The 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 as amended by The Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now
considered to be in the public domain.
30 July 2024

STAFFLINE GROUP PLC
('Staffline', the
'Company' or the 'Group')
UNAUDITED INTERIM RESULTS FOR THE SIX
MONTHS ENDED 30 JUNE 2024
Strong H1 2024 performance
across the Group and underlying trading in line with FY 2024
expectations
Staffline growing its market
leading position underpinned by solid new business
pipeline
Staffline Group PLC, the recruitment
and training group, announces its unaudited interim results for the
six months ended 30 June 2024 ("H1 2024").
Financial
highlights
Continuing
activities
|
Six months to 30 June
2024
Unaudited
|
Six
months to 30 June 2023
Unaudited
|
Change
|
Revenue
|
£480.2m
|
£430.0m
|
+11.7%
|
Gross sales value1
|
£532.4m
|
£492.3m
|
+8.1%
|
Gross profit
|
£38.2m
|
£38.1m
|
+0.3%
|
Gross margin %
|
8.0%
|
8.9%
|
-0.9 ppts
|
Underlying operating profit
|
£2.9m
|
£3.0m
|
-3.3%
|
Gross profit to underlying operating profit conversion
%
|
7.6%
|
7.9%
|
-0.3 ppts
|
Loss before tax
|
£(12.1)m
|
£(1.4)m
|
-£10.7m
|
Pre-IFRS16 Net debt2
|
£(9.2)m
|
£(3.5)m
|
-£5.7m
|
Alternative performance
measures
1.
Gross sales
value represents the fair value of consideration received or
receivable for the supply of services, including agency sales,
(excluding fees), net of VAT
2.
On a
Post-IFRS16 basis, net debt was £(14.5)m at 30 June 2024 (2023: net
debt £(8.0)m)
Key highlights:
· Revenue
increased 11.7% to £480.2m (H1 2023: £430.0m)
· Strong trading
driven by a 9.2% year-on-year uplift in temporary hours worked in
Recruitment GB
· Permanent
recruitment fees in Ireland were up 30%
· The Group's
recruitment businesses are performing well
o Recruitment GB operating
profit up 56%
o Ireland operating profit up
50%
· Underlying
operating profit at £2.9m (H1 2023: £3.0m) impacted by £1.3m
reduction in PeoplePlus underlying operating profit
· PeoplePlus to be
preferred sole supplier to Mitie Care & Custody on HMP Millsike
contract, and a two year extension to Restart agreed. However,
other pipeline delays caused by political
uncertainty, have led to a non-cash impairment charge of £12.9m
against goodwill carrying value of PeoplePlus
· Net debt
increased as a result of working capital investment and share
buybacks
Current trading and outlook
• FY 2024
outlook is supported by momentum in Staffline's market leading
blue-collar recruitment division and revenues on new contract wins
in the Republic and Northern Ireland
• The
Board expects FY 2024 underlying operating profit to be in line
with expectations despite macro-economic and political uncertainty
following the change of government
•
Customers' staff attrition has reduced, and the ONS reports that
overall vacancies are in decline, however, a tight labour market
continues in many sectors and geographic areas.
• Delays
in PeoplePlus' 2025 pipeline have arisen as a result of the UK
general election, albeit 2024 remains in line with
expectations
• Interest
rates have remained high for longer than expected, and although the
Group's strong performance on working capital management continues,
there is an impact on net finance charges
• With a
strong balance sheet and continued expected positive underlying
trading cashflows, £2.2 million is still set aside for continued
share buybacks
• The
Group continues to make good progress across its key strategic
priorities, further capitalising on Staffline's market leading
position in the blue-collar recruitment market
Albert Ellis, Chief Executive Officer of Staffline,
commented:
"With the widely reported downturn in the recruitment sector,
I am delighted to report a highly creditable performance across the
first half of 2024.
In what has proven to be a persistently challenging
macro-economic environment, Staffline's strategy to grow its market
share organically, and focus on customer service and delivery has
served it well in the first six months of the year. In exiting the
Skills market twelve months ago, PeoplePlus has reduced its
overheads at a time when political changes in the UK have resulted
in the pipeline being pushed back.
"My thanks to everybody in the Group who has contributed to
this excellent result, and looking forward, I am pleased that we
expect underlying trading to be in line with expectations for the
full year."
Retail investor webcast
Management will be hosting a
presentation for investors in relation to the Company's interim
results at 8.00am (BST) on Tuesday, 30 July 2024.
The presentation will be hosted on the
Investor Meet Company ("IMC") digital platform and is open to all
existing and potential shareholders. Investors can sign up to IMC
for free and add themselves to meet Staffline via:
https://www.investormeetcompany.com/staffline-group-plc/register-investor
Investors who have already registered and have
been added to meet the Company will be automatically
invited.
For further
information, please contact:
Staffline Group plc
www.stafflinegroupplc.co.uk
Albert Ellis, Chief Executive
Officer
Daniel Quint, Chief Financial
Officer
|
via Vigo Consulting
|
|
|
Panmure Liberum Nominated
Adviser and Joint Broker
www.liberum.com
Richard Lindley / Satbir
Kler
Zeus Joint
Broker
www.zeuscapital.co.uk
David Foreman (Investment
Banking)
Nick Searle (Sales)
|
020 3100 2222
020 3829 5000
|
Vigo Consulting Investor
Relations & Financial PR
www.vigoconsulting.com
Jeremy Garcia / Verity
Snow
|
020 7390 0230
staffline@vigoconsulting.com
|
About Staffline - Recruitment, Training and
Support
Enabling the Future of
Work™
Staffline is the UK's market
leading Recruitment and Training group. It has three
divisions:
Recruitment GB
The Recruitment GB business is
a leading provider of flexible blue-collar workers, supplying
c.30,000 staff per day on average from around 400 sites, across a
wide range of industries including supermarkets, drinks, driving,
food processing, logistics and manufacturing.
Recruitment Ireland
The Recruitment Ireland business
is a leading end to end solutions provider operating across
multiple industries, ten branch locations and ten onsite customer
locations, supplying c.4,500 staff per day on average, and offering
RPO, MSP, temporary and permanent solutions across public and
private sectors throughout the island of Ireland.
PeoplePlus Division
The PeoplePlus business is a
leading provider of employability, adult training, prison
education and skills-based programmes across the country
to those who are disadvantaged in society. In addition, it
delivers Community Service support as well as social value services
and expertise to employers.
Chief
Executive Officer's review
Introduction
I am delighted to report a solid overall six
months of trading, with recruitment growing strongly, underpinned
by ongoing market share gains across our recruitment divisions and
PeoplePlus in line with revised expectations.
Revenue grew 11.7% to £480.2m (H1 2023:
£430.0m), with gross margin of 8.0% (H1 2023: 8.9%). Gross profit
was marginally above last year at £38.2m (2023: £38.1m), with the
recruitment businesses growing gross profit by £1.6m, due to
increasing blue-collar temporary hours and a stronger than expected
performance in permanent fees in Ireland, being offset by an equal
decline in PeoplePlus' gross profit. Group underlying operating
profit of £2.9m (H1 2024: £3.0m) was held back by a reduction of
£1.3m in PeoplePlus driven by lower levels of trading in
PeoplePlus, albeit trading is on budget and in line with
expectations.
The Group's two recruitment businesses
increased combined underlying operating profit by 53.8%, driven by
organic growth in the largest of our existing blue-collar
Recruitment GB customers as a result of an increase of 9.2% in
hours worked, as well as the increase in Recruitment Ireland's
permanent hiring fees.
The ongoing strength of our recruitment
footprint continues to drive our growth as we secured both new
mandates in permanent recruitment, including with G4S, alongside
broadening activity with existing temporary recruitment customers,
such as Tesco and Morrisons. This highly creditable performance,
underpinned by the increase in reported hours within the temporary
staffing sector, is in contrast to the widely reported trend in a
subdued recruitment market where demand remains below historic
levels as a weak macro-economic environment persists.
