Note	2015		2014
			£'000	£'000
Revenue	2, 3		16,647	14,442
Cost of sales			(6,425)	(6,115)
Net fee income			10,222	8,327
Administrative expenses			(8,792)	(7,300)
Operating profit	4		1,430	1,027
Finance income			6	20
Finance expense			-	(2)
Profit before taxation			1,436	1,045
Income tax expense	7		(310)	(203)
Profit for the year   Other comprehensive income   Exchange profit/(loss) on translating foreign operations			1,126         130	842       (111)
Other Comprehensive income for the year			130	(111)
Total comprehensive income for the year			1,256	731
Attributable to:
Equity shareholders of the parent			1,256	731
Earnings per share	9
Basic earnings per share			9.28p	7.10p
Diluted earnings per share			9.01p	6.83p

The above results relate to continuing operations

 

Consolidated Statement of Changes in Equity

For the year ended 31 March 2015

	Called up share capital	Capital Redemp- tion reserve	Treasury shares	Share premium account	Merger reserve	Share option reserve	Trans- lation reserve	Retained Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2013	1,207	9	(191)	7,109	173	97	423	5,256	14,083
Total comprehensive income for the year	-	-	-	-	-	-	(111)	842	731
Adjustment in respect of share schemes	-	-	-	-	-	23	-	23	46
Shares issued from treasury	-	-	53	-	-	-	-	-	53
Shares purchased for treasury	-	-	(5)	-	-	-	-	-	(5)
Dividend	-	-	-	-	-	-	-	(485)	(485)
At 31 March 2014	1,207	9	(143)	7,109	173	120	312	5,636	14,423
Total comprehensive income for the year	-	-	-	-	-	-	130	1,126	1,256
Capital reduction  (Note 17)	-	-	-	(1,800)	-	-	-	-	(1,800)
Adjustment  in respect of share schemes	-	-	-	-	-	92	-	38	130
Issues of ordinary shares	12	-	-	48	-	-	-	-	60
Shares issued from treasury	-	-	42	13	-	-	-	-	55
Shares purchased for treasury	-	-	(62)	-	-	-	-	-	(62)
Adjustment on share disposal	-	-	142	-	-	-	-	(142)	-
Dividend	-	-	-	-	-	-	-	(588)	(588)
At 31 March 2015	1,219	9	(21)	5,370	173	212	442	6,070	13,474

Consolidated Statement of Financial Position

 

 

		2015		2014
	Note	£'000		£'000
Assets
Non - current assets
Goodwill	11	9,769		9,769
Property, plant and equipment	10	316		328
		10,085		10,097
Current assets
Trade and other receivables	13	4,538		3,535
Cash at bank and in hand	21	1,009		2,963
		5,547		6,498
Total assets		15,632		16,595
Liabilities
Current liabilities
Financial liabilities	14	-		1
Trade and other payables	15	1,958		2,005
Current tax liabilities		184		151
		2,142		2,157
Non-current liabilities
Deferred tax liabilities	16	16		15
		16		15
Total liabilities		2,158		2,172
Net assets		13,474		14,423

 

   

 

                                                                                                                                   

		2015		2014
		Note	£'000		£'000
Capital and reserves attributable to the Company's equity holders
Called up share capital		17	1,219		1,207
Capital redemption reserve fund		18	9		9
Treasury shares		18	(21)		(143)
Share premium account		18	5,370		7,109
Merger reserve		18	173		173
Share option reserve		18	212		120
Translation reserve		18	442		312
Retained earnings		18	6,070		5,636
Total equity			13,474		14,423

 

 

Group Cash Flow Statement

 

				Group
				2015	2014
	Note			£'000	£'000
Cash generated from (used in) underlying operations	20			685	1,586
Income tax paid				(276)	(230)
Income tax received				-	60
Net cash from/(used by) operating activities				409	1,416
Cash flows from investing activities
Net interest received				6	18
Net purchase of property, plant and equipment				(156)	(180)
Dividend received				-	-
Net cash (used in)/from investing activities				(150)	(162)
Cash flows from financing activities
Capital reduction				(1,800)	-
Issue of ordinary share capital				72	-
Shares issued from treasury				42	(5)
Shares purchased for treasury				(62)	53
Dividend paid to shareholders				(588)	(485)
Net cash used in financing activities				(2,336)	(437)
Net (decrease)/ increase in cash and cash equivalents				(2,077)	817
Cash and cash equivalents at beginning of the year				2,962	2,256
Effect of foreign exchange rate changes				130	(111)
Cash and cash equivalents at the end of the year				1,009	2,962

 

1     Nature of Operations

 

Prime People Plc ('the Company') and its subsidiaries (together 'the Group') is an international recruitment services organisation with offices in the United Kingdom, the Middle East and the Asia Pacific region from which it serves an international client base. The Group offers both permanent and contract specialist recruitment consultancy for large and medium sized organisations.

 

The Company is a public limited Company which is quoted as an AIM Company and is incorporated and domiciled in the UK. The address of the registered office and the principal place of business is 2 Harewood Place, London W1S 1BX. The registered number of the Company is 1729887.

