TIDMNBB
RNS Number : 8515G
Norman Broadbent PLC
24 July 2023
24 July 2023
Norman Broadbent plc
("Norman Broadbent" or the "Company" or the "Group")
Interim results for the six months ended 30 June 2023
Norman Broadbent plc (AIM: NBB), a leading London quoted
Executive Search and Interim Management firm offering a diversified
portfolio of integrated Leadership Acquisition & Advisory
Services, is pleased to announce its unaudited interim results for
the six months ended 30 June 2023 ("H1 2023").
Financial Highlights
-- Revenue growth of 54% to GBP6.1m (H1 2022: GBP3.9m).
-- Underlying(1) EBITDA of GBP0.27m up almost 400% (H1 2022: GBP0.06m).
- Reflects the improvements made in the culture, brand,
headcount growth and quality and seniority of mandates secured.
-- Profit after tax of GBP8,000 (H1 2022: loss after tax
GBP72,000). First profitable H1 since 2019.
-- Net cash generated by operating activities of GBP0.05m (H1 2022: net cash used (GBP0.50m)).
-- Repaid GBP0.2m of Convertible Loan Notes ("CLNs") in May 2023.
- The balance of GBP0.2m is expected to be repaid before the second anniversary of issue.
Operational Highlights
-- Net fee income ("NFI") up 58% to GBP5.2m (H1 2022: GBP3.3m).
- Q2 2023 NFI increased by 50% to GBP2.7m (Q2 2022: GBP1.8m).
- Executive Search NFI grew by 58% to GBP4.1m (H1 2022: GBP2.6m).
- Interim Management NFI was up 43% to GBP1.0m (H1 2022: GBP0.7m).
- GBP1.0m of NFI generated in June 2023 alone the highest
achieved under the new management team to date in a single
month
-- Average new search fee value increased by 43% and average NFI
per fee earner up 13% compared to H1 2022.
-- 35% growth in fee earner headcount since 30 June 2022 with
additional high-quality hires in train for H2 2023.
-- Implementation of improved technology platforms in 2023 with
new finance system, HR platform and expense management tool, all of
which will provide improved management information and support
accelerated growth.
[1] Underlying EBITDA excludes share based payment charges
Kevin Davidson, CEO of Norman Broadbent, said: "I am delighted
to be announcing such strong results which demonstrate the quality
and dedication of the team and the culture of excellence which we
have established together over the past couple of years. This
platform has enabled us to retain and hire exceptional talent in a
market which continues to be extremely competitive.
We have strengthened the business in all areas with economies of
scale and efficiency improvements beginning to benefit the bottom
line. Having delivered a profit after tax for the first time since
H1 2019, the substantial carried forward tax losses of over GBP14m
begin to be of significant value as we expect to deliver
sustainable and accelerated growth in the years ahead.
Despite a challenging market, we look forward with confidence
and excitement about what can be achieved again at Norman
Broadbent. Looking ahead, we remain conscious of the macro-economic
environment, but continue to see a strong pipeline of opportunities
giving us confidence as we head into H2. I thank everyone in the
team for their continued dedication, our clients for choosing to
work with us and our investors for their continued support."
For further Information, please contact:
Norman Broadbent plc 020 7484 0000
Kevin Davidson, CEO
Mehr Malik, CFO
Shore Capital (Nominated Adviser and Broker) 020 7408 4090
Tom Griffiths / Tom Knibbs (Corporate Advisory)
Henry Willcocks (Corporate Broking)
Copies of this announcement are available on the Company's
website at www.normanbroadbent.com.
CEO's Statement
Norman Broadbent has delivered considerable growth in headcount,
capability and capacity in H1 2023 whilst also generating positive
EBITDA. With NFI up 58% and underlying EBITDA up almost 400%, we
are delighted to have delivered the Company's best results for some
time.
New hires continue to establish themselves rapidly and H1 2023
has seen us deepen our capabilities and reach across our key
sectors and corporate functions, including Industrial, Investor,
Digital & Technology, Life-Sciences, Finance and Change &
Transformation. As we enter H2 2023, the Company has already
secured an additional fee earner to accelerate the development of
our Board Practice. There are other fee generating hires in process
and we remain disciplined in terms of quality and cultural
alignment on all prospective recruits.
