TIDMNAK
RNS Number : 4597I
Nakama Group Plc
14 December 2020
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR"). With the publication of this announcement,
this information is now considered to be in the public domain.
14 December 2020
Nakama Group plc
("Nakama" or the "Group")
UNAUDITED HALF YEAR RESULTS
Nakama Group plc (AIM: NAK), the AIM quoted recruitment
consultancy working across UK and Asia, providing recruitment
services for the web, interactive, digital media, IT and business
change sectors, announces its half year report for the six months
ended 30 September 2020.
Overview
-- The Group has experienced unprecedented trading conditions in
H1 2020 due to the impact of the COVID 19 pandemic
-- Net fee income ("NFI") of GBP0.83m (H1 2019: GBP1.5m)
-- Permanent placement revenues of GBP0.49m (H1 2019: GBP1m)
-- Contractor revenues were GBP2.65m (H1 2019: GBP3.7m)
-- Overall headcount reduced by 31% to 27, reducing the Company's cost base
-- Loss before tax of GBP99k (H1 2019: profit of GBP20k)
-- The Group has taken advantage of various government support
schemes in the UK and elsewhere but has failed to raise additional
capital (debt or equity) to allow the business to continue trading
in the medium term
-- Proposed sale of the Company's operating businesses to
Sanderson Group announced on 9 December 2020
Robert Thesiger, Chief Executive Officer of Nakama Group,
commented: "2020 has been an unprecedented year with the onset of a
global pandemic and as such the business has seen a marked decrease
in trading across all of its geographical locations. The health and
safety of all our staff and clients has been of paramount
importance and I would like to thank all our staff for their
sterling efforts during this time"
"On 9 December we announced the sale of our trading businesses
to Sanderson and this will allow them to grow under a
well-capitalised parent. I believe this disposal is in the best
interests of our clients and staff. Nakama will, should the
proposed disposal be approved by shareholders, become an AIM cash
shell and we will update shareholders on our plans in due
course."
Enquiries:
Nakama Group plc www.nakamaglobal.com
Robert Thesiger, Chief Executive
Officer 01883 341 144
Tim Sheffield, Chairman 020 7236 2400
Allenby Capital Limited (Nominated
Adviser & Broker) www.allenbycapital.com
Nick Naylor / Liz Kirchner 020 3328 5656
About Nakama Group plc:
Chief Executive's review
Nakama Group plc (AIM: NAK) is a recruitment consultancy which
places people into specialist and management positions in the
digital, data, creative, media, marketing and technology
disciplines with offices in the UK and Asia. The UK operation also
specialises in the insurance and wealth management sectors,
specifically in business change and IT, through the brand Highams
Recruitment.
The Group's speciality is finding excellent career opportunities
and assignments for senior digital, IT, business and professional
services talent. The team at Nakama seek to 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 need
of its clients.
Nakama Group plc was created in October 2011 through the
acquisition of Nakama Ltd UK and its subsidiaries in Hong Kong,
Singapore and Sydney by AIM listed Highams Systems Services Group
plc.
The onset of COVID 19 has had an immediate impact on the group
and has seen our trading decline accordingly. As a business we took
immediate and decisive action which saw us take advantage of the
various government support schemes. We immediately implemented a
working from home strategy and reduced our cost base in line with
our reduced levels of trading.
In the UK the proposed changes to IR35 (since revised) also had
a big impact on our contractor business and the deferral of these
changes came too late. As a result, our UK contractor business
declined.
2020 has been an incredibly challenging year, however, I am very
proud of the way we have met these challenges and continued to
trade. We have recently announced a sale of our trading businesses
to Sanderson Group as it has become increasingly clear that without
an injection of capital the Group may not be able to continue to
trade. Further details of the proposed disposal are set out in a
circular sent to shareholders on 10 December 2020. Should the
proposed disposal, which is subject to shareholder approval,
proceed the Company will become an AIM Rule 15 cash shell. As such,
the Company , will either be required to make an acquisition or
acquisitions constituting a reverse takeover under AIM Rule 14 on
or before the date falling six months from the date of becoming a
cash shell or be re-admitted to trading on AIM as an investing
company under the AIM Rules (which requires the raising of at least
GBP6 million) failing which, Nakama's Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM would be cancelled six months from the date of any
suspension should the suspension not have been lifted
beforehand.