Furthermore, PeoplePlus extended two of its
largest contracts; Restart (employability) to 2028; and the Prison
Education Framework, which will now run until Q4 2025. PeoplePlus
is also expected to be the preferred supplier of prison education
services to Mitie Plc following the announcement of the HMP
Millsike bid results.
The Group remains disciplined in its
allocation of capital with strong levels of cashflow supporting a
share buyback programme of up to £2.5 million announced on 10 June
2024.
Market
The broader macro-economic uncertainty
continued across H1 2024 in both the UK and Irish labour markets.
Staffline, in partnership with its customers, continues to adjust
to cost pressures. The unemployment rate has risen slightly to 4.4%
but, whilst inflation has now fallen, the labour market remains
tight with the estimated number of vacancies at 889,000 for the
quarter ended June 2024, still at historically high levels. This
was a decrease of 15,000 on the previous quarter.
White-collar recruitment continues to remain
relatively subdued, impacted by continued demand and the ongoing
skills shortage, with the exception of specialist engineering
roles.
With the UK general election now concluded, we
expect the pipeline delays and backlog of public sector demand to
begin to improve, particularly within Northern Ireland, but also in
the medium-term within PeoplePlus.
Strategy
The Group has delivered excellent
progress in its strategy of increasing its share of the blue-collar
recruitment market, growing its business in the Republic of
Ireland, and remains focused on delivering across its strategic,
operational, and financial objectives which include:
·
Capitalising on market leadership in blue-collar
to expand organically and drive market share gains
·
Cross selling and expanding the recruitment
portfolio; managed services and permanent recruitment
·
Investing in the Republic of Ireland
·
Continuing to transform PeoplePlus into a stable
annuity business with diverse revenues
The Group continues to operate
from a position of financial stability and strength, providing a
solid foundation for continued investment and providing cash
returns to shareholders.
Operational
review
Recruitment
The Group's market leading
blue-collar recruitment activities traded well, increasing both
revenues and profits despite broader macro challenges which have
impacted many of our white-collar peers. Our sizeable scale,
geographic reach and market leadership across the UK has attracted
new business opportunities.
Recruitment GB
|
H1
2024
|
H1
2023
|
%
Var
|
|
£m
|
£m
|
|
Revenue
|
393.0
|
341.2
|
+15.2%
|
Gross Profit
|
24.7
|
23.5
|
+5.1%
|
Underlying operating
profit
|
2.8
|
1.8
|
+55.6%
|
The performance of Recruitment GB
has improved significantly in H1 2024 vs 2023, with temporary
worker hours worked up 9.2% year-on-year. Importantly, this strong
performance has been driven by an increase in market share across
our top 20 largest blue-collar customers, mainly in food
distribution and logistics. Our continued focus on efficiency
savings across the business is reflected in overall overheads
remaining broadly flat year-on-year despite ongoing inflationary
pressures.
The division continues to grow organically,
with market share increasing c.17% across our top 20 customers. We
have maintained our strong market presence across the UK food
retail sector; securing further spend by Tesco and Sainsburys
(delivered via 3rd party logistics partner relationships with DHL
and GXO); and we now exclusively provide all agency workers at
Morrisons.
Outlook for our permanent
recruitment activity remains in line with expectations, despite a
challenging marketplace, mainly due to the division's focus on its
technical engineering speciality, a sector which remains buoyant.
The volume permanent hiring service, such as the managed service
with G4S, continues to perform well and expand in line with
expectations.
In anticipation of a return to
growth in white-collar recruitment, headcount investment has been
made in our Gloucestershire Omega Head Office as well as our Leeds
operation, and in H1 2024 we have also successfully opened our
third operation in Birmingham. Datum remains affected by a
slow-down in the construction sector but is expected see an
improvement in its performance during H2 2024.
Recruitment Ireland
|
H1
2024
|
H1
2023
|
%
Var
|
|
£m
|
£m
|
|
Revenue
|
53.8
|
54.5
|
-1.3%
|
Gross Profit
|
6.5
|
6.1
|
+6.6%
|
Underlying operating
profit
|
1.2
|
0.8
|
+50.0%
|
In Recruitment Ireland, gross
profit increased by 6.6% mainly as a result of the strong 30%
year-on-year increase in permanent recruitment with underlying
operating profit increasing by 50%. Revenues were marginally lower
than prior year but a change in the mix and a successful strategy
to focus on higher margin services is paying off. In addition,
investment made in the fee-earning capacity, office and technology
infrastructure of the business in recent years have increased the
capacity of the business to generate additional revenues without
much additional overhead.
This highly creditable performance
was set against the backdrop of the wider economic headwinds, weak
results reported from peers in the sector, as well as the ongoing
power sharing impasse at Stormont. With power sharing now
resolved, we believe this will improve demand in Northern Ireland
in the core public services sector. The mobilisation of the
new contract wins continue to gather pace with revenues expected to
be generated in Q4 2024, positively impacting FY 2024
performance.
PeoplePlus
|
H1
2024
|
H1
2023
|
%
Var
|
|
£m
|
£m
|
|
Revenue
|
33.4
|
34.3
|
-2.6%
|
Gross Profit
|
7.0
|
8.5
|
-17.6%
|
Underlying operating
profit
|
0.5
|
1.8
|
-72.2%
|
The financial performance of
PeoplePlus is in line with expectations, which were reset at the
beginning of 2024.
The UK general election
understandably created significant uncertainty in PeoplePlus's
public sector markets, with the bid pipeline adversely
affected. Delays, both in new commissioning but also
decisions in relation to outstanding bids, have been reported.
However, an extension to PeoplePlus' Restart (employability)
contract was secured to 2028.
PeoplePlus secured a c.£49 million
agreement (subject to contract) to provide education and industry
services at the newly built HMP Millsike over a 10 year period, in
support of our partner, Mitie Care & Custody. Following our
successful entry in 2023 into the Young Offenders' sector at
Werrington Young Offenders Institute, the preferred supplier status
to Mitie at HMP Millsike signifies our first entry into the Private
Sector prisons estate which represents a c.£500m market opportunity
over the next 10 years. This, combined with the new
government's focus on the prisons services sector, highlights this
prospective significant growth area for the business.
Board
changes
Tom Spain was appointed as
permanent Chair of the Board in March 2024, after having been
Interim Chairman since May 2022, and his contribution has been
invaluable, providing advice and support to the Board.
Outlook
Staffline's recruitment businesses
delivered an excellent performance across H1 2024 and is expected
to trade strongly in the second half of 2024. Therefore,
underlying operating profit for FY 2024 is anticipated to be in
line with expectations.
As a result of recent political
uncertainty, delays in PeoplePlus' pipeline will likely result in
the proportion of operating profit in FY 2025 being
more favourable to recruitment as a result
of market share gains delivered by
Staffline's recruitment activities.
Albert Ellis
Chief Executive Officer
29 July 2024
Financial
Review
Introduction
The Group has delivered resilient
results driven by significantly increasing temporary worker hours
in the period, notwithstanding ongoing challenges in the domestic
consumer market. Permanent recruitment has remained surprisingly
robust in contrast to market peers. The Group's balance sheet
remains strong with pre-IFRS16 net debt of £(9.2)m (2023: £(3.5)m)
after spend on share buybacks and funding for the Employee
Benefit Trust, totaling £9.1m since 30 June 2023. Significant
headroom of £50.2m (2023: £58.7m) exists in the Group's refinanced
banking facilities alongside material headroom in financial
covenants.
The Group continues to benefit
from its decision to purchase a three-year interest rate cap
product in October 2021, which has limited the Group's exposure to
increases in interest rates. This has been hugely beneficial during
the period, with receipts of £0.9m, partly offsetting increased
borrowing costs.
