TIDMNAK
RNS Number : 4812R
Nakama Group Plc
28 October 2013
For release at 07:00 on 28 October 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, announces its interim
results for the six months ended 30 September 2013".
INTERIM RESULTS
Highlights
-- Revenue was stable at GBP8.63m (2012: GBP8.64m)
-- PBTAE* GBP61,235 (2012: GBP141,029)
-- Net fee income (NFI) rose by 3% to GBP2.13m, (2012: GBP2.08m)
-- NFI percentage increased to 25% (2012: 24%)
-- Permanent recruitment fees increased by 27% to GBP1.01m (2012: GBP800k)
-- Revenue across APAC region increased by 38%
-- London office Launched a new Marketing Interim Division
*PBTAE - Profit before tax, amortisation and exceptional
items.
Ken Ford, Chairman of Nakama, commented:
"Whilst trading conditions in the UK remain challenging, we have
pleasingly made some important strategic hires and increased our
ability to deliver within a broader set of digital markets. We
expect to continue to build on these foundations across the board
and grow net fee incomes over forthcoming trading periods".
"Furthermore, we have seen client growth across the APAC
regions, with increased demand in the media and technology spaces,
e-commerce, Search Engine Management /Search Engine Optimisation
(SEM/SEO) throughout the region. Pleasingly the digital market
continues to grow, as clients all look to expand their internal
capabilities".
"We are therefore optimistic for the second half and look
forward to meeting head on, what is still a challenging
marketplace, but one on which we feel we are strategically well
placed to capitalise".
Enquiries:
Ken Ford. Chairman Tel: 07884 313191
Nakama Group plc
Andrew Kitchingman Tel: 0113 394
Nick Field 6619
Tel: 0207 220
1658
W H Ireland
Tarquin Edwards Tel: 07879 458
364
Peckwater PR
Notes to Editors:
About Nakama Group plc
Nakama Group plc is a recruitment group of two branded solutions
placing people into specialist and management positions;
-- Nakama operates in the digital, creative, media, marketing
and technology sectors all over the world from offices in the UK,
Asia and Australia.
-- The Highams brand specialises in the Financial Services
sector, specifically Business Change and IT in Insurance and Wealth
Management currently in the UK and Europe.
Nakama Group plc was created in October 2011 through the merging
of Nakama ltd UK and its subsidiaries in Hong Kong, Sydney and
Melbourne and Highams Recruitment Limited part of (formerly Highams
Systems Services Group plc).
Since forming in 2011 the Group has opened an office in
Singapore for Digital, Creative, Media and Marketing
Our aim is to offer all our services from both our brands in all
our locations
CHAIRMANS' STATEMENT
Interim results
Introduction
Nakama provides a 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 interim results for the half-year to 30 September 2013, show
a stable revenue stream for the Group as a whole and a small
increase in Net Fee Income (NFI) for the period along with a small
loss.
We continue to work hard on hiring new staff into the teams in
all offices and at all levels, on the back of the increased level
of requirements from our existing and new clients since the
beginning of our financial year. Competition remains challenging,
both on hiring new staff internally and for clients alike and
candidates are still reluctant to change roles in the current
market.
Financials
We report steady revenue of GBP8.63m (2012: GBP8.64m) and a 3
per cent increase in Net fee income (NFI) to GBP2.13m (2012:
GBP2.08m). The NFI percentage improved on prior periods to average
25% compared to 24% at the year end and previous interims, which is
as a result of increased permanent placement fees overall.
As shown in the segmental analysis in note 3, we have increased
our revenue in the APAC region by 38%, although UK revenues have
decreased as a result of there being fewer contractors on site
compared to the first half of last year. Permanent revenue has
however pleasingly increased, which has led to the increased NFI
overall. Staff levels in APAC also rose as per our expectations and
whilst the UK staff levels have not increased overall, we have
hired new team members during the period.
Along with our international competitors the strengthening of
the pound, particularly over the last quarter has impacted the
results in APAC mainly from the Australian dollar exposure, and an
exchange loss of GBP47k, which is included in administrative
expenses and relates to intercompany debt currency translation,
which is a non cash item.
We are currently in line with our expectations for the first
half of the year and anticipate an improved second half. The Munich
office, which was small and unprofitable, was closed during the
period.
Outlook
APAC
The first half of this trading year in APAC has been positive.
We have continued to focus on our core objectives, namely business
development across the corporate and agency sector encompassing a
local, regional and global strategy. We aim to concentrate our
efforts on expanding new and existing client relationships,
cross-selling services globally, the continued hiring of staff in
key locations, the training and development of existing staff and
increasing the volume of business and conversion rates across the
business.