 

2     Summary of Significant Accounting Policies

 

Basis of Preparation

 

The financial statements of Prime People Plc consolidate the results of the Company and all its subsidiary undertakings. As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company has not been included as part of these financial statements. The amount of profit after tax and before dividends dealt with in the financial statements of the parent is £537,595 (2014: profit £501,331). The financial statements have been prepared on a going concern basis.

 

The consolidated financial statements of Prime People Plc have been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union and also comply with IFRIC interpretations and Company Law applicable to Companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention modified as necessary so as to include any items at fair value, as required by accounting standards. 

 

The consolidated financial statements for the year ended 31 March 2015 (including comparatives) are presented in GBP '000.

 

The accounting polices applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 March 2015 and are described below.

 

International Accounting Standards (IAS/IFRS) and Interpretations in issue but not yet approved

 

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the IASB but are not yet effective. These have not been adopted early by the Group and the initial assessment indicates that either they will not be relevant or will not have a material impact on the Group:

 

Standards

 

·     IFRS 14 Regulatory Deferral Accounts ( Issued January 2014, effective date 1 January 2016)

·     IFRS 15 Revenue from Contracts with Customers ( Issued May 2014, effective date 1 January 2017)

·     IFTS 9 Financial Instruments ( Issued July 2014, effective date 1 January 2018)

 

Amendments (Effective date for all amendments listed is 1 January 2016)

 

·     IFRS 11 Amendments: Accounting for Acquisitions of Interest in Joint Operations ( Issued May 2014)

·     IAS 16 and IAS 38 Amendments: Clarification of Acceptable Methods of Depreciation and Amortisation ( Issued May 2014)

 

International Accounting Standards (IAS/IFRS) and Interpretations in issue but not yet approved

(continued)

 

·     IAS 27 Amendment - Equity Method in Separate Financial Statements ( Issued August 2014)

·     Annual Improvements to IFRSs 2012 - 2014 Cycle ( Issued September 2014)

·     Amendments to IAS 1: Disclosure Initiative (Issued December 2014)

 

Consolidation

 

Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

 

Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill.

 

Inter-Company transactions and balances on transactions between Group companies are eliminated in preparing the consolidated financial statements.

 

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

 

Going Concern

 

The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of the financial statements and have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.

 

Revenue recognition

 

a)   Revenue

 

Revenue, which excludes value added tax ("VAT"), constitutes the value of services undertaken by the Group from its principal activities, which are recruitment consultancy and other ancillary services. These consist of:

 

-     Revenue from temporary placements, which represents amounts billed for the services of temporary staff, including the salary of these staff. This is recognised when the service has been provided;

 

-     Revenue from permanent placements, which is based on a percentage of the candidate's remuneration package and is derived from both retained assignments (income recognised on completion of defined stages of work) and non-retained assignments (income recognised at the date an offer is accepted by a candidate, a start date has been agreed but employment has not yet commenced). The latter includes revenue anticipated but not invoiced at the balance sheet date, which is correspondingly accrued on the balance sheet within prepayments and accrued income. A provision is made against accrued income based on past historical experience for possible cancellations of placements prior to, or shortly after, the commencement of employment; and

 

-     Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

 

b)   Cost of Sales

 

Cost of sales consists of the salary cost of temporary staff and costs incurred on behalf of clients, principally advertising costs.

 

c)   Net Fee Income

 

Net fee income represents revenue less cost of sales and consists of the total placement fees of permanent candidates, the margin earned on the placement of temporary candidates and the margin on advertising income.

 

d)   Foreign Currency Translation

 

(i)         Functional and Presentation Currency

 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Sterling, which is the Company's functional and presentation currency.

 

(ii)    Transactions and Balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of comprehensive income.

 

d)    Foreign Currency Translation (continued)

 

(iii) Group Companies

 

On consolidation the results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

 

·     assets and liabilities for each year end presented are translated at the closing rate of that year end;

 

·     income and expenses for each statement of comprehensive income are translated at average exchange rates; and

 

·     all resulting exchange differences are recognised in other comprehensive income.

 

e)   Intangible Assets

 

(i)         Goodwill

 

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in 'intangible assets'.

 

As permitted by the exception in IFRS1 'First time adoption of International Reporting Standards', the Group has elected not to apply IFRS3 'Business combinations' to goodwill arising on acquisition that occurred before the date of transition to IFRS.

 

Separately recognised goodwill is reviewed annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.

 

(ii)        Computer Software

 

Computer software acquired by the Group is stated at cost. These costs are amortised to write the cost off in equal annual instalments over three years.

 

f)    Property, Plant and Equipment

 

All property, plant and equipment are stated at historical cost less accumulated depreciation less provisions for impairment. Depreciation is provided on all property, plant and equipment using the straight-line method at rates calculated to write off the cost less estimated residual values over their estimated useful lives, as follows:

 

·     Leasehold improvements over the expected period of the lease.

