Half year interim results Investor presentation Ian Temple, Chief Executive Officer John Hunter, Group COO & CFO
Interim Financial Highlights Results Net Fee Income Analysis Integration of Argyll Scott H1 2018 A Platform For Sustainable Profit Growth Interim Results Strong Current Trading 2020 Goals 2
Financial Highlights • Net Fee Income (“NFI”) increased by 57% • Pro-forma NFI increased by 10% • APAC NFI up 16% to £5.5m • EMEA NFI up 6% to £8.7m • US NFI flat at £0.5m • 53% of NFI earned outside the UK • Underlying PBT* £1.1m, up £0.9m • Increase in adjusted basic EPS in the period of 2.5p to 2.4p • Strengthening balance sheet with net cash of £1.3m, up £1.7m from 31 December • Return to payment of interim dividend of 0.5p per share being paid on 19 October * Adjusted for foreign exchange gains, amortisation of acquired brand and database, share based payments, non-controlling interest and exceptional items 3
NFI analysis Regional Permanent/Contract Sector 4
Integration of Argyll Scott Key objectives: Key achievements: • • Accelerate growth through scaling Proforma NFI growth in APAC of APAC operations 16% • • Realise support services Annualised proforma cost savings synergies of £1.5m achieved • • Diversify customer revenue Largest client accounts for 8% of NFI (H1 2017 – 14%) concentration 5
A Platform for Sustainable Profit Growth • • Robust operating model: Marketing & Technology: • Common “Go to Market” strategy driven • Building market leading niche specialist businesses by global CRM & technology platform • • Consistent targeting and reporting Digital marketing programme enabling development of scalable bespoke • People: relationships • Learning & Development culture • Selective M&A • Minority Interest Scheme • Investment In Productive Headcount 6
Trading Summary H1 2018 H1 2017 Revenue £68.6m £56.8m Gross profit (Net fee income) £14.8m £9.4m - Permanent NFI £8.5m £4.3m - Contract NFI £6.3m £5.1m Operating costs (£13.9m) (£10.2m) Other income £0.3m £0.3m Operating profit before exceptional items £1.2m £0.0m Underlying profit before tax* £1.1m £0.2m * Adjusted for foreign exchange gains, amortisation of acquired brand and database, share based payments, non-controlling interest and exceptional items 7
Balance Sheet 30 June 2018 30 June 2017 31 Dec 2017 Non-current assets £14.5m £15.0m £14.4m - Intangible assets £13.0m £13.5m £13.0m - Tangible assets £1.0m £0.9m £0.9m - Other assets £0.5m £0.6m £0.5m Current assets £27.1m £26.7m £26.8m - Debtors £24.0m £22.6m £24.0m - Cash and cash equivalents £3.1m £4.1m £2.8m Total assets £41.6m £41.7m £41.2m - Current liabilities £19.2m £18.9m £19.4m - Non-current liabilities £1.4m £0.9m £1.6m Total liabilities £20.6m £19.8m £21.0m Net assets £21.0m £21.9m £20.2m Net assets have increased since year end by £0.8m Net cash as at 30 June 2018 £1.3m (31 December 2017: net debt £0.4m) Current ratio remains unchanged at 1.4 (2017: 1.4) 8
Cashflow Statement 30 June 2018 30 June 2017 31 Dec 2017 Operating cashflow before movement in working capital £1.4m £0.5m £1.3m Movement in working capital £1.1m (£0.9m) (£2.8m) Tax and financing costs (£0.2m) (£0.2m) (£0.4m) Cashflows arising from exceptional items (£0.3m) (£0.1m) (£0.6m) Net cash inflow/(outflow) from operating activities £2.0m (£0.7m) (£2.5m) Cash at period/year end £3.1m £4.1m £2.7m Borrowings at period/year end £1.8m £2.4m £3.1m Net cash / (debt) £1.3m £1.7m (£0.4m) Average available funds £7.0m £4.4m £5.8m 9
Current Trading and Outlook • The Group has continued to trade well through the summer • Notable performances from our US and Australian operations • Encouraging outlook for Q4 • Confident the underlying profit and EPS for the year will be substantially ahead of current market expectations 10
2020 Goals Increase underlying Contract base Grow NFI by Grow underlying profit before tax to from 1,121 at over 10% pa EPS by 20% per NFI conversion from 30/06/18 to 1500 annum from 3.3p in 3.5% to > 15% by 2016 to 6.8p in 2020 2020 11
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