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Stronger together
Stronger together
Empresaria Group plc
Old Church House
Sandy Lane
Crawley Down
Crawley
West Sussex
RH10 4HS
T: +44 (0)1342 711430
www.empresaria.com/contact
www.empresaria.com
Empresaria Group plc
Annual report and accounts 2022
Empresaria
Annual report and accounts 2022
Our purpose
is to positively
impact the
lives of people,
while delivering
exceptional
talent to our
clients globally.
For more information visit our website
www.empresaria.com
Strategic Report
Investment case
1 Highlights
2 Purpose led approach
3 Chair’s statement
4 At a glance
6
8 Current market conditions
10 Our business model
12 Chief Executive’s Q&A
15 Strategic objectives
16
18 Operating review
24 Finance review
28 Risks and uncertainties
32 Engaging with our stakeholders
Key performance indicators
Governance
34 Introduction to corporate governance
35 The QCA’s ten principles of corporate governance
36
Board of Directors and Secretary
38 Corporate governance statement
42 Audit Committee report
44 Nomination Committee report
45 Directors’ remuneration report
48 Directors’ report
50 Directors’ responsibilities statement
Consolidated statement of changes in equity
Independent auditor’s report
Consolidated income statement
Financial Statements
51
55
56 Consolidated statement of comprehensive income
57 Consolidated balance sheet
58
59 Consolidated cash flow statement
60 Notes to the consolidated financial statements
87 Parent Company balance sheet
88 Parent Company statement of changes in equity
89 Notes to the Parent Company financial statements
97
98 Glossary
Officers and professional advisers
Cautionary statement
The sole purpose and use of this annual report is to provide information to the shareholders of the Company, as a body, to assist
them in exercising their governance rights. The Company, its Directors, employees, agents or advisers do not accept or assume
responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility
or liability is expressly disclaimed. This annual report contains certain forward-looking statements with respect to the operations,
performance and the financial position of the Company and the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and developments to differ from those anticipated. The forward-looking
statements reflect knowledge and information available at the date of preparation of this annual report and nothing in this annual
report should be construed as a profit forecast.
This document is printed to the
EMAS standard and Environmental
Management System certified to
ISO 14001.
100% of the inks used are HP Indigo
Electroink which complies with RoHS
legislation and meets the chemical
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(Nordic Swan) for printing companies.
95% of press chemicals are recycled
for further use and, on average 99%
of any waste associated with this
production will be recycled and the
remaining 1% used to generate energy.
This document is printed on a paper
made of material from well-managed,
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Designed and
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1
Highlights
Solid growth and building to
deliver on our medium-term
ambitions
Financial
Net fee income
£65.4m
2021: £59.5m
Adjusted profit before tax
£9.0m
2021: £8.6m
Adjusted net debt
£7.9m
2021: £14.0m
Profit before tax
£7.6m
2021: £6.0m
Adjusted, diluted earnings per share
Diluted earnings per share
8.8p
2021: 8.6p
£6.7p
2021: £4.5p
Operational
February 2022
• Empresaria awarded 3rd place in the ‘Top
100 Staffing Firms to Work For in 2022’.
March 2022
• Group headcount passes 3,000 for
the first time.
June 2022
• Tony Martin CBE, retires from the Board
after 18 years as Chair.
September 2022
• Empresaria recognised on Staffing
Industry Analysts (SIA) list of fastest
growing US staffing firms.
October 2022
• Our CEO, Rhona Driggs, recognised by
SIA in the 2022 list of the most influential
European staffing leaders for the third
consecutive year.
• Capital Markets Day to communicate
roadmap to deliver ambition to double
adjusted operating profit to £20m in the
medium term.
November 2022
• Our CEO, Rhona Driggs, recognised in the
SIA Global Power 150 Women in Staffing
for the seventh consecutive year.
For definition of terms:
See glossary on page 98
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 2
Purpose led approach
Our purpose
Our purpose is to positively impact the lives of
people, while delivering exceptional talent to
our clients globally.
Our vision
Our vision is to be the leading global specialist
staffing group in our chosen sectors.
Our values
Our strategy
Innovation
Creativity, Ingenuity
Collaboration Communication, Teamwork
Accountability Leadership, Commitment
Responsibility
Integrity, Honesty
Excellence
Results, Discipline
Build scale in key markets and sectors
Increase diversity of profits by sector, market
and service
Increase productivity and efficiency
Targeted investment in growth
Our business model
Multi-branded with focused sector-driven approach
Diversified by geography and sector
Range of staffing services
Empowered and supported leadership
Empresaria Annual report and accounts 2022For more information: See page 15For more information: See pages 10 and 11 3
Chair’s statement
“We are building the
foundations to deliver our
Roadmap to £20m.”
Penny Freer
Chair
2022 performance
We are pleased to report our full-year
results which have delivered solid growth
in net fee income and profits. The year has
been characterised by two phases. In the
first half of the year, the ongoing recovery
post COVID created significant opportunities
for the staffing market. However, as the
second half of the year progressed, the
emergence of inflationary and recessionary
pressures saw this growth checked.
Despite the increased economic
uncertainty, we delivered year-on-
year growth in net fee income in every
quarter of 2022. Our diversity by sector
and geography has continued to benefit
the Group, with strong performances in
Offshore Services, many of our businesses
in APAC, Professional in the UK and our
logistics operation in Germany. These
outweighed the expected drop in
Healthcare, challenging conditions for our
temporary business in Germany, and the
impact of a fall in global IT demand in the
second half of the year.
People
I want to acknowledge and thank our
teams across the Group for their hard work
and dedication. Our results would not have
been possible without their contributions.
In June, Tony Martin CBE, our Chair of 18
years, retired. Tony played an instrumental
role on the Empresaria Board guiding the
Group through challenging times, helping
to build the business, and supporting the
strategic changes that we have made
in recent years. We thank him for his
significant contribution over the years.
We strengthened our senior leadership
team in 2021 with the appointment
of regional leaders. Our leadership
team has helped us to accelerate
the implementation of our strategy
and is laying the foundations for our
future success.
I am pleased to welcome two new Non-
Executive Directors to the Board. Steve
Bellamy was appointed in January 2023 and
Ranjit de Sousa was appointed in February
2023. Together they bring a wealth of
experience to the Board and its committees.
Dividend
The Board has reviewed the dividend in
line with our progressive dividend policy
and for the year ended 31 December 2022
we are pleased to propose a dividend of
1.4p per share, an increase of 17% on the
prior year. This increase reflects the growth
in profits, and strong cash generation, in
the year and the Board’s confidence in the
Group’s medium-term prospects. Subject
to shareholder approval at the Annual
General Meeting, the dividend will be paid
on 15 June 2023, to shareholders on the
register on 26 May 2023.
Outlook
The economic environment became
more uncertain as 2022 progressed, with
the post-COVID recovery giving way to
inflationary and recessionary concerns.
Although this uncertainty is expected to
continue, we have proven our ability to
successfully navigate difficult periods
and take advantage of opportunities as
they arise. We therefore look forward with
cautious optimism and are focused on
delivering on our Roadmap to £20m.
Penny Freer
Chair
27 March 2023
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 4
At a glance
Who we are
Founded in 1996, Empresaria is
a global specialist staffing group
operating across six diversified
sectors in 19 countries and
placing candidates in many
more. Driven by our passion
for the staffing industry, we
are committed to positively
impacting the lives of people,
while delivering exceptional
talent to our clients globally. We
are listed on the AIM market of
the London Stock Exchange.
We have expertise in
6 sectors
and operate from
19 countries
across
4 regions
Our footprint
Empresaria Annual report and accounts 2022 5
Our expertise
Our expertise covers six key sectors:
Professional
IT
Healthcare
Property,
Construction
& Engineering
Commercial
Offshore
Services
Our diversified model
Our highly diversified business model, by geography, sector and service, creates a proven ability to offset
risks and challenges in one area with opportunities and growth elsewhere.
Service type
% of net fee income
Region
% of net fee income
Sector
% of net fee income
Permanent
2022 2021
34% 34%
Temporary and contract
48% 55%
Offshore Services
18% 11%
UK & Europe
APAC
Americas
Offshore Services
2022 2021
43% 49%
24% 23%
13% 16%
20% 12%
Professional
IT
Healthcare
Property, Construction
& Engineering
Commercial
Offshore Services
2022 2021
28% 29%
19% 22%
5%
3%
7%
3%
25% 27%
20% 12%
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 6
Investment case
Our diversification by sector and geography, our differentiating Offshore
Services sector, combined with our focused strategy and Roadmap to £20m,
create a unique and compelling investment case.
Roadmap to £20m
For more information:
See pages 7 and 12
Diversified
operations
For more information:
See pages 18 to 22
Our Roadmap to £20m
is focused on delivering
organic growth across three
main pillars underpinned by
our investment in people,
technology and process.
£20m
medium-term
adjusted operating
profit ambition
Empresaria is diversified
by geography, sector and
service, creating a proven
ability to offset risks and
challenges in one area
with opportunities and
growth elsewhere.
Permanent, temporary and contract,
and offshore services across
6
sectors
19
countries
4
regions
Offshore Services
differentiator
For more information:
See pages 21 and 23
Our Offshore Services offering
is unique among our peers.
We see great opportunity for
growth, both with external
clients and through increased
cooperation with operations
within Empresaria.
Offshore Services
75%
net fee income growth in 2022
Resilient financing
structure
For more information:
See pages 24 to 27
Our strong cash flow has
significantly reduced our level
of adjusted net debt.
Our borrowing requirements
are strongly linked to working
capital and in the event of
a downturn working capital
unwinds and our net debt
reduces.
