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RNS
CPL Resources PLC  -  CPS   

Final Results

Released 07:00 07-Sep-2017

RNS Number : 0419Q
CPL Resources PLC
07 September 2017
 

7 September 2017

 

Full year Results show record revenues of €455.2m with continued geographic reach

 

Cpl Resources Plc

 

Results for the Full Year Ended 30 June 2017

 

Dublin, 7 September 2017: Cpl Resources Plc ('Cpl', the 'Group' or the 'Company'), Ireland's leading employment services group, today announced results for the year ended 30 June 2017.

 

Highlights

·     Proposal to return €25 million in capital to all shareholders by way of a Tender Offer

·     Revenue increased by €21.8 million, to €455.2 million

·     Gross Profit increased by 3% to €71.8 million

·     3% increase in Profit before tax to €15.8 million

·     Earnings per share of 43.7 cent  (2016: 43.9 cent)

·     Total dividend per share of 11.5 cent  (2016: 11.0 cent)

 

John Hennessy, Chairman commented:

 

"The Group's results for the year ended 30 June 2017 show growth in revenue and profit before tax, reflecting expansion of our team, development of our service offering and broadening of our geographical footprint.

 

In recent months, the Board has considered a range of strategic and financial options to enhance shareholder value, particularly taking account of the continued generation of positive cash flows by the Group. Cpl remains a profitable, cash generative business and has built up a net cash position of €33.6 million as at 30 June 2017. Following careful consideration and having taken appropriate advice, the Board has determined that a return of surplus capital is in the best interests of shareholders. Consequently, subject to shareholder approval, we intend to return up to €25 million of surplus capital, in the form of a tender offer, to shareholders.

 

The Board is recommending a final dividend of 5.75 cent per share. This will bring the total dividend for the year to 11.5 cent per share.Based on current trends and circumstances in our main markets we expect to deliver further growth in our business during the financial year to 30 June 2018."

 

Anne Heraty CEO added:

 

"We continued to grow our international footprint opening offices in Munich and Boston during the year. We now have over 40 offices in 10 countries. These offices provide Cpl clients with the international reach they need especially in resourcing local talent. We also made further strategic progress with the acquisition of RIG Healthcare Group. This is Cpl's first entry into the locum doctor market and enhances the Company's operating presence in the UK, following the acquisition of Clinical Professionals in September 2015. 

 

We will continue to invest wisely to capture opportunities for growth. Cpl has a strong balance sheet with net assets of €103.7 million generated over the 27 years of continuous profitability. We believe our balance sheet and strong cash flows give us the resources to invest in the growth and expansion of our business while also returning capital to shareholders."

 

This announcement contains inside information

 

For Further Information:

 

Anne Heraty, CEO, Cpl Resources Plc: +353 1 614 6000

 

Mark Buckley, CFO, Cpl Resources Plc: +353 1 614 6000

 

Ivan Murphy/ Daragh O'Reilly, Davy Corporate Finance: +353 1 679 6363

 

Melanie Farrell/ Jonathan Neilan, FTI Consulting: +353 1 765 0888

 

 



 

Cpl Resources Plc

 

Chairman's statement

 

The financial year ended 30 June 2017 has been a year of growth in revenue and profit before tax for Cpl.  

 

Highlights of the Group's performance include:

 

- Revenue increased by €21.8m to €455.2m

- Gross Profit increased by 3% to €71.8m

- 3% increase in Profit before tax of €15.8m

- Earnings per share of 43.7 cent

- Total dividend per share of 11.5 cent

- Proposal to return €25 million in capital to all shareholders by way of a Tender Offer

 

Full Year Highlights

 


Year ended

Year ended

% change


30-June-17

30-June-16



€'000 

€'000 


Revenue

455,194

433,391

5%

Gross Profit

71,822

70,053

3%

Operating profit

15,387

15,384


Profit before tax

15,777

15,390

3%

Earnings per share

43.7 cent

43.9 cent


Dividend per share

11.5 cent

11.0 cent

5%





Conversion ratio *




Operating Profit

21.4%

22.0%


Profit before tax

22.0%

22.0%


 

* as % of gross profit

 

The Group's results for the year ended 30 June 2017 show growth in revenue and profit before tax, reflecting expansion of our team, development of our service offering and broadening of our geographical footprint.

 

Our revenue grew by €22 million in the financial year, up 5% on the prior year, and Group gross profit and profit before tax grew by 3% in the year.  The demand for talented temporary staff among our clients grew at a stronger pace than for permanent employees across most sectors during the year, with temporary fees growing by 12%.  The demand for permanent staff was adversely affected by changes in regulation in the healthcare sector and concerns about Brexit, which slowed recruitment decisions by certain employers. Our profit before tax is modestly ahead of the prior financial year, which, in light of the changed mix of business between temporary and permanent recruitment in the year, is a positive performance.

 

At year end, the Group had a strong balance sheet, with net assets of €104 million at 30 June 2017, up from €94 million in the prior year.  We ended the year with net cash of more than €33 million, after investing €10 million in RIG Healthcare Group and funding the working capital demands arising from the continued growth in our temporary business. It is in this context that we are pleased to announce the intention to return capital to shareholders by way of a tender offer.