·     Furniture, fittings and computer equipment 25% - 33%

·     Motor vehicles 33%

 

The gain or loss arising on disposal or retirement of an asset is determined by comparing the sales proceeds with the carrying amount of the asset and is recognised as income.

 

g)   Impairment of Assets

 

Assets that have an indefinite useful economic life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

 

h)   Taxation

 

The tax expense represents the sum of the current tax expense and deferred tax expense.

 

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantially enacted by the balance sheet date.

 

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

 

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

 

i)    Leased Assets and Obligations

 

All of the Group's leases are operating leases and the annual rentals are charged to profit and loss on a straight line basis over the lease term.

 

The benefit of rent free periods received for entering into a lease is spread evenly over the lease term.

 

j)    Pension Costs

 

On 1 July 2014, the Group automatically enrolled certain UK employees on NEST workplace pension, as required by law. The Group assesses the employees based on age and qualifying earning into three categories: Eligible jobholders, non-eligible jobholders and entitled workers. The contributions relate to staff who are eligible jobholders and have not 'opted out' of the scheme; and non- eligible jobholders and entitles workers who have 'opted in'.

 

The qualifying earnings include, but are not exhaustive of: salary, commission, bonuses, and statutory payments. The Group adopted the minimum legally required employer contribution rate of 1% of qualifying earnings and up to the maximum earning threshold for automatic enrolment for 2014-15, as set by the Pension Regulator.

 

Every year, the Department for Work and Pensions (DWP) reviews the earnings thresholds for automatic enrolment. Where there's a change, we will update this page with the new thresholds after DWP has announced them.

 

The changes take effect from the start of the next tax year following the changes on 6 April.

 

The pension costs charged to profit or loss represent the contributions payable by the Group during the year. Pension liabilities at the Balance Sheet date represent employer and employee pension contributions, that are payable to the pension provider by the 22nd date of each month.

 

k)   Segmental Reporting

 

IFRS8 requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Managing Director to allocate resources to the segment and to assess their performance.

 

l)    Financial instruments

 

Financial assets and liabilities are recognised in the Group's balance sheet when the Group becomes a party to the contractual provision of the instrument.

 

m)  Financial assets

 

The Group's financial assets comprise cash and various other receivable balances that arise from its operations. Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.  Loans and receivables are initially measured at fair value and subsequently at amortised cost using the effective interest rate method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

 

Financial assets are assessed for impairment at each balance sheet date, and are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

 

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account.  When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in the profit or loss account. If in a subsequent period the amount of the impairment loss decreases and the decreases can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit and loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

 

Cash and cash equivalents includes cash in hand and bank deposits that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Bank overdrafts are classified with current liabilities in the statement of financial position.

 

Financial liabilities and equity

 

Financial liabilities and equity instruments are initially measured at fair value and are classified according to the substance of the contractual arrangements entered into. Financial liabilities are subsequently measured at

amortised cost. The Group's financial liabilities comprise trade payables, borrowings, bank overdrafts and other payable balances that arise from its operations. They are classified as 'financial liabilities measured at amortised cost'.

 

n)   Share-Based Compensation

 

The Group operates equity-settled share-based compensation plans.

 

The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). At the balance sheet date the number of outstanding options is adjusted to reflect those options that have been granted during the year or have lapsed in the year.

 

o)   Dividend Distribution

 

A final dividend distribution to the Company's shareholders is recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders. Interim dividend distributions are recognised in the period in which they are approved and paid.

 

p)   Critical Accounting Estimates and Judgements

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates and judgements. It also requires management to exercise judgement in the process of applying the Company's accounting policies.

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described below:

 

Revenue Recognition

 

Revenue from permanent placements is recognised when a candidate formally accepts an offer of employment, a start date has been agreed, but employment has not commenced. A 'fall-through' provision is made by management, based on historical experience, for the proportion of those placements where the offer of employment is not taken up. Management have reviewed the past assumptions made with respect to the 'fall-through' provisions and consider that they remain reasonable. The fall through provision is estimated at 16.5 % of those offers where employment has yet to commence (2014: 21.9%). The Directors consider that a change in the range of possible outcomes, or sensitivity, would not have a material impact on the business.  

 

Goodwill Impairment

 

The Group's determination of whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill is allocated. This requires estimation of future cash flows and the selection of a suitable discount rate details of which are disclosed in note 11.

 

q)    Critical Accounting Estimates and Judgements (continued)

 

Trade Receivables

 

There is uncertainty regarding customers who may not be able to pay as their debts fall due.  In reviewing the appropriateness of the provisions in respect of recoverability of trade receivables, consideration has been given to the ageing of the debt and the potential likelihood of default, taking into account current economic conditions. Details of the total amount of receivables past due and the movement in allowance for doubtful debts are disclosed in note 13.

 

3    Segment Reporting

 

a)     Revenue and Net Fee Income, by Geographical Region

 

		Revenue			Net fee income
		2015		2014	2015		2014
		£'000		£'000	£'000		£'000
UK		12,957		11,432	6,532		5,317
Asia		2,992		2,230	2,992		2,230
Rest of World		698		780	698		780
		16,647		14,442	10,222		8,327

 

All revenues disclosed by the Group are derived from external customers and are for the provision of recruitment services.  The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 2.  Segment profit before taxation represents the profit earned by each segment after allocations of central administration costs.

