TIDMNGH
RNS Number : 3835L
Network Group Holdings PLC
05 May 2010
Network Group Holdings plc
(the "Group", "Company", "NGH")
Full year results
The Board of Network Group Holdings plc announces that it is today posting the
Annual Report and Accounts for the year ended 30 November 2009 to shareholders,
and it is also available on the Company's website. Copies of the Annual Report
and Accounts will be available for collection from the Company's Registered
Office at the address below:
Network Group Holdings plc
Meriden Hall
Main Road
Meriden
Warwickshire
CV7 7PT
Telephone +44 (0) 1676 525300
www.networkgroupholdings.co.uk
For further information please contact:
+--------------------------------+---------------+
| Network Group Holdings plc | 01676 525300 |
| David J Waller, Chairman | |
| www.networkgroupholdings.co.uk | |
+--------------------------------+---------------+
| | |
| Nominated Adviser | 0121 423 8943 |
| Arden Partners plc | |
| Steve Douglas | |
+--------------------------------+---------------+
CHAIRMAN'S REPORT
Introduction
The Group encountered extremely difficult market conditions during 2009 as a
result of the challenging economy. Following the activity of the Group in 2008
with the purchase and subsequent disposal of Pertemps People Development Group
Limited ("PPDG"), the focus during 2009 was on guiding the Group through the
challenging conditions. It is testament to the significant efforts of our
business leaders and our staff that the Group was able to deliver an operating
profit for the year.
Significant reductions were made in the Group's cost base, across both of the
Group's core activities. Towards the end of the year the Group experienced an
improvement in some of its market sectors.
In December 2008, the Group discharged the anti-embarrassment clause liability
relating to the sale of PPDG. Under the anti-embarrassment clause, an element
of the proceeds received from the sale were required to be passed back to the
original shareholders in exchange for the shares in Network Group Holdings plc
("NGH") that were issued on the original acquisition of PPDG. The cash held in
escrow and the shares held in the acquiring company, both of which were stated
in the 30 November 2008 balance sheet, were used firstly to buy-back, and
subsequently cancel, 39.9m shares in NGH and secondly, to purchase 6.5m shares
in NGH into a newly-formed Employee Benefit Trust. NGH underwent a process of
reducing its share premium prior to the buy-back and purchase of shares. The
balance sheet of the Group at 30 November 2009 reflects the transactions
described above. As I stated in my previous annual report, the Group retained
GBP5.1m cash from the disposal proceeds of PPDG and a pre-disposal dividend,
before the payment of costs of disposal and amounts payable as part of the
original purchase.
In November 2009, the Group increased its portfolio of specialist recruitment
agencies providing services to the public sector with the acquisition of Network
Recruitment Solutions Limited, which specialises in the health and social care
market. In line with the Group's partnering principles the Group acquired 51%
and the management retained 49% with the ability to convert it into shares in
NGH in the future. The Group issued 5 million new shares as consideration for
the acquisition.
Also, in November 2009, the Board decided to dispose of two recruitment
operations. Executive Network Legal Limited, which specialises in the placement
of legal professionals, and Total Employment Limited, which specialises in
placing workers into temporary industrial positions, were sold for GBP1 each
following disappointing performances in 2009. In conjunction with the
disposals, the Group received a repayment of the intercompany debts due to the
Group from these companies, together with a repayment of the outstanding
customer ledgers associated with these companies, resulting in an overall inflow
of cash to the Group of GBP850,000.
In December 2009, the Group completed the conversion of a minority shareholding
into shares in NGH. This resulted in the issue of 65,841 new shares in NGH at a
value of GBP10,000.
The consolidated cash flow statement shows an increase in cash and cash
equivalents of GBP364,000 and a reduction in borrowings of GBP5,739,000. The
net debt of the Group at 30 November 2009 was GBP2,326,000, reduced from
GBP8,429,000 at 30 November 2008.
The Group is currently, and is forecasting to continue, operating well within
its current facility levels. The Group's current banking facilities expire in
September 2010. The Directors have received confirmation that it is the Bank's
current intention to continue to provide facilities both now and from September
onwards. Consequently, the Directors have a reasonable expectation that the
Group will have sufficient finance for the foreseeable future and as such
continue to adopt the going concern principle.
Financial results
This is first opportunity for a true comparison of annual results following the
restructuring of the Group to facilitate the admission to AIM in 2007. As I
stated in my last annual report, whilst we will continue to make acquisitions of
specialist recruitment businesses, 2008 provided a base period for which
meaningful like for like comparisons can be made.
The presentation of the Income Statement has been amended to present the results
before the deduction of "Other items". Other items represent the credit /
charge to the Income Statement in respect of the movement in the liability
associated with the equity conversion mechanism, and the charge to the Income
Statement in respect of the movement in the mark-to-market value of the Group's
interest collar. The Board views these items in the Income Statement as
non-operational accounting entries and therefore has chosen to present the
Income Statement both before and after the inclusion of these figures.
The Income Statement shows the results split by continuing and discontinued
operations. The discontinued operations for 2008 represent the profits
generated by PPDG during the period of ownership and the profit generated by the
disposal of PPDG. Whilst there have been disposals during 2009, the results are
not classified as discontinued operations since they relate to the disposal of
recruitment businesses, and recruitment continued as one of our two core
activities.
