TIDMRTC
RNS Number : 2191U
RTC Group PLC
27 March 2023
27 March 2023
Certain information contained within this Announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR") as applied in
the United Kingdom. Upon publication of this Announcement, this
information is now considered to be in the public domain.
RTC Group Plc
("RTC", "the Company" or "the Group")
Final results for the year ended 31 December 2021
RTC Group Plc (AIM: RTC.L) is pleased to announce its audited
results for the year ended 31 December 2022.
Highlights
-- Group revenue from continuing operations GBP71.9m (2021: GBP77.7m).
-- EBITDA GBP0.6m (2021: GBP1.1m).
-- Improvement in cash generation from operating activities of GBP2.35m versus 2021.
-- Net assets GBP6.2m (2021: GBP6.6m).
-- Basic loss per share 2.45p (2021: earnings per share 0.04p).
-- No final dividend is proposed. Total dividend in respect of
the year to 31 December 2022: Nil (2021: Nil).
Commenting on the results Andy Pendlebury, CEO said:
" 2022 was a year of two very contrasting halves for RTC Group.
Like many other companies, the early part of the year continued to
be impacted by the effects of covid. Additionally, the new
maintenance and renewals contract with Network Rail which saw
Ganymede Rail successfully awarded another long-term programme of
work, was heavily biased towards upfront cost and investment
activities. Whilst the combined effect of these two events impacted
our first half profitability, the fundamental capabilities
underpinning all our trading entities remained robust. The second
half of the year saw much improved trading across the Group. With
the exception of Ganymede Rail, all of our businesses enjoyed
second half run rates last seen prior to the onset of covid in
2020.
Our overall financial position sees the Group with no long-term
debt, a working capital facility with significant headroom for
growth, and strong cash and treasury management supporting
predominately blue chip and government backed clients. RTC Group
has a strong balance sheet which hasn't necessitated any form of
recapitalisation which befell many larger players in the sector and
a very strong and lengthy order book with many leading clients
across a number of our sectors. I believe we are well positioned to
capitalise on growth opportunities as they emerge."
Enquiries:
RTC Group Plc Tel: 0133 286 1842
Bill Douie, Chairman
Andy Pendlebury, Chief Executive
SPARK Advisory Partners Limited (Nominated Tel: 0203 368 3550
Adviser)
Matt Davis / Mark Brady
www.Sparkadvisorypartners.com
Panmure Gordon (Broker) Tel: 020 7886 2500
Hugh Rich
www.panmure.com
About RTC
RTC Group Plc is an AIM listed recruitment business that focuses
on white and blue-collar recruitment, providing temporary and
permanent labour to a broad range of industries and customers in
both domestic and international markets through its geographically
defined operating divisions.
UK division
Through its Ganymede and ATA Recruitment brands the Group
provides a wide range of recruitment services in the UK.
Ganymede specialise in recruiting the best technical and
engineering talent and providing complete workforce solutions to
help build and maintain infrastructure and transportation for a
wide range of UK and international clients. Ganymede is a market
leader in providing a diverse range of people solutions to the
rail, energy, construction, highways and transportation sectors.
With offices strategically located across the country, Ganymede
provides its clients with the benefit of a national network of
skilled personnel combined with local expertise.
ATA Recruitment provide high-quality technical recruitment
solutions to the manufacturing, engineering and technology sectors.
Working as an engineering recruitment partner supporting businesses
across the UK. ATA Recruitment has a strong track record of
attracting and recruiting the best engineering talent for our
clients. ATA's regional offices which are strategically located in
Leicester and Leeds each have dedicated market-experts to ensure
ATA delivers excellence to both our clients and candidates.
The Group headquarters are located at the Derby Conference
Centre which also provides office accommodation for its operating
divisions in addition to generating rental and conferencing income
from space not utilised by the Group.
International division
Through its GSS brand the Group works with customers across the
globe that are focused on delivering projects in a variety of
engineering sectors. GSS has a track record of delivery in some of
the world's most hostile locations. Working closely with its
customers GSS provides contract and permanent staffing solutions on
an international basis, providing key personnel into new projects
and supporting ongoing large-scale project staffing needs. GSS
typically recruit across a range of disciplines and skills from
operators and supervisors, through to senior management level.
www.rtcgroupplc.co.uk
Chairman's statement
For the year ended 31 December 2022
I am pleased to present the final report for the year.
Group
The Group overall delivered revenues of GBP71.9m (2021:
GBP77.7m) and overall gross profit was GBP11.8m (2021:
GBP11.8m).