Mobile and advertising revenue has continued to grow alongside
visual and social media. We see social conversion becoming more
integrated and more multi-channel, which pushes the demand for
skills in this area. The need for skill sets in and around "big
data" is also a driver for increased demand across the region.
The market remains competitive with managed service providers
and internal recruiters continuing to provide competition across
the general recruitment market. Hiring issues do exist across APAC,
but these are not to do with mobility of talent, but rather with
local regions continuing to increase restrictions on external
hires. These restrictions make it difficult to fill highly skilled
roles where no local talent possess the skill set and we see this
situation as a continued challenge to growth across the recruitment
sector in APAC. However, with our global network of talent
expanding and with our continued drive to specialise and increase
headcount across the region, we are well positioned to continue to
grow revenue and NFI and build market share across the region.
UK
The first half of this year has seen growth in terms of internal
head count in the London office and NFI. Nakama London has also has
seen a significant uplift in temporary, freelance and contract
requirements issued by clients and we have become increasingly
efficient at converting these requirements, resulting in a positive
impact on billings.
We have launched a new Marketing Interim Division in London,
which has contributed to revenues in this period. This division is
primarily focused on building new commercial relationships with
blue-chip consumer brands within their digital and technology
teams, by providing high-value senior marketeers, who are required
to deliver an immediate impact to these organisations.
Permanent revenues in all markets have shown some improvement
and this is most notable within the Performance Marketing, Data and
Mobile and E-commerce sectors. We face competition from rival firms
in these areas, but with our established brand and a track record
of delivery, we will continue to profitably leverage off our brand
and competitive advantage.
Highams continues to specialise within the Insurance and
Financial Services verticals to provide our clients with the best
available talent for complex Business & IT Change and
Transformation programmes.
Our contractor services have seen a competitive first half of
the year, during which we have worked hard and successfully to
develop new accounts and to develop contract placement
opportunities, so as to grow our contractor numbers, which declined
following the end of client programmes last year.
Our strategy is paying off with new client wins in the Wealth
Management, London Market Insurance and the Life & Pensions
sectors. These in turn are generating contract opportunities and a
demand for high level strategic skills, in addition to the PMO,
Business / Systems Analysts, and Test Analysts, for which we are
known.
Summary
While trading conditions in the UK remain challenging, we have
pleasingly made some important strategic hires and increased our
ability to deliver within a broader set of digital markets. We
expect to continue to build on these foundations across the board
and grow net fee income over forthcoming trading periods.
Furthermore, we have seen client growth across the APAC regions,
with increased demand in the media and technology spaces,
e-commerce, SEM/SEO throughout the region. Pleasingly the digital
market continues to grow, as clients all look to expand their
internal capabilities.
We are therefore optimistic for the second half and look forward
to meeting head on, what is still a challenging marketplace, but
one on which we feel we are strategically well-placed to
capitalise.
Consolidated statement
of comprehensive income
for the six months ended 6 months 6 months 12 months
30 September 2013 to to to
30 Sep 30 Sep 31 Mar
2013 2012 2013
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Total Revenue 3 8,629 8,636 16,668
Cost of sales (6,496) (6,557) (12,679)
Gross profit 3 2,133 2,079 3,989
Administrative costs excluding
exceptional items (2,134) (1,974) (4,095)
Exceptional items - (68) (68)
---------------------------------- ----- ----------- ---------- ----------
Total administrative expenses (2,134) (2,042) (4,163)
Operating (loss)/profit (1) 37 (174)
Finance costs (24) (26) (45)
(Loss)/profit on ordinary
activities before taxation (25) 11 (219)
Tax expenses (6) - (7)
(Loss)/profit for the period
attributable to equity shareholders (31) 11 (226)
=========== ========== ==========
Basic (loss)/profit per
share (0.02) p 0.01 p (0.19) p
Diluted (loss)/profit per
share (0.02) p 0.01 p (0.19) p
Consolidated statement of
recognised income and expense
for the 6 months ended 6 months 6 months 12 months
30 September 2013 to to to
30 Sep 30 Sep 31 Mar
2013 2012 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ---------- ----------
(Loss)/profit for the period (31) 11 (226)
Exchange losses/gains arising
on translation of foreign
operations 19 (2) 25
---------------------------------- ----------- ----------
Total recognised income
and expense for the period
attributable to equity
