3rd Jun 2008 07:00
PENNA CONSULTING PLC ANNOUNCES
FULL YEAR RESULTS
3 June 2008
Penna Consulting Plc (PNA) the Human Capital Management Consultancy group today announces its final results for the year ended 31 March 2008.
Headlines
Revenue up 13.1% to £49.1m (2007: £43.4m)
Profit before tax £2.0m (2007: £0.6m)
Net cash* of £3.0m at year end (2007: £1.7m)
Dividends restored (2p recommended final dividend)
* Cash less bank borrowings
Commenting on the results, Stephen Rowlinson, Chairman said:
"The Group has made good progress through the year and the high volume of business in the fourth quarter has continued into the new financial year. All indications are that the Group will see a year of significant growth."
For further information please contact:
Stephen Rowlinson, Chairman 0771 00 23699
Gary Browning, Chief Executive 020 7648 2448
David Firth, Finance Director 020 7648 2423
Penna Consulting Plc
Chairman's Review
The Group made good progress through the year. Operating Profits were £0.5m in the first half and £1.5m in the second half, producing total pre tax profits of £2.0m for the year ended 31 March 2008 (2007: £0.6m)
Revenue grew by 13.1% to £49.1m (2007: £43.4m) and Net Revenue by 4.1%. Overhead costs were kept under close control following the restructuring completed during the previous year. Operating Margins improved to 6.2% (2007:2.4%).
The Group's Balance Sheet is strong. At year end the Group had Net Assets of £19.3m (2007: £17.9m); Net Tangible Assets† of £5.3m (2007: £3.9m) and Net Current Assets of £3.7m represented largely by Cash of £3.0m. The Group has no borrowings and its bank facility of £2.5m established in December 2007 remains undrawn.
In the light of our current trading and cash position the Board is recommending the resumption of Dividend payments. We propose a final Dividend of 2 pence per share in respect of 2007/8 and, in the absence of unforeseen circumstances, the Board expects to be able to recommend an Interim Dividend of 1p to be followed by a Final of 2p in the current year.
Operational Review
Growth during the year was broadly based with all six business streams delivering encouraging performance. The revenue reduction in Executive Recruitment was the result of a planned change of strategy and in HR Consulting from the ending of a large contract in the previous year. Of the other four divisions, three showed outstanding growth, in excess of 25%. The Group's largest division, Career Transition grew by 9% and ended the year with a high level of work in progress.
|
Net Revenue* by Service Line |
||||
|
Year to |
Year to |
|||
|
31 March 2008 |
31 March 2007 |
% change |
||
|
£'000 |
£'000 |
|||
|
Career Transition |
17,686 |
16,205 |
+9% |
|
|
Executive Recruitment |
3,590 |
4,815 |
-25% |
|
|
Executive Interim |
3,132 |
2,454 |
+28% |
|
|
Recruitment Communications |
948 |
667 |
+42% |
|
|
Leadership Development |
3,603 |
2,839 |
+27% |
|
|
HR Consulting |
3,313 |
4,008 |
-17% |
|
|
Total Net Revenue* |
32,272 |
30,988 |
|
+4.1% |
|
Total Revenue
|
49,067 |
43,379 |
|
+13.1% |
|
* Turnover less pass through costs (2008: £16,795; 2007 £12,391) |
||||
† Net Assets excluding goodwill
The market for the Group's Career Transition services is expanding rapidly and at the same time the division is increasing its market share. Published data from the ACF (Association of Career Firms) shows that Penna is the UK's largest outplacement consultancy in the Private sector and that its market share grew from 26% to 30% during 2007. The Group's leading position has been strengthened by the changes made in the previous year when the division's new top management refocused sales and delivery teams and introduced a range of new services. The upsurge in volume came in the last quarter of the year and is therefore not fully reflected in the growth of 9% for the year as a whole. The division has recently secured a number of important long-term contracts covering periods of up to three years.
The Group's Executive Recruitment business is now focussing on a more closely defined range of market sectors and this inevitably reduced volume during the year. We expect to see renewed growth in volume and profitability in the new year as a result of this new strategy.
Executive Interim had another good year with growth of 28% of net fee income. Penna is the second largest provider of Interim Managers in the UK and we are expanding our team to build on the successes of recent years.
Our Recruitment Communications business has continued to grow rapidly and has gained a number of new clients. Net revenue was 42% higher in the year and the division is now making a positive contribution to group profits.
Demand for the Group's Leadership Development services also grew strongly by an impressive 27%. Penna provides Executive Coaching and Leadership Development services to both the Private and Public sectors and has emerged as one of the leaders of this important and growing market.
In 2006/07 our HR Consulting team conducted a large assessment contract in India and the division's net revenue was boosted to £4.0m compared to £2.3m in the previous year. In the year under review net revenue was £3.3m and we are pleased to note that, excluding the Indian contract, the core HR business has achieved double digit compound growth over the last two years. This momentum has continued into the new Company year.