Ganymede Energy markedly increased volumes, our branch general
manufacturing and engineering recruitment performance was buoyant,
led by increased permanent placement volumes and our UK technical
and engineering operations produced a much-improved contribution.
Our international business continued to make steady progress from
an already sound base and achieved results comparable to the final
year of our service in Afghanistan despite reduced volumes. The
difficult trading conditions experienced in the rail business in
2021 continued through 2022, exacerbated by ongoing industrial
action, although the year ended with most of the challenges being
addressed. Within Central services the Derby Conference Centre
recovered strongly to generate a trading profit on markedly better
business levels in both the conferencing area and the hotel and
events activities.
Dividends
In the conditions which have unfolded this year it remains
prudent not to pay a dividend in respect of 2022 and to concentrate
future efforts on balance sheet improvement in preparation for the
expected need to invest in business changes and developments in the
future. It is unlikely that we will be recommending a return to
dividend payments in the near future.
Our people
I should like to thank all our people for their loyalty, hard
work, and enthusiasm during the course of the year.
Outlook
It is more than usually difficult to assess the likely economic
backdrop which will provide the stage for business management and
performance in 2023. Continuing high levels of inflation, albeit
varying throughout the world, coupled with the war between Russia
and Ukraine and alarming increases in tension between China and the
West do not augur well for stability. Although any slide into
recession in the UK could adversely affect general permanent
recruitment, other elements of our portfolio of activities are in
areas not so directly affected by economic factors and should offer
a more stable investment environment. Although it is possible that
inflation will continue to abate and remain lower, history casts
some doubt on the likelihood of that being the case. Nonetheless
the RTC Group has a strong balance sheet and management in depth
and your directors are cautiously optimistic of a continuing
improvement in our financial performance.
W J C Douie 26 March 2023
Chairman
Chief Executive's operational and strategic review
For the year ended 31 December 2022
Overview
2022 was a year of two very contrasting halves for RTC Group.
Like many other companies, the early part of the year continued to
be impacted by the effects of covid and the health, safety, and
well-being of both our permanent and contract workforce remained
our highest priority as we cautiously transitioned to a more
normalised trading environment. Additionally, the new maintenance
and renewals contract with Network Rail which saw Ganymede Rail
successfully awarded another long-term programme of work, albeit on
new operating routes, was heavily biased towards upfront cost and
investment activities. Whilst the combined effect of these two
events impacted our first half profitability resulting in only a
marginal EBITDA for the period, the fundamental capabilities
underpinning all our trading entities remained robust. This was
evidenced in the second half of the year which saw much improved
trading across the Group. With the exception of Ganymede Rail, all
of our businesses enjoyed second half run rates last seen prior to
the onset of covid in 2020. Furthermore, and whilst we are early in
the new financial year with much global and domestic uncertainty
clouding the visibility businesses and investors desire, I am
optimistic that these run-rates can maintain momentum and continue
in a positive direction.
Whilst 2022 full year sales of GBP71.9m were down around 7.5%
from 2021 reflecting the difficult start to the year, our gross
profit held constant at GBP11.8m with the margin gaining some
ground to 16% reflecting changes to our sales mix and operational
changes to our international contracts with fewer low margin
administration activities performed on behalf of our client.
Additionally, and of significance to the financial performance of
our Ganymede Rail business and the Group, it should be noted that
having endured elevated operating costs in the early part of the
year to comply with the tail end of covid, constantly escalating
fuel prices and wage-based inflation due to supply shortages, the
business was further heavily impacted in the second half of the
year by industrial action across the whole of the rail network.
This was naturally hugely disappointing and costly to our rail
business having invested significantly in the preparation of
personnel and new route management/deployment activities in the
early part of the year. To give some financial context, the
business, with minimal ability to offset operational cost, lost
around 75,000 billable hours in the second half of the year due to
the disruption which in turn equated to missed revenue of around
GBP2m along with the associated gross margin and profit
contribution. A significant sum which if recognised would have had
a positive impact on the outcome of the Group's results.
Furthermore, and taking account of our medium to long-term view
of growth across the industries and sectors we operate in, we have
continued throughout the year to invest in and increase the number
of recruitment consultants employed across the Group and alongside
this have committed to investing in a new front end, cloud based
CRM recruitment system which will provide a unified platform across
the Group and integrate with all financial, payroll and accounting
systems. Also, as we cooperate and integrate more closely alongside
and within our clients' businesses our technology platform will
enable us to seamlessly enhance and grow the value of key client
relationships. Naturally, the nature of these investments,
especially the costs attached to finding, training, and developing
new consultants, are forward loaded with delayed revenue streams
and we expect a positive return on these investments from 2023
onwards.
