Pinnacle Staffing Group plc
Pinnacle Staffing Group plc, (AIM: PCL) the healthcare recruitment group, announces its full year results for the year ended 3rd January 2010.
Operational highlights of the year include:
|
|
•
|
Transfer of all group central functions to the head office in Luton.
|
|
|
•
|
Establishment of the new Doctors division.
|
|
|
•
|
Acquisition of The Compliance Company (GB) Limited.
|
|
|
•
|
Substantial increase in the level of NHS demand for the services of the British Nursing Association ("BNA").
|
Commenting on the results, David Hope, Chief Operating Officer & Finance Director of Pinnacle said:
"2009 has been a challenging year for Pinnacle where the focus of the Board has been on transforming the internal processes of the Group to make it a more robust and efficient business that is better placed to cope with the increasing regulatory demands of the temporary healthcare staffing market. The changes that we have made to the business, combined with revised pricing on the new NHS Frameworks for Nursing, have enabled us to develop further our relationships with NHS Organisations. Despite a disappointing final quarter to the year, caused in part by the severe weather in December, the level of NHS interest in using reasonably priced quality staff from BNA has been exceptional. The challenge for the business in 2010 will be to use its resources effectively to capitalise on these growth opportunities."
Enquiries:
|
|
Pinnacle Staffing Group Plc
|
|
|
|
Tom Charlton, Executive Chairman
|
01582 395900
|
|
|
David Hope, Chief Operating Officer and Finance Director
|
01582 395900
|
|
|
Brewin Dolphin Limited (NOMAD)
Matt Davis
|
0845 270 8600
|
Chairman's Statement
Business Review
The Group has experienced another difficult year of trading as a result of more challenging market conditions in the UK healthcare sector. Previous hopes of being able to report a profit for the year were further hit by the adverse winter weather conditions in December which especially affected our nursing branches in Northern England and Scotland. Consequently, on 15th January 2010, the Board announced that it had embarked on a strategic review of Pinnacle's operations to establish how best to deliver shareholder value.
Financial Results
The results presented are for the 52 weeks ended 3rd January 2010 and the comparative figures are for the 52 weeks ended 4th January 2009. Group revenue for the period amounted to £40.2m (2008: £38.1m) a rise of approximately 5.5%. Gross margins have increased to 20.6% (2008: 19%). Total gross profit achieved was £8.3m (2008: £7.3m).
Trading
The Nursing Division had a disappointing second half to the year, delivering results below budget. On the positive side, our three brands gained positions on the new National Frameworks for Agency Nursing and we received a substantial number of enquiries from NHS Organisations interested in putting in place new service level agreements with BNA. Nevertheless, the immediate impact on revenue was muted as the number of available nurses to meet strong demand was severely limited. In some other areas, BNA encountered a temporary ban on the use of nursing agency staff by a number of NHS hospitals. Fortunately, we experienced increased demand for nursing services which were provided in patients' homes and funded by local NHS Primary Care Trusts. Overall, it was a testing time for our nursing division with our staff facing many challenges.
The purchase of The Compliance Company (GB) Ltd was completed during the year giving Pinnacle one of the best available systems for monitoring the compliance status of its workers. This is extremely important for Pinnacle as it builds on its relationship with the NHS to provide cost-effective flexible staffing solutions together with the very highest standards of training and compliance.
Pinnacle's doctors recruitment businesses, which trade under the Medic International and Holt Doctors brand names, were unable to lift their weekly commission run-rate beyond the level reached in June. Demand for junior doctors, which had been buoyed by the implementation of the European Working Time Directive at the start of August 2009, subsequently eased off. Positive progress was made in developing the sourcing of doctors internationally for permanent positions in UK hospitals.
Medical Services again performed poorly. The previous lack of investment in developing a recruitment pipeline to bring qualified overseas candidates to the UK and the failure of a new initiative to generate any additional candidates meant that the demand for qualified staff could not be met.
The invoice discounting facility provided to the operating subsidiaries of Pinnacle by Barclays Bank plc has been extended until 1st September 2010 and discussions with our bankers regarding renewal of this facility have already commenced. The guarantee which had been provided by the Executive Chairman as additional security to our bankers was released in June 2009.
Outlook and Strategic Review
As part of the ongoing review of Pinnacle's business we recognise that the nursing brands, BNA and Grosvenor, have outstanding opportunities to extend their geographical reach and to be much more effective in supplying nurses and healthcare assistants to NHS Organisations. This will mean increasing the size of certain key branches to cope with substantially increased volumes. At the same time BNA continues to have a significant number of underperforming branches which are sub-scale in terms of the number of shifts being booked and where they also lack a sufficient pool of qualified workers.
BNA has also been slow to recognise the strong underlying growth in its continuing care supplies to local Primary Care Trusts and has not, to date, devoted dedicated resource to developing this growth area. Pinnacle needs to invest in resourcing its key branches and pursuing its growth opportunities while at the same time managing the decline elsewhere in the branch network.
Medical Services has continued to see revenues decline due to the lack of a pipeline of new candidates. Our focus here will remain on supplying our existing clients with their requirements rather than investing further to try and grow the business.