Robert Thesiger
Chief Executive Officer
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the six months to
30 September 2020 6 Months 6 Months Year ended
to to
30 Sep 20 30 Sep 19 31 Mar 20
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 3,139 4,767 9,719
Cost of sales (2,307) (3,237) (6,805)
------------------- --------------- ---------------------
Net Fee Income 832 1,530 2,914
------------------- --------------- ---------------------
27% 32% 31%
Administrative cost (928) (1,503) (3,125)
------------------- --------------- ---------------------
Operating profit (96) 27 (211)
Finance costs (3) (7) (14)
Exceptional item - - 82
---------------
Profit on ordinary activities
before taxation (99) 20 (143)
------------------- --------------- ---------------------
Tax expense - (8) (8)
------------------- --------------- ---------------------
Profit for the period
attributable to equity
shareholders (99) 12 (151)
=================== =============== =====================
(Loss)/Profit per share
Basic and diluted profit
per share from continuing (0.13)
operations (0.08) p 0.01 p p
CONSOLIDATED STATEMENT OF RECOGNISED
INCOME AND EXPENSE
For the six months to 30 September 6 Months 6 Months Year ended
2020 to 30 Sep to 31 Mar
20 30 Sep 20
19
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit for the period (99) 12 (151)
Foreign currency translation
difference (2) (6) 36
----------- ---------- -----------
Total recognised income and
expense for the period attributable
to equity shareholders (101) 6 (115)
----------- ---------- -----------
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
As at 30 September 2020
Employee Currency Retained
share reserve earnings
Share Share Merger benefit Total
capital premium reserve reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 1,602 2,580 90 (61) 5 (4,014) 202
---------------------------- --------- --------- --------- --------- --------- ---------- --------
Profit for the year - - - - - (151) (151)
Other comprehensive Loss - - - - 36 - 36
---------------------------- --------- --------- --------- --------- --------- ---------- --------
Total Comprehensive loss
for the year - - - - 36 (151) (115)
--------- --------- ---------- --------
At 31 March 2020 1,602 2,580 90 (61) 41 (4,165) 87
At 1 April 2019 1,602 2,580 90 (61) 5 (4,014) 202
---------------------------- --------- --------- --------- --------- --------- ---------- --------
Profit for the year - - - - - 12 12
Other comprehensive Loss - - - - (6) - (6)
Total Comprehensive loss
for the year - - - - (1) 12 6
---------------------------- --------- --------- --------- --------- --------- ---------- --------
At 30 Sept 2019 1,602 2,580 90 (61) 41 (4,002) 208
At 1 April 2020 1,602 2,580 90 (61) 41 (4,165) 87
---------------------------- --------- --------- --------- --------- --------- ---------- --------
Profit for the six months - - - - - (99) (99)
Other comprehensive Income - - - - 2 - 2
Total Comprehensive profit
for the 6 months - - - - 2 (99) (97)
---------------------------- --------- --------- --------- --------- --------- ---------- --------
At 30 September 2020 1,602 2,580 90 (61) 43 (4,264) (9)
---------------------------- --------- --------- --------- --------- --------- ---------- --------
Consolidated balance sheet
As at 30 September 2020
30 Sep 2019 31 Mar
30 Sep 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current Assets
Property, plant and equipment 13 17 13
Deferred Tax asset 18 18 18
------------------------------- ------------- ------------ --------
Total 31 35 31
Current assets
Trade and other receivables 771 1,677 1,497
Cash and cash equivalents 253 8 190
Total 1,024 1,685 1,687
------------------------------- ------------- ------------ --------
Total assets 1,055 1,720 1,718
------------------------------- ------------- ------------ --------
Liabilities
Current Liabilities
Trade and other payables (770) (991) (830)
Borrowings (294) (521) (801)
Total (1,064) (1,512) (1,631)
------------------------------- ------------- ------------ --------
Net assets (9) 208 87
------------------------------- ------------- ------------ --------
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 (61) (61) (61)
Currency reserve 43 12 41
Retained earnings (4,264) (4,015) (4,165)
-------------------------------
Total equity (9) 208 87
------------------------------- ------------- ------------ --------
CONSOLIDATED STATEMENT OF CASH
FLOWS
to 30 September 2020
6 months 6 months Year ended
to to 31 Mar 2020
30 Sep 2020 30 Sep 2019 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit before taxation (99) 20 (143)
Depreciation of property, plant
and equipment 2 4 8
Net finance costs 3 7 14
Tax credit/(paid) - (8) (8)
Decrease/(Increase) in trade and
other receivables 726 (78) 102
Decrease in trade and other payables (57) (160) (321)
---------------- ---------------- ----------------
Net cash generated by operating
activities 575 (215) (129)
------------------------------------------ ---------------- ---------------- ----------------
Cash flows from investing activities
Purchase of property plant and
equipment - (13) (13)
---------------- ---------------- ----------------
Net cash outflow from investing
activities - (13) (13)
------------------------------------------ ---------------- ---------------- ----------------
Financing activities
(Decrease)/Increase in borrowings (507) 83 363
Finance cost paid (3) (7) (14)
---------------- ---------------- ----------------
Net cash outflow from financing
activities (510) 76 349
------------------------------------------ ---------------- ---------------- ----------------
Net changes in cash and cash equivalents 65 (152) (12)
Cash and cash equivalents, beginning
of year 190 166 166
Effect of foreign exchange rate
movements (2) (6) 36
---------------- ---------------- ----------------
Cash and cash equivalents at end
of period 253 8 190
------------------------------------------ ---------------- ---------------- ----------------
Notes to the Interim Report
1. Basis of Preparation
This unaudited consolidated interim financial information has
been prepared in accordance with International Accounting Standards
and International Financial Reporting Standards as issued by the
International Accounting Standards Board and adopted by the EU. It
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 2021. The
comparative financial information for the half year ended 30
September 2019 has not been audited.