Trading performance
Total revenue for H1 2024
increased by 11.7% to £480.2m (2023: £430.0m) resulting from
increased worker hours, predominately in the food retail and
distribution sectors. Gross profit has increased to £38.2m (2023:
£38.1m) alongside a decrease in gross margin to 8.0% from 8.9% in
2023. The reduction in gross margin % is as a result of a
combination of pay inflation from National Minimum Wage increases,
the increase in temporary worker hours in sectors where the margin
is comparatively low and the reduction in higher margin
employability training activity.
Underlying divisional performance
The Group comprises three
divisions: Recruitment GB, flexible blue-collar recruitment;
Recruitment Ireland, generalist recruitment; and PeoplePlus, adult
skills, training and employability provision.
|
Six months ended 30 June
2024
|
Six
months ended 30 June 2023
|
|
Recruitment
GB
Unaudited
|
Recruitment
Ireland
Unaudited
|
PeoplePlus
Unaudited
|
Group
costs
Unaudited
|
Total
Group
Unaudited
|
Recruitment GB
Unaudited
|
Recruitment Ireland
Unaudited
|
PeoplePlus
Restated
Unaudited
|
Group
costs
Unaudited
|
Total
Group
Restated
Unaudited
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
Revenue
|
393.0
|
53.8
|
33.4
|
-
|
480.2
|
341.2
|
54.5
|
34.3
|
-
|
430.0
|
Period-on-period % change
|
15.2%
|
(1.3)%
|
(2.6)%
|
-
|
11.7%
|
(1.2)%
|
(2.3)%
|
9.2%
|
-
|
(0.6)%
|
Gross sales
value1
|
445.2
|
53.8
|
33.4
|
-
|
532.4
|
403.5
|
54.5
|
34.3
|
-
|
492.3
|
Period-on-period % change
|
10.3%
|
(1.3)%
|
(2.6)%
|
-
|
8.1%
|
5.6%
|
(2.3)%
|
9.2%
|
-
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
24.7
|
6.5
|
7.0
|
-
|
38.2
|
23.5
|
6.1
|
8.5
|
-
|
38.1
|
Period-on-period % change
|
5.1%
|
6.6%
|
(17.6)%
|
-
|
0.3%
|
(4.5)%
|
(3.2)%
|
(1.5)%
|
-
|
(3.6)%
|
Gross margin %
|
6.3%
|
12.1%
|
21.0%
|
-
|
8.0%
|
6.9%
|
11.2%
|
24.8%
|
-
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
Underlying operating profit
/(loss)
|
2.8
|
1.2
|
0.5
|
(1.6)
|
2.9
|
1.8
|
0.8
|
1.8
|
(1.4)
|
3.0
|
Underlying operating profit as a % of
revenue
|
0.7%
|
2.2%
|
1.5%
|
-
|
0.6%
|
0.5%
|
1.5%
|
5.2%
|
-
|
0.7%
|
Underlying operating profit as a % of gross
profit
|
11.3%
|
18.5%
|
7.1%
|
-
|
7.6%
|
7.7%
|
13.1%
|
21.2%
|
-
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
Post-IFRS16 net
(debt)/cash
|
-
|
-
|
-
|
-
|
(14.5)
|
-
|
-
|
-
|
-
|
(8.0)
|
Pre-IFRS16 net
(debt)/cash
|
-
|
-
|
-
|
-
|
(9.2)
|
-
|
-
|
-
|
-
|
(3.5)
|
1 Gross sales value
represents the fair value of consideration received or receivable
for the supply of services, including agency sales, (excluding
fees) net of VAT.
Key performance indicators
|
Six months ended 30 June
2024
|
Six
months ended 30 June 2023
|
|
Recruitment
GB
Unaudited
|
Recruitment
Ireland
Unaudited
|
PeoplePlus
Unaudited
|
Total
Group
Unaudited
|
Recruitment GB
Unaudited
|
Recruitment Ireland
Unaudited
|
PeoplePlus
Unaudited
|
Total
Group
Unaudited
|
|
|
|
|
|
|
|
|
|
Hours worked by temporary
workers
|
20.6m
|
2.9m
|
-
|
23.5m
|
18.8m
|
3.2m
|
-
|
22.0m
|
Gross profit per fee
earner
|
£38.5k
|
£49.2k
|
-
|
£40.4k
|
£36.3k
|
£47.0k
|
-
|
£38.0k
|
Revenue per employee
|
-
|
-
|
£25.4k
|
-
|
-
|
-
|
£26.4k
|
-
|
For management reporting purposes,
the Recruitment GB division presents its 'gross sales', which
includes sales under agency arrangements. The reporting of gross
sales gives an indication of the full level of activity undertaken
by the division. The value is adjusted for revenue reporting in
accordance with IFRS15. The adjustment relative to reported revenue
for the Group is as follows:
|
H1 2024
Unaudited
£'m
|
H1 2023
Restated
Unaudited
£'m
|
Gross sales value
|
532.4
|
492.3
|
Agency sales
|
(52.2)
|
(62.3)
|
Revenue as reported
|
480.2
|
430.0
|
Revenues in the Recruitment GB
division increased by £51.8m, (15.2%), to £393.0m (2023: £341.2m).
The increase is predominately as a result of organic growth with
existing customers in the latter part of 2023 and in H1 2024,
particularly in the food retail and distribution sectors. This new
business has been won based on quality service and performance by
the business and in spite of the ongoing cost-of-living
challenges.
The gross profit for Recruitment
GB increased 5.1% year-on-year, from £23.5m in 2023 to £24.7m, with
the gross margin % decreasing from 6.9% in H1 2023 to 6.3% this
year. This was significantly impacted by a 9.8% increase in the
National Living Wage from April 2024, from £10.42 to £11.44, which
follows on from a 9.7% increase the year before. This contributed
to an average increase in our temporary worker pay rates of c.7.1%.
This does not impact absolute gross profit as the increase is
passed through to customers, but does adversely impact the gross
margin % achieved. Gross profit margin % was supported by the
higher margin activity of permanent recruitment, which generated
£2.0m of gross profit, an 11.1% increase from £1.8m in H1
2023.
Revenues in the Recruitment
Ireland division were broadly flat at £53.8m (2023: £54.5m),
reflecting a reduction in onsite temporary recruitment activity.
The gross profit for Recruitment Ireland increased by 6.6% from
£6.1m in H1 2023 to £6.5m in H1 2024, whilst the gross profit
margin % increased from 11.2% to 12.1% . This gross margin %
improvement was driven by permanent recruitment increasing by 30.0%
with £1.3m of gross profit in H1 2024 compared to £1.0m in H1 2023,
reflecting cautious optimism following the return of local
Government. Revenues and gross profits were increased in the branch
networks in both Northern Ireland and the Republic of
Ireland.
After adjustment to exclude the
discontinued in-person Skills business, PeoplePlus revenues
decreased by £0.9m, to £33.4m (2023: £34.3m). The gross profit for
the division decreased from £8.5m (24.8%) in H1 2023 to £7.0m in H1
2024 (21.0%). In a decisive response to these
increasingly challenging market conditions, the business was
restructured in H2 2023 to align business operations to market
opportunities, exiting the in-person skills market and the process
of reducing overhead costs is ongoing.
Given the ongoing uncertainty in the UK adult
training, education and employability market along with the unknown
departmental funding plans following the general election, there
are delays to the pipeline. Therefore, the Group has incurred a
non-underlying, non-cash goodwill impairment charge of £12.9m,
which is a material non-cash item that, based on its size and
nature, is considered to be non-underlying. The remaining
PeoplePlus goodwill balance at 30 June 2024 is £10.7m.
The prison education services business
continues to perform well and will benefit in 2025 from the
recently announced win of the provision of education services into
HMP Millsike. This c.£49m contract over 10 years opens up new
markets for the division in the private prisons sector.
Group underlying operating profit
was £2.9m (2023: £3.0m), with gross profit to underlying operating
profit conversion reducing to 7.6% compared to 7.9% in H1 2023.