Taking all of this into account and considering our overall
financial position which sees the Group with no long term debt, a
working capital facility with significant headroom for growth,
strong cash and treasury management supporting predominately
blue-chip and government backed clients, a strong balance sheet
which hasn't necessitated any form of recapitalisation, which
befell many larger players in the sector and a very strong and
lengthy order book with many leading clients across a number of our
sectors, I believe we are well positioned to capitalise on growth
opportunities as they emerge.
Our strategy is very clear and will continue to centre around
our business model of growing industry leading, independent
subsidiary businesses capable of competing in each of their
respective sectors and offering clients significant opportunities
for greater value add and high-level cost savings through working
collaboratively across all RTC Group companies.
Finally, I believe our commitment to the highest levels of
corporate, commercial, and operational governance has been a
significant distinguishing factor in building the strong and
long-term relationships we have with our client base. This coupled
with the financial health of the Group, our ability to attract
strong management teams in each of our businesses and a Group board
with the necessary experience and proven track record to steer the
business through what has been an unprecedented few years for the
sector with significant companies having to seek additional
shareholder funds to survive, is evidence that the Group is in very
solid and strong position for its shareholders.
Business review
UK Division
2022 was a year of recovery for our UK recruitment business with
very strong demand returning for both permanent and temporary
recruitment pushing vacancy levels to post pandemic highs. However,
whilst client requirements for permanent staff were running at
all-time highs, a shortage of candidates due to skill availability,
candidate reluctance to change employer during the prevailing
economic uncertainties and counter offers by employers to retain
'hard-to-replace' employees, created a challenging recruitment
environment. Despite this our white-collar recruitment teams in
Ganymede and ATA enjoyed a 25% increase in permanent fees for the
period. The growth was driven by a combination of increased fees as
salary levels rose to attract key hires and an overall increase in
volume in line with market growth. The focus we have achieved
through combining our white-collar rail and infrastructure
recruitment business alongside our Ganymede Rail business has
continued to provide opportunities across the sector with many
clients choosing to leverage the combined capability. Having been
awarded several preferred supplier status contracts we have been
able to secure additional revenue and reduce external recruitment
costs for many rail and infrastructure clients. Also, during the
year, following encouragement from a number of rail specific
clients, a rail signalling business was established, and this is
now delivering a new and profitable business stream with growing
demand as we enter the new year.
Whilst candidate caution due to economic and political
uncertainty dominated the permanent marketplace, the temporary
sector excluding rail had an extremely buoyant year. Ganymede and
ATA's white collar recruitment teams saw revenue from temporary
activity increase significantly across both businesses resulting in
increased gross profit of 38%. This is a hugely impressive
performance, especially for the ATA business which lost over 90% of
temporary workers out on assignment during the height of covid.
ATA's current run-rate is now tracking back at pre-covid levels and
demand as we enter the new year is showing positive signs of
encouragement.
During 2022 Ganymede Energy finally began to fulfil its full
potential following successive years of setbacks. Over 5 years ago
the business established itself as a partner to major utility
companies to provide personnel to support the Government's smart
meter roll out strategy. Having recruited, trained, and begun to
deploy smart meter installers it quickly became apparent that
issues with the technology would have to halt the programme pending
technology improvements. This was followed by delays caused through
client redundancy programmes and then a complete suspension of
activity as covid restrictions prohibited workers from attending
private residences. This was still the case in quarter one 2022 but
once all restrictions were finally lifted activity recommenced. I
am delighted to report that during the rest of the year demand for
our smart meter installers has hit record highs with the year
ending with over 200 Ganymede personnel out on daily assignment and
this is expected to rise during 2023. Outside of the 6 major
utility companies our energy business is now one of the largest
providers of smart meter installers in the country. A remarkable
achievement given the multiple hurdles the business has faced
during its growth journey. The Government is currently legislating
to extend its powers in relation to the smart meter roll-out until
November 2028. Based on data published at the end of September 2022
there are some 24 million smart meters awaiting fitment. Given
current installation rates across the industry it is estimated that
it will take between 6-8 years (excluding enhancements to existing
meters) to replace the remaining traditional meters. We are
confident that given our current performance and dominant
positioning our energy business has a significant and sustainable
revenue potential revenue for the foreseeable future. In addition,
in collaboration with our conference business, the Derby Conference
Centre, our energy partners are using our inhouse facility to
induct direct personnel alongside the Ganymede smart meter
installers which is generating broader revenue for the Group.
