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RTC revenues rise as it works to replace Afghanistan business
26th Jul 2021 13:00
(Sharecast News) - Engineering and technical recruitment company RTC Group announced its unaudited results for the six months ended 30 June on Monday, with group revenue from continuing operations totalling £40.5m, up from £39.9m a year earlier.
The AIM-traded firm said its profit before tax was in line year-on-year at £0.2m, while net assets grew to £6.7m from £6.5m.
Net cash outflow from operating activities came in at £2.1m, swinging from an inflow of £4.3m a year earlier, while basic earnings per share fell to 0.76p from 1.20p.
No dividends were paid in the period, in line with the prior year, with the board confirming that no interim dividend was being proposed for the year ending 31 December.
"The first half of 2021 has been navigated satisfactorily in the continuing environment of the current pandemic," said chairman Bill Douie.
"Although the wave which commenced in September and October did not reach a peak until part way through the first quarter, the general economic environment remained very constrained and much of our business continued to be materially adversely affected.
"Happily, our strong emphasis on infrastructure generally, and railway, which has continued to perform at levels much as in 2020, was aided by early signs of recovery in branch UK recruitment and has made the profitable result for the period possible."
Douie said that, although there was still not a positive environment for the Derby Conference Centre and Hotel, the firm's international staffing solutions business had continued at profitable levels.
"During the first six months, more positive news on the vaccine roll-out has raised hopes of a period of recovery with a slow and bumpy return to improved profitability.
"However, there are additional head winds which present challenges for the immediate future and beyond.
"Shareholders will be aware that all NATO forces have now been withdrawn from Afghanistan, which will, to all intents and purposes, herald the end of our main business in that country which has served us well for many years."
Replacing that revenue was a "high priority", Bill Douie said, and while the group was continuing to service other existing overseas contracts and secure replacement business, it was expecting a period of lag in replacing that revenue.
"Shareholders will also be aware that this year we are in the position of having to renew our contract with Network Rail.
"The tender process has now been completed and we should know the outcome of Network Rail's decision in the second half of the year."
Bill Douie also said that the board was "fully aware" that the market in the company's shares was "very limited", and as a result, it had responded by renewing its authority to purchase shares in the market up to 2,195,091 shares, an amount equivalent to 14.99% of its outstanding capital, at the time of the last annual general meeting.
"Other than the two factors mentioned above, the outcome for the remainder of 2021 depends on whether the present optimism over the vaccine roll-out and the consequential economic forecast plays out as the government hopes.
"We will continue to manage the group with caution and determination."
At 1157 BST, shares in RTC Group were down 26% at 37p.
The AIM-traded firm said its profit before tax was in line year-on-year at £0.2m, while net assets grew to £6.7m from £6.5m.
Net cash outflow from operating activities came in at £2.1m, swinging from an inflow of £4.3m a year earlier, while basic earnings per share fell to 0.76p from 1.20p.
No dividends were paid in the period, in line with the prior year, with the board confirming that no interim dividend was being proposed for the year ending 31 December.
"The first half of 2021 has been navigated satisfactorily in the continuing environment of the current pandemic," said chairman Bill Douie.
"Although the wave which commenced in September and October did not reach a peak until part way through the first quarter, the general economic environment remained very constrained and much of our business continued to be materially adversely affected.
"Happily, our strong emphasis on infrastructure generally, and railway, which has continued to perform at levels much as in 2020, was aided by early signs of recovery in branch UK recruitment and has made the profitable result for the period possible."
Douie said that, although there was still not a positive environment for the Derby Conference Centre and Hotel, the firm's international staffing solutions business had continued at profitable levels.
"During the first six months, more positive news on the vaccine roll-out has raised hopes of a period of recovery with a slow and bumpy return to improved profitability.
"However, there are additional head winds which present challenges for the immediate future and beyond.
"Shareholders will be aware that all NATO forces have now been withdrawn from Afghanistan, which will, to all intents and purposes, herald the end of our main business in that country which has served us well for many years."
Replacing that revenue was a "high priority", Bill Douie said, and while the group was continuing to service other existing overseas contracts and secure replacement business, it was expecting a period of lag in replacing that revenue.
"Shareholders will also be aware that this year we are in the position of having to renew our contract with Network Rail.
"The tender process has now been completed and we should know the outcome of Network Rail's decision in the second half of the year."
Bill Douie also said that the board was "fully aware" that the market in the company's shares was "very limited", and as a result, it had responded by renewing its authority to purchase shares in the market up to 2,195,091 shares, an amount equivalent to 14.99% of its outstanding capital, at the time of the last annual general meeting.
"Other than the two factors mentioned above, the outcome for the remainder of 2021 depends on whether the present optimism over the vaccine roll-out and the consequential economic forecast plays out as the government hopes.
"We will continue to manage the group with caution and determination."
At 1157 BST, shares in RTC Group were down 26% at 37p.