TIDMFDM
RNS Number : 0592F
FDM Group (Holdings) plc
17 March 2022
FDM Group (Holdings) plc
Preliminary Results
FDM Group (Holdings) plc ("the Company") and its subsidiaries
(together "the Group" or "FDM"), today announces its results for
the year ended 31 December 2021.
31 December 31 December % change
2021 2020
Revenue GBP267.4m GBP267.7m Unchanged
------------ ------------ ----------
Adjusted operating profit(1) GBP47.3m GBP42.7m +11%
------------ ------------ ----------
Profit before tax GBP41.4m GBP41.0m +1%
------------ ------------ ----------
Adjusted profit before tax(1) GBP46.7m GBP42.0m +11%
------------ ------------ ----------
Basic earnings per share 29.1p 28.2p +3%
------------ ------------ ----------
Adjusted basic earnings
per share(1) 33.2p 28.8p +15%
------------ ------------ ----------
Cash flow generated from
operations GBP52.1m GBP66.1m -21%
------------ ------------ ----------
Cash conversion(2) 124.1% 158.4% -22%
------------ ------------ ----------
Adjusted cash conversion(1) 110.3% 154.8% -29%
------------ ------------ ----------
Dividend per share(3) 33.0p 46.5p -29%
------------ ------------ ----------
Cash position at period
end GBP53.1m GBP64.7m -18%
------------ ------------ ----------
-- FDM made good progress in 2021, delivering a strong
operational and financial performance, comfortably in line with the
Board's expectations.
-- Strong levels of demand for our Mounties and high deal volumes across most of our regions.
-- Mounties assigned to clients at week 52(4) were 4,033 (2020:
3,580), with the UK and APAC delivering the strongest growth in
Mounties deployed. In North America, Canada performed well with a
more subdued performance in the US, where we are introducing a
number of initiatives that should enable us to respond better to
strong demand.
-- Mountie utilisation rate(5) improved to 97.3% (2020: 94.8%).
-- Group revenue was flat against the prior year (up 2% on a
constant currency basis), reflecting the phasing of headcount year
on year; adjusted operating profit increased by 10.8% to GBP47.3
million (2020: GBP42.7 million).
-- Mountie training completions during the year of 2,410 (2020:
1,341) were the highest in FDM's history and the Group ended the
year with a record number in training.
-- 78 new clients secured globally (2020: 52) of which 66 were
outside the financial services sector; progress in the software and
IT services, government, and commercial and professional services
sectors.
-- Continued investment in the Academy Transformation and
Accreditation Programmes to underpin the future growth of the
business.
-- Strong balance sheet, with GBP 53.1 million of cash at year
end (2020: GBP64.7 million), after dividend payments during the
year of GBP46.8 million (2020: GBP20.1 million).
-- Cash conversion of 124.1% (2020: 158.4%), in line with the
Board's expectations. Cash conversion in the prior year reflected a
higher level of accruals.
-- Final dividend of 18.0 pence per share, following an interim
dividend of 15.0 pence per share declared in July 2021, giving a
total dividend for the year of 33.0 pence.
-- FDM is committed to reducing its carbon footprint; the
Group's Carbon Reduction Plan was approved in 2021 and will be
published later this year.
-- 2022 has started well, with very strong demand for our
Mounties across all our geographies and excellent levels of deal
volumes.
(1) The adjusted operating profit and adjusted profit before tax
are calculated before Performance Share Plan expense (including
social security costs) of GBP5.3 million (2020: GBP1.0 million).
The adjusted basic earnings per share is calculated before the
impact of Performance Share Plan expenses (including social
security costs and associated deferred tax). The adjusted cash
conversion is calculated by dividing cash flow generated from
operations by adjusted operating profit.
(2) Cash conversion is calculated by dividing cash flow
generated from operations by operating profit.
(3) See note 13 .
(4) Week 52 in 2021 commenced on 20 December 2021 (2020: week 52
commenced on 21 December 2020).
(5) Utilisation is calculated as the ratio of cost of utilised
Mounties to the total Mountie payroll cost.
Rod Flavell, Chief Executive Officer, said:
"FDM made good progress in 2021, with the numbers of Mounties
trained during the year and of Mounties in training at the year-end
both a record high.
The Group continued with its significant investment in Academy
transformation and accreditation programmes to underpin the future
growth of the business. This year we are targeting a significant
increase in the numbers of Mounties that we train and deploy and
plan to accelerate our internal staff recruitment and other
internal development programmes, with a particular focus on our
sales and Academy training teams.
During these first weeks of 2022, demand for our people across
all our operating territories has been very strong and we are
achieving excellent levels of deal volumes. We have seen client
ordering patterns at greater levels than ever before with
established and new clients of the Group looking for very
significant quantities of Mounties, across a broad range of skill
sets.
Notwithstanding the wider geopolitical issues ongoing in the
world, the Group is well placed to deliver a good performance in
2022 and beyond."
Enquiries
For further information:
FDM Rod Flavell - CEO 0203 056 8240
Mike McLaren - CFO 0203 056 8240
Nick Oborne
(financial public relations) 07850 127526
Forward-looking statements
This announcement contains statements which constitute
'forward-looking statements'. Although the Group believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will
prove to have been correct. Because these statements involve risks
and uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We are FDM
FDM Group (Holdings) plc ("the Company") and its subsidiaries
(together "the Group" or "FDM") form a global professional services
provider with a focus on IT. Our mission is to bring people and
technology together, creating and inspiring exciting careers that
shape our digital future.
