3^rd September 2015

Cpl Resources Plc

Results for the Full Year Ended 30 June 2015

Dublin, 3 September 2015: Cpl Resources Plc ('Cpl', the 'Group' or the 'Company'), Ireland's leading employment services group, today announced results for the year ended 30 June 2015.

Full Year Highlights

 -          Revenue increase to €393.6 million, up 6.6% on last year

-           Gross Profit increase to €58.7 million up 7.3% on last year

-           Profit Before Tax down 2.1% to €14.1 million

-           Basic earnings per share of 40.2 cent versus 40.7 cent

-           Total dividend per share of 9.75 cent (2014: 9.75 cent)

-           Acquisition of Clinical Professionals Limited - UK Pharmaceutical and Life Science Recruitment Company

John Hennessy, Chairman commented:

"I am pleased to report that the 12 months ended 30 June 2015 has been another year of growth for Cpl.  Economic indicators in our main markets are positive, and we have invested in strengthening our team and our systems to allow us to meet demand as these markets continue to recover and grow.

2015 marks the 25^th anniversary of the establishment of CPL.  Over that period we have grown from small beginnings to become Ireland's leading provider of people and employment services to business, with significant operations overseas, and we expect to continue to achieve growth in our business in the years ahead."

Anne Heraty CEO added:

"Cpl grew revenue and gross profit by 7% to €393.6 million and €58.7 million. The employment market continues to improve with skills shortages in some key sectors. I am also delighted to announce the acquisition of Clinical Professionals Limited a UK leading Pharmaceutical and Life Science recruitment company. We look forward to working with the management, staff and their clients in the forthcoming years. 

For Further Information:

Anne Heraty, CEO, CPL Resources Plc: +353 1 614 6000

Mark Buckley, CFO, CPL Resources Plc: +353 1 614 6000

Ivan Murphy/ Daragh O'Reilly, Davy Corporate Finance: +353 1 679 6363

Cpl Resources Plc

Chairman's statement

The financial year ended 30 June 2015 has been another year of growth for CPL.   

Financial highlights of the Group's performance include:

·     Increase in revenue, up 7% to €393.6 million

·     Increase of €4.0 million in gross profit to €58.7m

·     Profit before tax of €14.1 million

·     Earnings per share of 40.2 cent  (2014: 40.7 cent)

·     Total dividend per share of 9.75 cent  (2014: 9.75 cent)

Full Year Highlights

The Group's results for the year to 30 June 2015 reflect growth across most of the business sectors and locations in which we operate.  We have taken the opportunity presented by this growth to invest in strengthening our team and our systems.  Although this investment has reduced our profits for the year we are well positioned to respond to further recovery and growth in our principal markets and sectors.

Economic indicators, including employment trends, are broadly positive in our principal markets.  However, we are mindful that we operate in a very competitive industry and that continued growth in our main markets remains sensitive to events affecting the wider European and global economies.

During the year demand for people in both permanent and temporary roles grew across most sectors. Our fees from permanent placements grew by 16% year on year.  In our temporary business we succeeded in reducing downward pressure on margins while delivering growth in both revenues and gross profit.  

We maintain a focus on the management of costs in our business, with operating profit ratio of 24% in the financial year. The Group continues to have a strong balance sheet, with net assets in excess of €81 million at 30 June 2015 up from €72 million in the prior year.  We ended the year with net cash of more than €30 million at the year end, despite the continued working capital investment needed to fund the growth in our temporary business.

People

2015 marks the 25^th anniversary of the establishment of CPL.  From very modest beginnings the Group has become Ireland's leading provider of people and employment services to businesses, and has expanded its operations internationally.  Since its inception as a small recruitment agency, the Group has grown by diversifying successfully into a wide variety of business sectors, product offerings and markets.  The period from 1990 to 2015 has been marked by a number of economic cycles, including very significant downturns.  We have weathered the storms, learned from them and emerged each time with a stronger and more resilient business than before.

During that period we have also made several important acquisitions that have contributed to our growth, and we announce another addition to the Group today.  We are pleased to announce the acquisition of Clinical Professionals Limited, a Pharmaceutical and Life Science recruitment company operating in the United Kingdom, and we look forward to working with the management and staff of that company to develop the business and increase our presence in the UK market.

Our record of success over 25 years has been achieved through the extraordinary and sustained commitment and dedication of our people, under the leadership of a highly talented group of executive directors and senior management.  I am most grateful to each and every one of the people who, through their ability and exceptional efforts, have contributed to our growth and success over 25 years.  I also wish to thank our clients for their support and their loyalty to our business.

Earnings per Share, Dividend & Dividend Policy

CPL has delivered earnings per share in the twelve months to June 2015 of 40.2 cent. In deciding how to use our free cash flow, the Board continues to prioritise the maintenance of a strong balance sheet, allowing us to be in a position to take advantage of opportunities to invest in further growth, both organically and through acquisition.  The Group also has a progressive dividend policy, which reflects underlying earnings growth and the continued strength of the Group's balance sheet.