 

b)     Revenue and Net Fee Income, by Classification

 

	Revenue		Net fee income
	2015	2014	2015	2014
	£'000	£'000	£'000	£'000
Permanent
-UK -Asia -Rest of World	5,760 2,992 698	4,548 2,230 780	5,747 2,992 698	4,533 2,230 780
Temporary (UK)	7,197	6,884	785	784
Total	16,647	14,442	10,222	8,327

 

c)     Profit before Taxation by Geographical Region

 

	2015		2014
	£'000		£'000
UK	993		719
Asia	370		381
Rest of World	67		(73)
Operating Profit	1,430		1,027
Net finance income	6		18
Profit before taxation	1,436		1,045

 

Operating profit is the measure of profitability regularly reviewed by the Board, which collectively acts as the Chief Operating Decision Maker. Consequently, no segmental analysis of interest or tax expenses are provided.

Segment operating profit is the profit earned by each operating unit and includes inter segment revenues totalling £0.64m (2014 £0.37m) for the UK, and charges of £0.53m (2014 £0.24m) for Asia and £0.11m (2014 £0.13m) for the rest of the world.

 

d)     Segment Assets and Liabilities by Geographical Region

 

		Total non-current assets		Total liabilities
		2015	2014	2015	2014
		£'000	£'000	£'000	£'000
UK		10,023	10,062	1,309	1,380
Asia		50	7	687	656
Rest of World		12	28	162	136
Total		10,085	10,097	2,158	2,172

 

The analysis above is of the carrying amount of reportable segment assets, liabilities and non-current assets.  Segment assets and liabilities include items directly attributable to a segment and include income tax assets and liabilities.  Non-current asset include property, plant and equipment and computer software.

 

 

4  Profit on ordinary activities before taxation

 

	2015	2014
	£'000	£'000
Profit for the year  is arrived at after charging:
Depreciation            - owned assets	170	116
Operating lease rentals           - land and buildings	471	353
- other operating leases	-	2
Loss/(profit) on disposal of fixed assets	1	(2)
Exchange rate loss	1	25
The analysis of auditors remuneration is as follows:
Audit of company Audit of subsidiaries	12 31	12 30
Total audit fees	43	42
Tax compliance services (i.e. related to assistance with corporate tax returns)	2	2
Total fees	45	44

 

 

5   Directors' emoluments

 

	2015	2014
	£'000	£'000
Emoluments for qualifying services	503	494
	503	494
Highest paid Director:
Emoluments for qualifying services	230	274

 

 

6  Employees

 

Group	2015		2014
	Number		Number
The average monthly number of employees of the Group during the year, including Directors, was as follows:
Consultants	84		63
Management and administration	25		22
Temporary staff	3		6
	112		91

 

Staff costs for all employees, including Directors, but excluding temporary staff placed with clients are as follows and have been included in Administration expenses in the consolidated statement of comprehensive income:

 

Group	2015	2014
	£'000	£'000
Wages and salaries	5,744	4,677
Social security costs	500	388
Pension contributions	12	-
Share option charge	130	46
	6,386	5,111

 

Remuneration of key management	2015	2014
	£'000	£'000
Short term employee benefits (excluding social security costs)	765	816
Share based payments	24	11
	789	827

 

Key management includes executive Directors and senior divisional managers.

7  Taxation on Profits on Ordinary Activities

 

	2015	2014
	£'000	£'000
a)   Analysis of tax charge in the year
Current tax
UK Corporation tax	278	123
UK tax over provided in previous years Foreign tax	(21) 52	(23) 60
Total current tax	309	160
Deferred tax
Origination and reversal of temporary differences	1	43
Total charge on profit for the year	310	203
UK corporation tax is calculated at 21% (2014: 23%) of the estimated assessable profits for the year.   Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.   b)   The charge for the year can be reconciled to the profit per the consolidated statement of comprehensive income as follows:
	2015 £'000	2014 £'000
Profit before taxation	1,436	1,045
Tax at UK corporation tax rate of 21% (2014: 23%) on profit on ordinary activities	302	247
Effects of:
Expenses not deductible for tax purposes	16	7
Capital allowances for the period less than depreciation	2	(20)
Tax losses not (utilised)/utilised	19	(45)
Tax rate differences	(20)	(21)
Temporary differences recognised	11	15
Overprovision in prior years	(21)	(23)
Total current tax	309	160
Deferred Tax
Origination and reversal of temporary differences	1	43
Tax charge for the year	310	203

 

8      Dividends

       

	2015	2014
	£'000	£'000
Final dividend for 2014: 3.09p per share (2013: 3.09p per share)	376	366
Interim dividend for 2015: 1.75p per share (2014: 1.00p per share)	212	119
	588	485

 

The final dividend in relation to 2014 was recommended on 28 May 2014 but was not recognised as a liability in the year ended 31 March 2014.