Together, the recruitment businesses delivered underlying operating
profit of £4.0m (H1 2023: £2.6m), representing growth of
53.8%. This was offset by the decrease in PeoplePlus'
underlying operating profit from £1.8m to £0.5m. Similar to
2023, the Group expects underlying operating profit to be H2
weighted due to the main peak trading period in the lead up to
Christmas and the New Year.
Discontinued activity
The results of the in-person
Skills training business within PeoplePlus, which was discontinued
during H2 2023, were included in the reported result for H1 2023.
The comparative results in this Interim statement have been
restated to exclude the results of the Skills business. Further
details are provided in note 3.
Finance costs and interest rate hedge
Net finance costs were £2.1m
(2023: £1.8m), which includes £0.2m (2023: £0.2m) of non-cash
charges for amortisation of debt re-financing costs and the hedging
instrument. The higher cost arises from the increased usage of
working capital and customer financing facilities due to the growth
in temporary worker hours supplied to some of our retail and
logistics customers, as well as the increase in the Bank of England
base rate between H1 2023 and H1 2024.
The Group's reported loss before
taxation, after the non-cash goodwill impairment charge of
£(12.9)m, is £(12.1)m in H1 2024 compared to a loss of £(1.4)m in
2023.
Taxation
There is a £0.2m tax charge (2023:
credit £0.6m) for the period due principally to the movement on
deferred tax balances.
The reported loss after tax on continuing
activities for H1 2024 is £(12.3)m (2023: loss £(0.8)m).
Statement of financial position, cash generation and
financing
The Group ended H1 2024 with pre-IFRS16 net
debt of £(9.2)m (2023: £(3.5)m). Post-IFRS16 net debt was £(14.5)m
at H1 2024 (2023: £(8.0)m). The movement in net
debt is shown in the table below. The change in working capital
includes the Q1 VAT payment, representing VAT collections in the
Group's peak seasonal Q4 2023 trading period. Good trading cash
generation in the period driven by the organic growth in
Recruitment GB temporary hours worked, has been offset by the
required working capital usage. Additionally, the Group purchased a
higher number of shares than prior year, taking advantage of the
relatively low share price at the time.
Movement in net debt
|
H1 2024
Unaudited
£'m
|
H1 2023
Unaudited
£'m
|
Opening net cash
(pre-IFRS16)
|
3.8
|
5.0
|
Cash generated before changes in
working capital (note 13)
|
5.2
|
2.7
|
Movements in working
capital
|
(12.1)
|
(7.7)
|
Net taxation and interest
paid
|
(1.9)
|
(1.4)
|
Capital investment (net of
disposals)
|
(1.4)
|
(1.0)
|
Own shares purchased
|
(1.9)
|
(0.5)
|
Principal repayment of lease
liabilities
|
(1.2)
|
(0.9)
|
Employee equity settled share
options
|
0.3
|
0.3
|
Closing net (debt)
(pre-IFRS16)
|
(9.2)
|
(3.5)
|
IFRS16 lease
liabilities
|
(5.3)
|
(4.5)
|
Closing net (debt)
(post-IFRS16)
|
(14.5)
|
(8.0)
|
The table below reconciles
underlying EBITDA (earnings before
interest, taxation, depreciation and
amortisation), to operating
loss.
Reconciliation of operating loss to EBITDA
|
H1 2024
Unaudited
£'m
|
H1 2023
Restated
Unaudited
£'m
|
Operating profit
|
(10.0)
|
0.4
|
Non-underlying charges
|
12.9
|
2.6
|
Underlying operating profit
|
2.9
|
3.0
|
Depreciation and
amortisation
|
2.3
|
2.6
|
Underlying EBITDA
|
5.2
|
5.6
|
Lease rental payments
|
(0.8)
|
(0.9)
|
Underlying EBITDA (pre-IFRS16)
|
4.4
|
4.7
|
Note: Underlying operating profit is stated before goodwill
impairment, provisions arising from the closure of the Skills
training business and amortisation of intangible assets arising on
business combinations.
The Group's banking facility
headroom under its available committed banking facilities is set
out below:
|
H1 2024
Unaudited
£'m
|
H1 2023
Unaudited
£'m
|
Cash at bank
|
4.6
|
12.2
|
Available receivables finance
agreement unutilised
|
45.6
|
46.5
|
Banking facility
headroom
|
50.2
|
58.7
|
Banking facilities
The Group manages its working capital
requirements using a receivables finance agreement ("RFA"), and
a number of separate, non-recourse,
customer financing arrangements whereby specific customers'
invoices are settled in advance of their normal settlement date via
a funding intermediary.
The RFA leverages the Group's trade
receivables with sufficient headroom and flexibility to manage the
variability and size of weekly cash outflows. On 14 December 2023,
the Group and its lenders agreed to an amendment to the RFA with
improved terms, reflecting progress in the business and ongoing
balance sheet strength. The key terms of the facility are set out
below:
i) maximum
receivables financing facility of £60.0m (previously £90.0m) over a
four-year term, with a one-year extension option;
ii)
an Accordion option of up to an additional £20.0m (previously
£15.0m), subject to lender approval;
iii)
security on all of the assets and undertakings of the Company and
certain subsidiary undertakings;
iv) interest
accruing at a maximum of 2.25% (previously 2.75%) over SONIA, with
a margin ratchet downward to 1.5% (previously 2.0%), dependent upon
the Group's leverage reducing to less than 1.00x;
v) a
non-utilisation fee of 0.35% (previously 0.7% during
2023);
vi) maximum net
debt (averaged over a rolling three months) to EBITDA leverage
covenant of 4.0x; and
vii) minimum interest
cover covenant of 2.25x the last 12 months EBITDA to finance
charges.
The estimated balance funded under
the customer finance arrangements at 30 June 2024 was £58.2m (2023:
£44.8m).
Purchases of own shares
The Company has delivered three
years of annual underlying operating profits of at least £10.0m and
annual operating cash generation remains strong. During the last 12
months the Board has taken the opportunity to make share purchases
under share buyback programmes and for the Employee Benefit Trust.
The Group continues to have substantial headroom of £50.2m (2023:
£58.7m) under its available banking facilities.
On 10 June 2024 the Company
announced the launch of a further share buyback programme to
repurchase ordinary shares in the capital of the Company (the
"Ordinary Shares") up to an aggregate value of £2.5 million. As at
30 June 2024 the Company had acquired 850,790 shares for a
consideration of £0.3m. The Ordinary Shares purchased
pursuant to the Share Buyback will be cancelled.
Dividend policy
No interim dividend for 2024 is proposed
(2023: £nil).
Going concern
The Directors have formed a
judgement, at the time of approving the unaudited
condensed interim Group financial statements, that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence and meet its
liabilities as they fall due over the assessment period. The
Directors have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may
cast significant doubt on the Group's ability to continue as a
going concern for a period of at least eighteen months from when
the unaudited condensed interim Group
financial statements are authorised for issue. For this
reason, the Directors continue to adopt the going concern basis in
preparing the financial statements.
International Financial Reporting Standards
There have been no new accounting
standards or interpretations in the first half of 2024 which
materially impact the Group's reported performance or financial
position.
