ROBERT WALTERS PLC — Annual Report 2012

Feb 26, 2013

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RNS Number : 6379Y

Robert Walters PLC

26 February 2013

ROBERT WALTERS PLC

Results for the year ended 31 December 2012

PERFORMANCE IN LINE WITH EXPECTATIONS

FINANCIAL HIGHLIGHTS

·     Revenue of £567.8m (2011: £528.1m).

·     Gross profit (net fee income) of £188.4m (2011: £183.4m).

·     Operating profit of £8.5m (2011: £15.6m).

·     Profit before taxation of £7.7m (2011: £15.1m).

·     Basic earnings per share of 6.8p (2011: 14.1p).

·     Final dividend maintained at 3.68p per share (2011: 3.68p) giving a total dividend for the year of 5.15p (2011: 5.15p).

·     Balance sheet remains strong with net cash of £11.5m as at 31 December 2012 (31 December 2011: £17.1m).

OPERATIONAL HIGHLIGHTS

·     Profitability was impacted by a decline in permanent global financial services recruitment.

o  Decisive action has been taken reducing headcount across this sector by 18%.

·     Successfully grew net fee income by diversifying into new disciplines and territories providing a platform for profitable growth, with headcount increases of:

o  Sales and marketing: 29%.

o  Engineering and oil and gas: 31%.

o  HR and supply chain and procurement: 23%.

·     New offices opened in San Francisco, Rio de Janeiro, Milton Keynes and Parramatta. Two new offices opened early 2013 - Ghent and Dubai. The Group now has 53 offices in 24 countries.

·     Good balance of permanent (69%) and contract (31%) recruitment net fee income (2011: 69%:31%).

·     Group headcount increased to 2,233 as at 31 December 2012 (31 December 2011: 2,047) largely due to Resource Solutions, our recruitment outsourcing business, winning several new contracts during the year and expanding into Asia.

Robert Walters, Chief Executive, commented:

"2012 has been a year of transition. We successfully increased our net fee income across all regions and delivered results in line with expectations whilsttaking considerable strides to diversify away from financial services. This is evident by the fact that 85% of the Group's recruitment net fee income is now generated outside of this sector (2011: 78%). The Group has successfully responded to market conditions, supported by strong management, a healthy balance sheet and a well regarded international brand.

"We are confident that the significant changes we have made to the structure of our business will deliver a platform for enhanced future profitability. In addition, whilst some geographic areas continue to face economic uncertainty we believe it is important to maintain our presence across our markets in order to benefit from operational gearing when confidence returns." 

The Group will publish an Interim Management Statement for the first quarter ended 31 March 2013 on 9 April 2013.

ENQUIRIES:

Robert Walters plc	+44 (0) 20 7379 3333
Robert Walters, Chief Executive
Alan Bannatyne, Chief Financial Officer
Pelham Bell Pottinger
Archie Berens	+44 (0) 20 7861 3112
	aberens@pelhambellpottinger.co.uk
Charles Goodwin	+44 (0) 20 7861 3117
	cgoodwin@pelhambellpottinger.co.uk

Robert Walters plc

Results for the year ended 31 December 2012

Chairman's statement

I am pleased that we successfully delivered results in line with expectations. Whilst profitability has been impacted by the decline in financial services we have taken decisive action to re-align the business; cutting relevant costs, diversifying into new disciplines and investing in Resource Solutions, our profitable recruitment outsourcing business. 85% of the Group's recruitment net fee income is now generated from outside of financial services (2011: 78%).

Revenue was £567.8m (2011: £528.1m) and gross profit (net fee income) increased by 3% to £188.4m (2011: £183.4m). Operating profit was £8.5m (2011: £15.6m) and profit before taxation was £7.7m (2011: £15.1m). The Group has maintained a strong balance sheet with a net cash position of £11.5m as at 31 December 2012 (31 December 2011: £17.1m).