 

An interim dividend of 1.75p (2014: 1.0p) was paid on 28 November 2014 to shareholders on the register at the close of business on 21 November 2014. The interim dividend was approved by the Board on 7 November 2014.

 

A special second interim dividend of 4p was paid subsequent to the end of the year to shareholders on the register at the close of business on 27 March 2015. The special second interim dividend was approved by the Board on 17 March 2015 and was paid on 2 April 2015. As interim dividends are recognised only when paid the special second interim dividend has not been included in these financial statements.

 

A final dividend of 3.09p (2014: 3.09p) is proposed, taking the total dividend for the year to 8.84p (2014: 4.09p). The proposed dividend will be paid on 26 June 2015 to shareholders on the register on 12 June 2015 subject to approval at the AGM.

 

9      Earnings per share

 

Earnings per share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

 

Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options assuming dilution through conversion of all existing options.

 

Earnings and weighted average number of shares from continuing operations used in the calculations are shown below.

 

	2015	2014
	£'000	£'000
Profit for the year and earnings used in basic and diluted earnings per share	1,126	842
	Number	Number
Weighted average number of shares used for basic earnings per share	12,131,633	11,863,698
Dilutive effect of share options	362,117	462,126
Diluted weighted average number of shares         used for diluted earnings per share	12,493,750	12,325,824
	Pence	Pence
Basic earnings per share	9.28p	7.10p
Diluted earnings per share	9.01p	6.83p

 

 

10   Property, Plant and Equipment

 

	Fixtures, fittings and equipment		Motor vehicles		Total
Group	£'000		£'000		£'000
Cost
At 1 April 2013	747		22		769
Additions	166		20		186
Disposals	(26)		(22)		(48)
Exchange difference	(11)		-		(11)
At 1 April 2014	876		20		896
Additions	168		-		168
Disposals	-		(20)		(20)
Exchange difference	13		-		13
At 31 March 2015	1,057		-		1,057
Depreciation
At 1 April 2013	483		22		505
Provision for the year	110		6		116
Disposals	(22)		(22)		(44)
Exchange rate loss	(9)		-		(9)
At 1 April 2014	562		6		568
Provision for the year	169		1		170
Disposals	-		(7)		(7)
Exchange rate gain	10		-		10
At 31 March 2015	741		-		741
Net book value
At 31 March 2015	316		-		316
At 31 March 2014	314		14		328
At 31 March 2013	264		-		264

 

11   Goodwill  

 

	£'000
Cost
At 1 April 2013, 1 April 2014 and 31 March 2015	9,769

 

The total carrying value of goodwill is £9.77m, which relates to the acquisition of the Macdonald & Company Group of companies in January 2006, has been tested for impairment with the recoverable amount being determined from value in use calculations.

 

The recoverable amount is determined on a value in use basis utilising the value of cash flow projections.  The first year of the projections is based on detailed budgets prepared and approved by management. Subsequent years are based on extrapolations.

 

The key assumptions in calculating the value in use is that the Group will meet its budgeted growth in net fee income of 17% in the year to 31 March 2016.  After the end of the period covered by the budget a 5% growth rate is applied.  This growth rate represents the average rate of growth in the markets in which the Group operates. A discount rate of 9% has been applied which represents the weighted average costs of capital for the Group. In the last two years, operating profit achieved exceeded budgeted operated profit by approximately 25%.

 

Based upon this analysis the asset has not been impaired since the 'recoverable amount' (being the greater of the net realisable value and the value in use) is in excess of its carrying amount by £8.4m. If Operating profit remains constant with no growth into the future or if a discount factor greater than 16% were applied then an impairment loss would need to be recognised.

 

12    Investments

 

The following are subsidiary undertakings at the end of the year and have all been included in the consolidated financial statements:

 

                                                            Country of                                                 Principal                                                   incorporation                                                                  activity

                                                                                                                                      

                                                                                                                                                            

Macdonald & Company

Group Limited                                       England and Wales                                    Holding Company

       

Macdonald & Company

Property Limited                                   England and Wales                                    Recruitment

 

Macdonald and Company

Freelance Limited                                  England and Wales                                    Recruitment

 

Macdonald & Company

(Overseas) Limited                                England and Wales                                    Dormant

 

Macdonald & Company Ltd                   Hong Kong                                                Recruitment

 

Ru Yi Consulting Limited                       Hong Kong                                                Dormant

 

Macdonald and Company

Pte Limited                                           Singapore                                                  Recruitment

 

Macdonald & Company Pty Ltd             Australia                                                   Dormant

 

Macdonald & Company

Recruitment Proprietary Ltd                   South Africa                                              Dormant

 

The Prime Organisation Ltd                   England and Wales                                    Dormant

 

For all undertakings listed above, the country of operation is the same as its country of incorporation.

The Group holds 100% of all classes of issued share capital. The percentage of the issued share capital held is equivalent to the percentage of voting rights for all companies.                                