Adjusted net debt
£7.9m
(2021: £14.0m)
Experienced Board
and management
team
For more information:
See pages 36 to 37
Our experienced Board and
senior leadership team have
a strong track record in the
staffing industry.
Board staffing industry experience
>100
years
Empresaria Annual report and accounts 2022 Roadmap to £20m
7
Growth in
Commercial
less increase in
central/regional
overheads
Pillar 2
Growth in
new services
- Empresaria
Solutions
£10m
£1m
£4m
£1m
£4m
£20m
2022 adjusted
operating profit
Pillar 1
Accelerated
growth in
high potential
sectors
Pillar 3
Continued
growth in
Offshore
Services
£20m adjusted
operating profit
ambition
Underpinned by our investments in people, technology and process
Our Roadmap to £20m, launched at a Capital Markets Day in October 2022, identifies
three key pillars for growth to deliver on the Group’s medium term ambition of achieving
£20m adjusted operating profit.
For more information:
See CEO’s Q&A on page 12
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 8
Current market conditions
Staffing market forecasts
In November 2022, Staffing Industry
Analysts (SIA) projected the global staffing
market would grow by 11% in 2022,
following significant growth of 23% in 2021.
They forecast there will be more modest
global growth of 6% in 2023 but suggest
there will be significant variances from
market to market, and sector to sector.
In our regions, within UK & Europe, UK is
forecast to grow by 5%, while Germany
is forecast to grow 4%. In APAC, Japan is
forecast to grow 8%, Australia by 6% and
five of our other markets in the region are
expected to grow at double digit rates.
Growth in the Americas is forecast to be
more modest with the US expecting only
2% growth.
SIA identifies the top six staffing
markets, which together make up 65%
of the global staffing market, as US, UK,
Germany, Japan, France and Australia. We
have a presence in five out of six of these
and these operations accounted for 59%
of our net fee income in 2022. With the
exception of the UK, we deliver to one
or two of our sectors in these markets
giving us a good opportunity to increase
our penetration, such as with our planned
expansion into delivering Professional in
the US in 2023 leveraging our current
presence in other sectors.
SIA staffing market growth forecasts
6 largest markets
16%
12%
8%
4%
0%
2022
2023
Global - 2022
Global - 2023
US
Japan
UK
Germany
France
Australia
Empresaria Annual report and accounts 2022 9
Skill shortages persist amidst global economic uncertainty
The global economic outlook for
2023 is both complex and filled with
contradiction. There is no doubt that
there is a high level of economic and
geopolitical uncertainty across the globe
with increased inflation and the threat
of recession looming in many of the
world’s largest economies. However,
this has so far not translated to high
unemployment, and new jobs continue
to be added. In the UK, unemployment
rates are still well below their pre-
pandemic levels and while job vacancy
growth has slowed in recent months,
they remain significantly higher than
pre-COVID levels. In January 2023, the
US recorded its lowest unemployment
since 1969 and saw a surge in job
growth. Japan also saw a drop in its
unemployment rate in January 2023
from 2.5% to 2.4%, the lowest it has been
since pre pandemic.
It is no surprise then that skill shortages
continue to plague organisations as the
supply of skilled talent fails to keep pace
with demand. Increased digitalisation
in almost every organisation across
the globe, new categories of jobs that
didn’t exist 10 years ago and a failure
of organisations and government to
ensure continued up/re-skilling have
long compounded these issues. While
we have seen several highly publicised
job losses amongst the tech giants in
recent months this does not appear to
be adding overall relief to the crippling
skill shortages felt by many markets.
Our diversity by geography and sector
positions us well to navigate economic
uncertainty and our agility ensures
we can effectively support our clients
as their demands shift. Our deep
sector knowledge, global candidate
database and access to specialist talent
communities ensures we can find talent
for our clients where and when they
need them.
Increased demand for Offshore Services
The recruitment sector has become
increasingly competitive, with margins
shrinking due to increased economic
volatility and business models challenged
by technology. Demand for increased
productivity, streamlined delivery
processes and improved cost efficiency
has driven demand for Offshore Services.
A survey by Staffing Industry Analysts
in the US and the UK found that 48% of
recruitment agencies are using, or intend
to start using, Offshore Services and of
these, 52% of US firms and 44% of UK
firms intend to use more of it over the next
12 months. As pioneers in this sector, we
are well placed to deliver on this demand
and utilise this expertise to enhance our
own operating models.
Salary dissatisfaction increases job churn
With the increased costs of living across
most major markets, our candidate
research showed high levels of
dissatisfaction with salaries. 60% of those
that responded to our survey said they
were dissatisfied with their salary and 87%
were expecting a salary increase in the
next 12 months. More than half of those
who were expecting a raise were looking
for more than a 10% increase on their
current salary.
This dissatisfaction certainly increases
employee movements and 88% of
the people we surveyed were either
actively looking for a role or open to new
opportunities. When asked for their main
motivators to move role, an uncompetitive
salary was the top reason stated.
As career partners to our candidates, we
are focused on positively impacting their
lives by helping them navigate the world
of work and finding opportunities for them
to flourish.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 10
Our business model
Our resources
People
Our people are our greatest asset. We
invest in our employees and provide our
candidates with outstanding service and
career opportunities.
Clients
Client relationships built on trust drive
our success. We seek to provide our
clients with the best experience and
talent in the marketplace.
Financial strength
Our financial strength and stability
enables us to invest in our clients, our
people and our business.
Our approach
Our values
Innovation
Collaboration
Accountability
Responsibility
Excellence
Multi-branded with focused sector-driven approach
The Group operates in six sectors, targeting different segments of the
market with different brands. Each has in-depth knowledge and expertise
in their specific market.
Diversified by geography and sector
Our diversification across six sectors and 19 countries in four regions helps
mitigate economic and political risks as well as provide opportunities to
drive organic growth.
Range of staffing services
The Group has three main service lines: permanent recruitment; temporary
and contract recruitment; and offshore services. We have a bias towards
temporary and contract recruitment as it is generally more stable through
the economic cycle.
Empowered and supported leadership
The Group empowers its leaders as experts in the markets in which
they operate. The support structures we have put in place enable our
businesses to maximise their potential for success.
Empresaria Annual report and accounts 2022 11
Brand reputation
Our brands are experts in their markets
and sectors and have long-standing
client relationships.
Global network
Our brands operate from 19 countries
across the world and service many more
from hub locations.
Technology
Our technology enables us to connect
with clients and candidates quickly
and effectively.
Delivering long-term value
We look to generate long-term
value for all our stakeholders
Our people
Our culture and values allow our employees and candidates to develop and flourish
so they can realise their potential and achieve their career goals.
Our clients
We deliver exceptional talent and creative solutions to our clients globally, enabling
them to deliver on their own strategies and objectives.
Our communities
Our purpose is to positively impact the lives of people. We make direct social and
economic contributions in the countries we operate in. We are engaged in supporting
local community and charitable organisations. We also contribute to the local
economy through tax payments and use of local suppliers.
Our investors
We aim to deliver sustainable returns for investors through growing earnings per share
and dividends. Our strong cash flow allows us to invest in our businesses to grow our
profits into the future.
Delivered through our strategy
Stakeholder engagement
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022For more information: See page 15For more information: See pages 32 and 39 12
Chief Executive’s Q&A
Q&A
with CEO
Rhona Driggs
“Good
financial,
strategic and
operational
progress
underpinned
our overall
performance.”
Rhona Driggs
Chief Executive Officer
Q
Q
2022 saw the Group deliver
some solid results; how
would you characterise the
performance in 2022?
A
We continued to make good
financial, strategic and
operational progress in 2022
which underpinned our overall
performance.
Our Offshore Services operation continued
to perform well and delivered a record
year with significant net fee income
growth of 75%. We also saw record net
fee income from our operations in Japan,
Indonesia, Singapore, Thailand and the
Philippines and strong performances from
our Professional operations in the UK and
our logistics business in Germany. These
stronger results helped to outweigh those
in markets that had more challenging
trading environments and performances.
Throughout 2022, we maintained our
strategic focus and continued to invest in
our growth, adding significant headcount
in both our Offshore Services and APAC
regions. We ended 2022 with our global
headcount up 22% year-on-year.
We made good progress on our key
strategic objectives following the
appointment of our new regional
leadership team in 2021, strengthening
our foundation for success.
We have made progress in launching
our enhanced Recruitment Process
Outsourcing ('RPO') solutions and this has
already proven successful with the delivery
of several RPO projects in APAC and UK &
Europe (see case study on page 13).
Our staff productivity increased 6%
year-on-year following the continued
rollout of our common front office
technology. In addition, our ongoing shift
away from a 360 recruitment model to an
operating model that has dedicated sales
and delivery teams has allowed us to focus
our expertise in these areas and scale
more effectively and leverage our Offshore
Services resources.
You recently outlined your plans
to double adjusted operating
profit in the medium term. Can
you give us some additional
insight into this?
A
While we expect to see organic
growth across all our sectors, our
Roadmap to £20m focuses on
the three key pillars that we have
identified to accelerate our growth.
Our first pillar is to build scale and
accelerate growth in high potential
sectors, capitalising on our core expertise
in Professional, IT and Healthcare. We
currently offer Professional recruitment
services in just two of the six largest
staffing markets globally despite having
operations in five of these. We will
leverage our existing footprint, client
base and expertise, and expand our
Professional services into US, Japan and
Germany, with the US launch planned for
2023.
We will expand our IT offering by scaling
existing locations, leveraging our
footprint to enter new locations while
focusing on increasing our temporary and
contract business.
Lastly, we will focus on growing our
Healthcare business in the US where it
is projected that demand for healthcare
workers will outpace supply by 2025.