A summary of the financial performance for the year ended 30 November 2009 is
set out below, with a comparison to the year ended 30 November 2008:
+--------------------------------------+----------+----------+
| | 2009 | 2008 |
+--------------------------------------+----------+----------+
| | GBP000 | GBP000 |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| Revenue * | 52,136 | 61,637 |
+--------------------------------------+----------+----------+
| Gross profit * | 18,302 | 23,954 |
+--------------------------------------+----------+----------+
| Operating profit * | 1,088 | 1,103 |
+--------------------------------------+----------+----------+
| Profit Before Tax * ^ | 752 | 480 |
+--------------------------------------+----------+----------+
| Profit from Discontinued Operations | - | 2,143 |
+--------------------------------------+----------+----------+
| | | |
+--------------------------------------+----------+----------+
| Net debt | 2,326 | 8,429 |
+--------------------------------------+----------+----------+
* The above amounts relate to the continuing operations of NGH
^ Profit before tax is stated before Other items, being the movement in value
of the equity conversion mechanism liabilities, and the movement in value of the
Group's interest rate collar.
The reported Profit for the Year, after Other items, is GBP3,693,000 (2008:
GBP1,879,000). However the Income Statement includes a credit of GBP2,855,000
(2008: charge of GBP233,000) presented within Other items in respect of the
movement in the value of the liabilities associated with the Group's equity
conversion mechanism. The liability is calculated using the historical profits
of the participating subsidiaries and with reduced profits from these
subsidiaries, all within the recruitment sector, the value of the liabilities
has reduced causing a credit to the Income Statement.
Revenue for the Group for 2009 was 15.4% lower than revenue for 2008. Gross
profit of the Group for 2009 was 23.6% lower than gross profit for 2008. This
reflects the challenging economic conditions in which the Group was operating
during the year.
However, operating profit for 2009 was only GBP15,000 (1.4%) lower than
operating profit for 2008 reflecting the decisive early management action, which
significantly reduced the overheads, by the Group. Additionally, operating
profit includes profit on disposal of GBP224,000 in 2009 and a loss on partial
disposal of GBP220,000 in 2008.
Profit before tax before Other items was GBP272,000 (56.7%) higher than profit
before tax before Other items in 2008 due to reduced finance costs in 2009.
Outlook
The Group is experiencing an improvement in trading conditions in some of its
market sectors, however we continue to remain cautious in our outlook, as the
economic conditions remain challenging making it difficult to predict the
current year with any certainty.
The overheads of the Group have been significantly reduced and continue to be
monitored closely.
With the reduced cost base and the Group's diverse portfolio of business
sectors, we believe the Group is well placed to take advantage of the upturn in
the market.
Board
During the year I was appointed as non-executive chairman, replacing Christopher
Ross. I would like to thank all Board members for their contributions during a
very difficult year.
Finally, I would like to extend my thanks to all of our business leaders and
their staff for their contributions over the last year.
D J Waller
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
Financial and Operational Review
The financial year ended 30 November 2009 was extremely challenging as a result
of the economic conditions. However, the second half of the year experienced
improved trading results, despite the continued challenging economic conditions,
with an improvement in trading conditions in some market sectors.
I set out below the revenue and operating profit for our two divisions. Further
detail is provided for the individual sectors of our recruitment division.
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | | Operating | | Operating |
| | Revenue | profit | Revenue | profit |
+--------------------+----------------+-----------+----------------+-----------+
| | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | GBP000 | % | GBP000 | GBP000 | % | GBP000 |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Professional | 5,609 | 10.7 | (119) | 8,522 | 13.8 | 948 |
| recruitment* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Technical | 21,511 | 41.2 | (420) | 29,170 | 47.3 | 393 |
| recruitment* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Public sector | 18,441 | 35.4 | 561 | 17,104 | 27.8 | 180 |
| recruitment* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Central | 498 | 1.0 | 239 | 359 | 0.6 | (319) |
| recruitment | | | | | | |
| function* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Recruitment total* | 46,059 | 88.3 | 261 | 55,155 | 89.5 | 1,202 |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Business | 6,077 | 11.7 | 1,187 | 6,482 | 10.5 | 1,114 |
| outsourcing* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Central Group | - | - | (358) | - | - | (845) |
| costs* | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| | | | | | | |
+--------------------+--------+-------+-----------+--------+-------+-----------+
| Total* | 52,136 | 100.0 | 1,090 | 61,637 | 100.0 | 1,471 |
+--------------------+--------+-------+-----------+--------+-------+-----------+
* The above amounts relate to the continuing operations of NGH.
Note that the operating profit of GBP1,090,000 (2008: GBP1,471,000) shown above
excludes amortisation of goodwill and intangible assets of GBP80,000 (2008:
GBP99,000), share-based payments of GBP146,000 (2008: GBP49,000) and profit on
disposal of subsidiaries of GBP224,000 (2008: GBPnil) and loss on partial
disposal of subsidiaries of GBPnil (2008: GBP220,000). Operating profit shown
in the Income Statement is GBP1,088,000 (2008: GBP1,103,000).