The doctors business, having developed extremely well in the first six months under its new management, then saw its commission run-rate level off. The management team has plans in place to take the business to the next level, however this has necessitated significant additional investment in personnel which has added to overhead costs but which should deliver a return in the future. Pinnacle's clear focus has to be on rebuilding its nursing division which, with proper investment, can create substantial value for shareholders. Pinnacle's doctors division, now that it is established, has to demonstrate it can achieve its growth targets and generate cash to fund its further development.
The Company announced on 15th January 2010 that it was undertaking a strategic review to assess how best to deliver shareholder value. This process is ongoing and further announcements will be made, as appropriate, in due course.
Tom Charlton
Executive Chairman
26th April 2010
Principal activities and Review of Business
The Group is a provider of healthcare workers in the temporary healthcare staffing market. It supplies nurses, locum doctors, carers and other medical personnel to a wide client base including the NHS, private hospitals, care homes and to individuals within their own homes. It is one of the few national temporary staffing recruitment businesses dedicated to the supply of healthcare workers. The business has a national presence, operating through 33 branches, which are supported by the Group infrastructure.
The results for the year show revenue of £40.2m (2008: £38.1m) and EBITDA* of £1k (2008: £(362)k). Operating loss was £1,089k (2008: £6,974k) and loss before tax was £1,270k (2008: £7,214k). The taxation expense for the period was £27k (2008: Credit £132k) and the loss after tax was £1,297k (2008: £7,082k).
*profit before finance charges, taxation, depreciation, amortisation of intangible assets and impairment of goodwill and intangible assets
Strategy
The objective of the Group is to achieve profitable growth by capitalising on its strong brand portfolio and national presence. We aim to achieve this through:
|
|
•
|
remaining focused and dedicated to the supply of temporary healthcare workers to the NHS and independent markets;
|
|
|
•
|
developing local agreements with NHS Organisations to cater for their specific, local, requirements with focus being placed on the continuing care market;
|
|
|
•
|
the active regeneration of our historic database of over 20,000 former healthcare workers;
|
|
|
•
|
development of overseas relationships and offices to deliver a larger candidate base;
|
|
|
•
|
continued development of the Group's information technology platform to allow remote access for customers and candidates, further reducing transactional costs;
|
|
|
•
|
investing in our people and our marketing capability.
|
Financial Review
Statement of comprehensive income
The results presented here are for the year ended 3rd January 2010 ("2009"). Comparative information is presented for the year ended 4th January 2009 ("2008").
Revenue
Revenue for the period amounted to £40.2m (2008: £38.1m). The Group's core Nursing Division which includes its key brand, BNA, maintained its revenue with sales for the year of £31.4m (2008: £31.5m). The Medical Services Division continued to see substantial falls in revenue to £3.7m (2008: £6.6m) whilst the new Doctors division has seen substantial growth during the year with revenues of £5.1m (2008: £nil).
Gross Profit
The overall gross profit amounted to £8.3m (2008: £7.3m). Through the continued revision of its non-NHS charge rates the business has managed to reverse some of the downward pressures on its margins which, combined with the addition of the new higher margin Doctors business and additional focus being placed on permanent placements in the nursing division, has led to the improvement of the overall gross margin to 20.6% (2008: 19%).
Operating Expenses
During 2009 management made some significant cost savings however the majority of these were offset by the additional costs associated with developing the new Doctors recruitment business and the opening of offices in new geographical locations. Further expense was incurred on the review and improvement of many of the Group's internal processes, procedures and handbooks which had suffered from a degree of historic underinvestment.
Further unbudgeted expenditure was incurred on improving the compliance status of the temporary workforce including a free nationwide vaccination programme for Measles, Mumps and Rubella and influenza.
Operating expenses before financing charges, depreciation, amortisation of intangibles and impairment of goodwill and intangible assets amounted to £8.3m (2008: £7.6m).
Following an annual review of the Group's intangible assets and goodwill, £864k has been charged to the statement of comprehensive income in respect of an impairment of goodwill as detailed in note 6.
Financing Costs
The Group fulfils its financing requirements by way of an invoice discounting facility, whereby it can borrow up to 80% of outstanding receivable balances less than 120 days old. Total bank charges in the period amounted to £89k (2008: £68k) and interest payable on the invoice discounting facility borrowings totalled £92k (2008: £176k).
Loss before tax
The Group made a loss before tax of £1,270k (2008: £7,214k).
Taxation
The total taxation charge for the year is £27k (2008: Credit £132k). £22k relates to an under provision for recoverable tax in previous years. £49k is the deferred tax charge for the year (2008: Credit £67k). The charge relating to the loss for the year is £nil (2008: £nil).
Loss Per Share
Basic loss per share amounted to 1.38 pence (2008: 8.08 pence).
Dividend
The Directors do not recommend the payment of a dividend on ordinary shares at this time (2008: £nil).
Cashflow and borrowings
Closing net borrowings amounted to £2.1m (2008: £2.2m). Our financial year end coincides with the slowest point of the year both operationally and from a cash generation perspective as many of our clients curtail their operations over the Christmas period. In addition, our December holiday pay year end means that there is a significant cash outflow as temporary staff claim their rolled-up holiday pay entitlement. Further, the adverse weather conditions during December had a negative impact on year end trading and the associated cashflows. Year end trade debtor days were 45 days (2008: 48 days).