The Group's principal business activities involve recruiting,
training and deploying its own permanent IT and business
consultants ("Mounties" or "consultants") to clients, either on
site or remotely. FDM specialises in a range of technical and
business disciplines including Development, Testing, IT Service
Management, Project Management Office, Data Engineering, Cloud
Computing, Risk, Regulation and Compliance, Business Analysis,
Business Intelligence, Cyber Security, AI (Artificial
Intelligence), Machine Learning and Robotic Process Automation.
The FDM Careers Programme bridges the gap for graduates,
ex-Forces, returners to work and apprentices, providing the
training and experience required to make a success of launching or
relaunching their careers. We have dedicated training centres and
sales operations located in London, Leeds, Glasgow, New York NY,
Arlington VA, Charlotte NC, Austin TX, Toronto, Frankfurt,
Singapore, Hong Kong, Shanghai and Sydney. We also operate in
Ireland, Luxembourg, the Netherlands, Poland, Switzerland, Austria,
Spain, South Africa, and New Zealand.
The physical and mental health and wellbeing of our people and
stakeholders is central to who we are and what we do. As such, our
outreach programmes for our Mounties and in-house staff have grown
and broadened during the pandemic, becoming key to our support and
care for all of our people globally.
FDM is a collective of over 5,500 people, from a multitude of
different backgrounds, life experiences and cultures. We are a
strong advocate of diversity and inclusion in the workplace and the
strength of our brand arises from the talent within.
INTRODUCTION
FDM made good progress in 2021, delivering a strong operational
and financial performance. The Group continued its significant
investment in Academy transformation and accreditation programmes
to underpin the future growth of the business, and the numbers of
Mounties trained during the year and of trainees at the year-end
were both a record high. The strength of our response to the many
challenges presented by the COVID-19 pandemic has been
pleasing.
Throughout the year, we consistently saw average weekly deal
volumes exceed expectations. We experienced strong client demand
across the majority of our markets, most notably in the UK and
APAC, and the levels of beached and signed-off Mounties returned to
pre-pandemic levels. To meet this growth in demand, 2,410 Mounties
were trained during the year (2020: 1,341 training completions;
2019: 2,115 training completions) which is the highest in the
Group's history, and the Group ended the year with a record number
in training.
We ended the year with 4,033 Mounties placed with clients, ahead
of the pre-pandemic closing 2019 headcount of 3,924. The Group
recorded revenue of GBP267.4 million and delivered an adjusted
operating profit(1) of GBP47.3 million.
We maintain a strong focus on cash management and cash
collection, ending the year with GBP53.1 million of cash and no
debt.
Our strategy
FDM's strategy is straightforward: to deliver customer-led,
sustainable, profitable growth on a consistent basis, through our
well-established and proven Mountie model. The resilience and
agility of our business model has enabled us to deliver a very
strong performance in the year and to continue to deliver on our
four key strategic objectives: attract, train and develop
high-calibre Mounties; invest in leading-edge training
capabilities; grow and diversify our client base; and expand and
consolidate our geographic presence.
Our strategy requires that all activities and investments
produce the appropriate level of return on investment, that they
deliver sustained and measurable improvements for all our
stakeholders including customers, staff and shareholders, and that
they further our objective of launching the careers of talented
people worldwide, which remains core to everything we do.
Strategic objectives
Attract, train and develop high-calibre Mounties
As client demand increased throughout 2021, we were able to ramp
up recruitment and training and delivered a record number of
training completions in the year. The efforts made by our
Recruitment teams globally throughout the pandemic to maintain
engagement with potential candidates and our university partners
benefited our recruitment significantly. Our Academy Transformation
Programme, which is discussed in more detail below, offers
market-leading, flexible training to increasing numbers of
trainees, using the latest technologies and training methods,
further enhancing the quality and efficiency of training and making
our offering more attractive than ever to candidates, and further
differentiating FDM in the current high-wage inflationary
environment.
Our Ex-forces and Returners programmes remain an important
source of talent for the business and we continue to invest in
those programmes. We are also investing in our programme of
apprenticeships, which will further diversify our talent
pipeline.
In total, there were 2,410 training completions in 2021, an
increase of 80% on the previous year (2020: 1,341), and the highest
number in the Group's history. In 2022 we shall target a
significant increase in the numbers of Mounties that we train.
Invest in leading-edge training capabilities
As previously reported, one of our key responses to the pandemic
was the introduction of remote training. Realising the benefits
that remote training brings to our business, we have been heavily
focussed on developing our strategy for the longer-term delivery of
our training programmes and in June 2021 we formally started our
Academy Transformation Programme. This consists of five key
areas:
Accreditation - External validation of FDM's programme content,
delivery approach, and assessment
Standardisation - Ensuring the programmes we deliver are
consistent across the global business
Academy Change - Trials of new ways of working within the
Academy - including larger classes, cross-regional deliveries,
hybrid training (remote and classroom-based training) and agile
training delivery
Physical Infrastructure - Understanding the needs and
configuration of the physical space of the FDM Academy of the
future
Technological Infrastructure - Updating our existing IT systems
to better support remote training delivery
Working with our accreditation partner, TechSkills, we achieved
the Tech Industry Gold Standard accreditation for seven of our
programmes - Business Analysis, Business Consulting (accredited as
'Project Management Office'), Business Intelligence, Software
Testing, Software Development, RRC (Risk Regulation and Compliance)
and Robotic Process Automation. This accreditation provides
assurance for candidates and clients that the content that we
deliver meets industry standards for job readiness. Once the
initial FDM training has been completed, our Mounties receive their
Foundation Certification, with digital credentials provided by
Credly. Mounties will also have the opportunity to undertake their
Practitioner Certification, which is based on the successful
completion of learning outcomes during their first two years in
industry with our clients.
