TIDMNAK
RNS Number : 6708N
Nakama Group Plc
30 July 2014
For release at 07:00 on 30 July 2014
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 2014
Highlights
Financial
-- Group revenue increased by 5 per cent. to GBP17.5m (2013: GBP16.7m)
-- PBTAE* GBP56,000 (2013: GBP9,000)
-- Group loss before taxation GBP121,000 (2013: Loss GBP219,000)
-- Net fee income improved by 9 per cent. to GBP4.4m (2013: GBP4.0m)
-- Net fee income percentage increased to 25 per cent. (2013: 24 per cent.)
-- No dividend recommended, but a resumption in dividend payments will be kept under review
* PBTAE - Profit before tax, amortisation and exceptional items
(no exceptional items in the year (2013: GBP68,000)).
Operational
-- Global networks growing global client base creating increased blue chip clients
-- Contractors on client sites and permanent placements increased overall
-- Revenue across APAC region increased by 39 per cent. to GBP5.3m (2013: GBP3.8m)
-- Regional managing directors have been appointed in the Hong Kong and Singapore offices
Ken Ford, Chairman of Nakama, commented:
"Our stated strategy of expanding into our specialist areas
internationally is proving successful, but tough UK market
conditions have had an impact on UK profits. Digital media
recruitment both into agencies and into corporate global clients
continues to grow and Highams' traditional business of providing
technology, business and professional services staff to the
insurance and financial services sector remains firm.
With regard to APAC, 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.
We look to 2014/2015 as a year in which the improved economic
environment and a renewed and changing workforce will provide new
and exciting opportunities. We look forward to leveraging off our
specialism and brand and further developing our service offering
with existing and new clients."
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 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 in the UK, Asia and Australia.
The market conditions during the year under review were mixed,
with tough market conditions being experienced during 2013, but
with an improvement being seen at the start of 2014 with a more
active market and the level of staff requirements increasing.
Despite margins being under pressure during the period, they
pleasingly have held steady.
Financial Results
Group revenue for the year ended 31 March 2014 increased by 5
per cent. overall to GBP17.5m (2013: GBP16.7m). Net Fee Income
("NFI") improved on the prior period by 9 per cent. to GBP4.35m
(2013: GBP3.98m). Our NFI percentage improved slightly to 25 per
cent. (2013: 24 per cent), which is as a result of increased
permanent niche supply, though we saw UK revenue reduce in the
period to GBP12.2m from GBP12.9m due to a reduction in contractors
on site in the first half of the year. With increased staff costs
and related fees, this resulted in a reduced UK profit performance
to GBP157,000 from GBP329,000 in 2013.
As reported at the interim stage, we significantly increased our
revenue in APAC. With the recruitment of additional staff in the
region during the previous period, we are now starting to see some
of the rewards of this investment bear fruit in the year under
review. For APAC, this expansion delivered a 39 per cent. increase
in revenue to GBP5.3m compared to revenue in the prior period of
GBP3.8m. This performance now gives APAC a 30 per cent. share of
total Group revenue compared to 23 per cent. in the previous
year.
The strengthening of the pound has impacted the results in APAC,
particularly from Australian dollar exposure, and an exchange loss
of GBP94,000 was recorded, which is included in administrative
expenses and relates to intercompany debt currency translation,
which is a non cash item.
Operating profit before amortisation, tax and exceptional items
grew to GBP56,000 (2013: profit of GBP9,000) and as stated above,
the restructuring and investment in Australia and Hong Kong during
the previous year has had a very pleasing and positive impact on
the APAC region's performance. The Directors are not recommending
the payment of a final dividend for the year to 31 March 2014
(2013: nil), but a resumption in dividend payments will be kept
under review.
The Group invested in its IT infrastructure during the year
under review with computer equipment, software and a new version of
the Group's website. All offices are now using the same IT systems
and software and the Board anticipates that this will produce cost
savings and benefits of scale going forward. Headcount increased by
30 per cent. during the period to 68 staff across all the offices,
with the largest increase being seen in the Australian offices. We
expect our new hires to make a full contribution to increasing
revenue during the 2014/2015 period.
Board changes
We are very pleased to welcome Rob Sheffield (Managing Director
of Nakama APAC) and Paul Goodship (Managing Director of Nakama
London) who were appointed to the Board on 11 June 2013. Stefan
Ciecierski left the company on 7 May 2013.