 

13    Trade and other Receivables

 

							2015	2014
							£'000		£'000
Current
Trade receivables							2,126		1,613
Allowance for doubtful debts							(102)		(38)
Other receivables							578		52
Prepayments and accrued income							1,936		1,908
							4,538		3,535

 

At 31 March 2015, the average credit period taken on sales of recruitment services was 38 days (2014: 41 days) from the date of invoicing.  An allowance of £102,000 (2014: £38,000) has been made for estimated irrecoverable amounts. Due to the short-term nature of trade and other receivables, the Directors consider that the carrying value approximates to their fair value. 

 

Prepayments and accrued income principally comprise amounts to be billed for permanent placements with a start date within three months from the start of the new financial year.

           

The Group does not provide against receivables solely on the basis of the age of the debt, as experience has demonstrated that this is not a reliable indicator of recoverability.  The Group provides fully against all receivables where it has positive evidence that the amount is not recoverable.

 

The ageing of trade receivables at the reporting date was:

 

	Gross trade receivables		Provisions		Gross trade receivables		Provisions
	2015		2015		2014		2014
	£'000		£'000		£'000		£'000
Not past due	1,635		24		1,255		7
Past due 0-30 days	322		-		276		21
Past due 30-90 days Past due more than 90 days	100 69		969		82 -		10 -
	2,126		102		1,613		38

 

Movement in allowance for doubtful debts:

 

		2015		2014
		£'000		£'000
1 April 2014		38		85
Impairment losses recognised		100		38
Amounts written off as uncollectable		(11)		(72)
Impairment losses reversed		(25)		(13)
31 March 2015		102		38

 

14    Financial Instruments

 

						2015		2014
	Note					£'000		£'000
Financial assets
Trade and other receivables	13					4,538		3,535
Cash and cash equivalents						1,009		2,963
						5,547		6,498

 

Cash is held either on current account or on short term deposits at floating rates of interest determined by the relevant bank's prevailing base rate.

 

						2015		2014
	Note					£'000		£'000
Financial liabilities
Current
Bank overdraft						-		1
Trade and other payables	15					478		13
						478		13

 

The Group has not renewed its borrowing facilities with Barclays Bank Plc as the Board consider that the net cash within the Group is sufficient to meet existing and foreseeable liabilities as they fall due.

There is no material difference between the book values of the Group's financial assets and liabilities and their fair values.

 

The Group and the Company do not hold any derivative financial instruments.

 

15    Trade and other Payables

 

						2015		2014
						£'000		£'000
Current
Trade payables						239		303
Other payables						239		256
Taxation and social security						567		490
Accruals and deferred income						913		956
						1,958		2,005

 

Due to the short-term nature of the trade and other payables, the Directors consider that the carrying value approximates to their fair value.  Trade payables are generally on 30-60 day terms.  No payables are past their due date.

 

16    Deferred Tax Liability

 

	Tax losses		Accelerated depreciation		Total
	£'000			£'000		£'000
At 1 April 2013	(26)			(2)		(28)
Credit to income	26			17		43
At 31 March 2014	-			15		15
Charge to income	-			1		1
At 31 March 2015	-			16		16

 

17    Share Capital

 

	2015			2014
	Number		£'000		Number		£'000
AUTHORISED  CALLED UP AND FULLY PAID
Ordinary shares of 10p each
At 1 April 2014 Shares issued	12,066,500 127,449		1,207 12		12,066,500 -		1,207 -
At 31 March 2015	12,193,949		1,219		12,066,500		1,207

 

The Company has one class of ordinary shares which carries no right to fixed income and which represents 100% of the total issued nominal value of all share capital.

 

Each share carries the right to one vote at general meetings of the company.  No person has any special rights of control over the company's share capital and all its issued shares are fully paid.

 

Pursuant to shareholder resolutions at the AGM of the Company on 16 June 2014, the Company has the following authorities during the period up to the next AGM.

 

-     to issue new/additional ordinary shares to existing shareholders through a rights issue up to a maximum nominal amount of £406,465, representing one third of the then issued share capital of the Company;

 

-     to issue new/additional ordinary shares to new shareholders up to a maximum nominal amount of £406,465 representing one third of the issued shares capital of the Company

 

-     to allot equity securities for cash, without the application of pre-emption rights, up to a maximum nominal amount of £60,970 representing 5% of the then issued share capital of the Company; and

 

-     to purchase through the market up to 10% of the Company's issued share capital, subject to certain restrictions on price.

 

Capital Risk Management

 

The Group manages its capital to ensure that it will be able to continue as a going concern while maximising returns to shareholders through the optimisation of debt and equity balances. The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent comprising issued capital reserves and earnings.

 The Group manages the capital structure and makes adjustments to it in the light of changes to economic conditions and risks. In order to manage capital the Group has continued to consider and adjust the level of dividends paid to shareholders and also made purchases of its own shares which are held as Treasury Shares. As part of its strategy of seeking to optimise the Group's debt and equity balance the Group also considers the appropriate level of external borrowing and, as disclosed in Note 14, has taken the decision not to renew its borrowing facilities with Barclays Bank.

 

Employee Share Schemes

 

The Company operates two share options schemes and a HM Revenue & Customs SAYE approved scheme.