Alongside accreditation, we are standardising our programmes
globally, allowing us to offer accredited programmes in more
locations. We have already reduced the impact of regional borders
with UK trainers delivering to Frankfurt trainees, and North
American and APAC trainers delivering throughout their respective
regions. Standardising our content will enable this model to become
more widespread over time.
With trainees able to join training remotely, we have seen a
reduction in the number of trainees who leave within the initial
14-day cooling off period, and an increase in average class sizes.
Remote training also offers greater accessibility to those with
travel restrictions, children and other caring responsibilities.
Reinforcing inclusivity in this way will enable our trainee
population to become more diverse.
We have implemented hybrid training trials in the UK, utilising
a combination of classroom-based and remote training. These trials
will continue throughout 2022 as we work towards the best training
delivery solution for the post-COVID world of work. Our permanent
Academies, of which we have nine, remain a key part of our training
model as we trial and assess the benefits of bringing trainees into
physical classrooms for some elements of their training.
Grow and diversify our client base
We continue to deliver the highest level of service to our
clients and have worked closely with them as demand for our
Mounties increased throughout in the year. We secured 78 new
clients in the year (2020: 52), of which 33 were in the UK, 20 in
North America, 17 in APAC and 8 in EMEA. 85% were secured from
outside the financial services sector. We have made good progress
in the software and IT services, government, and commercial and
professional services sectors.
Expand and consolidate our geographic presence
The expansion and consolidation of our geographic presence is a
key growth driver for FDM. APAC Mountie headcount at week 52
increased to 880 compared to 633 in 2020 and 497 in 2019. The UK
also delivered a very strong performance, increasing Mountie
headcount by 232 over 2020. Headcount in North America increased by
nine overall, led by a strong performance from our Canadian
operation; our performance in the US was more subdued, primarily
reflecting continued pandemic-related uncertainties, but demand
improved during the second half and has strengthened further in the
opening months of 2022, and we have introduced a number of new
initiatives in the US which should enable us to meet that demand as
it continues to grow. EMEA, which now includes Ireland (please see
'Segmental performance' section), closed with 252 Mounties
deployed, down 35 compared with 2020 after the completion of a
major client project in Luxembourg during the second half; we saw
good activity levels in our nascent location of Poland.
With high client engagement and high demand for Mounties in all
territories, we anticipate continued growth of our international
footprint in 2022 and beyond, both in our longer-established
territories and our newer locations.
Our service offerings
We continually review our training content to ensure we deliver,
at scale, a consultant workforce that meets our clients' current
and future requirements. We have numerous exciting client projects
in progress across the mainstream cloud providers including AWS,
GCP, and Microsoft Azure. As the financial regulators gain
increasing confidence in the security that cloud providers offer,
we have seen our banking clients look to accelerate their
cloud-specific programmes of work. Software Engineering continues
to be a strong area of demand, with clients making the most of this
skillset's adaptable nature. We have also seen strong interest
across our Data products, especially around
hard-to-source-skillsets such as Data Engineering. Further, we have
supported our clients' regulatory programmes of work with large
order fulfilment across KYC (Know Your Customer) and programmes of
work related to specific regulatory deadlines.
Throughout 2021 we have also developed deeper partnerships with
technology providers such as AWS and their 'AWS re/Start
programme', A Cloud Guru, Microsoft, and Salesforce, providing
additional strength to our industry-accredited training.
Following the success of our Agile Pods in 2020, we have
continued to develop this initiative, which allows our Mounties to
develop skills remotely in a multi-disciplinary and collaborative
setting which closely simulates the client environments in which
they will be placed.
GROUP RESULTS
Summary income statement
Year ending Year ending
31 December 31 December
2021 2020 % change
Revenue GBP 267.4m GBP 267.7 Unchanged
m
Adjusted operating
profit(1) GBP 47.3m GBP 42.7 m +11%
Operating profit GBP42.0 m GBP41.7m +1%
Adjusted profit
before tax(1) GBP 46.7m GBP 42.0 m +11%
Profit before
tax GBP41.4m GBP 41.0 m +1%
-------------------- ------------- ------------- ----------
Adjusted basic
EPS(1) 33.2p 28.8p +15%
Basic EPS 29.1p 28.2p +3%
Overview
The Group delivered a solid performance in 2021, evidencing good
recovery from the impact of the pandemic. Whilst revenue was flat
in comparison to the prior year at GBP267.4 million (2020: GBP267.7
million), adjusted operating profit(1) increased by 10.8% to
GBP47.3 million (2020: GBP42.7 million), with adjusted basic
earnings per share(1) up 15%, to 33.2 pence (2020: 28.8 pence). We
ended the year with a robust balance sheet, including cash of
GBP53.1 million and converted 124% of our operating profit into
operating cash flow. We remain well positioned for future growth
with a proven and agile business model that allows us to respond
rapidly and effectively to market fluctuations.
Revenue was flat against the prior year at GBP267.4 million
(2020: GBP267.7 million); on a constant currency basis revenue
increased by GBP5.6 million. The change in revenue is less than the
increase in Mountie headcount due to the phasing of headcount year
on year. Mounties assigned to clients at week 52 2021 increased by
13%, totalling 4,033 (week 52 2020: 3,580; week 52 2019: 3,924). At
week 52 2021 our Ex-Forces Programme accounted for 196 Mounties
deployed worldwide (week 52 2020: 194). Our Returners Programme had
156 Mounties deployed at week 52 2021 (week 52 2020: 112). The
Mountie utilisation rate improved to 97.3% (2020: 94.8%).
