Annual Report & Accounts 2013

Transcription

1 Annal Report & Acconts 2013 the best people for the job where people matter

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3 the best people for the job we find the best people for the job we are the best people for the job

4 ,000 Cpl 2013 Financial Highlights 50,000100, ,000150, ,000200, ,000250, ,000300, ,000 (all amonts are in thosands nless stated) 330,758 Revene 11,720 Operating profit 48,843 Gross profit 12,284 Profit before tax 35.0 cent Basic earnings per share Revene Growth 000 s Net Cash 000 s ,000 50, , , , , , , , , , , , ,000 10,000 10,00020,000 20,00030,000 30,00040,000 40,00050,000 50,000 FY 2012 FY million million retrned retrned to to shareholders 14% 26% 8.5c Record revenes of e331 million, p 14% on last year Increase in profit before tax to e12.3 million Total dividend per share (2012: 6.5 cent) 5% We contine to expand or client base and service offerings. Cpl now has 32 offices in 9 contries. Or website is the only recritment agency in the top 10 Irish job boards. Cpl has established a sccessfl new bsiness called Cpl Learning and Development which offers opportnities for people to train and re-skill to where skills are most in demand. Cpl finished the year with 8,223 people working on behalf of Cpl on client projects.

5 CANADA CONTENTS Directors and Other Information 4 IRELAND ENGLAND POLAND Cpl Vales 5 CZECH REPUBLIC SLOVAKIA Chairman s Statement 6 HUNGARY Chief Exective s Review 8 BULGARIA SPAIN Philanthropy and Corporate Social Responsibility 18 Directors Report 20 TUNISIA Statement of Directors Responsibilities 26 Or Bsiness Cpl Resorces plc. is a leading provider of recritment, staffing and otsorcing services. We provide these services to local cstomers and mltinationals throgh a network of 32 offices in Canada, Czech Repblic, England, Hngary, Ireland, Poland, Slovakia, Spain and Tnisia. Or bsiness is based on matching the capabilities of or candidates and employees with the needs of or clients to get work done. We achieve this by: Cpl locations Placing people in permanent jobs with or clients Staffing client projects with or temporary employees and contractors Employing staff in or service centres to spport or international client base. In addition to providing these services to cstomers in Ireland, we serve the Eropean needs of global corporations in Technology, Finance & Acconting, Science & Engineering, Sales & Marketing, International Cstomer Service and Healthcare. Independent Aditor s Report Grop Statement of Comprehensive Income Grop Statement of Changes in Eqity Company Statement of Changes in Eqity Grop and Company Balance Sheets Grop and Company Cash Flow Statements Significant Acconting Policies Notes Forming Part of the Financial Statements

6 Directors and Other Information Board of Directors John Hennessy (Non-Exective - Chairman) Breffni Byrne * (Non-Exective) Oliver Tattan ** (Non-Exective) Anne Heraty (Exective) Pal Carroll (Exective) Garret Roche (Exective) * Chairman of the Adit Committee and Designated Senior Independent Director ** Chairman of the Nomination and Remneration Committee John Hennessy, Breffni Byrne and Oliver Tattan are members of the Adit Committee and of the Nomination and Remneration Committee. John Hennessy, Chairman, joined the Board of Cpl Resorces plc in He is a practicing barrister and a chartered accontant. Breffni Byrne joined the Board of Cpl Resorces plc in December He is chairman of Aviva Life & Pensions Ireland Limited and Tedcastles Holdings and is a non-exective director of Citibank Erope plc, Hikma Pharmacetical plc, and a nmber of other companies. A chartered accontant, he was formerly a Senior Partner of the Adit and Bsiness Advisory practice of Arthr Andersen in Ireland. Oliver Tattan joined the Board of Cpl Resorces plc in December He was the fonder and CEO of Vivas Insrance Limited. He previosly held the role of chief exective at Vhi Healthcare and was co-fonder of Daon. Anne Heraty, Pal Carroll and Garret Roche each entered into service agreements dated 22 Jne 1999 with the Company in respect of their appointment as exective directors. John Hennessy entered into an engagement letter dated 22 Jne 1999 with the Company in respect of his appointment as non-exective director of the Company. Breffni Byrne and Oliver Tattan both entered into engagement letters dated 1 December 2007 with the Company in respect of their appointments as non-exective directors of the Company. All directors are reqired to present themselves for re-election every three years. Other Company Information Secretary Aditor KPMG Chartered Accontants 1 Stokes Place St. Stephen s Green Dblin 2 Principal bankers AIB plc 62 St Brigid s Road Artane Dblin 5 UK paying agents Comptershare Investor Services plc The Pavilions Bridgewater Road Bristol BS99 6ZZ England Wilton Secretarial Limited First Floor Fitzwilton Hose Wilton Place Dblin 2 Registered office 83 Merrion Sqare Dblin 2 Solicitors William Fry Fitzwilton Hose Wilton Place Dblin 2 Registrars and paying agents Comptershare Investor Services (Ireland) Limited Heron Hose Corrig Road Sandyford Indstrial Estate Dblin 18 4 CPL Annal Report 2013