The Board is recommending a final dividend of 5.0 cent per share. This will bring the total dividend for the year to 9.75 cent per share. The dividend, if approved by the shareholders, will be payable on 2 November 2015 to shareholders on the Company's register at the close of business on the record date of 9 October 2015.

Outlook

Our business is affected by several key variables, including employment and economic trends in our key markets.  Current indicators suggest that modest economic growth will continue in these markets, and we expect that these factors, together with the efforts of our people, will allow us to achieve further growth in our business during the financial year to 30 June 2016.

John Hennessy

Chairman                                                                                                         

2 September, 2015

Cpl Resources Plc

Chief Executive's review

This year Cpl celebrates our 25^th year of finding the best talent for our clients and the best jobs for skilled people. Over the last 25 years the scale and pace at which we operate has changed significantly although the fundamental challenge for our clients is still the same - how to attract and retain top talent. Today we operate from 36 offices in nine countries finding the best talent for clients. A measure of our success is the increase in revenue and the repeat work we get from our valued clients. I am pleased to report that in the year to 30 June 2015 we increased our revenue by €24.4 million to €393.6 million, an increase of 7%, and gross profit by €4.0 million to €58.7 million, also an increase of 7%.  Our operating profit is €14.0 million, down from €14.2 million the previous year. In the first half of our financial year we made a number of investments, expanding the Hub in Krakow, new head office facilities and upgrading some of our systems. Our operating profit in the second six months is up 34%.

The Irish Labour market continued to improve during 2014. Employment increased by 33,000 (annual average) and the employment rate increased by 1.2% to 61.7% with 1.91 million people in employment. The increase in employment was broadly based with 11 out of 14 economic sectors recording gains. The largest increases were recorded in the construction and financial (including real estate) sectors which accounted for just over half of all jobs created.  Momentum has continued into 2015. The number of people employed grew by 1% quarter on quarter in Q2 2015, one of the fastest rates of growth since the start of the recovery. The unemployment rate has dropped to 9.5% in July 2015, its lowest level since December 2008. While this is encouraging, there is still a long way to go to reach full employment. We are now seeing a two speed labour market where there are shortages of highly skilled professionals in certain sectors and a high rate of unemployment still persisting across certain parts of the labour market. Many of the skills shortages are in sectors where Cpl have a strong presence such as ICT, Healthcare, Pharmaceutical and Finance. Companies in these sectors are looking internationally for talent. In the first 9 months of 2014 approximately 4,100 new employment permits were issued in Ireland, an increase of 34% on 2013. The increase was mostly due to an increase in the number of permits issued to IT workers, but also due to the reintroduction of medical employment permits. The IT sector accounted for 43% of all new employment permits issued in 2014, with a further 25% issued to the healthcare sector.

In May 2014 Cpl opened a sourcing hub to locate people with hard to find skills for our clients. We have 13 recruiters employed in the hub and we are seeing positive results from their search efforts. The sourcing hub gives us a competitive advantage when designing solutions for clients who have difficulty accessing scarce skills or who need to hire teams rapidly.

Financial Highlights

The Group increased its revenue by 7% to €393.6 million in the year to 30 June 2015 (2014: €369.3 million). Gross profit increased by 7% to €58.7 million (2014: €54.7 million). The Group's gross margin was 14.9% (2014: 14.8%). Our operating profit is €14.0 million (2014: €14.2 million). Profit before tax is €14.1 million (2014: €14.4 million) and our earnings per share was 40.2 cent (2014: 40.7 cent).

Our operating expenses were €44.7 million, 11% higher than last year. The majority of our cost base, circa 73%, is staff related costs. As previously mentioned we invested in the first six months and our improvement in gross profit and operating profit in the second half of the year reflects this investment. Gross profit was up €2.2 million to €30.4 million in the second half and operating profit was up €2.0 million to €8.0 million including foreign exchange movements.

Our balance sheet is strong. At 30 June 2015 our net cash balance was €30.5 million, notwithstanding the investment in working capital required to grow our revenues by €24.4 million. Our largest asset is

our trade and other receivables which grew to €81.8 million in the year to 30 June 2015 from €70.0 million in the year to 30 June 2014. Our track record for debtor collections over the years has been consistently good with minimal bad debts.  This is as a result of our blue-chip client base as well as the diligent monitoring of outstanding debtor balances.

We paid our shareholders an interim dividend of 4.75 cent per share. The Board is recommending a final dividend of 5.0 cent per share for the year to 30 June 2015. The total dividend per share for the year is 9.75 cent.

Our gross margin was 14.9% in the year to 30 June 2015. We are starting to see margin pressure in our temporary business level off. We remain focused on restructuring how we deliver to these customers in order to drive efficiency and maximise returns. Permanent fees increased by 15.8% to €24.0 million. Gross profit from permanent placement accounts for 40.8% of the total gross profit.

Our conversion rate of gross profit to operating profit is one of our key performance metrics in the Group and was 23.8% in 2015.

Operations Review

Cpl is a leader in the provision of specialist recruitment and outsourcing services. Our capability spans the entire employment lifecycle and includes permanent, temporary and contract recruitment, workforce management, training and outplacement. We have a broad and diverse range of customers from market-leading multinationals to small and medium enterprises.

