Empresaria Group PLC
25 September 2006

Empresaria Group plc

Chairman's report on the unaudited interim results for the six months ending on
30th June 2006

Empresaria Group plc ('Empresaria' or 'the Group') is pleased to announce its
unaudited interim results for the six months ended 30th June 2006

Financial highlights

â.¢ Turnover of £33.9m (2005 £24.5m), up 38%
â.¢ Net fee income of £9.9m (2005 £7.0m), up 41%
â.¢ Adjusted operating profit of £1.15m (2005 £0.89k), up 29%*
â.¢ Adjusted profit before tax of £0.95m (2005 £0.75m) up 27%*
â.¢ Adjusted earnings per share 2.3p (2005 1.8p) up 28%*

Operating highlights

â.¢ Strong organic growth both in UK and overseas.
â.¢ Japanese subsidiary performing well ahead of expectations.
â.¢ New operations established in China, India and Indonesia.
â.¢ Senior management appointment in Europe.

Commenting on the results, Chairman Tony Martin said:

'Our strong growth through the first half has positioned us well for a positive
second half, when we traditionally make the majority of our profit. The Group's
operational, geographical and sector diversification means that no single one of
our companies accounts for more than 12% of Group net fee income, while our
international development programme is beginning to build momentum, and is now
contributing over 20% of net Group monthly income. We continue to maintain a
careful balance between temporary and permanent staffing operations, with our
expansion underpinned by a balanced mix of organic and acquired growth.'

* Figures based on underlying profits, adjusted for goodwill amortisation and
exceptional items. There were no exceptional items in the period to 30th June

The directors of the issuer accept responsibility for this announcement.

Press Contacts

Empresaria Group Plc 01293 649900

Tony Martin (Chairman)

Miles Hunt (Chief Executive)

Nick Hall-Palmer (Finance Director)

Bridgewell Limited 0207 0033000

James Wellesley-Wesley

Notes for editors:

Empresaria Group plc (sector Support Services, staffing) provides specialist
staffing services across nine countries through 30 trading subsidiaries.
Empresaria was formed in 1996 by Miles Hunt and its business model is based on
the philosophy of management equity which allows founder managers and key staff
within Empresaria's subsidiaries to acquire or retain a meaningful stake in the
businesses they run or work in.

Chairman's Statement


In the six month period to June 2006 the Group once again produced an excellent
set of results with EPS growth of 28% adjusted to exclude goodwill amortisation
and exceptional costs. This earnings growth was driven by turnover up 38% to
£33.9m (2005: £24.5m), an increase in gross profit, or net fee income, of 41% to
£9.9m (2005: £7.0m) and an increase in adjusted pre-tax profit of 27% to £948k
(2005: £749k).

The organic turnover growth rate in the period was 16% and adjusted profit
before tax on the same basis grew by 20%.

Diluted earnings per share before amortisation of goodwill were 2.3p (2005:
1.8p). Diluted earnings per share after amortisation of goodwill were 1.0p.
There were no exceptional costs in the period.


The Board is not recommending the payment of an interim dividend for the six
months to 30 June 2006 (2005: nil).


Empresaria is a specialist staffing group seeking to sustain high growth rates
at the same time as managing business risk. Its approach is to apply a
combination of a management equity philosophy, a decentralised management
structure, a balanced business mix (between temporary and permanent staffing
operations as well as between industry sectors) and an international expansion

Each of the companies in the group is run by managers holding significant equity
stakes in their own businesses or alternatively in Empresaria itself. The
central group functions are focussed on financial management and group
development. A combination of this equity philosophy and freedom of operation
attracts, motivates and retains good managers.

The diversification of investment across different operations, industry sectors
and geographies manages risks relating to individual people, clients, companies
and markets. No one company accounts for more than 12% of group net fee income
and no one client accounts for more than 6% of group revenues.

Empresaria's international development programme, launched less than two years
ago, is beginning to build momentum. In the whole of 2005 the Group's
international businesses contributed 3% towards total net fee income. Since May
this year, despite strong organic growth in the UK, Empresaria's overseas
businesses have been contributing over 20% of Group net fee income on a monthly
basis. With a continued focus on international development, the mix between UK
and overseas financial contribution is expected to change rapidly.

The Group enjoys a balance between temporary and permanent staffing operations
with 52% of net fee income being derived from temporary staffing business. In
the medium term it is anticipated that this percentage contribution from the
more stable temporary operations will increase.


In total, turnover in the UK increased by 16% to £28.3m (2005: £24.5m) and net
fee income increased by 9% to £7.6m (2005: £7m). The UK operations saw strong
organic growth and contribution from the Financial Services and Property
Services and Construction sectors.

After a relatively poor performance in 2005, all the Financial Service companies
have demonstrated an improvement in profitability with particular headway being
made in the investment banking and asset management market sectors.

