TIDMNAK
RNS Number : 6610K
Nakama Group Plc
01 August 2013
For release 1(st) August
2013
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 2013
Highlights
Financial
-- Group revenue increased by 25 per cent. to GBP16.7m (2012:
GBP13.3m) for our first full year since the acquisition of Nakama
in October 2011
-- PBTAE* GBP9,000 (2012: GBP128,000)
-- Group loss before taxation GBP219,000 (2012: Loss GBP180,000)
-- Gross profit improved by 45 per cent. to GBP3.98m (2012: GBP2.74m)
-- Profit margins increased again to 24 per cent. (2012: 20 per cent.)
-- Net Assets GBP1,784m (2012: GBP1,969m)
-- Net Borrowing GBP0.764m (2012: GBP1,058m)
-- Finance costs have been halved to GBP45k (2012: GBP95k)
-- No dividend recommended, but a resumption in dividend payments will be kept under review
* PBTAE - Profit before tax, amortisation and exceptional
items
Operational
-- New offices opened in Singapore and Munich in the period
-- Restructuring in the Hong Kong and Sydney offices
-- Cost savings in back office integration
-- Contractors on clients' sites and permanent placements remain stable
-- Global networks increasing blue chip client base
-- New Board structure with Paul Goodship and Rob Sheffield appointed on 10 June 2013
Ken Ford, Chairman of Nakama, commented:
"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 grow and Highams' traditional business providing
technology, business and professional services to the insurance and
financial services sector remains firm and increasingly
digital."
"The recent additions to the Board of Rob Sheffield and Paul
Goodship, two founders of Nakama Limited bring continuity of drive
and knowledge to the building of the Nakama brand, The Board looks
to the 2013/2014 year as one in which it will work to increase
turnover and results from the strengthened infrastructure and new
offices now in place."
Enquiries:
Nakama Group plc www.nakamaglobal.com
Ken Ford, Chairman Tel: 07884 313191
Kerri Sayers, COO Tel: 01883 341144
WH Ireland Limited
Andrew Kitchingman Tel: 0113 394 6619
Nick Field Tel: 0207 220 1658
Peckwater PR Tel: 07879 458 364
Tarquin Edwards tarquin.edwards@peckwaterpr.co.uk
NOTES TO EDITORS
About 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 Limited by Nakama Group plc
(formerly Highams Systems Services plc) in October 2011, the Group
now has an international platform, operating from offices in
London, Melbourne, Sydney, Hong Kong and most recently, 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 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 to provide services
across the spectrum of the digital technology and interactive media
industry on an international level.
Chairman's Statement
Introduction
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.
The results for the full year results to 31 March 2013 were
disappointing although revenue increased by 25 per cent., with a
full year of figures included since the acquisition of Nakama in
October 2011.
The company has strengthened its infrastructure during the year
under review opening offices in Singapore and Munich. The company's
network of proven managers provides the Group with the potential to
grow in future years.
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 grow
and Highams' traditional business providing technology, business
and professional services to the insurance and financial services
sector remains firm and increasingly digital.
We are always looking to recruit further excellent, driven
individuals to enhance the current team globally 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 are focussed on growing each office organically to ensure we
are making full use of the infrastructure we have now built. We
will continue to look at other opportunities to grow by acquisition
of teams or companies.
Financial Results
Group revenue increased by 25 per cent. to GBP16.7m (2012:
GBP13.3m), for our first full year since the acquisition of Nakama
Ltd in October 2011. Gross profit improved by 45 per cent. to
GBP3.98m (2012: GBP2.74m), with gross margin increased again to 24
per cent (2012: 20 per cent).
The operating profit before amortisation, tax and exceptional
items was GBP9,000 (2012: profit of GBP128,000), The disappointing
result mainly reflects the Hong Kong office issues reported in our
half year results in November 2012, whereby the Board was alerted
that a significant misappropriation of company funds and
misreporting to cover poor trading had arisen. We also restructured
our Australia offices, strengthening the teams there and incurred
costs in relation to opening new offices. The Directors are not
recommending the payment of a final dividend for the year to 31
March 2013 (2012: nil), but a resumption in 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 I 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. Since the year end Stefan Ciecierski has left the Board and
we wish him well. The recent additions to the Board of Rob
Sheffield and Paul Goodship, two founders of Nakama Limited bring
continuity of drive and knowledge to the building of the Nakama
brand.
Outlook
Trading in the first quarter since the year end has been in line
with our expectations; we continue to focus on ensuring continuity
of performance in each office location with the UK continuing to
deliver consistently and APAC benefiting from increased staff
levels and improving performance on revenues and results. The Board
looks to the 2013/2014 year as one in which it will work to
increase turnover and results from the strengthened infrastructure
and new offices now in place.
Ken Ford
31 July 2013
Operating review
The Board has reviewed the detail of the business during the
past year and we have provided an overview of the offices split
between the UK and APAC regions as these are considered to be the
strategic business units that although supplying the same product
offerings, operate in distinct markets and as such are managed on a
day to day basis by separate directors as listed on pages 3 and 4
of the Annual report. We also provide an outlook for the next
financial year. There has been growth in turnover but profits have
been depressed by events in the Hong Kong office in particular and
the opening of new offices and restructuring.