Towards the second half of 2022 our projects business which had
traditionally focused on rail projects began exploring the
opportunity to enter the social housing market given the scale of
property refurbishment which was forecast across many district
councils. Following a pilot scheme which saw some upfront
investment to gain skills, capability and experience the team began
working as a secondary provider of labour to a prime contractor.
Over the past 6 months and following successful inclusion as a
direct provider our projects business has now refurbished in excess
of 100 council properties. Whilst it is early days, we believe the
scale of properties requiring renovation or upgrade as part of the
Government's heating and building strategy to decarbonise homes,
offers another long-term opportunity for two RTC business units to
combine capabilities and offer a single point solution to a
significant and growth dominated sector. In preparation and
readiness for this the Group is funding the establishment of a
training and assessment centre within our energy business
premises.
As has been alluded to Ganymede Rail experienced a very
challenging year in 2022 mainly due to the tail end of covid,
disruption to its operational route management through significant
industrial action, escalating fixed and variable costs through
excessive fuel prices and high wage inflation, and the impact of
route changes which resulted in reduced revenue and additional set
up costs for the newly awarded long term Network Rail contract.
Whilst this has proved an extremely difficult period for the
business, its management, and its permanent and contract workforce,
I cannot emphasise enough the strategic value and importance that
the Group board place on this business. The business has a long
term, multimillion-pound order book with a minimum 4-year tenure
which will see Ganymede continue as one of Network Rail's largest
and historically best performing maintenance and renewals labour
suppliers. In addition to its long-term direct relationship with
Network Rail Ganymede Rail is partner with numerous blue-chip prime
contractors and has a first-class track record in safety management
in the sector and is one of the largest apprentice training funders
across labour supply companies. We remain extremely confident in
the business's ability deliver an extremely high value service on
one of the country's most important and strategic assets and we
look forward to seeing it rebound in 2023.
Central services
The Derby Conference Centre which forms part of the central
services division had a much-improved year culminating in a
significant increase in volume for all its service offerings.
Following a long period of closure to comply with government
restrictions in 2020 and 2021 the business like many in the
hospitality sector was plagued with uncertainty at the beginning of
2022. However, its performance due to its strong reputation in the
East Midlands quicky regained momentum and December delivered one
of its best festive results. Furthermore, as we enter 2023 the
business achieved its best January result and the whole team is
encouraged about its long-term future in the sector.
International
Whilst GSS no longer provides personnel to Afghanistan following
the demobilisation of all international personnel, the business
remains very active in supporting overseas clients and territories
and has secured new clients providing exciting new opportunities
for the business. We still provide a wide-ranging workforce to many
other overseas locations including, Dubai, Bahrain, Iraq,
Mogadishu, and Poland. During 2022 the business secured a
significant new contract with its largest client to provide large
volumes of permanent personnel to British Overseas Territories. The
team are also currently working with several NATO supply partners
in support of emerging mobilisation contracts in various
locations.
Outlook
Following a vastly improved performance in the second half of
the year and early signs of a continuation of this trajectory into
the early part of this year, I remain cautiously optimistic about
our future revenue and profit generation. Whilst naturally there is
considerable and justified concern about both international and
domestic events which serve to destabilise both market and customer
demand, I believe the services being provided by many of our
domestic clients, especially our utility and transportation clients
where maintenance and enhancement programmes to key infrastructure
assets have work programmes spanning many years offering
significant growth potential to add to our already well established
orderbook. In addition to this, the broad generalist capability
being offered by our permanent and temporary recruitment business
serving the UK's growing manufacturing, industrial and engineering
companies, and our expanding geographic presence through our
international business will ensure that we are well placed to take
capture new business opportunities across all our Group recruitment
businesses.
Our people
The energy and enthusiasm showed by our people across the RTC
Group is, as always, exceptional. Given how tough the last few
years have been on our people and their families it is has been
humbling to see their resilience, ambition, and desire to see RTC
continue to differentiate itself in highly populated markets.
The Board of directors could not be prouder of the collective
team effort and would like to thank everybody across the Group.
A M Pendlebury
CEO 26 March 2023
Finance Director's report
For the year ended 31 December 2022
Financial highlights
The Group overall delivered revenues of GBP71.9m (2021:
GBP77.7m) and overall gross profit was GBP11.8m (2021: GBP11.8m).