A copy of the full year audited statutory financial statements
for the year ended 31 March 2020 has been finalised and is due to
be delivered to the Registrar of Companies in advance of the
reporting deadline. The auditors' report on those accounts was
unqualified, with a Material Uncertainty Related to Going Concern
paragraph and did not contain a statement under Section 498(2) or
Section 498(3) Companies Act 2006.
AIM-quoted companies are not required to comply with IAS34
'Interim Financial Reporting' and the Company has taken advantage
of this exemption.
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. Going concern
The directors have recently announced the sale of the Group's
trading businesses to Sanderson Group as it has become increasingly
clear that without an injection of capital the Group may not be
able to continue to trade. Further details of the proposed sale are
set out in a circular sent to shareholders on 10 December 2020.
Should the proposed sale proceed, which is subject to shareholder
approval, the Company will become an AIM Rule 15 cash shell. As
such, the Company will either be required to make an acquisition or
acquisitions constituting a reverse takeover under AIM Rule 14 on
or before the date falling six months from the date of becoming a
cash shell or be re-admitted to trading on AIM as an investing
company under the AIM Rules (which requires the raising of at least
GBP6 million) failing which, the Ordinary Shares would then be
suspended from trading on AIM pursuant to AIM Rule 40. Admission to
trading on AIM would be cancelled six months from the date of any
suspension should the suspension not have been lifted
beforehand.
Should the sale of the trading businesses not proceed, the
directors believe that without additional funding and a material
improvement in market conditions it will not be possible to grow
the trading businesses further or to maintain the Group as a going
concern. Should the sale of the Trading Businesses not proceed, the
Directors believe they will be forced to take steps to protect the
interests of the Group's creditors. However, the directors are
confident that the proposed sale will proceed and subsequently the
Company will make an acquisition and therefore they continue to
adopt the going concern basis of accounting in preparing the
financial statements.
3. Earnings per share
Basic earnings per share are calculated by dividing the profit
for the Period attributable to the shareholders by the weighted
average number of shares in issue. The calculation of diluted
earnings per share takes into account the potentially diluting
effect of share options.
6 months 6 months Year ended
to to 31 Mar 2020
30 Sep 2020 30 Sep 2019 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Earnings
Net (loss) attributable to equity
shareholders (99) 12
---------------- ---------------- ----------------
Number of shares Number '000 Number '000 Number '000
Weighted average number of ordinary
shares 177,791 177,791 177,791
Earnings per share p p p
Basic (0.08) 0.01 (0.13)
Number '000 Number '000 Number '000
Diluted effect of shares options 2,235 2,235 2,235
Weighted average number of ordinary
shares for the purposes of dilutive
earnings per shares
Diluted earnings per share * p p p
Diluted - 0.01 -
---------------------------------------- ---------------- ---------------- ----------------
* No diluted earnings per share is shown where the effect would
be anti-dilutive.
4. Segmental Analysis
The Group has 2 main reportable segments based on the location from
which revenue is derived:
Asia Pacific - This segment includes Hong Kong and Singapore.
UK - The segment includes candidates placed in the UK.
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 offering, 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 Total
30 Sep 2020 30 Sep 2020 30 Sep 2020
GBP'000 GBP'000 GBP'000
Revenue from external customers 415 2,724 3,139
------------- ------------
Segment loss before tax (211) 112 (99)
------------- ------------ ------------
Asia Pacific UK Total
30 Sept 30 Sept 19
19 30 Sept 19
GBP'000 GBP'000 GBP'000
Revenue from external customers 884 3,883 4,767
------------- ------------
Segment profit/(loss) before
tax (3) 15 12
------------- ------------ ------------
Asia Pacific UK Total
31 Mar 20 31 Mar 20 31 Mar 20
GBP'000 GBP'000 GBP'000
Revenue from external customers 1,626 8,093 9,719
------------- ------------
Segment profit/(loss) before
tax 100 74 174
------------- ------------ ------------
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