TIDMNAK
RNS Number : 7418X
Nakama Group Plc
28 November 2017
28 November 2017
Nakama Group plc (AIM: NAK)
("Nakama" or the "Group")
Half-Year Report
Nakama Group plc, the AIM quoted recruitment consultancy working
across UK, Europe, Asia, North America and Australia providing
recruitment and related services for the web, interactive, digital
media, IT and business change sectors, announces its half year
report for the six months ended 30 September 2017.
Highlights
-- Net fee income ("NFI") of GBP2.7 million (2016: GBP2.9 million)
-- Permanent placement revenue increased by 11 per cent to
GBP1.7 million (2016: GBP1.5 million)
-- Contractor revenue decreased by 30% to GBP6.5 million (2016: GBP9.2 million)
-- Loss before tax GBP437,000 (2016: loss GBP63,000)
Angus Watson, CFO and interim CEO of Nakama, commented:
"The results for the first six months are disappointing and it
has taken longer than expected to see the benefits from the changes
to the business that have taken place in past months. The
restructuring of the Group though is now almost complete and we are
in a better position going forward and are able to feel more
confident about the future.
"In June 2017, we announced the substantial investment by
Sheffield Haworth into the share capital of the Group.
Collaboration with Sheffield Haworth is continuing to develop and
beginning to unlock opportunities that were formerly closed to us.
In addition, we continue to concentrate our efforts on mitigating
any slowdown in contractor revenue with a focus on tighter cost
control, higher margin work and an increase in permanent placement
revenues. To this end, we are therefore optimistic of a better
second half and of being able to report a turnaround in the
results."
-S-
For further enquiries please contact:
Nakama Group plc www.nakamaglobal.com
Angus Watson, CFO and interim Tel: 01883 341 144
CEO
WH Ireland Limited (Nomad
and Broker) Tel: 0113 394 6600
Tim Feather
James Sinclair-Ford
Peckwater PR
Tarquin Edwards Tel: 07879 458 364
tarquin.edwards@peckwaterpr.co.uk
NOTES TO EDITORS
About Nakama Group plc
Nakama Group plc is the AIM-quoted recruitment consultancy which
places people into specialist and management positions; the Nakama
businesses operate in the digital, data analytics, creative, media,
marketing and technology sectors all over the world from offices in
the UK, Asia, US and Australia. The UK also specialises in the
financial services sector, specifically business change and IT, for
the insurance and investment management sectors.
The Group's speciality is finding excellent career opportunities
and assignments for senior digital, IT, business and professional
services talent. Nakama staff seek to consistently develop their
relationships and networks to ensure the Group obtains the best
available positions for such talent, whilst ensuring that the
skills and personalities of its staff are compatible with the needs
of its clients.
Nakama staff work hard to develop and maintain long-term
relationships with their clients, contractors and applicants. To do
this, the Group focuses on the development and retention of
experienced staff to ensure they are among the most knowledgeable
in the industry, both in terms of recruitment best practice and for
the niche markets in which the Company operates.
CHIEF EXECUTIVE OFFICER'S STATEMENT
I present the unaudited results of Nakama Group plc for the
first six months to 30 September 2017. The first half year showed a
loss before tax of GBP437,000 (2016: loss GBP63,000) on turnover of
GBP8.25 million (2016: GBP10.86 million).
Financial results
The Group revenue of GBP8.25 million shows a decrease of 24 per
cent from the prior period. This decrease was entirely due to a
reduction in contractor revenues. In APAC, performance was impacted
following a large contract coming to an end and in the UK, we
experienced a softer contracting market as technology has reduced
the need for multiple contractors. Permanent revenue however of
GBP1.75 million was up substantially by 11 per cent from the
GBP1.58 million achieved last year and our efforts to grow this
permanent placement side of our business have been largely
successful, as we sought to close the gap caused by a softening in
the contracting market.
Segmental analysis shows that revenue in the APAC region of
GBP3.05 million dropped by GBP1.24 million, representing a 28.9 per
cent fall on the GBP4.3 million revenue achieved last year. This
impact was almost entirely due to the cancellation of a contract
that was starting to become uneconomic to the Sydney business and
as a result, the APAC business moved from a local profit of
GBP139,999 in 2016 to a loss of GBP257,000 for this year.
.
Net Fee Income ("NFI") for the first six months was GBP2.72
million compared to GBP2.89 million last year. The reduction in
contractor revenue was mitigated somewhat by higher margin work and
an increase in permanent placement revenues.
