TIDMNAK
RNS Number : 4105V
Nakama Group Plc
28 October 2014
For release at 07:00 on 28 October 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, Digital media, IT and Business Change sectors
announces its interim results for the six months ended 30
September 2014".
INTERIM RESULTS
Highlights
-- Revenue increased by 29% to GBP11.1 million (2013: GBP8.63 million)
-- Profit before tax increased substantially to GBP222,000 (2013: loss GBP25,000)
-- Net fee income (NFI) rose by 27% to GBP2.71 million (2013: GBP2.13 million)
-- NFI percentage stable at 25% (2013: 25%)
-- Permanent recruitment fees increased by 32% to GBP1.33 million (2013: GBP1.01 million)
-- Revenue across APAC region increased by 20% driven by the
continuing shortage of skilled talent within specialised
markets.
-- Revenue across UK increased by 32% following increased demand
for both contract and permanent business.
Ken Ford, Chairman of Nakama, commented:
"There is an increasing feeling of confidence in the digital
recruitment market at the moment, which is demonstrated by the
number of requirements released by both corporate and agency
clients being at a 5 year high."
"The Group has improved its financial position overall and begun
to generate some creditable momentum during the period under
review, despite a still challenging and competitive marketplace.
Looking forward, we are optimistic for the second half and expect
to continue to build on these foundations across the Group and
further grow net fee income over forthcoming trading periods."
- ENDS -
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
Liam Gribben Tel: 0113 394 6615
Peckwater PR Tel: 07879 458 364
Tarquin Edwards tarquin.edwards@peckwaterpr.co.uk
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 (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.
CHAIRMAN'S STATEMENT
Interim results
Introduction
Nakama provides a range of specialist recruitment services to
its clients, providing staff for the Web, Interactive, Digital
Media, IT and Business Change 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 2014 show
an increase in revenue for the Group as a whole and an increase in
both Net Fee Income (NFI) and profit for the period, with Nakama
benefiting from a strong performance across both contract and
permanent recruitment in the UK and from an especially strong
performance in Australia with permanent hiring.
Financials
The Group saw a 29 per cent increase in revenue of GBP11.1
million (2013: GBP8.63 million) and a 27 per cent increase in Net
Fee Income (NFI) to GBP2.71 million (2013: GBP2.13 million). The
NFI percentage remained stable on prior periods to average 25 per
cent over the past few years. We have continued to reduce our
borrowings on invoice discounting as anticipated, but this has had
a negative impact on cash flow for the period.
Segmental analysis shows that we have increased our revenue in
the APAC region by 20 per cent, and have grown our UK revenues by
32 per cent. Permanent revenue has again increased and this has led
to the increased NFI overall. Staff levels across the Group also
rose.
We are currently in line with our expectations for the first
half of the year and we anticipate the second half continuing to be
in line, provided that we remain focused on quality of service and
the professional delivery of our products, with a view to improving
revenues and NFI whilst growing our headcount and providing
industry specific training.
APAC
The first half of the year has seen growth in revenue, net
profit and head count across the APAC business, alongside the
launch of new service lines, which include data, analytics and
business change for technology. Our core aims though, encompass
continued investment in the training and development of our
existing staff, an increase in the volume of contractor and
permanent business and ensuring the continued increase in
conversion rates across the business.
One trend we have seen across the region is for larger
enterprises now to convert to digital business, whereas previously,
many had been slow to embrace new technology. Driving this trend
are technologies encompassing the analytics, mobile, cloud and
social media space, however the focus of change lies now on how
these technologies can be adopted to facilitate change in the next
generation of business enterprise and strategy.
We expect steady growth across the Asia and Australasia markets
over the next six months with the depth of specialisation being a
key differentiator for us. There is still a shortage of skilled
talent in our specialised market and we see this shortage
continuing, based on the speed of evolution in the digital
industry. The continued increase in restrictions on migrant workers
across the region will also prove a challenge.
We believe that our strategy of 'working local and thinking
global', through the pooling of talent from different geographies,
will stand us in good stead in the second half year, as we focus
the APAC operation on identifying new geographies to expand into.
The business will concentrate on our CRM, social and marketing
presence to identify new business opportunities and leads and we
will continue to monitor competitors and disruptors within our
industry. Recruitment across our space over the next six months
will see companies and organisations continue to embrace technology
in the way they conduct business and this will act as a catalyst in
the creation of new products, new markets and new areas of growth
and revenue. Our aim is to be at the forefront of this change,
despite the market remaining competitive with managed service
providers and internal recruiters challenging in the space.