Trade Payables
Trade payables and payroll liabilities of the Group amounted to £2.9m (2008: £2.9m). The Company had no trade payables at the year end. It is the Group's practice to agree credit terms with all suppliers and to pay all approved invoices within these credit terms.
Treasury Policy and Financial Risk Management
The Group manages its cash and debt position in order to minimise interest costs. The current level of borrowings mean that the Board believes that it is unnecessary to have an interest rate hedging policy.
The Group's financial instruments comprise invoice discounting facilities, cash and other items arising from operating activities such as trade receivables and trade payables. The main purpose of these financial instruments is to provide finance for the Group's operations.
The principal financial risks of the Group are identified as follows:
Banking covenants
The Group is committed to maintaining the key financial indicators as set out in the covenants relating to the invoice discounting facility. The Group continues to trade within its existing bank facilities and remains in compliance with its banking covenants. During the previous year, at the request of our bankers, Executive Chairman Tom Charlton gave a personal guarantee to support the Company's invoice discounting facility. This guarantee was released on the 12th June 2009.
Credit Risk Management
It is Group policy to mitigate credit risk arising through client debt by undertaking credit checks on all new private clients prior to commencement of trading. Further, the application of rigorous credit control procedures highlights potentially difficult debt at an early stage so that remedial action can be taken.
Charitable and Political Donations
The Group made no charitable or political donations in the year (2008: £nil).
David Hope
Chief Operating Officer and Finance Director
26th April 2010
Group Statement of Comprehensive Income
for the 52 weeks ended 3rd January 2010
|
|
|
|
52
weeks to 03/01/10
|
52
weeks to
04/01/09
|
|
|
|
Notes
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
3
|
40,201
|
38,116
|
|
Cost of sales
|
|
|
(31,916)
|
(30,848)
|
|
|
|
|
|
|
|
Gross profit
|
|
|
8,285
|
7,268
|
|
|
|
|
|
|
|
Marketing and sales
|
|
|
(4,743)
|
(2,670)
|
|
Administrative expenses
|
|
|
(4,052)
|
(5,563)
|
|
Impairment of goodwill and intangible assets
|
|
|
(864)
|
(6,009)
|
|
Negative goodwill
|
|
|
285
|
-
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(1,089)
|
(6,974)
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
-
|
4
|
|
|
|
|
|
|
|
Finance expense
|
|
|
(181)
|
(244)
|
|
|
|
|
|
|
|
Loss before taxation
|
|
|
(1,270)
|
(7,214)
|
|
|
|
|
|
|
|
Tax (expense)/credit
|
|
4
|
(27)
|
132
|
|
|
|
|
|
|
|
Loss for the period
|
|
|
(1,297)
|
(7,082)
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
-
|
-
|
|
|
|
|
|
|
|
Total comprehensive loss for the period
|
|
|
(1,297)
|
(7,082)
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the company
|
|
|
(1,249)
|
(7,082)
|
|
Minority interest
|
|
|
(48)
|
-
|
|
|
|
|
(1,297)
|
(7,082)
|
|
|
|
|
|
|
|
Analysis:
|
|
|
|
|
|
EBITDA
|
|
|
1
|
(362)
|
|
Depreciation of property, plant and equipment
|
|
|
(289)
|
(317)
|
|
Amortisation of intangible assets
|
|
|
(222)
|
(286)
|
|
Impairment of goodwill and intangible assets
|
|
|
(864)
|
(6,009)
|
|
Negative goodwill
|
|
|
285
|
-
|
|
Operating loss
|
|
|
(1,089)
|
(6,974)
|
|
|
|
|
|
|
|
Loss per 10p share
|
|
|
|
|
|
Basic
|
|
5
|
(1.38p)
|
(8.08p)
|
|
Diluted
|
|
5
|
(1.38p)
|
(8.08p)
|
|
|
|
|
|
|
|
|
|
|
|
|
The results shown above relate entirely to continuing and acquired operations.
