TIDMNAK
RNS Number : 1188R
Nakama Group Plc
15 November 2012
For release at 07:00 on 15 November 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, announces its interim
results for the six months ended 30 September 2012".
INTERIM RESULTS
Highlights
-- Revenue grew by 81% to GBP8.64m (2011: GBP4.78m), primarily
reflecting additional revenue following the acquisition of Nakama
in Oct 2011
-- EBITDA before exceptional items increased to GBP191,411 (2011:156,080)
-- Net fee income (NFI) rose by 134% to GBP2,078,782,(2011: GBP887,000)
-- NFI percentage increased to 24% (2011: 18.6%)
-- Net profit decreased to GBP11,000 (2011: GBP152,000)
-- New offices opened in Singapore and Munich with the Singapore
office being profitable in the year to date and performing well and
the recently opened Munich office expected to make a contribution
next year
-- The half year outcome has been substantially reduced by
GBP120,000 relating to significant mismanagement and
misappropriation of funds in our Hong Kong office. All other Nakama
offices were profitable.
Stefan Ciecierski, CEO of Nakama, commented:
"We report on our interim results to 30 September 2012, which
have shown encouraging resilience, in the face of a tough market
and with the disruption following our acquisition last year and of
our continuing group integration. Activity in our UK markets has
held firm and provides us with a continuingly strong platform. Our
overseas offices have grown organically and I am pleased to report
the opening of our two new offices in Singapore and Munich."
"Whilst events regarding the Hong Kong office have impacted upon
the group's performance, we continue to make good progress
elsewhere and we now move into the second half of the year with a
solid platform on which to continue to develop the enlarged Group.
Nakama's international presence has helped retain and develop
relationships with many blue chip global digital companies and we
remain well positioned to take advantage of an upturn in the
UK."
Enquiries:
Stefan Ciecierski, Chief Executive Tel: 020 3170
Officer 8202
Nakama Group plc
Guy Peters Tel: 0207 107
8000
Seymour Pierce Limited
Tarquin Edwards Tel: 07879 458
364
Peckwater PR
Notes to Editors:
Nakama Group plc
The AIM quoted recruitment consultancy working across UK,
Europe, Asia and Australia providing staff for the Web,
Interactive, IT and Digital media sectors, announces its interim
results for the six months ended 30 September 2012
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 and Munich, 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. 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.
CEO STATEMENT
Interim results
Introduction
We report on our interim results to 30 September 2012, which
have shown encouraging resilience, in the face of a tough market
and with the disruption following our acquisition last year and of
our continuing group integration. Activity in our UK markets has
held firm and provides us with a continuingly strong platform. Our
overseas offices have grown organically and I am pleased to report
the opening of our two new offices in Singapore and Munich.
It is with considerable regret that I must advise that the board
recently uncovered the significant misappropriation of company
funds and of misreporting from the Hong Kong office. Its manager
has been instantly dismissed and related debtors are being
vigorously pursued. We will pursue all avenues to ensure we recoup
what can be recovered. It is a real shame to see the group's
creditable performance and the hard work put in by all at Nakama
tarnished as a consequence of these events.
Financials
We are pleased to report an encouraging increase in revenue of
81% to GBP8.64m (2011: GBP4.78m) on the same period last year,
following the acquisition of Nakama. We also saw an increase in net
fee income (NFI) across the group, reflecting improved profit
margins along with improved earnings before interest, tax,
depreciation and amortisation. In the last six months, 59 per cent
of group NFI came from the UK and 41 per cent came from overseas.
Activity in the UK has held firm whilst the overseas offices have
grown organically, and with two new offices in Singapore and
Munich.
As detailed below and owing to costs of the misappropriation of
funds in the Hong Kong office, I do not believe the financial
results for the six-month period accurately reflect the underlying
encouraging and solid performance of the Group on a number of
fronts during the period. With that one exception, I believe the
rest of the Group has performed in line with expectations and I
strongly believe the future potential of the Group is
excellent.
Following the recent acquisition and on-going integration of the
two businesses, the Board of Nakama is not in a position to
recommend the payment of an interim dividend. However, the Board
will keep its future dividend policy closely under review and will
consider a return to recommending dividend payments as and when the
Company's trading position and performance permits
Recent News
Nakama APAC
At the beginning of the period, Rob Sheffield, one of the
founding directors of Nakama, moved to Australia to accelerate the
growth of Nakama APAC and to help the existing teams there grow the
business further and build foundations for future development. This
has enabled us to expand our Australian offices and from Sydney and
Melbourne, the Company has experienced over the past year very
rapid growth across its international client portfolio. This in
turn has required an equally fast scale-up and growth of the teams
there in order to keep pace with the demands of the developing
digital, interactive media and mobile sectors.