APAC
APAC is represented by two Nakama offices in Australia, one in
Hong Kong and a newly opened office in Singapore. We serve digital
media markets across a broad spectrum of clients ranging from
corporates to digital marketing agencies.
Early during the year, Rob Sheffield relocated from the UK to
direct operations in the APAC region. Rob is now based in Sydney
and he has been successful in appointing sales directors in the
Hong Kong and Singapore offices. We have also made good progress in
resolving the difficulties reported during the year with the Hong
Kong office.
The opportunities to cross-sell to international clients located
across the region are more prevalent than elsewhere. Overall the
market has been competitive, and finding good quality candidates
can be difficult. However our global connections have been very
beneficial. Several staff have also been relocated from the UK
office to boost sales resources in APAC.
Whilst the trend and signs across the APAC business are
encouraging, and we are working with clients in multiple
geographies there is also pressure from local environments to
ensure businesses are hiring local personnel rather than bringing
in expatriate talent as the first option which is slowing
growth.
The future emphasis is on continuing to recruit good quality
sales staff to increase revenue and drive profit.
UK
The UK is represented by two UK offices: the Nakama brand
operating from London and the Highams brand operating from
Caterham. We work closely together to explore opportunities to
cross-sell services into the respective client bases. Whilst the UK
has seen an increase in client requirements for both contact and
permanent staff, here too it has been challenging to find good
quality candidates. This is because in an uncertain climate
employees have been content to stay put. The market has been very
competitive with candidates often having a choice of offers from
which to choose, which can lead to last minute fall-out.
We have been recruiting sales staff in the UK to maintain and
improve our service levels to clients and candidates alike and as
in previous years, our staff turnover is particularly low for the
sector.
The UK has made some good quality client wins and we constantly
review our services to adapt to changing market conditions.
In common with some of our competitors this has been a difficult
year but we are beginning to see an upturn and the emphasis is on
recruiting quality sales staff with the objective of increasing
revenue, which with continuing cost control should result in better
results.
Consolidated income statement
For the year ended 31 March 2013
2013 2012
GBP'000 GBP'000
------- -------
Revenue 16,668 13,298
Cost of sales (12,679) (10,555)
-------------- -------- --------
Gross profit 3,989 2,743
Administrative expenses
------------------------------- ------- -------
Administrative costs excluding
exceptional items (4,095) (2,591)
Exceptional items (68) (237)
Total administrative expenses (4,163) (2,828)
------------------------------- ------- -------
Operating loss (174) (85)
Finance costs (45) (95)
------------------------------- ------- -------
Loss before tax (219) (180)
Tax expenses (7) -
---------------- ----- -----
Loss for the period attributable
to equity shareholders (226) (180)
--------------------------------- ----- -----
Loss per share
Basic loss per share from continuing
operations (0.19) (0.20p)
Diluted loss per share from continuing
operations (0.19) (0.20p)
--------------------------------------- ------ -------
All of the above relate to continuing operations.
Consolidated statement of comprehensive income
For the year ended 31 March 2013
2013 2012
GBP'000 GBP'000
------- -------
Loss for the period (226) (180)
Foreign currency translation difference 25 -
---------------------------------------- ----- -----
Total comprehensive income for
the period
attributable to equity shareholders (201) (180)
---------------------------------------- ----- -----
Consolidated balance sheet
At 31 March 2013
Company number 1700310
2013 2012
GBP'000 GBP'000
----------------------------- -------- --------
Assets
Non-current assets
Intangible assets 1,147 1,297
Property, plant and
equipment 46 39
Deferred tax asset 301 301
Total 1,494 1,637
Current assets
Trade and other receivables 2,843 3,146
Cash and cash equivalents 7 279
Total 2,850 3,425
----------------------------- -------- --------
Total assets 4,344 5,062
----------------------------- -------- --------
Current Liabilities
Trade and other payables (1,796) (2,035)
Borrowings (764) (1,058)
----------------------------- -------- --------
Total (2,560) (3,093)
Net Assets 1,784 1,969
----------------------------- -------- --------
Equity
Share capital 1,602 1,602
Share premium account 2,580 2,580
Merger reserve 90 90
Employee share benefit
trust reserve (61) (61)
Currency reserve 29 4
Retained earnings (2,456) (2,246)
----------------------------- -------- --------
Total Equity 1,784 1,969
----------------------------- -------- --------
Consolidated statement of changes in equity
As at 31 March 2013
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
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 1 April
2012 1,602 2,580 90 (61) 4 (2,246) 1,969
Comprehensive
income for
the year
Loss for the
year - - - - - (226) (226)
Other comprehensive
income - - - - 25 - 25
--------------------- --------- --------- --------- --------- --------- ---------- --------
Total comprehensive
loss for the
year - - - - 25 (226) (201)