 

Tender Offer

In recent months, the Board has considered a range of strategic and financial options to enhance shareholder value, particularly taking account of the continued generation of positive cash flows by the Group. As part of this the Board has, and will continue to, review acquisition and investment opportunities which may optimise value for shareholders and in June this year we were pleased to announce the acquisition of a 91% shareholding in RIG Healthcare Group.

 

Cpl remains a profitable, cash generative business and has built up a net cash position of €33.6 million as at 30 June 2017. Following careful consideration and having taken appropriate advice, the Board has determined that a return of surplus capital is in the best interests of shareholders.

 

Consequently, subject to shareholder approval, we intend to return up to €25 million of surplus capital, in the form of a tender offer, to shareholders (the "Tender Offer"). As was the case in the Group's previous return of capital to shareholders in 2011, the return of capital will be made by way of a fixed price tender offer structure. The Tender Offer will be made at a price per Ordinary Share of €6.75 (the "Tender Price").

 

The Board believes that a return of capital in the amount proposed represents the most effective use of those shareholder funds and that the continued strength of the Group's balance sheet, and its cashflow generation after the return of those funds, will be sufficient to pursue the Group's stated growth objectives. The Tender Offer provides all shareholders with choice (that is, the discretion to participate) and certainty of value. Those shareholders who do not wish to participate can retain their full existing investment in the company.

 

Further details on the Tender Offer are included in the section entitled "Proposed Tender Offer".

 

People

Once again our people have delivered outstanding service to our clients and candidates during the year.  The continuous growth in our business poses challenges to our teams, and they have responded well to these challenges.  Our customers continue to give us very positive feedback on the service they receive.

 

On behalf of the Board, I would like to thank all of our people for their commitment, dedication and hard work, delivered daily for the benefit of the whole Group. I also wish to thank our clients and candidates for their continued support, their valuable input and their loyalty to our business.

 

Board & Executive announcements

In March 2017, Colm Long was appointed to the Board as an independent non-executive director.  Colm has extensive experience of media and digital businesses and has contributed very positively to the Board since his arrival.  We are delighted to welcome him and look forward to working with him in the future.

 

As the Group embarks on its next phase of growth, the Board has appointed Mark Buckley, current CFO, to the position of Deputy CEO and COO for the Group, with responsibility for operational performance and delivery of service to clients.  We look forward to working with Mark as he takes on these important roles.

 

I am also delighted to announce that Lorna Conn has been appointed CFO of the Cpl Group.  The Board and management look forward to working with Lorna, who will join us on 2 October 2017.

 

 

Earnings per Share, Proposed Dividend & Dividend Policy

Cpl has delivered earnings per share in the twelve months to 30 June 2017 of 43.7 cent. The Group also has a progressive dividend policy which reflects underlying earnings growth and our continued financial strength.

 

The Board is recommending a final dividend of 5.75 cent per share. This will bring the total dividend for the year to 11.5 cent per share. The dividend, if approved by the shareholders, will be payable on 6 November 2017 to shareholders on the Company's register at the close of business on the record date of 13 October 2017.

 

Outlook

Economic indicators, including employment trends, are generally positive in our principal markets.  Our industry is highly competitive, and our continued growth remains sensitive to events affecting the wider European and global economies.  As the UK moves towards its planned departure from the EU, the terms of which remain unclear, "Brexit" continues to give rise to uncertainty in our main markets.  We will continue to monitor these developments closely, and assess and respond to their implications for our business.

 

Based on current trends and circumstances in our main markets we expect to deliver further growth in our business during the financial year to 30 June 2018.

 

John Hennessy

 

Chairman

 

7 September 2017

 


Chief Executive Review

 

In the financial year to 30 June 2017 Cpl delivered growth in revenues, gross profit and profit before tax. Our revenue increased by 5% to €455.2 million, gross profit and profit before tax increased by 3% to €71.8 million and €15.8 million respectively. Our net cash balance is €33.6 million post our investment of €10 million in the acquisition of RIG Healthcare in June 2017. Growth in our temporary placement and managed services business was strong and outpaced permanent placement which was impacted by regulatory changes to international nurse recruitment in the UK.

 

Financial Highlights

The Group increased its revenue by 5% to €455.2 million in the year to 30 June 2017 (2016: €433.4 million). Gross profit increased by 3% to €71.8 million (2016: €70.1 million). The Group's gross margin was 15.8% (2016: 16.2%). Profit before tax was €15.8 million (2016: €15.4 million) and our diluted earnings per share was 43.7 cent (2016: 43.9 cent).

 

Our operating expenses were €56.4 million, 3.1% higher than last year. Our conversion rate of gross profit to profit before tax was 22.0% (2016: 22.0%).

 

Most of our cost base is people related and the other main components are offices and investment in our technology infrastructure. We continued to invest in technology to improve productivity and ensure ease of use for our clients and candidates. One of our key projects during the year was the investment in a web and mobile based App that harnesses the latest in smartphone technology for booking and managing temporary staff. The App manages all aspects of front and back office including: communications, bookings, scheduling, timesheet management, accounting and compliance. It is designed to drive efficiencies, increase recruiter productivity and improve service levels to our candidates and clients.