shareholders (12) 9 (201)
----------- ---------- ----------
Statement of changes in equity
At 30 September 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 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 - - - 29 (226) (201)
------------------------- --------- --------- --------- --------- --------- ---------- --------
Share based payment
credit - - - - - 16 16
At 1 April 2013 1,602 2,580 90 (61) 29 (2,456) 1,784
------------------------- --------- --------- --------- --------- --------- ---------- --------
Total comprehensive
income to 30 September
2013 - - - - - (31) (31)
Other comprehensive
Income - - - - 19 - 19
At 30 September 2013 1,602 2,580 90 (61) 48 (2,487) 1,772
Consolidated balance
sheet
As at 30 September
2013
6 months 6 months 12 months
to to to
30 Sep 30 Sep 31 Mar
2013 2012 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 1,101 1,269 1,147
Property, plant
and equipment 34 48 46
Deferred tax asset 301 301 301
Total 1,436 1,618 1,494
--------------------------- ---------- ---------- ----------
Current assets
Trade and other
receivables 2,784 3,027 2,843
Cash and cash equivalents 139 20 7
Total 2,923 3,047 2,850
--------------------------- ---------- ---------- ----------
Total assets 4,359 4,665 4,344
--------------------------- ---------- ---------- ----------
Liabilities
Current liabilities
Trade and other
payables (1,741) (1,864) (1,796)
Borrowings (846) (823) (764)
Total (2,587) (1,288) (2,560)
--------------------------- ---------- ---------- ----------
Net assets/(liabilities) 1,772 1,978 1,784
--------------------------- ---------- ---------- ----------
Equity
Share capital 1,602 1,602 1,602
Share premium account 2,580 2,580 2,580
Merger reserve 90 90 90
Employee share benefit
trust reserve (61) (61) (61)
Currency reserve 48 2 29
Retained earnings (2,487) (2,236) (2,456)
Total equity 1,772 1,978 1,784
---------- ---------- ----------
Consolidated Cash Flow
Statement
As at 30 September 2013
6 months 12 months
6 months to to to
30 Sep 31 Mar
30 Sep 2013 2012 2013
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating activities
Profit /(loss)before taxation (25) 11 (219)
Depreciation of property,
plant and equipment 17 18 40
Amortisation of intangible
assets 86 77 160
Net finance costs 24 26 45
Tax paid (6) 0 (7)
Changes in trade and other
receivables 61 118 303
Changes in trade and other
payables (55) (191) (204)
------------
Net cash used in operating
activities 102 59 118
Cash flows from investing
activities
Purchase of property plant
and equipment (7) (25) (48)
Purchase of intangible
asset (40) (30) (9)
Net cash used in investing
activities (47) (55) (57)
------------ ---------- ----------
Financing activities
Increase/(decrease) in
borrowings 82 (235) (294)
Finance cost paid (24) (26) (45)
---------- ----------
Net cash from financing
activities 58 (261) (339)
------------ ---------- ----------
Net changes in cash and
cash equivalents 113 (257) (279)
Cash and cash equivalents,
beginning of period 7 279 279
Exchange losses, cash and
cash equivalent 19 (2) 7
Cash and cash equivalents
at end of period 139 20 7
------------ ---------- ----------
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 2014 and are unchanged from those disclosed in the
Group's Annual Report for the year ended 31 March 2013
The financial information for the six months ended 30 September
2013 and 30 September 2012 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 2013 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
2013 2012 2013
Unaudited Unaudited Audited
Weighted Weighted Weighted
average average average
number number number
of Loss of Profit of Loss
per per per
Loss shares share Profit shares share Loss shares share
GBP'000 '000 p GBP'000 '000 p GBP'000 '000 p
Basic earnings
per share (31) 117,791 (0.02) 11 117,791 0.01 (226) 117,791 (0.19)
Diluted earnings
per share (31) 123,762 (0.02) 11 121,749 0.01 (226) 121,749 (0.19)
3. Segmental Analysis
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 monitoredby 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 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 UK
Pacific Total
30 Sep 30 Sep
13 13 30 Sep13
GBP'000 GBP'000 GBP'000
Revenue from external
customers 2,638 5,991 8,629
--------- --------
Segment profit before
tax 5 155 160
--------- -------- ---------
Asia UK
Pacific Total
30 Sept 30 Sept 30 Sept
12 12 12
GBP'000 GBP'000 GBP'000
Revenue from external
customers 1,904 6,732 8,636
--------- --------
Segment (loss)/profit
before tax (9) 197 188
--------- -------- ---------
Reconciliation of reportable segment profit
to the Group's corresponding amounts:
30 Sept 13 30 Sept 31 Mar
12 13
Profit or loss after GBP'000 GBP'000 GBP'000
income tax expense
Total profit or loss
for reportable segments 160 188 67
Exceptional item 0 (68) (68)
PLC costs not cross
charged (99) (31) (46)
Amortisation of
intangibles (86) (78) (156)
Share based payments 0 0 (16)
----------- --------
(Loss)/profit before
income tax expense (25) 11 (219)
----------- -------- --------
Corporation taxes 6 - 7
----------- -------- --------
(Loss)/profit after
income tax expense (31) 11 (226)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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