Administrative costs for the Group increased 7 per cent from
GBP2.93 million last year to GBP3.13 million. GBP0.1m of the
increase related to an adverse foreign exchange variance.
Our markets
Market conditions in the period became softer for some of our
APAC businesses. This has been addressed by a focus on new service
lines within APAC and in the other business units. The Highams
business in the UK and the Hong Kong businesses continue to perform
well.
Board changes
On 13 September 2017, we announced the resignation of the CEO,
Rob Sheffield, with immediate effect. Rob was a founding partner of
Nakama and had been CEO since August 2015. The Board has asked me
to act as interim CEO. I have since conducted a review of the
operating divisions and their markets and have identified a number
of areas where we could improve performance and to that end, I have
implemented a process of change.
Outlook
After a period of reorganisation, we are now in a better
position going forward and feel more confident about the future. On
26 June 2017, we announced the acquisition by Sheffield Haworth of
24.1% of the issued share capital of the Group. Collaboration with
Sheffield Haworth is continuing to develop and is unlocking markets
that were formerly closed to us. Tim Sheffield (no relation) has
joined the Board as a non-executive director and is helping us to
re-establish the long-term potential of Nakama. In addition, we
continue to concentrate our efforts on mitigating any slowdown in
contractor revenue with a focus on higher margin work and an
increase in permanent placement revenues. To this end, we are
therefore optimistic of a better second half and of being able to
report a turnaround in the results.
Angus Watson
CFO and interim CEO
28(th) November 2017
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the six months to 30 September 6 Months 6 Months 12 Months
2017 to to to
30 Sep 30 Sep 31 Mar
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 8,255 10,864 22,519
Cost of sales (5,538) (7,968) (16,326)
Net Fee Income 2,717 2,896 6,193
Administrative costs (3,135) (2,930) (6,404)
Operating (loss)/profit (418) (34) (211)
Net finance cost (19) (29) (59)
Profit/(loss) on ordinary activities
before taxation (437) (63) (270)
Tax expense/credit (0) (0) (82)
Loss for the period attributable
to equity shareholders (437) (63) (352)
========== ========== ==========
Loss per share
Basic and diluted profit per
share from continuing operations (0.36)p (0.05)p (0.25)p
CONSOLIDATED STATEMENT OF RECOGNISED INCOME
AND EXPENSE
For the six months to 30 September 6 Months 6 Months 12 Months
2017 to to to
30 Sep 30 Sep 30 Mar
2017 2016 2017
GBP'000 GBP'000 GBP'000
---------- ---------- ----------
Loss/(profit) for the period (437) (63) (352)
Exchange gains/(losses) arising
on translation of foreign operations (107) (87) (30)
----------
Total recognised income and
expense for the period attributable
to equity shareholders (544) (150) (382)
---------- ---------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 September 2017
Employee
Share Share Merger share 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 2016
Comprehensive
income
for the year 1,602 2,580 90 (61) 56 (2,471) 1,796
Loss for the year (352) (352)
Other comprehensive
income (30) (30)
Total comprehensive
loss for the year (30) (352) (382)
-------------------- --------- --------- --------- --------------- --------- ---------- -----------
At 1 April 2017
Comprehensive
income
for the year 1,602 2,580 90 (61) 26 (2,823) 1,414
Loss for the period (437) (437)
Other comprehensive
income (107) (107)
-------------------- --------- --------- --------- --------------- --------- ---------- -----------
Total comprehensive
loss for the
period (107) (437) (544)
At 30 September
2017 1,602 2,580 90 (61) (81) (3,260) 870
-------------------- --------- --------- --------- --------------- --------- ---------- -----------
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 30 September 2017
6 months 6 months 12 months
to to to
30 Sep 30 Sep 31 Mar
2017 2016 2017
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 0 114 37
Property, plant and equipment 62 100 86
Goodwill 487 487 487
Deferred tax asset 85 108 84
------------------------------------- ---------- ---------- ----------
Total 634 809 694
Current assets
Trade and other receivables 2,816 3,917 3,885
Cash and cash equivalents 236 383 259
Total 3,052 4,300 4,144
------------------------------------- ---------- ---------- ----------
Total assets 3,686 5,109 4,838
------------------------------------- ---------- ---------- ----------
Current liabilities
Trade and other payables (1,816) (2,170) (1,953)
Borrowings (1,000) (1,293) (1,471)
---------- ---------- ----------
Total current liabilities (2,816) (3,463) (3,424)