The loss from operations of GBP0.2m (2021: profit of GBP0.3m)
reflects a mixed year that saw good performance across all areas of
the Group other than rail which experienced a perfect storm of
increased costs to supply and lower than anticipated volumes (see
more detail in the UK Recruitment section below).
UK Recruitment
The division's white collar recruitment divisions, serviced by
our ATA and Ganymede recruitment brands both performed well
throughout the year, despite the well-publicised candidate
shortages, with strong client demand across both permanent and
contract recruitment. In 2022 these divisions delivered a combined
25% growth in permanent fees and 38% growth in contract GP compared
to 2021.
Ganymede Energy continued its growth trajectory, supporting the
Government's smart meter roll out programme, delivering 50% growth
at GP level compared to 2021. Additionally, 2022 saw the
development of training and assessment facilities at the Ganymede
Energy premises in Milton Keynes to support workforce
upskilling.
Ganymede Rail had a challenging year, severely impacted by
ongoing industrial action, escalating fuel prices and wage
inflation fuelled by candidate shortages. Year on year volumes
reduced by 35% in comparison to 2021 reflecting the changes in
geographical regions of supply to Network Rail under the revised
contract which commenced in Q4 of 2021, combined with the lost
revenue impact of the rail strikes between June and December.
Additionally, the company continued to grow its minor projects
capability; developed a signalling labour supply business and
delivered ongoing improvement in safety performance throughout the
year.
Overall, UK Recruitment delivered slightly reduced revenues of
GBP64.8m (2021: GBP66.8m) which were converted to profit from
operations of GBP1.5m (2021: GBP2.7m). The reduction in profit from
operations reflecting strike action and the increased cost of
supply, particularly fuel prices in the Rail division and increased
administrative expenses largely due to higher commissions on very
strong performances in energy and recruitment.
International
Whilst revenue reduced significantly to GBP5.2m (2021: GBP9.6m)
following the withdrawal of NATO from Afghanistan, gross profit
reduced only slightly to GBP0.8m (2021: GBP0.9m) with gross margin
increasing to 15% (2021: 10%) as much of the revenue relating to
Afghanistan related to services (e.g., contractor travel) that were
provided at cost. The division has been successful in securing work
under new framework agreements in addition to existing arrangements
delivering profit from operations of GBP0.5m (2021: GBP0.5m) on a
par with 2021 despite the withdrawal from Afghanistan.
Central Services
Within Central Services, the Derby Conference Centre has seen
good levels of activity relating to conferences, events and bedroom
sales for the majority of 2022 with a particularly strong finish on
festive activities. Revenue generated by the segment was GBP2.0m
(2021: GBP1.3m) and gross profit increased to GBP1.1m (2021:
GBP0.7m).
Taxation
The tax credit for the year was GBP0.1m (2021: charge of
GBP0.1m). The variance between this and the expected charge if a
19% corporation tax rate was applied to the result for the year is
explained in note 9.
Dividends
No dividends were paid during the year (2021: Nil). No final
dividend for the year ended 31 December 2022 has been proposed
(2021: Nil).
Own shares held
The cost of the Group's own shares purchased through the
Employee Benefit Trust (EBT) is shown as a deduction from equity.
No options were exercised during the year. The balance of
GBP235,918 (2021: GBP235,918) in the own shares held reserve within
equity reflects 337,027 (2021: 337,027) shares remaining in the EBT
that will be used to satisfy future exercises.
Statement of financial position and cash flows
The Group's net working capital reduced slightly to GBP4.6m
(2021: GBP5.0m). The ratio of current assets to current liabilities
was slightly reduced at 1.4 (2021: 1.5). The Group's gearing ratio,
which is calculated as total borrowings over net assets, increased
to 0.5 (2021: 0.4).
The Group generated GBP2.4m more cash in 2022 compared to. This
improvement versus 2021 reflects increased activity across the
majority of the business.
The Group has no term debt and is financed using its invoice
discounting and overdraft facilities with HSBC. At 31 December 2022
the Group's had available funds to draw down of GBP5.1m (2021:
GBP4.3m)
Financing and going concern
The Group's current bank facilities include a net overdraft
facility across the Group of GBP50,000 and an invoice discounting
facility with HSBC providing of up to GBP12.0m, based on a
percentage of good book debts, at a margin of 1.6% above base. The
Board closely monitors the level of facility utilisation and
availability to ensure there is enough headroom to manage current
operations and support the growth of the business.