Our second pillar will see us continue to
diversify our client offering beyond the
more traditional temporary and permanent
recruitment services. Through Empresaria
Solutions we will provide clients with
regional and global services as well as
additional value-added solutions like RPO.
And finally, our third pillar is continued
growth in Offshore Services. We will
build scale and grow our client base
by strengthening our sales teams and
accelerating their efforts. We will continue
to look at options to diversify our offering
to our staffing industry clients such
as expanding our back office services
and introducing new services such as
outsourced marketing. We will also
further expand our delivery capacity in the
Philippines in order to provide our clients
with an additional option outside of India
and to expand our access to talent.
Empresaria Annual report and accounts 2022 13
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Case Study
Diversifying our service offering
to meet our clients’ needs
Regional and global clients are looking
for staffing partners that can service them
across multiple locations and disciplines
while providing value added solutions
beyond traditional staffing. We have
traditionally offered our permanent and
temporary recruitment services through
our specialist brands making it challenging
for our clients to work with us across sectors
and geography.
In 2022, through our regional sales leads,
we shifted our focus, taking a more
customer centric approach to how we
service our clients. We have developed a
suite of globally consistent solutions that
go beyond transactional staffing and can
be delivered to our clients through a single
point of contact taking the complexity out
of buying our services.
Our APAC region has been quick to see
success from offering a consultative
approach and a bespoke set of services to
their clients. Through a dedicated regional
sales team we have had a strong focus
on expanding our services to provide RPO
(Recruitment Process Outsourcing) to
our clients. Our project RPO solutions are
specifically aligned to each individual client’s
needs, whether they want to outsource
all or part of their recruitment process,
and are delivered through our specialist
brands with a local project manager.
Two such clients have been Brankas
Financial in Indonesia and MoneyMe in the
Philippines.
Brankas Financial was an existing client
of ours who needed to scale their team
of developers fast and were looking for a
new solution to support this. Developers
in Indonesia were some of the most
sought after and hard to find profiles in
the market at the time. We were able
to deliver a project RPO solution with a
dedicated team working in partnership
with Brankas’s internal talent team. Due to
the focused approach and our extensive
experience with FinTech clients, we were
able to leverage our existing network
to maximise efficiency and reduce the
time to hire by half compared to a typical
contingency process. This was only
achievable by working in true partnership
and maintaining close communication
throughout the project. We placed
12 highly skilled Developers within
three months.
Bala Subramanian, Chief of Staff, PT.
Brankas Teknologi Indonesia said of
the project:
“We [needed] to accelerate our
hiring needs for our engineering
team… the team was quick,
reliable and most importantly
were flexible enough to evolve
the hiring strategies as equal
partners. We were able to hire
a large team of engineers and
could count on [them] to do the
same again.”
MoneyMe is a multi-award winning FinTech
company that provides personal loan
services in Australia. MoneyMe needed
to rapidly scale their team in Manila,
Philippines and approached us to support
them. The initial requirement was for
20 finance and operations employees
however this quickly extended to include
ongoing technology roles. We created
a project RPO solution with a dedicated
account manager and delivery team to
ensure targets were met. The dedicated
RPO consultant was directly responsible for
all aspects of delivery and worked in close
partnership with the hiring manager. Due to
the ongoing success, what was originally
a three-month project has now been
extended for an additional 15 months.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
14
Chief Executive’s Q&A continued
Q
Q
Q
How do you see 2023
developing for the Group?
A
The uncertainty in the wider
economic environment resulted
in a softening of demand as the
second half of 2022 progressed,
and this has continued with a slower start
to 2023, however, across our markets, the
overall number of vacancies remains
above pre-COVID levels.
The strengthening of our leadership
team and our progress in investing in
technology, people and process, leaves
us well placed to weather economic
challenges and gives us confidence to
stay the course in executing our strategy
and delivering on our Roadmap to £20m.
Rhona Driggs
Chief Executive Officer
27 March 2023
What are your investment
priorities for 2023?
A Looking to 2023, we will focus on
actions to deliver our Roadmap
to £20m.
There is significant global
economic and geopolitical
uncertainty. How do you see
the Group navigating this
environment?
A
Our agility and diversification by
geography and sector, improves
our resilience and we have
proven that we can successfully adapt to
changing market conditions. The
transformation of the Group in recent
years has created a strong foundation to
capitalise on the opportunities these
changes present.
Ongoing skill shortages combined with
low unemployment rates have made the
staffing market more resilient than normal
to the global economic uncertainty. While
2022 was dominated by strong demand
for permanent employees, market
forecasts suggest a shift to increased
temporary recruitment as employers
demand more flexibility from their
workforce. We therefore expect our mix
of temporary to permanent placements
to adjust to reflect this, and we are well
positioned to support this change.
In the first half of 2023 we will launch
a new operation in the US focused
on providing temporary, contract and
permanent staffing in the Professional
sector. We will seek to leverage our
existing client base in the Healthcare
and IT sectors where we have a proven
track record of delivery, while providing
our clients with more options to use our
services across their businesses.
We will continue to execute on our
strategy to broaden our service offering
and enhance our regional and global
sales capabilities under the Empresaria
Solutions umbrella. We will invest in
strengthening our sales and delivery
teams to target areas where we see
opportunities for success.
Our people are key to the success of
our business. We will continue to focus
on developing and retaining our talent.
We will be launching our Top Talent
Programme in the UK & Europe following
the successful 2022 programme in APAC.
This programme is aimed at engaging
and developing the future leaders of
our organisation.
To further drive productivity, speed
to market and collaboration, we will
continue to implement our core common
technology platform across the Group. We
will also commence the second phase of
our technology roll out which is focused
on increasing productivity through bolt-
on technologies such as onboarding
and reporting. We will complement this
with increased automation capabilities
to build talent communities and long-
term engagement.
Empresaria Annual report and accounts 2022 15
Strategic objectives
Strategic objective
2022 progress
2023 priorities
Build scale in
key markets and
sectors
We are focused on developing scale
in key markets and sectors. We will
do this by gaining additional market
share with clients through cross-
selling efforts, providing them with
services across sectors, skillsets and
regions, as well as developing new
service offerings to drive additional
revenue streams.
• Regional sales directors appointed.
• APAC IT offering expanded to the
majority of locations.
• Offshores Services hub established
in Philippines, 105 headcount at 31
December 2022.
• Targeted investment in sales and
delivery teams with headcount
increased by 8% (excluding Offshore
Services).
• Record net fee income in a number of
locations.
• Launch of Professional sector
operation in US.
• Implementation of go-to-market
branding strategy.
• Launch of Empresaria Solutions
to drive regional sales and wider
service offerings.
• Continued expansion of Offshore
Services hub in Philippines.
Increase diversity
of profits by sector,
market and service
Diversifying our profit base across our
business is key for us. We will do this
through growing our high potential
businesses and sectors, increasing our
temp to perm ratio to 70:30 over time
to create a more stable profit base, and
ensuring all businesses in the Group
deliver a minimum profit threshold.
Increase
productivity
and efficiency
Increasing our productivity and
efficiency through the use of
technology and our focused
operating models will enable us to
deliver to clients and candidates more
quickly and effectively.
Targeted investment
in growth
We seek to maximise our return on
investments, focusing on areas we
believe will deliver the most benefit.
We seek to balance investment in
growth with an aim to reduce the
overall level of net debt relative to the
size of the Group.
• Increase in RPO activity levels.
• Temp to perm ratio reduced to 58:42
(excluding Offshore Services) reflecting
strong growth in permanent recruitment
in 2022.
• Finalised plans for Empresaria Solutions.
• Launch of Empresaria Solutions
to drive regional sales and wider
service offering including RPO.
• Focus on growing temporary and
contract IT in the US.
• Three more operations live on our
common front office platform in 2022.
• Second phase projects for
complementary technology launched
with implementations planned for 2023.
• Increase in breadth of internal utilisation
of Offshore Services.
• Notable increase in cross-group
collaboration.
• Moved multiple UK brands into a single
London office.
• Staff productivity increased by 6% (see
page 17).
• Continue implementation of
front office platform and focus on
maximising post-implementation
benefits
• Implementation of second phase of
complementary technology projects
including enhanced reporting and
onboarding solutions.
• Continue to drive internal utilisation
of our Offshore Services offering.
• Creation of delivery centre to service
UK MSP clients, supported by
Offshores Services.
• Headcount investment – see above.
• Investment in office and infrastructure to
support ongoing expansion of Offshore
Services.
• Ongoing investment in technology
roadmap.
• Continued investment in Offshore
Services to support growth.
• Continued investment in technology
roadmap.
• Continue to identify growth
opportunities.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
16
Key performance indicators
We measure progress against our objectives
using the following performance measures.
Strategic objectives
1
2
3
4
Build scale in key markets and sectors
Increase diversity of profits by sector, market and service
Increase productivity and efficiency
Targeted investment in growth
Net fee income
£65.4m
2022
2021
2020
2019
2018
65.4
59.5
54.0
74.5
72.3
Why and how we measure
Net fee income is the Group’s principal ‘revenue’ measure,
incorporating permanent fees and the gross margin earned on
temporary and contract workers, and offshore services.
How we have performed
Net fee income has increased by 10% in 2022, reflecting strong
growth in Offshore Services and APAC which outweighed falls in
UK & Europe and Americas.
Adjusted profit before tax
£9.0m
2
4
Adjusted, diluted earnings per share
8.8p
2022
2021
2020
2019
2018
5.2
9.0
8.6
9.3
11.4
2022
2021
2020
2019
2018
4.1
8.8
8.6
8.5
12.1
Why and how we measure
Adjusted profit before tax measures the Group’s profit
performance and is stated before amortisation of intangible assets
identified in business combinations, impairment of goodwill and
other intangible assets, exceptional items and fair value charges
on acquisition of non-controlling shares.
