CARLISLE GROUP ANNOUNCES INTERIM RESULTS FOR THE SIX MONTHS ENDED 30th SEPTEMBER 2007 Belize City, Belize, 15th November, 2007 Carlisle Group Limited (London: CXG) (the ‘Company’ or ‘Carlisle’)
Interim results for the six months ended 30th September 2007
Carlisle Group Limited, a leading provider of staffing and outsourced people-related services, reported turnover for the quarter ended 30th September 2007 of £100.2m (2006 – £91.8m) and operating profit of £1.8m (2006 – £1.7m). Net profit for the quarter amounted to £1.3m (2006 – £1.5m) and diluted earnings per share amounted to 5.4 pence (2006 – 6.1 pence).
For the six months ended 30th September 2007, turnover was £195.6m (2006 – £178.6m) and operating profit was £2.9m (2006 – £2.4m). Net profit for the six month period was £2.2m (2006 – £2.5m) and diluted earnings per share was 9.1 pence (2006 – 10.1 pence).
Richard Bradford, Chief Executive, said:
“The results for both the quarter and the half year to date highlight the overall progress being made within the Group. Operating profits have increased by more than 20% over last year’s first half despite the ongoing cost of investment in organic growth and the one-time costs relating to the recently announced cash shell dividend.
There is an improving trend in the performance and ratios in Staffing Services whilst the Support Services operations have produced another stable contribution in the quarter”.
Staffing Services
Turnover for the quarter ended 30th September 2007 was £69.5m (2006 – £67.2m), with operating profit of £1.0m (2006 – £0.6m). For the six month period, turnover was £138.4m (2006 – £132.4m) with operating profit of £1.8m (2006 – £0.9m).
Strong sector growth has been enjoyed in a number of brands, particularly in Technical markets, Accounting, Legal, Aviation and Managed Solutions. Investment has continued in fee earning staff in the key growth markets and a total of 50 further staff have been added since April. The targeted increase in permanent fee income has continued to show progress. Permanent fees now represent 8% of Staffing Services sales in the half year to date compared with 5.1% for the same period last year.
As well as investment in new fee earners within the supply brands the division has incurred costs in larger contracts. These contracts provide some certainty of future income but can be dilutive to earnings during the implementation phase. The Managed Solutions business has successfully renewed contracts with both KPMG and Ernst & Young in the quarter whilst implementing the previously announced contract gain with Friends Provident in August.
A new contract has been won with the UK Healthcare Commission and CSCI principally based in London and Newcastle Upon Tyne commencing in November. Furthermore, a new contract has been awarded due to commence in 2008, for a three year period, with Jet Aviation. This principally involves Engineering and Aviation specialists provided internationally through the S.Com brand.
Support Services
Turnover for the quarter ended 30th September, 2007 was £30.7m (2006 – £24.6m), with operating profit of £1.3m (2006 – £1.4m) from the three business segments that, in aggregate, comprise the Support Services division. For the six month period, turnover was £57.2m (2006 – £46.2m) with operating profit of £2.0m (2006 – £2.1m). Profitability did not grow due to a combination of implementation costs of new contract wins in Security Services and retailer cost reduction initiatives which impacted gross margins in the Retail Support Services operations.
Within the regulated services businesses, the quarter and the year to date show a significant uplift in revenue which is yet to be reflected in profitability. In UK security services, in particular, new contract gains have incurred start-up costs which have impacted short-term earnings in a sector where margins and profitability remain tight. Events services has enjoyed a successful and busy summer, especially boosted by a presence at major cricket matches throughout the UK.
In Retail Support Services, the quarter and year to date continue to show the increasing scale of the merchandising and store support activities. All services remain in demand and revenue growth continues although this is not matched by profit growth as margin pressures remain. The order book of retail projects in the third quarter looks strong.
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