the
Group's strategy over the next few years.
- Ends -
Enquiries:
Nakama Group plc www.nakamaglobal.com
Stefan Ciecierski, Chief Tel: 020 3170 8202
Executive
Seymour Pierce Limited Tel: 020 7107 8000
Guy Peters, Corporate Finance
Jacqui Briscoe, Corporate
Broking
Peckwater PR tarquin.edwards@peckwaterpr.co.uk
Tarquin Edwards Tel: 07879 458 364
Notes to Editors:
Nakama Group plc
Nakama Group plc is the AIM quoted recruitment consultancy and
leading niche provider of technology, business and professional
services to the insurance and financial services sectors and
recruitment for the digital technology and interactive media
industry.
Following the acquisition of Nakama by Nakama Group plc
(formerly Highams Systems Services Group plc) in October 2011, the
Group now has an international platform, operating from offices in
London, Melbourne, Sydney, Hong Kong and most recently, now in
Singapore, with a specialism in recruitment for the digital
technology and interactive media industry.
The company places emphasis on providing excellent levels of
service and industry knowledge to deliver single or multiple
solutions for its clients. The directors of Nakama believe that
whilst companies may continually try to reduce their supplier base,
they demand wider fulfilment and services from their recruitment
partners.
In response to this, Nakama supplies staff internationally
through the whole chain of technology lifecycle, where other IT or
technology recruiters might supply only one part of the chain.
Nakama was formed to take advantage of an opportunity the founders
saw to provide services across the spectrum of the digital
technology and interactive media industry on an international
level.
Chairman's Statement
Introduction
I am pleased to report our full year results to 31 March 2012,
which have seen encouraging revenue progress since the acquisition
of Nakama and its integration with Highams to create Nakama Group
plc (AIM: NAK).
Nakama provides a full range of specialist recruitment services
to its clients, providing staff for the Web, Interactive, IT and
Digital Media sectors through the placement of contract and
permanent staff across the UK, Europe, Asia and Australia and post
year end Singapore.
The company's network of proven managers populating the Group's
offices in the UK, Hong Kong, Singapore, Sydney and Melbourne,
provides the Group with the potential for leveraging off its unique
platform to rapidly accelerate its drive into fast developing
specialist markets over the coming years. The digital media
industry in particular is expanding globally at a very fast rate
and the Board of Nakama believe that the Group is now well
positioned to take full advantage of this growth.
As part of the acquisition we are very pleased to have Stefan
Ciecierski as our CEO, who provides expertise and experience in
building a global business. Stefan joined the Board from the date
of acquisition in October 2011.
Strategy
Our strategy is to build from a strong base in the UK and expand
both in our specialist areas internationally and into targeted
developing markets. London is a global leader in many of our chosen
market sectors and provides a strong hub from which to develop an
international client base. Digital media recruitment both into
agencies and into corporate marketing departments continues to show
no signs of slowing down and Highams' traditional business
providing technology, business and professional services to the
insurance and financial services sector remains strong and is
increasingly digital.
Selective recruitment of new staff into the company,
particularly at graduate level, has enhanced the levels of activity
required to meet the needs of our clients and delivery of our
specialist services. We believe that the Nakama Group offering and
quality of our service is based upon our staff's deep understanding
and knowledge of our clients' requirements and their markets.
We have achieved our strategy of growing strategically by
acquisition and continue to look at other opportunities
globally.
Financial Results
Group revenue increased by 47 per cent. to GBP13.3m (2011:
GBP9m), primarily reflecting the additional revenue following the
acquisition of Nakama Ltd in October 2011. Net fee income (NFI)
improved by 68 per cent. to GBP2.74m (2011: GBP1.63m), with profit
margins increased again to 20 per cent (2011: 18 per cent).
The operating profit before exceptional items (the acquisition
of Nakama Ltd) was GBP232,000 (2011: profit of GBP321,000), which
was disappointing. The integration of both companies' back office
functions has been completed and will show cost savings in the
current year, but the consolidation and re-organisation of
accounting and debt financing took longer than expected. The
Directors are not recommending the payment of a final dividend for
the year to 31 March 2012 (2011: nil), but a resumption in future
dividend payments will be kept under review.
Executives and Staff
We remain a strong team of very knowledgeable long serving staff
and we look forward to continuing to build the new Nakama Group. I
would like to acknowledge the loyalty and commitment of all the
staff to the group and am extremely grateful for their efforts.
Again I extend a very warm welcome to all new members of the team
and I look forward to their development and the future success of
Nakama.
