Final Results

4 August 2017

Nakama Group PLC (AIM: NAK)

 ("Nakama" or "the Group")

"The AIM quoted recruitment consultancy working across the UK, Europe, Asia, USA and Australia

 providing staff for the Web, Interactive, Digital Media sectors, IT and Business Change"

Preliminary Results

For the year ended 31 March 2017

Highlights

· Group revenue increased by 7 per cent. to £22.5m (2016: £21.0m)

· Net fee income improved by 8 per cent. to £6.19m (2016: £5.73m)

· Net fee income percentage increased to 27.5 per cent. (2016: 27.3 per cent.)

· Revenue across the APAC region increased by 27 per cent. to £8.82m (2016: £6.92m)

· Loss for the year of £270,000 (2016: breakeven)

Rob Sheffield, CEO of Nakama, commented:

"As we advised on 20 June, we had been expecting a stronger second half performance, however fluctuations in headcount that we had seen in the first half and inconsistency in some of the global markets of our businesses meant that it regrettably took longer than expected to correct and the knock-on effect led to a slower than anticipated recovery, as reflected in the results. The business has benefitted from the infrastructure improvements over the past 12 months and we have seen improvements in efficiency of operations. The business will continue to invest in improving and increasing the consistency and output of its sales staff globally and ensuring that cost savings and improvements are implemented through the use of technology."

"From a wider perspective, however and whilst organic growth in the short to medium term will serve the business well for it to meet long-term objectives, we will and have continued our efforts to identify suitable businesses to join the Group, so as to enhance profitability, add new service lines and expand into new geographies. This includes identifying businesses within the staffing and technology space that provide the use of technology platforms and Human Capital services".

"Trading in the first two months of the current financial year is ahead of the same period last year. Whilst the market sectors in which Nakama operates are in high demand, the business needs stable local economies in the current trading locations, stability in current staff numbers and the continued hiring of new sales staff, to deliver against less specialised, but much larger competitors. The Board looks to 2018 as a year in which the Group will continue to grow organically in terms of net fee income and profit, whilst reviewing other options to build scale in its core markets".

Enquiries:

NOTES TO EDITORS

About Nakama Group plc

Nakama Group plc is the AIM-listed recruitment consultancy of two branded solutions placing people into specialist and management positions; the Nakama businesses operate in the digital, creative, media, marketing and technology sectors all over the world from offices in the UK, USA, Asia and Australia. The UK also specialises in the Financial Services sector, specifically Business Change and IT in Insurance and Investment Management currently in the UK. At Nakama, we're in the business of people solutions & consultancy and our vision is to be the best people business on the planet.

Our speciality is finding excellent career opportunities and assignments for senior digital, IT, business and professional services talent. We are constantly developing our relationships and networks to ensure we obtain the best available positions for such talent, whilst ensuring that their skills and personalities are compatible with the needs of our clients.

At Nakama, we work hard to develop and maintain long-term relationships with our clients, contractors and applicants. To do this, we focus on the development and retention of our experienced staff to ensure they are among the most knowledgeable in the industry, both in terms of recruitment best practice and the niche markets in which Nakama operates.

CHAIRMAN'S STATEMENT

Group revenue for the year ended 31 March 2017 increased by 7 per cent. to £22.5m (2016: £21.0m) whereas Net Fee Income ("NFI") improved on the prior year by 8 per cent to £6.19m (2016: £5.73m). The results over the past year have seen lower than expected performance at a Group level. The investment in staff training and development and the introduction of a new CRM system will enhance the results going forward, but had a direct effect on the Group results to March 2017.

Whilst organic growth in the short to medium term will serve the business well for the business to meet our long-term objectives, the Board also continues to focus on identifying suitable businesses to join the Group to enhance profitability, add new service lines and expand into new geographies.

Nakama Group's strategy has continued to concentrate on providing staffing solutions with two highly specialised businesses: Nakama, within the digital, creative, media, marketing and technology sectors and the UK business within the financial services sector. The approach focuses on delivering a local, regional and global solution. The business continues to maintain this as fundamental, but will look to broaden the service offerings across the Group with an emphasis on providing digital solutions to clients across recruitment, outsourcing, on site and consultancy through the use of technology. It is the strategy of the Board and management team to be a leading international specialist within staffing, delivering a quality service to our customers and candidates, whilst creating a sustainable business for the long-term benefit of all stakeholders.

The management team has stabilised over the past year and is now in a position to focus on delivering value to clients and shareholders going forward. We continue to look to recruit further excellent, driven individuals to meet our client and candidate needs.

There are currently no new offices planned for the next financial year as the Board intends to concentrate on improving the performance of the current operations.

The Group retains a strong team of very knowledgeable and long-serving staff and we look forward to continuing to build the Nakama Group. The Board would like to acknowledge the loyalty and commitment of all the staff to the Group and we are extremely grateful for their efforts. Again, we extend a very warm welcome to all new members of the team.

Trading in the first two months of the current financial year is ahead of the same period last year. Whilst the market sectors in which Nakama operates are in high demand, the business needs stable local economies in the current trading locations, stability in current staff numbers and the continued hiring of new sales staff to deliver against less specialised, but much larger competitors. The Board looks to 2018 as a year in which the Group will seek to grow organically and review other options to grow, in terms of net fee income and profit.

Ken Ford

Chairman

4 August 2017

All of the above relate to continuing operations.

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The financial information set out above does not constitute the company's statutory accounts for 2017 or 2016. Statutory accounts for the years ended 31 March 2017 and 31 March 2016 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Annual Report and Financial Statements for the years ended 31 March 2017 and 31 March 2016 were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

Statutory accounts for the year ended 31 March 2016 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 March 2017 will be delivered to the Registrar in due course.

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS"), IFRIC interpretations and the parts of the Companies Act 2006 applicable to companies reporting under IFRS. The Financial Statements have been prepared under the historical cost convention.

The preparation of Financial Statements in conformity with IFRS require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial information, including the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.

Copies of the statutory accounts for the year ended 31 March 2017 will be posted to all shareholders. Additional copies will be available from the Company Secretary, Nakama Group plc, Quadrant House, 33/45 Croydon Road, Caterham, Surrey, CR3 6PB and will be available to download from the investor relations section on the Company's website www.nakamagroupplc.com 

The weighted average number of shares excludes 183,953 (2016: 183,953) shares held by the Employee Share Benefit Trust.

2. Operating segments

Operating segments are reported on a geographical basis.

The Group has three main reportable segments based on the location revenue is derived from:

• Asia Pacific - This segment includes Australia, Hong Kong and Singapore.

• UK - The UK segment includes candidates placed in the UK and Europe.

• USA - This start up includes candidates placed in the USA.

These segments are monitored by the Board of Directors and are reported in a manner consistent with the internal reporting provided to them. The Board of Directors are considered to be the chief operating decision makers. All revenue is derived from the supply of recruitment and human resource services.

The Group's reportable segments are strategic business units that, although supplying the same product offerings, operate in distinct markets and are therefore managed on a day to day basis by separate teams.

The accounts policies of the operating segments are the same as those described in the summary of significant accounting policies.

The Group evaluates performance on the basis of profit or loss from operations before tax not including overhead costs incurred by the head office such as plc AIM related costs not recharged, exceptional items, amortisation and share based payments.

The Board does not review assets and liabilities by segment.

The Group makes sales to Europe, Asia, USA and Australasia. All revenue is derived from the provision of services. An analysis of sales revenue by country is given below: