Preliminary Results for the year to 31 July 2014 Brian Wilkinson - - PowerPoint PPT Presentation

Preliminary Results for the year to 31 July 2014

Brian Wilkinson – Executive Chairman Adrian Gunn – Chief Executive Officer Tony Dyer – Chief Financial Officer October 2014

Results

Performance Summary

1 Adjusted Basic EPS excludes the amortisation on acquired intangibles 2 Recommended

↑10%

Group Revenue £451.6m (2013: £408.9m)

↑17% ↑27%

EBITA £13.6m (2013: £10.7m)

↑20%

Profit Before Tax £11.9m (2013: £9.9m) Adjusted Basic EPS 39.1 pence1 (2013: 32.9 pence)

↑19% ↑14%

Final Dividend 14.59 pence2 (2013: 12.85 pence) Net Fee Income £45.0m (2013: £38.4m)

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Income Statement

4 Year to 31 July

2014 2013 Change Like for Like1

£m £m % % Revenue 451.6

408.9

+10% +7%

Contract NFI 32.8

27.2

+21% +14% Contract gross margin (%) 7.5% 6.8%

Permanent fees 12.2

11.2

+9% +9%

Gross profit (NFI) 45.0

38.4

+17% +13% Gross margin (%) 10.0% 9.4%

Operating overheads (31.4)

(27.7)

• 13%
• 10%

EBITA 13.6

10.7

+27% +19% NFI conversion (%) 30% 28% Operating margin (%) 3.0% 2.6%

Amortisation (0.7)

(0.2)

Profit from operations 12.9

10.5

+23%

Net interest (1.0)

(0.6)

Profit before tax 11.9

9.9

+20%

Taxation (2.8)

(2.4)

Profit after tax 9.1

7.5

+21%

1 Like for like excludes the effects of acquisitions

Earnings per share & Dividends

Year to 31 July 2014 2013 Change Profit after tax

£million

9.1

7.5

+22%

Average shares in issue

million

24.7

23.5

+5%

Shares under option

million

1.4

1.0

+42%

Fully diluted shares

million

26.1

24.5

+6%

Earnings per share Basic

pence

37.0

32.0

+16%

Diluted

pence

35.0

30.7

+14%

Adjusted earnings per share1 Basic

pence

39.1

32.9

+19%

Diluted

pence

36.9

31.6

+17%

Dividend per share

pence

20.0

18.0

+11%

Adjusted dividend cover1

times

2.0 x

1.8 x

+11%

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Balance Sheet & Cashflow

↓£7.4m ↑£10m

Banking facilities: £60m (2013: £50m) Debtor Days 46 days (2013: 49 days)

↓3 days

Net debt: £3.1m (2013: £10.5m)

↑11ppts

Operating cash conversion: 121% (2013: 110%)

↑32%

Net assets: £42.7m (2013: £32.3m)

↓1 day

Creditor days: 8 days (2013: 9 days) Debtor days: 46 days (2013: 49 days)

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Cashflow

(£10.5m) (£3.1m) £13.6m £2.1m £4.1m £0.0m £0.3m £0.7m £2.8m £4.2m £4.5m (£15.0m) (£10.0m) (£5.0m) £0.0m £5.0m £10.0m £15.0m

July 2013 EBITA Non-cash items Equity Placing Working Capital Net Cap-Ex Interest & Fees Taxation Acquisition Dividends July 2014

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Contract activity

3,400 3,700 4,400 4,800 4,500 5,100 6,000 6,700 7,000 7,200

£0.25m £0.30m £0.38m £0.44m £0.45m £0.41m £0.42m £0.50m £0.56m £0.67m

£0.00m £0.10m £0.20m £0.30m £0.40m £0.50m £0.60m £0.70m

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Contractors at period end Average weekly Net Fee Income 8

10.4% 9.8% 9.5% 9.0% 8.4% 7.8% 7.0% 6.8% 6.8% 7.5% Contract Margin %

Permanent activity

£3,600 £3,900 £3,800 £3,800 £3,900 £3,700 £4,580 £4,580 £4,940 £5,000 1,280 1,520 2,190 2,870 2,120 1,670 2,120 2,550 2,600 3,000

£0.09m £0.12m £0.17m £0.22m £0.17m £0.13m £0.19m £0.22m £0.23m £0.25m

£0.00m £0.05m £0.10m £0.15m £0.20m £0.25m

£- £1,000 £2,000 £3,000 £4,000 £5,000 £6,000 £7,000 £8,000 £9,000 £10,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Average Fee Placements Average weekly Fees