It has also enabled us to open a business in Singapore, which
has made a small profit year to date.
Hong Kong
The Board was alerted on 21 October 2012 that a significant
misappropriation of company funds and misreporting to cover poor
trading at the Hong Kong office had arisen. This was investigated
immediately and as a consequence the manager has been dismissed for
gross misconduct and he and related debtors are being pursued in an
attempt to make some recovery. In the meantime, we have taken the
precaution of making an exceptional item provision of (GBP68,000)
for potential bad debt and have written off (GBP52,000) of
misreported sales .The misreporting at the Hong Kong office has had
an impact on the interim results as a whole, with lost anticipated
revenue and profits and increased spend resulting in the Hong Kong
office making a loss for the period of GBP102,000. We do not
believe that any of the amounts relate to prior periods.
Operations
We are very pleased to report that a new Highams office was
opened in Munich in September 2012 and the board believes its
prospects are encouraging. It is expected that the first placements
in Germany will be billed early next year.
Nakama operates under the Highams, Nakama London and Nakama
International brands. Both Highams and Nakama London have
consistently maintained their numbers of contractors and the number
of permanent placements has been variable month on month with
demand high, but with much lower numbers of people changing jobs
compared to the previous period.
The Australian offices have grown steadily and the Singapore
office, which, opened in April, is profitable during the year to
date and is performing well. The Munich office has been opened very
recently and is expected to make a contribution next year. The
Highams brand is now present in Munich and will be extended to
Singapore and Hong Kong next year.
Nakama's international presence has helped retain and develop
relationships with many blue chip global digital companies and we
remain well positioned to take advantage of an upturn in the
UK.
Summary and Outlook
Whilst we have suffered with the recent events regarding the
Hong Kong office, we continue to make good progress elsewhere and
we now move into the second half of the year with a solid platform
on which to continue to develop the enlarged Group.
We have, over the past few months, recruited more personnel into
the company to expand delivery and I welcome all new joiners to the
Group. I am particularly pleased to welcome our new colleagues in
Singapore and Munich.
Stefan Ciecierski
CEO
15 November 2012
Consolidated statement of
comprehensive income
for the six months ended 6 months 6 months 12 months
30 September 2012 to to to
30 Sep 30 Sep 31 Mar
2012 2011 2012
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Total Revenue 8,636 4,779 13,298
Cost of sales (6,557) (3,892) (10,555)
Net fee income 2,079 887 2,743
------------------------------------- ----- ---------- ---------- ----------
Other administrative costs (1,974) (732) (2,591)
Exceptional Items 3 (68) - (237)
------------------------------------- ----- ---------- ---------- ----------
Total administrative expenses (2,042) (732) (2,828)
Operating profit 37 155 (85)
Finance costs (26) (3) (95)
Profit on ordinary activities
before taxation 11 152 (180)
Tax credit - - -
Profit and total comprehensive
income for the period attributable
to equity shareholders 11 152 (180)
========== ========== ==========
Basic earnings per share 2 0.01 p 0.22 p (0.20) p
Diluted earnings per share 2 0.01 p 0.21 p (0.20) p
Consolidated statement of
recognised income and expense
for the six months ended
30 September 2012
6 months 6 months 12 months
to to to
30 Sep
30 Sep 2012 2011 30 Sep 2012
Unaudited Unaudited Audited
Profit/loss for the period 11 152 (180)
Foreign exchange losses on
translation of overseas operations (2) - -
------------ ---------- ------------
Total recognised income and
expense for the period attributable
to equity shareholders 9 152 (180)
------------ ---------- ------------
Statement of changes
in equity
at 30 September
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 to 31
March 2011 - - - - 503 503
--------------------- --------- --------- --------- --------- --------- ---------- --------
At 31 March
2011 1,597 1,239 90 (61) 4 (2,068) 801
New shares
issued 5 1,341 1,346
Share based
payment credit 2 2
Loss to 31
March 2012 - - - - - (180) (180)
--------------------- --------- --------- --------- --------- --------- ---------- --------
At 31 March
2012 1,602 2,580 90 (61) 4 (2,246) 1969
Total comprehensive
income to
30 September
2012 - - - - (2) 11 9
--------------------- --------- --------- --------- --------- --------- ---------- --------
Profit to 30
September 2012 1,602 2,580 90 (61) 2 (2,235) 1,978
