TIDMRTC
RNS Number : 5998D
RTC Group PLC
18 May 2012
RTC Group Plc ("RTC", "the Company" or "the Group")
Preliminary results for the year ended 31 December 2011
RTC Group Plc, a support services group, which provides
recruitment and conferencing services, is pleased to announce its
preliminary results for the year ended 31 December 2011.
HIGHLIGHTS
- Group revenue from continuing operations of GBP29.5m (2010: GBP19.6m)
- Group operating loss from continuing operations before
exceptional items of GBP87,000 (2010: GBP492,000)
- Loss for the year attributable to equity holders of GBP611,000 (2010: GBP958,000)
- Loss per share from continued and discontinued operations of 5.10p (2010: 10.62p)
- Dividends the Board believes that it would not be prudent to
use financial resources to declare a final dividend at this time
(2010: nil)
- Recruitment made an operating profit before exceptional items
of GBP211,000 (2010: GBP210,000)
- Conferencing made an operating profit of GBP35,000 (2010: loss GBP277,000)
Commenting on the results Bill Douie, Chairman, said:
"Our strategic plan has identified significant opportunities to
build on our expertise in managed service operations globally, in
development of our presence in India, in the services to SME
industrial clients through our branch network in England and in
labour supply in the UK. Implementation of the management
development and re-structuring programme has given us a team
capable of pursuing those opportunities."
ENQUIRIES:
RTC Group Plc Tel: 01332 861 844
Bill Douie, Executive Chairman
Andy Pendlebury, Chief Executive
Allenby Capital Limited Tel: 020 3328 5656
Jeremy Porter, Corporate Finance
Mark Connelly, Corporate Finance
Chairman's Statement
I am pleased to present the final report for the year ended
31(st) December 2011.
GROUP
2011 has been the first complete year when the Group has traded
in its new reorganised structure. Although the Derby Conference
Centre is not an obvious core business in a recruitment company it
is a sound and profitable business and serves to provide, in
addition, a Head Office for the Group. All other businesses in the
Group are involved in Recruitment and fall into three divisions: UK
white collar recruitment, International Managed Service and UK
labour supply.
TRADING
ATA Recruitment Limited
UK white collar recruitment provides personnel, both permanent
and contract, mainly to industrial clients in vertical markets
through our premises in the Derby Conference Centre and to the SME
industrial market through six UK branches. Both markets have
continued to make steady progress. In the period under review,
revenues were up 16% at GBP15.825m, generating an operating profit
of GBP357,000 (2010 : GBP15,000)
International Managed Service has continued to expand its
operations in NATO premises in Afghanistan. Revenues in 2011 were
up 221% at GBP7,088m but significant operating difficulties during
a period of rapid turnover increases resulted in an operating loss
of (GBP66,000) (2010 : profit GBP169,000). All of the operational
problems have now been eliminated and the business is running
profitably.
Ganymede Solutions Limited had another good year in its
traditional markets of Rail, Infrastructure, Trades and labour. An
initial entry into the Telecoms sector was not successful and
resulted in a material non-recurring loss of GBP378,000 in the
first half of the year. Revenues were up 74% at GBP4.843m and
operating profit, before exceptional items, were GBP194,000 (2010 :
GBP26,000).
The Derby Conference Centre continued to make steady
improvements in performance in a difficult market environment.
Revenues were up 36% in the period under review at GBP1.763m,
generating an operating profit of GBP35,000 (2010 : loss
GBP277,000).
Non - recurring item. As announced in our interim statement, our
entry into the Telecoms industry, whilst providing contractors to
high quality end-user clients, was serviced through a third party
agent who proved to be of inferior quality, resulting in an
exceptional loss of GBP378,000. This business area has been
discontinued and investigations by the relevant authorities into
potential fraud by the third party are ongoing.
As a direct consequence, Group liquidity was adversely affected
and movements between dollar, euro and sterling accounts, which
would not normally have taken place, led to exchange losses and
costs of GBP274,000.