Outlook
I am pleased by the merger of Highams and Nakama and the
substantial progress seen during the year in terms of integration
and increased sales to create the Nakama Group and the subsequent
appointment of Stefan Ciecierski as Group Chief Executive. The next
year will see a full year contribution from Nakama Ltd and a
contribution from recently opened businesses such as Singapore and
Nakama Search, as well as many new staff, recently recruited. We
look forward to continuing progress over the coming financial year,
which should be reflected in an improved financial performance.
Ken Ford
6 August 2012
Chief Executive's Statement
Operational Review
Introduction
There are many technology recruitment companies around the
world, most of which work in the IT operations markets, but very
few of any size work in the Digital Media sector. Nakama was
developed with a specific aim to service the growing online
world.
The growth of all online technologies globally is too fast and
too broad to accurately map; however, companies, consumers and
governments are increasingly communicating, trading and
entertaining online. They are doing this via desktop computers, or
laptops, or smartphones or tablets, and the online world connects
instantaneously across vast geographies.
Access to the Internet and all it offers is the world of digital
design, usability and technology and it is in this area that Nakama
is a unique service provider working across UK, Europe, Asia and
Australasia.
Digital Media require IT. In the past Nakama was unable to
service clients' needs in IT, but that has now changed with the
acquisition and being able to utilise the skills across the new
Group. Our brands can now expand and work with all its clients from
the Group's overseas locations. The price comparison industry in
insurance is a good example of where digital media and insurance
come together in a very sophisticated way in the UK, but this
combination is only just starting to develop in Asia and
Australia.
In between the Web and IT operations is the rapidly expanding
world of software into which Nakama Group will seek to expand,
particularly with regard to e-commerce and Internet security.
Staffing Strategy
To grow the Group organically and in the most cost effective
way, Nakama has been mainly hiring graduates with little or no work
experience and training them into consultants. This has been a
successful and predictable way to grow staff numbers. UK current
market conditions are favourable in that many high calibre
graduates who may have found work in previous years in management
consulting or financial institutions are looking for careers in
recruitment.
The UK is the largest part of Nakama Group plc and I expect it
will continue to be so for many years, as it is the centre for much
of what we do and it is a good location from which to support
operations in Asia and Australasia, as well as trading into
mainland Europe. However, we are exploring significant growth
opportunities in Asia where we have experienced fast growth and
where our clients are developing rapidly with the need to hire many
specialist people.
Expansion during the current financial year
The Group opened an office in Singapore in April to service the
fast growing digital sector in South East Asia and it also expects
to open an office in Munich in the second quarter to address the IT
needs of the growing German financial services sector.
Nakama Search also opened in May this year through the
acquisition of Libby Fisher Associates and this division will
target the senior level hiring needs of the UK digital and online
markets. The board is also assessing the viability of opening an
office in Mainland China.
Nakama has a unique vision of its place in technology
recruitment at a time when that sector is experiencing rapid
expansion. We will be opportunistic in terms of attracting
individuals and teams of people into the Group, many of whom I
believe are seeing what we are achieving and wish to bring their
skills into the Group.
Stefan Ciecierski
6 August 2012
Consolidated income statement
For the year ended 31 March 2012
2012 2011
Note GBP'000 GBP'000
Revenue 13,298 9,020
Cost of sales (10,555) (7,390)
Gross profit 2,743 1,630
Administrative expenses
-------------------------------------- ----- --------- --------
Administrative costs excluding
exceptional items (2,591) (1,317)
Exceptional Items (237) -
-------------------------------------- ----- --------- --------
Total administrative expenses (2,828) (1,317)
Operating (loss)/profit (85) 313
Finance cost (95) (10)
-------------------------------------- ----- --------- --------
(Loss) /profit before tax (180) 303
-------------------------------------- ----- --------- --------
Tax credit - 200
(Loss)/profit for the period
attributable to equity shareholders (180) 503
-------------------------------------- ----- --------- --------
(Loss)/profit per share
Basic (loss)/profit per share
from continuing operations 1 (0.20) p 0.73 p
Diluted (loss)/profit per share
from continuing operations 1 (0.20) p 0.71 p
-------------------------------------- ----- --------- --------
All of the above relate to
continuing operations.