Given the uncertainty and mixed opinion about short and
medium-term prospects for the UK economy influenced by the
cost-of-living crisis, widespread strike action, the looming threat
of a recession and other geo-political events, in addition to the
established budgeting and forecasting processes, which considers a
range of plausible events and circumstances, a reverse stress test
has been undertaken. This shows that, assuming a continuation of
the current facilities, the Group has access to sufficient cash and
facilities to withstand a 20% reduction against the 2022 revenues
without any significant restructuring or other cost reduction
measures.
In assessing the risks related to the continued availability of
the current facilities, the Board have taken into consideration the
existing relationship with HSBC and the strength of the security
provided, also taking into account the quality of the Group's
customer base. Based on their enquiries, the Board have concluded
that sufficient facilities will continue to remain available to the
Group and therefore the going concern basis of preparation remains
appropriate and no material uncertainty exists.
Liquidity risk
The Group seeks to mitigate liquidity risk by effective cash
management. The Group's policy, throughout the year, has been to
ensure the continuity of funding through a net overdraft facility
of GBP50,000 and an invoicing discounting facility, providing up to
GBP12m based on a percentage of good book debts. The invoice
discounting facility, which is the Group's core funding line is
classed as evergreen in that it has no fixed expiry date (although
it is reviewed annually).
The strategic report was approved by the Board on 26 March 2023
and signed on its behalf by:
S L Dye 26 March 2023
Consolidated statement of comprehensive income
For the year ended 31 December 2022
2022 2021
Notes GBP'000 GBP'000
---------------------------------------------- ------- ---------- ----------
Revenue 2 71,907 77,715
Cost of sales (60,132) (65,928)
---------------------------------------------- ------- ---------- ----------
Gross profit 11,775 11,787
Other operating income 6 351
Administrative expenses (12,024) (11,864)
---------------------------------------------- ------- ---------- ----------
(Loss)/profit from operations (243) 274
Finance expense (212) (160)
---------------------------------------------- ------- ---------- ----------
(Loss)/profit before tax (455) 114
Tax expense 3 104 (109)
---------------------------------------------- ------- ---------- ----------
Total (loss)/profit and other comprehensive
(expense)/income for the year attributable
to owners of the Parent (351) 5
---------------------------------------------- ------- ---------- ----------
Earnings per ordinary share
Basic (2.45p) 0.04p
---------------------------------------------- ------- ---------- ----------
Fully diluted (2.45p) 0.03p
---------------------------------------------- ------- ---------- ----------
Consolidated statement of changes in equity
For the year ended 31 December 2022
Share Share Own Capital Share Retained Total
capital premium shares redemption based earnings equity
held reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- ----------- ---------
Balance
at 1 January
2022 146 120 (236) 50 146 6,320 6,546
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
expense for
the year - - - - - (351) (351)
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Transactions
with owners:
Share options
cancelled - - - - (24) 24 -
Share based
payment charge
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total transactions
with owners - - - - (24) 24 -
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2022 146 120 (236) 50 122 5,993 6,195
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
The consolidated statement of changes in equity for the prior
year was as follows:
Share Share Own Capital Share Retained Total
capital premium shares redemption based earnings equity
held reserve payment
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- ---------- --------- ------------- ---------- ----------- ---------
Balance at
1 January
2021 146 120 (236) 50 718 6,278 7,076
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total comprehensive
income for
the year - - - - - 5 5
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Transactions
with owners:
Share options
cancelled - - - - (782) 37 (745)
Share based
payment charge - - - - 210 - 210
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Total transactions
with owners - - - - (572) 37 (535)
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
At 31 December
2021 146 120 (236) 50 146 6,320 6,546
---------------------- ---------- ---------- --------- ------------- ---------- ----------- ---------
Consolidated statement of financial position
As at 31 December 2022
2022 2021
Note GBP'000 GBP'000
--------------------------------- ------- ---------- ----------
Assets
Non-current
Goodwill 132 132
Other intangible assets 28 74
Property, plant, and equipment 1,544 1,554
Right-of-use assets 2,491 2,779
Deferred tax asset 210 40
------------------------------------------ ---------- ----------
4,405 4,579
Current
Inventories 15 21
Trade and other receivables 15,388 13,481
Cash and cash equivalents 467 946