Overall Group trading performance, built on three growing
recruitment businesses, improved at the operating profit level, but
the final outcome was materially adversely affected by both the
growing pains in the Managed Services division and our unsuccessful
entry into Telecoms contract recruitment.
CAPITAL INVESTMENT
During the year, although capital investment was limited by the
need to divert the majority of incoming cash flow into working
capital to finance growth in trading volumes, it was possible to
continue the upgrade of the Derby Conference Centre premises as
further space was brought back into use.
DIVIDENDS
Your directors believe that it would not be prudent to use
financial resources to declare a final dividend at this time.
MANAGEMENT
During the year, development of our management structure at all
levels continued apace and following the year-end a re-structure
has taken place following the creation of two operating divisions,
each with its own management team reporting direct to the CEO and
three Operations Directors have been appointed. These moves, in
addition to reflecting the qualities of the affected individuals
and the growth of the underlying businesses are also necessary to
provide an appropriate level of management to ensure the capture of
growth opportunities which have been identified in our strategic
plan.
THE GROUP BOARD
During the year we appointed our two key senior managers and a
Non - Executive Director, John T White, to the Group Board, who
were all confirmed at the Annual General Meeting on 22(nd) June
2011. Since the year end Gary Hewett, Executive Director, has left
the Group.
ISSUE OF NEW EQUITY
Under the authority granted at the Annual General Meeting in
2010, we announced on 3 May 20011, a subscription of new shares in
the Company, by certain directors and senior management, raising
GBP396,000 net of expenses.
BALANCE SHEET
As at 31 December 2011 the Group had net assets of GBP637,000
(2010: 849,000). Group borrowings at the end of the year stood at
GBP3,149,000 (2010: GBP2,231,000) leaving GBP2,051,000 undrawn of
the Group's GBP5.2m invoice discounting facility.
CORPORATE GOVERNANCE
RTC Group takes very seriously its corporate governance
obligations. Whilst we recognise the potential input of an
appropriate number of Non-Executive Directors we presently feel
that the appointment of one is adequate at this stage in the Group
growth profile. We are indebted to John White for his help and
guidance in 2011.
OUTLOOK
The Group has now completed a major and essential
re-organisation and is entirely focused on recruitment services
with the addition of conferencing activities at our Head Office
premises. Major inroads have been made in international markets led
by our contract to serve NATO establishments in Afghanistan and the
establishment, post year end, of our new 90% owned company in
India. Operating difficulties in the International Division have
also been eliminated. Our strategic plan has identified significant
opportunities to build on our expertise in managed service
operations globally, in development of our presence in India, in
the services to SME industrial clients through our branch network
in England and in labour supply in the UK. Implementation of the
Management development and re-structuring programme has given us a
team capable of pursuing those opportunities.
We look forward to further growth of revenues and a material
improvement in underlying profitability in 2012.
STAFF
We continue to enjoy the benefits of a growing team of loyal and
conscientious management and staff. They have my admiration and
thanks and I feel privileged to work with them.