In line with our long-term growth strategy, we continued to diversify our recruitment discipline coverage and opened four new offices during the year (San Francisco, Rio de Janeiro, Milton Keynes, Parramatta) which strengthened our position in existing markets. In the past two months, we have opened two new offices, in Ghent and Dubai, bringing the Group's global footprint to 53 offices in 24 countries. In addition, the Group has invested £1.0m to establish a Resource Solutions presence in Asia.

The Board will be recommending maintaining the final dividend at 3.68p per share (2011: 3.68p) which combined with the interim dividend of 1.47p per share will result in a total dividend of 5.15p per share (2011: 5.15p).

During the year, no shares were purchased through the Group's long-term share buy-back programme, however the Board was authorised to repurchase up to 10% of the Group's issued share capital and will be seeking approval for the renewal of this authority at the Annual General Meeting on 24 May 2013.

I am delighted to have joined such a strong, international business as Chairman. On behalf of the Board, I would like to take this opportunity to thank Philip Aiken and Russell Tenzer who both retired from the Board earlier this year, for their many years of service and counsel as Non-executive Directors.

In conclusion, I would like to thank all our staff across the world for their hard work this year. The business has successfully responded to market conditions, supported by strong management, a healthy balance sheet and a well regarded international brand.

Leslie Van de Walle

Chairman

25 February 2013

Chief Executive's statement

The Group is more geographically, discipline and sector diverse than ever before. We now have in place a strong blend of permanent, contract and interim recruitment income streams, a broad breadth of recruitment disciplines and an exceptionally strong commerce sector client base. Whilst we still have a strong financial services offering, we recognise that markets and levels of demand have changed and we have therefore responded accordingly. In Resource Solutions, we also have a market-leading and rapidly growing recruitment process outsourcing business.

Group headcount increased to 2,233 as at 31 December 2012 (31 December 2011: 2,047) largely due to our Resource Solutions business winning several new contracts during the year and expanding into Asia.

Review of Operations

Asia Pacific (50% of net income)

Revenue was £280.6m (2011: £246.6m) and net fee income increased to £93.4m (2011: £92.7m), producing an operating profit of £7.2m (£6.9m in constant currency) (2011: £12.3m).

Australia, the region's largest business, was impacted by the downturn in financial services and the ripple effect of the slowdown in the resources sector, particularly during the second half of the year. To take advantage of growth, particularly from SMEs, we have opened a second office in the suburbs of Sydney in Parramatta (following last year's opening in Chatswood) and the Group now has seven offices across Australia.

Asia has been impacted by the slowdown in the banking sector, although we have partially offset this by growing commerce as demonstrated by strong performances from our operations in Malaysia and Thailand. In China, we have completed the purchase of the remaining 30% minority interest and restructured the management team.

In January 2012, we established our Resource Solutions business in Asia, supported by a £1.0m investment, and I am pleased to say that we have already secured a number of client wins.

UK (26% of net fee income)

Revenue was £193.2m (2011: £189.0m) and net fee income increased to £49.7m (2011: £47.0m), producing an operating profit of £0.4m (2011: £0.5m).

Financial services recruitment activity remained weak whilst net fee income grew strongly across the UK in other disciplines. We opened a new office in Milton Keynes to further strengthen our regional office footprint.

Resource Solutions performed strongly winning new clients and renewing existing contracts.

Europe (21% of net fee income)

Revenue was £87.8m (2011: £87.4m) and net fee income was £39.6m (2011: £39.1m), producing an operating profit of £1.2m (£1.4m in constant currency) (2011: £2.8m).

Trading conditions deteriorated during the second half of the year although France, our largest business, produced a robust performance. Germany continued to deliver strong net fee income growth throughout the year however in the Netherlands, conditions remained difficult and net fee income declined year-on-year. In Spain, market conditions continue to be extremely tough while our business in Ireland increased profitability.

Americas and South Africa (3% of net fee income)

Revenue was £6.1m (2011: £5.1m), net fee income increased by 24% to £5.7m (2011: £4.6m), producing an operating loss of £0.4m (operating loss of £0.5m in constant currency) (2011: £nil).