Our International business in Ireland and Continental Europe includes Executive Recruitment, Leadership Development and HR Consulting. There was some reduction in Recruitment volume which was matched by growth of the other services and overall net revenues were at similar levels to the previous year at £4.3m (2007: £4.6m).
Outlook
The high volume of business in the fourth quarter of 2007/08 has continued into the new financial year and all indications are that the Group will see a year of significant growth.
Stephen Rowlinson
Chairman
3 June 2008
Penna Consulting Plc
Consolidated income statement
for the year ended 31 March 2008 (unaudited)
|
Notes |
Year Ended 31 March 2008 £'000 |
Year Ended 31 March 2007 £'000 |
|
|
Revenue |
49,067 |
43,379 |
|
|
Operating expenses |
(47,065) |
(42,647) |
|
|
Operating profit |
2,002 |
732 |
|
|
Interest received Interest paid |
15 (47) |
37 (197) |
|
|
Profit before tax |
1,970 |
572 |
|
|
Income tax expense |
2 |
(592) |
- |
|
|
|
||
|
Profit for the year |
1,378 |
572 |
|
|
|
|
||
|
Attributable to: |
|||
|
Equity holders of the parent |
1,378 |
572 |
|
|
Earnings per share: |
3 |
||
|
- basic |
5.47p |
2.58p |
|
|
- diluted |
5.47p |
2.58p |
|
Penna Consulting Plc
Consolidated balance sheet
at 31 March 2008 (unaudited)
|
Note |
31 March 2008 £'000 |
31 March 2007 £'000 |
|
|
Non-current assets |
|||
|
Goodwill |
14,036 |
14,036 |
|
|
Property, plant and equipment |
1,850 |
1,972 |
|
|
Other intangible assets - software |
32 |
50 |
|
|
Deferred taxation |
24 |
77 |
|
|
15,942 |
16,135 |
||
|
Current assets |
|||
|
Trade receivables |
11,271 |
9,956 |
|
|
Other current assets |
1,788 |
1,916 |
|
|
Cash and cash equivalents |
5b |
2,961 |
3,218 |
|
16,020 |
15,090 |
||
|
Total assets |
31,962 |
31,225 |
|
|
Current liabilities |
|||
|
Trade payables |
2,368 |
2,667 |
|
|
Bank loans and overdrafts |
- |
1,200 |
|
|
Loan notes Obligations under finance leases |
111 88 |
431 94 |
|
|
Short-term provisions |
153 |
194 |
|
|
Corporation tax |
154 |
8 |
|
|
Other creditors and accruals |
9,406 |
7,906 |
|
|
12,280 |
12,500 |
||
|
Non-current liabilities |
|||
|
Bank loan |
- |
300 |
|
|
Obligations under finance leases |
- |
88 |
|
|
Long-term provisions |
351 |
388 |
|
|
351 |
776 |
||
|
Total liabilities |
12,631 |
13,276 |
|
|
Net assets |
19,331 |
17,949 |
|
|
Capital and reserves |
|||
|
Called up share capital |
1,264 |
1,264 |
|
|
Share premium account |
15,109 |
15,109 |
|
|
Merger reserve |
10,170 |
10,170 |
|
|
Employee Share Option Plan reserve |
(397) |
(397) |
|
|
Foreign currency translation reserve |
3 |
66 |
|
|
Retained loss |
(6,818) |
(8,263) |
|
|
Total equity |
19,331 |
17,949 |
Penna Consulting Plc
Consolidated statement of changes in equity
at 31 March 2008 (unaudited)
|
Called up share capital £'000 |
Share premium £'000 |
Merger reserve £'000 |
ESOP reserve £'000 |
Foreign currency translation £'000 |
Retained loss £'000 |
Total equity £'000 |
|
At 1 April 2006 |
978 |
11,899 |
10,170 |
(397) |
42 |
(8,839) |
13,853 |
|
Share issue |
286 |
3,210 |
- |
- |
- |
- |
3,496 |
|
Currency translation differences |
- |
- |
- |
- |
24 |
- |
24 |
|
Net profit for the year |
- |
- |
- |
- |
- |
572 |
572 |
|
Share option credit |
- |
- |
- |
- |
- |
4 |
4 |
|
At 31 March 2007 |
1,264 |
15,109 |
10,170 |
(397) |
66 |
(8,263) |
17,949 |
|
At 1 April 2007 |
1,264 |
15,109 |
10,170 |
(397) |
66 |
(8,263) |
17,949 |
||
|
Currency translation differences |
- |
- |
- |
- |
(63) |
- |
(63) |
||
|
Net profit for the year |
- |
- |
- |
- |
- |
1,378 |
1,378 |
||
|
Share option credit |
- |
- |
- |
- |
- |
67 |
67 |
||
|
At 31 March 2008 |
1,264 |
15,109 |
10,170 |
(397) |
3 |
(6,818) |
19,331 |
||
Penna Consulting Plc
Consolidated group cash flow statement
for the year ended 31 March 2008 (unaudited)
|
Note |
Year Ended 31 March 2008 £'000 |
Year Ended 31 March 2007 £'000 |
|
|
Cash flows from operating activities |
|||
|
Cash generated by operations |
5a |
2,497 |
2,238 |
|
Tax (paid)/refunded |
|
(393) |
45 |
|
Interest paid |