Note: Average fees excludes Alderwood

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10 Year Performance Summary

£0m £50m £100m £150m £200m £250m £300m £350m £400m £450m £500m £0m £5m £10m £15m £20m £25m £30m £35m £40m £45m £50m

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Net Fee Income EBITA Revenue

NFI Conversion %

36% 40% 40% 42% 39% 34% 23% 24% 28% 30% 10

Operating Review

NFI Business Mix

75% 72% 72% 71% 73% 25% 28% 28% 29% 27%

2010 2011 2012 2013 2014

Contract Permanent

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NFI Sector Split

£18.4m £19.2m £22.4m £24.0m £27.1m £7.8m £10.6m £13.7m £14.4m £17.9m

2010 2011 2012 2013 2014

Engineering Professional Services

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* Including £1.8m NFI from Provanis *

Engineering Overview

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Engineering Sector

£3.3m £3.0m £3.0m £4.1m £4.7m £5.9m £3.8m £2.8m £3.5m £4.3m £4.7m £8.0m

NFI by sub-sector

2014 2013 Infrastructure Energy Automotive Aerospace Maritime General Engineering

NFI by type

2014 Contract NFI: 83% Permanent Fees: 17% 2013 Contract NFI: 82% Permanent Fees: 18%

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NFI Conversion 39%

(2013: 37%)

Engineering Growth Drivers

£38bn investment into rail engineering projects Highways Agency reporting record levels of spending New 5 year water AMP cycle starts January 2015 Increased funding in commercial property Major accounts signed up to long term agreements

Infrastructure

£3.2bn MOD award contract for upkeep of RN fleet Type 26 Frigate programme moving into design stage Successor Submarine programme moving into design stage Canada and Singapore providing opportunities to expand internationally

Maritime Energy

North Sea EPC contractors directly recruiting Margins and pay rates under pressure Focus on niche subsea, drilling and equipment manufacturers Major Accounts continue to provide medium term visibility of work 16

Engineering Growth Drivers

Limited demand for design and development of new aircraft structures Manufacturing order book for commercial aircraft at record capacity Continued research in new materials and advance manufacturing processes Increased activity in drone development

Aerospace

High End OEM’s benefiting from global demand UK supply chain at record levels of activity JLR with multiple platforms at R&D stage UK centre of excellence for advanced automotive engineering International growth in Germany and China

Automotive General Engineering

3.9% growth in output from UK manufacturing sector Strong growth within medical devices and specialist industrial equipment manufacturers Leveraging our market leading brand across the broader engineering and manufacturing community 17

Professional Services Overview

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Professional Services Overview

£5.3m £9.1m £6.3m £1.8m £9.8m

NFI by sub-sector

2014 2013 Technology: Connectus Provanis Professional Staffing Aerospace Marine General Engineering

NFI by type

2014 Contract NFI: 57% Permanent Fees: 43% 2013 Contract NFI: 53% Permanent Fees: 47%

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NFI Conversion 17%

(2013: 12%)

Our purpose

Engage our staff Delight our clients Promote our candidates

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The relationship Specialist Personalised approach Within the top 5% of benchmark group Engagement score of 90% 91% completed staff engagement survey Going the extra mile ‘You get us’ Market intelligence

Our 2017 strategy

Sharpen

• ur focus

Invest in attractive markets Greater scale yet even more specialist Go-to recuiter in our chosen markets

Move up value chain

Place higher level candidates Work with clients who value service Charge right price for quality service

Go global

Attract international candidates International

• pportunities

for candidates Follow key clients

• verseas

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Our 2017 vision

Premium stock for investors

Market leading specialist recruiter Employer of choice Best partner to clients & candidates Rapidly developing international business

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Our Investment proposition

Well Balanced

Broad client relationships and business mix

Yield

Solid dividend payout record

International

Expanding into selected markets

Established

Strong track record of

• rganic NFI and profit

growth

Resilient

Contract business model

Specialist

Niche sector expertise

Expert

Capability and resources to increase market share in permanent recruitment

Committed funding

Facilities of £60m

Flexible

Efficient systems and high

• perational flexibility

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Outlook

Increasing contract margin percentage Volume of permanent vacancies increasing Improvements in the NFI we generate per sales head Increasing operational efficiencies Continued investment is sales headcount in growth markets

“The new financial year has started well, building on our solid foundations. We are confident that the Group will continue to make significant progress again this year.”

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