2012 was a year of significant investment across the Americas and South Africa. South Africa delivered a positive result with net fee income growing strongly. We believe our business is a market leader and well positioned to continue to build market share.

In New York, banking recruitment remained tough however our recent move into sales and marketing and legal recruitment shows promise. San Francisco has performed well, benefiting from its focus on the technology and digital media industries. In Brazil, we opened a new office in Rio de Janeiro early in the year, however the Brazilian economy has since slowed, making market conditions more difficult.

Outlook

Although the global economy is still facing a number of difficulties, we are confident that the significant changes we have made to the structure of our business will deliver a platform for enhanced future profitability. In line with our growth strategy, we will continue to invest selectively in areas which will enable us to build our market share, keeping a tight control on costs and taking every opportunity to make the business as efficient as possible.

Robert Walters

Chief Executive

25 February 2013

Consolidated Income Statement

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£'000	£'000
Revenue	567,771	528,114
Cost of sales	(379,380)	(344,671)
Gross profit	188,391	183,443
Administrative expenses	(179,922)	(167,810)
Operating profit	8,469	15,633
Finance income	134	368
Finance costs	(788)	(730)
Loss on foreign exchange	(90)	(189)
Profit before taxation	7,725	15,082
Taxation	(2,838)	(4,909)
Profit for the year	4,887	10,173
Attributable to:
Owners of the Company	4,860	9,866
Non-controlling interest	27	307
	4,887	10,173
Earnings per share (pence):
Basic	6.8	14.1
Diluted	6.2	12.7

The amounts above relate to continuing operations.

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£'000	£'000
Profit for the year	4,887	10,173
Exchange differences on translation of overseas operations	(2,497)	397
Total comprehensive income and expense for the year	2,390	10,570
Attributable to:
Owners of the Company	2,363	10,263
Non-controlling interest	27	307
	2,390	10,570

Consolidated Balance Sheet

AS AT 31 DECEMBER 2012

	2012	2011
	£'000	£'000
Non-current assets
Intangible assets	9,477	9,292
Property, plant and equipment	11,896	11,564
Deferred tax assets	8,033	6,942
	29,406	27,798
Current assets
Trade and other receivables	125,703	115,680
Corporation tax receivables	2,161	327
Cash and cash equivalents	26,022	28,965
	153,886	144,972
Total assets	183,292	172,770
Current liabilities
Trade and other payables	(94,991)	(87,059)
Corporation tax liabilities	(947)	(1,295)
Bank overdrafts and loans	(14,550)	(11,904)
Provisions	(464)	(1,318)
	(110,952)	(101,576)
Net current assets	42,934	43,396
Non-current liabilities
Deferred tax liabilities	(39)	(65)
Provisions	(783)	(382)
	(822)	(447)
Total liabilities	(111,774)	(102,023)
Net assets	71,518	70,747
Equity
Share capital	17,114	17,113
Share premium	21,249	21,247
Other reserves	(73,410)	(73,410)
Own shares held	(9,121)	(12,028)
Treasury shares held	(19,860)	(19,860)
Foreign exchange reserves	9,149	11,646
Retained earnings	126,397	125,534
Equity attributable to owners of the Company	71,518	70,242
Non-controlling interest	-	505
Total equity	71,518	70,747

Consolidated Cash Flow Statement

FOR THE YEAR ENDED 31 DECEMBER 2012

	2012	2011
	£'000	£'000
Cash generated from operating activities	11,330	16,983
Income taxes paid	(6,352)	(10,004)
Net cash from operating activities	4,978	6,979
Investing activities
Interest received	134	368
Purchases of computer software	(1,060)	(1,291)
Purchases of property, plant and equipment	(3,931)	(9,350)
Purchase of non-controlling interest	(712)	-
Net cash used in investing activities	(5,569)	(10,273)
Financing activities
Equity dividends paid	(3,684)	(3,484)
Proceeds from issue of equity	3	228
Interest paid	(788)	(730)
Proceeds from bank loans and overdrafts	3,885	5,070
Repayment of long-term bank loans	(1,184)	(270)
Purchase of own shares (net of proceeds from option exercises)	-	(528)
Net cash (used) generated in financing activities	(1,768)	286
Net decrease in cash and cash equivalents	(2,359)	(3,008)
Cash and cash equivalents at beginning of year	28,965	31,906
Effect of foreign exchange rate changes	(584)	67
Cash and cash equivalents at end of year	26,022	28,965