7 Cpl Vales Core vales define who we are as a bsiness. They gide how we behave and make decisions which affect Or Clients, Or Candidates, Or People and Or Shareholders. These 5 vales nderpin everything we do in the Cpl Grop and are representative of where we want to be as a bsiness both now and in the ftre. Cstomer Focs Accontability Respect Effective Commnication Empowerment Cstomer Focs: Excellence in everything we do for or clients & internal cstomers, inclding a commitment to innovation Accontability: It is not jst abot yor part of the job or task it is abot seeing the whole job throgh to the end, It is not done ntil it is all done Respect: Integrity, fairness, listening, co-operation, responsiveness and perceptiveness Effective Commnication: Clarity in commnication, openness and willingness to listen ensres nderstanding of the reqest Empowerment: Enabling and spporting people to maximise their potential. An entreprenerial spirit and passion for the work we do Cpl has fonded its bsiness on forging strong relationships and delivering an exceptional service to clients and candidates. We want to inspire all of or employees to have the same passion to deliver the most exceptional service possible. Cpl endeavors to create a workplace that is welcoming and challenging. Or Core Vales nderpin all that is reqired in order to achieve that goal. CPL Annal Report

8 Chairman s Statement I am pleased to report that the year ended 30 Jne 2013 has been one of frther profitable growth for the Cpl Grop ( Cpl, the Grop or the Company ). Highlights of the Grop s performance inclde: Record Revenes of million p 14% on prior year 17% increase in operating profit to 11.7 million Earnings per share of 35.0 cent (2012: 25.6 cent) Total dividend per share of 8.5 cent (2012: 6.5 cent) Fll Year Highlights Highlights 2013 e e 000 % change Revene 330, ,240 14% Gross profit 48,843 43,538 12% Operating profit 11,720 10,015 17% Profit before tax 12,284 9,754 26% Earnings per share 35.0 cent 25.6 cent 37% Dividends per share 8.5 cent 6.5 cent 31% Conversion ratios** Operating profit 24.0% 23.0% Profit before tax 25.1% 22.4% Net fnds 27,931 28,030 ** as % of gross profit The Grop s reslts for the year to 30 Jne 2013 reflect growth across all or major bsiness areas and locations. This has been achieved in challenging and highly competitive markets and in the face of contining economic ncertainty in these markets. Despite this ncertainty, gaps remain between the spply of skills and the emerging demand for people in several sectors in which we operate. We contine to work with or clients and candidates to fill these gaps and to provide appropriate soltions where skills are in short spply. 6 CPL Annal Report 2013

9 Dring the year we experienced growth in demand for both flexible, temporary soltions and for permanent appointments. Fees from permanent placements grew by 16.3% year on year. Despite contining downward pressre on margins, gross profits from temporary placements grew by 10.6% over the prior year. We contine to manage or costs closely, and this is reflected in an improved operating profit ratio of 24% (23% in the prior year). Cpl contines to have a strong balance sheet, with net assets in excess of 63 million at 30 Jne 2013 and net free fnds at that date of 28 million. People The Grop s strong performance in difficlt trading conditions in the year ended 30 Jne 2013 reflects the contined commitment, talent and dedication of or people. We contine to recrit new talent into the Grop and to invest in training and developing or people so that they can meet the changing needs of or clients. Cpl has a strong cltre, spported by clear and practical core principles that are esposed by or people. We aim to deliver to all or clients and candidates a special and personal experience that is consistently excellent across all or locations and bsiness sectors. I am gratefl to all the staff of Cpl for the otstanding service they provide throgh their dedication, their creativity and their adherence to or cltre and core principles. In April 2013 Josephine Tierney left the Grop to take p new challenges elsewhere. In her role as Finance Director and CFO, Josephine contribted significantly to the growth and sccess of Cpl dring her tenre. On behalf of the Board I wold like to thank Josephine for her otstanding commitment and contribtion, and to wish her well in the ftre. Earnings per Share, Dividend and Dividend Policy The Grop has delivered a 37% increase in earnings per share in the twelve months to Jne 2013, to 35.0 cent. The Board s crrent priorities for or free cash flow are to maintain the strength of or balance sheet, to allow the Grop to optimise opportnities to drive organic growth and fnd Grop development throgh appropriate acqisitions, and to spport a sstainable dividend policy. The Grop has a progressive dividend policy, which reflects nderlying earnings growth and the contined strength of the Grop s balance sheet. The Board is recommending a final dividend of 4.5 cent per share. This will bring the total dividend for the year to 8.5 cent per share. The dividend, if approved by the shareholders, will be payable on 4 November 2013 to shareholders on the Company s register at the close of bsiness on the record date of 11 October Otlook Forecasting remains a challenge in the crrent economic environment. There are some signs of economic recovery in certain markets in which we operate, giving rise to small increases in demand for skills in certain sectors and locations. It is too early to predict whether these signs indicate a sstained recovery. However, on an overall basis we do expect to achieve frther profitable growth in the months ahead. John Hennessy Chairman 4 september 2013 In Jly Mark Bckley joined the Grop as Chief Financial Officer. I wold like to welcome Mark to the team and I look forward to working with him. CPL Annal Report