Group and Company Statements of Financial Position
As at 3rd January 2010
|
|
|
|
|
Group
|
Company
|
|
|
|
|
|
03/01/10
|
04/01/09
|
03/01/10
|
04/01/09
|
|
|
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
|
Assets
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
6
|
4,552
|
5,416
|
-
|
-
|
|
Intangible assets
|
|
6
|
3,100
|
2,801
|
-
|
-
|
|
Property, plant and equipment
|
|
7
|
541
|
533
|
-
|
-
|
|
Deferred income tax assets
|
|
|
-
|
49
|
-
|
-
|
|
Investments in subsidiaries
|
|
|
-
|
-
|
14,893
|
15,242
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
8,193
|
8,799
|
14,893
|
15,242
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
14
|
-
|
-
|
-
|
|
Trade and other receivables
|
|
|
5,810
|
5,820
|
21
|
1
|
|
Cash and cash equivalents
|
|
|
114
|
84
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
5,938
|
5,904
|
21
|
1
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
14,131
|
14,703
|
14,914
|
15,243
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Capital and reserves attributable to equity
holders of the company
|
|
|
|
|
|
Share capital
|
|
|
|
9,263
|
8,763
|
9,263
|
8,763
|
|
Share premium
|
|
|
|
7,408
|
7,408
|
7,408
|
7,408
|
|
Share payment reserve
|
|
|
-
|
11
|
-
|
11
|
|
Retained losses
|
|
|
(9,070)
|
(7,532)
|
(7,391)
|
(6,426)
|
|
|
|
|
|
7,601
|
8,650
|
9,280
|
9,756
|
|
Minority interest in equity
|
|
|
|
(48)
|
-
|
-
|
-
|
|
Total equity
|
|
|
7,553
|
8,650
|
9,280
|
9,756
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
4,312
|
3,654
|
5,634
|
5,487
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
- Borrowings - loans
|
|
|
|
2,234
|
2,275
|
-
|
-
|
|
Provision for liabilities
|
|
|
|
32
|
124
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
6,578
|
6,053
|
5,634
|
5,487
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
6,578
|
6,053
|
5,634
|
5,487
|
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
|
14,131
|
14,703
|
14,914
|
15,243
|
Group and Company Statements of Changes in Equity
for the 52 weeks ended 3rd January 2010
|
|
|
|
|
|
|
|
|
|
Group
|
Share
|
Share
|
Share
|
Retained
|
Total
|
Minority
|
Total
|
|
52 weeks to 4th January 2009
|
capital
£000
|
premium
£000
|
payment reserve
£000
|
losses
£000
|
£000
|
Interest
£000
|
equity
£000
|
|
Balance at 7th January 2008
|
8,763
|
7,408
|
11
|
(450)
|
15,732
|
-
|
15,732
|
|
Total comprehensive loss for the year
|
-
|
-
|
-
|
(7,082)
|
(7,082)
|
-
|
(7,082)
|
|
Balance at 4th January 2009
|
8,763
|
7,408
|
11
|
(7,532)
|
8,650
|
-
|
8,650
|
|
|
|
|
|
|
|
|
|
|
52 weeks to 3rd January 2010
|
|
|
|
|
|
|
|
|
Balance at 5th January 2009
|
8,763
|
7,408
|
11
|
(7,532)
|
8,650
|
-
|
8,650
|
|
Shares issued during the period (note 8)
|
200
|
-
|
-
|
-
|
200
|
-
|
200
|
|
Reserve transfer in respect of shares issued at below par value (note 8)
|
300
|
-
|
-
|
(300)
|
-
|
-
|
-
|
|
Share payment reserve transfer
|
-
|
-
|
(11)
|
11
|
-
|
-
|
-
|
|
Transactions with owners
|
9,263
|
7,408
|
-
|
(7,821)
|
8,850
|
-
|
8,850
|
|
Total comprehensive loss for the year
|
-
|
-
|
-
|
(1,249)
|
(1,249)
|
(48)
|
(1,297)
|
|
Balance at 3rd January 2010
|
9,263
|
7,408
|
-
|
(9,070)
|
7,601
|
(48)
|
7,553
|
|
|
|
|
|
|
|
|
|
|
Company
|
Share
|
Share
|
Share
|
Retained
|
Total
|
Minority
|
Total
|
|
52 weeks to 4th January 2009
|
capital
£000
|
premium
£000
|
payment reserve
£000
|
losses
£000
|
£000
|
Interest
£000
|
equity
£000
|
|
Balance at 7th January 2008
|
8,763
|
7,408
|
11
|
(937)
|
15,245
|
-
|
15,245
|
|
Total comprehensive loss for the year
|
-
|
-
|
-
|
(5,489)
|
(5,489)
|
-
|
(5,489)
|
|
Balance at 4th January 2009
|
8,763
|
7,408
|
11
|
(6,426)
|
9,756
|
-
|
9,756
|
|
|
|
|
|
|
|
|
|
|
52 weeks to 3rd January 2010
|
|
|
|
|
|
|
|
|
Balance at 5th January 2009
|
8,763
|
7,408
|
11
|
(6,426)
|
9,756
|
-
|
9,756
|
|
Shares issued during the period (note 8)
|
500
|
-
|
-
|
-
|
500
|
-
|
500
|
|
Share payment reserve transfer
|
-
|
-
|
(11)
|
11
|
-
|
-
|
-
|
|
Transactions with owners
|
9,263
|
7,408
|
-
|
(6,415)
|
10,256
|
-
|
10,256
|
|
Total comprehensive loss for the year
|
-
|
-
|
-
|
(976)
|
(976)
|
|
(976)
|
|
Balance at 3rd January 2010
|
9,263
|
7,408
|
-
|
(7,391)
|
9,280
|
-
|
9,280
|
Group Statement of Cash Flows
for the 52 weeks ended 3rd January 2010
|
|
|
|
|
Group
|
|
|
|
|
|
52
weeks to 03/01/10
|
52
weeks to
04/01/09
|
|
|
|
|
|
£000
|
£000
|
|
Operating activities
|
|
|
|
|
|
|
Cash generated from operations (note 9)
|
|
511
|
326
|
|
Interest paid
|
|
|
|
(181)
|
(244)
|
|
Interest received
|
-
|
4
|
|
Income taxes paid
|
67
|
-
|
|
Net cash generated from operating activities
|
397
|
86
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Purchase of intangible assets
|
(13)
|
(2)
|
|
Purchase of tangible assets
|
(298)
|
(365)
|
|
Purchase of subsidiary undertakings
|
(15)
|
-
|
|
Net cash used in investing activities
|
(326)
|
(367)
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
(Decrease)/increase in loans from banks
|
(41)
|
255
|
|
Net cash (used in)/generated from financing activities
|
(41)
|
255
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
30
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of the period
|
84
|
110
|
|
Net increase/(decrease) in cash and cash equivalents
|
30
|
(26)
|
|
Cash and cash equivalents at end of the period
|
114
|
84
|
Company
The Company does not hold cash and consequently has not presented a statement of cash flows.
