Nakama Group Plc Trading update (5440C)
11 Febbraio 2020 - 8:00AM
UK Regulatory
TIDMNAK
RNS Number : 5440C
Nakama Group Plc
11 February 2020
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
11 February 2020
Nakama Group plc
("Nakama" or "the Group")
Trading update
Nakama Group plc (AIM: NAK), the AIM quoted recruitment
consultancy working across the UK and Asia providing recruitment
and related services for the web, interactive, digital media, IT
and business change sectors, wishes to update shareholders on its
current trading and financial condition.
Since the appointment of the new Chief Executive in April 2019,
the Board has restructured the Group in order to reduce the cost
base and it is expected that the benefits of this will be seen in
the next financial year. Trading to date for the year ending 31
March 2020 has been broadly in line with management's expectations
but during the final quarter of the financial year the Group has
encountered a number of challenges.
The impact of Coronavirus on revenues for both Hong Kong and
Singapore have been immediately felt. As a result of the curbs on
movement of people imposed by regional governments, firms are
currently choosing to delay, in some cases indefinitely, the start
dates of new hires until the full impact of the virus has been
determined, directly impacting revenue recognition for the Group.
Furthermore, recruitment activity generally has been immediately
impacted by the effects of Coronavirus. Despite this immediate
challenge, the Asia region, as a whole, remains highly attractive
and it is expected that the future growth of the business will be
focussed on developing the Group's reach in region.
The UK remains a challenging recruitment environment and
management believe that the changes to IR35, which come into force
from April 2020, will have a short-term impact on the Highams
business. Some of Highams' clients are potentially looking to move
payrolled contractors directly on to their payrolls thus reducing
the Group's monthly revenue stream. Furthermore, the uncertainty
around IR35 has seen a short-term reduction in permanent hiring as
companies assess their overall headcounts as April 2020
approaches.
At the start of the calendar year the decision was made to
relocate the Nakama UK office to Caterham, where the Highams
business is based. Management are pleased with the positive
response this has received from employees to date. Furthermore, as
a result of the implementation of the new robust performance
management programme, the Managing Director of the Singapore office
exited the business and has been replaced internally.
While headcount in the Group has decreased year on year, the
Board believes that these reductions are necessary in order to
bring the cost base in line with revenues to ensure the business
continues to be profitable going forward.
The Group's cash position remains severely constrained and the
Company faces a short-term cash challenge until the full impact of
the recent cost reductions has come through. The Board are
considering several alternative sources of funding to improve the
Group's cash position, but the Group still urgently requires an
injection of capital.
The Board will make further announcements in due course.
Enquiries:
Nakama Group plc www.nakamaglobal.com
00 44 20 7236
Tim Sheffield, Chairman 2400
00 44 20 3588
Robert Thesiger, Chief Executive Officer 4560
Allenby Capital Limited (Nominated
Adviser & Broker)
00 44 20 3328
Nick Naylor / Nicholas Chambers 5656
Notes to Editors:
Nakama Group plc is a recruitment group of two branded solutions
placing people into specialist and management positions:
-- Nakama operates in the digital, creative, media, marketing
and technology sectors all over the world from offices in the UK
and Asia; and
-- the Highams brand specialises in the Financial Services
sector, specifically Business Change and IT in Insurance and Wealth
Management currently in the UK and Europe.
Nakama Group plc was created in October 2011 through the
acquisition of Nakama Ltd UK and its subsidiaries in Hong Kong and
Singapore by AIM listed Highams Systems Services Group plc.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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