 

Our balance sheet remains strong with net assets of €103.7 million (2016: €93.7 million). Goodwill and intangible assets increased by €8.5 million to €26.0 million, reflecting the acquisition of RIG Healthcare Group on 6 June 2017. Trade and other receivables stood at € 99.7 million, up from €90.3 million at 30 June 2016. From a financial perspective managing working capital is key to our success. Cash flow in the year was strong with €10.1 million of net cash generated prior to the RIG acquisition, to bring the closing net cash balance to €33.6 million.

 

The interim dividend paid was 5.75 cent per share. The Board is recommending a final dividend of 5.75 cent per share for the year to 30 June 2017, resulting in a total dividend per share for the year of 11.5 cent, a 5% increase from the prior year.

 

Operations Review

Cpl's capability spans the entire employment lifecycle and includes permanent, temporary and contract recruitment, workforce management, training, outsourcing and outplacement. We have a diverse range of clients from market leading multinationals to small and medium enterprises.

 

Cpl is a recognised leader in permanent and temporary recruitment. Our business is based on matching the capabilities of our candidates to our clients in a rapidly changing marketplace. We operate through distinct specialist brands in a wide range of sectors including technology, finance and legal, healthcare, pharmaceutical, life science, sales, engineering, HR, light industrial and office administration.

 

Our managed services and outsourcing business assumes accountability for selected business process on behalf of clients. Cpl brings value to our clients by creating measurable improvements and cost savings in areas that are viewed as non-core to our clients. Our main service offerings are: Contact Centre Outsourcing, Recruitment Process Outsourcing (RPO) and HR Consulting Services (which includes outplacement). These projects are normally contracted for a number of years. During the year we delivered managed services/outsourced projects to over 15 clients including leading organisations in the financial services, technology and pharmaceutical sectors.

Key Performance Indicators

2017

2016

Gross margin

15.8%

16.2%

Operating margin

  3.4%

  3.6%




Conversion Ratio



    Operating Profit

21.4%

22.0%

     Profit before tax

22.0%

22.0%




Permanent fees as % of the total gross profit

36.3%

41.5%

Temporary fees as % of the total gross profit

63.7%

58.5%




Contractor and temporary staff headcount at the year-end

11,504

11,367

Average number of recruiters during the year (incl. RIG)

     547

     503

 

Due to the change in business mix between permanent and temporary fees our gross margin in the year to June 2017 was 15.8%, a reduction of 40 basis points. Most of our growth occurred in our temporary business. Our permanent placement business which generates 100% gross margin represented 36.3% of total gross profit whereas in the year to June 2016 it was 41.5% of total gross profit.

 

We improved our margin on temporary business to 10.7% (2016: 10.1%)

 

Our operating margin was 3.4%, a year on year reduction driven mainly by the change in business mix, increase in staff numbers, investment in offices and technology infrastructure. Taking a long-term view of the business, we will continue to invest in talent and technology. We expect in the coming year to see an improvement in our operating margin through an increase in productivity due to the investment already made.

 

Permanent

Most of our permanent placement work is undertaken on a contingent basis, which means we only generate revenue when the candidate is placed in a role. If the time to successfully place candidates is extended this impacts our cost base and recruiter productivity.

 

Last year I highlighted that international nurse recruitment in the UK was undergoing significant change driven mainly by changes in regulation and concerns about "Brexit". This impacted our performance in permanent placements in the year to June 2017. While other divisions such as technology, pharma and financial services performed well, it was not sufficient to compensate for the reduction in international nurse recruitment in the UK.

 

Permanent fee revenue decreased by 10.3% to €26.1 million (2016: €29.1 million).

 

Looking ahead to 2018, we believe international nurse recruitment is stabilising and the demand for talent in the technology, pharma and financial services sector remains strong.

 

Temporary

Our temporary and contracting business provides clients with qualified, skilled people on short and long terms assignments. Demand for temporary and contract staff remained strong during the year and we grew net fee income by 11.7% to €45.7 million (2016: €41.0 million). We were able to build on the improvement in temporary and contract staffing margins that we experienced last year. Margin in year to 30 June 2017 was 10.7% (2016:  10.1%).

 

We finished the year with 11,504 temporary staff and contractors working on behalf of Cpl on client projects.  Our clients recognise the value that temporary and contract staffing can bring to managing total labour costs. It adds a variable cost component to a company's other-wise fixed labour costs. At the same time many of our candidates are also seeking more flexibility. Highly skilled professionals particularly in ICT and engineering are choosing to work on a project basis.

 

Driven by this increasing demand from our clients and candidates for greater flexibility, temporary and contract staffing continues to represent an area of significant growth opportunity.

 

People

Our talented and experienced team are committed to our core values of accountability, respect, customer focus, effective communication and empowerment. In 2017, Cpl Resources plc was recognized in the Best Places to Work program's large category. This recognition is important for the Group as attracting and retaining the best talent in the industry is key to operational excellence which delivers real value to our clients.

 

Management Team & Appointment of CFO

Our management team continues to evolve. I am delighted Mark Buckley has taken on the role of COO and deputy CEO. We are also delighted to welcome Lorna Conn to the team. Lorna has been appointed as our CFO of the Group.  Lorna trained as a Chartered Accountant with Deloitte and has held a number of senior finance roles both in Ireland and the US. Her most recent role was Finance Director at ISS Ireland, part of the ISS Group Plc. Lorna joins us on 2 October 2017.