UK
The UK financial sector has experienced increased demand for IT
and Change services, which mirrors the upturn in the UK economy
during the first half of the financial year. This increased demand
has improved the levels of both contract and permanent recruitment
across the board and we expect to see continued growth in our
markets. We also anticipate various legislative, regulatory and
digital changes in future periods to impact positively upon our UK
business. These include:
-- The latest changes to UK pensions for the over 55's, which
will have an impact on the technology required to deal with these
changes. Nakama hopes to benefit from the large scale change
projects, which are being driven across the sector. These will need
innovative solutions, which in turn will drive demand for
additional permanent and contract skills.
-- In line with these changes, the Wealth Management sector has
continued to be highly active for clients and includes reviews to
its strategic technology and business platforms so as to deliver
customer choice and satisfaction within a competitive market.
-- The implementation of Solvency 2 within the insurance markets
by January 2016 has prompted fresh activity to complete the
reporting challenges that many companies face and will lead to
calls for additional contract specialist to meet deadlines.
In the Digital arena, we have taken advantage of the rising
demand for advertising technology and specialist software
engineering skills across the corporate client base, as companies
invest in strengthening their in-house digital capabilities.
It is also expected that the upward trend will continue in
programmatic marketing, biddable (target specific and automated)
and media requirements across the temporary, contract and permanent
teams. The recently launched marketing contracts division is
particularly well placed to capitalise on the increasing demand in
these sectors, building on its strong performance in its core
business areas of performance marketing and analytics.
There is an increasing feeling of confidence in the digital
recruitment market at the moment, which is demonstrated by the
number of requirements released by both corporate and agency
clients being at a 5 year high. We have grown significantly in
recent periods and we will continue to increase our headcount to
meet the demand for recruitment services across the Marketing,
Design, Creative and Technology divisions.
Overall the outlook remains positive with good signs of on-going
requirements within our markets with new clients requiring
specialist knowledge from their recruitment partners, which fits
the Nakama customer offering.
Summary
The Group has improved its financial position overall and begun
to generate some creditable momentum during the period under
review, despite a still challenging and competitive marketplace.
Looking forward, we are optimistic for the second half and expect
to continue to build on these foundations and further grow net fee
income over forthcoming trading periods.
Ken Ford
Non-Executive Chairman
28 October 2014
Consolidated statement
of comprehensive income
for the six months ended 6 months 6 months 12 months
30 September 2014 to to to
30 Sep 30 Sep 31 Mar
2014 2013 2014
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Total Revenue 3 11,099 8,629 17,502
Cost of sales (8,388) (6,496) (13,149)
----------- ---------- ----------
Net Fee Income 2,711 2,133 4,353
Administrative costs (2,467) (2,134) (4,429)
----------- ---------- ----------
Operating profit/(loss) 3 244 (1) (76)
Finance costs (22) (24) (45)
----------- ---------- ----------
Profit/(loss) on ordinary
activities before taxation 222 (25) (121)
Tax expenses 2 (6) (81)
Profit/(loss) for the period
attributable to equity shareholders 224 (31) (202)
=========== ========== ==========
Basic Profit/(loss) per
share 0.19 p (0.02) p (0.17) p
Diluted Profit/(loss) per
share 0.19 p (0.02) p (0.17) p
Consolidated statement of
recognised income and expense
for the 6 months ended 6 months 6 months 12 months
30 September 2014 to to to
30 Sep 30 Sep 31 Mar
2014 2013 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ---------- ----------
Profit/(loss) for the period 224 (31) (202)
Exchange losses/gains arising
on translation of foreign
operations (9) 19 44
---------------------------------- ----------- ----------
Total recognised income
and expense for the period
attributable to equity
shareholders 215 (12) (158)
----------- ---------- ----------
Statement of changes in equity
At 30 September 2014
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 2013 1,602 2,580 90 (61) 29 (2,456) 1,784
Comprehensive income
for the year
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 1 April 2014 1,602 2,580 90 (61) 73 (2,652) 1,632
---------------------- --------- --------- --------- --------- ----------------------- ---------- --------