--------------------- --------- --------- --------- --------- --------- ---------- --------
Share based
payment credit - - - - - 16 16
--------------------- --------- --------- --------- --------- --------- ---------- --------
At 31 March
2013 1,602 2,580 90 (61) 29 (2,456) 1,784
--------------------- --------- --------- --------- --------- --------- ---------- --------
Consolidated statement of cash flows
For the year ended 31 March 2013
2013 2012
GBP'000 GBP'000
--------------------------------- -------- --------
Operating activities
Loss for the year before
tax (219) (180)
Depreciation of property,
plant and equipment 40 9
Amortisation of intangible
assets 160 71
Net finance costs 45 95
Tax paid (7) -
Changes in trade and other
receivables 303 (893)
Change in trade and other
payables (204) (16)
--------------------------------- -------- --------
Net cash generated by
operating activities 118 (914)
--------------------------------- -------- --------
Cash flows from investing
activities
Acquisition of subsidiary
cash - 52
Purchase of property,
plant and equipment (48) -
Purchase of intangible
assets (9) -
Net cash generated by
investing activities (57) 52
--------------------------------- -------- --------
Financing activities
Issue of new shares -
Increase/decrease in borrowings (294) 1,058
Finance cost paid (45) (95)
Net cash from financing
activities (339) 963
Net changes in cash and
cash equivalents (279) 101
Cash and cash equivalents,
beginning of year 279 176
Exchange losses, cash
and cash equivalent 7 2
--------------------------------- -------- --------
Cash and cash equivalents,
end of year 7 279
--------------------------------- -------- --------
1. Basis of Preparation
The financial information in this preliminary announcement does
not constitute the Group's statutory accounts for the years ended
31 March 2013 or 2012 as defined in section 434 of the Companies
Act 2006. Statutory accounts for the year ended 31 March 2012 have
been delivered to the Registrar of Companies and those for the year
ended 31 March 2013 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 2013 or 2012 did not contain statements under s498 (2) or
(3) of the Companies Act 2006.
Copies of the statutory accounts for the year ended 31 March
2013 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
2. Loss per share
2013 2012
------- ---------- ---------- ------- ----------- ------
Weighted Weighted
average average Loss
number Loss number per
. Loss of shares per share Loss of shares share
GBP'000 '000 p GBP'000 '000 p
----------------- ------- ---------- ---------- ------- ----------- ------
Basic loss per
share (226) 117,791 (0.19)p (180) 91,350 (0.20)
Diluted loss per
share (226) 117,791 (0.19)p (180) 91,350 (0.20)
The weighted average number of shares excludes 183,953 (2012:
183,953) shares held by the Employee Share Benefit Trust.
3. Operating Segments
Due to the acquisition in the prior year we have changed the way
we report internally and we now report on a geographical basis, we
have therefore restated the comparatives on this basis.
The Group has two main reportable segments based on the location
revenue is derived from:
Asia Pacific - This segment includes Australia, Hong Kong and
Singapore.
UK - The UK segment includes candidates placed in the UK and
Europe
These segments are monitored by the board of directors.
Factors that management used to identify the Group's reportable
segments
The Group's reportable segments are strategic business units
that although supplying the same product offerings, operate in
distinct markets and are therefore managed on a day to day basis by
separate teams.
Measurement of operating segment profit or loss, assets and
liabilities
The accounts policies of the operating segments are the same as
those described in the summary of significant accounting
policies.
The group evaluates performance on the basis of profit or loss
from operations before tax not including overhead costs incurred by
the head office such as plc AIM related costs not recharged,
exceptional items, amortisation and share based payments.
The board does not review assets and liabilities by segment.
Asia Pacific UK Total
2013 2013 2013
GBP'000 GBP'000 GBP'000
Revenue from external customers 3,794 12,866 16,660
Segment profit/loss before income tax (262) 329 67
The comparisons for 2012 include 5.5 months of Nakama from the
date of the acquisition:
Asia Pacific UK Total
2012 2012 2012
GBP'000 GBP'000 GBP'000
Revenue from external customers 1,654 11,644 13,298
Segment profit/loss before income tax (269) 469 200
Reconciliation of reportable segment profit to the Group's
corresponding amounts:
2013 2012
Profit or loss after income tax expense GBP'000 GBP'000
Total profit or loss for reportable segments 67 199
Exceptional item (68) (237)
PLC costs not cross charged (46) (68)
Amortisation of intangibles (156) (70)
Share based payments (16) (4)
Profit before income tax expense (219) (180)
Corporation taxes 7 -
Profit after income tax expense (226) (180)
The Group makes sales to Europe, Asia and Australasia. An
analysis of sales revenue by country is given below:
Revenue by country:
2013 2012
GBP'000 GBP'000
United Kingdom 11,683 9,473
Europe 1,191 2,171
Hong Kong 462 484
Singapore 228 -
Australia 3,104 1,170
16,668 13,298
Transactions with the Group's largest customer equates to 7 per
cent of the Group's revenue and relates to the UK segment (2012: 16
per cent).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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