 

I would like to thank our talented and dedicated colleagues for their commitment to delivering for our candidates and clients. I am delighted to welcome those people who joined Cpl during the year and I also want to thank our loyal customers for their partnership and support during the year.

 

Strategy

Our strategy to develop a balanced business mix and therefore avoid overdependence on any one service, sector, or geography remains unchanged. We generated 63.7% of our net fee income from temporary recruitment and 36.3% from permanent recruitment.

 

We continued to expand organically in new markets. We opened offices in Munich and Boston during the year. Our business outside Ireland now accounts for approximately 25% of the Groups net fee income. We have over 40 offices in 10 countries. These offices provide Cpl clients with the international reach they need especially in resourcing local talent.

 

Ardlinn, our executive search brand, which we launched in July 2016 to support our clients recruiting top level C-suite talent has had a very successful first year and is profitable. They have completed a number of international assignments, recruiting high impact leadership talent for clients. We will build on this success by expanding the team in the coming year.

 

Now more than ever CEO's and boards are acutely aware of the critical role key leadership talent plays in building competitive advantage. We believe Ardlinn is well positioned to source and attract the right leadership talent for our clients.

 

Acquisition

We focus mainly on organic expansion, while using selective acquisitions to build platforms in new sectors or markets with good long-term potential. We are keen to deepen our presence in high value sectors such as Healthcare which is labour intensive and experiencing skills shortages. The acquisition of RIG Healthcare is a further step in extending the Group's footprint in the healthcare sector.

 

In June 2017, we acquired a 91% shareholding in RIG Healthcare Group (RIG) for a cash consideration of €9.5m. RIG Healthcare Group, the trading name of RIG Locums Limited and RIG Medical Recruit Limited, is a UK specialist healthcare recruiter with a focus on market niches within the Locum Doctors and Allied Health Professions. They have five offices across the UK.

 

RIG supplies qualified medical professionals to the UK's National Health Service (NHS) with a particular focus on radiography, occupational therapy, pharmacy and physiotherapy. Healthcare recruitment, staffing and training has long been one of Cpl's most important sectors in Ireland and the UK. RIG will complement the Company's existing portfolio of healthcare brands which include: Cpl Healthcare, Kate Cowhig International Healthcare Recruitment, Servisource Healthcare and Private Homecare. The acquisition is Cpl's first entry into the locum doctor market and enhances the Company's operating presence in the UK, following the acquisition of Clinical Professionals in September 2015. 

 

Outlook

As we enter the year to June 2018, market conditions across the sectors in which we operate are mixed. Economic trends are favourable with strong employment growth in Ireland and the Eurozone. Unemployment in Ireland is expected fall to less than 6% by year end and unemployment in the Eurozone is expected to fall below 9%. Despite this there are considerable risks on the horizon. In Cpl, we are mindful of the uncertainty that 'Brexit' creates in our core markets and we are closely monitoring the potential impacts both positive and negative of 'Brexit' on our business. On the positive we have seen an increase in enquiries from companies looking to establish in Ireland and increased demand for insurance financial services and fintech talent. On the negative, there are threats to employment in sectors exposed to the UK.

 

From a longer-term point of view, we operate in attractive markets with a strong business model and significant global clients. All indicators suggest that the labour market is tightening and there is a widening skills gap in a number of specialist skills areas. Our key focus is on supporting clients in sectors and occupations where these skills gaps occur. This places higher value on our services and presents us with growth opportunities.

 

We will continue to invest wisely to capture opportunities for growth. Cpl has a strong balance sheet with net assets of €103.7 million generated over the 27 years of continuous profitability. We believe our balance sheet and strong cash flows give us the resources to invest in the growth and expansion of our business while also returning capital to shareholders.

 

 

Anne Heraty

 

Chief Executive Officer

 

7 September 2017


Proposed Tender Offer

 

The Board is proposing to return up to €25 million of surplus capital to shareholders through the Tender Offer. As was the case in the Group's previous return of value to shareholders in 2011, the return of capital will be made by way of a fixed price tender offer structure and tenders will only be accepted at the Tender Price of €6.75 per Ordinary Share.

 

Background and reasons for the proposed Tender Offer

 

In the year to 30 June 2017, the Group reported strong operational and financial performance. The Group has continued to generate positive cash flow and as a result has built up a net cash position of €33.6 million as at 30 June 2017. In the absence of the proposed Tender Offer the Board would expect the Group's positive cash position to continue to increase further.

 

To date in 2017, the Board has considered a range of strategic and financial options to enhance shareholder value. The Board, in consultation with its advisers, reviewed a number of factors including:

 

·     the Group's current net cash position;

·     the Group's ongoing earnings and cash flow generation;

·     the relatively low interest income capable of being generated by the Group's current cash balance; and

·     acquisition and investment opportunities.

 

Following this review, the Board (with the exception of Anne Heraty and Paul Carroll, who absented themselves from deliberations relating to the proposed Tender Offer) unanimously determined that a return of surplus capital is in the interests of shareholders. The Board believes that a return of capital in the amount proposed represents the most effective use of those shareholder funds and that the continued strength of the Group's balance sheet, and its cashflow generation after the return of those funds, will be sufficient to pursue the Group's stated growth objectives. 

 

The Board concluded, following consultation with the Group's advisers, that a return of up to €25 million of capital by way of the Tender Offer is in the interests of the Group and its shareholders as it provides shareholders with both choice (that is, the discretion to participate) and certainty of value.