How we have performed
Adjusted profit before tax has increased by 5% in 2022, reflecting
solid growth in net fee income and operating profits, partially
offset by higher interest costs.
Why and how we measure
Adjusted, diluted earnings per share measures the underlying
performance of the Group’s earnings for its shareholders. Adjusted
earnings is adjusted in the same manner as for adjusted profit
before tax along with the related tax impacts.
How we have performed
Adjusted, diluted earnings per share has increased by 2% in 2022,
reflecting the increase in profits along with an increase in the
proportion of those profits allocated to non-controlling interests.
1
3
4
2
4
Empresaria Annual report and accounts 2022
17
Free cash flow
£9.5m
2022
2021
2020
2019
2018
2.6
5.3
4.8
9.5
13.7
8.5
11.5
6.7
10.4
9.6
Post-tax
Pre-tax
Why and how we measure
Free cash flow is the level of cash generated that is available
for investment by the Group. It is calculated as net cash from
operating activities per the cash flow statement, adjusted to
exclude working capital movements related to cash held in
respect of pilot bonds and after deducting payments made under
lease agreements. As an international business tax cash flows can
be volatile, so a pre-tax free cash flow figure is also presented.
How we have performed
In 2022 free cash flow has increased, reflecting the increase in
profits and a working capital inflow due to an increased proportion
of revenue being generated from permanent placements.
4
Debt to debtors ratio
4
24%
2022
2021
2020
2019
2018
24
35
37
36
42
Why and how we measure
The majority of the Group’s debt is short term and matched
against working capital requirements. The Group’s debt to debtors
ratio is calculated as adjusted net debt as a percentage of trade
debtors. Adjusted net debt excludes cash held in respect of pilot
bonds.
How we have performed
The Group’s debt to debtors ratio has reduced significantly during
the year, reflecting the significant reduction in adjusted net debt.
This reduction has delivered on our aim of reducing our debt to
debtors ratio to 25%.
Conversion ratio
15.6%
3
Staff productivity
3
1.80x
2022
2021
2020
2019
2018
15.6
15.6
17.0
11.5
14.0
2022
2021
2020
2019
2018
1.80
1.70
1.67
1.68
1.72
Why and how we measure
The conversion ratio measures how efficient we are at converting
our net fee income to profit. It is calculated as adjusted operating
profit as a percentage of net fee income.
Why and how we measure
Staff productivity measures how effective our staff are at delivering
income for the Group. It is measured as total net fee income
divided by total staff costs within administrative costs.
How we have performed
The conversion ratio has remained unchanged in the year,
reflecting the improvement in staff productivity which offset our
investment in technology. We continue to focus on efficiencies
and productivity in the business with the longer-term ambition of
achieving a 20% conversion ratio.
How we have performed
Staff productivity has improved by 6% from the prior year,
reflecting the benefits of operational initiatives.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 18
Operating review
UK & Europe
Locations
• Austria
• Finland
• Germany
• UK
% of Group net fee income
Net fee income by service
Net fee income by sector
43%
Financials
£m
Revenue
Net fee income
Adjusted operating profit
% of Group net fee income
Average number of staff
2022 2021
124.9
28.4
4.7
43%
272
133.1
29.0
5.3
49%
282
2022 2021
Permanent
32% 29%
Professional
Temporary & contract
68% 71%
IT
Healthcare
PCE
Commercial
2022 2021
36% 33%
12% 15%
3%
5%
4%
4%
44% 44%
Julie Smith
Regional CEO, UK & Europe
The UK & Europe region saw mixed
performances in 2022 with net fee income
reducing by 2% (2% in constant currency)
and adjusted operating profit falling by 11%
(11% in constant currency). Revenue fell by
6% (6% in constant currency) reflecting the
change in the temp to perm mix.
In the UK, net fee income grew by 3%
year-on-year with double digit percentage
growth in profit. Net fee income from the
Professional sector grew 6% year-on-year,
driven by permanent placement activity
which increased significantly, particularly
in the first half of the year. Net fee income
from IT fell by 18% compared to 2021
reflecting ongoing operational challenges.
Corrective actions are in place to improve
this performance including accelerating
the focus on growth in the UK market as
the majority of activity in our UK based
operation is with clients throughout
mainland Europe. In the second half of
the year we moved a number of brands
into a single location which is driving
collaboration and cross-selling as well as
improving operational efficiency.
In Finland, our Healthcare business had
a challenging year as net fee income
fell by 35% and the business generated
a loss. This performance was in part
driven by significant changes in public
sector healthcare in Finland, alongside
the expected drop in COVID-19 related
demand.
In Germany, our operations focused on the
Commercial sector delivered contrasting
results leaving overall net fee income and
profits in line with prior year. Our logistics
operation saw a good recovery with
strong growth in both net fee income and
profits. However, our temporary staffing
business has been adversely affected by
a number of factors including demand
from key clients operating in the troubled
automotive industry, and an ongoing
increase in sickness rates due to COVID-19
which has impacted margins.
Our operation in Austria is similar to our
temporary business in Germany and was
impacted by the same factors outlined
above. As a result, net fee income fell by
over 20% and profits fell by two-thirds.
“We are making good progress in delivering
the operational improvements that will lay the
foundations to return the region's profits to growth.”
Empresaria Annual report and accounts 2022 19
APAC
Locations
% of Group net fee income
Net fee income by service
Net fee income by sector
• Australia
• China
• Indonesia
• Japan
• Malaysia
• New
Zealand
• Philippines
• Singapore
• Sweden
• Thailand
• Vietnam
24%
Financials
£m
Revenue
Net fee income
Adjusted operating profit
% of Group net fee income
Average number of staff
2022 2021
49.9
15.8
0.8
24%
292
40.3
14.1
1.4
23%
233
2022 2021
Permanent
65% 61%
Professional
Temporary & contract
35% 39%
IT
Healthcare
PCE
Commercial
2022 2021
47% 45%
43% 44%
0%
3%
7%
1%
2%
8%
In our APAC region we saw strong growth
in revenue, which was up 24% year-on-year
(26% in constant currency), and in net fee
income, which grew by 12% (12% in constant
currency). Profits fell, reflecting investment
in our regional team along with significant
challenges in a couple of locations.
Japan is our largest country in the region
and we are primarily focused on the IT
sector. Our operations delivered solid
results with single digit percentage growth
in both net fee income and profit. Growth
was stronger in the first half of the year and
driven by permanent placement revenues
which saw high demand. In the second
half of the year we were impacted by a
few key clients significantly reducing hiring
requirements and contractor headcount.
Despite the weaker close to the year, this
was a record year for both net fee income
and profit.
In Australia, our operation is focused
on digital and creative roles within our
Professional sector. Results in 2022 were
extremely disappointing with net fee
income down 14% year-on-year driven by
a fall in temporary and contract activity.
Investments in staff have not proved
successful and the operation delivered a
loss in the year. A significant restructuring of
this operation has been undertaken at the
start of 2023 in order to bring this operation
back to profitability.
Vietnam and China both saw year-on-
year falls in net fee income. In China this
reflected the challenges of local lockdowns
which continued to impact our Shanghai
based operation throughout 2022. In
Vietnam high staff turnover at the start of
the year disrupted the strong progress
made in 2021.
Elsewhere in the region a number of
countries delivered record levels of net
fee income with Singapore, Indonesia,
Philippines and Thailand all beating their
previous highs and delivering strong
growth in profits. Our operations in these
countries are predominantly permanent
placement focused and showed strong
growth across the Professional and IT
sectors in the year.
Our aviation operation, which has offices
in New Zealand, Singapore and Sweden,
did not show any significant improvement
in 2022. Aviation recovery in our core Asia
market has lagged behind that in the
US and Europe reflecting the continued
closure of China throughout 2022 and
significant restrictions on travel to Japan.
As these restrictions ease in 2023 we
expect to see demand improve and for
this operation to move back towards
profitability.
Rafael Moyano
Regional CEO, APAC
“Our strong growth in
net fee income, along
with record results in
a number of locations,
demonstrates the
progress we are making
in the region.”
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 20
Operating review continued
Americas
Locations
% of Group net fee income
Net fee income by service
Net fee income by sector
• Chile
• Peru
• USA
13%
Financials
£m
Revenue
Net fee income
Adjusted operating profit
% of Group net fee income
Average number of staff
2022 2021
62.7
71.0
8.7
1.5
13%
160
9.9
2.8
16%
151
2022 2021
Permanent
32% 34%
Professional
Temporary & contract
68% 66%
IT
Healthcare
PCE
Commercial
2022 2021
11% 12%
26% 30%
27% 31%
2%
2%
34% 25%
Garrick Cooper
President, North America
In Peru, changes to outsourcing laws
and political instability have adversely
impacted our operations in 2022. Despite
this, net fee income grew strongly
reflecting recovery from 2021 which was
still being heavily impacted by COVID-19.
Profits fell slightly as we invested in
ensuring we have the right team and
structure to rebuild the business to
previous levels.
In the Americas, revenue fell by 12% (16%
in constant currency), net fee income fell
by 12% (19% in constant currency) and
profits reduced by 46% to £1.5m.
In the US, net fee income dropped by
20%, and profits by half, with reductions
in both of our operations. In Healthcare
we had a record year in 2021 driven by
COVID-19 related demand which reduced
as expected in 2022. In IT, we saw a
significant impact in the second half of
2022 from a drop in demand from key
clients. We are focused on diversifying our
client base to create more opportunity and
stability. Temporary and contract growth in
IT was disappointing and is a key focus for
us in the US. We are investing in our sales
team in order to drive this forward in 2023.