10 Chief Exective s Review Anne Heraty Chief Exective The year to Jne 2013 was one of solid progress for Cpl. Performance across the Grop was strong reslting in a 40.5 million increase in Revene to million, p 14% and a 2.5 million increase in profit before tax to 12.3 million, p 26%. We have strengthened or position within or established sectors and markets. At the same time, we have expanded or international footprint and established a sccessfl new bsiness called Cpl Learning and Development. Or revenes are focsed on some of the areas in greatest demand in the economy today. Sectors and occpations sch as ICT, Healthcare and Engineering are experiencing serios skills shortages across Erope. Labor market forecasts sggest a Erope wide shortfall of 700,000 ICT professionals by 2015 and a shortfall of 500,000 Engineers by Qalified immigration to the EU is being called for as part of the soltion. The demand for healthcare professionals has also been constantly increasing. By 2020, almost 1.6 million healthcare professionals will be reqired, mostly to replace existing people who leave or retire from the workforce. (Sorce: Cedefop 2012) Cpl s largest recritment divisions are ICT, Engineering and Healthcare. We are working with clients to bridge the gap by sorcing people with specialist skills all over the world. In addition, the need for investment in edcation and training/re-skilling is clear so that the skills of people will better match the jobs that are available. Cpl Learning and Development offers opportnities for people to train and re-skill to where skills are most in demand. Indicators for the Irish labor market have recently shown some improvement. Annal employment growth is now at its highest level since Q and nemployment is down to 13.7%. We are seeing the emergence of a two speed labor market in Ireland with white collar and services occpations having an nemployment rate of 6% or less while the highest nemployment rates are among people previosly employed in constrction and people with low edcation attainment. These are also the areas where people are more at risk of long-term nemployment i.e. ot of work for over 12 months. In Jne 2013, 45% of those nemployed had been on the Live Register for longer than one year. This proportion is p from 44% in Jne 2012 and 41% in Jne The government s focs and many of the initiatives in the Action Plan for jobs is on the long-term nemployed. Cpl Learning and Development were delighted to work with the Momentm Project nder the Department of Edcation and Skills which aimed to p-skill 6,500 job seekers to re-enter the workforce. 620 people were in training at the year end with Cpl and work placements are already identified for over 80% of these people, mainly in the healthcare and food indstries. Or experience in Cpl tells s that it is critically important that those who are nemployed are kept close to the labor market and constantly pdated on where opportnities exist and how to re-skill for these opportnities. 8 CPL Annal Report 2013

11 THE BEST IN OUTSOURCING Or otsorcing bsiness provides cstomer service and back office soltions to the technology, banking, insrance and pharmacetical indstries across Ireland, the CEE region and Africa. Proactive and Efficient Soltions We take responsibility for delivering qality otcomes nder strctred Service Level Agreements (SLAs) to achieve a sccessfl otcome for the cstomer. We offer proactive and efficient talent acqisition and management soltions, enabling or clients to increase prodctivity, redce trnover and maximise profitability. Innovative Work Practices The key to effective co-sorcing is having a clear nderstanding of or cstomers reqirements and being able to pt the right resorces in place as qickly as possible. We contine to invest heavily in design, bilding innovative systems to streamline or processes. We recrit only the best people for the job and give them the tools they need to deliver on or promise to clients. Cstomer Focs is an integral part of how we do bsiness and or otsorcing divisions trly encompass both innovation and a client-centric ethos. 9

12 Chief Exective s Review (contined) 14.8% 15.0% 3.5% 3.4% key performance indicators 24.0% 23.0% 25.1% 22.4% Gross margin Operating margin Conversion ratio Conversion ratio 14.8% 15.0% 3.5% 3.4% Operating profit Profit before 24.0% 23.0% 25.1% tax 22.4% Gross margin Operating margin Conversion ratio Conversion ratio Operating profit Profit before tax 8,223 7, % 67.9% 68.8% % 314 8,223 7,853 Permanent 32.1% fees Temporary 67.9% fees Contractor 68.8% & temporary Nmber of recriters % 314 as % of the total as % of the total staff headcont at the at the year end gross profit gross profit year end Permanent fees as % of the total gross profit Temporary fees as % of the total gross profit Contractor & temporary staff headcont at the year end Nmber of recriters at the year end Or combination of accredited training and access to Or operating expenses were e37.1 million, 10.7% higher a wide range of employers, positions Cpl Learning and than last year. The majority of or cost base circa 71% is Development to best help nemployed individals identify staff costs. At year end we had increased or internal staff oss margin 14.8% 15.0% Gross margin 14.8% 15.0% perating margin and 3.5% bild 3.4% the skills to access the opportnities that Operating are margin nmbers 3.5% by 3.4% 64 from the previos year. We have invested Conversion Ratio Conversion Ratio available. in bilding both or recritment teams and spport Operating Profit 24.0% 23.0% erating Profit 24.0% 23.0% Profit before tax teams 25.1% to take 22.4% advantage of any ptrn in the market. The fit before tax 25.1% 22.4% Gross We margin finished 14.8% the year 15.0% with 8,223 people working on behalf Gross margin 14.8% 15.0% other main components of or cost base are property Operating margin 3.5% 3.4% Permanent fees as % of the total Operating gross margin profit 3.5% 32.1% 3.4% 31.2% as % of the total of gross Cpl on profit client 32.1% projects, 31.2% an increase of Temporary 5% on previos fees as % of 12 the total Conversion Ratio Conversion and gross information profit Ratio 67.9% technology 68.8% costs. We contined to invest as % of the total Operating months. gross profit Profit The 67.9% most 24.0% important 68.8% 23.0% ingredient Contractor to and or temporary sccess staff is headcont Operating the Profit year end 24.0% 8, % 7,853 in or technology infrastrctre, pgrading or financial staff headcont at the year end 8,223 7,853 Nmber of recriters at the Profit year before end tax % % Profit before or talented tax and 25.1% hardworking 22.4% riters at the year end team. They care abot or systems and or internet presence. Contined investment candidates and are committed to getting people back Permanent to fees as % of the total gross profit 32.1% 31.2% anent fees as % of the total gross profit 32.1% 31.2% in or technology infrastrctre is essential in order to Temporary fees as % of the total gross profit 67.9% 68.8% porary fees as % work of the along total with gross developing profit 67.9% innovative 68.8% soltions Contractor for or and temporary increase staff headcont or operational the year end efficiency 8,223 and 7,853 provide excellent temporary staff clients headcont to meet at the their year changing end 8,223 needs. 7,853 Nmber of recriters at the year end service to or clients. mber of recriters at the year end Financial Highlights The Grop increased its revene by 14% to e330.8 million in the year to Jne 2013 (2012: e290.2 million). Gross profit increased by 12% to e48.8 million (2012: e43.5 million). The Grop s gross margin was 14.8% (2012: 15%). Or Operating Profit increased by 17.0% to e11.7 million (2012: e10.0 million). Profit before tax was p 26% at e12.3 million (2012: e9.8 million). Or earnings per share was 35.0 cent (2012: 25.6 cent) an increase of 37% which incldes the impact of the share byback in the prior year. At 30 Jne 2013 or net cash balance was e28 million, broadly nchanged on the previos year. Dring this period, we paid or shareholders an interim dividend of 4.0 cent per share. The Board is recommending a final dividend of 4.5 cent per share for the year to Jne The total dividend per share for the year is 8.5 cent. 10 CPL Annal Report 2013