Daniel
Quint
Chief
Financial Officer
29 July 2024
Consolidated statement of comprehensive
income
For
the six months ended 30 June 2024
|
|
Six-month period ended 30
June 2024
Unaudited
|
Six-month period ended 30 June 2023
Restated
Unaudited
|
Year
ended
31
December 2023
Audited
|
|
Note
|
£'m
|
£'m
|
£'m
|
Continuing operations
|
|
|
|
|
Revenue
|
2
|
480.2
|
430.0
|
938.2
|
Cost of sales
|
|
(442.0)
|
(391.9)
|
(857.4)
|
Gross profit
|
|
38.2
|
38.1
|
80.8
|
Administrative expenses
|
|
(48.2)
|
(37.7)
|
(84.5)
|
Operating (loss)profit
|
|
(10.0)
|
0.4
|
(3.7)
|
Underlying operating profit before
non-underlying administrative expenses
|
|
2.9
|
3.0
|
10.3
|
Administrative expenses
(non-underlying)
|
3
|
(12.9)
|
(2.6)
|
(14.0)
|
Operating profit/(loss)
|
2
|
(10.0)
|
0.4
|
(3.7)
|
Finance income
|
|
0.9
|
0.7
|
1.9
|
Finance charges -
underlying
|
|
(3.0)
|
(2.5)
|
(5.6)
|
Finance charges -
non-underlying
|
|
-
|
-
|
(0.5)
|
Loss for the period before taxation
|
|
(12.1)
|
(1.4)
|
(7.9)
|
Tax (expense)/credit
|
|
(0.2)
|
0.6
|
(0.5)
|
Loss for continuing activities
|
(12.3)
|
(0.8)
|
(8.4)
|
Loss from discontinued
activities
|
-
|
(2.4)
|
(2.6)
|
Loss for the period
|
(12.3)
|
(3.2)
|
(11.0)
|
|
|
|
|
Items that will not be
reclassified to the statement of comprehensive income - actuarial
gains and losses, net of deferred tax
|
-
|
0.1
|
0.2
|
Items that may be reclassified to
the statement of comprehensive income:
|
|
|
|
cumulative translation
adjustment
|
0.1
|
-
|
(0.4)
|
movement on cash flow hedge, net of deferred
tax
|
(0.4)
|
0.3
|
(0.8)
|
Total comprehensive loss for the period
|
|
(12.6)
|
(2.8)
|
(12.0)
|
|
|
|
|
|
Earnings per ordinary share
|
4
|
|
|
|
Continuing operations: Basic and
diluted
|
|
(8.6)p
|
(2.0)p
|
(7.0)p
|
The accompanying notes form an integral part of
these unaudited condensed interim Group financial
statements.
Notes to the summary financial
statements
For the six months ended 30 June 2024
1 Interim accounts and accounting
policies
Staffline Group plc, a Public Limited Company,
is incorporated and domiciled in the United Kingdom.
The unaudited condensed interim Group
financial statements for the six-month period ended 30 June 2024
(including the comparatives for the six-month period ended 30 June
2023 and the year ended 31 December 2023) were approved and
authorised for issue by the Board of Directors on 29 July
2024.
It should be noted that accounting estimates
and assumptions are used in the preparation of the interim
financial information. Although these estimates are based on
management's best knowledge and judgement of current events, actual
results may ultimately differ from those estimates. The unaudited
condensed interim Group financial statements have been prepared
using the accounting policies as described in the December 2023
audited year-end Annual Report and have been consistently
applied.
The interim Group financial information
contained within this report does not constitute statutory accounts
as defined in the Companies Act 2006, section 434. The full
accounts for the year ended 31 December 2023 received an
unqualified report from the auditors and did not contain a
statement under Section 498(2) or (3) of the Companies Act 2006. A
copy of the statutory accounts for that year has been delivered to
the Registrar of Companies.
Basis of
preparation
The unaudited interim Group financial
statements, which should be read in conjunction with the audited
Annual Report for the year ended 31 December 2023, have been
prepared in accordance with AIM Rules for Companies - Part One,
Section 18 "Half-yearly reports".
The unaudited condensed interim Group
financial statements consolidate those of the parent company and
all its subsidiaries as at 30 June 2024. Subsidiaries are all
entities to which the Group is exposed, or has rights, to variable
returns and has the ability to affect those returns through power
over the subsidiary.
The unaudited condensed interim Group
financial statements have been prepared on a going concern basis
using the significant accounting policies and measurement bases
summarised in the December 2023 audited year-end Annual Report, and
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and with the Companies Act 2006, as
applicable to companies reporting under IFRS. The financial
statements are prepared under the historical cost convention except
for equity-settled share options, derivative financial instruments
and the retirement benefit net asset, which are measured at fair
value. The consolidated financial statements are presented in
sterling, which is also the functional currency of the parent
company.
Going concern
The
Directors have formed a judgement, at the time of approving
the unaudited condensed interim Group
financial statements, that there is a
reasonable expectation that the Group has adequate resources to
continue in operational existence and meet its liabilities as they
fall due over the assessment period. The Directors have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant
doubt on the Group's ability to continue as a going concern for a
period of at least 18 months from when the unaudited condensed interim Group financial statements
are authorised for issue. For this reason, the
Directors continue to adopt the going concern basis in preparing
the unaudited condensed interim Group
financial statements.
Notes to the summary financial statements
(continued)
For the six months ended 30 June 2024
2 Segmental
reporting
Management currently identifies three
reportable segments: Recruitment GB, the provision of workforce
recruitment and management to industry; Recruitment Ireland, the
provision of generalist recruitment services; and PeoplePlus, the
provision of skills training and employability services. The
Group's reportable segments are determined based on the Group's
internal reporting to the Chief Operating Decision Maker ("CODM").
The CODM has been determined to be the Group Chief Executive, with
support from the Board.
Whilst there are individual legal entities
within the three reportable segments, they are operated and
reviewed as single units by the Board of Directors. Each legal
entity within a reportable segment has the same management team,
head office and have similar economic characteristics. Historically
and going forward, practice has been to integrate new acquisitions
into the main trading entities within each reportable
segment.
Segment information for the reporting
half-year is as follows:
|
Six months ended 30 June
2024
|
Six
months ended 30 June 2023
|
Segment continuing operations
|
Recruitment
GB
Unaudited
£'m
|
Recruitment
Ireland
Unaudited
£'m
|
PeoplePlus
Unaudited
£'m
|
Group
costs
Unaudited
£'m
|
Total
Group
Unaudited
£'m
|
Recruitment
GB
Unaudited
£'m
|
Recruitment
Ireland
Unaudited
£'m
|
PeoplePlus
Restated
Unaudited
£'m
|
Group
costs
Unaudited
£'m
|
Total
Group
Restated
Unaudited
£'m
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external
customers
|
393.0
|
53.8
|
33.4
|
-
|
480.2
|
341.2
|
54.5
|
34.3
|
-
|
430.0
|
Cost of sales
|
(368.3)
|
(47.3)
|
(26.4)
|
-
|
(442.0)
|
(317.7)
|
(48.4)
|
(25.8)
|
-
|
(391.9)
|
Segment gross profit
|
24.7
|
6.5
|
7.0
|
-
|
38.2
|
23.5
|
6.1
|
8.5
|
-
|
38.1
|
Administrative expenses
(underlying)
|
(20.7)
|
(5.0)
|
(5.7)
|
(1.6)
|
(33.0)
|
(20.4)
|
(5.0)
|
(5.7)
|
(1.4)
|
(32.5)
|
Depreciation and software
amortisation (underlying)
|
(1.2)
|
(0.3)
|
(0.8)
|
-
|
(2.3)
|
(1.3)
|
(0.3)
|
(1.0)
|
-
|
(2.6)
|
Segment underlying operating profit/(loss)*
|
2.8
|
1.2
|
0.5
|
(1.6)
|
2.9
|
1.8
|
0.8
|
1.8
|
(1.4)
|
3.0
|
Goodwill impairment
|
-
|
-
|
(12.9)
|
-
|
(12.9)
|
-
|
-
|
-
|
-
|
-
|
Amortisation of intangible assets
arising on business combinations
|
-
|
-
|
-
|
-
|
-
|
(2.5)
|
-
|
(0.1)
|
-
|
(2.6)
|
Segment operating (loss)/profit
|
2.8
|
1.2
|
(12.4)
|
(1.6)
|
(10.0)
|
(0.7)
|
0.8
|
1.7
|
(1.4)
|
0.4
|
Finance (costs)/income
|
(2.8)
|
-
|
-
|
0.7
|
(2.1)
|
(2.4)
|
(0.1)
|
-
|
0.7
|
(1.8)
|
(Loss)/profit for the period before taxation
|
-
|
1.2
|
(12.4)
|
(0.9)
|
(12.1)
|
(3.1)
|
0.7
|
1.7
|
(0.7)
|
(1.4)
|
Tax (charge)/credit
|
-
|
(0.3)
|
(0.1)
|
0.2
|
(0.2)
|
0.8
|
(0.2)
|
(0.2)
|
0.2
|
0.6
|
Net (loss)/profit for the period
|
-
|
0.9
|
(12.5)
|
(0.7)
|
(12.3)
|
(2.3)
|
0.5
|
1.5
|
(0.5)
|
(0.8)
|
* Segment
underlying operating profit before goodwill impairment,
amortisation of intangible assets arising on business
combinations.