An analysis of revenue and headcount by region is set out in the
table below:
Year ending Year ending 2021 2020
31 December 31 December Mounties Mounties
2021 2020 assigned assigned
Revenue Revenue to clients to clients
GBPm GBPm at week 52(2) at week 52(2)
UK(3) 121.8 116.7 1,806 1,574
North America 81.4 97.1 1,095 1,086
EMEA(3) 25.0 23.9 252 287
APAC 39.2 30.0 880 633
------------- ------------- --------------- ---------------
267.4 267.7 4,033 3,580
------------- ------------- --------------- ---------------
Adjusted Group operating profit margin increased to 17.7% (2020:
16.0%) with overheads decreasing to GBP84.7 million (2020: GBP87.0
million). As previously disclosed, the prior year adjusted
operating profit margin was impacted by an increase in overheads
after the Board took the pragmatic and commercial decision in 2020
to settle for GBP3.0 million a long-standing legal claim which the
Board considered to be unmeritorious.
1 The adjusted operating profit and adjusted profit before tax
are calculated before Performance Share Plan expenses (including
social security costs). The adjusted basic earnings per share is
calculated before the impact of Performance Share Plan expenses
(including social security costs and associated deferred tax).
2 Week 52 in 2021 commenced on 20 December 2021 (2020: week 52
commenced on 2 1 December 2020).
3 Reflecting internal management and reporting, performance and
headcount results for Ireland, previously included within 'UK and
Ireland' region, are included within EMEA. All results, including
prior year comparatives, have been updated to reflect this change.
Ireland Mountie headcount was 20 at the end of 2021 (2020: 51).
Adjusting items
The Group presents adjusted results, in addition to the
statutory results, as the Directors consider that they provide a
useful indication of underlying performance. The adjusted results
are stated before Performance Share Plan expenses including
associated taxes. An expense of GBP5.3 million was recognised in
the year to 31 December 2021 relating to Performance Share Plan
expenses including social security costs (2020: GBP1.0
million).
Net finance expense
The finance expense costs include lease liability interest of
GBP0.6 million (2020: GBP0.7 million). The Group continues to have
no borrowings.
Taxation
The Group's total tax charge for the year was GBP9.6 million,
equivalent to an effective tax rate of 23.2%, on profit before tax
of GBP41.4 million (2020: effective tax rate of 25.0% based on a
tax charge of GBP10.2 million and a profit before tax of GBP41.0
million). The effective tax rate in 2021 is higher than the
underlying UK tax rate of 19% primarily due to Group profits earned
in higher tax jurisdictions. The effective tax rate reflects the
Group's geographical mix of profits and the impact of items
considered to be non-taxable or non-deductible for tax purposes,
with the decrease year-on-year primarily due to changes in these
factors.
Earnings per share
Basic earnings per share increased in the year to 29.1 pence
(2020: 28.2 pence), whilst adjusted basic earnings per share were
33.2 pence (2020: 28.8 pence). Diluted earnings per share were 28.8
pence (2020: 28.1 pence).
Dividend
During the year, the Group paid three dividends totalling
GBP46.8 million, representing 43.0 pence per share.
On 27 January 2021, taking into account the decision not to
recommend a final dividend in 2020 in respect of the 2019 financial
year, the Board declared a second interim dividend for 2020 of 13.0
pence per share which was paid to shareholders on 26 February 2021.
On 28 April 2021, a final dividend of 15.0 pence per share for 2020
was approved by shareholders at the AGM and was paid on 4 June
2021. On 27 July 2021, an interim dividend of 15.0 pence per share
for 2021 was declared which was paid on 3 September 2021.
The Board has recommended a final dividend of 18 pence per
share, subject to shareholder approval at the forthcoming AGM,
taking the total dividend to 33.0 pence per share.
The Board has set a minimum consistent cash buffer at a Group
level and will always consider the ongoing needs for the funding of
organic growth across the business and the distributable reserves
available to the Group when considering dividend levels. At 31
December 2021 the Company had distributable reserves of GBP51.2
million. This statement does not form part of the audited financial
statements and the distributable reserves figure of GBP51.2 million
is therefore not audited by PwC.
Cash flow and Statement of Financial Position
The Group's cash balance decreased to GBP53.1 million (2020:
GBP64.7 million) with the variation of the timing of dividends
bolstering the prior year end financial position. Cash conversion
remained good at 124.1% (2020: 158.4%) reflecting strong cash
generation and cash collection performance by our credit control
team.
Dividends paid in the year totalled GBP46.8 million (2020:
GBP20.1 million). Net capital expenditure was GBP0.4 million (2020:
GBP0.6 million) and tax paid was GBP10.6 million (2020: GBP11.5
million).
SEGMENTAL PERFORMANCE
UK(1)
The UK experienced strong growth in Mountie headcount with
Mounties deployed at week 52 increasing 15% to 1,806 (2020: 1,574).
Revenue increased by 4.4% to GBP121.8 million (2020: GBP116.7
million), less than the increase in Mountie headcount due to the
phasing of headcount year-on-year, and adjusted operating profit(2)
increased 17.8% to GBP28.4 million (2020: GBP24.1 million). We
progressively increased training during the year to meet client
demand with 1,035 training completions during the year, an increase
of 150% over the previous year (2020: 414).
In 2020, in response to reduced client demand we decreased our
number of trainees, instead focussing on upskilling those already
onsite and those who were signed off. Demand returned in 2021 and
the proportion of consultants who are within their first year
increased to 49% (2020: 21%), while the proportion who have
completed their first two years with FDM reduced to 33% (2020:
41%); we anticipate that this will continue to rebalance to more
normal levels over the next two to three years.