Professional Recruitment Sector
Revenue for the year ended 30 November 2009 was GBP5,609,000 representing 12.2%
of the recruitment division revenue and 10.7% of the total revenue compared to
GBP8,522,000 for the year ended 30 November 2008 representing 15.5% of
recruitment division revenue and 13.8% of total revenue. The operating loss for
the year was GBP119,000 compared to an operating profit of GBP948,000 for 2008.
The professional sector has a strong bias towards permanent recruitment, which
was significantly affected by the economic climate, resulting in the fall in
revenue and profitability.
All markets experienced lower profitability compared to 2008. The legal
recruitment market was particularly affected and consequently the Group has
recently disposed of both its businesses in this sector following significant
trading losses. Executive Network Legal Limited was disposed of immediately
prior to the end of the year and the business of Ortus Professional Search
Limited was disposed of shortly following the year end.
Technical Recruitment Sector
Revenue for the year ended 30 November 2009 was GBP21,511,000 representing 46.7%
of the recruitment division revenue and 41.2% of the total revenue compared to
GBP29,170,000 for the year ended 30 November 2008 representing 52.9% of
recruitment division revenue and 47.3% of total revenue. The operating loss for
the year was GBP420,000 compared to an operating profit of GBP393,000 for 2008.
The businesses within the technical recruitment sector operate in diverse
markets, with a strong bias towards temporary and contract recruitment. The
businesses within the construction sector were significantly affected by the
market conditions with significantly reduced revenue levels and consequently
incurred trading losses. Businesses in the IT sector were less affected and
delivered profits consistent to 2008 despite reduced revenue.
Public Sector Recruitment
Revenue for the year ended 30 November 2009 was GBP18,441,000 representing 40.0%
of the recruitment division revenue and 35.4% of the total revenue compared to
GBP17,104,000 for the year ended 30 November 2008 representing 31.0% of
recruitment division revenue and 27.8% of total revenue. The operating profit
for the year was GBP561,000 compared to an operating profit of GBP180,000 for
2008.
Revenue increased in the public sector principally due to growth in the Group's
health and social care operation. This sector benefits from some longer term
government funded contracts which has been the focus of the Group in recent
years. Revenue in the Group's catering business also increased from 2008.
Profitability significantly increased in the Group's health and social care
businesses as a result of many years of investment in this sector. Shortly
before the year end the Group acquired Network Recruitment Solutions Limited
which increases further the Group's offering in this sector.
Central Recruitment
The operating profit for the year was GBP239,000 compared to an operating loss
of GBP319,000 for 2008. These results were assisted by non-recurring income of
GBP280,000 and significantly reduced overheads.
Business Process Outsourcing
Revenue for the year ended 30 November 2009 was GBP6,077,000 representing 11.7%
of the total revenue compared to revenue of GBP6,482,000 for the year ended 30
November 2008 representing 10.5% of the total revenue. The operating profit for
the year was GBP1,187,000 compared to an operating profit of GBP1,114,000 in
2008.
The return on the business process outsourcing division was good with an
increase in profitability despite a fall in revenue largely due to reductions in
business overheads. The business continues to benefit from the temporary
recruitment revenues of its major customer. The number of new customers
increased with a good number of contract wins during the year.
Balance Sheet
The consolidated balance sheet shows shareholders' funds of GBP2,332,000, an
increase of GBP1,642,000 from the prior balance sheet date.
The balance sheet includes liabilities within current and non-current
liabilities totalling GBP2,311,000 (2008: GBP4,870,000) in respect of the equity
conversion mechanism for the subsidiary minority shareholders. The view of the
Board is that these equity conversion mechanisms will benefit NGH, with it being
highly probable that these liabilities will be settled in equity shares and not
in cash (with the exception of GBP316,000).
Cashflow & Funding
The consolidated cash flow statement shows an increase in cash and cash
equivalents of GBP364,000 and a reduction in borrowings of GBP5,739,000. The
net debt of the Group at 30 November 2009 was GBP2,326,000, reduced from
GBP8,429,000 at 30 November 2008.
The Group is currently and is forecasting to continue operating well within its
current facility levels. The Group's current banking facilities expire in
September 2010. The Directors have received confirmation that it is the Bank's
current intention to continue to provide facilities both now and from September
onwards. Consequently, the Directors have a reasonable expectation that the
Group will have sufficient finance for the foreseeable future and as such
continue to adopt the going concern principle.
Ongoing Strategy
The Group remains focussed on the growth of its specialist recruitment
businesses, organically, by acquisition, and to a lesser extent by start up. We
anticipate that the current economic conditions will provide further
opportunities from growing businesses that are attracted by our equity sharing
principles.
We also expect there to be opportunities within the outsourcing markets as
companies seek to reduce costs in the current economic conditions.
Finally, I would like to extend my thanks to all the employees and business
partners of NGH for their efforts during 2009 and into the new financial year.
The Group is well placed to take advantage of the upturn in the market.