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 31 DECEMBER 2012

	Share capital	Share premium	Other reserves	Own shares held	Treasury shares held	Foreign exchange reserves	Retained earnings	Total	Non-controlling interest	Total equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2011	17,092	21,040	(73,410)	(14,115)	(19,860)	11,249	120,017	62,013	198	62,211
Profit for the year	-	-	-	-	-	-	9,866	9,866	307	10,173
Foreign currency translation differences	-	-	-	-	-	397	-	397	-	397
Total comprehensive income and expense for the year	-	-	-	-	-	397	9,866	10,263	307	10,570
Dividends paid	-	-	-	-	-	-	(3,484)	(3,484)	-	(3,484)
Own shares acquired	-	-	-	(960)	-	-	-	(960)	-	(960)
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	3,377	3,377	-	3,377
Deferred tax on share-based payment transactions	-	-	-	-	-	-	(1,626)	(1,626)	-	(1,626)
Transfer to own shares held on exercise of equity incentives	-	-	-	3,047	-	-	(2,616)	431	-	431
New shares issued	21	207	-	-	-	-	-	228	-	228
Balance at 31 December 2011	17,113	21,247	(73,410)	(12,028)	(19,860)	11,646	125,534	70,242	505	70,747
Profit for the year	-	-	-	-	-	-	4,860	4,860	27	4,887
Foreign currency translation differences	-	-	-	-	-	(2,497)	-	(2,497)	-	(2,497)
Total comprehensive income and expense for the year	-	-	-	-	-	(2,497)	4,860	2,363	27	2,390
Dividends paid	-	-	-	-	-	-	(3,684)	(3,684)	-	(3,684)
Acquisition of non-controlling interest	-	-	-	-	-	-	(1,809)	(1,809)	(532)	(2,341)
Credit to equity for equity-settled share-based payments	-	-	-	-	-	-	4,455	4,455	-	4,455
Deferred tax on share-based payment transactions	-	-	-	-	-	-	(52)	(52)	-	(52)
Transfer to own shares held on exercise of equity incentives	-	-	-	2,907	-	-	(2,907)	-	-	-
New shares issued	1	2	-	-	-	-	-	3	-	3
Balance at 31 December 2012	17,114	21,249	(73,410)	(9,121)	(19,860)	9,149	126,397	71,518	-	71,518

Statement of Accounting Policies

FOR THE YEAR ENDED 31 DECEMBER 2012

Accounting Policies

Basis of preparation

Robert Walters plc is a Company incorporated in the United Kingdom under the Companies Act.

The financial report for the year ended 31 December 2012 has been prepared in accordance with the historical cost convention and with International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations as adopted for use by the European Union, though this announcement does not itself contain sufficient information to comply with IFRSs.

The Group had net cash of £11.5m at 31 December 2012. Despite the volatile and uncertain global economic conditions, the Group remains confident of its long-term growth prospects. The Group has a strong balance sheet and considerable financial resources, together with a diverse range of clients and suppliers across different geographic locations and sectors. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully.  After making enquiries, the Directors have formed a judgement, at the time of approving the accounts, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the accounts.

The financial information in this announcement, which was approved by the Board of Directors on 25 February 2013, does not constitute the Company's statutory accounts for the year ended 31 December 2012 but is derived from these accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies and those for 2012 will be delivered following the Company's Annual General Meeting. The auditors have reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The Annual General Meeting of Robert Walters plc will be held on 24 May 2013 at 11 Slingsby Place, St Martin's Courtyard, London WC2E 9AB.

