Norman Broadbent plc (LON:NBB) – a leading London quoted Professional Services firm offering a diversified portfolio of integrated Leadership Acquisition & Advisory Services – has announced the Group’s unaudited interim results for the six months ended 30 June 2020
Highlights
· Positive EBITDA of £11,000
· NFI decline of just 5.7% despite the disruption arising from the Covid-19 pandemic
· Interim Management and Solutions saw positive NFI increases from H1 2019 of +48% and +22% respectively
· Net cash inflow from operations of £629,000
· Debtor days at end of H1 2020 was 48 days (Dec 2019 – 72 days)
· All external loans (excluding Bibby Working Capital Invoicing Discounting facility) fully repaid
· Actively seeking growth opportunities via key appointments, M&A initiatives, and partnerships/strategic ‘tuck-ins’
Mike Brennan, Norman Broadbent Group CEO, said:
“I am pleased to report that the first six months of 2020 showed positive EBITDA, and, despite Covid-19, we saw only a minimal decline in NFI of 5.7%. This remarkable achievement is down to the dedication of my colleagues and our strategy of building an innovative, diversified, and agile Group. These factors, coupled with our willingness to take difficult decisions quickly and early on in the pandemic, meant we were well placed to respond to market challenges and uncertainties.
We have proven our strategy is working, and our leadership team has the bandwidth to build the Group further. With this in mind, and despite these challenging times, we are actively seeking growth opportunities in the form of key strategic appointments to the Group, M&A initiatives, and partnerships/strategic ‘tuck-ins’.
I and the Board would like to thank our supportive shareholders and clients for continuing to place their trust in us. I must also pay tribute to my colleagues – I am justifiably proud of them and their performance. Our continued positive momentum during this most difficult of times is down to their hard work, dedication, and commitment.”
Steve Smith, Norman Broadbent Group CFO/COO, added:
“With the Group posting positive EBITDA for H1 2020, and with revenues only marginally down, we have demonstrated Norman Broadbent’s resilience and relevance. Culturally and operationally we are no longer a traditional, siloed, pure-play executive search business but something much broader, more progressive, and relevant in today’s market. Increasingly our clients see us for what we now are – a problem-solving business partner offering bespoke solutions incorporating Consulting, Interim, Research & Insight, and high‐quality fully retained Search Solutions.”
CEO Review:
In the six months to 30 June 2020, the Group reported positive EBITDA of £11,000 (2019: £111k) on turnover of £4,430,000 (2019: £5,260,000). We are pleased with this result which has been achieved during a period of significant disruption due to the Covid-19 pandemic.
The Group has changed from a predominantly single service traditional executive search business to a more balanced service/revenue business providing clients with an integrated range of relevant, complementary, progressive, and sophisticated offerings. This not only helps us serve our clients better, but also enables us to differentiate ourselves in what is becoming an increasingly transactional and commoditised traditional executive search market.
Our aim is to continue strategically scaling all business units. 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 continued profitability. Despite the pandemic, we have not been deflected from pursuing our long-term strategy. This has seen us transition the Group to a business which is structured around specific industry and functional hubs and away from individual teams focussing on their own siloed service line. This strong client focus benefits our customers and, in turn, the company as evidenced by the record levels of internal referrals of work. By making this change we are no longer a traditional, siloed, pure-play executive search business but something much broader, more progressive, more integrated, and relevant in today’s market. Increasingly our clients see us for what we now are – a problem-solving business partner offering bespoke solutions incorporating Consulting, Interim, Research & Insight, and high‐quality fully retained Search Solutions.
Summarised Financial Results:
The table below summarises the results for the Group.
| Six months to 30 June2020 | Six months to 30 June2019 | Year ended31 Dec2019 | |
| £000’s | £000’s | £000’s | |
| Continuing operations | |||
| Revenue | 4,430 | 5,260 | 11,486 |
| Cost of sale | (1,109) | (1,738) | (3,879) |
| Gross profit / Net Fee Income | 3,321 | 3,522 | 7,607 |
| Operating expenses | (3,310) | (3,411) | (7,357) |
| EBITDA | 11 | 111 | 250 |
| Net finance cost, depreciation and amortisation | (63) | (95) | (166) |
| Profit / (Loss) before tax | (52) | 16 | 84 |
| Income tax | – | – | – |
| Profit / (Loss) after tax | (52) | 16 | 84 |
Financial Position
Equity shareholders’ funds were £1,322,000 as at 30 June 2020 (£1,365,000 at 31 December 2019), with net current liabilities of £254,000 (net current liabilities £219,000 at 31 December 2019). Cash and cash equivalents at 30 June 2020 amounted to £399,000 (£432,000 at 31 December 2019, £258,000 at 30 June 2019).
Net cash inflow from operations was £629,000 driven primarily by improved trade debt collections with debtor days improving to 48 days (72 days – December 2019) (Net cash outflow from operations was £182,000 at 31 December 2019) and net cash outflow from financing activities amounted to £621,000 driven entirely by pay down of debt. (£21,000 inflow at 31 December 2019).
Outlook
These positive results – generated during a difficult period – evidence our relevance, resilience, and progression, and we look forward to updating the market on FY2020 trading as early as possible in 2021. I would like to thank my colleagues for their hard work, innovation and commitment, our clients for placing their continued trust in us, and of course our supportive shareholders.
Michael J. Brennan
Group Chief Executive Officer