T Watts
Chief Executive Officer
Consolidated Income Statement for the year ended 30 November 2009
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | 2009 | | | 2008 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | Before | | | Before | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | other | Other | | other | Other | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | items | items | Total | items | items | Total |
| | | * | | | * | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| CONTINUING OPERATIONS | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Revenue | 52,136 | - | 52,136 | 61,637 | - | 61,637 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Cost of sales | (33,834) | - | (33,834) | (37,683) | - | (37,683) |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| GROSS PROFIT | 18,302 | - | 18,302 | 23,954 | - | 23,954 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Administrative | (17,212) | - | (17,212) | (22,483) | - | (22,483) |
| expenses | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Loss on partial | | | | | | |
| disposal of | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| subsidiary | - | - | - | (220) | - | (220) |
| undertakings | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Profit on disposal of | | | | | | |
| subsidiary | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| undertakings | 224 | - | 224 | - | - | - |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Amortisation and | | | | | | |
| impairment of | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| goodwill and | (80) | - | (80) | (99) | - | (99) |
| intangible assets | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Share-based payment | (146) | - | (146) | (49) | - | (49) |
| costs | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Total administrative | (17,214) | - | (17,214) | (22,851) | - | (22,851) |
| expenses | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| OPERATING PROFIT | 1,088 | - | 1,088 | 1,103 | - | 1,103 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Finance income | 19 | 2,855 | 2,874 | 73 | - | 73 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Finance costs | (355) | (7) | (362) | (696) | (359) | (1,055) |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| PROFIT BEFORE TAX | 752 | 2,848 | 3,600 | 480 | (359) | 121 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Income tax credit / | 93 | - | 93 | (385) | - | (385) |
| (expense) | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| PROFIT / (LOSS) FOR | | | | | | |
| THE | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| YEAR FROM CONTINUING | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| OPERATIONS | 845 | 2,848 | 3,693 | 95 | (359) | (264) |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| DISCONTINUED | | | | | | |
| OPERATIONS | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Profit for the year | | | | | | |
| from discontinued | - | - | - | 2,143 | - | 2,143 |
| operations | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| PROFIT FOR THE YEAR | 845 | 2,848 | 3,693 | 2,238 | (359) | 1,879 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Attributable to: | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Equity holders of the | 1,003 | 2,848 | 3,851 | 1,339 | (359) | 980 |
| parent | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| Minority interest | (158) | - | (158) | 899 | - | 899 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | 845 | 2,848 | 3,693 | 2,238 | (359) | 1,879 |
+-----------------------+----------+--------+----------+----------+--------+----------+
| | | | | | | |
+-----------------------+----------+--------+----------+----------+--------+----------+
* Other items includes the movement in the value of the equity conversion
mechanism and the movement in the mark to market valuation of the Group's
interest rate collar.
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | | | 2009 | | | 2008 |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | Before | | | Before | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | other | Other | | other | Other | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | Notes | items | items* | Total | items | items* | Total |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| EARNINGS / (LOSS) PER | | | | | | | |
| SHARE | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| From continuing | 4 | | | | | | |
| operations | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| Basic | | 1.6p | 4.7p | 6.3p | (0.4)p | (0.4)p | (0.8)p |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| Diluted | | 1.6p | 4.7p | 6.3p | (0.4)p | (0.4)p | (0.8)p |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| From continuing and | 4 | | | | | | |
| discontinued | | | | | | | |
| operations | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| Basic | | 1.6p | 4.7p | 6.3p | 1.5p | (0.4)p | 1.1p |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| Diluted | | 1.6p | 4.7p | 6.3p | 1.5p | (0.4)p | 1.1p |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
| | | | | | | | |
+-----------------------+-------+--------+--------+-------+--------+--------+--------+
Consolidated statement of changes in equity
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| | | | | | | | | | Anti- | |
| | | | | | | | | | embarra- | |
| | | | | | | | | | ssment | |
| | | | | | | | | | clause | |
| | | | | | | | | | reserve | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+ +----------+
| | | Share | | | Share | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+ +----------+
| | | capital | | Investment | based | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+ +----------+
| | Share | redemption | Share | in | payment | Merger | Special | Retained | | |
| | | | | own | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+ +----------+
| | capital | reserve | premium | shares | reserve | reserve | reserve | earnings | | Total |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| At 1 December 2007 | 57 | - | 128 | - | 80 | 743 | - | (1,091) | - | (83) |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| New shares issued | 48 | - | 16,820 | - | - | - | - | - | - | 16,868 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Share-based payment | - | - | - | - | * | - | - | - | - | 299 |
| costs | | | | | 299 | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Lapsed share | - | - | - | - | * | - | - | 292 | - | - |
| options | | | | | (292) | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Profit for year | - | - | - | - | - | - | - | 980 | - | 980 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Disposal of | - | - | - | - | - | 258 | - | (258) | - | - |
| associate | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Revaluation of | | | | | | | | | | |
| equity conversion | - | - | - | - | - | - | - | 233 | - | 233 |
| mechanism | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Anti-embarrassment | - | - | - | - | - | - | - | - | (17,607) | (17,607) |
| clause | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| At 30 November 2008 | 105 | - | 16,948 | - | 87 | 1,001 | - | 156 | (17,607) | 690 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| New shares issued | 5 | - | 495 | - | - | - | - | - | - | 500 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Share premium | - | - | (16,948) | - | - | - | 363 | 16,585 | - | - |
| account reduction | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Share buy-back and | (40) | 40 | - | (2,427) | - | - | - | (15,180) | 17,607 | - |
| cancellation | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Movement in special | - | - | - | - | - | - | (63) | 63 | - | - |
| reserve | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Share-based payment | - | - | - | - | 146 | - | - | - | - | 146 |
| costs | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Lapsed share | - | - | - | - | (28) | - | - | 28 | - | - |
| options | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Profit for year | - | - | - | - | - | - | - | 3,851 | - | 3,851 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Disposal of | - | - | - | - | - | 166 | - | (166) | - | - |
| subsidiary | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| Revaluation of | | | | | | | | | | |
| equity conversion | - | - | - | - | - | - | - | (2,855) | - | (2,855) |
| mechanism | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| At 30 November 2009 | 70 | 40 | 495 | (2,427) | 205 | 1,167 | 300 | 2,482 | - | 2,332 |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
| | | | | | | | | | | |
+---------------------+---------+------------+----------+------------+----------+---------+---------+----------+----------+----------+
* Share-based payment costs above includes GBP250,000 relating to discontinued
activities.