Notes to the summary financial
statements (continued)
For the six months ended 30 June 2024
2 Segmental reporting
(continued)
|
Six months ended 30 June
2024
|
Six
months ended 30 June 2023
|
Segment continuing operations
|
Recruitment
GB
Unaudited
£'m
|
Recruitment
Ireland
Unaudited
£'m
|
PeoplePlus
Unaudited
£'m
|
Group costs
Unaudited
£'m
|
Total
Group
Unaudited
£'m
|
Recruitment
GB
Unaudited
£'m
|
Recruitment
Ireland
Unaudited
£'m
|
PeoplePlus
Unaudited
£'m
|
Group costs
Unaudited
£'m
|
Total
Group
Unaudited
£'m
|
Total non-current assets
|
28.1
|
10.8
|
13.0
|
-
|
51.9
|
27.8
|
12.9
|
37.5
|
0.4
|
78.6
|
Total current assets
|
115.2
|
17.6
|
10.9
|
3.7
|
147.4
|
107.2
|
18.2
|
9.2
|
3.7
|
138.3
|
Total assets (consolidated)
|
143.3
|
28.4
|
23.9
|
3.7
|
199.3
|
135.0
|
31.1
|
46.7
|
4.1
|
216.9
|
Total liabilities (consolidated)
|
137.3
|
10.3
|
15.0
|
-
|
162.6
|
117.9
|
10.5
|
19.3
|
0.5
|
148.2
|
Capital expenditure inc
software
|
3.5
|
0.1
|
0.1
|
-
|
3.7
|
0.6
|
0.2
|
0.2
|
-
|
1.0
|
Segment information for the year ended 31
December 2023 is as follows:
Segment continuing
operations
|
Recruitment GB
2023
£'m
|
Recruitment Ireland
2023
£'m
|
PeoplePlus
2023
£'m
|
Group Costs
2023
£'m
|
Total Group
2023
£'m
|
Sales revenue from external
customers
|
763.0
|
108.3
|
66.9
|
-
|
938.2
|
Cost of sales
|
(711.1)
|
(96.0)
|
(50.3)
|
-
|
(857.4)
|
Segment gross profit
|
51.9
|
12.3
|
16.6
|
-
|
80.8
|
Administrative expenses
|
(40.8)
|
(9.9)
|
(11.7)
|
(3.2)
|
(65.6)
|
Depreciation, software & lease
amortisation
|
(2.5)
|
(0.6)
|
(1.8)
|
-
|
(4.9)
|
Segment underlying operating
profit/(loss)*
|
8.6
|
1.8
|
3.1
|
(3.2)
|
10.3
|
Reorganisation, rationalisation and
restructuring costs
|
(1.8)
|
-
|
-
|
-
|
(1.8)
|
Goodwill impairment
|
-
|
-
|
(8.9)
|
-
|
(8.9)
|
Amortisation of intangibles arising
on business combinations
|
(3.2)
|
(0.1)
|
-
|
-
|
(3.3)
|
Segment (loss)/profit from
operations
|
3.6
|
1.7
|
(5.8)
|
(3.2)
|
(3.7)
|
Net finance costs
|
(5.5)
|
(0.1)
|
-
|
1.9
|
(3.7)
|
Refinancing cost
|
-
|
-
|
-
|
(0.5)
|
(0.5)
|
Segment (loss)/profit before
taxation
|
(1.9)
|
1.6
|
(5.8)
|
(1.8)
|
(7.9)
|
Tax (expense)/ credit
|
0.9
|
(0.2)
|
(1.4)
|
0.2
|
(0.5)
|
Segment (loss)/profit from
continuing operations
|
(1.0)
|
1.4
|
(7.2)
|
(1.6)
|
(8.4)
|
|
|
|
|
|
|
Total non-current assets
|
24.7
|
12.3
|
26.4
|
-
|
63.4
|
Total current assets
|
112.6
|
15.7
|
13.8
|
2.3
|
144.4
|
Total assets
(consolidated)
|
137.3
|
28.0
|
40.2
|
2.3
|
207.8
|
Total liabilities
(consolidated)
|
131.8
|
9.6
|
15.3
|
0.1
|
156.8
|
Capital expenditure inc
software
|
1.9
|
0.6
|
1.1
|
-
|
3.6
|
* Segment
underlying operating profit before goodwill impairment and
amortisation of intangible assets arising on business combinations
and other non-underlying costs.
The analysis above excludes deferred tax
assets and liabilities, as required by IFRS 8, Operating
segments.
No customer contributed more than 10% of the
Group's revenue in either of the six months ended 2024 or
2023.
Notes to the summary financial
statements (continued)
For the six months ended 30 June 2024
3 Non-underlying expenses and discontinued
activities
Administrative
expenses
|
|
Six months
ended
30 June
2024
Unaudited
£'m
|
Six months
ended
30 June
2023
Restated
Unaudited
£'m
|
Year ended 31
December 2023
Audited
£'m
|
Reorganisation, rationalisation and
restructuring costs
|
|
-
|
-
|
1.8
|
Goodwill impairment
|
|
12.9
|
-
|
8.9
|
Amortisation of intangible assets arising on
business combinations (licences and customer contracts)
|
|
-
|
2.6
|
3.3
|
Tax credit on non-underlying costs
|
|
-
|
(0.6)
|
(1.2)
|
Post taxation
effect on non-underlying costs
|
|
12.9
|
2.0
|
12.8
|
Closure of
the Skills business within PeoplePlus
During the year ended 31 December 2023 a
substantial contract operated by the in-person Skills business
within the PeoplePlus division concluded and was not renewed.
Further contracts also concluded during the second half of 2023.
The Board decided that in view of the weak performance and the
impending completion of a number of contracts, that the in-person
Skills business be closed. The business had obligations to provide
classroom learning up to August 2023 and consequently was classed
as a continuing operation for the reporting period ended 30 June
2023 but was classed as discontinued for the full year ended 31
December 2023.
Closure costs from staff redundancies,
property exits and other commitments, were anticipated after
completion of contractual obligations in August 2023. Furthermore,
the contracts remaining to be completed after 30 June 2023 were
considered onerous. The decision to close the business had been
formally noted by the Board in May 2023 and provisions for closure
and the onerous contracts were recognised at 30 June
2023.
The results of the Skills business for the
period ended 30 June 2023, which are set out below, have been
treated as discontinued and the comparative values for that period
have been restated accordingly.
Proforma
Statement of Comprehensive Income - Skills
business
|
Six months ended 30
June 2023 Unaudited
£'m
|
Year ended 31
December 2023
Audited
£'m
|
Revenue
|
|
|
4.1
|
4.5
|
Cost of sales
|
|
|
(4.2)
|
(5.3)
|
Gross
loss
|
|
|
(0.1)
|
(0.8)
|
Administrative expenses*
|
|
|
(0.5)
|
(0.7)
|
Closure costs and onerous contracts
|
|
|
(2.3)
|
(1.6)
|
Operating
loss
|
|
|
(2.9)
|
(3.1)
|
Tax credit
|
|
|
0.5
|
0.7
|
Loss for the
period after taxation
|
|
|
(2.4)
|
(2.4)
|
*Administrative expenses comprise
an allocation of central overheads, relating principally to
administrative staff, of the PeoplePlus Division, which has been
consistently applied to each period, to represent the element of
costs utilised by the Skills business.