W.J.C. Douie, Chairman 17 May 2012
Consolidated Statement of Comprehensive Income
Year ended 31 December 2011
2011 2010
Notes GBP'000 GBP'000
Revenue 5 29,519 19,639
Cost of sales (25,517) (16,720)
------------------------------------- ------ ----- ---------------------- -------------------
Gross Profit 4,002 2,919
Administrative expenses (4,467) (3,353)
------------------------------------- ------ ----- ---------------------- -------------------
Operating Loss (465) (434)
------------------------------------- ------ ----- ---------------------- -------------------
Analysed as
Operating Loss before exceptional
items 5 (87) (492)
Administrative (expenses) /
income - exceptional 7 (378) 58
------------------------------------- ------ ----- ---------------------- -------------------
Operating Loss after exceptional
items (465) (434)
------------------------------------- ------ ----- ---------------------- -------------------
Financing expense (96) (18)
------------------------------------- ------ ----- ---------------------- -------------------
Loss before tax (561) (452)
Income tax 6 62 18
------------------------------------- ------ ----- ---------------------- -------------------
Net Loss from continuing operations (499) (434)
Loss from discontinued operations 4 (112) (524)
------------------------------------- ------ ----- ---------------------- -------------------
Loss for the year and total
comprehensive income for the
year attributable to equity
holders of the parent (611) (958)
------------------------------------- ------ ----- ---------------------- -------------------
Basic and diluted:
Loss per share - continuing
operations (pence) 3 (4.17) (4.81)
Loss per share - discontinued
operations (pence) 3 (0.93) (5.81)
------------------------------------- ------ ----- ---------------- -------------------
Loss per share - continuing
and discontinued operations
(pence) 3 (5.10) (10.62)
------------------------------------- ------ ----- ---------------- -------------------
There is no dilutive effect of share options
Consolidated Statement of Changes in Equity
Year ended 31 December 2011
Share Share Capital Share Accumulated Total
capital premium redemption based losses equity
account reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2011 90 2,117 50 30 (1,438) 849
Loss and total comprehensive
income for the year - - - - (611) (611)
Share issue (net
of expenses) 45 351 - - - 396
Share based payment
reserve - - - 3 - 3
At 31 December 2011 135 2,468 50 33 (2,049) 637
------------------------------ --------- --------- ------------ --------- ------------ --------
Year ended 31 December 2010
Share Share Capital Share Accumulated Total
capital premium redemption based losses equity
account reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2010 90 2,117 50 38 (480) 1,815
Loss and total comprehensive
income for the year - - - - (958) (958)
Share based payment
reserve - - - (8) - (8)
At 31 December 2010 90 2,117 50 30 (1,438) 849
------------------------------ --------- --------- ------------ --------- ------------ --------
The Share based payment reserve comprises of the cumulative
share option charge under IFRS 2 less the value of any share
options that have been exercised or have lapsed.
Consolidated Statement of Financial Position
As at 31 December 2011 2011 2010
Notes GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non current assets
Property, plant and equipment 292 279
Deferred tax asset 132 70
------------------------------- ------
424 349
Current assets
Inventories 14 10
Trade and other receivables 6,444 4,787
6,458 4,797
------------------------------- ------ -------- -------- -------- ----------
Total assets 6,882 5,146
------------------------------- ------ -------- -------- -------- ----------
Liabilities
Current liabilities
Trade and other payables (3,096) (2,066)
Current borrowings (3,149) (2,231)
Total current liabilities (6,245) (4,297)
Net assets 5 637 849
------------------------------- ------ -------- -------- -------- ----------
Equity attributable to
equity holders of the
parent
Share capital 135 90
Share premium 2,468 2,117
Capital redemption reserve 50 50
Share based payment reserve 33 30
Accumulated losses (2,049) (1,438)
------------------------------- ------ -------- -------- -------- ----------
Total equity 637 849
------------------------------- ------ -------- -------- -------- ----------
The financial statements were approved and authorised for issue
by the Board and were signed on its behalf on 17 May 2012 by:
A Bailey Director
A M Pendlebury Director
Consolidated Statement of Cash Flows
Year ended 31 December 2011
2011 2010
------------------------------------------- -------- ---------
GBP'000 GBP'000
Cash flows from operating activities
Operating result from continuing
operations (465) (432)
Adjustments for:
Employee equity settled share options 3 (8)
Depreciation 156 153
Loss on sale of property, plant 5 -
and equipment
Change in inventories (4) 1
Change in trade and other receivables (1,657) (2,400)
Change in trade and other payables 1,030 652
------------------------------------------- -------- ---------