Consolidated Balance Sheet at 30 November 2009
+---------------------------------------------+---------+----------+
| | 2009 | 2008 |
+---------------------------------------------+---------+----------+
| | GBP000 | GBP000 |
+---------------------------------------------+---------+----------+
| ASSETS | | |
+---------------------------------------------+---------+----------+
| NON-CURRENT ASSETS | | |
+---------------------------------------------+---------+----------+
| Goodwill | 4,171 | 3,556 |
+---------------------------------------------+---------+----------+
| Other intangible assets | 109 | 157 |
+---------------------------------------------+---------+----------+
| Investments | 5 | - |
+---------------------------------------------+---------+----------+
| Property, plant and equipment | 462 | 569 |
+---------------------------------------------+---------+----------+
| Deferred tax asset | 158 | - |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| | 4,905 | 4,282 |
+---------------------------------------------+---------+----------+
| CURRENT ASSETS | | |
+---------------------------------------------+---------+----------+
| Short term investments | - | 6,852 |
+---------------------------------------------+---------+----------+
| Trade and other receivables | 6,447 | 13,986 |
+---------------------------------------------+---------+----------+
| Cash held in Escrow | - | 10,512 |
+---------------------------------------------+---------+----------+
| Cash and cash equivalents | 1,974 | 1,610 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| | 8,421 | 32,960 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| TOTAL ASSETS | 13,326 | 37,242 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| LIABILITIES & EQUITY | | |
+---------------------------------------------+---------+----------+
| CURRENT LIABILITIES | | |
+---------------------------------------------+---------+----------+
| Trade and other payables | 6,061 | 7,952 |
+---------------------------------------------+---------+----------+
| Current tax liabilities | 216 | 727 |
+---------------------------------------------+---------+----------+
| Bank overdrafts and loans | 4,300 | 14 |
+---------------------------------------------+---------+----------+
| Financial liabilities | 1,277 | 2,293 |
+---------------------------------------------+---------+----------+
| Anti-embarrassment clause liability | - | 17,364 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| | 11,854 | 28,350 |
+---------------------------------------------+---------+----------+
| NON-CURRENT LIABILITIES | | |
+---------------------------------------------+---------+----------+
| Bank loans | - | 10,025 |
+---------------------------------------------+---------+----------+
| Financial liabilities | 1,034 | 2,577 |
+---------------------------------------------+---------+----------+
| Deferred tax liabilities | - | 87 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| | 1,034 | 12,689 |
+---------------------------------------------+---------+----------+
| EQUITY | | |
+---------------------------------------------+---------+----------+
| Share capital | 70 | 105 |
+---------------------------------------------+---------+----------+
| Share capital redemption reserve | 40 | - |
+---------------------------------------------+---------+----------+
| Share premium account | 495 | 16,948 |
+---------------------------------------------+---------+----------+
| Investment in own shares | (2,427) | - |
+---------------------------------------------+---------+----------+
| Share-based payment reserve | 205 | 87 |
+---------------------------------------------+---------+----------+
| Merger reserve | 1,167 | 1,001 |
+---------------------------------------------+---------+----------+
| Special reserve | 300 | - |
+---------------------------------------------+---------+----------+
| Retained earnings | 2,482 | 156 |
+---------------------------------------------+---------+----------+
| Anti-embarrassment clause reserve | - | (17,607) |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| Total equity attributable to equity holders | 2,332 | 690 |
| of the parent | | |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| Minority interest | 417 | 383 |
+---------------------------------------------+---------+----------+
| Other reserve | (2,311) | (4,870) |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| Total minority interest | (1,894) | (4,487) |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
| TOTAL LIABILITIES & EQUITY | 13,326 | 37,242 |
+---------------------------------------------+---------+----------+
| | | |
+---------------------------------------------+---------+----------+
Consolidated statement of cash flows for the year ended 30 November 2009
+------------------------------------------+-------+---------+---------+
| | | 2009 | 2008 |
+------------------------------------------+-------+---------+---------+
| | Notes | GBP000 | GBP000 |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| NET CASH FROM / (USED IN) OPERATING | 6 | 7,156 | (824) |
| ACTIVITIES | | | |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| INVESTING ACTIVITIES | | | |
+------------------------------------------+-------+---------+---------+
| Interest received | | 6 | 50 |
+------------------------------------------+-------+---------+---------+
| Dividends received from assets held for | | - | 674 |
| resale / associates | | | |
+------------------------------------------+-------+---------+---------+
| (Payment of costs) / proceeds on | | (498) | 3,677 |
| disposal of assets held for resale | | | |