1.	Segmental information
			2012			2011
			£'000			£'000
i)	Revenue:
	Asia Pacific		280,628			246,613
	UK		193,247			188,958
	Europe		87,787			87,449
	The Americas and South Africa		6,109			5,094
			567,771			528,114
ii)	Gross profit:
	Asia Pacific		93,353			92,721
	UK		49,737			46,952
	Europe		39,557			39,130
	The Americas and South Africa		5,744			4,640
			188,391			183,443
1.		Segmental information (continued)
					2012			2011
					£'000			£'000
iii)		Profit before taxation:
		Asia Pacific			7,178			12,327
		UK			444			488
		Europe			1,213			2,786
		The Americas and South Africa			(366)			32
		Operating profit			8,469			15,633
		Net finance costs			(744)			(551)
		Profit before taxation			7,725			15,082
iv)		Net assets:
		Asia Pacific		30,258			27,579
		UK		13,007			11,785
		Europe		6,894			8,175
		The Americas and South Africa		679			237
		Unallocated corporate assets and liabilities*		20,680			22,971
				71,518			70,747

* For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans and corporate deferred tax balances.

The analysis of revenue by destination is not materially different to the analysis by origin and the analysis of finance income and costs are not significant.

The Group is divided into geographical areas for management purposes, and it is on this basis that the segmental information has been prepared.

v)	Other information - 2012	P,P&E and  software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	2,339	1,874	13,617	53,521	(23,263)
	UK	1,644	1,548	5,734	68,879	(55,871)
	Europe	964	327	1,814	20,941	(14,048)
	The Americas and South Africa	84	62	208	3,735	(3,056)
	Unallocated corporate assets and liabilities*	-	-	8,033	36,216	(15,536)
		5,031	3,811	29,406	183,292	(111,774)
1.	Segmental information (continued)
v)	Other information - 2011	P,P&E and software additions	Depreciation and amortisation	Non-current assets	Assets	Liabilities
		£'000	£'000	£'000	£'000	£'000
	Asia Pacific	4,816	1,616	13,418	51,966	(24,387)
	UK	4,937	1,220	5,731	59,905	(48,119)
	Europe	666	317	1,454	22,556	(14,381)
	The Americas and South Africa	222	63	253	2,109	(1,872)
	Unallocated corporate assets and liabilities*	-	-	6,942	36,234	(13,264)
		10,641	3,216	27,798	172,770	(102,023)

*For the purposes of segmental information, unallocated corporate assets and liabilities include cash, bank loans and corporate deferred tax balances.

		2012	2011
		£'000	£'000
vi)	Revenue by business grouping:
	Robert Walters	467,567	446,169
	Resource Solutions (recruitment process outsourcing)	100,204	81,945
		567,771	528,114

2.	Finance costs
		2012	2011
		£'000	£'000
	Interest on bank overdrafts	700	644
	Interest on bank loans	88	86
	Total borrowing costs	788	730

3.	Taxation
		2012	2011
		£'000	£'000
	Current tax charge
	Corporation tax - Overseas	4,052	5,848
	Adjustments in respect of prior years
	Corporation tax - UK	32	(74)
	Corporation tax - Overseas	100	(171)
		4,184	5,603
	Deferred tax
	Deferred tax - UK	(445)	(815)
	Deferred tax - Overseas	(607)	124
	Adjustments in respect of prior years
	Deferred tax - UK	118	894
	Deferred tax - Overseas	(412)	(897)
		(1,346)	(694)
	Total tax charge for year	2,838	4,909
	Profit before taxation	7,725	15,082
	Tax at standard UK corporation tax rate of 24.5% (2011: 26.5%)	1,893	3,997
	Effects of:
	Unrelieved losses	62	239
	Other expenses not deductible for tax purposes	124	126
	Overseas earnings taxed at different rates	665	537
	Adjustments to tax charges in previous years	(162)	(247)
	Impact of tax rate change	256	257
	Total tax charge for year	2,838	4,909