Notes to the Financial Information
1 Corporate Information
Pinnacle Staffing Group plc is a limited liability company incorporated and domiciled within the United Kingdom whose shares are publicly traded. The consolidated preliminary results for the Company as at and for the year ended 3rd January 2010 comprise the company and its subsidiaries ("the Group").
The consolidated preliminary results for the Group for the year ended 3rd January 2010 were approved by the directors on 26thApril 2010.
2 Basis of preparation and accounting policies
Basis of preparation
These consolidated preliminary results have been prepared in accordance with the recognition and measurement criteria of IFRS. They do not include all of the financial information included in the Group's annual report and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 3rd January 2010.
Nature of the financial information
The financial information set out above does not constitute the Company's statutory accounts for the year ended 3rd January 2010 and for the year ended 4th January 2009, but is derived from those accounts. Statutory accounts will be delivered to the Registrar of companies following the Company's annual general meeting. The auditors have agreed to the issue of these results and expect to issue an unqualified audit report on the 2009 accounts following formal completion of the audit.
Significant accounting policies
The accounting policies applied by the Group in these consolidated preliminary results are the same as those applied by the Group in the consolidated financial statements contained in the annual report and accounts.
3 Segmental reporting
Operations are conducted and managed through three segments - Nursing, Medical Services and Doctors, with segmental results reported on this basis. The Doctors business commenced trading in 2009. Costs have been allocated on a specific basis where possible, and certain central costs allocated on a reasonable and consistent basis.
The UK was the origin and destination of all of the Group's material revenue in 2009. All revenue is derived from external customers. All of the Group's material operating profits were earned in the UK, and all of the Group's material operating assets and net assets were located in the UK, in 2009.
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
Revenue by business segment
|
|
|
|
|
Nursing
|
|
|
31,417
|
31,497
|
|
Medical Services
|
|
|
3,660
|
6,619
|
|
Doctors
|
|
|
5,124
|
-
|
|
|
|
|
|
|
|
|
Total
|
|
|
40,201
|
38,116
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss)
|
Operating profit/(loss)
|
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
EBITDA by business segment
|
|
|
|
|
Nursing
|
|
404
|
(130)
|
|
Medical Services
|
|
140
|
(232)
|
|
Doctors
|
|
(543)
|
-
|
|
|
|
|
|
|
Total EBITDA
|
|
1
|
(362)
|
|
|
|
|
|
|
Depreciation
|
|
(289)
|
(317)
|
|
Amortisation of intangible assets
|
|
(222)
|
(286)
|
|
Impairment of goodwill and intangible assets
|
|
(864)
|
(6,009)
|
|
Negative goodwill
|
|
285
|
-
|
|
Total operating loss
|
|
(1,089)
|
(6,974)
|
|
|
|
|
|
|
Operating loss by business segment
|
|
|
|
|
Nursing
|
|
|
(91)
|
(5,733)
|
|
Medical Services
|
|
|
(432)
|
(1,241)
|
|
Doctors
|
|
|
(566)
|
-
|
|
|
|
|
|
|
|
|
Total operating loss
|
(1,089)
|
(6,974)
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
-
|
4
|
|
|
|
|
|
|
|
|
Finance expense
|
|
|
(181)
|
(244)
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(1,270)
|
(7,214)
|
|
Tax (expense)/credit
|
|
|
(27)
|
132
|
|
|
|
|
|
|
|
|
Loss for the period
|
|
(1,297)
|
(7,082)
|
|
|
|
|
|
|
|
Central costs have been allocated across the business segments on the basis of activity and on a consistent and reasonable basis.