------------------------------------- ---------- ---------- ----------
Net assets 870 1,646 1,414
------------------------------------- ---------- ---------- ----------
Equity
Ordinary shares 1,602 1,602 1,602
Share premium 2,580 2,580 2,580
Merger reserve 90 90 90
Employee share benefit trust
reserve (60) (61) (61)
Currency reserve (81) (31) 26
Retained earnings (3,260) (2,534) (2,823)
Total equity 870 1,646 1,414
------------------------------------- ---------- ---------- ----------
CONSOLIDATED STATEMENT
OF CASH FLOWS
For the six month period ended 30
September 2017
6 months 6 months 12 months
to to to
31 Sep 31 Mar
30 Sep 2017 2017 2016
Unaudited Audited Audited
GBP'000 GBP'000 GBP'000
Cash flows from
operating
activities
Profit before
taxation (437) (63) (270)
Depreciation of property,
plant and equipment 33 16 80
Amortisation of
intangible
assets 37 79 156
Net finance costs 19 29 59
Tax paid 0 - (1)
Foreign exchange (107) (87) (127)
Changes in trade and other
receivables 1,068 (503) (445)
Change in trade and other
payables (137) 322 105
Net cash generated in
operating activities 476 (207) (443)
------------------------- ------------- --------- ----------
Cash flows from
investing
activities
Purchase of property
plant and equipment (9) (9) (45)
Net cash generated in
investing activities (9) (9) (45)
------------------------- ------------- --------- ----------
Financing activities
Increase/(decrease)
in borrowings (471) 46 224
Finance cost paid (19) (29) (59)
Net cash from
financing
activities (490) 17 165
----------------------- ------------- --------- ----------
Net changes in cash
and cash equivalents (23) (199) (323)
Cash and cash
equivalents,
beginning of year 259 582 582
Cash and cash
equivalents
at end of period 236 383 259
------------------------- ------------- --------- ----------
Cash and cash equivalents for the purposes of the statement
of cash flows comprises:
Cash and cash
equivalents 236 383 259
Bank overdrafts 0 0 0
236 383 259
--------------------- ------------- --------- ----------
Notes to the Interim Report
1. Basis of Preparation
This unaudited consolidated interim financial information has
been prepared in accordance with Financial Reporting Standard 100
Application of Financial Reporting Requirements ("FRS100") and
Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS
101"). September 2017 is unaudited and does not constitute the
Group's statutory financial statements for those periods. The
principal accounting policies used in preparing the interim results
are those the Group expects to apply in its financial statements
for the year ending 31 March 2018. The comparative financial
information for the full year ended 31 March 2017 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. Loss per share
6 months 6 months
to 30 to 30 12 Months
Sep Sep to 31
2017 2016 March
Unaudited Unaudited 2017Audited
Weighted Weighted Weighted
average Average average
number number number
of Loss of Loss of Loss
per per per
Loss shares share Loss shares share Loss shares share
GBP'000 '000 p GBP'000 '000 p GBP'000 '000 p
Basic and
diluted
loss per
share (437) 117,791 (0.36) (63) 117,791 (0.05) (296) 117,791 (0.25)
3. Segmental Analysis
The Group has three main reportable segments based
on the location from which revenue is derived:
Asia Pacific - This segment includes Australia,
Hong Kong and Singapore.
UK - The UK Segment includes candidates placed
in the UK.
USA -This consist of the New York operation.
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 very similar service
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, head office costs and
amortisation.
The Board does not review assets and liabilities by segment.
Asia Pacific UK USA Total
30 Sep 17 30 Sep 17 30 Sep 17 30 Sep 17
GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external customers 3,055 5,196 4 8,255
------------- ----------
Segment loss before tax (257) (28) (32) (317)
Asia Pacific UK USA Total
30 Sep 16 30 Sep 16 30 Sep 16 30 Sep 16
GBP'000 GBP'000 GBP'000 GBP'000
Revenue from external customers 4,297 6,533 34 10,864
------------- ----------
Segment profit/(loss) before tax 139 (12) (54) 73
------------- ---------- ---------- ----------
Reconciliation of reportable segment profit/(loss)
to the Group's corresponding amounts:
30 Sep 17 30 Sep
16
Profit or loss after GBP'000 GBP'000
income tax expense
Total profit or loss
for reportable segments (317) 73
PLC costs not cross
charged (restated) (37) (30)
Amortisation of intangibles (83) (106)
Loss before income tax
expense (437) (63)
------------- --------
Corporation taxes - -
------------- --------
Loss after income tax
expense (437) (63)
------------- --------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKFDNDBDDADB
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