Strategy
Our stated strategy of expanding into our specialist areas
internationally is proving successful, but tough UK market
conditions have had an impact on UK profits. Digital media
recruitment both into agencies and into corporate global clients
continues to grow and Highams' traditional business of providing
technology, business and professional services staff to the
insurance and financial services sector remains firm.
With regard to APAC, 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.
We look to 2014/2015 as a year in which the improved economic
environment and a renewed and changing workforce will provide new
and exciting opportunities. We look forward to leveraging off our
specialism and brand and further developing our service offering
with existing and new clients.
As well as developing our staff from within we are always
looking to recruit further excellent, driven individuals to enhance
the current team globally to meet the needs of our clients and the
delivery of our specialist services. We believe that the Nakama
Group offering and quality of our service is based upon our staff's
professional understanding and knowledge of our clients'
requirements and their markets.
We intend to concentrate on our strengths and we are focused on
growing each office organically to ensure we are making full use of
the infrastructure, which is now in place. We will continue to look
at other opportunities to grow, whether by acquisition of teams or
companies. Our Board remains very firmly aligned to our strategy
and goals, as we look to create more activity as a team, by
developing increased brand awareness and by solid client and
candidate focused delivery.
Executivesand Staff
The Company retains a strong team of very knowledgeable and long
serving staff and we look forward to continuing to build the 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.
Outlook
Trading in the first quarter of our financial year has improved
in terms of both Net Fee Income and profitability. Finding good
quality candidates is still challenging, but candidates are now
more willing to consider changing employers so as to progress their
careers and they also now have more opportunities to choose from.
We continue to focus on ensuring continuity of performance in each
office. The Board looks to the 2014/2015 year as one in which the
Group will benefit from a still improving market environment and
will work to increase revenue and profit performance from the
strengthened infrastructure and international offices now securely
in place.
Ken Ford
29 July 2014
Consolidated income statement
For the year ended 31 March 2014
2014 2013
GBP'000 GBP'000
=================================== =================== ================
Revenue 17,502 16,668
Cost of sales (13,149) (12,679)
=================================== =================== ================
Net fee income
Administrative expenses 4,353 3,989
=================================== =================== ================
Administrative costs excluding
exceptional items (4,429) (4,095)
Exceptional items - (68)
=================================== =================== ================
Total administrative expenses (4,429) (4,163)
=================================== =================== ================
Operating loss (76) (174)
Finance costs (45) (45)
=================================== =================== ================
Loss before tax (121) (219)
Tax expenses (81) (7)
=================================== =================== ================
Loss for the period attributable
to equity shareholders (202) (226)
=================================== =================== ================
Loss per share
Basic loss per share from
continuing operations (0.17)p (0.19)p
Diluted loss per share from
continuing operations (0.17)p (0.19)p
=================================== =================== ================
All of the above relate to
continuing operations.
Consolidated statement of comprehensive income
For the year ended 31 March 2014
2014 2013
GBP'000 GBP'000
--------------------------------------- -------- --------------
Loss for the year (202) (226)
Items that will or may be reclassified
to profit or loss
======================================= ======== ==============
Foreign currency translation
difference 44 25
======================================= ======== ==============
Total comprehensive loss for
the year attributable to equity
shareholders (158) (201)
======================================= ======== ==============
Consolidated statement of financial position
At 31 March 2014
Company number 1700310
2014 2013
GBP'000 GBP'000
===================================== =================== ===============
Assets
Non-current assets
Intangible assets 1,037 1,147
Property, plant and equipment 46 46
Deferred tax asset 226 301
===================================== =================== ===============
Total 1,309 1,494
Current assets
Trade and other receivables 3,206 2,843
Cash and cash equivalents 114 7
Total 3,320 2,850
===================================== =================== ===============
Total assets 4,629 4,344
===================================== =================== ===============
Current Liabilities
Trade and other payables (1,678) (1,796)
Borrowings (1,319) (764)
===================================== =================== ===============
Total (2,997) (2,560)
===================================== =================== ===============
Net Assets 1,632 1,784
===================================== =================== ===============