In H1 2023, the Company placed leaders across the UK and Europe,
the US, South America, the Middle East and Asia. It has
purposefully developed its international client base and brand over
the past two years and it is very pleasing to see that 29% of H1
2023's NFI was generated from international assignments (H1 2022:
24%). This international spread of business enables the Company to
capitalise fully on global key accounts, secure the most senior
mandates, mitigate risk and open multiple fronts for continued
growth. The Board does not declare the payment of an interim
dividend (2022: nil pence).
As it has scaled, the Company has also focused heavily on
processes, systems and team development to ensure efficiency and
consistency. This, coupled with the rapidly rising quality and
seniority of mandates, has enabled the Company to grow NFI in an
increasingly accretive way as efficiencies are realised within the
research and support teams.
Summarised Financial Results:
The table below summarises the financial results for the
Group:
Six months Six months Year ended
to 30 Jun to 30 Jun 31 Dec
2023 2022 2022
GBP000's GBP000's GBP000's
(unaudited) (unaudited) (audited)
Revenue 6,057 3,936 8,697
Cost of sales (879) (640) (1,350)
------------- ------------- -----------
Gross profit (Net Fee Income) 5,178 3,296 7,347
Operating expenses (4,907) (3,241) (7,254)
Underlying EBITDA [1] 271 55 93
Share based payment charge (82) - (131)
------------- ------------- -----------
EBITDA 189 55 (38)
Depreciation and amortisation (111) (104) (223)
Group operating profit/(loss)
before tax 78 (49) (261)
Net finance cost (70) (23) (77)
------------- ------------- -----------
Profit/(loss) before tax 8 (72) (338)
Income tax expense - - -
------------- ------------- -----------
Profit/(loss) after tax 8 (72) (338)
------------- ------------- -----------
Financial Position
As at 30 June 2023, equity shareholders' funds were GBP0.76m (30
June 2022: GBP0.764m), with net current liabilities of GBP0.762m
(30 June 2022: GBP0.646m). Cash and cash equivalents at 30 June
2023 amounted to GBP81,000 (30 June 2022: GBP64,000). Net debt
(excluding lease liabilities had improved to GBP1.2m (30 June 2022:
GBP1.4m) reflecting partial repayment of the CLNs. Net debt
post-lease liabilities at 30 June 2023 had reduced to GBP1.4m (30
June 2022: GBP1.8m).
Net cash inflow from operations was GBP52,000 (H1 2022: outflow
of GBP495,000) and net cash inflow from financing activities
amounted to GBP8,000 (H1 2022: inflow of GBP173,000).
Outlook
Despite the extremely challenging economic backdrop, Norman
Broadbent has continued to deliver against its successful
revitalisation and growth agenda, delivering rapid and sustainable
profit growth.
As the Company continues to re-establish itself as a pre-eminent
force in executive search and senior interim management across the
UK and internationally, the Board is monitoring carefully the
evolving macro-economic climate. The Board continues to believe
that the Company is very well positioned in more stable and growing
markets, notably across Industrials and, in particular, Energy,
Power, Chemicals, Transport & Infrastructure, including Civil
Aviation. All of these sectors continue to attract significant
capital investment whilst also experiencing extreme imbalances in
the supply of, and demand for, senior leadership talent. The
Company is also effectively leveraging its functional expertise
across these markets, particularly in Digital & Tech, Finance,
HR and Change & Transformation.
With considerable forward momentum, the Board is confident of
delivering strong results in H2 2023 and is increasingly confident
about achieving its medium-term target of GBP1.25 million of EBITDA
by 2025.
