RNS Number : 9939C
Empresaria Group PLC
09 September 2008


EMPRESARIA GROUP PLC

Interim Results for the six months ended 30 June 2008

Revenue up 81%, net fee income increased by 69%

Significant growth in more resilient temporary business and overseas


operations Empresaria Group plc (‘Empresaria’ or the ‘Group’), the
AIM-quoted international specialist staffing company, today announced
revenues of £100.6 million and gross profit of £25.3 million in the
six months ended 30 June 2008. Adjusted profit before tax increased by
50% to £1.8 million and diluted earnings per share on the same basis
was 19% higher. The Group also said it has continued to make
significant progress in diversifying its operations internationally.

New entry into the Finnish and Estonian markets underpinned
Empresaria’s strategy for growth across diverse geographical and
specialist sectors, as did further investments in China, Singapore
and the UK.

The Group also announced that 74% of its net fee income for the same
period was generated by its temporary and contract operations, which
offer greater resilience during economically challenging markets,
compared with 62% for the same period in 2007.

The contribution from the Group’s international businesses also grew
significantly with overseas net fee income providing 57% of the net
fee income, up from 33% in 2007.

Chief Executive Miles Hunt said: ‘We are pleased to report further
progress in the Group’s performance with a 69% increase in net fee
income and a 50% increase in adjusted profit before tax. The Group
has continued to make excellent progress in the development of a
broadly based multi-disciplined international specialist staffing
company with further investments in China, Singapore, Finland,
Estonia and the UK in the period. The expectation of more challenging
economic and market conditions highlights the strength of our core
strategy, implemented over many years, of investment diversification
and focus on developing temporary staffing revenues. Whilst the Board
remains cautiously optimistic as to the outlook for the current year,
Empresaria is well positioned to meet potential market challenges over
the coming months.’


Operating Headlines

• Organic growth in the UK, with Property and Construction,
Specialist Brands and Financial Services sectors performing
particularly well.
• Overseas contribution continued to rise steadily to 57% of
the Group’s net fee income (2007: 33%)
• Temporary business generated 74% of net fee income (2007: 62%)
• Entry into Finland and Estonia markets with investment in
Mediradix, a provider of temporary medical staff
• Further investment in China and Singapore, with the
acquisition of a 60% stake in engineering and technical staffing
specialist Shanghai Intelligence


Financial Headlines

2008 2007

Revenue £100.6m £55.7m + 81 %
Gross Profit £25.3m £15.0m + 69 %
Operating profit * £2.3m £1.6m + 44 %
Profit before tax * £1.8m £1.2m + 50 %
Diluted earnings per share * 2.5p 2.1p + 19 %

* adjusted for intangible amortisation and exceptional items.

- Ends -


Notes for editors:

• Empresaria Group plc (AIM: EMR; sector: Support Services,
staffing) operates in 22 countries with over 150 offices and over
1,100 internal staff.
• It applies a management equity philosophy and business model
with each group company management team holding significant equity
in their own business.
• Empresaria was named International Business of the Year at
the 2007 Fast Growth Business Awards, and in July 2008 was awarded
Company of the Year for the greatest increase in both top-line and
bottom-line growth at the Business Achievement Awards.

Enquiries;

Empresaria Group Plc 01293 649900
Miles Hunt (Chief Executive)
Stuart Kilpatrick (Group Finance Director)
Madeleine Pallas
(Head of Corporate Communications) 01293 649906/07973 326


Kaupthing Singer & Friedlander Capital Markets 020 3205 7500
Limited
Nominated Advisor - Nicholas How




Full results announcement attached. A presentation of these results
will be made to analysts and investors at 9.30am on 9 September 2008,
and an edited copy of this will be available later that morning on
the Empresaria Group plc website: www.empresaria.com

Chairman’s Statement

I am pleased to report that Empresaria has continued to make
excellent progress in the first half of 2008. The Group’s strategy
to develop a broadly based multi-disciplined international specialist
staffing business has advanced further with investments in China,
Singapore, Finland, Estonia and in the UK during the period.

