Cpl Resources Plc

Results for the six months ended 31 December 2015

CPL delivers Strong double-digit earnings growth in First Half of 2016

Cpl Resources Plc ('Cpl' or the 'Group'), Ireland's leading employment services group, today announced results for the half year ended 31 December 2015.

Chairman's Statement

I am pleased to report that in the six months to 31 December 2015 the Group delivered continued strong growth in revenues, net fee income and profits.

Highlights

·      12% increase in revenues to €216.4 million

·      20% increase in gross profit (net fee income) to €34.0 million

·      Adjusted operating profit* of €8.4 million, an increase of 39% over the same period last year

·      37% increase in adjusted profit before tax*, to €8.4 million

·      25% increase in profit before tax to €7.6 million

·      11% increase in interim dividend to 5.25 cent per share

* Adjusted operating profit and adjusted profit before tax exclude non-cash charges relating to the Group's Long-Term Incentive Plan (LTIP)

** As a % of gross profit.

Revenues for the six months to 31 December 2015, including four months' trading in Clinical Professionals, our recent UK acquisition, increased by 12% to €216.4 million. Our gross profit grew by 20% against the same period last year to €34.0m. The Group's adjusted operating profit, which excludes non-cash LTIP charges, was €8.4 million for the six months to 31 December 2015, 39% higher than the same period last year. Adjusted profit before tax increased by €2.3 million to €8.4 million. Including the non-cash LTIP charge, profit before tax increased by 25%. The non-cash LTIP charge was €850k in the six months to 31 December 2015 and €74k in the six months to 31 December 2014. The LTIP charge for the six months to 31 December 2015 reflects current expectations on achieving the performance targets included in the LTIP awards which may result in the vesting of these instruments.

The Group delivered earnings per share of 21.2 cent for the six months to 31 December 2015, up 23% on same period last year.

We have achieved growth across all of our main business units and markets, and the acquisition of Clinical Professionals in September 2015 also contributed to our strong performance during the period. Our conversion rate of gross profit to operating profit (excluding LTIP) has increased to 24.8%, from 21.4% in the same period last year.

During the six months ended 31 December 2015, we have experienced improvements in conditions in our markets, including markets outside of Ireland which delivered 26% of total fees in the period.  However, skills shortages in certain sectors continue to cause challenges. The Group continues to work with clients to understand their specific requirements and with our candidates in order to match their skills to those client requirements. Margin pressure continues across the temporary staffing market and this market segment remains highly competitive.

We continue to employ professional and committed people within the Group, and we were pleased to see the quality of our people and our services recognised by the National Recruitment Federation, which recently awarded us the title Recruitment Agency of the Year for 2015.  On behalf of the Board I wish to express my gratitude for the continuing hard work and dedication of our people and for their commitment to the Group.

Cash

The Group has a cash balance of €27.6 million as at 31 December 2015. In the six months to 31 December 2015 €8.8 million was generated in cash flow from operating activities before acquisition consideration and changes in working capital. Our business requires significant investment in working capital and this, together with our acquisition of Clinical Professionals for an initial net cash consideration of €4.5m, has given rise to a net cash outflow from cash and cash equivalents of €2.9 million in the period.

Dividend

The Board proposes to pay an interim dividend of 5.25 cent per share, an increase of 11% on last year's interim dividend which reflects the Group's strong performance in the period and attractive prospects.  The dividend will be payable on 4th March 2016 to shareholders on the register at the close of business on the record date of 5th February 2016.

Board

Having been a director of the Group since its flotation, Garret Roche today retires from the Board.  On behalf of my fellow directors and all of our people I would like to thank Garret for his exceptional dedication and commitment to his role as a director and for his valuable contribution to our success.  Mark Buckley, our Chief Financial Officer, has been appointed to the Board with effect from today, and I welcome him to the Board and look forward to continuing to work with him as he takes on this additional role. Additional disclosures in respect of Mr. Buckley under paragraph (g) of Schedule Two of the AIM and ESM Rules will be made under a separate regulatory filing.  

Outlook

In the six month period to 31 December 2015 we have seen continued organic growth across key business sectors. The acquisition of Clinical Professionals was completed in the period and performance from this business has been in line with expectations.

While the pace of growth in many markets remains somewhat uncertain, we remain confident in the outlook for the business and expect to deliver continued profitable growth for the remainder of the financial year.

John Hennessy

Chairman

28 January 2016

Condensed Group Statement of Comprehensive Income

for the period ended 31 December 2015