Notes to the summary financial
statements (continued)
For the six months ended 30 June 2024
4 Earnings per share and
dividends
The calculation of basic earnings per share is
based on the earnings attributable to ordinary shareholders divided
by the weighted average number of shares in issue during the
period, after deducting any shares held by the Employee Benefit
Trust ("EBT") - "own shares" (7,583,206 shares at 30 June 2024,
2,014,511 shares at 31 December 2023 and 964,511 shares at 30 June
2023). The calculation of the diluted earnings per share is based
on the basic earnings per share as adjusted to further take into
account the expected issue of ordinary shares resulting from any
share options granted to Executive Directors and certain senior
employees, and share options granted to employees under the SAYE
scheme.
Details of the earnings and weighted average
number of shares used in the calculations are set out
below:
|
Basic six months ended 30
June 2024
|
Basic
six months ended 30 June 2023
Restated
|
Basic
Year
ended 31 December 2023
|
Diluted six months ended 30
June 2024
|
Diluted six months ended 30 June 2023
Restated
|
Diluted
Year
ended 31 December 2023
|
|
Unaudited
|
Unaudited
|
Audited
|
Unaudited
|
Unaudited
|
Audited
|
Loss from continuing operations
(£'m)
|
(12.3)
|
(0.8)
|
(8.4)
|
(12.3)
|
(0.8)
|
(8.4)
|
Weighted daily average number of
shares
|
142,369,230
|
162,451,337
|
157,247,639
|
143,313,695
|
163,961,869
|
157,788,528
|
Loss per share from continuing
operations (p)
|
(8.6)
|
(0.4)
|
(5.3)
|
(8.6)
|
(0.4)
|
(5.3)
|
Underlying earnings from
continuing operations (£'m)*
|
0.6
|
1.2
|
4.9
|
0.6
|
1.2
|
4.9
|
Underlying earnings per share
(p)*
|
0.4
|
0.7
|
3.1
|
0.4
|
0.7
|
3.1
|
Loss from discontinued operations
(£'m)
|
-
|
(2.4)
|
(2.6)
|
-
|
(2.4)
|
(2.6)
|
Weighted average number of
shares
|
-
|
162,451,337
|
157,247,639
|
-
|
163,961,869
|
157,788,528
|
Loss per share from discontinued
activities (p)
|
-
|
(1.4)
|
(1.7)
|
-
|
(1.4)
|
(1.7)
|
Loss for the period
(£'m)
|
(12.3)
|
(3.2)
|
(11.0)
|
(12.3)
|
(3.2)
|
(11.0)
|
Weighted average number of
shares
|
142,369,230
|
162,451,337
|
157,247,639
|
143,313,695
|
163,961,869
|
157,788,528
|
Total loss per share
(p)
|
(8.6)
|
(2.0)
|
(7.0)
|
(8.6)
|
(2.0)
|
(7.0)
|
*Underlying earnings after
adjusting for goodwill impairment and amortisation of intangible
assets arising on business combinations.
Dividends
No interim dividend for 2024 is proposed
(2023: £nil).
Notes to the summary financial
statements (continued)
For the six months ended 30 June 2024
5 Goodwill
The breakdown of Goodwill carrying value by
division is listed below:
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Recruitment GB
|
21.4
|
21.4
|
21.4
|
Recruitment Ireland
|
5.7
|
5.7
|
5.7
|
PeoplePlus
|
10.7
|
32.5
|
23.6
|
|
37.8
|
59.6
|
50.7
|
Following indications of reduced medium-term
profitability in the PeoplePlus division, an impairment review was
conducted as at 30 June 2024. The recoverable amount of goodwill
was determined based on a value-in-use calculation, using forecasts
for 2024-26. The results of the impairment review showed an
impairment adjustment of £12.9m is required for the PeoplePlus CGU.
The same calculations indicated that an impairment adjustment of
£13.2m is required to the Company's carrying value of its
investment in PeoplePlus, leaving the carrying value in the Company
at £12.0m. In making the assessment of the recoverability of assets
of PeoplePlus, the same judgements and assumptions were used as
those set out in the Group's Annual Report for the year ended 31
December 2023.
6 Trade and other
receivables
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Restated
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Trade receivables
|
107.0
|
97.0
|
121.2
|
Prepayments and other receivables
|
29.5
|
22.9
|
5.0
|
Contract assets - accrued income
|
5.5
|
2.8
|
3.2
|
|
142.0
|
122.7
|
129.4
|
7 Derivative financial
instruments
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Fair value
hedge - interest rate cap
|
0.8
|
3.1
|
1.7
|
In October 2021 the Group entered
into an amortising interest rate cap instrument, which reduces
exposure to interest rate increases above 1% of SONIA on an
aggregated two-thirds of the Receivables Finance Agreement and the
customer finance arrangements. The instrument, which expires on 13
October 2024, is based on quarterly notional amounts varying
between £39.5m and £62.5m, with an average of £51.9m.
Notes to the summary financial
statements (continued)
For the six months ended 30 June
2024
8 Cash and cash
equivalents
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Cash and cash
equivalents
|
4.6
|
12.2
|
13.3
|
Cash and cash equivalents consist of cash on
hand and balances with banks only. All cash on hand and balances
with banks are held by subsidiary undertakings but these balances
are available for use by the Group.
Long term credit ratings for the banks used by
the Group are currently as follows:
|
Fitch
|
Standard
&
Poor's
|
Moody's
|
National Westminster Bank plc
|
A+
|
A+
|
A1
|
Royal Bank of Scotland plc
|
A+
|
A+
|
A1
|
The Group's banking facility headroom is as
follows:
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Cash and cash equivalents
|
4.6
|
12.2
|
13.3
|
Available receivables finance agreement
balance
|
45.6
|
46.5
|
49.1
|
Banking
facility headroom
|
50.2
|
58.7
|
62.4
|
9 Trade and other payables
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Restated
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Trade and other payables
|
26.2
|
25.3
|
27.4
|
Accruals and deferred income
|
59.7
|
47.9
|
50.2
|
Contract liabilities - deferred
income
|
5.5
|
5.9
|
6.2
|
Other taxation and social security
|
50.5
|
44.4
|
57.0
|
|
141.9
|
123.5
|
140.8
|
Notes to the summary financial statements
(continued)
For the six months ended 30 June 2024
10 Borrowings
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31 December
2023
Audited
£'m
|
Current
liabilities:
|
|
|
|
Receivables finance agreement
|
13.8
|
15.7
|
9.5
|
Lease liabilities
|
1.4
|
1.5
|
1.4
|
|
15.2
|
17.2
|
10.9
|
Non-current
liabilities:
|
|
|
|
Lease liabilities
|
3.9
|
3.0
|
2.6
|
Total
borrowings
|
19.1
|
20.2
|
13.5
|
Less: Cash and cash equivalents (note
8)
|
(4.6)
|
(12.2)
|
(13.3)
|
Net debt as
disclosed in consolidated statement of cash flows (note
13)
|
14.5
|
8.0
|
0.2
|
Credit facilities
The Group uses a Receivables
Financing Agreement ("RFA") to fund its day-to-day working capital
requirements.