Consolidated balance
sheet
as at 30 September
2012
6 months 6 months 12 months
to to to
30 Sep 30 Sep 31 Mar
2012 2011 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 1,269 - 1,297
Property, plant
and equipment 48 4 39
Deferred tax asset 301 301 301
Total 1,618 305 1,637
--------------------------- ---------- ---------- ----------
Current assets
Trade and other
receivables 3,027 1,590 3,146
Cash and cash equivalents 20 346 279
Total 3,047 1,936 3,425
--------------------------- ---------- ---------- ----------
Total assets 4,665 2,241 5,062
--------------------------- ---------- ---------- ----------
Liabilities
Current liabilities
Trade and other
payables (1,864) (1,288) (2,035)
Borrowings (823) - (1,058)
Total (2,687) (1,268) (3,093)
--------------------------- ---------- ---------- ----------
Net assets/(liabilities) 1,978 953 1,969
--------------------------- ---------- ---------- ----------
Equity
Share capital 1,602 1,597 1,602
Share premium account 2,580 1,239 2,580
Merger reserve 90 90 90
Employee share benefit
trust reserve (61) (61) (61)
Currency reserve 2 4 4
Retained earnings (2,235) (1,917) (2,246)
Total equity 1,978 953 1,969
---------- ---------- ----------
Consolidated Cash Flow
Statement
as at 30 September 2012
6 months 6 months 12 months
to to to
30 Sep 30 Sep 31 Mar
2012 2011 2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating activities
Profit before taxation 11 152 (180)
Depreciation of tangible
assets 18 1 9
Amortisation of intangible
assets 77 - 71
Net finance costs 26 3 95
Changes in trade and other
receivables 118 2 (893)
Changes in trade and other
payables (191) 15 (16)
Net cash used in operating
activities 59 173 (914)
Cash flows from investing
activities
Purchase of property plant
and equipment (25) - -
Acquisition of subsidiary
cash 52
Purchase of intangible
asset (30)
Net cash used in investing
activities (55) - 52
Financing activities
(decrease)/increase in
borrowings (235) - 1,058
Interest paid (26) (3) (95)
---------- ---------- --------------------
Net cash from financing
activities (261) (3) 963
---------- ---------- --------------------
Net changes in cash and
cash equivalents (257) 170 101
Cash and cash equivalents
at beginning of period 279 176 176
Exchange losses, cash
and cash equivalent (2) 2
Cash and cash equivalents
at end of period 20 346 279
---------- ---------- --------------------
Notes to the Interim Report
1. Basis of Preparation
This unaudited consolidated interim financial information has
been prepared using the recognition and measurement principles of
International Accounting Standards, International Financial
Reporting Standards and Interpretations adopted for use in the
European Union (collectively EU IFRSs). The principal accounting
policies used in preparing the interim results are those that the
Group expects to apply in its financial statements for the year
ended 31 March 2013 and are unchanged from those disclosed in the
Group's Annual Report for the year ended 31 March 2012
The financial information for the six months ended 30 September
2012 and 30 September 2011 is unreviewed and unaudited and does not
constitute the Group's statutory financial statements for those
periods. The comparative financial information for the full year
ended 31 March 2012 has, however, been derived from the audited
statutory financial statements for that period. A copy of those
statutory financial statements has been delivered to the Registrar
of Companies. The auditors' report on those accounts was
unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report and did not contain a statement under section 498(2)-498(3)
of the Companies Act 2006.
The financial information in the Interim Report is presented in
Sterling and all values are rounded to the nearest thousand pounds
(GBP'000) except when otherwise indicated.
2. Earnings per share
6 months 6 months 12 Months
to 30 to 30 to 30
Sept Sept March
2012 2011 2012
Unaudited Unaudited Audited
Weighted Weighted Weighted
average average average
number number number
of Profit of Profit of Profit
per per per
Profit shares share Profit shares share Profit shares share
GBP'000 '000 p GBP'000 '000 p GBP'000 '000 p
Basic earnings
per share 11 117,791 0.01 152 68,834 0.22 (180) 91,350 (0.20)
Diluted earnings
per share 11 121,749 0.01 152 70,976 0.21 (180) 91,350 (0.20)
3. Exceptional items
Exceptional items are those items that in the Directors view are
required to be separately disclosed by virtue of its incidence to
enable a full understanding of the Group's financial performance.
Following the discovery of the misappropriation of funds in the
Hong Kong office a provision has been made to cover a potential
unrecoverable debt.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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