 

An independent committee of the Board, comprised of independent non-executive directors Breffni Byrne, Oliver Tattan and Colm Long, was formed to consider and settle the terms and conditions of the Tender Offer, including the Tender Price.

 

Summary of the Tender Offer

 

The Tender Offer will be made to shareholders at the Tender Price of €6.75 per Ordinary Share. The Tender Price represents a premium of 15.2 per cent. to the closing price of €5.86 per Ordinary Share on 6 September 2017, (being the latest practicable date prior to this announcement) and represents a premium of 14.1 per cent. to the volume weighted average price over the three months to 6 September 2017.

 

The Group intends to purchase, in aggregate, up to 3,703,703 Ordinary Shares from shareholders at the Tender Price. These Ordinary Shares will subsequently be cancelled by the Group. Each shareholder will be entitled to sell up to approximately 12 per cent. of their shareholding, rounded down to the nearest whole number of Ordinary Shares (the "Guaranteed Entitlement"). Shareholders will also have an opportunity to sell more than their Guaranteed Entitlement to the extent that other shareholders tender less than their Guaranteed Entitlement. To the extent that any Shareholders have tendered less than their Guaranteed Entitlement, surplus tenders will be accepted in proportion to the number of additional Ordinary Shares tendered so that the total number of Ordinary Shares purchased pursuant to the Tender Offer does not exceed 3,703,703.

 

The Board reserves the right at any time prior to the anticipated completion of the Tender Offer and having regard to prevailing market conditions, to (i) vary the Tender Price; and/or (ii) change the maximum number of Ordinary Shares that can be tendered pursuant to the Tender Offer; and/or (iii) not proceed with the Tender Offer; if they conclude that the implementation of the Tender Offer at the Tender Price is no longer in the interests of the Group and/or its shareholders.

 

Each of the Directors has irrevocably committed to participate in the Tender Offer on a pro rata basis.

 

Benefits of a Tender Offer

 

The benefits of the Tender Offer, compared to other available options for a return of capital to shareholders, include that the Tender Offer:

 

a)   provides those shareholders who wish to sell Ordinary Shares with the opportunity to do so;

b)   enables those shareholders who do not wish to receive capital at this time to maintain their full investment in the Group;

c)   is available to all shareholders (other than shareholders who may be resident in certain prohibited territories) regardless of the size of their shareholdings;

d)   ensures equal opportunity to all shareholders to participate in the return of capital by offering the Guaranteed Entitlement to all shareholders; and

e)   will have a positive impact on both the Group's earnings per share and dividend per share as all shares acquired under the Tender Offer will be cancelled.

 

Shareholder Approval

 

The Tender Offer will be subject to approval by Cpl's shareholders at an Extraordinary General Meeting ("EGM"). A notice of EGM together with additional explanatory documentation setting out further detail with regard to the background to and reasons for, the terms and conditions of and instructions on how to participate in, the Tender Offer will be sent to shareholders in due course.

 



 

Cpl Resources Plc

 

Group Statement of Comprehensive Income

for the year ended 30 June 2017



      2017

      2016

 



    €'000

     €'000

 





 

Revenue


 455,194

 433,391

 

Cost of sales


(383,372)

(363,338)

 



                

                 

 





 

Gross profit


71,822

 70,053

 

Distribution expenses


 (4,134)

 (4,059)

 

Administrative expenses *


     (52,301)

    (50,610)

 



               

               

 





 

Operating profit


15,387

15,384

 

Financial income


      438

       61

 

Financial expenses


      (48)

      (55)

 



               

               

 





 

Profit before tax


15,777

15,390

 

Income tax expense


 (2,337)

 (1,968)

 



               

                

 



               

                               

 

Profit for the financial year- all attributable to


               

               

 

equity shareholders


13,440

13,422

 



                

__________ 

 





 





 

Profit attributable to:




 

Owners of the Parent


13,394

13,434

 

Non - controlling interests


       46

      (12)

 



                

                    

 





 



13,440

13,422

 



                

                 

 





 





 

Other comprehensive income




 

Foreign currency translation differences - foreign operations


   (453)

   (198)

 



                

               

 





 

Total comprehensive income for the year - all




 

attributable to equity shareholders


12,987

13,224

 



               

               

 





 

Basic earnings per share


43.7 cent

43.9 cent

 





 

Diluted earnings per share


43.7 cent

43.9 cent

 





 

* Includes €388,000 of non-cash LTIP charge (2016 : €1,987,000)





Cpl Resources Plc

Group Statement of Changes in Equity

for the year ended 30 June 2017




Other



Share








undenominated

Currency

Put

based



Non -

Total


Share

Share

capital

translation

option

payment

Retained


Controlling

Shareholders


capital

premium

fund

reserve

reserve

reserve

earnings

Total

interests

Equity


 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

 

€'000

    

€'000

 

€'000

 

€'000













Balance at 1 July 2015

3,053

1,705

724

(3,357)

(395)

-

177

80,141

82,048

(89)

81,959

Total comprehensive income for the year












Profit/(loss) for the financial year

-

-

-

-

-

-

-

13,434

13,434

(12)

13,422

Foreign currency translation effects

-

-

-

-

(198)

-

-

-

(198)