+------------------------------------------+-------+---------+---------+
| Proceeds on disposal of property, plant | | 30 | 6 |
| and equipment | | | |
+------------------------------------------+-------+---------+---------+
| Purchases of property, plant and | | (234) | (279) |
| equipment | | | |
+------------------------------------------+-------+---------+---------+
| Acquisition of subsidiary undertakings | | (180) | (1,790) |
+------------------------------------------+-------+---------+---------+
| Purchase of investments | | (5) | - |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| NET CASH (USED IN) / FROM INVESTING | | (881) | 2,338 |
| ACTIVITIES | | | |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| FINANCING ACTIVITIES | | | |
+------------------------------------------+-------+---------+---------+
| Dividends paid to minority interests | | (172) | (377) |
+------------------------------------------+-------+---------+---------+
| Repayments of borrowings | | (5,739) | (1,614) |
+------------------------------------------+-------+---------+---------+
| New bank loans raised | | - | 500 |
+------------------------------------------+-------+---------+---------+
| Decrease in bank overdrafts | | - | (16) |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| NET CASH USED IN FINANCING ACTIVITIES | | (5,911) | (1,507) |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| NET INCREASE IN CASH AND CASH | | 364 | 7 |
| EQUIVALENTS | | | |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| CASH AND CASH EQUIVALENTS AT BEGINNING | | 1,610 | 1,603 |
| OF YEAR | | | |
+------------------------------------------+-------+---------+---------+
| | | | |
+------------------------------------------+-------+---------+---------+
| CASH AND CASH EQUIVALENTS AT END OF YEAR | | 1,974 | 1,610 |
+------------------------------------------+-------+---------+---------+
NOTES
1 General Information
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 November 2009 or 2008 but is derived
from those accounts. Statutory accounts for the year ended 30 November 2008 have
been delivered to the Registrar of Companies, and those for 2009 will be
delivered in due course. The auditors have reported on those accounts; their
reports were (i) unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without qualifying their
report and (iii) did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985 in respect of the accounts for 2008 nor a statement under
section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for
2009.
2 Significant Accounting Policies
Basis of accounting
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs). The financial statements have also been
prepared in accordance with IFRSs adopted by the European Union and therefore
the Group financial statements comply with Article 4 of the EU IAS Regulation.
The financial statements have been prepared on the historical cost basis as
modified by the revaluation of financial liabilities (including derivative
instruments) or fair value through the Income Statement.
The Group is currently and is forecasting to continue operating well within its
current facility levels. The Group's current banking facilities expire in
September 2010. The Directors have received confirmation that it is the Bank's
current intention to continue to provide facilities both now and from September
onwards. Consequently, the Directors have a reasonable expectation that the
Group will have sufficient finance for the foreseeable future and as such
continue to adopt the going concern principle.
The presentation of the Income Statement has been amended to present the results
before the deduction of "Other items". Other items represent the credit /
charge to the Income Statement in respect of the movement in the liability
associated with the equity conversion mechanism and the charge to the Income
Statement in respect of the movement in the mark-to-market value of the Group's
interest collar.
Basis of Consolidation
The consolidated financial information includes the results, cash flows and
assets and liabilities of Network Group Holdings Plc and the entities under its
control (its subsidiaries). Control is achieved where Network Group Holdings
Plc has the power to govern the financial and operating policies of an investee
entity so as to obtain benefits from its activities.
Minority interests in the net assets of consolidated subsidiaries are identified
separately from the Network Group Holdings Plc equity therein. Minority
interests consist of the amount of those interests at the date of the original
business combination and the minority's share of changes in equity since the
date of the combination. Losses applicable to the minority in excess of the
minority's interest in the subsidiary's equity are allocated against the
interests of Network Group Holdings Plc.
The results of subsidiaries acquired or disposed of during the year are included
in the Consolidated Income Statement from the effective date of acquisition or
up to the effective date of disposal. Adjustments are made, where necessary, to
the financial statements of subsidiaries to bring their accounting policies into
line with those of Network Group Holdings Plc. All Intra-Group transactions,
balances, income and expenses are eliminated on consolidation.
Employee Benefit Trust
NGH (Trustees) Limited is a subsidiary of the Group and the trustee of the
Group's Employee Benefit Trust which owns shares in the Company. NGH (Trustees)
Limited is consolidated into the Group financial statements with the shares in
the Company reflected with a debit to equity described as Investment in own
shares.
