Norman Broadbent plc (LON: NBB) – a leading London quoted Professional Services firm offering a diversified portfolio of integrated Leadership Acquisition & Advisory Services (Board & Leadership Search, Senior Interim Management, Research & Insight, Leadership Consulting & Assessment, and executive level Talent Solutions) – has today announced the Group’s unaudited interim results for the six months ended 30th June 2019.
Highlights
· The Group posted a small profit before tax
· Group revenue increased by £0.6m (+13%) to £5.2m
· Net Fee Income (NFI) increased by £0.2m (+7%) to £3.5m
· Group Operating Profit was £55,000 against a Group Operating Loss of £234,000 in H1 2018
· PBT was £16,000 against a loss of £265,000 in H1 2018
· Interim Management NFI for H1 2019 was £900,000, an increase of £101,000 from H1 2018 (+13%)
· Following a change in leadership, Solutions H1 2019 NFI was £901,000, an increase of £283,000 (+46%) on the prior six months, and the best ever NFI and PBT results
· New and enhanced Working Capital Facility agreed with Bibby Financial Services
Mike Brennan, Norman Broadbent Group CEO, said:
“I am pleased to report that the first six months of 2019 have seen continued positive top line growth. We also recorded a small profit before tax – the first for many years. The return to profitability in H1 is an extremely important milestone for the Group. Having posted a loss of £0.3m in H1 2018, and a loss of £0.5m in H2 2018, I am pleased with the significant improvement in H1 2019 which saw the Group return to profit.
These results validate our strategy of building a more diversified business supplying high value, more relevant services to clients. As we build a disruptive, market leading Professional Services business, we continue to attract, and invest in, high‐quality Talent keen to join us on our journey.
On achieving this milestone, I would like to again thank my colleagues for their continued hard work, innovation and commitment, our clients for placing their continued trust in us, and our supportive shareholders”
CEO Review:
In the six months to 30 June 2019, the Group posted an operating profit of £55,000 (2018: loss £234,000) on turnover of £5,260,000 (2018: £4,667,000). The achievement of operating profit for the first six months is a major landmark in our strategic journey.
The Group has changed from a predominantly single service executive search business to an enterprise providing our clients with an integrated range of complementary, progressive, and sophisticated offerings geared specifically to their needs. This not only helps us serve our clients better, but also enables us to differentiate ourselves in what is becoming an increasingly transactional/commoditised traditional executive search market. This also helps build a more balanced Group with complementary, high-quality recurring annuity type revenue streams.
The rebalancing of our service mix saw our established Executive Search business, (including Insight and Research revenue), contribute 46% of Net fee Income (56% in the year to 31 December 2018) with Interim and Solutions both growing and increasing their percentage share of Group Net Fee Income. This continued overall growth across the Group, and the introduction of new services has created a more relevant and balanced business.
Our aim is to continue strategically scaling all of the business units via the development of our existing resources and, where appropriate, the selective recruitment of high quality Talent to the Group. As we continue to grow, we will maintain our focus on innovation, client-service, enhancing our established brand, the growth of high-quality recurring revenues, and a return to profitability.
Summarised Financial Results:
The table below summarises the results for the Group.
| Six months to 30 June | Six months to 30 June | Year ended | |
| 2019 | 2018 | 31-Dec | |
| 2018 | |||
| £000’s | £000’s | £000’s | |
| Continuing operations | |||
| Revenue | 5,260 | 4,667 | 9,414 |
| Cost of sale | -1,738 | -1,377 | (2,770) |
| Gross profit / Net Fee Income | 3,522 | 3,290 | 6,644 |
| Operating expenses | -3,467 | -3,524 | -7,308 |
| Group operating profit / (loss) | 55 | -234 | -664 |
| Net finance cost | -39 | -31 | -77 |
| Profit / (Loss) before tax | 16 | -265 | -741 |
| Income tax | – | – | – |
| Profit / (Loss) after tax | 16 | -265 | -741 |
Norman Broadbent Executive Search (“NBES”)
Net Fee Income for H1 2019 was £1,612,000, a decrease of £163,000 from H1 2018 (-9%). NBES made a loss of £71,000 for H1 2019 compared with a loss of £18,000 in H1 2018.
Research & Insight (“R&I”)
NBES revenues shown above include those generated by our R&I Practice where we continue to invest. The R&I Practice not only serves our own internal requirements, but also provides complementary services to our other businesses, and increasingly to external clients who buy our stand-alone Research & Insight services.
Norman Broadbent Interim Management (“NBIM”)
NBIM continues to grow. Net Fee Income for H1 2019 was £900,000, an increase of £101,000 from H1 2018 (+13%), and up £215,000 (+31%) from the underlying H2 2018 Net Fee income. We have continued to invest into NBIM and our aim is to selectively and carefully scale as and when appropriate. Profit in H1 was £13,000 (£118,000 in H1 2018).
NB Solutions (“NBS”)
NBS Net Fee Income for H1 2019 was £901,000, an increase of £283,000 from H1 2018 (+46%). NBS posted a Profit before Tax of £258,000 compared with a profit of £66,000 in H1 2018. Following a change in leadership within NBS, this part of the business posted its “best ever” results in H1 2019 and indeed NBS H1 Net Fee Income was 56% up as compared to that achieved in H2 2018.
Norman Broadbent Leadership Consulting (“NBLC”)
NBLC Net Fee Income for H1 2019 was £108,000, an increase of £10,000 (+10%) from H1 2018. NBLC reported a loss of £30,000 for H1 2019 compared to a loss of £44,000 in H1 2018.
Financial Position
Equity shareholders’ funds were £1,294,000 as at 30 June 2019 (£1,268,000 at 31 December 2018), with net current liabilities of (£418,000) (net current liabilities £454,000 at 31 December 2018). Cash and cash equivalents at 30 June 2019 amounted to £258,000 (£684,000 at 31 December 2018, £260,000 at 30 June 2018).
Net cash outflow from operations was £529,000 (Net cash inflow from operation was £354,000 at 31 December 2018) and net cash inflow from financing activities amounted to £160,000 (£103,000 outflow at 31 December 2018).
Outlook
These are positive results and evidence our progression. We remain confident that we will see continued top line and Net Fee Income growth, along with an improved bottom line for 2019. I would like to thank my colleagues for their hard work, innovation and commitment, our clients for placing their continued trust in us, and our supportive shareholders.
Michael J. Brennan
Group Chief Executive Officer
