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Results for the year ended 31 December 2013

11 March 2014 by
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​Empresaria Group plc ("Empresaria" or the "Group"), the international specialist staffing group, has delivered a strong growth in profit over the prior year with earnings per share up 73% on 2012, showing the benefit of our diversified business model.

Financial Highlights



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Net fee income





Operating profit





Adjusted operating profit*





Profit before tax





Adjusted profit before tax*





Earnings per share (diluted)




Adjusted earnings per share*




  • Revenue stable with a change in mix, with permanent revenue up 6% and temporary staffing revenues down 0.5% on prior year

  • Net fee income (gross profit) diversified by geography (Continental Europe 33%, UK 37%, Rest of the World 30%)

  • Conversion ratio increased to 14.2% (2012: 12.0%)

  • Singapore start-up businesses deliver profit after two years of investment

  • Turnaround in Chile to deliver profit in 2013

  • Cost savings of £2.2m in Germany & Austria

  • 28% reduction in reported net debt to £5.8m (2012: £8.1m)

​* adjusted to exclude amortisation of intangible assets, exceptional items, gain or loss on disposal of business and movements in the fair values of options

Chief Executive Joost Kreulen said:

"In 2013 we have delivered a 17% growth in adjusted profit before tax over the prior year on stable revenues due to a focus on improving operational efficiency and maintaining a tight control of costs. This has resulted in the conversion ratio increasing to 14.2%. Improvements have been particularly marked in the Rest of the World region where the profits in Singapore and the turnaround in Chile supported a 40% increase in adjusted operating profit.

We follow a brand led growth strategy and will continue to invest in our existing businesses, with planned office openings in Kuala Lumpur, Hong Kong and Mexico City in the first half of 2014. Market conditions are improving in UK and Continental Europe and the economic forecasts are positive in all the countries in which we operate, so we see good opportunities to grow the business.

I am also delighted to announce that we have just acquired 51% of BW&P, a high quality search firm in the Technical & Industrial sector, which is based in Dubai and covers the Middle East region providing entry into a new region for Empresaria. Their management team have previously worked with Tony Martin, Zach Miles and I when they built up one of the leading staffing firms in Dubai and the UK and we see this investment as an exciting opportunity to build a leading brand in this important geographic region and deliver strong profit growth over the next few years."

Chairman's statement

Overview of performance

The world economy has demonstrated further volatility throughout 2013, therefore I am pleased that despite these market conditions we have delivered an impressive growth in profit and enter 2014 as a stronger company. The economic recovery in the UK and Continental Europe has gained momentum during the second half of the year, in particular in the UK and Germany, our two largest territories and whilst the economic forecasts for the emerging markets are down on recent levels, the GDP growth rates remain positive.

In 2013 Group revenue was flat at £194.4m (2012: £194.3m) with net fee income down 3% to £42.6m (2012: £43.9m). This was in part impacted by the disposal of our UK payroll services business in August. On an underlying basis revenues increased 0.5% with net fee income down only 1.5%, as margins were squeezed on temporary sales and training services. Despite this, and due to a focus on cost control, operating profit increased 25% to £5.5m (2012: £4.4m) and with lower interest costs, profit before tax increased 36% to £4.9m (2012: £3.6m). Following our continued purchase of minority interests from management earnings per share grew 73% to 5.2p (2012: 3.0p). We expect to reduce the number of these minority interest acquisitions over the next few years which will help free up cash from operations to reduce our net debt and enable management to make selective investments to accelerate the growth of the business.

The Group generated cash from operations of £7.8m (2012: £5.2m) which helped reduce our reported net debt by £2.3m to £5.8m at year end (2012: £8.1m).

I am also pleased to report that our exposure to claims for retrospective pay and social security in Germany is largely resolved, with all worker claims having been settled and no new claims able to be made. We believe we have fully provided for the social security exposure, with the 2010 year remaining subject to audit.


The success of the Group is dependent on having the right people in the right place and the Board would like to thank all of the Group's staff for their hard work, commitment and contribution over the last year.

The Group strategy and success is underpinned by our philosophy of management equity. Operating company management teams invest directly in their own businesses, thereby aligning management and shareholder interests. When we acquire first generation management equity we actively pursue a strategy of issuing second generation equity to incentivise senior managers to drive the next stage of development of their companies. We expect to issue second generation equity within a number of brands in 2014. This will typically involve setting a threshold profit limit and allowing minority shareholders to benefit from increases in profit over this limit. I am pleased that during 2013 we added seven new management shareholders to the Group.


We continue to invest in the business to grow future profits, with the organic development of the brands a key part of our strategy. During 2014 we will open new offices in Hong Kong, Kuala Lumpur and Mexico City. I am also pleased that in March 2014 we acquired a majority share in BW&P, a high quality search firm operating in Dubai and covering the Middle East region. The senior management team have an unrivalled experience in this territory and provides us with entry into a new geographic region and an opportunity to develop a leading brand.


We continue to adopt a consistent dividend policy, whilst prioritising free cash flow for developing the Group and strengthening the balance sheet. For the year ended 31 December 2013, the Board is proposing to maintain the final dividend at 0.35p per share (2012: 0.35p per share) which, if approved by Shareholders at the Annual General Meeting, will be paid on 23 June 2014 to shareholders on the register at 23 May 2014.


The principle of sound corporate governance practices is core to our success as a Group. The diversified nature of the Group, now operating through 20 brands in 19 countries, means it is vital that a strong financial control culture and clear policies on corporate conduct and governance exist and are communicated and monitored effectively. The Board develops the Group's corporate governance arrangements with reference to the UK Corporate Governance Code, making sure that the entrepreneurial freedom enjoyed by the operating companies is within a framework of clearly understood principles and controls.

Values & culture

We believe the Group offers a unique proposition to entrepreneurial managers who want to retain some ownership in their company while enabling them to develop and grow within a group environment that supports them and provides access to finance and staffing expertise. We are committed to develop the Group further by attracting and working with the best talent in the industry.


Overall in the year we did what we said we would do. We delivered a strong growth in profits driven by strengthened more experienced management and by operational improvements in Germany and Chile, continued investment in Singapore to deliver a profitable contribution and maintaining a tight control of costs. With key operational issues resolved and a reduction in net debt we are a stronger company than a year ago. The directors are cautiously optimistic about the year ahead. Market conditions are improving in the UK and Continental Europe and whilst the Rest of the World is more challenging than in recent years, we continue to see good growth opportunities. We believe that the Group is well placed to deliver growth across our network and see exciting opportunities from the new investment in the Middle East. We will continue to invest in the business to deliver growth through a combination of organic development and external investments.


Empresaria Group plc
Joost Kreulen, Chief Executive Officer
Spencer Wreford, Group Finance Director

01342 711 430

Shore Capital (Nominated Adviser and Broker)
Bidhi Bhoma / Edward Mansfield

020 7408 4090

A presentation of these results will be made to investors on 11 March 2014 and an edited copy of this will be made available late that morning on the Empresaria Group plc website:

Notes for editors:

Empresaria Group plc (AIM: EMR; Sector: Support Services, Staffing) applies a management equity philosophy and business model, with group company management teams holding significant equity in their own business.