Within the Property Services and Construction markets our FastTrack brand
continues to grow both in absolute terms as well as in market share. During the
period the FastTrack cost base increased by over £500k as the business invested
in both consultants and branch network. In July it opened a new office in
Stratford, East London, to take advantage of opportunities presented by the 2012
Olympics. It is expected that the revenue and profit effects of this expansion
will be felt in full in 2007.

The overall UK growth rate was reduced by weakness within the Public Sector
businesses, particularly within the Allied Healthcare market which was affected
by a substantial slowdown in NHS spending. Reacting to this, the Board has
decided to merge our Allied Healthcare, Nursing and Social Care operations. New
management has been recruited and the sector is expected to return to
profitability during the course of the second half of 2006 once the integration
process has been completed. Public Sector net fee income accounts for less than
4.5% of Group total. If the Public Sector performance was excluded from like
for like financial analysis, underlying year on year turnover growth in the UK
would have been 25%.


Empresaria's international businesses contributed £4.5m of turnover and £2.1m of
net fee income in the period. There are no comparable figures for 2005 as
contributions from overseas subsidiaries commenced only towards the end of last

The Group benefits from increased exposure to a number of fast growing
international staffing markets. In Japan, the Skillhouse operation (IT and
support services staffing) has grown rapidly from start up at the end of 2004 to
become a significant profit contributor this year. The Japanese staffing market
continues to benefit from the effect of an improved economic environment and
structural changes to the staffing industry. In addition, the Group is seeing
evidence of similar growth opportunities with the new India and China
investments made earlier this year.

2006 has also seen the Group make its first investment in continental Europe
with its acquisition of the GiT operation giving it a foothold in both the Czech
Republic and Slovakia. GiT has traded profitably, in line with our expectations,
in the first half of 2006. The Group believes that Eastern Europe offers
excellent opportunities for future growth and is actively investigating
opportunities in this region as well as in those more mature European markets
with growth potential.

In the six months to June 2006, the Group has invested nearly £1m in developing
its network of international businesses and the primary focus of management in
the second half of 2006 and throughout 2007 will continue to be increasing the
exposure of the Group to high growth international staffing markets.


In June we announced the appointment of Armin Preisig to Empresaria's senior
management team. Armin was until April this year on the Board of Management of
Vedior and responsible for the majority of that group's European operations. He
previously fulfilled a similar role for Select Appointments. Armin brings with
him a wealth of experience and knowledge of European staffing operations, which
is expected to be of great benefit to Empresaria.


The Group performed strongly over the first six months of 2006 and has continued
to perform well in the intervening months. Organic growth continues to be
driven by established operations supplemented increasingly by recent start-ups
and supportive acquisitions. As Empresaria has historically made the majority
of its profit in the second half of the year it is anticipated that this trend
will continue in 2006. The Board is positive as to the outlook for the year.

Tony Martin


25th September 2006


For the 6 months to 30th June 2006

Half Year Half Year Full Year
2006 2005 2005
£ 000 £ 000 £ 000
(unaudited) (unaudited) (audited)

Existing operations 33,157 22,679 48,342
Acquisitions 743 1,848 5,718
Continuing Operations 33,900 24,527 54,060
Discontinued operations - - -
Total turnover 33,900 24,527 54,060

Cost of Sales (23,986) (17,507) (38,667)

Gross Profit 9,914 7,020 15,393

Administrative Expenses (9,102) (6,366) (13,749)

Operating profit
Existing operations 739 493 1,217
Acquisitions 73 183 697
Continuing operations 812 676 1,914
Discontinued operations - (22) -

Group operating profit 812 654 1,914

Share of operating profit in associated company (38) (34) (44)
774 620 1,870

Interest receivable and similar income
Interest payable and similar charges (168) (112) (263)

Profit on ordinary activities before taxation 606 508 1,607

Tax on profit on ordinary activities (250) (225) (726)

Profit on ordinary activities after taxation 356 283 881

Minority equity interests (137) (101) (233)

Profit on ordinary activities attributable to
the members of Empresaria Group plc 219 182 648

Equity dividends paid - - (80)

Retained profit for the period 219 182 568

Earnings per share (pence) basic and diluted 1.0 0.9 3.1


As at 30th June 2006

June- June- December
2006 2005 2005
£ 000 £ 000 £ 000
(unaudited) (unaudited)
Fixed Assets
Intangible Assets 8,672 6,042 7,981
Tangible Assets 648 301 535
Investment in associates 664 274 39
9,984 6,617 8,555
Current Assets
Trade and other debtors 13,817 10,393 10,169
Cash 2,135 1,658 2,405
15,952 12,051 12,574

Amounts falling due within one year (14,349) (9,309) (10,992)

Net current assets 1,603 2,742 1,582

Amounts falling due after more than one year (1,323) (1,595) (1,449)

Total net assets 10,263 7,764 8,688

Capital and reserves
Called up share capital 1,175 1,037 1,113
Other reserve 1,516 991 1,539
Share premium 4,980 3,463 3,822
Profit and loss account 1,665 1,291 1,447