Kevin Davidson
Chief Executive
24 July 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2023
Note Six months Six months Year ended
ended ended
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (unaudited)
GBP000 GBP000 GBP000
Revenue 2 6,057 3,936 8,697
Cost of Sales (879) (640) (1,350)
------------ ------------ ------------
Gross profit (Net Fee Income) 5,178 3,296 7,347
Operating expenses (5,100) (3,345) (7,608)
------------ ------------ ------------
Operating profit / (loss) from
continued operations 78 (49) (261)
Net finance cost (70) (23) (77)
------------ ------------ ------------
Profit /(loss) on ordinary
activities before income tax 8 (72) (338)
Income tax expense - -
Total comprehensive profit
/ (loss) for the period 8 (72) (338)
============ ============ ============
Profit/(loss) per share 3
- Basic 0.01p (0.12p) (0.56p)
- Diluted 0.01p (0.12p) (0.56p)
Adjusted profit/(loss) per share
- Basic 0.14p (0.12p) (0.34p)
- Diluted 0.14p (0.12p) (0.34p)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Note As at As at As at
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (unaudited)
GBP000 GBP000 GBP000
Non-current assets
Intangible assets 1,363 1,363 1,363
Property, plant and equipment 301 472 402
------------ ------------ ------------
Total non-current assets 1,664 1,835 1,765
------------ ------------ ------------
Current assets
Trade and other receivables 3,143 1,998 2,320
Cash and cash equivalents 81 64 50
------------ ------------ ------------
Total current assets 3,224 2,062 2,370
------------ ------------ ------------
Total assets 4,888 3,897 4,135
------------ ------------ ------------
Current Liabilities
Trade and other payables 2,609 1,260 2,006
Bank Loans and Loan Note 4 1,140 1,256 483
Lease liabilities 237 192 203
------------ ------------ ------------
Total current liabilities 3,986 2,708 2,692
------------ ------------ ------------
Net current liabilities (762) (646) (322)
Non Current Liabilities
Lease liabilities 9 242 155
Bank Loan and Loan Note 4 133 183 618
------------ ------------ ------------
142 425 773
------------ ------------ ------------
Total liabilities 4,128 3,133 3,465
------------ ------------ ------------
Total assets less total liabilities 760 764 670
------------ ------------ ------------
Equity
Issued share capital 6,345 6,334 6,345
Share premium account 14,110 14,080 14,110
Retained earnings (19,695) (19,650) (19,785)
Total equity 760 764 670
------------ ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023
Share Share Retained Total
Capital Premium Earnings Equity
GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2022 6,334 14,080 (19,578) 836
Loss for the period - - (72) (72)
Total comprehensive loss
for the period - - (72) (72)
--------- --------- ---------- --------
Balance at 30 June 2022
(unaudited) 6,334 14,080 (19,650) 764
========= ========= ========== ========
Balance at 1 July 2022 6,334 14,080 (19,650) 764
Loss for the period - - (266) (266)
Total other comprehensive - - - -
income
--------- --------- ---------- --------
Total comprehensive loss
for the period - - (266) (266)
--------- --------- ---------- --------
Transactions with owners
of the Company, recognised
directly in equity
Issue of ordinary shares 11 30 - 41
Credit to equity for share
based payments - - 131 131
Total transactions with
owners of the Company 11 30 131 172
--------- --------- ---------- --------
Balance at 31 December
2022 (audited) 6,345 14,110 (19,785) 670
========= ========= ========== ========
Balance at 1 January 2023 6,345 14,110 (19,785) 670
Profit for the period - - 8 8
Total comprehensive profit
for the period - - 8 8
--------- --------- ---------- --------
Transactions with owners
of the Company, recognised
directly in equity:
Credit to equity for share
based payments - - 82 82
Balance at 30 June 2023
(unaudited) 6,345 14,110 (19,695) 760
--------- --------- ---------- --------
CONSOLIDATED STATEMENT OF CASH FLOW
For the six months ended 30 June 2023
Note Six months Six months Year
ended ended ended
30 June 30 June
2023 (unaudited) 2022 (unaudited)
31 December
2022
(audited)
GBP000 GBP000 GBP000
Net cash generated by / (used
in) operating activities (i) 52 (495) (33)
Cash flows from investing activities
and servicing of finance
Net finance cost (18) (23) (51)
Payments to acquire tangible
fixed assets (11) (50) (65)
Net cash generated by / (used
in) investing activities (29) (73) (116)
------------------ ------------------ -----------------
Cash flows from financing activities
Repayment of borrowings (257) (22) (32)
Proceeds from issue of capital - - 41
Increase / (decrease) in invoice
discounting 386 (141) (469)
New Loans received - 400 400
Payment of finance lease liabilities (121) (64) (200)
Net cash from financing activities 8 173 (260)
------------------ ------------------ -----------------
Net (decrease)/ increase in
cash and cash equivalents 31 (395) (409)
Net cash and cash equivalents
at beginning of period 50 459 459
Effects of exchange rate changes - - -
on cash balances held in foreign
currencies
------------------ ------------------ -----------------