In the second half of the year we introduced paid training in
the UK, recognising a cost of GBP2.0 million in 2021. Trainees are
now employed and paid a salary from the first day of training, in
line with our operations elsewhere in the world.
(1) 2020 results for both the UK region and EMEA region have
been restated to show results for Ireland as part of EMEA.
Previously, results for Ireland were included in the region "UK and
Ireland".
(2) The adjusted operating profit is calculated before
Performance Share Plan expenses (including social security
costs).
North America
North America Mounties deployed at week 52 increased slightly to
1,095 from 1,086 in 2020. Revenue decreased by 16.2% to GBP81.4
million (2020: GBP97.1 million) due to the phasing of headcount
year-on-year as during 2020 North America headcount was largely
resilient to the effects of the pandemic until the last quarter.
During 2021, we increased our training output by 27%, with 661
training completions compared with 520 in 2020.
Despite Canada's strict lockdown for much of 2021, client demand
has been good; US trading was more subdued, primarily reflecting
continued pandemic-related uncertainties. However, demand for our
Mounties in the US improved during the third and fourth quarters
and has strengthened further in the opening months of 2022, and we
have introduced a number of new initiatives in our recruitment,
training and sales processes which should enable us to optimise the
throughput of quality talent to meet that demand as it continues to
grow. We continued to focus on expanding our client base and added
a further 20 new clients during the year (2020: 10), a record for
the region.
Adjusted operating profit decreased by 4.8% to GBP13.1 million
(2020: GBP12.5 million).
EMEA (Europe, Middle East and Africa, excluding UK) (1)
EMEA Mounties deployed decreased by 12.2% to 252 at week 52
(2020: 287), reflecting the anticipated completion of a major Risk,
Regulation and Compliance project for a client in Luxembourg. We
had 197 training completions in the period, a record for the region
and double the prior year (2020: 96), while revenue increased 4.6%
to GBP25.0 million (2020: GBP23.9 million).
During the year we established a presence in Poland, where we
have seen good initial demand and we ended the year with 38
consultants deployed with clients.
Adjusted operating profit decreased 24.4% to GBP3.4 million
(2020: GBP4.5 million).
APAC (Asia Pacific)
APAC continued to grow at a rapid pace in 2021, led by growth in
Australia, which now holds the largest headcount in the region.
Mounties deployed at week 52 increased 39.0% to 880 (2020: 633) and
revenue increased by 30.7% to GBP39.2 million (2020: GBP30.0
million). During the year we trained 517 consultants, an increase
of 66% (2020: 311).
We continued to expand our client base, adding a further 17
clients in the year (2020: 16). During the year we established a
trading entity in New Zealand, to meet client demand and benefit
from the reciprocal visa arrangements between Australia and New
Zealand.
Adjusted operating profit increased 50.0% to GBP2.4 million
(2020: GBP1.6 million).
THE BOARD
There have been no changes to the Board since the publication of
our last Annual Report.
Jacqueline de Rojas (independent Non-Executive Director) was
appointed as an additional member of the Nomination Committee with
effect from 1 March 2021, and Rod Flavell (CEO) stepped down as a
member of that Committee with effect from 27 April 2021. Following
those changes, the Committee now comprises three independent
Non-Executive Directors (Jacqueline de Rojas, Michelle Senecal de
Fonseca and Peter Whiting), in addition to David Lister as the
Committee Chair.
OUR PEOPLE
FDM is a people business and looking after our people has
remained our top priority this year. Our results reflect the
dedication and hard work of all our colleagues; our consultants
working with clients and our recruiters, trainers, internal staff
and those in support roles. Our people understand that our clients'
success is our success, and the Board would like to thank them
again for their great contribution to our performance during the
year.
The People Team continues to engage with staff to ensure that
their wellbeing is monitored and safeguarded. The People Team
continues to work closely with the Board on succession planning and
people development whilst progress on the implementation of our
Group People Strategy has continued during the year.
As in 2020, we have not accessed the UK Coronavirus Job
Retention Scheme (commonly known as furlough), nor have we taken
any UK government funding.
CURRENT TRADING AND OUTLOOK
During these first weeks of 2022, demand for our Mounties across
all operating territories has been very strong and we are achieving
excellent levels of deal volumes. We have seen client ordering
patterns at greater levels than ever before with established and
new clients of the Group looking for very significant quantities of
Mounties, across a broad range of skill sets.
Notwithstanding the wider geopolitical issues ongoing in the
world, the Group is well placed to deliver a good performance in
2022 and beyond.