The segment assets and liabilities at 3rd January 2010 and capital expenditure, depreciation, amortisation and impairment for the period then ended are as follows:
|
|
|
|
Segment
|
Segment
|
Net
|
|
|
|
|
assets
|
liabilities
|
assets
|
|
|
|
|
2009
|
2009
|
2009
|
|
|
|
|
£000
|
£000
|
£000
|
|
Analysis of operating assets and liabilities by business segment
|
|
Nursing
|
|
|
7,431
|
(5,140)
|
2,291
|
|
Medical Services
|
|
917
|
(593)
|
324
|
|
Doctors
|
|
1,231
|
(845)
|
386
|
|
|
|
|
|
|
|
|
Total operating assets/(liabilities) at
3rd January 2010
|
9,579
|
(6,578)
|
3,001
|
|
Goodwill
|
|
|
4,552
|
|
Net assets, including goodwill, at 3rd January 2010
|
|
|
7,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditure
|
Depreciation
|
Amortisation of intangibles
|
Impairment of goodwill
|
|
|
|
2009
|
2009
|
2009
|
2009
|
|
|
|
£000
|
£000
|
£000
|
£000
|
|
Analysis of other items by business segments
|
|
|
|
Nursing
|
|
149
|
202
|
176
|
328
|
|
Medical Services
|
-
|
26
|
37
|
536
|
|
Doctors
|
|
162
|
61
|
9
|
-
|
|
|
|
|
|
|
|
|
Total
|
|
311
|
289
|
222
|
864
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
Segment
|
Net
|
|
|
|
|
assets
|
liabilities
|
assets
|
|
|
|
|
2008
|
2008
|
2008
|
|
|
|
|
£000
|
£000
|
£000
|
|
Analysis of operating assets and liabilities by business segment
|
|
Nursing
|
|
|
6,263
|
(4,997)
|
1,266
|
|
Medical Services
|
|
3,024
|
(1,056)
|
1,968
|
|
|
|
|
|
|
|
|
Total operating assets/(liabilities) at 4th January 2009
|
9,287
|
(6,053)
|
3,234
|
|
Goodwill
|
|
|
5,416
|
|
Net assets, including goodwill, at 4th January 2009
|
|
|
8,650
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditure
|
Depreciation
|
Amortisation of intangibles
|
Impairment of goodwill and intangibles
|
|
|
|
2008
|
2008
|
2008
|
2008
|
|
|
|
£000
|
£000
|
£000
|
£000
|
|
Analysis of other items by business segments
|
|
|
|
Nursing
|
|
312
|
267
|
243
|
5,108
|
|
Medical Services
|
55
|
50
|
43
|
901
|
|
|
|
|
|
|
|
|
Total
|
|
367
|
317
|
286
|
6,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group derives approximately 64% (2008: 58%) of revenue from the NHS in England, Scotland, Wales and Ireland. For 2009 this was £26m (2008: £22m) and was spread across a large number of NHS Organisations, including Acute, Mental Health and Primary Care Trusts. Revenue from the NHS is included within all business segments.
4 Taxation
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
UK Corporation tax on taxable profit/(loss) for the period
|
-
|
-
|
|
Under provision for recoverable tax in previous years
|
(22)
|
(65)
|
|
|
|
|
|
|
|
|
Current tax credit
|
|
(22)
|
(65)
|
|
|
|
|
|
Deferred tax charge/(credit) for the period
|
49
|
(67)
|
|
|
|
|
|
|
|
|
Deferred tax charge/(credit)
|
49
|
(67)
|
|
|
|
|
|
|
|
|
Total tax expense/(credit) for the period
|
|
27
|
(132)
|
|
|
|
|
|
|
|
|
The effective tax rate for the period is 0% of corporation tax for the UK (2008: 0%)
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
Loss at the standard rate of corporation tax at 21% (2008: 20%)
|
(267)
|
(1,443)
|
|
Expenses not deductible
|
177
|
1,272
|
|
Unrelieved current year tax losses
|
95
|
171
|
|
Timing differences in respect of trading losses
|
(3)
|
-
|
|
Other short term timing differences
|
(2)
|
-
|
|
Under provision in respect of prior period
|
(22)
|
(65)
|
|
Timing differences in respect of accelerated capital allowances
|
49
|
(67)
|
|
|
|
|
|
|
|
|
Total tax expense/(credit) for the period
|
27
|
(132)
|
At the balance sheet date, the Group had unused tax losses of £1,130,326 (2008: £673,158) available for offset against suitable future profits. A deferred tax asset has not been recognised in respect of such losses due to the uncertainty of future profit streams. The contingent deferred tax asset is estimated to be £341,677 (2008: £188,424)
5 Loss per share
Basic loss per 10p share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period.
For diluted loss per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary shares. The Group does not have a category of potentially dilutive ordinary shares.
|
|
|
|
|
|
|
|
|
|
|
2009
Earnings attributable to equity shareholders
|
2009
Weighted
average
number of
|
2009
Earnings
per share
|
|
|
|
|
£000
|
10p shares
|
pence
|
|
|
|
|
|
|
|
|
Loss per share
|
|
(1,249)
|
90,764,938
|
(1.38)
|
|
Diluted loss per share
|
|
(1,249)
|
90,764,938
|
(1.38)
|
|
|
|
|
|
|
|
|
|
2008
Earnings attributable to equity shareholders
|
2008
Weighted
average
number of
|
2008
Earnings
per share
|
|
|
|
£000
|
10p shares
|
pence
|
|
|
|
|
|
|
|
Loss per share
|
|
(7,082)
|
87,633,070
|
(8.08)
|
|
Diluted loss per share
|
|
(7,082)
|
87,633,070
|
(8.08)
|
6 Goodwill and intangible assets
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
2009
|
|
Goodwill
|
|
|
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 5th January 2009
|
|
|
5,416
|
|
Impairment charge
|
|
|
|
(864)
|
|
|
|
|
|
|
|
|
At 3rd January 2010
|
|
|
|
4,552
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
2008
|
|
Goodwill
|
|
|
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 7th January 2008
|
|
|
9,868
|
|
Impairment charge
|
|
|
|
(4,452)
|
|
|
|
|
|
|
|
|
At 4th January 2009
|
|
|
|
5,416
|
Group goodwill derives from the acquisition of businesses and subsidiary undertakings in 2006. In 2006, the directors specifically evaluated the carrying values of goodwill. As a result of the impairment testing as at 3rd January 2010, the value of the goodwill has been impaired by £864k to more accurately reflect a recoverable carrying amount.