Net cash and cash equivalents at
end of period 81 64 50
================== ================== =================
Analysis of net funds (pre
lease liabilities)
Cash and cash equivalents 81 64 50
Borrowings due within one year (1,140) (1,256) (483)
Borrowings due within more than
one year (133) (183) (618)
Net debt (1,192) (1,375) (1,051)
================== ================== =================
Note (i)
Reconciliation of operating Six months Six months Year
profit to net cash from operating ended ended ended
activities 30 June 30 June 31 December
2023 (unaudited) 2022 (unaudited) 2022
(audited)
------------------ ------------------ -----------------
Operating profit / (loss) from
continued operations 78 (49) (261)
Depreciation/amortisation of
property, plant and equipment 111 104 223
Share based payment charge 82 - 131
(Increase)/decrease in trade
and other receivables (823) (83) (405)
Increase/(decrease) in trade
and other payables 604 (467) 279
Net cash generated by / (used
in) operating activities 52 (495) (33)
================== ================== =================
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
1.1 Basis of preparation
The financial information set out in these interim financial
statements does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The Group's statutory
financial statements for the year ended 31 December 2022, prepared
under International Financial Reporting Standards (IFRS), have been
filed with the Registrar of Companies. The auditor's report on
those statements was unqualified.
The interim financial information for the six months ended 30
June 2023, has been prepared in accordance with the AIM Rules for
Companies. The Group has not elected to apply IAS 34 'Interim
Financial Reporting'. The principal accounting policies used in
preparing the interim results are those the Group expects to apply
in its financial statements for the year ending 31 December 2023
and are unchanged from those disclosed in the Group's Annual Report
for the year ended 31 December 2022. The interim financial
statements have not been audited.
1.2 Basis of consolidation and business combinations
Group financial statements consolidate those of the Company and
of the following subsidiary undertakings:
Principal Group investments: Country of incorporation or Principal activities Description and proportion of
registration and operation shares held by the Company
------------------------------ ------------------------------ -------------------- ------------------------------
Norman Broadbent Executive England and Wales Executive Search 100 per cent ordinary shares
Search Ltd
Norman Broadbent (Ireland) Republic of Ireland Dormant 100 per cent ordinary shares
Ltd
2. SEGMENTAL ANALYSIS
Group revenues are primarily driven from UK operations. However,
when revenue is derived from overseas business, the results are
presented to the Board by geographic region to identify potential
areas for growth or those posing potential risks to the Group.
i) Revenue by class of business:
Revenue GBP'000
Six Months Ended Six Months Ended Year Ended
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (audited)
Search 4,062 2,555 5,666
Interim Management 1,776 1,378 2,920
Leadership consulting 219 3 111
Total 6,057 3,936 8,697
----------------------- ----------------- ----------------- ------------
ii) Revenue and gross profit by geography:
Revenue GBP'000 Gross Profit GBP'000
Six Months Ended Year Ended Six Months Ended Year Ended
30 June 30 June 31 December 30 June 30 June 31 December
2023 2022 2022 2023 2022 2022
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited)
United Kingdom 4,513 3,159 6,660 3,652 2,519 5,627
Rest of
World 1,544 777 2,037 1,526 777 1,720
Total 6,057 3,936 8,697 5,178 3,296 7,347
---------------- -------------- ------------ ------------ ------------ ------------ ------------
3. Profit/(LOSs) PER ORDINARY SHARE
i) Basic profit/(loss) per share:
This is calculated by dividing the profit/(loss) attributable to
equity holders of the Company by the weighted average number of
ordinary shares in issue during the period:
Six Months Ended Year Ended
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (audited)
------------ ------------ ------------
Profit/(loss) attributable to shareholders (GBP) 8,000 (72,000) (338,000)
------------ ------------ ------------
Weighted average number of ordinary shares 61,817,510 60,740,575 60,879,205
============ ============ ============
ii) Diluted profit/(loss) per share:
This is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all potentially
dilutive issues of ordinary shares. The Company has issued share
options which are potentially dilutive. A calculation is done to
determine the number of shares that could have been acquired at
fair value (determined as the average annual price of the Company's
shares) based on the monetary value of the subscription rights
attached to the outstanding options. The number of shares
calculated as above is compared with the number of shares that
would have been issued assuming the exercise of the share
options.