Consolidated Income Statement
for the year ended 31 December 2021
Note 2021 2020
GBP000 GBP000
Revenue 4 267,356 267,737
Cost of sales (140,641) (138,957)
Gross profit 126,715 128,780
( 84,700
Administrative expenses ) (87,040)
Operating profit 5 42,015 41,740
Finance income 6 58 99
Finance expense 6 (650) (815)
( 592
Net finance expense ) (716)
Profit before income tax 41,423 41,024
( 9,594
Taxation 7 ) (10,249)
Profit for the year 31,829 30,775
Earnings per ordinary share
2021 2020
pence pence
Basic 8 29.1 28.2
Diluted 8 28.8 28.1
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
2021 2020
GBP000 GBP000
Profit for the year 31,829 30,775
Other comprehensive expense
Items that may be subsequently reclassified
to profit or loss
Exchange differences on retranslation of
foreign operations (net of tax) (47) (635)
Total other comprehensive expense (47) (635)
Total comprehensive income for the year 31,782 30,140
Consolidated Statement of Financial Position
as at 31 December 2021
2021 2020
Note GBP000 GBP000
Non-current assets
Right-of-use assets 11,631 14,774
Property, plant and equipment 4,069 5,554
Intangible assets 19,597 19,885
Deferred income tax assets 2,484 2,123
37,781 42,336
Current assets
Trade and other receivables 9 35,841 31,048
Cash and cash equivalents 10 53,120 64,725
88,961 95,773
Total assets 126,742 138,109
Current liabilities
Trade and other payables 11 31,235 28,563
Lease liabilities 5,413 5,502
Current income tax liabilities 2,147 2,094
38,795 36,159
Non-current liabilities
Lease liabilities 9,817 13,986
Total liabilities 48,612 50,145
Net assets 78,130 87,964
Equity attributable to owners
of the parent
Share capital 12 1,092 1,092
Share premium 9,705 9,705
All other reserves 5,126 (57)
Retained earnings 62,207 77,224
Total equity 78,130 87,964
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Note 2021 2020
GBP000 GBP000
Cash flows from operating activities
Group profit before tax for the
year 41,423 41,024
Adjustments for:
Depreciation and amortisation 5 6,160 6,501
Loss on disposal of non-current
assets 2 19
Finance income 6 (58) (99)
Finance expense 6 650 815
Share-based payment charge (including
associated social security costs) 5,622 2,187
(Increase)/ decrease in trade
and other receivables (5,123) 9,802
Increase in trade and other payables 3,471 5,885
Cash flows generated from operations 52,147 66,134
Interest received 58 99
Income tax paid (10,606) (11,464)
Net cash inflow from operating
activities 41,599 54,769
Cash flows from investing activities
Acquisition of property, plant
and equipment (368) (536)
Acquisition of intangible assets - (79)
Net cash used in investing activities (368) (615)
Cash flows from financing activities
Proceeds from sale of shares
from EBT 450 349
Principal elements of lease payments (5,294) (5,294)
Interest elements of lease payments (564) (746)
Proceeds from sale of own shares 50 405
Finance costs paid (85) (68)
Dividends paid 13 (46,820) (20,085)
Net cash used in financing activities (52,263) (25,439)
Exchange losses on cash and cash
equivalents (573) (969)
Net (decrease)/ increase in cash
and cash equivalents (11,605) 27,746
Cash and cash equivalents at
beginning of year 64,725 36,979
Cash and cash equivalents at
end of year 10 53,120 64,725
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Share Share All Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2021 1,092 9,705 (57) 77,224 87,964
Profit for the year - - - 31,829 31,829
Other comprehensive expense ( 47
for the year - - (47) - )
Total comprehensive income
for the year - - (47) 31,829 31,782
Share-based payments - - 5,320 - 5,320
Transfer to retained
earnings - - (1,530) 1,530 -
Own shares sold - - 1,440 (938) 502
Recharge of net settled
share options - - - (618) (618)
Dividends (note 13 ) - - - (46,820) (46,820)
Total transactions with
owners, recognised directly
in equity - - 5,230 (46,846) (41,616)
Balance at 31 December
2021 1,092 9,705 5,126 62,207 78,130
Share Share All Other Retained Total
capital premium reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2020 1,092 9,687 (3,241) 67,526 75,064
Profit for the year - - - 30,775 30,775
Other comprehensive expense
for the year - - (635) - (635)
Total comprehensive income
for the year - - (635) 30,775 30,140
Share-based payments - - 2,092 - 2,092
Transfer to retained
earnings - - (2,642) 2,642 -
New share issue - 18 - - 18
Own shares bought back - - (25) - (25)
Own shares sold - - 4,394 (3,634) 760
Dividends (note 13 ) - - - (20,085) (20,085)
Total transactions with
owners, recognised directly
in equity - 18 3,819 (21,077) (17,240)
Balance at 31 December
2020 1,092 9,705 (57) 77,224 87,964
Notes to the Consolidated Financial Statements
1 General information
The Group is an international professional services provider
focussing principally on IT, specialising in the recruitment,
training and deployment of its own permanent IT and business
consultants.
The Company is limited by shares, incorporated and domiciled in
the UK and registered as a public limited company in England and
Wales with a Premium Listing on the London Stock Exchange. The
Company's registered office is 3rd Floor, Cottons Centre, Cottons
Lane, London, SE1 2QG and its registered number is 07078823.
2 Basis of preparation
The financial information set out in this preliminary
announcement does not constitute statutory accounts for the years
ended 31 December 2021 and 31 December 2020, for the purpose of the
Companies Act 2006, but is derived from those accounts. The audited
statutory accounts for 2020 have been delivered to the Registrar of
Companies and those for 2021 were approved for issue on 16 March
2022. The Group's auditor reported on the Annual Report and
Accounts for the year ended 31 December 2021 on 16 March 2022.
Their report was unqualified, did not draw attention to any matters
by way of emphasis without qualifying their report and did not
contain statements under Section 498(2) or (3) of the Companies Act
2006.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with UK-adopted
International Financial Reporting Standards, this announcement does
not itself contain sufficient information to comply with UK-adopted
International Financial Reporting Standards. The accounting
policies applied in preparing this financial information are
consistent with the Group's financial statements for the year ended
31 December 2020 with the exception of the following standards and
amendments which were effective from 1 January 2021 and were
adopted by the Group in preparing the financial statements. The
adoption of these standards and amendments has not had a material
impact on the Group's financial statements in the year:
-- Revised Conceptual Framework for Financial Reporting
-- COVID-19-related Rent Concessions - Amendments to IFRS 16
-- Amendments to IAS 1 'Presentation of Financial Statements'
and IAS 8 'Accounting policies' on Definition of Material
-- Amendment to IFRS 3 'Business Combinations' on Definition of a Business
-- Amendment to IFRS 9 'Financial Instruments', IAS 39
'Financial Instruments recognition and measurement' and IFRS 7
'Financial Instruments disclosures' on Interest rate benchmark
reform
-- Interest Rate Benchmark Reform - Phase 2 - Amendments to IFRS 7, IFRS 4 and IFRS 16
3 Settlement of legal claim
On 25 February 2021, the Group paid GBP3.0 million in full
satisfaction of the agreed settlement in respect of the
long-standing legal claim. The claim was provided in full at 31
December 2020.