Results

In the six months to 30 June 2008, revenue increased by 81% to
£100.6m and net fee income (gross profit) by 69% to £25.3m. This
reflected a full contribution from acquisitions and start-ups made
in 2007 together with organic growth of 9% and 12% in revenue and
net fee income respectively.

Adjusted profit before tax before exceptional items and intangible
amortisation, was 50% higher than the prior period at £1.8m and
diluted earnings per share on the same basis increased by 19%. As
indicated in our 2007 Annual Report, the Group was reviewing its
strategy towards the UK public sector staffing market and has now
decided to exit from this business. As a consequence of this decision,
there is an exceptional charge of £0.4m recorded in the period in
respect of goodwill impairment and restructuring costs. It is our
policy to constantly review our presence in various sectors and
markets in order to ensure long term growth.

Dividend

In line with previous years, the Board is not recommending the
payment of an interim dividend for the six months ended 30 June 2008
(2007: nil).

Strategy

Empresaria’s strategy is to develop a multi-disciplined international
specialist staffing group, balanced in terms of sector, geographic
and operational coverage, as well as organic and acquisitive growth.
The initial focus in our international expansion has been mainly on
high growth emerging markets and sectors around the globe.

Strategic focus is concentrated on developing sustainable high growth
at the same time as managing business risk. The Group’s 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 programme.

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

The diversification of investment across different operations,
industry sectors and geographies manages risks relating to individual
people, clients, companies and markets. In addition, the Group
operates a process of financial control and discipline to ensure
good corporate governance.

Empresaria has made further good progress in the development of its
international network of companies. In the six months ended 30 June
2008, the UK generated 43% (2007: 66%) of net fee income, a further
43% (2007: 23%) arose in Continental Europe and 14% (2007: 11%) came
from operations in the Rest of the World. The proportion of net fee
income derived outside the UK is expected to increase significantly
over time through a function of investment focus outside the UK as
well as higher growth rates in emerging markets. In line with our
strategy to achieve a balanced mix of business between permanent and
temporary staffing from varying industry sectors, the Group derived
74% of its net fee income for the six months to June from temporary
operations, compared to 62% for the same period in 2007.


Operations

UK

UK revenue increased to £39.9m in the six months ended 30 June 2008
(2007: £39.3m). Turnover from the discontinued Public Sector
businesses fell by £1.0m in the period and new bolt-on acquisitions
contributed £0.3m. After adjusting for these items, organic revenue
growth was 4%. Net fee income increased by £0.9m, which after
adjusting for the Public Sector operations and businesses acquired
in the period, is an increase of 11% on the first half of 2007.

Organic growth and improvement in earnings were recorded by most
businesses. In particular, the Property and Construction,
Specialist Brands and the Financial Services sectors performed well
despite the economic background. As indicated in our 2007 Annual
Report, any companies or non performing sectors are constantly
assessed for long term growth and performance.

Continental Europe

Revenue in Continental Europe increased by £32.2m to £44.0m in the
first half of 2008. The division benefited from a full contribution
in the period from Headway, a staffing business based in Germany and
from EAR, based in the Netherlands, which joined the Group in
May 2007. On a proforma basis, had these businesses been consolidated
for the whole of the prior period, revenue and gross profit would
have increased by 15% and 12% respectively in the period. In both
businesses performance is in line with expectations.

Headway has over 70 branches across southern and central Germany and
has operations in Austria and Romania. The German staffing market
remains one of the most attractive in Europe with continuing strong
growth in demand for staffing services resulting from recent
structural changes to the labour markets. On 4 August 2008,
Empresaria invested in Mediradix, a healthcare staffing business
which recruits medical staff from Estonia into the Finnish market.

Rest of World

This region includes Asia Pacific and South America. Revenue in the
region increased to £16.7m (2007: £4.6m), partly due to contribution
from Alternattiva, Chile, which has performed in line with
expectations since joining the Group in November 2007. In addition,
our Skillhouse business in Japan demonstrated strong organic growth
and the South-East Asian region almost doubled revenue in the six
month period. Net fee income, albeit from a low base, doubled to
£3.8m in the first half.