-

(198)













Transactions with Shareholders












Share based payment charge

-

-

-

-

-

-

1,987

-

1,987

-

1,987

Dividends paid

-

-

-

-

-

-

-

(3,131)

(3,131)

-

(3,131)

Put Option granted

-

-

-

-

-

(400)

-

-

(400)

-

(400)

Non controlling interest on acquisition in year

-

-

-

-

-

-

-

-

-

72

72













Balance at 30 June 2016

3,053

1,705

724

(3,357)

(593)

(400)

2,164

90,444

93,740

(29)

93,711













Balance at 1 July 2016

3,053

1,705

724

(3,357)

(593)

(400)

2,164

90,444

93,740

(29)

93,711

Total comprehensive income for the year












Profit for the financial year

-

-

-

-

-

-

-

13,394

13,394

46

13,440













Foreign currency translation effects

-

-

-

-

(460)

-

-

-

(460)

7

(453)













Transactions with Shareholders












Share based payment charge

-

-

-

-

-

-

388

-

388

-

388

Dividends paid

-

-

-

-

-

-

-

(3,512)

(3,512)

(31)

(3,543)

Shares issued

33

-

-

-

-

-

-

-

33

-

33

Put option granted

-

-

-

-

-

(740)

-

-

(740)

-

(740)

Non-controlling interest on acquisition in year

-

-

-

-

-

-

-

735

735

124

859             













Balance at 30 June 2017

3,086

1,705

724

(3,357)

(1,053)

(1,140)

2,552

101,061

103,578

117

103,695

 

Cpl Resources Plc

Company Statement of Changes in Equity

for the year ended 30 June 2017




Other








undenominated

Share based

Put




Share

Share

capital

payment

option

Retained

Total


capital

premium

fund

reserve

reserve

earnings

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000









Balance at 1 July 2015

3,053

1,705

724

177

-

1,742

7,401

Total comprehensive income for the year








Profit for the financial year

-

-

-

-

-

1,911

1,911









Transactions with shareholders








Share based payment charge

-

-

-

1,987

-

-

1,987

Dividends paid

-

-

-

-

-

(3,131)

(3,131)

Put Option Granted

-

-

-

-

(400)

-

(400)

 

------------------








Balance at 30 June 2016

3,053

1,705

724

2,164

(400)

522

7,768









Balance at 1 July 2016

3,053

1,705

724

2,164

(400)

522

7,768

Total comprehensive income for the year








Profit for the financial year

-

-

-

-

-

29,698

29,698









Transactions with shareholders








Share based payment charge

-

-

-

388

-

-

388

Dividends paid

-

-

-

-

-

(3,512)

(3,512)

Shares issued

33

-

-

-

-

-

33

Put option granted

-

-

-

-

(740)

-

(740)









Balance at 30 June 2017

3,086

1,705

724

2,552

(1,140)

26,708

33,635


Cpl Resources Plc

 

Group and Company Balance Sheets

as at 30 June 2017

                                                                 



Group

Company



2017

2016

2017

2016

Assets


€'000

€'000

€'000

€'000

Non-current assets






Property, plant and equipment


 1,870

 1,994

  1,603

  1,721

Goodwill and intangible assets


26,002

17,489

  1,316

  1,421

Investments in subsidiaries


        -

        -

31,065

21,132

Deferred tax asset


    710

    786

       70

       63



                

               

               

              







Total non-current assets


     28,582

20,269

34,054

24,337



               

              

               

              

Current assets






Trade and other receivables


     99,664

90,333

  119,286

122,262

Cash and cash equivalents


     38,819

34,843

 9,659

 20,680



                

               

               

              







Total current assets


   138,483

125,176

   128,945

142,942



               

               

               

              







Total assets


   167,065

145,445

   162,999

167,279



                

               

               

               







Equity






Issued share capital


 3,086

3,053

 3,086

  3,053

Share premium


 1,705

1,705

 1,705

  1,705

Other reserves


(2,274)

   (1,462)

 2,136

  2,488

Retained earnings


   101,061

   90,444

    26,708

     522



              

             

________

              



  103,578

   93,740

    33,635

  7,768

Non-controlling interest


    117

   (29)

       -

       -



              

               

                

              

Total equity


   103,695

    93,711

33,635

  7,768



               

               

                

               

 


Cpl Resources Plc

 

Group and Company Balance Sheets (continued)

as at 30 June 2017

 

                                                                 



Group

Company



     2017

    2016

     2017

   2016



   €'000

   €'000

   €'000

  €'000

Current liabilities






Trade and other payables


  61,415

 50,133

127,409

   157,910



               

              

                

               







Total current liabilities


     61,415

    50,133

   127,409

   157,910



                

              

                

               







Non current liabilities






Contingent consideration


          815

   1,201

          815

   1,201

Put option liability


       1,140

      400

    1,140

      400



                

               

                

               







Total non current liabilities


       1,955

   1,601

       1,955

    1,601



                

               

                

               







Total liabilities


     63,370

   51,734

   129,364

   159,511



                

               

                

               







Total equity and liabilities


    167,065

  145,445

   162,999

   167,279



                 

               

                

                













 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Cpl Resources Plc

 

Group and Company Cash Flow Statements

for the year ended 30 June 2017

 