4 Segmental reporting
Management has determined the operating segments based on the
operating reports reviewed by the Board of Directors that are used
to assess both performance and strategic decisions. Management has
identified that the Executive Directors are the chief operating
decision maker in accordance with the requirements of IFRS 8
'Operating segments'.
At 31 December 2021, the Board of Directors consider that the
Group is organised on a worldwide basis into four core geographical
operating segments:
(1) UK;
(2) North America;
(3) Europe, Middle East and Africa, excluding UK ("EMEA"); and
(4) Asia Pacific ("APAC").
Each geographical segment is engaged in providing services
within a particular economic environment and is subject to risks
and returns that are different from those of segments operating in
other economic environments.
All segment revenue, profit before taxation, assets and
liabilities are attributable to the principal activity of the
Group, being a global professional services provider with a focus
on IT .
For the year ended 31 December 2021
North
UK(1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 121,846 81,387 24,963 39,160 267,356
Depreciation and amortisation 2,489 1,714 241 1,716 6,160
Segment operating profit 24,570 12,215 3,237 1,993 42,015
Finance income(2) 159 174 - 4 337
Finance costs(2) (231) (60) (88) (550) (929)
Profit before income tax 24,498 12,329 3,149 1,447 41,423
As at 31 December 2021
Total assets 75,995 21,038 11,937 17,772 126,742
Total liabilities (13,053) (8,669) (6,193) (20,697) (48,612)
(1) Reflecting internal management and reporting changes, the
results for FDM Group Ireland Limited are now included within the
EMEA segment, The results were previously included within segment
'UK & Ireland' which is now presented as 'UK'. All results,
including prior year comparatives, have been updated to reflect
this change.
(2) Finance income and finance costs include intercompany
interest which is eliminated upon consolidation
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK (1) America EMEA(1) APAC Total
GBP000 GBP000 GBP000 GBP000 GBP000
31 December 2021 24,839 2,144 1,030 7,284 35,297
For the year ended 31 December 2020
North
UK(1) America EMEA(1) APAC Total
Restated Restated
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 116,744 97,082 23,928 29,983 267,737
Depreciation and amortisation (2,648) (1,873) (239) (1,741) (6,501)
Segment operating profit 23,465 12,279 4,474 1,522 41,740
Finance income(2) 168 193 3 3 367
Finance costs(2) (314) (103) (71) (595) (1,083)
Profit before income tax 23,319 12,369 4,406 930 41,024
As at 31 December 2020
Total assets 82,517 24,431 11,494 19,667 138,109
Total liabilities (9,163) (12,861) (5,806) (22,315) (50,145)
(1) Reflecting internal management and reporting changes, the
results for FDM Group Ireland Limited are now included within the
EMEA segment, The results were previously included within segment
'UK & Ireland' which is now presented as 'UK'. All results,
including prior year comparatives, have been updated to reflect
this change.
(2) Finance income and finance costs include intercompany
interest which is eliminated upon consolidation
Included in total assets above are non-current assets (excluding
deferred tax) as follows:
North
UK(1) America EMEA(1) APAC Total
Restated Restated
GBP000 GBP000 GBP000 GBP000 GBP000
31 December 2020 27,405 2,812 888 9,108 40,213
Information about major customer
2021 revenue from c ustomer A is attributed across all four
operating segments . Customer A represents 10% or more of the
Group's 2021 and 2020 revenues.
2021 2020
GBP000 GBP000
Revenue from customer A 35,942 31,488
5 Operating profit
Operating profit for the year has been arrived at after charging
/(crediting):
2021 2020
GBP000 GBP000
Net foreign exchange differences 39 (59)
Depreciation of right-of-use assets 4,294 4,551
Depreciation of property, plant and equipment
and amortisation of software and software
licences 1,866 1,950
Expense relating to short-term leases 78 177
6 Finance income and expense
2021 2020
GBP000 GBP000
Bank interest 58 99
Finance income 58 99
2021 2020
GBP000 GBP000
Interest on lease liabilities (564) (746)
Finance fees and charges (86) (69)
Finance expense (650) (815)
7 Taxation
The major components of income tax expense for the years ended
31 December 2021 and 2020 are:
2021 2020
GBP000 GBP000
Current income tax:
Current income tax charge 9,904 11,536
Adjustments in respect of prior periods (418) (577)
Total current income tax 9,486 10,959
Deferred tax:
Relating to origination and reversal of
temporary differences 108 (710)
Total deferred tax 108 (710)
Total tax expense reported in the income
statement 9,594 10,249
The standard rate of corporation tax in the UK is 19% (2020:
19%), accordingly, the profits for 2020 and 2021 are taxed at 19%.
