Key Strategic Highlights
- EBITDA increased 13.9% to £47.5 million (2010: £41.7 million)
- Operating profit increased 13.4% to £34.8 million (2010: £30.7 million)
- Adjusted operating profit increased 16.2% to £38.7 million (2010: £33.3 million)
- Conversion of gross margin to operating profit increased to 19.1% (2010: 16.8%)
- Basic earnings per share increased 15.6% to 54.0p (2010: 46.7p)
- Net cash of £1.8 million at 30 December 2011 (31 December 2010: Net debt of £17.8 million)
* Adjusted operating profit excludes amortisation of client relationships and non-recurring items
Cheryl Jones, Chairman commented: "I am pleased to announce Impellam Group plc concluded 2011 with a strong set of financial results whilst at the same time completing several important milestones in support of repositioning the Group's businesses. Our strategy is built on the premise of 'Unlocking the Value of the Impellam Group of Companies' for our shareholders, our clients, management teams and employees.
First, the financial structuring of the Group has been critical for the Company in that a highly leveraged historic debt position had to be addressed. Conversion of margin to profit and through to cash flows has been an imperative in this regard and remains so going forward.
In 2011, the Group's operating profit increased by 13.4%, aligned in part to an increase in the conversion ratio of 2.3%, whilst EBITDA improved by 13.9% to £47.5 million on increased revenues of 1.6%. Basic earnings per share improved by 15.6%. At the year-end the Group was in a net cash position.
Execution of the strategy in 2010/2011 has allowed the Group to repay in full and on the due date in 2011 its final obligations under the £20 million guaranteed secured loan notes; and both of the Group's UK and US financing facilities were also successfully renewed during the year.
During the year, taking the opportunity of market conditions, Impellam purchased 360,500 of its own shares at a cost of £1.2m. On an annualised basis this provides shareholders with an approximate 1% increase in value, as measured through earnings per share. The Board will continue to look to purchase its own shares going forward, as well as reviewing potential acquisitions where they are accretive and fit with the Group's overall strategy.
Second, the strategy requires the Group to align its brands into focused market-facing businesses. To support this divisional and group strategy, two new holding companies have been established in 2011 to house the realigned Medacs Healthcare and Carlisle Support Services brands.
The UK and US Staffing businesses have begun the realignment of their brands to support accelerated development of evolving client requirements for Managed Service Offerings and Client Innovation; moreover, accelerated development of the Science, Engineering and Technology related brand activities is also key. Restructuring of these businesses is underway.
The accomplishments in 2011 were critical to the transformational strategy of the Group. The primary trading markets of the UK and US are anticipated to continue to show tough conditions, but the Group remains focused in delivering the most efficient and innovative service offerings. Establishing consistency of reliability and a sustainable competitive advantage are key elements for our current and prospective clients. The Group will continue to develop in 2012 in all its key businesses and markets.
The Board remains focussed on maximising shareholder value and unlocking the value of the Impellam Group of Companies. This will include the payment of dividends when appropriate.
To this end, Impellam will shortly be seeking shareholder and court approval for a capital reorganisation. Contingent on such approval, the Company will then have sufficient distributable reserves to be in a position to pay a cash dividend starting with the 2012 interims. The capital reorganisation will also provide for other forms of capital transactions capable of delivering value to the shareholders. Further details will be sent to shareholders in due course."