Equity Shareholders' Funds 9,336 6,782 7,921

Minority interests 927 982 767
10,263 7,764 8,688


For the 6 months ended 30th June 2006

June June December
2006 2005 2005
Note £ 000 £ 000 £ 000
Unaudited Unaudited
Net cash inflow from operating activities 1 287 35 2,500

Returns on investments and servicing of finance
Interest paid (168) (112) (263)
Dividends paid to minority shareholders in (61) (33) (196)
subsidiary companies
Net cash outflow for returns on investments and (229) (145) (459)
servicing of finance

Taxation - Corporation Tax Paid (245) (95) (586)

Capital expenditure and financial investment

Payments to acquire tangible assets (298) (189) (413)

Net cash outflow for capital expenditure (298) (189) (413)

Acquisitions and disposals

Purchase of subsidiaries (741) (1,134) (1,993)
Cash/overdraft acquired with subsidiary (14) 324 462
Purchase of associates (593) (162) (21)
Net cash outflow for acquisitions and disposals (1,348) (972) (1,552)

Equity dividends paid - - (84)

Net cash (outflow)/inflow before financing (1,833) (1,366) (594)


Issue of shares 920 -
Issue of loan stock -
Raising of Long term Loan -
Repayment Of Loan (105) (96) (238)
Increase/(Decrease) in invoice discounting 748 199 316
Capital elements of hire purchase contracts -

Net cash (outflow)/inflow from financing 1,563 103 78

(Decrease)/increase in cash in the period 3 (270) (1,263) (516)

1 Reconciliation of operating profit to net cash inflow from operating activities

June June December
2006 2005 2005
Operating profit 812 654 1,914
Loss on disposal of tangible fixed assets - - 73
Depreciation of tangible assets 167 136 262
Amortisation of goodwill 342 240 618
Increase in debtors (3,424) (1,225) (433)
Decrease in creditors 2,390 230 66

Net cash inflow from operating activities 287 35 2,500

2 Reconciliation of net cash flow to movement in net debt

June June December
2006 2005 2005
£000's £000's £000's

(Decease)/increase in cash in the period (270) (1,263) (516)
Cash inflow from increase in debt (643) (103) (78)

Change in net debt resulting from cash flows (913) (1,366) (594)
Factoring debt acquired - - (286)
(913) (1,366) (880)
Opening net debt (2,447) (1,567) (1,567)

Closing net debt (3,360) (2,933) (2,447)
3 Analysis of net debt
31 December non-cash 30 June
2005 Cash flow Changes 2006
£000's £000's £000's £000's

Cash at bank and in hand 2,405 (270) - 2,135
Amounts owed to factors (3,302) (748) - (4,050)
Long term Loans
Due within one year (225) (20) - (245)
Due after one year (1,325) 125 - (1,200)
(2,447) (913) - (3,360)


1. Basis of preparation

The interim financial information has been prepared on the basis of accounting
policies consistent with those adopted for the year ended 31 December 2005. The
interim financial information has not been audited and does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.

The comparative results for this period present an abridged version of the full
accounts for the year ended 31 December 2005, which received an unqualified
audit report, and which have been filed with the Registrar of Companies.

The interim financial statements comprise the following:

â.¢ Profit and loss account for the six months ended 30 June 2006 with
comparative information for the year ended 31 December 2005 and for the 6
months ended 30 June 2005;

â.¢ Balance sheet as at 30 June 2006 with comparative information at 31
December 2005 and at 30 June 2005;

â.¢ Cash flow statement for the 6 months ended 30 June 2006 with comparative
information for the year ended 31 December 2005 and the 6 months ended 30
June 2005;

2. Dividend

The directors do not propose the payment of a dividend for the period.

3. Earnings per share (basic and diluted)

Basic earnings per share are calculated by dividing the retained profit for each
period by the average number of shares in issue, 22,478,049 (December 2005:
20,798,075; June 2005: 20,370,877).

Based on current trading conditions, the Directors are of the opinion that there
would be no dilution to the earnings per share figure resulting from subsidiary
minority shareholders trading up.

4. Reconciliation of basic to adjusted EPS

6 Months 6 Months Year
ended ended ended
June June Dec
2006 2005 2005
pence pence pence

Headline EPS 1.0 0.9 3.1

Effect of goodwill amortisation 1.3 0.9 2.6

Effect of exceptional items - - -

Adjusted EPS 2.3 1.8 5.7

5. Reconciliation of adjusted profits

6 Months 6 Months Year
ended ended ended
June June Dec
2006 2005 2005
£ 000's £ 000's £ 000's

Operating profit 812 654 1,870
Profit before tax 606 508 1,607

Goodwill amortisation 342 241 618
Exceptional operating items - -
342 241 618

Exceptional non-operating items - - -

Adjusted operating profit 1,154 895 2,488
Adjusted profit before tax 948 749 2,225

This information is provided by RNS
The company news service from the London Stock Exchange

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