Six months ended 30 June Six months ended 30 June Year ended 31 December
2023 2022 2022
(unaudited) (unaudited) (audited)
--------------------------- --------------------------- ---------------------------
Profit/(loss) attributable
to shareholders (GBP) 8,000 (72,000) (338,000)
--------------------------- --------------------------- ---------------------------
Weighted average no. of
ordinary shares 61,817,510 60,740,757 60,879,205
Weighted average number of
ordinary shares for diluted
earnings per share 61,817,510 60,740,757 60,879,205
=========================== =========================== ===========================
iii) Adjusted profit/(loss) per share
Adjusted profit/(loss) per share has also been calculated in
addition to the basic and diluted loss per share and is based on
losses adjusted to eliminate charges for share based payments. It
has been calculated to allow shareholders to gain a clearer
understanding of the trading performance of the Group.
Six months ended 30 June 2023 Six months ended 30 June 2022 Year ended 31 December 2022
(unaudited) (unaudited) (audited)
Basic Diluted Basic Diluted Basic Diluted
pence per pence per pence per pence per pence per pence per
share share share share share share
GBP000 GBP000 GBP000
-------- ----------- ---------- -------- ----------- ---------- ------- ---------- ----------
Basic earnings
Profit/(loss)
after tax 8 0.01 0.01 (72) (0.12) (0.12) (338) (0.56) (0.56)
-------- ----------- ---------- -------- ----------- ---------- ------- ---------- ----------
Adjustment
======== ==========
Share based
payment
charge 82 0.13 0.13 - - - 131 0.22 0.22
Adjusted
earnings 90 0.14 0.14 (72) (0.12) (0.12) (207) (0.34) (0.34)
4. BORROWINGS
Six months ended Six months ended Year ended
30 June 30 June 31 December
2023 2022 2022
(unaudited) (unaudited) (audited)
GBP000 GBP000 GBP000
----------------- ----------------- ------------
Invoice discounting facility (see note (a) below) 869 811 483
Loans (see note (b) below) 404 628 618
Total 1,273 1,439 1,101
================= ================= ============
(a) Invoice discounting facility
The Group operates an invoice discounting facility with Metro
Bank. All Group invoices are raised through Norman Broadbent
Executive Search Limited and as such Metrobank (SME Invoice Finance
Limited) holds an all asset debenture for Norman Broadbent plc and
Norman Broadbent Executive Search Limited. At as 30 June 2023, the
outstanding balance on the facility of GBP0.9m was secured by trade
receivables of GBP2.7m. Interest is charged on the drawn down funds
at a rate of 2.4% above the bank base rate.
(b) Loans
In November 2020, the Group received a CBILS loan of GBP250,000
for a term of 6 years. Repayment of capital and interest began in
January 2022, and the loan incurs interest at 4.75% above the Metro
Bank UK base rate. Metro Bank holds an all asset fixed and floating
charge over Norman Broadbent Executive Search Limited linked to
this facility.
On 20 May 2022, a total of GBP400,000 nominal value of CLNs were
issued to Downing Strategic Micro-Cap Investment Trust Plc and
Moulton Goodies Limited, each of whom subscribed GBP200,000. On 19
May 2023, GBP200,000 nominal value of CLNs was repaid. Each of
Downing Strategic Micro-Cap Investment Trust Plc and Moulton
Goodies Limited holds GBP100,000 of CLNs of which up to 50% of the
outstanding amount is convertible plus any compounded interest in
accordance with the terms of the secured loan instrument and
security provided by Norman Broadbent Executive Search Limited.
[1] Underlying EBITDA excludes share based payment charges
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END
IR ZFLFLXDLEBBZ
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