 

Enterprise Management Incentive Share Option Scheme

 

At 31 March 2015 the following options had been granted and remained outstanding in respect of the Company's ordinary shares:

 

Year of grant	Exercise Price Pence	Exercise Period	Number of options 31 March 2014	Granted	Exercised	Forfeited	Number of Options 31 March 2015
2005/6	57.50	2007-2015*	184,234	-	(100,000)	-		84,234
2008/9	20.77	2011-2016*	51,000	-	(3,000)	-		48,000
	31.50	2012-2017*	10,000	-	0	(10,000)		-
	31.50	2014-2019*	100,000	-	-	-		100,000
2009/10	42.00	2013-2018*	34,000	-	(23,000)	-		11,000
2011/12	68.00	2014-2019*	18,000	-	(10,000)	(5,000)		3,000
2013/14	Nil Nil	2016-2021 2019-2021	124,250 116,250	- -	- -	(20,000) (20,000)		104,250 96,250
2014/15	10.00 10.00	2016-2021 2019-2021		192,500 355,500	- -	(5,000) (5,000)		187,500 350,500
Total 2015			637,734	548,000	(136,000)	(65,000)		984,734
Weighted average exercise price 2015 (pence)			27.86p	10.00p	54.84p	11.62p		15.27p
Total 2014			672,234	264,500	(178,000)	(121,000)		637,734
- Weighted average exercise price 2014 (pence)			43.48p	Nil	29.66p	51.05p		27.86p

 

Enterprise Management Incentive Share Option Scheme(continued)

 

*These options have fully vested

 

There were 984,734 options outstanding at 31 March 2015 (2014: 637,734) which had a weighted average price per share of 15.27p (2014: 27.86p). The options vest over a period of two to five years conditional upon the option holders continued employment with the Company.

 

The conditions applying to those options which are fully vested have been achieved. The number of outstanding options that will vest is dependent on the achievement of a number of key performance measures of the group, measured at a regional and consolidated level for the financial years 2014 and 2015.   The fair value of the employee services received in exchange for the grant of the share options is charged to the profit and loss account over the vesting period of the share option, based on the number of options which are expected to become exercisable. 

 

	2015	2014
Share price (pence)	85.00	61.50
Fair value of options granted during the year	76.45	63.42
Expected volatility (%)	14.0	35.0
Risk-free interest rate (%)	4.0	4.0
Expected life of options (years)	2 & 5	2 & 5

 

Expected volatility was determined by reference to historical volatility of the Company's share price.

The share based payment expense recognised within the income statement during the period was £0.13m (2014: £0.05m).

 

SAYE Share Scheme

 

The Company operated a Save As You Earn (SAYE) scheme for the benefit of the employees within the Company which was administered by Barclays Bank Trust Company Limited.

 

On 18 August 2011 all eligible employees within the Group were invited to buy shares in Prime People Plc.  On 18 October 2014 the options granted on 18 August 2011 matured.  All option holders were given six months from the maturity date to exercise their options.  At 31 March 2015 all options had been exercised.

 

Details are as follows:                                                                                                          

Year of grant	Exercise price Pence	Exercise period	Number of options 31 March 2014	Exercised	Number of Options 31 March 2015
2011	56.00	2014	72,383	(72,383)	-
Total 2014			72,383	(72,383)	-
Weighted average exercise price 2015 (pence)			56.0p	56.0p	56.0p
Weighted average exercise price 2014 (pence)			56.0p	56.0p	56.0p

 

Share Premium

 

The reduction of capital of £1.80 million relates to cancellation of part of the amount that stood to the credit of the Company's Share Premium Account. This resulted in return of cash to shareholders who were on the Company's register of members at 16 July 2014, pro rata to their respective holdings of Ordinary Shares. The return of cash amounted to 14.809329p per Ordinary share and was paid to shareholders on 24 July 2014.

 

18    Reserves

 

Capital Redemption Reserve Fund

 

The capital redemption reserve relates to the cancellation of the Company's own shares.

 

Treasury Shares

 

At 31 March 2015, the total number of ordinary shares held in Treasury and their values were as follows: 

 

	2015		2014
	Number	£'000	Number	£'000
As at 01 April 2014	35,000	143	206,000	191
Shares purchased for treasury	67,210	62	7,000	5
Shares issued from treasury	(80,934)	(42)	(178,000)	(53)
Equity reclassification on disposal of treasury shares	-	(142)	-	-
As at 31 April 2015	21,276	21	35,000	143
Nominal value		2		4
Market value		23		29

 

The maximum number of shares held in treasury during the year was 54,050 shares representing 0.4% of the called-up ordinary share capital of the Company (2014: 206,000 representing 1.70% of the called-up ordinary share capital of the Company).

 

Share Premium Account

 

The balance on the share premium account represents the amounts received in excess of the nominal value of the ordinary shares. During the year, the balance on the share premium account was reduced by £1.81 million relating to return of cash to shareholders.

 

Merger Reserve

 

The merger reserve represents the fair value of the consideration given in excess of the nominal value of the ordinary shares issued to acquire subsidiaries.