The tax charge for the year is higher (2020: higher) than the
standard rate of corporation tax in the UK. The differences are set
out below:
2021 2020
GBP000 GBP000
Profit before income tax 41,423 41,024
Profit before income tax multiplied by UK standard rate of corporation tax of 19% (2020: 19%) 7,870 7,795
Effect of different tax rates on overseas earnings 1,695 2,051
Effect of expenses not deductible for tax purposes 143 128
Adjustments in respect of prior periods (418) (577)
Effect of unused tax losses not recognised for deferred tax assets 304 852
Total tax charge 9,594 10,249
Factors affecting future tax charges
Deferred tax assets and liabilities are measured at the rate
that is expected to apply to the period when the asset is realised
or the liability is settled, based on the rates that have been
enacted or substantively enacted at the reporting date. Therefore,
at each year end, deferred tax assets and liabilities have been
calculated based on the rates that have been substantively enacted
by the reporting date.
The Finance Act 2021 confirmed an increase of UK corporation tax
rate from 19% to 25% with effect from 1 April 2023 and this was
substantively enacted by the statement of financial position date
and therefore included in these financial statements.
8 Earnings per ordinary share
Basic earnings per share is calculated by dividing the profit
attributable to ordinary equity holders of the Parent Company by
the weighted average number of ordinary shares in issue during the
year.
2021 2020
GBP0
Profit for the year 00 31,829 30,775
Average number of ordinary shares in
issue (thousands) 109,192 109,191
Basic earnings per share Pence 29.1 28.2
Adjusted basic earnings per share is calculated by dividing the
profit attributable to ordinary equity holders of the Parent
Company, excluding Performance Share Plan expense (including social
security costs and associated deferred tax), by the weighted
average number of ordinary shares in issue during the year.
2021 2020
Profit for the year (basic
earnings) GBP000 31,829 30,775
Share-based payment expense
(including social security
costs) GBP000 5,261 988
Tax effect of share-based
payment expense GBP000 (837) (341)
Adjusted profit for the
year GBP000 36,253 31,422
Average number of ordinary shares in issue
(thousands) 109,192 109,191
Adjusted basic earnings per share Pence 33.2 28.8
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has one type of dilutive potential ordinary shares in the form of
share options; the number of shares in issue has been adjusted to
include the number of shares that would have been issued assuming
the exercise of the share options.
2021 2020
Profit for the year (basic
earnings) GBP000 31,829 30,775
Average number of ordinary
shares in issue (thousands) 109,192 109,191
Adjustment for share options
(thousands) 1,386 207
Diluted number of ordinary
shares in issue (thousands) 110,578 109,398
Diluted earnings per share Pence 28.8 28.1
9 Trade and other receivables
Due to their short-term nature, the Directors consider that the
carrying amount of trade receivables approximates to their fair
value. The standard credit terms are 30 days.
2021 2020
GBP000 GBP000
Trade receivables 26,727 24,118
Other receivables 3,464 1,477
Prepayments and accrued
income 5,650 5,453
35,841 31,048
10 Cash and cash equivalents
2021 2020
GBP000 GBP000
Cash at bank and in hand 53,120 64,725
11 Trade and other payables
Due to their short-term nature, the Directors consider that the
carrying amount of trade payables approximates to their fair
value.
2021 2020
GBP000 GBP000
Trade payables 1,113 1,153
Other payables 1,725 2,029
Other taxes and social
security 8,444 6,502
Accruals and deferred income 19,953 18,879
31,235 28,563
12 Share capital
Authorised, called up, allotted and fully
paid share capital
2021 2021 2020 2020
Number of GBP000 Number GBP000
shares of
shares
Ordinary shares of GBP0.01
each
At 1 January 109,191,669 1,092 109,186,739 1,092
New issues - - 4,930 -
At 31 December 109,191,669 1,092 109,191,669 1,092
Ordinary shares
All ordinary shares rank equally for all dividends and
distributions that may be declared on such shares. At general
meetings of the Company, each shareholder who is present (in
person, by proxy or by representative) is entitled to one vote on a
show of hands and, on a poll, to one vote per share.
There were no changes in the authorised, called up, allotted and
fully paid share capital during the year. During 2020 4,930 shares
were issued, the difference between market value and par value at
issue resulted in an amount of GBP18,000 being recognised in share
premium with GBP49.30 recognised as an increase in issued share
capital.
13 Dividends
2021 2020
GBP000 GBP000
Dividends paid
Paid to shareholders 46,820 20,085
2021
An interim dividend of 15.0 pence per ordinary share was
declared by the Directors on 27 July 2021 and was paid on 3
September 2021 to holders of record on 6 August 2021.
The Board is proposing a final dividend of 18.0 pence per share
in respect of the year to 31 December 2021, for approval by
shareholders at the AGM on 24 May 2022, the total amount payable
will be GBP19,655,000. Subject to shareholder approval the dividend
will be paid on 10 June 2022 to shareholders of record on 20 May
2022.
This brings the Company's total dividend for the year to 33.0
pence per share (2020: 46.5 pence per share).
The Board has resumed its progressive dividend policy; the Group
will retain sufficient capital to fund ongoing operating
requirements, maintain an appropriate level of dividend cover and
sufficient funds to invest in the Group's longer-term growth.
2020
An interim dividend of 18.5 pence per ordinary share was
declared by the Directors on 28 July 2020 and was paid on 4
September 2020 to holders of record on 7 August 2020.
The Board declared a second interim dividend of 13.0 pence per
ordinary share on 27 January 2021, the amount payable was
GBP14,146,000, which was paid to shareholders on 26 February 2021
to holders of record on 5 February 2021.
The Board paid a final dividend of 15.0 pence per share on 4
June 2021, the total amount payable was GBP16,322,000.
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END
FR DBGDXGUBDGDL
(END) Dow Jones Newswires
March 17, 2022 03:00 ET (07:00 GMT)
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