Anti-embarrassment clause
As part of the acquisition of Pertemps People Development Group Limited ("PPDG")
in the year ended 30 November 2008, an anti-embarrassment clause existed which
enabled the original vendor shareholders of PPDG to receive a significant
element of the consideration from the disposal in exchange for the buy-back of
the 46,428,585 Network Group Holdings Plc shares issued on the acquisition.
Following the disposal of PPDG, a liability was recognised in the balance sheet
with a corresponding debit to the anti-embarrassment clause reserve, within
shareholders' funds. When the anti-embarrassment clause liability was
discharged, the anti-embarrassment clause reserve was transferred to the
relevant reserves within shareholders' funds.
Equity Conversion Mechanism
The Group operates an equity conversion mechanism whereby the minority
shareholders of subsidiary undertakings are able to transfer their minority
shareholdings to Network Group Holdings Plc ("NGH") in exchange for NGH equity
shares or cash. The choice of consideration is at the discretion of the
Directors of NGH. It is the current intention of the Directors to discharge the
liability in equity shares and not by way of payment in cash, with the exception
of GBP316,000 (2008: GBP316,000).
The accounting treatment follows the application of IAS 39: Financial
Instruments: Recognition and Measurement. Upon the creation of a new equity
conversion mechanism, liabilities are recognised within current and non-current
liabilities, with a corresponding debit to the other reserve within minority
interests. The financial liability arising from the Group's equity conversion
mechanism is calculated based on the appropriate historical profit figures and
the largest potential multiple representing the Directors' best estimate of the
liability available for each relevant subsidiary undertaking, discounted back to
present value for those options which cannot be exercised within the next 12
months. Consequently the results of actual conversions may differ from these
estimations. At each balance sheet date the fair value is recalculated based on
the appropriate historical profit figures, with any movement in the liability
being recognised within finance income or finance costs in the Income Statement.
The movement in the Income Statement is then transferred from retained earnings
to the other reserve within minority interests.
Upon exercise of the equity conversion mechanism, an element of the liability is
discharged, and an element of the other reserve is transferred as part of the
acquisition.
3 Dividends
No dividends were paid in the year and none are proposed (2008: GBPnil).
4 Earnings / (loss) per share
From continuing and discontinued operations
The calculation of the basic and diluted earnings / (loss) per share is based on
the following data:
Earnings
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | 2009 | | | 2008 |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | Before | | | Before | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | other | Other | | other | Other | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | items | items | Total | items | items | Total |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------+--------+--------+--------+--------+--------+--------+
| Earnings for the | | | | | | |
| purposes of basic | | | | | | |
| earnings per share being | | | | | | |
| net profit attributable | | | | | | |
| to equity holders of the | 1,003 | 2,848 | 3,851 | 1,339 | (359) | 980 |
| parent and Earnings for | | | | | | |
| the purposes of diluted | | | | | | |
| earnings per share | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| Number of shares | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | | | 2009 | 2008 |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | | | 000 | 000 |
+--------------------------+--------+--------+--------+--------+--------+--------+
| Weighted average number | | | | | | |
| of ordinary shares for | | | | | | |
| the purposes of basic | | | | | 61,305 | 89,048 |
| earnings per share | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | | | | |
| Effect of dilutive | | | | | | |
| potential ordinary | | | | | | |
| shares: | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| Share options | | | | | 2 | 342 |
+--------------------------+--------+--------+--------+--------+--------+--------+
| | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
| Weighted average number | | | | | | |
| of ordinary shares for | | | | | | |
| the purposes of diluted | | | | | 61,307 | 89,390 |
| earnings per share | | | | | | |
+--------------------------+--------+--------+--------+--------+--------+--------+
The weighted average number of ordinary shares for the purposes of basic
earnings per share and for the purposes of diluted earnings per share excludes
6,500,000 ordinary shares held by the Employee Benefit Trust.
The diluted earnings per share calculation does not consider the shares that
would be issued in respect of the equity conversion mechanism.
From continuing operations
+------------------------+--------+--------+--------+---------+--------+---------+
| | | | 2009 | | | 2008 |
+------------------------+--------+--------+--------+---------+--------+---------+
| | Before | | | Before | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| | other | Other | | other | Other | |
+------------------------+--------+--------+--------+---------+--------+---------+
| | items | items | Total | items | items | Total |
+------------------------+--------+--------+--------+---------+--------+---------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------+--------+--------+--------+---------+--------+---------+
| | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| Net profit | | | | | | |
| attributable to equity | 1,003 | 2,848 | 3,851 | 1,339 | (359) | 980 |
| holders of the parent | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| Adjustments to exclude | | | | | | |
| profit for year from | - | - | - | (1,697) | - | (1,697) |
| discontinued | | | | | | |
| operations | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
| Earnings / (loss) from | | | | | | |
| continuing operations | | | | | | |
| for the purpose of | | | | | | |
| basic earnings / | | | | | | |
| (loss) per share | | | | | | |
| excluding discontinued | 1,003 | 2,848 | 3,851 | (358) | (359) | (717) |
| operations and | | | | | | |
| Earnings / (loss) from | | | | | | |
| continuing operations | | | | | | |
| for the purpose of | | | | | | |
| dilutive earnings / | | | | | | |
| (loss) per share | | | | | | |
| excluding discontinued | | | | | | |
| operations | | | | | | |
+------------------------+--------+--------+--------+---------+--------+---------+
The profit for the year from discontinued operations of GBPnil (2008:
GBP2,143,000) has been adjusted for minority interests of GBPnil (2008:
GBP446,000) resulting in the amounts above.