------------------------------------------ ---------- ----------
15,870 14,448
Total assets 20,275 19,027
------------------------------------------ ---------- ----------
Liabilities
Current
Trade and other payables (7,875) (6,430)
Lease liabilities (303) (294)
Current borrowings (3,132) (2,828)
(11,310) (9,552)
Non-current liabilities
Lease liabilities (2,576) (2,801)
Deferred tax liabilities (194) (128)
------------------------------------------ ---------- ----------
Total liabilities (14,080) (12,481)
------------------------------------------ ---------- ----------
Net assets 6,195 6,546
------------------------------------------ ---------- ----------
Equity
Share capital 146 146
Share premium 120 120
Own shares held (236) (236)
Capital redemption reserve 50 50
Share based payment reserve 122 146
Retained earnings 5,993 6,320
Total equity 6,195 6,546
------------------------------------------ ---------- ----------
Consolidated statement of cash flows
For the year ended 31 December 2022
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit before tax (455) 114
Adjustments for:
Depreciation, loss on disposal and
amortisation 857 816
Finance expense 212 160
Employee equity settled share options
charge - 210
Change in inventories 6 (14)
Change in trade and other receivables (1,907) (77)
Change in trade and other payables 1,445 (3,271)
---------------------------------------------- --------- ---------
Cash inflow/(outflow) from operations 158 (2,062)
Income tax paid - (217)
Interest paid (212) (160)
Net cash outflow from operating activities (54) (2,439)
---------------------------------------------- --------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment
and intangibles (417) (279)
Net cash outflow from investing activities (417) (279)
Cash flows from financing activities
Movement on invoice discounting facility 872 2,231
Movement on perpetual bank overdrafts (568) (370)
Amounts paid to cancel share options - (745)
Payment of lease liabilities (312) (279)
Net cash (outflow)/inflow from financing
activities (8) 837
---------------------------------------------- --------- ---------
Net decrease in cash and cash equivalents (479) (1,881)
---------------------------------------------- --------- ---------
Cash and cash equivalents at beginning
of year 946 2,827
---------------------------------------------- --------- ---------
Cash and cash equivalents at end of
year 467 946
---------------------------------------------- --------- ---------
1. Corporate information and basis of preparation
RTC Group Plc is a public limited company incorporated and
domiciled in England whose shares are publicly traded.
The announcement of results of the Group for the year ended 31
December 2022 was authorised for issue in accordance with a
resolution of the directors on 26 March 2023.
The financial information included in this announcement has been
prepared under the historical cost convention, as modified by
measurement of share-based payments at fair value at date of grant
, and in accordance with UK adopted international accounting
standards ("IFRS") and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. This announcement
does not itself 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 2021. There have been no significant changes in the basis
upon which estimates have been determined, compared to those
applied at 31 December 2021 and no change in estimate has had a
material effect on the current period.
2. Segment analysis
The business is split into three operating segments, with
recruitment being split by geographical area. This reflects the
integrated approach to the Group's recruitment business in the UK
and independent delivery of overseas business. Three operating
segments have therefore been agreed, based on the geography of the
business unit: United Kingdom, International and Central
Services.
This is consistent with the reporting for management purposes,
with the Group organised into two reportable segments, Recruitment
and Central Services, which are strategic business units that offer
different products and services. They are managed separately
because each segment has a different purpose within the Group and
requires different technologies and marketing strategies.
Segment operating profit is the profit earned by each operating
segment defined above and is the measure reported to the Group's
Board, the Group's Chief Operating Decision Maker, for performance
management and resource allocation purposes. The Group manages the
trading performance of each segment by monitoring operating
contribution and centrally manages working capital, financing, and
equity.
Revenues within the recruitment operating segment have similar
economic characteristics and share a majority of the aggregation
criteria set out in IFRS 8:12 in particular the nature of the
products and services, the type or class of customers, the country
in which the service is delivered, and the processes utilised to
deliver the services and the regulatory environment for the
services.
The purpose of the Central Services segment is to provide all
central services for the Group including the Group's head office
facilities in Derby. It also generates income from the Derby site
including rental of excess space and hotel and conferencing
facilities.