Income for the year - - - - - 224 224
Other comprehensive
income - - - - (9) - (9)
---------------------- --------- --------- --------- --------- ----------------------- ---------- --------
Total Comprehensive
income for the year (9) 224 215
---------------------- --------- --------- --------- --------- ----------------------- ---------- --------
Share based payment
credit 5 5
At 30 September 2014 1,602 2,580 90 (61) 64 (2,423) 1,852
Consolidated statement
of financial position
As at 30 September 2014
6 months 6 months 12 months
to to to
30 Sep 30 Sep 31 Mar
2014 2013 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 940 1,101 1,037
Property, plant and equipment 40 34 46
Deferred tax asset 226 301 226
Total 1,206 1,436 1,309
------------------------------- ---------- ---------- ----------
Current assets
Trade and other receivables 3,927 2,784 3,206
Cash and cash equivalents 194 139 114
Total 4,121 2,923 3,320
------------------------------- ---------- ---------- ----------
Total assets 5,327 4,359 4,629
------------------------------- ---------- ---------- ----------
Liabilities
Current liabilities
Trade and other payables (2,273) (1,741) (1, 678)
Borrowings (1,202) (846) (1,319)
Total (3,475) (2,587) (2,997)
------------------------------- ---------- ---------- ----------
Net assets/(liabilities) 1,852 1,772 1,632
------------------------------- ---------- ---------- ----------
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 64 48 73
Retained earnings (2,423) (2,487) (2,652)
Total equity 1,852 1,772 1,632
---------- ---------- ----------
Consolidated Cash Flow
Statement
As at 30 September 2014
6 months 12 months
6 months to to to
30 Sep 31 Mar
30 Sep 2014 2013 2014
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating activities
Profit /(loss)before taxation 222 (25) (121)
Depreciation of property,
plant and equipment 17 17 35
Amortisation of intangible
assets 96 86 177
Net finance costs 22 24 45
Tax paid 2 (6) (6)
Changes in trade and other
receivables (721) 61 (363)
Changes in trade and other
payables 595 (55) (117)
------------
Net cash used in operating
activities 233 102 (350)
Cash flows from investing
activities
Purchase of property plant
and equipment (10) (7) (35)
Purchase of intangible
asset - (40) (66)
Net cash used in investing
activities (10) (47) (101)
------------ ---------- ----------
Financing activities
Increase/(decrease) in
borrowings (117) 82 555
Finance cost paid (22) (24) (45)
---------- ----------
Net cash from financing
activities (139) 58 510
------------ ---------- ----------
Net changes in cash and
cash equivalents 84 113 59
Cash and cash equivalents,
beginning of period 114 7 7
Exchange losses, cash and
cash equivalent (4) 19 48
Cash and cash equivalents
at end of period 194 139 114
------------ ---------- ----------
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 2015 and are unchanged from those disclosed in the
Group's Annual Report for the year ended 31 March 2014, except that
in the current financial year, the Group had adopted a number of
revised standards and interpretations. However, none of these has
had a material impact on the Group's reporting.
The financial information for the six months ended 30 September
2014 and 30 September 2013 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 2014 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
2014 2013 2014
Unaudited Unaudited Audited
Weighted Weighted Weighted
average average average
number number number
of Profit of Loss of Loss
per per per
Profit shares share Loss shares share Loss shares share
GBP'000 '000 p GBP'000 '000 p GBP'000 '000 p
Basic earnings
per share 224 117,791 0.19 (31) 117,791 (0.02) (202) 117,791 (0.17)
Diluted earnings
per share 224 117,791 0.19 (31) 117,791 (0.02) (202) 117,791 (0.17)
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
14 14 30 Sep14
GBP'000 GBP'000 GBP'000
Revenue from external
customers 3,163 7,936 11,099
--------- --------
Segment profit before
tax 203 249 452
--------- -------- ---------
Asia UK
Pacific Total
30 Sept 30 Sept 30 Sept
13 13 13
GBP'000 GBP'000 GBP'000
Revenue from external
customers 2,638 5,991 8,629
--------- --------
Segment profit before
tax 5 155 160
--------- -------- ---------
Reconciliation of reportable segment
profit to the Group's corresponding amounts:
30 Sept 14 30 Sept 31 Mar
13 14
Profit or loss after GBP'000 GBP'000 GBP'000
income tax expense
Total profit or loss
for reportable segments 452 160 178
PLC costs not cross
charged (139) (99) (116)
Amortisation of
intangibles (86) (86) (177)
Share based payments (5) 0 (6)
----------- --------
profit/(loss) before
income tax expense 222 (25) (121)
----------- -------- --------
Corporation taxes 2 (6) (81)
----------- -------- --------
Profit/loss after
income tax expense 224 (31) (202)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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