13 THE BEST FOR INITIATIVE Cpl was awarded 620 places in the Momentm Project, making s one of the programme s largest contractors. The innovative nationwide training programme aims to provide 6,500 job seekers with the necessary skills to re-enter the workforce. Siobhan Kinsella Director Cpl Learning and Development Exciting new initiative We were delighted to partner with Momentm, a Government led initiative. It allowed s to get even closer to or cstomers and assess the skills they needed for ftre bsiness growth. Or record of delivering complex soltions throgh similar payment-for-reslts type projects was a distinct advantage. Innovative flexible soltions Or sccess was achieved by virte of the innovative soltions we proposed and or intimate nderstanding of the trends and developments within the employment landscape. We were able to develop flexible programmes that met the specific needs of Irish employers and gave sstainable advantage to job seeking participants. At Cpl, or core vales are instrmental in everything we do, and the vale of accontability was the cornerstone of or activities in the Momentm Project. It encoraged s to take responsibility for or actions and be accontable to or learners, trainers, employers, employees and overall brand. CPL Annal Report

14 Chief Exective s Review (contined) 40.5m Growth in Revenes 12.3m Profit Before Tax [p from 9.8m 2012] Or revenes grew by e40.5 million, reslting in an increased investment in working capital. Trade and other receivables grew to e61.9 million in Jne 2013 from e52.0 million in Jne We contine to actively manage or debtors and have not experienced any increase in the level of bad debts dring the year. Or gross margin decreased slightly by 0.2% to 14.8% in the year to Jne We are still experiencing margin pressre in or temporary bsiness althogh pricing has improved in or permanent placement bsiness. The permanent revene increased by 16.3% to e15.8 million. Gross profit from permanent placement acconts for 32.1% of the total gross profit. Or conversion rate of gross profit to operating profit is one of or key performance metrics in the Grop. We improved or conversion rate to 24.0% from 23.0% in Operational Review Cpl provide recritment, workforce soltions and people-based services in each of the markets in which we operate. We contine to bild on or deeply rooted long-term cstomer relationships and or ability to attract and retain the best people for or bsiness. Cpl offers a diverse range of services to over 1,500 clients each year. These services broadly comprise of temporary staffing, permanent recritment, managed services and otsorcing. The majority of or gross profit (67.9%) is derived from temporary staffing/ managed services. Permanent placement acconts for 32.1%. Or recritment bsiness frther breaks down into professional/specialist recritment and generalist recritment. Or professional/specialist recritment is a significant part of the Cpl bsiness and operates nder a nmber of different services and bsiness lines. These are broadly Information Technology (IT), Finance and Acconting, Engineering & Science, Sales & Marketing, Contact Centre, Hman Resorces (HR) and Healthcare. These bsiness lines have the potential for better margins particlarly in sectors where there are skills shortages. Recent data indicates that nemployment among white collar workers is 6% and we believe it is less than this in some of or key sectors e.g. ICT and Healthcare. Or generalist bsiness is a lower margin bsiness and cost is often a major factor in sccessfl tenders. Or managed services and otsorcing bsiness is the platform for delivering a wide range of services that help client s sorce staff and manage their workforce in an efficient and flexible manner. Some of the services provided by these divisions are Recritment Process Otsorcing (RPO), Managed Staffing, Contact Centre Otsorcing, Bsiness Process Otsorcing, Career Transition and Training. This platform will be a key driver of growth for Cpl as clients look for greater efficiencies and cost savings combined with flexibility. 12 CPL Annal Report 2013

15 THE BEST IN CLASS For over 23 years now, Kate Cowhig International Healthcare Recritment (KCR) has been a leading recritment specialist for registered nrses, midwives, allied health professionals and doctors in Ireland, the UK and the Middle East. In the past 12 months, KCR has placed a total of 900 candidates in healthcare roles throghot Ireland, England, Channel Islands, Qatar, Sadi Arabia and Astralia. KATE COWHIG MANAGING DIRECTOR, KCR Reptation for Sccess With offices in Dblin, London, Barcelona and Lisbon, we develop a partnership approach with or clients and candidates, bilding close relationships based on open and reglar commnication. Or reptation for sccess is demonstrated by or reslts and the testimonials of or clients. Professor Nancy Fontaine, Chief Nrse at the Princess Alexandra Hospital NHS Trst had this to say: I jst woldn t se any other recritment company. Kate and her team are always very efficient, and deliver the exact brief before the deadline; how many organisations can boast that? The core vale of respect is central to how we operate. Or consltants work hard to develop an intimate knowledge of or client s hiring needs so we can find the best candidates for every job. Whatever the need or reqirement, or clients can be assred of one thing; we re the best people for the job. CPL Annal Report