4.	Dividends
		2012	2011
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	Interim dividend paid of 1.47p per share (2011: 1.47p)	1,052	1,027
	Final dividend for 2011 of 3.68p per share (2010 3.5p)	2,632	2,457
		3,684	3,484
	Proposed final dividend for 2012 of 3.68p per share  (2011: 3.68p)	2,632	2,568
	The proposed final dividend of £2,632,000 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	The final dividend, if approved, will be paid on 14 June 2013 to those shareholders on the register as at 24 May 2013.
5.	Earnings per share
	The calculation of earnings per share is based on the profit for the year attributable to equity holders of the parent and the weighted average number of shares of the Company.
		2012	2011
		£'000	£'000
	Profit for the year attributable to equity holders of the parent	4,860	9,866
		2012	2011
		Number of shares	Number of shares
	Weighted average number of shares:
	Shares in issue throughout the year	85,568,121	85,463,121
	Shares issued in the year	230	79,054
	Treasury and own shares held	(14,357,336)	(15,810,840)
	For basic earnings per share	71,211,015	69,731,335
	Outstanding share options	7,522,863	7,841,200
	For diluted earnings per share	78,733,878	77,572,535

6.	Intangible assets
		Goodwill	Computer software	Total
		£'000	£'000	£'000
	Cost:
	At 1 January 2011	7,874	6,058	13,932
	Additions	-	1,291	1,291
	Disposals	-	(38)	(38)
	Foreign currency translation differences	68	20	88
	At 31 December 2011	7,942	7,331	15,273
	Additions	40	1,060	1,100
	Disposals	-	(923)	(923)
	Foreign currency translation differences	(63)	(48)	(111)
	At 31 December 2012	7,919	7,420	15,339
	Accumulated amortisation and impairment:
	At 1 January 2011	-	5,300	5,300
	Charge for the year	-	698	698
	Disposals	-	(30)	(30)
	Foreign currency translation differences	-	13	13
	At 31 December 2011	-	5,981	5,981
	Charge for the year	-	773	773
	Disposals	-	(840)	(840)
	Foreign currency translation differences	-	(52)	(52)
	At 31 December 2012	-	5,862	5,862
	Carrying value:
	At 1 January 2011	7,874	758	8,632
	At 31 December 2011	7,942	1,350	9,262
	At 31 December 2012	7,919	1,558	9,477

The carrying value of goodwill relates to the acquisition of Talent Spotter in China (£1,032,000), the historic acquisition of the Dunhill Group in Australia (£6,847,000) and the acqusition of MRL Consulting in Dubai (£40,000) in 2012. The historical acquisition cost of Talent Spotter was £768,000, with the movement to the current carrying value a result of foreign currency translation differences. Goodwill is tested annually for impairment, or more frequently if there are indications that goodwill might be impaired. The recoverable amount of the goodwill is based on value in use over the next five years, calculated by preparing cash flow forecasts derived from the most recent financial budgets and an assumed growth rate of 3% for years two to five, which does not exceed the long-term average potential growth rate of the respective operations. The forecast for revenue and costs as approved by the Board reflect the latest industry forecasts and management expectations based on past experience. The value of the cash flows is then discounted at a post-tax rate of 7.3% (pre-tax rate of 11.5%), based on the Group's estimated weighted average cost of capital and risk adjusted depending on the location of goodwill.