(32) |
(171) |
|
|
Interest received |
15 |
37 |
|
|
Net cash generated by operating activities |
2,087 |
2,149 |
|
|
Cash flows from investing activities |
|
||
|
Net purchase of property, plant and equipment |
(415) |
(266) |
|
|
Sale of investment |
- |
750 |
|
|
Net cash (used in)/generated by investing activities |
(415) |
484 |
|
|
Cash flows from financing activities |
|||
|
Interest paid - finance leases |
(15) |
(26) |
|
|
Repayment of finance leases |
(94) |
(85) |
|
|
Repayment of loan notes |
(320) |
(2,031) |
|
|
Issue of ordinary share capital |
- |
3,496 |
|
|
New bank loan received |
- |
2,250 |
|
|
Bank loan repaid |
(1,500) |
(750) |
|
|
Net cash (used in)/from financing activities |
(1,929) |
2,854 |
|
|
Net (decrease)/increase in cash and cash equivalents |
(257) |
5,487 |
|
|
Cash and cash equivalents at start of period |
3,218 |
(2,269) |
|
|
Cash and cash equivalents at end of period |
5b |
2,961 |
3,218 |
Penna Consulting Plc
Notes to the preliminary announcement
for the year ended 31 March 2008 (unaudited)
| Accounting policies The unaudited preliminary consolidated financial statements are for the year ended 31 March 2008. They have been prepared under the historical cost convention, except for certain financial instruments, using accounting polices that are consistent with current International Financial Reporting Standards (IFRS). The financial statements are unaudited. |
||
|
2. Taxation Current taxation has been provided for at 30% (2007:30%), for the UK and appropriate rates for overseas earnings. 3. Earnings per share The calculation of basic and diluted earnings per share are based on the following amounts: |
||
|
Year ended 31 March 2008 |
Year ended 31 March 2007 |
|
|
Earnings |
||
|
Profit after tax (£'000) |
1,378 |
572 |
|
Number of shares |
||
|
Weighted average number of Shares |
25,173,348 |
22,151,821 |
|
Dilution effect of share option Schemes |
14,495 |
- |
|
Diluted weighted average number Of Shares |
25,187,843 |
22,151,821 |
|
Earnings per share: |
||
|
Basic |
5.47p |
2.58p |
|
Diluted |
5.47p |
2.58p |
|
4. Dividends A final dividend of 2p (2007: nil) will be recommended for approval at the Annual General Meeting. |
||
Penna Consulting Plc
Notes to the preliminary announcement (continued)
for the year ended 31 March 2008 (unaudited)
|
5a. Reconciliation of operating profit to cash generated by operating activities |
Year Ended 31 March 2008 £'000 |
Year Ended 31 March 2007 £'000 |
|
Operating profit |
2,002 |
732 |
|
Adjustments for: |
||
|
Depreciation |
532 |
509 |
|
Loss on disposal of fixed assets Share option expense |
- 67 |
80 4 |
|
Changes in working capital: |
||
|
(Increase)/Decrease in trade and other receivables |
(1,187) |
995 |
|
Increase in trade and other payables Movement in provisions |
1,161 (78) |
94 (176) |
|
Cash generated by operations |
2,497 |
2,238 |
|
5b. Cash and cash equivalents |
At 31 March 2008 £'000 |
At 31 March 2007 £'000 |
|
Cash and cash equivalents are made up as follows: |
||
|
Cash at bank |
2,850 |
3,019 |
|
Cash on restricted deposit |
111 |
199 |
|
Cash and cash equivalents |
2,961 |
3,218 |
|
Penna Consulting Plc Notes to the preliminary announcement (continued) for the year ended 31 March 2008 (unaudited) 6. Nature of the financial information The Board of Directors approved the Preliminary Results on 3 June 2008. The financial information set out in this document does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The financial information in respect of the year to 31 March 2008 is unaudited. Statutory accounts for the year ended 31 March 2007, on which the auditor's report was unqualified and did not contain a statement under s237(2) or (3) of the Companies Act 1985, have been delivered to the Registrar of Companies. Copies can be obtained from our Registered Office at 3rd Floor, St Mary's Court, 20 St Mary at Hill, London EC3R 8EE. The financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in July 2008. |
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