The carrying amounts of goodwill by business segment are as follows:
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
Goodwill by business segment/cash generating unit (CGU)
|
|
|
|
Nursing
|
|
|
2,606
|
4,012
|
|
Medical services
|
|
|
1,946
|
1,404
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,552
|
5,416
|
|
Intangible assets
|
Development Costs
2009
£000
|
Temporary Staff Databases
2009
£000
|
Customer Contracts
2009
£000
|
Compliance
database
2009
£000
|
Total
2009
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 5th January 2009
|
|
82
|
81
|
5,051
|
-
|
5,214
|
|
Additions
|
13
|
-
|
-
|
-
|
13
|
|
Acquired with subsidiary (note 8)
|
-
|
-
|
-
|
508
|
508
|
|
|
|
|
|
|
|
|
At 3rd January 2010
|
95
|
81
|
5,051
|
508
|
5,735
|
|
|
|
|
|
|
|
|
Amortisation and impairment
|
|
|
|
At 5th January 2009
|
80
|
12
|
2,321
|
-
|
2,413
|
|
Amortisation charge
|
-
|
4
|
154
|
64
|
222
|
|
|
|
|
|
|
|
|
At 3rd January 2010
|
80
|
16
|
2,475
|
64
|
2,635
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
|
|
|
At 3rd January 2010
|
15
|
65
|
2,576
|
444
|
3,100
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
Development
Costs
2008
£000
|
Temporary Staff Databases
2008
£000
|
Customer Contracts
2008
£000
|
Total
2008
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 7th January 2008
|
80
|
81
|
5,051
|
5,212
|
|
Additions
|
2
|
-
|
-
|
2
|
|
|
|
|
|
|
|
|
At 4th January 2009
|
82
|
81
|
5,051
|
5,214
|
|
|
|
|
|
|
|
|
Amortisation and impairment
|
|
|
|
At 7th January 2008
|
-
|
8
|
562
|
570
|
|
Amortisation charge
|
-
|
4
|
282
|
286
|
|
Impairment charge
|
80
|
-
|
1,477
|
1,557
|
|
|
|
|
|
|
|
|
At 4th January 2009
|
80
|
12
|
2,321
|
2,413
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
|
|
|
At 4th January 2009
|
2
|
69
|
2,730
|
2,801
|
Intangible assets represent the capitalised value of customer contracts and staff databases acquired via business combinations (acquisitions of businesses and subsidiary undertakings). Such contracts and databases are capitalised at fair value and amortised over a period equal to the remaining useful economic life. During the current year the estimated useful life of the customer contracts was aligned with the estimated useful life of the staff databases, which is twenty years. The effect of this change resulted in a £128k reduction in the current year amortisation charge. Amortisation is included in administrative expenses.
The Group carries out reviews of its intangible assets on an annual basis to determine whether events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Goodwill is tested annually for impairment, by CGU, and other intangible assets are tested for impairment if an indication of impairment exists. For the impairment testing, the recoverable amount of the asset has been estimated based on its value in use; the resultant loss (the difference between the carrying amount and the recoverable amount) is recorded as a charge to the Group statement of comprehensive income. The calculation of replacement costs is based on the current value of overhead costs attributable to database management. The value in use is calculated as the present value of the estimated future pre -tax cash flows expected to result from the use of assets in the business being evaluated. In order to determine the present value of estimated future cash flows, the Group uses a discount rate of 11% based on its estimated weighted average cost of capital. Estimated future cash flows used in the impairment calculations represent management's best view of likely market conditions including selling prices, volumes and employment costs over a period of 5 years. Beyond this, the UK long-term growth rate of 2% has been assumed. Actual cash flows may differ significantly from these estimates due to the effect of changes in market conditions or to subsequent decisions on the activities of the business. These differences may have a material impact on the asset values, impairments and amortisation expense reported in future periods.
The compliance database refers to the Group owning the rights to the database management software which was acquired during the acquisition of The Compliance Company (GB) Ltd (see note 8). The database management software specifically manages and monitors the compliance status of healthcare staff in line with industry requirements. The database is amortised over a period equal to the useful economic life, which is estimated to be five years.