                 Group

          Company


2017

2016

2017

2016


€'000

€'000

€'000

€'000

Cash flows from operating activities





Profit for the financial year

13,440

13,422

     29,698

     1,911

Adjustments for:





Depreciation on property, plant and





Equipment

     770

     590

       544

       510

Share based payment charge

     388

   1,987

          -

          -

Amortisation of intangible assets

     459

     343

       450

       331

Financial income

      (438)

      (61)

      -

      (33)

Financial expense

       48

       55

          -

          -

Income tax expense/(credit)

   2,337

   1,968

       (7)

       (35)


_______

_______

_______

_______              

Operating cashflows before changes in





working capital

    17,004

    18,304

    30,685

    2,684






(Increase)/decrease in trade and other receivables

   

(3,320)

   

(4,849)

 

2,975

 

(14,429)

Increase/(decrease) in trade and other payables

      6,590

      1,092

 (30,881)

 21,136


_______

________

________

________






Cash generated from operations

   20,274

   14,547

  2,779

  9,391






Interest (paid)

        (48)

        (55)

        -

        -

Income tax (paid)

  (1,825)

  (2,485)

        (6)   

        -   

Interest received

       22

      110

       -

       82


________            

________             

________

________             






Net cash from operating activities

   18,423

   12,117

  2,773

  9,473


________

________            

________

_______            

Cash flows from investing activities





Investments in subsidiaries

         -

         -

  (9,544)

  (3,998)

Purchase of property, plant and





equipment

      (667)

      (684)

    (426)

    (398)

Acquisition of business (net of cash and





loans acquired)

  (13,359)

  (5,083)

             -

             -

Purchase of intangible assets

   (345)

   (602)

    (345)

    (569)


________

_______             

_______       

_______






Net cash (outflow) from investing activities

 

  (14,371)

                

  (6,369)

               

 (10,315)

                

  (4,965)

              

 



 

Cpl Resources Plc

 

Group and Company Cash Flow Statements (continued)

for the year ended 30 June 2017

 

 



Group

Company



2017

2016

2017

2016



€'000

€'000

€'000

€'000







Cash flows used in financing activities






Shares issued


     33

        -

         33

-

Dividends paid


(3,543)

(3,131)

(3,512)

(3,131)



________ 

               

________

                  







Net cash (used in) financing activities


(3,510)

(3,131)

(3,479)

(3,131)



________

               

________

               







Net increase/(decrease) in cash and cash






Equivalents


 542

     2,617

 (11,021)

 1,377







Cash and cash equivalents at beginning






of year


33,092

30,475

20,680

19,303



________

               

________

               

Cash and cash equivalents at






end of year


33,634

                 

33,092

               

9,659

               

20,680

               

 

 

 

 

 

 

 

 

 

 

 

 

Cpl Resources Plc

 

Notes 

 

1       Financial income and expenses                                                                                   


2017

2016


€'000

€'000




Interest (income) on cash deposits

Change in fair value of financial liabilities

(32)

(406)

_____

(438)

                   

(61)

-

_____

(61)

            

 

 

Interest expense


 

Interest payable

48

       

55

          



 




 

2       Income tax expense                                                                             

           

2017

2016


€'000

€'000

Recognised in the income statement:






Current tax expense



Current year

2,276

2,299

Adjustments in relation to prior years

6

26


_____

_____

Current tax expense

2,282

2,325




Deferred tax



Origination and reversal of temporary differences

106

(321)

Adjustments in relation to prior years

(51)

(36)


_____   

_____                    

Total tax in the income statement

2,337

_____

1,968

_____







 

 



 

Cpl Resources Plc

 

Notes (continued)

 

Reconciliation of effective tax rate

 

2017

 

2016


€'000

€'000




Profit before tax

15,777

15,390


 _____ 

 _____




Tax based on Irish corporation tax rate of 12.5%

1,972

1,924




Non-deductible items

  122

  111

Other deductions

  104

  (110)

Differences in effective tax rates on overseas earnings

29

45

Losses on which deferred tax not recognised

154

8

Income taxed at higher rate

(Over) provision in prior years

1

(45)

-

(10)


 _____

 _____




Total tax in income statement

2,337

1,968


_____          

_____




                                                                                                              

3       Dividends to equity shareholders

 

         Interim dividends to equity shareholders in Cpl Resources Plc are recognised when the interim dividend is paid by the Company. The final dividend in respect of each financial year is recognised when the dividend has been approved by the Company's shareholders. During the financial year, the following dividends were recognised:           


2017

2016


€'000

€'000

Final dividend paid in respect of previous financial year



of 5.75 cent (2016: 5.0 cent) per ordinary share

1,756

1,527




Interim dividend paid in respect of current financial year



of 5.75 cent (2016: 5.25 cent) per ordinary share

1,756

1,604




Dividend paid in respect of Non-controlling interest

31

-


          

          





3,543

3,131


         

         

 

The directors have proposed a final dividend in respect of the 2017 financial year of 5.75 cent per ordinary share. This dividend has not been provided for in the Company or Group balance sheet as there was no present obligation to pay the dividend at the year end. The final dividend is subject to approval by the Company's shareholders at the Annual General Meeting.