16 Chief Exective s Review (contined) 31% Growth in permanent fees generated in offices otside Ireland Permanent Placement There was a welcome improvement in the Irish labor market in the past year, with a decline in the nemployment rate and an increase in the nmber of people employed. Foreign direct investment into Ireland remained strong with some notable gains in technology, pharma and financial services sectors. These are all areas in which Cpl has a strong presence. We also noted some increase in demand in the second half of the year from indigenos companies. In the year to Jne 2013 permanent fees increased by 16.3% to e15.8 million (2012: e13.6 million). Permanent fees generated in offices otside Ireland grew by 31%. We experienced growth across or entire bsiness, with international healthcare, financial and ICT showing particlar strength. Temporary Staffing We contine to see strong demand from or clients for flexible workforce soltions sch as temporary staffing and otsorcing. Revenes generated from temporary assignments in the year to Jne 2013 were e315.0 million (2012: e276.7 million) representing 13.8% growth. We generated e33.2 million gross profit, 10.6% higher than the year to Jne Against this backdrop we are very pleased to have increased the nmber of people working on client sites by 5% over the corse of the year. Overseas bsiness We had a sccessfl year in or international divisions in the year to Jne We contine to expand or client base and service offerings. We now have 32 offices in 9 contries. Dring the year we expanded into Tnisia and opened an office in Canada. We have now firmly established Cpl as a provider of managed service soltions otside Ireland. We have increased or net fee income from otside Ireland by 35%. We are focsed on organic growth in Central and Eastern Erope as we believe many of these markets are still in the early stage of growth. Disposal We disposed of the Swedish bsiness Eropean Hman Resorces AB, ( ERHAB ). As the blk of the consideration for the 2012 transaction was to be payable throgh an earn-ot, there is no material financial impact on the Grop. Strategy Cpl is a robst and well-developed bsiness with a solid earnings history and good earnings potential. The Grop has many strengths inclding or reptation, or client base and the qality of or candidate and client relationships. The management team are committed to bilding on these strengths and driving the bsiness forward to deliver or long-term strategy. 14 CPL Annal Report 2013

17 THE BEST IN TECHNOLOGY At Cpl, we recognise that online digital platforms have been a game changer in the modern job search. Candidates are spending more time online and we re constantly adapting to changing consmer needs. Over the past 12 months, we have invested heavily in or website in order to develop or online presence and improve the candidate experience. 68% increase in web traffic Throgh or on-going social media and SEO development projects, Cpl.ie now receives an average of 125,000 niqe visitors per month, which represents a 68% increase in overall traffic, year on year. In a recent online recritment srvey by Social Talent, Cpl.ie is the only recritment agency website ranked among the Top 10 Irish job boards. Enhanced online experience By continosly refining or online offerings, Cpl.ie is delivering a more intitive and ser-friendly candidate experience. In 2011, we were the first to market with an integrated job search app for Apple and Android devices. This year, we have lanched a more advanced version, allowing s to engage more immediately with candidates to provide a richer job search experience. CPL Annal Report

18 Chief Exective s Review (contined) We are the only recritment agency in the top 10 Irish job boards This incldes bilding a profitable, cash generative bsiness with good predictability in earnings, improving or infrastrctre and bilding a balanced portfolio of service lines and cstomers. In the year to Jne 2013 we invested in or online capability and presence. We made it easier and faster for candidates and clients to access s online. Or website is the only recritment agency in the top 10 Irish job boards. We also lanched the first mobile job app in Ireland. Or clients have benefited from these initiatives becase we are able to present candidates with the right skills to them more qickly. This is crcial in a skills scarce market. Otlook Cpl made solid progress on many fronts last year. We grew or revenes, broadened or services offerings and client base and expanded geographically. We have demonstrated resilience in difficlt market conditions over the last five years and we intend to move forward from a position of strength. The natre of or bsiness, particlarly permanent placement, is sch that we have limited visibility on demand for or services. However, or goals are clear: contine to deepen or cstomer relationships, expand or service lines and drive profitable growth. Or strategic advantages are or client base and the qality of or client and candidate relationships. People I wold like to thank all or employees for delivering for or candidates and clients. Their talent, skills and ability are fndamental to or ability to deliver vale to or clients. I wold also like to extend my appreciation to or cstomers for their contined loyalty and spport. Anne Heraty Chief Exective 4 September 2013 We annonced in Janary 2013 that Josephine Tierney or Finance Director had resigned. I wold like to take this opportnity to thank Josephine for her contribtion to the Grop and wish her every sccess in her ftre career. In Jly, Mark Bckley joined the Grop as Chief Financial Officer. His experience in private eqity and in the spport services sector in both pblic and private companies will have a strong impact on the Grop as we expand into new markets and lanch new services. 16 CPL Annal Report 2013

19 The Best for knowledge As Ireland s leading recritment and otsorcing company, we have extensive knowledge of indstry. We have established orselves as Thoght Leaders across all sectors of the labor market and become a respected athority on topics of interest to or clients and candidates. Recognised Experts and Thoght Leaders We have pblished nmeros inflential indstry pblications sch as or Cpl Salary Gide and the Jobs Monitor Employment Market Sentiment Srvey. Or senior management team are reglar commentators in their area of expertise and actively participate in indstry grops sch as the National Recritment Federation (NRF), Institte of Directors (IOD) and Dblin Web Smmit. Respected Pblic Commentators Over the past 12 months, many of or consltants have pblically represented Cpl throgh their engagement with online and offline media platforms sch as RTÉ and Newstalk. Also, by staying tre to or core vales, we empower or recriters to act as knowledge athorities by prodcing candidate-focsed career advice blogs, which are reglarly pblished on CPL Annal Report