Revenue, gross profit, and operating profit delivery by
geography:
2022 2021
UK UK Inter-national Total UK UK Inter-national Total
Recruitment Central Recruitment Group Recruitment Central Recruitment Group
Services Services
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------- ---------- ---------------- ---------- ------------- ---------- ---------------- ----------
Revenue 64,764 1,979 5,164 71,907 66,842 1,279 9,594 77,715
Cost of
sales (54,878) (912) (4,342) (60,132) (56,703) (622) (8,603) (65,928)
----------------- ------------- ---------- ---------------- ---------- ------------- ---------- ---------------- ----------
Gross profit 9,886 1,067 822 11,775 10,139 657 991 11,787
Other operating
income* - 6 - 6 213 138 - 351
Administrative
expenses (7,948) (2,883) (341) (11,172) (7,240) (3,293) (519) (11,052)
Amortisation
of intangibles (46) - - (46) (100) - - (100)
Depreciation
of
right-of-use
assets (144) (240) - (384) (129) (239) - (368)
Depreciation (261) (157) (4) (422) (175) (165) (4) (344)
----------------- ------------- ---------- ---------------- ---------- ------------- ---------- ---------------- ----------
Total
administrative
expenses (8,399) (3,280) (345) (12,024) (7,644) (3,697) (523) (11,864)
----------------- ------------- ---------- ---------------- ---------- ------------- ---------- ---------------- ----------
Profit
from
operations 1,487 (2,207) 477 (243) 2,708 (2,902) 468 274
----------------- ------------- ---------- ---------------- ---------- ------------- ---------- ---------------- ----------
*Other operating income represents Government Grants in respect
of the Coronavirus Job Retention Scheme and a Local Government
Business Support Grant (none of which are required to be
repaid).
The revenue reported above is generated from continuing
operations with external customers. There were no sales between
segments in the year (2021: Nil). For segment reporting purposes in
this note, revenue is analysed by the geographical location in
which the services are delivered.
The accounting policies of the operating segments are the same
as the Group's accounting policies described in notes 1 above.
Segment profit represents the profit earned by each segment,
without allocation of Group administration costs or finance
costs.
During 2022, one customer in the UK segment contributed 10% or
more of total revenue being GBP18.0m (2021: GBP28.0m) and one
customer in the International segment also contributed 10% or more
of total revenue being GBP5.1m (2021: GBP9.1m).
Recruitment revenues are generated from permanent and temporary
recruitment and long-term agreements for labour supply. Within
Central Services revenues are generated from the rental of excess
space and hotel and conference facilities at the Derby site,
described as Other below.
Revenue and gross profit by service classification for
management purposes:
Revenue Gross profit
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- --------- ---------
Permanent placements 2,706 2,098 2,706 2,098
Temporary placements 67,222 74,338 8,002 9,032
Others 1,979 1,279 1,067 657
----------------------- --------- --------- --------- ---------
71,907 77,715 11,775 11,787
----------------------- --------- --------- --------- ---------
All operations are continuing. All assets and liabilities are in
the UK.
3. Tax expense
2022 2021
Continuing operations GBP'000 GBP'000
---------------------------------------------------- --------- ---------
Current tax
UK corporation tax - (6)
Deferred tax
Origination and reversal of temporary differences (104) 115
Tax (104) 109
---------------------------------------------------- --------- ---------
Factors affecting the tax expense
The tax credit assessed for the year is lower than (2021: charge
higher than) would be expected by multiplying the loss by the
standard rate of corporation tax in the UK of 19% (2021: 19%). The
differences are explained below:
2022 2021
Factors affecting tax expense GBP'000 GBP'000
--------------------------------------------------- --------- ---------
Result for the year before tax (455) 114
--------------------------------------------------- --------- ---------
(Loss)/profit multiplied by standard rate of tax
of 19% (2021: 19%) (86) 22
Non-deductible expenses 50 68
Tax charge on exercise of options - 28
Effect of change in deferred tax rate 13 (9)
Adjustment in respect of previous periods (81) -
--------------------------------------------------- --------- ---------
(104) 109
--------------------------------------------------- --------- ---------
4. Dividends
No final dividend for the year ended 31 December 2022 has been
proposed (2021: Nil). This represents a payment of Nil (2021: Nil)
per share.
5. Report and accounts
The above financial information does not constitute the
Company's statutory accounts for the years ended 31 December 2022
or 2021 but is derived from those accounts. The auditor has
reported on these accounts; their report was unqualified, did not
draw attention to 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 2020 have been filed with the Registrar of
Companies.
Full audited accounts of RTC Group Plc for the year ended 31
December 2022 will be made available on the Company's website at
www.rtcgroupplc.co.uk later today and will be dispatched to
shareholders on 25 April 2023 and then be available from the
Company's registered office - The Derby Conference Centre, London
Road, Derby, DE24 8UX.
The Company's Annual General meeting will be held at 12.30pm on
31 May 2023 at the Derby Conference Centre, London Road, Derby,
DE24 8UX.
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END
FR EAXDLALEDEFA
(END) Dow Jones Newswires
March 27, 2023 02:00 ET (06:00 GMT)
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