 

 

 

 

 

 

 

 

 

 

Cpl Resources Plc

 

Notes (continued)

 

4       Earnings per share


2017

2016


€'000

€'000

Numerator for basic and diluted earnings per share:



Profit for the financial year attributable to equity



shareholders

13,394

13,434


                  

                   

Denominator for basic earnings per share:



Weighted average number of shares in issue



for the year

30,655,391

30,545,159


                   

                   




Denominator for diluted earnings per share:

30,655,391

30,545,159


                  

                  




Basic and diluted earnings per share

    43.7 cent

    43.9 cent


                 

                  







 

5    Trade and other receivables                               


       Group

       Company


2017

2016

2017

2016


€'000

€'000

€'000

€'000






Trade receivables

74,841

74,069

-

-

Accrued income

20,581

13,623

-

-

Prepayments and other debtors

3,710

1,915

1,667

738

Corporation tax

532

726

-

-

VAT

Amounts due from subsidiary

-

-

395

-

undertakings

-

-

117,224

121,524


              

              

            

            







99,664

90,333

119,286

122,262


              

            

            

             

 

         Amounts due from subsidiary undertakings are repayable on demand.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cpl Resources Plc

 

Notes (continued)

 

6       Net funds                                                                      


Group

      Company


2017

2016

2017

2016


€'000

€'000

€'000

€'000






Cash and cash equivalents

38,819

34,843

9,659

20,680

Bank overdraft

(6)

(307)

-

-

Invoice discounting facility

(5,179)

(1,444)

-

-


            

            

            

            







33,634

33,092

    9,659

    20,680






Cash and cash equivalents in





the cash flow statement

33,634

33,092

9,659

20,680


            

            

            

            






Net funds

33,634

33,092

9,659

20,680


            

            

            

            

 

 

7        Share capital, share premium, and other reserves                                                     


2017

2016


€'000

€'000

Authorised



50,000,000 ordinary shares at €0.10 each

5,000

5,000


         

        





€'000

€'000

Allotted, called up and fully paid



30,875,856 (2016: 30,545,159) ordinary shares at € 0.10 each

 

 

3,086

         

 

 

3,053

         

           

                       

          The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

 

         Share premium at 30 June 2017 amounted to €1,705,000 (2016: €1,705,000).

 

Other reserves comprise an other undenominated capital fund of €723,666 (2016: €723,666), a merger reserve of €3,357,000 negative (2016: €3,357,000 negative) a currency translation reserve of €1,053,000 negative (2016: €593,000 negative), a share based payment reserve of €2,552,000 (2016: €2,164,000) and a put option reserve of €1,140,000 negative (2016: €400,000 negative). The merger reserve arose in 1998 when the Company acquired by way of a share for share exchange the share capital of two group companies formerly under common ownership, management, and control. The translation reserve movement comprises all foreign exchange differences from 1 July 2015 arising from the translation of the net assets of the Group's non-euro denominated operations including the translation of the results of such operations from the average exchange rate for the year to the exchange rate at the balance sheet date.

Cpl Resources Plc

 

Notes (continued)

 

8       Trade and other payables

 

         Amounts falling due in less than one year:

 


       Group

    Company


2017

2016

2017

2016


€'000

€'000

€'000

€'000






Trade creditors

2,802

2,788

940

2,135

Invoice discounting facility

Bank overdraft

Accruals

5,179

6

33,515

1,444

307

25,306

-

-

2,494

-

-

3,394

VAT

10,064

8,822

-

8,094

PAYE/PRSI

9,849

11,466

-

-

Amounts due to subsidiary





undertakings

-

-

123,975

144,287


            

            

             

             







61,415

50,133

127,409

157,910


             

             

             

             






 

Amounts due to subsidiary undertakings are repayable on demand.



 

Cpl Resources Plc

 

Notes (continued)

 

 

9       Acquisitions and disposals

On 6 June 2017 Cpl acquired a 100% shareholding in RIG Healthcare Group ("RIG") for a cash consideration of €9.5m. RIG Healthcare Group is the trading name of RIG Locums Limited and RIG Medical Recruit Limited.

On 30 June 2017 the existing management team of RIG subscribed for a 9% shareholding in RIG.

The acquisition is Cpl's entry to the locum doctor market and enhances the group's operating presence in the UK.

The provisional fair values of the assets and liabilities which were acquired, determined in accordance with IFRS, were as follows:

  



Book

Fair Value

Fair



Value

Adjustment

Value



€'000

€'000

€'000






Property, plant and equipment

Trade and other receivables

Trade and other payables


3

7,597

(2,741)

-

-

-

3

7,597

(2,741)

Cash acquired


144

-

144

Loans acquired


(3,959)

-

(3,959)



            

             

             

Net identifiable assets and liabilities acquired

 


1,044

______

-

_______

1,044

______

Goodwill arising on acquisition

 

 

 

 

Satisfied by:

Cash consideration

 




8,500

______

9,544

______

 

 

9,544

______





 

 

 

10     Basis of preparation

 

         The financial information included in this preliminary result statement has been extracted from the Group's financial statements for the year ended 30 June 2017 and is prepared based on accounting policies set out therein. As permitted by EU law and in accordance with AIM / ESM rules, the Group financial statements have been prepared in accordance with International Financial Reporting Standards and their interpretations issued by the International Accounting Standards Board as adopted by the EU. The Group Financial Statements will be filed with the Irish Registrar of Companies and circulated to shareholders in due course.


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