IMPELLAM GROUP PLC 28 July 2022
Impellam Group plc
("Impellam", the "Group" or the "Company")
INTERIM RESULTS TO 1 JULY 2022
Impellam (AIM: IPEL) announces its unaudited interim results for the 26 weeks ended 1 July 2022.
H1 gross profit reaches historic highs across all regions
Like-for- | ||||
H1 2022 | H1 2021(1) | Actual | like(2) | |
Inc/(Dec) | Inc/(Dec) | |||
Revenue (£ millions) | £1,232.3 | £1,042.8 | 18.2% | 17.0% |
Gross profit (£ millions) | £149.3 | £116.6 | 28.0% | 25.8% |
Operating profit (before amortisation) (£ | ||||
millions) (3) | £17.8 | £12.0 | 48.3% | 50.9% |
Operating profit (before amortisation) | ||||
conversion (%) (4) | 11.9% | 10.3% | 1.6ppts | |
Operating profit (£ millions) | £13.1 | £7.1 | 84.5% | 78.7% |
Continuing adjusted basic EPS (5) | 23.8p | 12.8p | 85.9% | |
Continuing basic EPS | 15.5p | 4.3p | 260.5% | |
Net cash/(debt) (£ millions) pre IFRS 16(6) | £18.0 | £(7.1) | ||
Net cash/(debt) (£ millions) post IFRS 16 | £3.7 | £(25.5) |
- 2021 financial statements restated for discontinued operations (see note 7)
- % change measured at constant exchange rates
- Operating profit before amortisation of acquired intangible assets (see note 2)
- Calculated as operating profit before amortisation of acquired intangible assets / gross profit
- Basic EPS before amortisation of acquired intangible assets (see note 5)
- Net debt pre IFRS 16 is used as the basis for banking covenant calculations
Key operational highlights
- Group revenue increase of 18.2%, (17.0%(2)), with trading at historic highs in all regions.
- Group gross profit increase of 28.0%, (25.8%(2)), with all regions showing strong growth over the same period last year - UK and Europe up 29.9%(2), APAC up 25.7%(2) and North America up 15.6%(2).
- Gross profit increases in all segments - Global Managed Services 14.3%(2); STEM 40.8%(2), Regional Specialist Staffing 25.2%(2) and Healthcare 20.6%(2).
- Gross profit per fee earner up 2.2%(2) on 2021 and up 3.8% per total full time employee ("FTE") as a result of improved gross profit margin of 12.2% (H1 2021: 11.2%) due to the mix of permanent and temporary recruitment and price improvement as well as our continued investments in people and IT.
- Investment in our key growth markets resulted in a headcount increase of 210 (7.4%) from the end of December 2021 and up 253 (20.6%) from June 2021 to 3,057 at 1 July 2022, responding to increasing demand and to support business growth.
- Operating profit(3) of £17.8m (H1 2021: £12.0m(1)) a 50.9%(2) improvement as a result of increased gross profit and productivity.
- Cash remains tightly controlled with Pre IFRS 16 net cash of £18.0m, a £33.0m improvement in the 6 months (December 2021: £15.0m net debt). Net cash after IFRS 16 of £3.7m (December 2021: £31.5m net debt).
- The Core Systems replacement programme is progressing well with the start of phased rollouts across the Group, including new bill/pay systems in the UK, finance systems in APAC and Corporate Sales CRM across the regions.
- The sale of Corestaff, our light industrial business in North America, to swipejobs Inc for a cash consideration of £16.3m ($21.9m) completed in February 2022, of which £14.1m ($19.0m) was paid in February 2022 and the balance in July 2022, generating a profit on disposal of £6.4m before the allocation of goodwill and tax.
- The Company continues to work with Lord Ashcroft in relation to his notification referred to in the 12 April 2022 announcement made by the Company that he wanted to explore opportunities to sell his shareholding, which resulted in the commencement of an offer period under the Takeover Code.
Julia Robertson, Chief Executive Officer, commented:
"Our H1 trading reached historic highs across all our regions with strong growth in our temporary and contractor margin supplemented by record months in permanent fees across our specialisms. Despite the uncertain global economic and political landscape, the demand for talent remains a key challenge for our customers and the labour market has remained buoyant.
We continue to invest strategically in people and technology. More than 200 new colleagues joined us as we responded to the demand for our services in our key growth markets and we end H1 with a headcount of 3,057. Our core systems technology programme gained further momentum with successful go-lives in the UK and APAC with further implementations planned for H2. These new systems will provide a solid foundation for future digital enhancements allowing the Group to scale and adapt quickly as we connect our Virtuosos to our customers and candidates.
Whilst our regions are now largely free of covid restrictions we have chosen to retain a flexible approach to when, how and where our colleagues work, learning from what worked well for our people, our customers and our business over the last two years and overlaying that with both old and new ways of improving culture, engagement, diversity and collaboration.
In February we completed the sale of Corestaff, our North American light industrial business to swipejobs Inc, and with these proceeds and our strong cash generating trading performance we returned to £18m net cash positive pre-IFRS 16, a £33m improvement from the £15m net debt at the end of December 2021.
Whilst the global economic and political environment remains uncertain, we are operating in a talent short market and we see no sign of a reduction in demand for our services for the remainder of the financial year. Our Virtuoso strategy means we will stay close to our customers and we have every confidence in our proven ability to respond quickly to any change in market dynamics."