In Chile, net fee income was in line with
2021 although profits fell back reflecting
increases in the cost base. Our core
strength lies in our outsourcing operation,
focused on the Commercial sector, which
has continued to grow strongly year-on-
year. However, permanent and temporary
recruitment activity has dropped
significantly from pre-COVID levels and
rebuilding these is now a key focus.
Juan Pablo Dañobeitia
Regional Director, LATAM
“We are investing in growing our
US temporary and contract IT.”
Empresaria Annual report and accounts 2022 21
Offshore Services
Locations
% of Group net fee income
Net fee income by service
• India
• Philippines
20%
Financials
£m
Revenue
Net fee income
Adjusted operating profit
2022 2021
25.3
13.5
7.1
15.3
7.7
4.1
2022 2021
% of Group net fee income
20%
12%
Temporary & contract
3%
1%
Average number of staff
2,481
1,578
Offshore services
97% 99%
Offshore Services delivered an extremely
strong 2022 with revenue up 65% (57% in
constant currency), net fee income up 75%
(67% in constant currency) and adjusted
operating profit up 73%. These results
reflect the strong momentum and growth
which built through 2021 and carried over
into 2022. Average headcount in 2022 was
up 57% year-on-year with headcount at 31
December 2022 27% higher than a year
earlier.
Our operations support the staffing
sector, principally in the US and the UK,
and provide any aspect of the end-
to-end recruitment process alongside
compliance, and finance and accounting
services. Clients are predominantly third-
party staffing companies but this operation
also plays an important role in supporting
activity across the Group.
Our Philippines hub, which we opened in
January 2021, is now well established with
a headcount of 105 primarily supporting
our US clients. We have started to expand
our capabilities and now offer services to
our UK and Australian clients from this
location as well.
Demand in 2022 has been extremely
strong from our UK clients, particularly
in the healthcare sector. As a result, the
number of billable seats supporting
the UK closed the year up two-thirds
compared to 31 December 2021 and now
exceeds those supporting the US. Growth
was from both existing and new clients
with the number of clients growing by 40%
in the year.
In the US, demand has been more
muted. While we saw some growth in
the first half of the year, the challenges in
global IT have fed through to our clients
that support this sector. As a result, the
number of billable seats dropped back
during the second half of the year and
closed the year 6% down on 31 December
2021. These reductions have been
driven by existing clients reducing their
requirements, not from the loss of clients,
and the number of clients we work with
grew by 20% in the year. We expect this
reduction to be temporary and that as
the IT sector returns to an equilibrium we
will be able to return to growth. We are
also focused on diversifying our US client
base to build a greater presence in other
sectors such as healthcare.
While the vast majority of our net fee
income is derived from recruitment and
related compliance services, we are
delivering finance and accounting support
to an increasing number of our clients.
This now accounts for 8% of our net fee
income and continues to be a focus area
for growth.
For a case study on Offshore Services
See page 23
Amit Somaiya
CEO, Offshore Services
“I am pleased to have
delivered another
record year from
Offshore Services.”
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 Revenue
Net fee income
2022
2021
2022
2021
56.5
34.1
17.6
9.2
120.5
24.9
(1.5)
261.3
57.5
37.6
27.4
8.1
114.8
14.5
(1.4)
258.5
18.7
12.6
3.2
2.2
16.6
13.1
(1.0)
65.4
17.3
13.5
4.3
1.7
16.3
7.6
(1.2)
59.5
22
Operating review continued
Sector summary
Net fee income by sector
Net fee income by sector
£m
Professional
IT
Healthcare
Property, Construction & Engineering
Commercial
Offshore Services
Intragroup eliminations
Total
2022 2021
28% 29%
19% 22%
Professional
IT
Healthcare
Property, Construction
& Engineering
5%
3%
7%
3%
Commercial
25% 27%
Offshore Services
20% 12%
The greatest growth in 2022 was from
Offshore Services as described in more
detail on page 21.
Professional saw good growth in net fee
income (up 8%) driven by permanent
placement activity across the UK and
APAC. Revenue fell slightly reflecting this
change in mix.
IT net fee income fell 7% with good
growth in APAC, more than offset by the
challenges in our UK operation and the
adverse second half impact in the US as
discussed in more detail on page 20.
Healthcare net fee income fell by 26%
year-on-year, as expected, given the
record performance in 2021 which was
driven by COVID-19 related demand.
Property, Construction and Engineering
saw some good recovery in net fee
income which was up 29% with the largest
growth coming from APAC.
Commercial net fee income grew by 2%.
Our largest operations delivering to this
sector are in Germany where we saw
mixed performances with overall net fee
income flat as described in more detail on
page 18.
Empresaria Annual report and accounts 2022 23
Case Study
Offshore Services and UK Healthcare
Our Offshore Services operations have
been providing solutions to the Healthcare
recruitment sector in the UK since 2008
and have a proven track record of delivery.
Our clients are often looking to scale their
teams fast and achieve a quick return on
investment on each headcount added.
Fierce competition for recruitment talent
in the UK has led to increased time to hire,
and the need for specialist knowledge
of the healthcare sector means time to
productivity can be slow. The key to our
success is both in our ability to mobilise
a team at pace and in our Healthcare
academy which rapidly upskills the
teams, ensuring that the time from hiring
to productivity is dramatically reduced
compared to hiring in the UK.
More than most sectors. the healthcare
industry requires flexible working hours
as doctors and nurses work around the
clock. This is where our ability to provide a
24-hour, seven days a week service sets us
apart from onshore teams and ensures that
we can provide support to our clients and
candidates no matter when they need it.
We recognise that our clients’ requirements
and challenges are unique to them, and
so we are focused on offering bespoke
solutions for our customers whether this is
an end-to-end recruitment service, from
talent mapping through to bookings and
placements, or a tailor-made solution
based on specific requirements. No matter
what our clients’ needs, we work in close
alignment to make each assignment a
success right from the start.
While onboarding new clients has
supported our growth in 2022, a
significant proportion has come from
increased demand from our existing
clients. This is driven by our ability to
deliver on our clients’ needs time and
time again, while ensuring continuous
process enhancements aligned to their
internal strategies.
A good example of this is a client we
have partnered with since 2019, who
is a leading supplier to the NHS. They
originally engaged with us to enhance
their candidate experience, improve their
compliance and offer a more consistent
and streamlined process. As a result of our
success in continually delivering on the
agreed KPIs we have seen our dedicated
headcount increase from 11 in December
2019 to 70 in December 2021 and now 137
in December 2022. The ongoing success
of this relationship reflects that it is a true
partnership. We work as an extension of the
UK team with shared goals and successes
and are able to offer a completely
seamless candidate experience.
+46%
increase in number of
UK Healthcare clients
during 2022
+71%
increase in number of
UK Healthcare billable
seats during 2022
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 24
Finance review
“Solid financial performance with a
significant reduction in net debt.”
Tim Anderson
Chief Financial Officer
Revenue
£261.3m
2021: £258.4m
Net fee income
£65.4m
2021: £59.5m
Adjusted profit before tax
£9.0m
2021: £8.6m
Overview
The Group’s results for 2022 reflect a solid performance with
net fee income and adjusted operating profit increasing by 10%.
Higher net interest costs due to the increase in base rates are
reflected in a 5% increase in adjusted profit before tax and a 2%
increase in adjusted, diluted earnings per share.
Our adjusted net debt has reduced significantly to £7.9 million
(2021: £14.0m) and is at its lowest year end level since 2015.
This reduction was driven by the profits for the year, along with
a working capital inflow generated despite the increase in net
fee income. We have seen an increase in permanent placement
activity, which has a lower working capital requirement, but a
reduction in temporary and contract revenues, which are more
working capital intensive. As a result of the reduction in net debt,
our debt to debtors ratio has fallen to 24%, below our 25% target
level. In the current economic environment we expect the mix
to shift back towards temporary and contract placements which
may result in an increased working capital requirement.
Income statement
Revenue increased by 1% (nil% in constant currency) with net fee
income increasing by 10% (8% in constant currency). The growth
in net fee income reflects strong growth in both permanent
placement (up 9% year-on-year) and offshore services (up 73%
year-on-year), offset by a reduction in temporary and contract
(down 5% year-on-year). This growth in net fee income is reflected
in a 10% year-on-year increase in adjusted operating profit (6%
increase in constant currency) with improved staff productivity
offset by investments including in technology.
Revenue
Net fee income
Operating profit
Adjusted operating profit1
Profit before tax
Adjusted profit before tax1
Diluted earnings per share
Adjusted, diluted earnings per share1
%
change
constant
currency2
+0%
+8%
+6%
2022
£m
2021
£m
%
change
261.3 258.4
+1%
65.4
59.5
+10%
8.8
10.2
7.6
9.0
6.7p
8.8p
6.7
9.3
+31%
+10%
6.0 +27%
8.6
+5%
4.5p +49%
8.6p
+2%
1
Adjusted to exclude amortisation of intangible assets identified in business
combinations, impairment of goodwill and other intangible assets,
exceptional items, fair value charges on acquisition of non-controlling shares
and, in the case of earnings, any related tax. See note 10 for a reconciliation
between profit before tax and adjusted profit before tax.
2
The constant currency movement is calculated by translating the 2021 results
at the 2022 exchange rates.
Following the appointment of regional leaders during 2021, the
Group has moved to a regional reporting structure. As a result,
with effect from 2022, the Group’s operating segmental analysis
is presented by region. 2021 financial information has been re-
presented on this basis. A detailed analysis by region is provided
in the operating review on pages 18 to 22. Central costs have
reduced to £3.9m (2021: £4.3m) reflecting reduced costs for
bonuses and share schemes.