On 15 July 2008 Empresaria acquired a 60% stake in the China and
Singapore based, Intelligence HR Consultants, a recruitment company
specialising in the engineering sector. It sources senior and
management level technicians within the engineering, construction,
chemicals, petrochemicals, pharmaceutical, biotechnology, electronics
and energy industries.

Prospects

The Group has historically generated the majority of its profits in
the second half of the year, it is anticipated that this trend will
continue in 2008 particularly with the Group’s focus on temporary
staffing, the sector focus of each of its businesses and its broad
international mix of operations.

Current global economic trends reinforce the benefit of the Empresaria
strategy of growing a multi-sector, multi-discipline balanced
international staffing business. The Group continues to invest in
businesses or start-ups with significant potential for growth and,
with a strong focus on improving and developing the existing
portfolio of businesses and generating cash, the Board believes that
there are excellent long term prospects for Empresaria.

With trading conditions expected to become more challenging in
certain markets over the coming months, the increasing contribution
from emerging markets and economies will help to mitigate any
deterioration in more developed markets. Whilst the Board remains
cautiously optimistic as to the outlook for the current year,
Empresaria is well positioned to meet potential market challenges
over the coming months.

Tony Martin
Chairman
9 September 2008



Consolidated interim income statement

6 months to 30 6 months to 30 Year to 31
June 2008 June 2007 December 2007

£ m £ m £ m

Revenue 100.6 55.7 147.8`
Cost of sales (75.3) (40.7) (105.2)
_______ _______ _______
Gross profit 25.3 15.0 42.6
Administrative
costs (23.0) (13.4) (35.7)
_______ _______ _______
Operating profit
before exceptional
items and intangible
amortisation 2.3 1.6 6.9
Exceptional items (0.4) - (0.1)
Intangible amortisation (0.1) - (0.1)
_______ _______ _______
Operating profit 1.8 1.6 6.7
Finance income 0.2 - 0.2
Finance costs (0.7) (0.3) (0.8)

Share of operating
result from
associates - (0.1) (0.1)
_______ _______ _______
Profit before tax 1.3 1.2 6.0
Income tax expense (0.5) (0.4) (1.9)
_______ _______ _______
Profit for the period 0.8 0.8 4.1
_______ _______ _______

Attributable to:
Equity holders of
the parent 0.4 0.5 2.5
Minority interest 0.4 0.3 1.6
_______ _______ _______
0.8 0.8 4.1
_______ _______ _______

Earnings per share :
Basic (pence) 1.0 2.0 8.4
Diluted (pence) 1.0 2.0 8.4

Before exceptional items and intangible amortisation:
Basic (pence) 2.6 2.1 9.2
Diluted (pence) 2.5 2.1 9.2



All results for the Group are derived from continuing operation
Consolidated interim balance sheet
30 June 30 June 31 December
2008 2007 2007
ASSETS £ m £ m £ m
Non-current assets
Property, plant and
equipment 1.9 1.7 1.9
Goodwill & other
intangible assets 26.3 23.4 24.7
Interests in associates 1.2 0.9 1.0
Deferred tax assets 1.1 0.5 0.9
_______ _______ _______
30.5 26.5 28.5
Current assets
Trade and other
receivables 39.3 23.7 32.5
Cash and cash
equivalents 3.7 4.7 4.1
_______ _______ _______
43.0 28.4 36.6
_______ _______ _______
Total Assets 73.5 54.9 65.1

LIABILITIES
Current liabilities
Trade and other
payables 29.1 20.8 24.7
Borrowings 8.7 6.0 6.2
Corporation tax 2.5 0.8 2.1
_______ _______ _______
40.3 27.6 33.0
Non-current liabilities
Borrowings 2.0 - 2.1
Deferred tax
liabilities 0.9 1.1 0.9
Other non-current
liabilities - 1.8 -
_______ _______ _______
Total non-current
liabilities 2.9 2.9 3.0
_______ _______ _______
Total liabilities 43.2 30.5 36.0
_______ _______ _______
Net assets 30.3 24.4 29.1
_______ _______ _______