7.	Property, plant and equipment
		Leasehold improvements £'000	Fixtures, fittings and office equipment £'000	Computer equipment £'000	Motor vehicles £'000	Total £'000
	Cost:
	At 1 January 2011	4,700	7,982	5,267	78	18,027
	Additions	3,521	3,962	1,859	8	9,350
	Disposals	(2,248)	(1,621)	(531)	-	(4,400)
	Foreign currency translation differences	55	(53)	39	(5)	36
	At 31 December 2011	6,028	10,270	6,634	81	23,013
	Additions	991	2,074	856	10	3,931
	Disposals	(276)	(1,344)	(1,412)	-	(3,032)
	Foreign currency translation differences	(208)	(269)	(155)	(6)	(638)
	At 31 December 2012	6,535	10,731	5,923	85	23,274
	Accumulated depreciation and impairment:
	At 1 January 2011	3,731	5,539	3,821	27	13,118
	Charge for the year	658	836	1,009	15	2,518
	Disposals	(2,284)	(1,470)	(481)	-	(4,235)
	Foreign currency translation differences	50	(20)	17	1	48
	At 31 December 2011	2,155	4,885	4,366	43	11,449
	Charge for the year	806	1,044	1,172	16	3,038
	Disposals	(266)	(1,069)	(1,385)	-	(2,720)
	Foreign currency translation differences	(151)	(127)	(108)	(3)	(389)
	At 31 December 2012	2,544	4,733	4,045	56	11,378
	Carrying value:
	At 1 January 2011	969	2,443	1,446	51	4,909
	At 31 December 2011	3,873	5,385	2,268	38	11,564
	At 31 December 2012	3,991	5,998	1,878	29	11,896

8.	Trade and other receivables
		2012	2011
		£'000	£'000
	Receivables due within one year:
	Trade receivables	100,749	89,443
	Other receivables	3,874	5,194
	Prepayments and accrued income	21,080	21,043
		125,703	115,680

Included within prepayments and accrued income is a provision against the cancellation of placements where a candidate may reverse their acceptance prior to the start date. The value of this provision as of 31 December 2012 is £1,055,000 (31 December 2011: £1,024,000). The movement in the provision during the year is a charge to administrative expenses in the income statement of £31,000 (2011: £123,000).

9.	Trade and other payables: amounts falling due within one year
		2012	2011
		£'000	£'000
	Trade payables	4,427	2,553
	Other taxation and social security	17,656	17,862
	Other payables	23,502	18,542
	Accruals and deferred income	49,406	48,102
		94,991	87,059

There is no material difference between the fair value and the carrying value of the Group's trade and other payables.

10.	Bank overdrafts and loans
		2012	2011
		£'000	£'000
	Bank overdrafts and loans: current	14,550	11,904
		14,550	11,904
	The borrowings are repayable as follows:
	Within one year	14,550	11,904
		14,550	11,904

In November 2012, the Group extended its three-year committed financing facility, which was increased to £30.0m until November 2015.  At 31 December 2012, £14.1m was drawn down under this facility.

In March 2008, the Group borrowed Renminbi 20m (£2.0m) at a rate of 110% of the People's Bank of China base rate to finance the acquisition of Talent Spotter and provide working capital.  Of the Renminbi 20m (£2.0m), Renminbi 10m (£1.0m) was a long-term loan and repayable over four years, with the final payment made in March 2012. The remaining Renminbi 10m (£1.0m) is a short-term facility, of which Renminbi 5m (£0.5m) remains outstanding as at 31 December 2012.  The loan is secured against cash deposits in Hong Kong.

The Directors estimate that the fair value of all borrowings is not materially different from the amounts stated in the Consolidated Balance Sheet of £14,550,000 (2010: £11,904,000).

11.	Notes to the cash flow statement
		2012	2011
		£'000	£'000
	Operating profit	8,469	15,633
	Adjustments for:
	Depreciation and amortisation charges	3,811	3,216
	Loss on disposal of property, plant and equipment and computer software	394	173
	Charge in respect of share-based payment transactions	4,455	3,377
	Operating cash flows before movements in working capital	17,129	22,399
	Increase in receivables	(10,533)	(15,202)
	Increase in payables	4,734	9,786
	Cash generated from operating activities	11,330	16,983

12.	Reconciliation of net cash flow to movement in net funds
		2012	2011
		£'000	£'000
	Decrease in cash and cash equivalents in the year	(2,359)	(3,008)
	Cash inflow from movement in bank loans	(2,705)	(4,800)
	Foreign currency translation differences	(525)	(14)
	Movement in net cash in the year	(5,589)	(7,822)
	Net cash at beginning of year	17,061	24,883
	Net cash at end of year	11,472	17,061

Net cash is defined as cash and cash equivalents less bank loans.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR UVRAROSAUUUR