Empresaria Annual report and accounts 2022 25
Adjusted profit before tax has increased by 5% to £9.0m reflecting
the increase in adjusted operating profit and an increased net
interest cost due to the impact of higher interest rates and 2021
interest credits following the settlement of tax audits. The reported
profit before tax reflects amortisation of intangible assets identified
in business combinations of £1.4m. There were no charges for
impairment in 2022 (2021: £1.2m) and as a result reported profit
before tax increased by 27% year-on-year to £7.6m.
The total tax charge for the year is £2.8m (2021: £3.1m), resulting in
an effective tax rate of 37% (2021: 52%). On an adjusted basis, the
effective rate is 34% (2021: 40%). The effective tax rate is higher
than the underlying tax rates due to a number of factors, including:
• expenses not deductible for tax purposes (£0.3m);
• withholding taxes, dividend taxes, and deferred tax liabilities
on unremitted earnings in respect of our overseas operations
(£0.3m);
• deferred tax assets not recognised for certain tax losses
around the Group, (£0.4m); partially offset by
• expenses with enhanced deductions for tax purposes (£0.2m).
Adjusted, diluted earnings per share increased by 2% to 8.8p. This
reflects the increase in adjusted profit before tax partially offset by
an increase in the proportion of profits allocated to non-controlling
interests due to the strong performance in our Offshore Services
operation where there is a 28% non-controlling interest. Reported
diluted earnings per share increased by 49% to 6.7p reflecting the
above and the £1.2m of impairment charges in the prior year.
Cash flow
The Group is typically highly cash generative with an historically
strong correlation between pre-tax profits and cash flows. The
Group measures its free cash flow as a key performance indicator
and defines this as net cash from operating activities per the
cash flow statement excluding cash flows related to pilot bond
liabilities (see financing section below) and after deducting
payments made under lease agreements.
Net cash inflow from operating activities
per cash flow statement
Cash flows related to pilot bonds
Payments under lease agreements
Free cash flow
Taxation
Free cash flow (pre-tax)
2022
£m
14.7
0.1
(5.3)
9.5
4.2
13.7
2021
£m
7.6
0.3
(5.3)
2.6
2.7
5.3
Free cash flow in 2022 was significantly higher than 2021, with
the largest driver being working capital which showed an inflow
of £3.5m in 2022 compared to an outflow of £4.4m in 2021 (both
excluding pilot bonds). The Group also presents a pre-tax free cash
flow measure as tax payments in a global business can be volatile.
In 2022 the Group utilised its free cash flow as follows:
Balance sheet
Goodwill and other intangible assets
Trade and other receivables
Cash and cash equivalents
Right-of-use assets
Other assets
Total assets
Trade and other payables
Borrowings
Lease liabilities
Other liabilities
Total liabilities
Net assets
2022
£m
40.1
46.7
22.3
7.5
7.2
123.8
(33.3)
(29.6)
(7.9)
(4.0)
(74.8)
49.0
2021
£m
39.8
50.5
21.1
7.5
5.0
123.9
(34.8)
(34.4)
(7.9)
(4.5)
(81.6)
42.3
Goodwill and other intangible assets arise from the investments
and acquisitions the Group has made. At 31 December 2022
the balance was £40.1m (2021: £39.8m) with the movement in
2022 due to £1.6m of amortisation of intangible assets (2021:
£1.6m), foreign exchange gains of £1.8m (2021: losses of £1.1m),
impairment charges of £nil (2021: £1.2m) and additions of £0.1m
(2021: £0.7m).
Trade and other receivables include trade receivables of £33.3m
(2021: £39.5m) with the decrease from 2021 reflecting a change
in mix with an increase in permanent placement revenue and a
reduction in temporary and contract revenue. Average debtor
days for the Group in 2022 reduced to 45 (2021: 48), with
debtor days at 31 December 2022 of 43 (2021: 47). The income
statement includes a charge of £nil (2021: £0.3m) in respect of
impairment losses on trade receivables.
Cash and borrowings are discussed in the financing section below.
Free cash flow
Purchase of shares in existing subsidiaries
Purchase of property, plant and
equipment, and software
Dividends paid to owners of Empresaria
Group plc
Dividends paid to non-controlling
interests
Purchase of own shares in Employee
Benefit Trust
Other
Decrease/(increase) in adjusted net debt
2022
£m
9.5
(0.1)
(2.1)
(0.6)
(0.4)
(0.3)
0.1
6.1
2021
£m
2.6
(0.6)
(1.7)
(0.5)
(0.3)
(0.3)
0.4
(0.4)
The purchase of shares in existing subsidiaries in the 2021
cash flow mainly related to the final payment in respect of the
acquisition of shares in ConSol Partners in 2020.
Purchase of property, plant and equipment, and software of £2.1m
reflects ongoing investments in the office, IT and infrastructure
of our Offshore Services operation to support its growth and the
ongoing investment in a common front office system. Dividends
paid to our shareholders were £0.6m (2021: £0.5m) reflecting the
increased dividend paid in the year. The Group has continued to
purchase Empresaria shares, transferring these into the Employee
Benefit Trust to satisfy future share option exercises, and these
purchases totalled £0.3m in 2022 (2021: £0.3m). Dividends paid to
non-controlling interests were £0.4m (2021: £0.3m).
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 26
Finance review continued
Financing
The Group’s treasury function is managed centrally and the
Group’s financial risk management policies are set out in note 22.
The Group maintains a range of facilities to manage its working
capital and financing requirements. At 31 December 2022 the
Group had facilities totalling £54.8m (2021: £55.5m).
UK facilities
Overdrafts
Revolving credit facility
Invoice financing facility
Total UK facilities
Continental Europe facilities
Asia Pacific facilities
Americas facilities
Undrawn facilities
(excluding invoice financing)
2022
£m
10.0
15.0
10.0
35.0
12.4
2.3
5.1
54.8
17.9
2021
£m
10.0
15.0
10.0
35.0
11.8
2.4
6.3
55.5
12.9
Undrawn facilities have increased significantly during the year,
reflecting the strong cash flows and the reduction in adjusted
net debt.
Covenants are tested on a quarterly basis in respect of the
revolving credit facility and all covenants have been met during
the year. The covenants, and our performance against them at 31
December 2022, are as follows:
Covenant
Net debt: EBITDA
Interest cover
Debtor coverage
Target
Actual
<3.0 times
>4.0 times
>1.75 times
0.7
9.7
7.1
Subsequent to the reporting date, in March 2023, the revolving
credit facility has been refinanced. The facility continues to be for
£15.0m and has a 3 year term to March 2026. For more details see
note 18.
Cash and cash equivalents
Pilot bonds
Adjusted cash
Overdrafts
Invoice financing
Bank loans
Total borrowings
Adjusted net debt
2022
£m
22.3
(0.6)
21.7
(17.1)
(3.5)
(9.0)
(29.6)
(7.9)
2021
£m
21.1
(0.7)
20.4
(18.2)
(4.6)
(11.6)
(34.4)
(14.0)
Adjusted net debt at 31 December 2022 decreased significantly
to £7.9m (2021: £14.0m) reflecting the cash flows discussed above.
Adjusted net debt excludes cash of £0.6m (2021: £0.7m) held to
match pilot bonds within our aviation business. Where required by
the client, pilot bonds are taken at the start of the pilot’s contract
and are repayable to the pilot or the client during the course of
the contract or if it ends early. There is no legal restriction over
this cash, but given the requirement to repay it over a three-year
period and that to hold these is a client requirement, we exclude
cash equal to the amount of the bonds when calculating our
adjusted net debt measure. Movements in the level of bonds
have no impact on our adjusted net debt measure.
During 2022, the month-end average adjusted net debt position
was £11.0m (2021: £14.8m) with a month end high of £16.1m at
28 February (2021: £19.1m at 31 May) and a month end low of
£7.9m at 31 December (2021: £11.1m at 30 September).
Our debt to debtors ratio (adjusted net debt as a percentage
of trade receivables) has reduced to 24% (2021: 35%) with the
significant reduction in adjusted net debt partly offset by a
reduction in trade receivables. This has brought us below our
debt to debtors target of 25% for the first time since 2015.
Total borrowings were £29.6m (2021: £34.4m) being bank
overdrafts of £17.1m (2021: £18.2m), invoice financing of £3.5m
(2021: £4.6m) and bank loans of £9.0m (2021: £11.6m). The
Group’s borrowings are principally held to fund working
capital requirements and are mainly due within one year. As at
31 December 2022, £0.5m of borrowings are shown as non-
current (2021: £11.2m) with the reduction reflecting the revolving
credit facility which as at 31 December 2022 was due within one
year. Subsequent to the reporting date, in March 2023, this facility
has been refinanced for a further 3 years (see note 18).
Empresaria Annual report and accounts 2022 27
Management equity
As highlighted in previous annual reports, the Group has moved
away from issuing second generation equity schemes for incoming
subsidiary management and has put in place appropriate
alternative incentive schemes. Existing shareholdings and
commitments remain in place and continue to be reflected in
these accounts.
Based on results for the year ended 31 December 2022, and using
applicable valuation mechanisms in shareholders’ agreements
but ignoring any holding period requirements, the payment to
acquire all those second generation shares not held by the Group
would be approximately £0.4m were the maximum valuation
multiples to apply. First generation shares are accounted for as
non-controlling interests in the consolidated financial statements
and in some cases do not include defined valuation mechanisms.
Based on results for the year ended 31 December 2022, and using
applicable valuation mechanisms in shareholders’ agreements
where these exist or applying these same valuation mechanisms
where they do not, the payment to acquire all those first generation
shares not held by the Group would be approximately £10.4m.
There is no legal obligation on the Group to acquire the shares
held by management at any time. Further information is provided
in note 26.
During the year the Group acquired shares from management for
total consideration of £0.1m. Further details are provided in note 5.