The denominators used are the same as those detailed above for both basic and
diluted earnings per share from continuing and discontinued operations.
From discontinued operations
+------------------------+--------+-------+-------+--------+-------+-------+
| | | | 2009 | | | 2008 |
+------------------------+--------+-------+-------+--------+-------+-------+
| | Before | | | Before | | |
+------------------------+--------+-------+-------+--------+-------+-------+
| | other | Other | | other | Other | |
+------------------------+--------+-------+-------+--------+-------+-------+
| | items | items | Total | items | items | Total |
+------------------------+--------+-------+-------+--------+-------+-------+
| | | | | | | |
+------------------------+--------+-------+-------+--------+-------+-------+
| Basic | - | - | - | 1.9p | - | 1.9p |
+------------------------+--------+-------+-------+--------+-------+-------+
| | | | | | | |
+------------------------+--------+-------+-------+--------+-------+-------+
| Diluted | - | - | - | 1.9p | - | 1.9p |
+------------------------+--------+-------+-------+--------+-------+-------+
5 Net assets / (liabilities)
At the balance sheet date, the net assets of the Group were GBP438,000 (2008:
net liabilities of GBP3,797,000).
The net assets / (liabilities) at the balance sheet date are impacted by a total
liability of GBP2,311,000 (2008: GBP4,870,000) in respect of the equity
conversion mechanism. At the balance sheet date the Directors expected this
liability to be discharged by way of equity share capital, and not through the
payment of cash, with the exception of GBP316,000. Therefore, the Directors
believe it is appropriate to also present the net assets / (liabilities)
excluding the liability for the equity conversion mechanism. The net assets /
(liabilities) at the balance sheet date, excluding the liability for the equity
conversion mechanism were GBP2,749,000 (2008: GBP1,073,000).
6 Notes to the consolidated cashflow statement
+--------------------------------------------+---------+---------+
| | 2009 | 2008 |
+--------------------------------------------+---------+---------+
| | GBP000 | GBP000 |
+--------------------------------------------+---------+---------+
| Operating activities | | |
+--------------------------------------------+---------+---------+
| Operating profit from continuing | 1,088 | 1,103 |
| operations | | |
+--------------------------------------------+---------+---------+
| Operating profit from discontinued | - | - |
| operations | | |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Total operating profit | 1,088 | 1,103 |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Adjusted for: | | |
+--------------------------------------------+---------+---------+
| Depreciation of property, plant and | 312 | 388 |
| equipment | | |
+--------------------------------------------+---------+---------+
| Impairment of goodwill | - | 18 |
+--------------------------------------------+---------+---------+
| Amortisation of intangible assets | 80 | 81 |
+--------------------------------------------+---------+---------+
| Loss on partial disposal of subsidiary | - | 220 |
| undertakings | | |
+--------------------------------------------+---------+---------+
| Profit on disposal of subsidiary | (224) | - |
| undertakings | | |
+--------------------------------------------+---------+---------+
| Profit on disposal of property, plant and | (4) | - |
| equipment | | |
+--------------------------------------------+---------+---------+
| Share-based payment costs | 146 | 49 |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Operating cash flows before movements in | 1,398 | 1,859 |
| working capital | | |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Decrease / (increase) in receivables | 7,471 | (1,341) |
+--------------------------------------------+---------+---------+
| (Decrease) / increase in payables | (676) | 17 |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Cash from operations | 8,193 | 535 |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Corporation tax paid | (685) | (625) |
+--------------------------------------------+---------+---------+
| Interest paid | (352) | (734) |
+--------------------------------------------+---------+---------+
| | | |
+--------------------------------------------+---------+---------+
| Net cash from / (used in) operating | 7,156 | (824) |
| activities | | |
+--------------------------------------------+---------+---------+
7 Post Balance Sheet Events
Following the balance sheet date, Network IT Recruitment Limited, a subsidiary
of the Group, acquired the entire share capital of IT Recruitment Network
Limited for GBP1 from a related party. The net liabilities of IT Recruitment
Network Limited at the date of acquisition were approximately GBP500,000 giving
rise to goodwill of approximately GBP250,000.
Following the balance sheet date, Ensco 766 Limited (formerly Ortus Professional
Search Limited) disposed of its business and certain assets for GBP36,000.
Simultaneously the Group acquired 24% of the shareholding of Ensco 766 Limited
for GBP1.
Following the balance sheet date, the Group acquired 24% of Ensco 766 Limited
for consideration of 65,841 ordinary shares of 0.1 pence each valued at 14.5
pence each pursuant to the Group's equity conversion mechanism.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UGUGWAUPUGPA
Network Group (LSE:NGH)
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Network Group (LSE:NGH)
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から 6 2023 まで 6 2024