20 Philanthropy and Corporate Social Responsibility Cpl prides itself on providing or clients and candidates with a flly integrated and professional recritment service. We vale the experience and specialist skills that each of or people bring to the organisation. Or sccess as Ireland s leading recritment and otsorcing soltions provider is bilt pon inspiring or people to bild positive relationships with or clients, candidates and partners. However, this ethos extends beyond the remit of or normal day-to-day responsibilities. Cpl aspires to forge prodctive relationships that benefit the wider commnity as a whole. At Cpl or Corporate Social Responsibility programme seeks to provide all of or people with an opportnity to participate in a range of CSR activities that are important to them. These activities inclde bt are not limited to fndraising, volnteering time off work to work with their chosen charity and jobseekers spport. This year Cpl introdced two new CSR initiatives. In Febrary of this year we lanched a Charities of the Year Programme and encoraged or people to nominate their preferred charity. Over 30 charities were proposed and after an internal voting process, the following charities were annonced as Charities of the Year : St Francis Hospice, MS Ireland and Pieta Hose. Cpl has introdced a Volnteering Time Off Policy or people can donate p to two days paid time off to one of or chosen charities or another charity that is important to them. We have also introdced a Charitable Giving Scheme, which allows employees to donate to the chosen charities throgh their monthly pay. All of or initiatives have been a great sccess and clearly demonstrate the commitment of Cpl and or people in this important area. Cpl is a prod spporter of The Ireland Fnds, which seeks to develop a global network of Irish diaspora and friends of Ireland for the prpose of fnding worthwhile Irish-centric programmes. MS Ireland: Cpl s Caroline Roche and Clodagh Smithers with Senator David Norris at World MS Day Cpl staff at the Pieta Hose Darkness into Light Walk CPL Annal Report 2013

21 Avril Mc Hgh, Cpl (Centre) and The Ireland Fnds Committee member on a visit to Barretstown Camp. Barretstown is one of the many Irish organisations that receive spport from The Ireland Fnds These programmes inclde investment in high-qality edcation initiatives, philanthropic activities, commnity development and cltral heritage promotion. To date the Worldwide Ireland Fnds Promising Ireland Campaign has exceeded its initial goal of $100 million and will achieve $150 million by its close at the end of We at Cpl are delighted to be associated with all of these charities and will work closely with them to raise awareness and spport for their fndraising efforts. Cpl has prodly spported the EPIC programme (Employment for People from Immigrant Commnities) for the past nmber of years. Or Recritment Consltants, with expertise and experience in career advice and job placement, provide one-to-one spport on the varios steps in seeking new employment or edcation. Recritment Consltants assist with CV development, interview preparation and general advice on the job market and frther edcation. Adrian O Herlihy Photography Pal Mc Clatchie, Manager at Careers Register (Centre) getting involved on a visit to the Rebel Wheelers in Limerick: a mlti-sports clb for children of all physical disabilities Cpl recognises that by spporting a comprehensive CSR programme, there are hge benefits for or people, for Cpl and most of all, for the commnity in which we do bsiness. CPL Annal Report

22 Directors Report The directors present their annal report and adited consolidated and Company financial statements for the year ended 30 Jne Principal activities, bsiness review (inclding principal risks and ncertainties) and ftre developments Cpl Resorces Plc is the leading Irish employment services organisation, specialising in the placement of candidates in permanent, temporary and contract positions and the provision of hman resorces consltancy services. The Grop s principal activities cover the areas of: Technology, Acconting and Finance, Sales, Engineering, Light Indstrial, Healthcare/ Pharmacetical and Office Administration. Cpl Resorces Plc is the holding company for the Grop s thirty sbsidiaries: Compter Placement Limited Cpl Soltions Limited Careers Register Limited Mltiflex Limited Tech Skills Resorces Limited Medical Recritment Specialists Limited Richmond Recritment Limited Occipital Limited Kate Cowhig International Healthcare Recritment Limited Flexsorce Limited Kate Cowhig International Healthcare Recritment Limited (UK) Cpl Healthcare Limited Nrsefinders UK Limited Cpl (Northern Ireland) Limited Cpl Learning and Development Limited Cpl Jobs S.r.o. Czech Repblic Cpl Jobs S.r.o. - Slovakia Cpl Jobs Sp z.o.o. Cpl Recritment S.L. Cpl Resorces International Holdings Limited Cpl Resorces Ireland Holdings Limited Servisorce Healthcare Limited Servisorce Recritment Limited Cpl Jobs Kft PHC Care Management Limited Rnway Personnel Limited Emoberry Limited Occipital Sarl Acompli Limited Cpl Jobs Limited The directors are satisfied with the performance of the Grop and are committed to improving the performance of the Grop by growing revene and profitability. The directors consider the principal risks and ncertainties the Grop faces to be as follows: The performance of the Grop has a very close relationship with and dependence on the nderlying growth of the economies of the contries in which it operates. The Grop contines to face competitor risk in the markets where the provision of permanent and temporary recritment is most competitive and fragmented. There is strong competition for clients and the Grop faces pricing and margin pressres in its temporary bsiness across its major specialist activities. The Grop faces a nmber of indstry risk factors in a competitive environment, notably the increasing se of social media. The Grop is not overly reliant on any single key client. However, if the Grop were to lose a nmber of large acconts simltaneosly, there wold be a temporary negative profit impact. The Grop is always sbject to the risk that a large cstomer might defalt on its payments. Against this crrent economic backdrop there is a risk that Cpl cold experience an increased level of bad debts. The Grop relies heavily on its information systems to store, process, manage and protect large amonts of financial, candidate and client information. If it fails to properly develop and implement technology, the bsiness cold be harmed. As employment laws are changed they bring with them new risks and opportnities. The temporary market is more heavily reglated and changes in legislation (e.g. changes to temporary worker rights) may impact the Grop s profitability. As the Grop increases its international activities, it will be exposed to a nmber of risks that it wold not face if it condcted its bsiness solely in Ireland. Any of these risks cold case a material negative effect on the Grop s profitability. Sch risks inclde less flexible labor laws and reglations, foreign exchange flctations, and difficlties staffing and managing foreign offices as a reslt of distance, langage and cltral difference. 20 CPL Annal Report 2013