Dividend
During the year, the Group paid a dividend of 1.2p per share in
respect of the year ended 31 December 2021. For the year ended
31 December 2022, the Board is proposing a dividend of 1.4p
per share, an increase of 17%. Subject to shareholder approval at the
Annual General Meeting, the dividend will be paid on 15 June 2023
to shareholders on the register on 26 May 2023.
Going concern
The Board has undertaken a recent and thorough review of the
Group’s budget, forecasts and associated risks and sensitivities.
Given the latest forecasts and early trading performance, the
Group is expected to be able to continue in operational existence
for the foreseeable future, being a period of at least 12 months
from the date of approval of the accounts. As a result, the going
concern basis continues to be appropriate in preparing the
financial statements. Further details on going concern are found
in note 1.
Tim Anderson
Chief Financial Officer
27 March 2023
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 28
28
Empresaria
Annual report and accounts 2022
Risks and uncertainties
The Board has ultimate responsibility
for establishing the Group’s appetite for
risk and for effective risk management
across the Group. The risk management
process followed by the Board is
designed to improve the likelihood of
delivering against the Group’s strategy,
protect the interests of shareholders,
improve the quality of decision making
and help safeguard our assets. We have
an established process for identifying
and monitoring the key operational and
strategic risks in the Group. The risk
management process incorporates a risk
appetite policy and a Group risk register.
Risk appetite
The Board wishes to minimise the exposure
to risks but accepts and recognises that a
trade-off exists between risk and reward
in delivering our strategy. The risk appetite
has been reviewed and approved by the
Board and is presented as part of the annual
budgeting process. The Board has set a
number of internal targets that frame its
appetite for risk, with boundaries defining
the limits the Group should operate within
and trigger points to help monitor and
identify where there is an increased risk of
reaching those boundaries.
Risk register
The Group’s risk register is regularly
reviewed at Board meetings with
risks added, amended or removed as
appropriate and actions updated. The
Group risk register is prepared based on
individual business risk registers which are
updated during the annual budget cycle
and reviewed regularly during the year.
The Audit Committee oversees the internal
and financial control frameworks to help
mitigate risk.
Group control environment
Group companies operate under a system
of internal controls which include but are
not limited to: a clear delegated authority
to operational management; formal risk
appraisals through the annual budget
process; a comprehensive financial
reporting system; investment and capital
expenditure approval processes; and
self-certification by operating company
management of compliance with controls
and Group policies and procedures.
Day-to-day risk management is the
responsibility of operating company
management.
Risk matrix chart
1
2
3
4
5
6
7
8
9
Political and social change
Economic environment
Loss of key staff
Investments poorly executed
Financial
Cyber security and data protection
Management capacity
Competition
Exposure to key clients
10
Payments to temporary workers
h
g
H
i
d
o
o
h
i
l
e
k
L
i
i
m
u
d
e
M
3
8
9
The risk management process identified
a number of risks across the Group, as
detailed in the chart below. The principal
risks that are most likely to affect business
operations, and hence the financial results
and delivery of strategy, are explained in
more detail in the following pages.
5
2
6
1
10
High
w
o
L
7
4
Low
Medium
Impact
Empresaria Annual report and accounts 202234
Political and social change
Risks
Change in risk profile
–
How we mitigate the risk
29
1
The Group’s businesses are subject
to legislation, regulation and changes
in political sentiment in their markets.
This particularly impacts temporary
recruitment, which is regulated to
protect the rights of workers, and
developing staffing markets where
new regulations are introduced as
the market develops. Any changes to
labour regulations, tax laws or political
views on the staffing industry could
have an impact on how we operate
and on the financial performance of the
Group. If local laws and regulations are
not followed it could lead to sanctions
being taken against the business,
including penalties, fines and licences
being revoked.
The Group closely monitors the legal
and regulatory environment in all our
markets. The Group has membership
of many local industry associations and
we use professional advisers with local
knowledge and understanding of the
relevant laws and labour regulations to
ensure we are compliant.
We are experts in our markets, which
helps us to respond effectively to
changes in legislation, as well as making
it easier to attract candidates because of
our reputation and knowledge.
Our business model, with diversification
across sectors and geographies, helps
us mitigate the negative impacts from
political and social changes.
In Germany, the coalition government
implemented a significant increase to
the minimum wage. This has an impact
on our Commercial sector operations
where pricing is often not margin based
and so increases in labour costs are not
automatically passed onto clients. We
have worked with clients to manage the
impact of this.
The ongoing war in Ukraine is not having
a significant impact on the Group. We do
not have operations in Ukraine or Russia
but we have seen some impact on client
supply chains, particularly in Germany in the
first half of 2022, which has had a limited
impact on demand. Additionally there has
also been some impact on our UK based
domestic services business which no longer
works with sanctioned Russian clients.
In Peru, some significant changes to
outsourcing regulations have increased
restrictions around the services provided.
We have adapted our operations to these
and do not expect these to have any long-
term impacts on the business.
Economic environment
Risks
Change in risk profile
–
How we mitigate the risk
2
The performance of staffing businesses
has historically shown a strong
correlation with the performance of the
economies in which they operate. An
economic slowdown will impact on the
demand for recruitment services and
could reduce the Group’s profits.
The first half of 2022 continued the post-
COVID economic recovery, however the
second half of the year saw the emergence
of inflationary and recessionary pressures
with global GDP forecasts falling. Despite
this we continued to see good demand
from our clients, driven by skills and labour
shortages which are expected to remain for
the foreseeable future.
High levels of inflation look to have peaked
but continue to be a factor in driving wage
growth in many of our markets which
creates both opportunities and challenges
for us.
While a global economic downturn
will impact all businesses, the Group’s
business model and strategy helps
mitigate the impact from an economic
downturn in any one market:
• Diversification across sectors and
geographies.
• Developing and scaling our leading
brands will create businesses that are
more robust and have greater ability to
withstand economic downturns.
• Bias towards temporary and contract
recruitment which is typically less
volatile than permanent recruitment
during the economic cycle.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 30
Risks and uncertainties continued
Loss of key staff
3
Risks
Change in risk profile
How we mitigate the risk
The Group’s success relies on recruiting
and retaining key staff.
The loss of a key staff member
without a suitable successor in place
could impact trading and profitability.
The choice of the wrong manager
for a business could lead to sub-
optimal decision-making and losing
ground to competitors or failing to
operate procedures properly and so
being at risk of reputational damage
or penalties.
We’ve embedded our regional structure,
implemented during 2021, providing
greater stability and a more agile and
stronger structure. It improves the
opportunity for career growth and reduces
the risks when an individual operational
leader leaves the Group.
There have been limited changes to key
operational management during the
year and we have seen some success
in promoting from within the Group into
leadership positions.
Our regional management structure
creates career paths within the Group,
improving retention and giving us greater
ability to adapt if operational leaders leave.
Incentive plans are aligned with the
Group’s objectives with long-term
incentives in place for senior leadership.
Investments poorly executed
4
Risks
Change in risk profile
How we mitigate the risk
There is a risk of losing value from
poorly executed external investments. If
an investment is overvalued the Group
could pay too much for it and risk a
lower return on investment in the future.
A poorly executed integration could
lead to lost value or lost opportunities.
Investment in existing operations,
whether in new offices, changes in
processes, or in technology, could, if
poorly implemented, have an adverse
impact with the potential to harm
existing business.
The Group has undertaken no significant
external investments in 2022.
We are investing in implementing
Bullhorn and associated technology as a
common front-office platform across our
Group. This will help improve the Group’s
competitiveness and is expected to
deliver significant benefits. A further three
locations went live in 2022, and we now
have around two-thirds of the operations
in the Group on Bullhorn. The internal
expertise we have built in this area is
further reducing the implementation risk
and cost.
All material external investments must
have Board approval with a clearly
defined integration plan. Due diligence
findings need to be acted upon to
minimise risks identified pre-acquisition.
Funding requirements must be taken
into account to ensure sufficient and
appropriate funding is in place. With our
people-focused business model, the fit
of the people is the most important factor
and is the first criteria that must be met
before any investment is pursued.
Any internal investments which require
significant outlay or commitment are
subject to Board review and authorisation
either as part of the annual budgeting
process or separately as appropriate.
Our ongoing Bullhorn implementation
is a significant investment for the Group
and is being undertaken in a phased
way, operation by operation, but with a
single Group-wide approach, to reduce
implementation risks.
Empresaria Annual report and accounts 2022 Financial
Risks
The Group uses debt to fund the
working capital requirements of the
business. If the Group was unable to
secure funding at required levels it
could be unable to take advantage
of opportunities for growth or could
be forced to dispose of parts of the
business to repay debt.
Any increase in interest rates will
increase costs and so reduce profit.
Operating from 19 countries, the
Group is exposed to movements in
foreign currency exchange rates.
Movements in exchange rates impact
the reporting of the Group’s profits
and may impact the value of cash and
other assets around the Group.
31
5
Change in risk profile
–
How we mitigate the risk
The Group has remained fully compliant
with all its covenants in the period and
has seen its facility headroom increase
significantly. Subsequent to the reporting
date, in March 2023, the Group has
successfully refinanced its revolving credit
facility for a further three year period.
The Group finances its operations through
its operating cash flows, bank borrowings
and issuing new equity. Treasury
management is led by the Group finance
team, who manage and monitor funding
requirements and maintain the Group’s
key banking relationships.
Base rates rose significantly through 2022
and although the Group’s level of debt
has reduced, this has led to a significant
increase in the Group’s interest cost, the
full year effect of which will start to be felt
in 2023. As well as reducing profits, this
will lower the Group’s interest cover which
is a key banking covenant. The Group
has significant headroom against these
covenants and based on current forecasts
expects to continue to do so.
