2nd Aug 2010 07:00
For release at 0700 on 2 August 2010
Highams Systems Services Group plc (AIM: HSS)
("Highams" or "the Group")
The AIM quoted recruitment consultancy and leading niche provider of technology, business and professional services to the insurance and financial services sectors.
Preliminary Results
for the year ended 31 March 2010
Highlights
·; Significant £0.5m turnaround of the business
·; Group revenue at £7.5m (2009: £10.5m), reflecting a reduced, but now stable number of contractors working on client sites during the year
·; Group profit before taxation of £131,000 (2009: loss of £370,000).
·; The Directors are not recommending the payment of a final dividend (2009: nil).
·; Profit margins improved slightly to 16.8% (2009: 16.7%)
·; Market activity continues to improve
·; Contractor numbers stable and permanent recruitment strong overall
·; Recruitment of new staff selective and closely tailored to client requirements
·; Strong brand in difficult trading market
Ken Ford, Chairman of Highams, commented:
"I am pleased by the progress achieved during the year and the considerable achievement by all at Highams in delivering a £0.5m turnaround of the business. We look forward to continuing this progress and to restoring Highams back onto a strong and sustainably profitable path. Our objective for the current year is to return revenue to prior year levels. We have made a good start and providing the employment market remains firm, the Board looks forward to the future with enthusiasm and confidence".
Enquiries:
|
Mark de Lacy , Managing Director |
Tel: 01883 341 144 |
|
Highams Systems Services Group plc |
|
|
www.highams.com |
|
|
|
|
|
John Cowie / David Foreman |
Tel: 0207 107 8000 |
|
Seymour Pierce (Nominated Adviser) |
|
|
|
|
|
Tarquin Edwards |
Tel: 07879 458 364 |
|
Peckwater PR |
|
Chairman's Statement
Introduction
As I noted in our interim results (announced 12 November 2009), our market had been showing signs of improvement and an increase in activity and we had been hoping for continued further progress into the second half of the year. I am pleased to report that that profitable progress has continued and that the Company has achieved a significant £0.5 million turnaround of the business during the year.
I am also pleased to note that this turnaround has been achieved in line with our stated intention "to seek profits, whilst maintaining the quality of our service". We believe that this has been achieved despite some very difficult market conditions.
Contractor numbers have stabilised from the beginning of the year compared to the reducing levels of contractors in the prior period. This however has resulted in reduced revenue to March 2010. I am also pleased that permanent recruitment has remained strong overall and this is despite difficult employment market conditions.
We still continue to focus in our niche market within the insurance and financial services sector and in maintaining our quality of service and delivery associated with our brand.
Staff numbers regrettably were reduced during the first half of the year as part of our necessary cost reduction programme, but I am pleased to report that we have now begun to recruit new staff selectively into the company to enhance the levels of activity required to meet the needs of our clients. I am also pleased to report an increase in requirement levels from both existing and new customers.
The company has explored the possibility of growing by acquisition as well as organically but is not in any current negotiations. Seymour Pierce were recently appointed as nominated adviser and stockbrokers to assist the company's growth plans.
Financial Results
Group revenue fell by 28.6 per cent. to £7.5m (2009: £10.5m), reflecting a reduced, but now stable number of contractors working on client sites during the year. This contrasts with the sharp decline in contractor numbers during the previous year.
Gross profit was reduced at £1.26m (2009: £1.76m), but our profit margins improved slightly to 16.8 per cent (2009: 16. 7 per cent).
Group profit before taxation was £131,000 (2009: loss of £370,000). The Directors are not recommending the payment of a final dividend for the year to 31 March 2010 (2009: nil).
Executives and Staff
We remain a strong team of very knowledgeable long serving staff; and whilst we have been in a very challenging market, we look forward to rebuilding for Highams the success it previously enjoyed. I would like to acknowledge the loyalty and commitment of all the staff to the group and am extremely grateful. I extend a very warm welcome to all new members of the team and I look forward to their development and future success with Highams. I would particularly like to thank Mark de Lacy and Kerri Sayers, who joined the Highams Board of Directors back in September 2008, for their significant contribution to the turnaround of the business.
Outlook
I am pleased by the progress achieved during the year and the considerable achievement by all at Highams in delivering a £0.5m turnaround of the business. We look forward to continuing this progress and to restoring Highams back onto a strong and sustainably profitable path. Our objective for the current year is to return revenue to prior year levels. We have made a good start and providing the employment market remains firm, the Board looks forward to the future with enthusiasm and confidence.
|
Ken Ford 30 July 2010
|
|
Consolidated income statement
For the year ended 31 March 2010
|
|
|
|
|
|
2010 |
2009 |
|
Note |
£'000 |
£'000 |
|
Revenue |
|
7,546 |
10,533 |
|
Cost of sales |
|
(6,280) |
(8,768) |
|
Gross profit |
1,266 |
1,765 |
|
|
Administrative costs |
|
(1,125) |
(2,082) |
|
|
|
|
|
|
Operating profit/(loss) |
|
141 |
(317) |
|
Finance income |
|
- |
4 |
|
Finance costs |
|
(10) |
(57) |
|
Profit/(loss) before tax |
131 |
(370) |
|
|
Tax credit |
|
101 |
- |
|
Profit(loss) for the period attributable to equity shareholders |
232 |
(370) |
Profit/(loss) per share
|
Basic profit/(loss) per share from continuing operations |
1 |
0.34p |
(0.77)p |
|
Diluted profit per share from continuing operations |
1 |
0.33p |
- |
All of the above relate to continuing operations.