UK & Europe
The UK & Europe region traded at historical highs with growth in all segments and brands. Gross profit increased 29.9%(2) to £101.6m (H1 2021: £78.3m). The strongest growth was in the UK STEM segment with gross profit up 49.6%(2) with increases across all our specialisms, IT & digital, life sciences and engineering. The education, hospitality and catering markets, which were slower to recover from Covid-19 due to the lockdowns, continue to grow strongly and the UK Regional Specialist Staffing segment gross profit increased by 25.6%(2). The Global Managed Services and Healthcare segments achieved double digit growth too, despite having more resilience to Covid-19 in prior years. The increases in gross profit supported by the ongoing control of our cost base following our transformation work in 2020 led to increased adjusted operating profit of 97.5%(2) to £16.0m (H1 2021: £8.3m).
North America (NA)
The North America region gross profit increased by 15.6%(1,2) to £37.4m, driven by Global Managed Services (Guidant Global) and STEM (Lorien). New business wins in Guidant Global more than offset reduced Covid related demand, however as these new accounts have yet to reach maturity the conversion to operating profit was lower and this, together with continued headcount investment in our STEM businesses led to an H1 reduction in adjusted operating profit of 50.0%(2) to £3.1m (H1 2021: £5.6m).
Sale of Corestaff
The disposal of the trade and assets of Corestaff completed on the 7 February 2022 for a cash consideration of £14.1m ($19.0m) subject to the agreement of a final working capital position. This position was agreed in July 2022, generating an additional cash consideration of £2.2m ($2.9m) giving rise to a profit on disposal of £6.4m before the allocation of goodwill and tax.
Asia Pacific (APAC)
The APAC region has performed strongly in 2022 with gross profit increasing by 25.7%(2) to £10.3m as state and international borders re-opened. Global Managed Services (Comensura and Guidant) had strong gross profit growth of 20.8%(2) and our Healthcare business grew gross profit by 22.3%(2) as doctors were able to travel across states for locum work. As a consequence of gross profit growth, adjusted operating profit doubled to £0.6m (H1 2021: £0.3m).
Cash flow, net debt and net assets
The Group generated £26.2m (H1 2021: £10.8m) of net cash from operations over the first half of the year including the final deferred VAT repayment of £3.3m. Days Sales Outstanding, being total trade receivables divided by average daily invoiced sales, remained stable at 35.5 days, up just 0.1 days from 35.4 days at the end of FY2021. As a result of these positive cash inflows and the £14.1m cash received from the sale of Corestaff net cash (pre IFRS 16) stood at £18.0m, which was a £33.0m improvement from the £15.0m net debt reported at 31 December 2021. Net cash after IFRS 16 adjustments stood at £3.7m, a £35.2m improvement from the net debt of £31.5m at 31 December 2021.
The Group has outstanding letters of credit drawn against its US borrowing facilities amounting to £3.3m (31 December 2021: £3.0m).
We continue to model scenarios to ensure the Group has sufficient liquidity over the period ahead. With our current level of net cash (pre IFRS 16) of £18.0m, our £182.5 million facility and strong relationship with our lenders we do not envisage the need for any additional financial support within the scenarios we have modelled.
Dividend and dividend policy
Approval was gained at the 2021 AGM to commence an updated programme authorising the Board to purchase up to a maximum of 4,560,363 shares, being 10% of the issued Ordinary Share capital of the company (as at 17 May 2021) until the earliest of the 2022 AGM or 30 June 2022. Under this programme a total of 330,104 shares were purchased at a value £1.4m, of which £0.8m was purchased during 2022.
An updated programme was approved at the 2022 AGM whereby a maximum of £0.5m of Ordinary Shares (by market value) can be purchased per calendar month until the 2023 AGM.
Trading outlook
Whilst we have achieved strong results in the first half of the year, we continue to monitor the ongoing global economic and political uncertainty and the potential impact it may have on our markets. To date, given the opportunities global talent shortages present, we have not experienced any significant changes in trading conditions within our segments and regions, except for the usual seasonality. We remain vigilant and given our agility and proven ability to respond rapidly to changing environments we are confident that we can meet any future external challenges and progress towards our strategic goals.
Financial results for the twenty-six weeks to 1 July 2022
The table below sets out the results for the Group by region for the first half of 2022.
Unaudited | Revenue | Gross profit | Operating profit | ||||||
H1 | H1 | Like-for- | H1 | H1 | Like-for- | H1 | H1 | Like-for- | |
£'million | 2022 | 2021(1) | like | 2022 | 2021(1) | like | 2022 | 2021(1) | like |
change(2) | change(2) | change(2) | |||||||
UK & Europe | 987.1 | 836.1 | 18.2% | 101.6 | 78.3 | 29.9% | 16.0 | 8.3 | 97.5% |
Gross profit % | 10.3% | 9.4% | |||||||
North America(1) | 195.5 | 176.5 | 3.6% | 37.4 | 30.1 | 15.6% | 3.1 | 5.6 | (50.0%) |
Gross profit % | 19.1% | 17.1% | |||||||
Asia Pacific | 49.7 | 30.2 | 65.5% | 10.3 | 8.2 | 25.7% | 0.6 | 0.3 | 118.2% |
Gross profit % | 20.7% | 27.2% | |||||||
Total | 1,232.3 | 1,042.8 | 17.0% | 149.3 | 116.6 | 25.8% | 19.7 | 14.2 | 37.5% |
Corporate costs | (1.9) | (2.2) | (13.6%) | ||||||
Operating profit(3) | 17.8 | 12.0 | 50.9% | ||||||
Amortisation of acquired intangible assets | (4.7) | (4.9) | |||||||
Operating profit | 13.1 | 7.1 | 78.7% | ||||||
- North America and all sub-totals have been restated for the prior period to remove the Corestaff trade which was sold in the current period
- % change measured at constant exchange rates
- Before amortisation of acquired intangibles
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Impellam Group plc published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 06:07:09 UTC.