 

Share Option Reserve

 

The reserve represents the cumulative amounts charged to profit in respect of employee share option arrangements where the scheme has not yet been settled by means of an award of shares to an individual.

 

Translation Reserve

 

The foreign currency translation reserve comprises all presentation foreign exchange differences arising from translation of the financial statements of foreign operations into the presentation currency of the Group accounts.

 

Retained Earnings

 

The balance held on this reserve is the accumulated retained profits of the Group.

 

19    Operating Lease Commitments

 

As at 31 March 2015 the Group was committed to making the following total payments in respect of non-cancellable operating leases:

 

	Land and buildings 2015		Other   2015		Land and buildings 2014		Other   2014
	£'000		£'000		£'000		£'000
Non-cancellable operating leases which expire:
Within one year	30		-		23		-
Within one to two years	217		-		-		-
Within two to five years	-		-		223		-
After five years	1,861		-		2,115		-
	2,108		-		2,361		-

 

The Group leases various offices under non-cancellable operating lease agreements. The leases have varying terms as disclosed above.

 

20    Reconciliation of Profit Before Tax to Net Cash Inflow from Operating Activities

 

			2015 £'000	2014 £'000
Profit before taxation			1,436	1,045
Adjust for:
Depreciation			170	116
Share based payment expense			130	46
Loss/(profit) on sale of plant & equipment			-	(2)
Net finance income			(6)	(18)
Operating cash flow before changes in working capital			1,730	1,187
(Increase)/decrease in receivables			(1,003)	(83)
(Decrease)/increase in payables			(42)	482
Cash generated from/(used by) underlying operations			685	1,586

 

 

21    Analysis of Cash less overdrafts

 

       

Group	At 1 April 2014		Cash flow		At 31 March 2015
	£'000		£'000		£'000
Cash at bank and in hand	2,963		(1,954)		1,009
Bank overdraft	(1)		1		-
Total cash	2,962		1,953		1,009

 

 

22    Financial Risk Management

 

The Board of Directors has overall responsibility for the risk management policies that are applied by the business to identify and control the risks faced by the Group.

 

The Group has exposure from its use of financial instruments to foreign currency risk, credit risk and liquidity risk.

 

Foreign Currency

 

The Group publishes its consolidated financial statements in Sterling.  The functional currencies of the Group's main operating subsidiaries are Sterling, the Singapore Dollar, the Hong Kong Dollar and the UAE Dirham.

 

The Group's international operations account for approximately 22% (2014: 21%) of revenue and approximately 15% (2014: 7%) of the Group's assets and consequently the Group has a degree of translation exposure in accounting for overseas operations.

 

Currently the Group's policy is not to hedge against this exposure but it does seek to minimise this exposure by converting into sterling all cash balances in foreign currency that are not required for capital monetary needs.  The settlement of intercompany balances held with foreign operations is neither planned nor likely to occur in the foreseeable future. Therefore, exchange differences arising from the translation of the net investments are recognised in Other Comprehensive income.

 

Credit Risk

 

The Group's principal financial assets are bank balances, trade and other receivables. The Group's credit risk is primarily in respect of trade receivables. Credit risk refers to the risk that a client will default on its contractual obligations resulting in financial loss to the Group. The Group does not have any significant credit risk exposure to any individual client. At the year end no customer represented more than 6% (2014: 7%) of the total balance of trade receivables.

 

In reviewing the appropriateness of the provisions in respect of recoverability of trade receivables, consideration has been given to the ageing of the debt and the potential likelihood of default, taking into account current economic conditions.

 

It is the Directors' opinion that no further provision for doubtful debts is required.

 

Liquidity Risk

 

The Group manages it liquidity risk by maintaining adequate cash and or credit facilities to meet forecast cash requirements of the Group. Management monitors its forecasted cash flow requirements at a Group level based on monthly returns made by the Group's operating units.

 

The Group has no financial liabilities other than short term trade payables and accruals as disclosed in note 16, all due within one year of the year end.

 

The Group has net funds of £1.01m (2014: £2.96m) which the Board consider are more than adequate to meet future working capital requirements and to take advantage of business opportunities.

 

23    Related Party Transactions

 

Prime People Plc provides various management services to its subsidiary undertakings. These services take the form of centralised finance and operations support. The total amount charged by the Company to its subsidiaries during the year is £240k (2014: £220k). The balance owed to the subsidiary undertakings at the year end is £145k (2014: £99k).

 

The Company also provides corporate guarantees on the subsidiary bank accounts. At 31 March 2015 amounts overdrawn by subsidiary bank accounts were nil (2014: £1k).

 

The Directors receive remuneration from the Group, which is disclosed in the Directors' Remuneration Report. As shareholders, the Directors also received dividends in the year from the Company amounting to £339,048 (2014: £290,881). As part of the return of capital to shareholders, the Directors received £1,027,775.

 

24    Availability of Annual Report

 

A copy of the company's Annual report will be available on the Company's website www.prime-people.co.uk and will be posted to those shareholders who have requested a copy on or around 5 June 2015.