Equity attributable to equity holders of the parent
Share capital 1.7 1.7 1.7
Share premium
account 16.7 16.7 16.7
Other reserves 3.5 1.3 2.4
Profit and loss
account 5.6 3.4 5.3
_______ _______ _______
27.5 23.1 26.1
Minority interests 2.8 1.3 3.0
_______ _______ _______
Total equity 30.3 24.4 29.1
_______ _______ _______

Consolidated interim statement of recognised income and expense

6 months 6 months Year
to to to
30 June 30 June 31 December
2008 2007 2007
£ m £ m £ m

Valuation gains
/(losses) taken
to equity (0.1) - -
Exchange
differences on
translation of
foreign
operations 0.7 (0.2) 0.9
_______ _______ _______
Net income /
(loss) recognised
directly in equity 0.6 (0.2) 0.9
Profit for the period 0.8 0.8 4.1
_______ _______ _______
Total recognised
income and expense
for the period 1.4 0.6 5.0

Attributed to:
Equity holders of
the parent 1.0 0.4 3.6
Minority
interest 0.4 0.2 1.4
_______ _______ _______
1.4 0.6 5.0
_______ _______ _______

Consolidated interim cash flow statement
6 months6 monthsYear
to to to
30 June 30 June 31 December
2008 2007 2007
£ m £ m £ m
Operating activities
Profit for the period 0.8 0.8 4.1
Adjustments for:
Depreciation 0.5 0.2 0.7
Intangible
amortisation 0.1 - 0.1
Tax charge 0.5 0.4 1.9
Share of losses
in associates - 0.1 0.1
Finance costs 0.5 0.3 0.6
Share based
payments 0.2 - 0.1
Exceptional
items charged
net of cash flow 0.4 - (0.1)
_______ _______ _______
Operating cash
flow before
movement in
working capital 3.0 1.8 7.5

Increase in trade
receivables (5.3) (0.5) (5.1)
Increase in trade
payables 1.9 (0.2) -
_______ _______ _______
Cash generated from
operations (0.4) 1.1 2.4
Income taxes paid (0.5) (0.3) (1.4)
_______ _______ _______
Net cash from /
(used in) operating
activities (0.9) 0.8 1.0

Investing activities
Acquisition of
subsidiaries net of
cash acquired (0.3) (10.6) (9.7)
Further investments in
existing subsidiaries (0.2) - (1.4)
Investment in
associates (0.1) (0.4) (0.8)
Purchase of property,
plant and equipment (0.4) (0.2) (1.1)
Finance income 0.2 - 0.1
_______ _______ _______
Net cash used in
investing activities (0.8) (11.2) (12.9)


Financing activities
Issue of shares 0.1 11.5 11.5
Increase / (decrease) in
borrowings due after
one year - 1.7 3.7
Increase / (decrease)
in borrowings due
within one year 2.3 (0.8) (1.1)
Interest paid (0.7) (0.4) (0.8)
Dividends paid - - (0.2)
Dividends paid to
minority shareholders
in subsidiary
undertakings (0.6) (0.2) (0.4)
_______ _______ _______
Net cash from
financing activities 1.1 11.8 12.7


Net increase/(decrease)
in cash and
cash equivalents (0.6) 1.4 0.8
Foreign exchange on
cash and cash
equivalents 0.2 - -
Cash and cash
equivalents at
beginning of period 4.1 3.3 3.3
_______ _______ _______
Cash and cash
equivalents at
end of period 3.7 4.7 4.1
_______ _______ _______


Notes to the consolidated interim financial statements

1) General information

Empresaria Group plc is the Group’s ultimate parent company. It is
incorporated and domiciled in Great Britain. The address of
Empresaria Group plc’s registered address is Peveril Court,
6-8 London Road, Crawley, West Sussex RH10 8JE. Its shares are
listed on AIM, a market of London Stock Exchange plc.