Consolidated statement of comprehensive income
For the year ended 31 March 2010
|
|
2010 |
2009 |
|
|
£'000 |
£'000 |
|
Profit/(loss) for the period |
|
232 |
(370) |
|
Foreign currency translation difference |
|
1 |
(1) |
|
Total comprehensive income for the period attributable to equity shareholders |
|
233 |
(371) |
Consolidated balance sheet
At 31 March 2010
COMPANY NUMBER 1700310
|
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
|
£'000 |
£'000 |
|
|
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Intangible assets |
|
|
- |
3 |
|
|
Property, plant and equipment |
|
|
7 |
12 |
|
|
Deferred tax asset |
|
|
101 |
- |
|
|
Total |
|
|
108 |
15 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Trade and other receivables |
|
|
1,291 |
1,343 |
|
|
Cash and cash equivalents |
|
|
4 |
- |
|
|
Total |
|
|
1,295 |
1,343 |
|
|
Total assets |
|
|
1,403 |
1,358 |
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Trade and other payables |
|
|
(876) |
(1,039) |
|
|
Borrowings |
|
|
(231) |
(256) |
|
|
Total |
|
|
(1,107) |
(1,295) |
|
|
Net Assets |
|
|
296 |
63 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
|
|
1,597 |
1,597 |
|
|
Share premium account |
|
|
1,239 |
1,239 |
|
|
Merger reserve |
|
|
90 |
90 |
|
|
Employee share benefit trust reserve |
|
|
(61) |
(61) |
|
|
Currency reserve |
|
|
4 |
3 |
|
|
Retained earnings |
|
|
(2,573) |
(2,805) |
|
|
Total Equity |
|
|
296 |
63 |
|
Consolidated statement of changes in equity
As at 31 March 2010
|
|
Share capital |
Share premium |
Merger reserve |
Employee share benefit reserve |
|
|
Total equity |
|
Currency reserve |
Retained earnings |
||||||
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
At 1 April 2008 |
1,594 |
679 |
90 |
(61) |
4 |
(2,435) |
(129) |
|
Issue of new shares |
3 |
647 |
- |
- |
- |
- |
650 |
|
Associated cost of new shares issued |
- |
(87) |
- |
- |
- |
- |
(87) |
|
Currency adjustments |
- |
- |
- |
- |
(1) |
- |
(1) |
|
Loss for the year |
- |
- |
- |
- |
- |
(370) |
(370) |
|
At 1 April 2009 |
1,597 |
1,239 |
90 |
(61) |
3 |
(2,805) |
63 |
|
Currency adjustments |
- |
- |
- |
- |
1 |
- |
1 |
|
Profit for the year |
- |
- |
- |
- |
- |
232 |
232 |
|
At 31 March 2010 |
1,597 |
1,239 |
90 |
(61) |
4 |
(2,573) |
296 |
|
|
|
|
|
|
|
|
|
Consolidated statement of cash flow
For the year ended 31 March 2010
|
|
|
|
|
|
|
|
|
|
2010 |
2009 |
|
|
|
|
£'000 |
£'000 |
|
Operating activities |
|
|
|
|
|
Profit/(loss) for the year before tax |
|
|
131 |
(370) |
|
Depreciation of property, plant and equipment |
|
|
5 |
10 |
|
Amortisation of intangible assets |
|
|
3 |
8 |
|
Net finance costs |
|
|
10 |
53 |
|
Changes in trade and other receivables |
|
|
52 |
930 |
|
Change in trade and other payables |
|
|
(162) |
(198) |
|
Net cash generated by operating activities |
|
|
39 |
433 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
- |
(10) |
|
Purchase of intangible assets |
|
|
- |
- |
|
Proceeds of property plant and equipment |
|
|
- |
7 |
|
Interest received |
|
|
- |
4 |
|
Net cash generated by investing activities |
|
|
- |
1 |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Increase/decrease in borrowings |
|
|
94 |
(890) |
|
Proceeds from issue of share capital |
|
|
- |
650 |
|
Associated cost of share issue |
|
|
- |
(87) |
|
Interest paid |
|
|
(10) |
(57) |
|
Net cash from financing activities |
|
|
84 |
(384) |
|
|
|
|
|
|
|
Net changes in cash and cash equivalents |
|
|
123 |
50 |
|
Cash and cash equivalents, beginning of year |
|
|
(119) |
(169) |
|
Cash and cash equivalents, end of year |
|
|
4 |
(119) |
1. Profit/(loss) per share
|
|
|
2010 |
|
|
2009 |
|
|
|
Profit |
Weighted average number of shares |
Profit per share |
Profit/ (loss) |
Weighted average number of shares |
Loss per share |
|
|
£'000 |
'000 |
p |
£'000 |
'000 |
p |
|
Basic profit/(loss) per share |
232 |
68,834 |
0.34 |
(370) |
47,770 |
(0.77) |
|
Diluted profit per share |
232 |
69,867 |
0.33 |
- |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average number of shares excludes 183,953 (2009: 183,953) shares held by the Employee Share Benefit Trust.
There is no difference in 2009 between the basic and diluted profit/(loss) per share.
2. The financial information in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 March 2010 or 2009 as defined in section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2009 have been delivered to the Registrar of Companies and those for the year ended 31 March 2010 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts, their reports were unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports. Their report for the year ended 31 March 2010 did not contain statements under s498 (2) or (3) of the Companies Act 2006 and their report for the year ended 31 March 2009 did not contain statements under s237 (2) or (3) of the Companies Act 1985.
3. Copies of the statutory accounts for the year ended 31 March 2010 will be posted to all shareholders. Additional copies will be available from the Company Secretary, Highams Systems Services 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.highamsrecruitment.com
Related Shares:
NAK.L