Cash generated from operations (932) (2,034)
Interest paid (96) (18)
Income tax received - 97
------------------------------------------- -------- ---------
Net cash from/(used in) operating
activities (1,028) (1,955)
------------------------------------------- -------- ---------
Cash flows from investing activities
Purchases of property, plant and
equipment (174) (24)
Proceeds from sale of property,
plant and equipment - 40
Net cash from/(used in) investing
activities (174) 16
------------------------------------------- -------- ---------
Cash flows from financing activities
------------------------------------------- -------- ---------
Proceeds from issue of share capital 396 -
------------------------------------------- -------- ---------
Net cash inflow from financing activities 396 -
------------------------------------------- -------- ---------
Net (decrease)/increase in cash
and cash equivalents from continuing
operation (806) (1,939)
------------------------------------------- -------- ---------
Cash movement from discontinued
operations
Operating Activities (112) (130)
Cash movements from discontinued
operations investing activities - (14)
------------------------------------------- -------- ---------
Net (decrease) in cash and cash
equivalents from discontinued operations (112) (144)
------------------------------------------- -------- ---------
Total net (decrease) in cash and
cash equivalents (918) (2,083)
------------------------------------------- -------- ---------
Cash and cash equivalents at the
beginning of the year (2,231) (148)
------------------------------------------- -------- ---------
Cash and cash equivalents at the
end of the year (3,149) (2,231)
------------------------------------------- -------- ---------
Notes
1. CORPORATE INFORMATION
The announcement of audited results of the Group for the year
ended 31 December 2011 was authorised for issue in accordance with
a resolution of the directors on 17 May 2012. RTC Group Plc is a
public limited company incorporated and domiciled in England whose
shares are publicly traded. The principal activities of the Group
are described in note 5.
The financial information included in this announcement has been
compiled in accordance with International Financial Reporting
Standards ("IFRS"), including International Accounting Standards
("IAS") and interpretations issued by the International Accounting
Standards Board ("IASB") and its committees, and as adopted by the
EU. This announcement does not however contain sufficient
information to comply with IFRS.
The accounting policies adopted are consistent with those
described in the annual financial statements for the year ended 31
December 2010. There have been no significant changes in the basis
upon which estimates have been determined, compared to those
applied at 31 December 2010 and no change in estimate has had a
material effect on the current period.
2. DIVIDENDS
The Board do not recommend the payment of a final dividend for
the year.
3. LOSS PER SHARE
The calculation of basic and diluted earnings per share from
continuing and discontinued operations is based on a loss after tax
expense of GBP611,000 (2010: loss GBP958,000) and a weighted
average of 11,974,276 (2010: 9,022,564) shares in issue.
The outstanding share options were not considered to be dilutive
in 2011 nor 2010.
4. Discontinued Operations
In August 2011, the Board decided to discontinue the activity of
Global Choice Recruitment Ltd. (2010: on 25 June 2010, the Board
decided to discontinue funding the Group's Training Division and
hence the Board of Catalis Limited put this company into
administration). The loss for the discontinued operations is stated
after charging:
2011 2010
GBP'000 GBP'000
Revenue 76 1,458
Cost of sales (109) (1,044)
-------- --------
Gross Profit/(loss) (33) 414
Administrative expenses - normal (79) (694)
-------- --------
Operating loss (112) (280)
Financing income/(expense) - -
-------- --------
Loss on ordinary activities before taxation (112) (280)
Attributable income tax expense - -
Loss on disposal of discontinued operations (244)
-------- --------
Net loss attributable to discontinued operations (112) (524)
-------- --------
Details of net assets disposed as a result of the administration
of Catalis Limited and the associated loss for the period resulting
from this are as follows:
2011 2010
GBP'000 GBP'000
Non current assets
Property plant and equipment - 202
Current assets - 321
Current liabilities - (279)
--------- --------
Net assets disposed of - 244
Consideration - -
--------- --------
Loss on disposal - (244)
--------- --------
5. Segmental Analysis
The Group is a provider of Recruitment and Conferencing Services
and operates a division for each, made up from a number of legal
entities. Segmental information is provided below in respect of
Recruitment and Conferencing operations. The Group manages its
divisions, the trading performance and working capital by
monitoring operating profit before exceptional items and centrally
manages Group taxation, capital structure and spend, including net
equity and net debt.
The Conferencing division services are wholly provided in the
UK. A growing proportion of the Recruitment division revenues now
derive from overseas activities.
Revenues are generated from permanent and temporary recruitment
in the Recruitment division and from the provision of a
conferencing and hotel facility in Derby for the Conferencing
division.
All revenues have been invoiced to external customers. Revenues
of GBP7.1m (2010: GBP2.2m) in the recruitment division were derived
from a single external customer.
The segmental analysis of revenue, gross margin, operating
profit before exceptional goodwill write off and net assets is as
follows: -
2011 2010
GBP'000 GBP'000
Revenue
Recruitment 27,756 18,344
Conferencing 1,763 1,295
29,519 19,639
-------- ---------
Gross Margin
Recruitment 2,964 2,356
Conferencing 1,038 563
4,002 2,919
-------- ---------
Operating (loss) from
continuing operations
before exceptional items
Recruitment 211 210
Conferencing 35 (277)
Group costs (333) (425)
-------- ---------
(87) (492)
2011 2010
GBP'000 GBP'000
Other information
Depreciation:
Recruitment 68 86
Conferencing 88 122
-------- --------
156 208
-------- --------
Capital expenditure:
Recruitment 106 24
Conferencing 68 14
-------- --------
174 38
-------- --------
2011 2011 2011 2010 2010 2010
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Assets Liabilities Net Assets Liabilities Net
Recruitment 5,828 (5,555) 273 4,548 (3,977) 571
Conferencing 604 (305) 299 403 (212) 191
Non-trading/Group 449 (385) 64 195 (108) 87
-------- ------------ -------- -------- ------------ --------
Continuing 6,881 (6,245) 636 5,146 (4,297) 849
Discontinued
Recruitment 1 - 1 - - -
Training - - - - - -
-------- ------------ -------- -------- ------------ --------
Total 6,882 (6,245) 637 5,146 (4,297) 849
-------- ------------ -------- -------- ------------ --------
All assets and liabilities are held in the United Kingdom.
6. Income Tax
Continuing operations 2011 2010
GBP'000 GBP'000
Analysis of tax :-
Current Tax
UK corporation tax - -
Adjustment in respect of
previous periods - (3)
- (3)
Deferred Tax
Origination and reversal (62) -
of temporary differences
Adjustment in respect of
previous periods - (15)
--------------------------- -------- --------
Tax (62) (18)
--------------------------- -------- --------
7. Exceptional Administrative Costs
2011 2010
GBP'000 GBP'000
Profit on disposal of property plant and equipment - 121
Reorganisation costs - (63)
Provision for bad debt 378 -
-------- --------
378 58
-------- --------
As further explained in the Chairman's statement, during the
year the Group has experienced a non recurring bad debt of
GBP378,000, including legal fees to date, from a 3(rd) party
agent.
Report & Accounts
The above financial information does not constitute the
Company's statutory accounts for the years ended 31 December 2011
or 2010 but is derived from those accounts. The auditor has
reported on these accounts; their report was unqualified, did not
draw any matters by way of emphasis without qualifying their report
and did not contain statements under s498(2) or (3) Companies Act
2006 or equivalent preceding legislation.The statutory accounts for
2010 have been filed with the Registrar of Companies.
Full audited accounts of RTC Group plc for the year ended 31
December 2011 will be dispatched to shareholders, made available on
the Company's website at www.rtcgroupplc.co.uk and will be
available from the Company's registered office:- The Derby
Conference Centre, London Road, Derby, DE24 8UX in advance of the
AGM.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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