23 Directors Report (contined) The Grop has acqired several companies and it may contine to acqire companies in the ftre. Entering into an acqisition entails many risks, any of which cold harm the Grop s bsiness, inclding diverting management s attention away from the core bsiness and failing to sccessflly integrate the acqisitions. Cpl s sccess depends on its ability to attract and retain key management and recritment consltants. Loss of a team or key members of a team cold disrpt the bsiness. The directors believe that these risks are managed as follows: Cpl management monitor economic developments to ensre that they can react qickly to any changes that may have an impact on the bsiness. Management are also aware of the need to ensre that the bsiness can be scaled in line with economic developments. Management prepare rolling forecasts to ensre that they have as mch visibility as possible on the impact economic events may have on the performance of the bsiness. Management actively manage cash collection, working capital days and cstomer payment terms to ensre all debtor acconts are paid within agreed terms. The Grop s cost base is highly variable and is careflly managed to align with bsiness activity. The Grop is highly cash generative, reqiring low levels of asset investment. The Grop monitors changes in the market in terms of indstry trends inclding social media and contines to invest in its online presence to provide a high qality cstomer experience. Management contine to work closely with the Grop s clients to ensre a qality of service that will differentiate the Grop from its competitors and ths minimise the risk of losing bsiness to a competitor. The Grop has adopted clear policies and procedres which ensre that we are in compliance in providing or employees with their employment rights. We have a dedicated internal employment lawyer who works closely with all of or bsiness areas to ensre we operate effectively within or code of practice and relevant legislation. The Grop continally monitors the performance and robstness of its IT sppliers and systems to ensre bsiness-critical processes are safegarded as far as is practicably possible. The Grop has pt in place clear governance strctres to review project stats when replacing certain key operational and financial systems, ensring that the necessary specialist resorces are available and that a clear project management process is followed. The Grop contines to bild a strong mltidisciplined management team and we are adding resorces and specialties to ensre that we have the organisational capacity to identify and integrate acqisitions and optimise organic growth opportnities. The Grop contines to invest in or people and or brand to ensre we become the nmber one provider of talent delivery soltions in the markets in which we operate. We spread or cash deposits across a variety of instittions and locations in order to minimise credit risk. Key performance indicators that are focsed on by management inclde: Management review team prodctivity inclding monitoring average fees per consltant and activity levels. Management also monitor average margins achieved per team and sector. The objective to increase the Grop s average margins has been set as the primary KPI for the senior team this year. Management review the nmber of temporary employees placed with the Grop s clients. The nmber of new starters and leavers are reviewed on a weekly basis. Management also review all margins to try to limit margin erosion. Management prepare rolling forecasts to evalate performance against bdget and to evalate any impact external economic factors may be having on the profitability of the bsiness. Management monitor debtor days to ensre the Grop remains cash generative and maximises its cash balances. The qality and range of services delivered to clients is critical to Cpl s sccess. As part of the Grop s performance improvement plan, new service qality targets were implemented focsing on both client and candidate needs. The Grop contines to increase client satisfaction levels, which are independently measred, and to experience a high level of repeat bsiness. CPL Annal Report