7 Property, plant and equipment
|
|
|
|
|
Plant &
|
|
|
|
|
|
|
equipment,
|
|
|
|
|
|
Leasehold
|
fixtures &
|
Motor
|
|
|
|
|
|
improvements
|
fittings
|
vehicles
|
Total
|
|
|
|
|
2009
|
2009
|
2009
|
2009
|
|
|
|
|
£000
|
£000
|
£000
|
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 5th January 2009
|
108
|
983
|
-
|
1,091
|
|
Additions
|
20
|
259
|
19
|
298
|
|
Disposals
|
-
|
(1)
|
-
|
(1)
|
|
|
|
|
|
|
|
|
At 3rd January 2010
|
|
128
|
1,241
|
19
|
1,388
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
At 5th January 2009
|
18
|
540
|
-
|
558
|
|
Charge for the period
|
|
25
|
258
|
6
|
289
|
|
|
|
|
|
|
|
|
At 3rd January 2010
|
|
43
|
798
|
6
|
847
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
|
|
|
At 3rd January 2010
|
|
85
|
443
|
13
|
541
|
|
|
|
|
|
Plant &
|
|
|
|
|
|
|
equipment,
|
|
|
|
|
|
Leasehold
|
fixtures &
|
|
|
|
|
|
improvements
|
fittings
|
Total
|
|
|
|
|
2008
|
2008
|
2008
|
|
|
|
|
£000
|
£000
|
£000
|
|
Group
|
|
|
|
|
|
Cost
|
|
|
|
|
|
|
At 7th January 2008
|
36
|
766
|
802
|
|
Additions
|
72
|
293
|
365
|
|
Disposals
|
|
-
|
(76)
|
(76)
|
|
|
|
|
|
|
|
|
At 4th January 2009
|
|
108
|
983
|
1,091
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
At 7th January 2008
|
-
|
311
|
311
|
|
Eliminated on disposals
|
|
-
|
(70)
|
(70)
|
|
Charge for the period
|
|
18
|
299
|
317
|
|
|
|
|
|
|
|
|
At 4th January 2009
|
|
18
|
540
|
558
|
|
|
|
|
|
|
|
|
Net book amount
|
|
|
|
|
|
At 4th January 2009
|
|
90
|
443
|
533
|
|
|
|
|
|
|
|
8 Business combinations
|
On 20th May 2009, the Group acquired the entire share capital of The Compliance Company (GB) Limited, a compliance software developer. The vendors were David Hope (a director of the Company) and his wife.
|
|
Details of net assets acquired and goodwill arising are as follows:
|
|
|
£000
|
|
Cost of acquisition:
|
|
Fair value of shares issued as consideration
|
200
|
|
Expenses of acquisition - paid in cash
|
|
15
|
|
|
|
|
|
Total cost of acquisition
|
|
215
|
|
|
|
|
|
The book value of the net assets immediately prior to the acquisition was £1,657.
The fair values of assets and liabilities as of 20th May 2009 acquired are as follows:
|
|
Intangible assets (note 6)
|
|
508
|
|
Trade and other payables
|
|
(8)
|
|
Fair value of net assets acquired
|
|
500
|
|
Negative goodwill
|
|
(285)
|
|
Total cost of acquisition
|
|
215
|
|
|
|
|
|
The transaction generated negative goodwill of £285k, which has been recognised as a credit in the Group's statement of comprehensive income in accordance with requirements of IFRS. 5,000,000 ordinary 10p shares were issued as consideration on 20th May 2009 when the market value was 4p per share, giving a fair value of £200,000. A reserves transfer of £300,000 between share capital and retained losses has been made to adjust for the shares being issued at below par value.
|
|
|
|
|
|
|
|
|
|
9 Notes to the cash flow statements
|
|
|
Group
|
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
|
£000
|
£000
|
|
|
|
|
Reconciliation of loss to cash
generated from operations
|
|
|
|
Operating loss
|
(1,089)
|
(6,974)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
|
Depreciation of property, plant and equipment
|
289
|
317
|
|
|
|
|
Loss on sale of property, plant and equipment
|
1
|
6
|
|
|
|
|
Impairment of goodwill and intangibles
|
864
|
6,009
|
|
|
|
|
Amortisation of intangibles
|
222
|
286
|
|
|
|
|
Negative goodwill
|
(285)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in working capital:
|
|
|
|
|
|
|
(Decrease)/increase in provisions
|
(92)
|
25
|
|
|
|
|
(Increase)/decrease in trade and other receivables
|
(37)
|
740
|
|
|
|
|
Increase/(decrease) in trade and other payables
|
652
|
(83)
|
|
|
|
|
Increase in inventories
|
(14)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations
|
511
|
326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
|
|
|
|
2009
|
2008
|
|
|
|
|
|
£000
|
£000
|
|
|
|
Reconciliation of net cash flow to
movement in net debt
|
|
|
Increase/(decrease) in cash and cash equivalents
|
30
|
(26)
|
|
|
|
Decrease/(increase) in loans from banks
|
41
|
(255)
|
|
|
|
|
|
71
|
(281)
|
|
|
|
Net debt at beginning of the period
|
(2,191)
|
(1,910)
|
|
|
|
|
|
|
|
|
|
|
Net debt at end of the period
|
(2,120)
|
(2,191)
|
|
|
|
|
|
|
|
|
|
|
|