These condensed interim financial statements have been prepared
applying the accounting policies and presentation that were applied
in the preparation of the company’s published consolidated financial
statements for the year ended 31 December 2007. The comparative
figures for the financial year ended 31 December 2007 are not the
company’s statutory accounts for that financial year. Those accounts
have been reported on the company’s auditors and delivered to the
Registrar of Companies. The auditor’s report on those financial
statements was unqualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report and did not contain a statement
under Section 237(2) or (3) of the Companies Act 1985. These interim
financial statements were approved for issue by the Board of
Directors on 9 September 2008.

2) Accounting estimates and judgements

The preparation of interim financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amount of income,
expense, assets and liabilities. The significant estimates and
judgements made by management were consistent with those applied to
the consolidated financial statements for the year ended 31 December
2007.

3) Segment analysis

The analysis of the Group’s business by geographical origin is set
out below:
6 months 6 monthsYear
to to to
30 June 30 June 31 December
2008 2007 2007
£ £m £m
Revenue
UK 39.9 39.3 81.1
Continental
Europe 44.0 11.8 52.5
Rest of World 16.7 4.6 14.2
________ ________ ________
100.6 55.7 147.8
________ ________ ________

Gross Profit
UK 10.8 9.9 21.0
Continental
Europe 10.7 3.2 16.8
Rest of World 3.8 1.9 4.6
________ ________ ________
25.3 15.0 42.4
________ ________ ________

4) Exceptional items

Exceptional items are those which, in management’s judgement, need to
be disclosed separately by virtue of their size or incidence in order
for the reader to obtain a proper understanding of the financial
information.
6 months6 monthsYear
to 30 to 30 to 31
June June December
2008 2007 2007
£m £m £m

Goodwill
impairments 0.4 - 0.7
Negative
goodwill - - (0.6)
_______ _______ _______
0.4 - 0.1
_______ _______ _______


5) Earnings per share

Basic and diluted earnings per share

The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders divided by the
average number of shares in issue during the year. 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. A reconciliation
of the earnings and weighted average number of shares used in
the calculations are set out below.

6 months 6 months Year
to 30 to 30 to 31
June June December
2008 2007 2007

Earnings for
the purposes of
basic earnings per
share 0.4 0.5 2.5
Adjustments:
Exceptional items and
intangible amortisation 0.5 - 0.2
Tax charge / (credit)
on exceptional and
intangible amortisation - - 0.1
_______ _______ _______
Adjusted earnings 0.9 0.5 2.8
_______ _______ _______


6 months 6 months Year
to 30 to 30 to 31
June June December
2008 2007 2007

Weighted average
number of shares -
basic (millions) 33.4 26.6 30.2
Effect of dilutive
share schemes
(millions) 0.9 - -
________ ________ ________
Weighted average
number of shares -
diluted (millions) 34.3 26.6 30.2
________ ________ ________



Earnings per share:
6 months 6 months Year
to 30 to 30 to 31
June June December
2008 2007 2007

pence pence pence

Basic 1.0 2.0 8.4
Diluted 1.0 2.0 8.4
Adjusted
Basic 2.6 2.1 9.2
Diluted 2.5 2.1 9.2


6) Movement in net borrowings

6 months 6 months Year
to 30 to 30 to 31
June June December
2008 2007 2007

£m £m £m
Change in net borrowings resulting from cash flows
Increase / (decrease)
in cash and cash
equivalents (0.6) 1.3 0.8
(Increase) / decrease
in net borrowings (2.4) (0.7) (2.6)


On acquisition of
business - (0.5) (1.0)
Currency translation
differences 0.2 - -
________ ________ ________
(Increase) / decrease
in net borrowings (2.8) 0.1 (2.8)

Net borrowings at
beginning of period (4.2) (1.4) (1.4)
________ ________ ________
Net borrowings at end
of period (7.0) (1.3) (4.2)
________ ________ ________




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