24 Directors Report (contined) Financial risk management Details of the Grop s financial risk management policies are otlined in Note 23 of the financial statements. Reslts and dividends The Chief Exective s review on pages 8 to 16 contains a comprehensive review of the operations of the Grop for the year. The adited financial statements for the year are set ot on pages 28 to 64. Operating profit for the year ended 30 Jne 2013 amonted to 11.7 million (2012: 10.0 million). The profit for the financial year ended 30 Jne 2013 amonted to 10.7 million (2012: 8.4 million). Basic earnings per share for the year amonted to 35.0 cent (2012: 25.6 cent), while adjsted flly dilted earnings per share for the year amonted to 35.0 cent (2012: 25.6 cent). An interim dividend of 4.0 cent per share (2012: 3.0 cent) was paid dring the year. A final dividend of 4.5 cent per share (2012: 3.5 cent) is proposed by the directors. No frther dividends or transfers to reserves are recommended by the directors. Shareholders eqity at 30 Jne 2013 amonted to 63.3 million (2012: 54.9 million). Directors and secretary and their interests (and those of their sposes and minor children) Josephine Tierney resigned as a director on 19 April There were no other changes in directors or secretary dring the year. The directors and secretary who held office at 30 Jne 2013 had no interests other than those shown below in the shares in the Company or Grop companies. 22 CPL Annal Report 2013 No. of shares 30 Jne 2013 No. of shares 1 Jly 2012 Shares in Cpl Resorces Plc Ordinary shares of 0.10 each Anne Heraty* 10,595,280 10,595,280 Pal Carroll* 1,833,819 1,833,819 John Hennessy 102, ,606 Breffni Byrne 8,209 8,209 Oliver Tattan - - Garret Roche 51,871 51,871 Wilton Secretarial Limited (Secretary) - - * Anne Heraty and Pal Carroll are hsband and wife. There have been no changes in the interests of the directors, the secretary and their families in the share capital of the Company between 30 Jne 2013 and 4 September Other than as disclosed above, in note 25 and the directors service agreements with the company as disclosed on page 4, none of the directors had a beneficial interest in any material contract with the Company or any of its sbsidiaries dring the year ended 30 Jne The directors did not hold any share options at 30 Jne 2013 (30 Jne 2012: nil). Significant shareholdings and share price At 30 Jne 2013, A. Heraty and P. Carroll together held 40.7% (2012: 40.7%) of the share capital of the Company. State Street Nominees Limited and Polar Capital Limited had shareholdings in excess of 5% of Jne Dring the year, the lowest and highest share prices were 2.70 and 6.20 respectively. At year end, the share price was Post balance sheet events There have been no significant post balance sheet events that wold reqire disclosre in the financial statements. Political donations The Grop made no political donations dring the year. Acconting records The directors believe that they have complied with the reqirements of Section 202 of the Companies Act, 1990 with regard to books of accont by employing personnel with appropriate expertise and by providing adeqate resorces to the financial fnction. The books of accont of the Company are maintained at the Company s premises at 83 Merrion Sqare, Dblin 2. Corporate governance Principles The Board of Cpl Resorces plc is firmly committed to bsiness integrity, high ethical vales and professionalism in all its activities and operations. It is therefore committed to maintaining the highest standards of corporate governance. As an Enterprise Secrities Market ESM listed company, Cpl Resorces Plc is not reqired to comply with the principles and provisions of the UK Corporate Governance Code as issed by the Financial Reporting Concil in May 2010 (formerly the Combined Code). However, the Board has ndertaken to comply with the UK Corporate Governance Code, as far as practicable, having regard to the size and natre of the Grop.

25 Directors Report (contined) Corporate governance (contined) The following sections describe how the principles and provisions of the UK Corporate Governance Code have been applied. The Board The Grop is controlled throgh its Board of Directors. The Board s main roles are to create vale for shareholders, to provide leadership to the Grop, to approve the Grop s strategic objectives and to ensre that the necessary financial and other resorces are made available to enable them to meet those objectives. Specific responsibilities reserved to the Board inclde: setting Grop strategy and approving an annal bdget and medim-term projections; reviewing operational and financial performance; approving major acqisitions, divestments and capital expenditre; reviewing the Grop s systems of financial control and risk management; ensring that appropriate management development and sccession plans are in place; approving appointments of directors and Company secretary; approving policies relating to directors remneration and directors contracts; and ensring that a satisfactory dialoge takes place with shareholders. The Board has delegated the following responsibilities to the exective management team: the development and recommendation of operational plans for consideration by the Board that reflect the longer-term objectives and priorities established by the Board; implementation of the strategies and policies of the Grop as determined by the Board; monitoring the operating and financial reslts against plans and bdgets; monitoring the qality of the investment process against objectives; prioritising the allocation of capital, technical and hman resorces; monitoring the composition and terms of reference of divisional management teams; and developing and implementing risk management systems. The Board crrently comprises the non-exective Chairman, three exective directors and two other non-exective directors, inclding the senior independent director. Each director retires by rotation every three years and no specific term of appointment is prescribed. The Board considers all of its non-exective directors to be independent in character and jdgement and each has wide ranging bsiness skills and other skills and commercial acmen. The Board has determined that there are no relationships or circmstances that are likely to affect, or cold appear to affect, the independent jdgement of any of the non-exective directors. No non-exective director: has been an employee of the Grop within the last five years has now, or has had at any time prior to or since his appointment to the Board, a material bsiness relationship with the Grop receives remneration other than a director s fee has close family ties with any of the Grop s advisers, directors or senior employees; or represents a significant shareholder. Board meetings are held at least eight times each year with agendas and Board papers circlated in advance of each meeting. There is a schedle of formal matters reserved for Board approval. All directors have access to advice from the Company Secretary and from independent professional advisors at the Grop s expense. Board committees The Board has established an Adit Committee and a Nomination and Remneration Committee. These committees have written terms of reference. Adit Committee The Adit Committee is comprised of Breffni Byrne, John Hennessy and Oliver Tattan. Breffni Byrne is the Committee Chairman. The Board considers Breffni Byrne to have recent and relevant financial experience. The Adit Committee meets at least three times each year. The Adit Committee reviews the acconting principles, policies and practices adopted in the preparation of the interim and annal financial statements, as well as reviewing the scope and performance of the Grop s internal finance fnction and reviewing the Grop s systems of financial control and risk management. It also discsses the scope and reslts of the adit with the external aditor and reviews the effectiveness and independence of the aditor. The external aditor attends Adit Committee meetings. The Chief Exective and the Chief Financial Officer also attend. The external aditor has the opportnity to meet with the members of the Adit Committee in the absence of exectives of the Grop at least once a year. In the year ended 30 Jne 2013, the Adit Committee, operating nder its terms of reference, discharged its responsibilities by: reviewing risks associated with the bsiness. reviewing the appropriateness of the Grop s acconting policies. CPL Annal Report