Consolidated statement of comprehensive income
For the year ended 31 March 2012
2012 2011
GBP'000 GBP'000
------- -------
(Loss) profit for the period (180) 503
Total comprehensive income for
the period
attributable to equity shareholders (180) 503
------------------------------------- ----- ---
Consolidated balance sheet
At 31 March 2012
Company number 1700310
2012 2011
GBP'000 GBP'000
----------------------------- -------- --------
Assets
Non-current assets
Intangible assets 1,297 -
Property, plant and
equipment 39 5
Deferred tax asset 301 301
Total 1,637 306
Current assets
Trade and other receivables 3,146 1,592
Cash and cash equivalents 279 176
Total 3,425 1,768
----------------------------- -------- --------
Total assets 5,062 2,074
----------------------------- -------- --------
Current Liabilities
Trade and other payables (2,035) (1,273)
Borrowings (1,058) -
----------------------------- -------- --------
Total (3,093) (1,273)
Net Assets 1,969 801
----------------------------- -------- --------
Equity
Share capital 1,602 1,597
Share premium account 2,580 1,239
Merger reserve 90 90
Employee share benefit
trust reserve (61) (61)
Currency reserve 4 4
Retained earnings (2,246) (2,068)
----------------------------- -------- --------
Total Equity 1,969 801
----------------------------- -------- --------
The financial statements were approved and authorised for issue
by the Board of directors on 6 August 2012
K A Sayers, Director J E Higham, Director
Consolidated statement of changes in equity
As at 31 March 2012
Employee
share
Share Share Merger benefit Currency Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- --------- --------- --------- --------- --------- ---------- --------
At 1 April
2010 1,597 1,239 90 (61) 4 (2,573) 296
Share based
payment
credit - - - - - 2 2
------------- --------- --------- --------- --------- --------- ---------- --------
Profit for
the year - - - - - 503 503
------------- --------- --------- --------- --------- --------- ---------- --------
At 1 April
2011 1,597 1,239 90 (61) 4 (2,068) 801
Issue of
New Shares 5 1,341 1,346
Share based
payment
credit 2 2
------------- --------- --------- --------- --------- --------- ---------- --------
Loss for
the year (180) (180)
------------- --------- --------- --------- --------- --------- ---------- --------
At 31 March
2012 1,602 2,580 90 (61) 4 (2,246) 1,969
------------- --------- --------- --------- --------- --------- ---------- --------
Consolidated statement of cash flow
For the year ended 31 March 2012
2012 2011
GBP'000 GBP'000
---------------------------- -------- --------
Operating activities
(Loss)/Profit for the
year before tax (180) 303
Depreciation of property,
plant and equipment 9 8
Amortisation of intangible
assets 71 -
Net finance costs 95 10
Changes in trade and other
receivables (893) (301)
Change in trade and other
payables (16) 399
---------------------------- -------- --------
Net cash generated by
operating activities (914) 419
---------------------------- -------- --------
Cash flows from investing
activities
Acquisition of subsidiary
cash 52 -
Purchase of property,
plant and equipment - (6)
Net cash generated by
investing activities 52 (6)
---------------------------- -------- --------
Financing activities
Issue of new shares - -
Increase/(decrease) in
borrowings 1,058 (231)
Proceeds from issue of
share capital - -
Finance cost paid (95) (10)
---------------------------- -------- --------
Net cash from financing
activities 963 (241)
Net changes in cash and
cash equivalents 101 172
Cash and cash equivalents,
beginning of year 176 4
Exchange losses, cash
and cash equivalent 2 -
---------------------------- -------- --------
Cash and cash equivalents,
end of year 279 176
---------------------------- -------- --------
1. Profit per share
2012 2011
---------- ---------- ---------- ------- ---------- ------
Weighted Weighted
average average Profit
Loss number Profit number per
per share of shares per share Profit of shares share
GBP'000 '000 p GBP'000 '000 p
---------------------- ---------- ---------- ---------- ------- ---------- ------
Basic (loss)/profit
per share (180) 91,350 (0.20) 503 68,834 0.73
Diluted (loss)/profit
per share (180) 91,350 (0.20) 503 69,867 0.71
The weighted average number of shares excludes 4,325,071 (2011:
3,634,781) shares held by the Employee Share Benefit Trust and
share options granted.
2. The financial information in this preliminary announcement
does not constitute the Group's statutory accounts for the years
ended 31 March 2012 or 2011 as defined in section 434 of the
Companies Act 2006. Statutory accounts for the year ended 31 March
2011 have been delivered to the Registrar of Companies and those
for the year ended 31 March 2012 will be delivered following the
Group's annual general meeting. The auditors have reported on those
accounts, their reports were unqualified and did not include
references to any matters to which the auditors drew attention by
way of emphasis without qualifying their reports. Their report for
the year ended 31 March 2012 or 2011 did not contain statements
under s498 (2) or (3) of the Companies Act 2006.
3. Copies of the statutory accounts for the year ended 31 March
2012 will be posted to all shareholders. Additional copies will be
available from the Company Secretary, Nakama Group plc, Quadrant
House, 33/45 Croydon Road, Caterham, Surrey, CR3 6PB and will be
available to download from the investor relations section on the
Company's website www.nakamaglobal.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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