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 73 29
Retained earnings (2,652) (2,456)
===================================== =================== ===============
Total Equity Attributable to the
Shareholders of the Company 1,632 1,784
===================================== =================== ===============
Consolidated statement of changes in equity
As at 31 March 2014
Employee
Share Share Merger share Currency Retained Total
capital premium reserve benefit reserve earnings equity
GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
GBP'000
=============== =========== ============= ========== =============== ============= =============== ============
At 1 April 2012 1,602 2,580 90 (61) 4 (2,246) 1,969
Loss for the
year
and total
comprehensive
loss - - - - - (226) (226)
Other
comprehensive
income - - - - 25 - 25
--------------- ----------- ------------- ---------- --------------- ------------- --------------- ------------
Total
comprehensive
income for
2013 25 (226) (201)
Share based
payment
credit - - - - - 16 16
=============== =========== ============= ========== =============== ============= =============== ============
At 1 April 2013
Comprehensive
income
for the year 1,602 2,580 90 (61) 29 (2,456) 1,784
Loss for the
year - - - - - (202) (202)
Other
comprehensive
income - - - - 44 - 44
=============== =========== ============= ========== =============== ============= =============== ============
Total
comprehensive
loss for the
year - - - - 44 (202) (158)
=============== =========== ============= ========== =============== ============= =============== ============
Share based
payment
credit - - - - - 6 6
=============== =========== ============= ========== =============== ============= =============== ============
At 31 March
2014 1,602 2,580 90 (61) 73 (2,652) 1,632
=============== =========== ============= ========== =============== ============= =============== ============
Consolidated statement of cash flows
For the year ended 31 March 2014
2014 2013
GBP'000 GBP'000
=================================== =============== ===============
Operating activities
Loss for the year before
tax (121) (219)
Depreciation of property,
plant and equipment 35 40
Amortisation of intangible
assets 177 160
Net finance costs 45 45
Tax paid (6) (7)
Changes in trade and other
receivables (363) (303)
Change in trade and other
payables (117) (204)
=================================== =============== ===============
Net cash generated by operating
activities (350) (118)
=================================== =============== ===============
Cash flows from investing
activities
Purchase of property, plant
and equipment (35) (48)
Purchase of intangible assets (66) (9)
=================================== =============== ===============
Net cash generated by investing
activities (101) (57)
=================================== =============== ===============
Financing activities
Increase /(decrease) in
borrowings 555 (294)
Finance cost paid (45) (45)
=================================== =============== ===============
Net cash from financing activities 510 (339)
=================================== =============== ===============
Net changes in cash and cash
equivalents 59 (279)
Cash and cash equivalents,
beginning of year 7 279
Exchange losses, cash and
cash equivalent 48 7
=================================== =============== ===============
Cash and cash equivalents,
end of year 114 7
=================================== =============== ===============
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 2014 or 2013 as defined in section 434 of the Companies
Act 2006. Statutory accounts for the year ended 31 March 2013 have
been delivered to the Registrar of Companies and those for the year
ended 31 March 2014 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 2014 or 2013 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
2014 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
2014 2013
------- ---------- ---------- ------- ----------- ------
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 (202) 117,791 (0.17) (226) 117,791 (0.19)
Diluted loss per
share (202) 117,791 (0.17) (226) 117,791 (0.19)
The weighted average number of shares excludes 183,953 (2013:
183,953) shares held by the Employee Share Benefit Trust.
3. Operating Segments
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
2014 2014 2014
GBP'000 GBP'000 GBP'000
Revenue from external customers 5,287 12,215 17,502
Segment profit/loss before income tax 21 157 178
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
Reconciliation of reportable segment profit to the Group's
corresponding amounts:
2014 2013
Profit or loss after income tax expense GBP'000 GBP'000
Total profit or loss for reportable segments 178 67
Exceptional item - (68)
PLC costs not cross charged (116) (46)
Amortisation of intangibles (177) (156)
Share based payments (6) (16)
Profit before income tax expense (121) (219)
Corporation taxes 81 7
Profit after income tax expense (202) (226)
The Group makes sales to Europe, Asia and Australasia. An
analysis of sales revenue by country is given below:
Revenue by country:
2014 2013
GBP'000 GBP'000
United Kingdom 11,489 11,683
Europe 726 1,191
Hong Kong 499 462
Singapore 423 228
Australia 4,365 3,104
17,502 16,668
Transactions with the Group's largest customer equates to 4 per
cent of the Group's revenue and relates to the UK segment (2013: 7
per cent).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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