The RFA leverages the Group's trade
receivables with sufficient headroom and flexibility to manage the
variability and size of weekly cash outflows. On 14 December 2023,
the Group and its lenders agreed to an amendment to the RFA with
improved terms, reflecting progress in the business and ongoing
balance sheet strength. The key terms of the facility are set out
below:
i) maximum
receivables financing facility of £60.0m (previously £90.0m) over a
four-year term, with a one-year extension option;
ii)
an Accordion option of up to an additional £20.0m (previously
£15.0m), subject to lender approval;
iii)
security on all of the assets and undertakings of the Company and
certain subsidiary undertakings;
iv)
interest accruing at a maximum of 2.25% (previously 2.75%) over
SONIA, with a margin ratchet downward to 1.5% (previously 2.0%),
dependent upon the Group's leverage reducing to less than
1.00x;
v) a
non-utilisation fee of 0.35% (previously 0.7% during
2023);
vi)
maximum net debt (averaged over a rolling three months) to EBITDA
leverage covenant of 4.0x; and
vii) minimum
interest cover covenant of 2.25x the last 12 months EBITDA to
finance charges.
The Group also has available a
number of separate, non-recourse, Customer Financing arrangements
whereby specific customer invoices are settled in advance of their
normal settlement date. At 30 June 2024, the estimated value of
invoices funded under these arrangements was £58.2m (2023:
£44.8m).
Notes to the summary financial
statements (continued)
For the six months ended 30 June
2024
11 Provisions
Group
|
|
|
|
2024
|
2023
|
|
Staff
|
Property
|
Discontinued
|
Group
|
Group
|
|
costs
|
costs
|
activity
|
Total
|
Total
|
|
£'m
|
£'m
|
£'m
|
£'m
|
£'m
|
At 1 January 2024
|
0.6
|
1.3
|
0.4
|
2.3
|
1.5
|
Amounts charged to the income
statement
|
-
|
0.1
|
-
|
0.1
|
3.9
|
Amounts utilised
|
(0.6)
|
(0.3)
|
(0.1)
|
(1.0)
|
(2.4)
|
Unused amounts reversed to the
income statement
|
-
|
-
|
-
|
-
|
(0.7)
|
At 30 June 2024
|
-
|
1.1
|
0.3
|
1.4
|
2.3
|
Due within one year
(current)
|
-
|
0.7
|
0.3
|
1.0
|
1.8
|
Due after more than one year
(non-current)
|
-
|
0.4
|
-
|
0.4
|
0.5
|
At 30 June 2024
|
-
|
1.1
|
0.3
|
1.4
|
2.3
|
The Group makes provision for staff and
property costs relating to reorganisation programmes. The staff
costs relate to redundancies and the property costs relate to lease
dilapidations.
Provision is made for "wear and tear"
dilapidation costs at the Group's leased properties. Where
possible, dilapidations provisions are determined based on an
independent valuation of the estimated total cost payable on expiry
of the respective leases. The timing and value of the costs are
uncertain due to potential changes to exit dates and the final
liability which may be subject to negotiation with the
landlord.
As described in note 3, provision was made for
the exit from the Skills training business within the PeoplePlus
division. Closure costs arose from, staff redundancies, property
exits and other commitments, which were incurred after completion
of contractual obligations in August 2023. An onerous contracts
provision was recognised for the cost of completing contracts after
30 June 2023.
The Company has no provisions (2023:
£nil).
12 Share
capital
|
30 June 2024
Unaudited
£'m
|
30 June
2023
Unaudited
£'m
|
31
December 2023
Audited
£'m
|
Allotted and issued
|
|
|
|
165,767,728 ordinary 10p
shares
|
14.8
|
16.6
|
14.9
|
|
|
|
|
|
30 June
2024
'000
|
30 June
2023
'000
|
31
December 2023
'000
|
Shares issued and fully paid
|
|
|
|
At beginning and end of the
period
|
148,340
|
165,768
|
149,191
|
All Ordinary Shares have the same rights and
there are no restrictions on the distribution of dividends or
repayment of capital with the exception of the 7,583,206 shares
held at 30 June 2024 (2023: 3,316,391 shares) by the Employee
Benefit Trust where the right to dividends has been
waived.
Notes to the summary financial
statements (continued)
For the six months ended 30 June
2024
13 Cash flows from operating
activities
Reconciliation of loss before taxation to net cash inflow from
operating activities
|
Six months
ended
30 June
2024
Unaudited
£'m
|
Six months
ended
30 June
2023
Restated
Unaudited
£'m
|
Year
ended
31
December 2023
Audited
£'m
|
|
|
|
|
Loss before taxation
from:
|
|
|
|
Continuing operations
|
(12.1)
|
(1.4)
|
(7.9)
|
Discontinued operations
|
-
|
(2.9)
|
(3.1)
|
|
(12.1)
|
(4.3)
|
(11.0)
|
Adjustments for:
|
|
|
|
Finance income
|
(0.9)
|
(0.7)
|
(1.9)
|
Finance costs
|
3.0
|
2.5
|
6.1
|
Depreciation and amortisation -
underlying
|
2.3
|
2.6
|
5.0
|
Depreciation and amortisation -
non-underlying
|
-
|
2.6
|
3.2
|
Goodwill impairment
|
12.9
|
-
|
8.9
|
Loss on disposal of property,
plant and equipment
|
-
|
-
|
0.2
|
Cash generated before changes in working capital and share
options
|
5.2
|
2.7
|
10.5
|
Change in trade and other
receivables
|
(12.6)
|
(3.2)
|
(9.5)
|
Change in trade, other payables
and provisions
|
0.5
|
(4.5)
|
10.8
|
Cash (utilised in)/generated from
operations
|
(6.9)
|
(5.0)
|
11.8
|
Employee equity settled share
options
|
0.3
|
0.3
|
0.6
|
Net cash (outflow)/inflow from operating
activities
|
(6.6)
|
(4.7)
|
12.4
|
Movement in net debt
|
Six months
ended
30 June
2024
Unaudited
£'m
|
Six months
ended
30 June
2023
Unaudited
£'m
|
Year
ended
31
December 2023
Audited
£'m
|
Net (debt)/cash at beginning of the
period
|
(0.2)
|
0.1
|
0.1
|
Lease payments, additions, disposals
and interest
|
(1.3)
|
0.4
|
0.9
|
Net (drawn from)/repayments to
Receivables Finance Agreement
|
(4.3)
|
10.3
|
16.5
|
Change in cash and cash
equivalents
|
(8.7)
|
(18.8)
|
(17.7)
|
Net
debt at end of period
|
(14.5)
|
(8.0)
|
(0.2)
|
|
|
|
|
Represented by:
|
|
|
|
Cash and cash equivalents (note
8)
|
4.6
|
12.2
|
13.3
|
Current borrowings (note
10)
|
(13.8)
|
(15.7)
|
(9.5)
|
Lease liabilities (note
10)
|
(5.3)
|
(4.5)
|
(4.0)
|
Net
debt at end of period
|
(14.5)
|
(8.0)
|
(0.2)
|
Notes to the summary financial
statements (continued)
For the six months ended 30 June
2024
14 Related party transactions
Transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. There were no
material transactions with Directors of the Company during the
period, except for those relating to remuneration.
On 21 June 2024, Albert Ellis, Chief Executive
Officer, and Daniel Quint, Chief Financial Officer, were awarded
ordinary shares of 10p each in the Company ("Ordinary Shares") in
relation to the proportion of their respective annual bonuses for
the financial year ended 31 December 2023 payable in Ordinary
Shares. Accordingly, the Employee Benefit Trust ("EBT") transferred
to Albert Ellis and Daniel Quint 213,386 and 167,660 Ordinary
Shares respectively.
The directors holding office at 30 June 2024
have the following beneficial interests in the Company's share
capital:
|
Number
|
Amanda Aldridge
|
80,000
|
Albert Ellis
|
997,296
|
Catherine Lynch
|
10,000
|
Daniel Quint
|
761,490
|
Tom Spain
|
1,675,000
|
|
3,523,786
|
Albert Ellis and Daniel Quint have interests
in 4,272,705 and 3,438,083 respectively for options
for Ordinary Shares, awarded under the Company's 2021 long term
incentive plan in May 2022, February 2023 and January 2024,
and SAYE scheme 2022. The other directors have no current interests
in share options or the SAYE scheme.