Our recruitment business operates through distinct specialist brands in a wide range of sectors including technology, accounting and finance, healthcare, pharmaceutical, sales, engineering, light industrial and office administration.

Our managed services and outsourcing business assumes accountability for selected business process on behalf of clients. Cpl brings value to our clients by creating measurable improvements and cost savings in areas that are viewed as non-core to our clients. Our main service offerings are: Contact Centre Outsourcing, Recruitment Process Outsourcing (RPO) and HR Consulting Services (which includes outplacement).

Permanent Placement

Our permanent placement business had a successful year to 30 June 2015. Permanent fee revenue increased by 15.8% to €24.0 million (2014: €20.7 million). Leading contributors to growth were our international businesses, particularly our healthcare business.

Our permanent placement business in Ireland performed well against a positive backdrop in job creation in both indigenous companies and foreign owned companies. The IDA had a record year in 2014 with one of the highest net levels of job creation in a decade. Circa 15,000 new jobs were created with IDA client companies. When job losses were taken into account the net increase in employment was 7,131. The indigenous sector also recorded a strong performance in 2014.

Jobs data for 2015 suggest continuous improvement in employment growth particularly in full-time jobs. Cpl are continuing to selectively add to our teams in certain sectors to support growth in permanent placement fees.

Temporary Staffing

Cpl provides temporary and contract staff to large number of clients at any one time. We finished the year with 9,729 people working on behalf of Cpl on client projects, an increase of 157 on the previous year.

Revenues generated from temporary assignments in the year to 30 June 2015 were €369.3 million (2014: €348.5 million) representing 6.0% growth. We generated €34.7 million gross profit, 2.1% higher than the year to June 2014. In prior years, margin erosion has been a challenge in our temporary business, but seems to be stabilising in this year. 

Historically, temporary and flexible staffing has been utilised more for lesser skilled roles. In Cpl, we are seeing greater demand for flexibility in professional specialist roles, for example in the Technology, Pharmaceutical, Financial Services and Healthcare industries. This demand is driven both by the highly skilled individual who wants choice and flexibility and by our clients who see the advantage of using temporary and flexible staffing. This gives client's access to skilled talent on-demand particularly for project based works and adds a variable cost component to a client's otherwise fixed labour costs.

Overseas Business

Our international divisions, particularly healthcare, had a strong performance in the year to 30 June 2015.  Demand for doctors, nurses and allied health professionals remains high. Our business in Central and Eastern Europe also had some significant client wins. 26.5% of our permanent fees now come from outside Ireland and we have 36 offices in nine countries.

Strategy

During the year we conducted a review of the Group's strategy. The review confirmed that Cpl's strategic goals are appropriate to meeting current and future market opportunities.

Our primary goal is to build a profitable cash generative business with good predictability of earnings.  We will do this by continuing to extend our leading position in specialist recruitment and by building a balanced business mix therefore avoiding overdependence on any one service, sector or geography. We will focus mainly on organic expansion, while using selective acquisitions to build platforms in new sectors or markets with good long term potential.  Cpl's acquisition of Clinical Professionals Limited is a good example of an acquisition which gives us a platform for growth in the UK.

Acquisitions

On 2 September 2015 Cpl acquired Clinical Professionals Limited a leading UK based Pharmaceutical and Life Science Recruitment Company. Cpl acquired 89.8% of the business and 63.5% (€5.1 million) of the potential total consideration payable was paid at completion. The balance is contingent on certain earn out targets being achieved. Clinical Professionals' clients include global leaders in pharmaceutical development and clinical research, whilst their expertise encompasses a wide remit of life science job sectors, including dedicated teams within clinical research, drug safety and pharmacovigilance, medical communications, QA/QC, regulatory affairs and medical affairs.  The Pharmaceutical and Life Science sectors are an important growth opportunity for Cpl. This acquisition complements our existing successful Pharmaceutical Recruitment business in Ireland and gives us a platform for growth in the UK. The company has offices in both Reading and London.

People

It is undoubtedly talented people who drive businesses. I would like to thank our talented and dedicated employees for their commitment to delivering for our candidates and clients. I am delighted to welcome those people who joined Cpl during the year. I also want to thank our loyal customers for their partnership and support during the year.

Outlook

We have a strong business model with an excellent client base and highly skilled employees as well as a history of financial and operational success. Our priorities for 2016 will be to stay focused on growing our net fee income and profit before tax while expanding our footprint in the UK and internationally.

Economic data indicates that the Irish economy is growing at a rate of approximately 5%. Employment growth was strong in the past year although we are seeing skills shortages in certain sectors. We believe we have the opportunity to grow further in Ireland as demand for skilled talent intensifies. Our performance in Cpl improved in the second half of the year to 30 June 2015 and while we have limited visibility particularly in our permanent placement business we believe our recent investments position us well for the future.

Anne Heraty

Chief Executive Officer

2 September, 2015

Cpl Resources Plc

Group Statement of Comprehensive Income

for the year ended 30 June 2015