Sterling exchange rates remain volatile
and foreign currency movements have
had a positive impact on the reporting
of the Group’s revenue, profits and net
assets from overseas operations in 2022.
The Group is exposed to movements in
interest rates. We do not currently hedge
this exposure but monitor movements
in the relevant rates to be able to react if
they move adversely.
Approximately 75% of the Group’s business
is based outside the UK, resulting in
exposure to movements in exchange rates
on translation of overseas operations. The
Group does not currently hedge this risk
as there is to some degree a natural hedge
from our geographical diversification.
Intragroup balances are hedged where
possible, using cash or overdraft balances
to act as a natural currency hedge.
A limited number of forward contracts are
used to hedge trading currency risks for
our operation in India which derives almost
all of its revenue from outside of India.
Cyber security and data protection
Risks
Change in risk profile
–
How we mitigate the risk
6
The risk of cyber-attacks is an ever
present one. A successful breach
could lead to the loss of sensitive
data on clients or candidates,
damage to our reputation, business
disruption or the loss of commercially
sensitive information.
With stringent regulatory
environments around data protection
there is a risk of failing to comply
with regulations, leading to fines and
damage to brand reputation.
The move to a single front-office system
increases the potential impact from a
cyber security or data breach but increases
the Group’s ability to reduce the likelihood.
The Group has been working with a third-
party data protection advisory service,
including provision of a formal data
protection officer role, which is continuing
to improve the identification and reduction
of any exposures and the controls and
policies around this.
We have policies in place to safeguard assets
and data within the Group. We have placed
an increased emphasis on cyber security
with greater oversight and training to ensure
we meet a minimum standard of security.
As we invest further in technology, we
will also continue to invest in ensuring our
cyber security measures and policies keep
pace and reflect the changes in the Group.
The Group operates in, or places candidates
in, a large number of jurisdictions, each with
their own data protection requirements.
Group data protection policies create a
high minimum level of compliance with
individual operations required to enhance
these for any specific local requirements.
The Group engages with a third-party data
protection officer service to help ensure
and monitor compliance.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 32
Engaging with our stakeholders
Stakeholder
How we engage
Our
employees
Retaining, developing and engaging our talent is key to the success of our business. In 2022 we undertook
several training and talent development programmes aimed at nurturing the future leaders of the business.
Staying connected and engaging our teams across the globe is a key priority for the Group. We drove
global collaboration through:
• quarterly leadership events;
• CEO Chats;
• networking, health and wellbeing events;
• training events;
• Top Talent programmes; and
• sharing of cultural events.
Diverse teams drive successful business results, and we are proud of the diversity we have at
Empresaria. We carry out an annual DE&I survey to ensure we are creating an inclusive workplace
where everyone can flourish.
Our
candidates
Our success relies on us being able to attract and engage talent with the skill sets our clients need.
Talent shortages were prevalent in many sectors and markets in 2022 and so building engaged talent
communities was a key priority.
Our aim is to create a positive experience for those who trust us with their careers, either being placed
in a permanent role or a temporary assignment with one of our clients.
Regular communication and engagement is critical, and we engage with our candidates in a number
of ways: through direct contact from our consultants, through our brand websites and social media
channels, through community engagement, and through our technology portals. By building strong
relationships we go beyond a transactional relationship to become a long-term career partner.
Our clients
By putting our clients at the heart of everything we do we build deep, long-term relationships with our
customers. Our success is built on their success, and we can only achieve this by acting as a partner
and trusted adviser. In 2022, we worked in partnership with our clients to identify and deliver to their
requirements and work with them to ensure the safety of our candidates.
With our new regional sales structure, we have been able to further develop our service offering to
better meet our clients’ needs whether that is through regional agreements or new solutions.
Our
communities
Across the Group, our operations and their teams work with local communities and charities to
positively impact the lives of those who need support. Each business targets specific organisations
that reflect the needs of those communities. Further details are provided on page 33.
Our
shareholders
We engage with shareholders to maintain a mutual understanding of objectives and to manage
expectations. Relations with shareholders and potential investors are managed principally by the
Executive Directors, who are contactable both directly and via our financial PR adviser.
The Executive Directors make regular presentations to investors, meet with shareholders to discuss
and obtain their views, present to the wider investor community using the Investor Meet Company
platform and communicate regularly during the year. In 2022 we held an in-person Capital Markets
Day to outline the Group’s medium-term ambition and introduce our regional leaders to investors.
The annual and interim presentations made to investors, interviews with the Executive Directors and
the Capital Markets Day presentation are all made available on the Company’s website.
The Company also retains a financial PR adviser, joint house brokers and equity research analysts, who
each provide feedback from existing shareholders and potential investors.
Empresaria Annual report and accounts 2022 33
• In Chile we took part in a Telethon to raise
funds for children with special needs.
• In Germany we made donations to
youth sports and sports institutions
who we have been supporters of for
many years.
• In India we supported a number of
causes through our People Possible
Foundation, including:
•
•
Garbage to Growth initiative:
Developing proper Garbage
Collection, Segregation and
Treatment for the cantonment
of Ahmedabad.
Health and Wellness: Supporting
the distribution of winter jackets to
protect vulnerable people against
the harsh weather.
• In Indonesia we supported the victims
of the Cianjur earthquake.
• In the Philippines we donated to
nursery students and children from
the Sala Cabuyao City Laguna,
Philippines community.
• In Vietnam we donated to the Tum Dac
orphanage.
Environmental impact
Our industry typically has a low
environmental impact, however the Group
is committed to minimising this impact
as much as possible. Our 2022 initiatives
included: participation in recycling
programmes for office waste, use of green
energy providers, reliance on electronic
media for marketing and communications,
including providing this annual report
in electronic format unless requested
otherwise, and the use of video conferencing
to minimise travel as far as is practical.
Contributing to communities
Our purpose of positively impacting
the lives of people extends beyond our
recruitment activity and we are committed
to having a positive impact on the
communities in which we operate as well
as supporting emergency appeals for
those in need of urgent support.
In 2022, the Group donated £10,000
to UNHCR to support those who fled
their homes due to the ongoing war in
Ukraine and were seeking refuge across
Europe. Our teams across the Group also
participated in local fundraising initiatives
in support of Ukraine.
Across the globe our teams have been
involved in activities that provide help,
support or money to good causes in their
local communities. Examples of activity
across the Group in 2022 include:
• In the UK we took part in the 3 Peaks
Challenge to raise funds for AbilityNet
who improve the lives of people with
disabilities and older people, by helping
them to use computers and other digital
technology to achieve their goals at
home, at work and in education.
• In Australia we supported Movember, a
leading charity supporting men’s health
as well as Guide Dogs Australia.
S172 statement
This statement sets out how the Board
seeks to understand the views of the
Company’s key stakeholders and how
their interests and the matters set out
in section 172 of the UK Companies Act
2006 have been considered in Board
discussions and decision-making.
During the year, the Directors consider
that they have acted and made decisions
in a way that would most likely promote
the success of the Group for the benefit
of its members as a whole, with particular
regard for:
• the likely consequences of any
decision in the long term: See
strategic objectives on page 15, our
business model on pages 10 and 11
and risks and uncertainties on pages
28 to 31;
• the interests of the Group’s
employees: See engaging with our
stakeholders on page 32;
• the need to foster the Company’s
business relationships with suppliers,
customers and others: See engaging
with our stakeholders on page 32;
• the impact of the Company’s
operations on the community and
environment: See engaging with our
stakeholders on pages 32 and 33;
• the desirability of the Company
maintaining a reputation for high
standards of business conduct: See
engaging with our stakeholders on
page 32 and corporate governance
statement on page 40; and
• the need to act fairly between
members of the Company: See
engaging with our stakeholders
on page 32 and the corporate
governance statement on page 39.
The principal decisions taken through
the year are discussed in greater detail
throughout the strategic report. These
key decisions included:
• creation and launch of our Roadmap
to £20m and hosting a Capital Markets
Day: See Chief Executive’s Q&A on
page 12 and corporate governance
statement on page 39;
• appointment of Cenkos as joint
broker: See corporate governance
statement on page 39;
• the structure of the board including
the search for two Non-Executive
Directors and the retirement of our
longstanding Chair: See corporate
govenance statement on page 39
and Nomination Committee report on
page 44; and
• continuation of and level of the
Group’s share buy-back programme:
See Directors’ remuneration report on
page 46.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
34
Introduction to corporate governance
“A sound framework to ensure
strong governance, accountability
and stakeholder confidence.”
I am pleased to present an update
on corporate governance for the year
ended 31 December 2022. Following the
retirement of Tony Martin CBE as Chair of
the Board, I have been honoured to serve
as Interim Chair and now as Chair of the
Board. A primary purpose of the Company
is to deliver long term shareholder value
and to achieve our sustainable growth
goals, it is vital that we have in place a
robust corporate governance framework.
A foundation stone of this framework is the
composition of our Board; ensuring that
it is strong and capable, that it promotes
and demonstrates our core values,
that it can draw on wide pools of skills
and experience and that it is receptive
to new ideas and innovations and to
constructive challenge.
Penny Freer
Chair
Introduction
The QCA Code
The Board considers that the QCA
corporate governance Code 2018 is most
appropriate to the size of the Company,
the regulatory framework that applies
to AIM companies and is best aligned
to the expectations of the Company’s
stakeholders. The Board considers
that the Company does not depart
from any of the principles of the QCA
Code and the relevant disclosures and
explanations are set out in this corporate
governance statement.
As Chair, my role is to lead and guide the
Board so that it can discharge its duties
effectively. I am responsible for promoting
best practice in corporate governance
and for overseeing the development,
adoption, delivery and communication of
an effective corporate governance model
for the Company. The Board collectively
develops and determines the Group’s
purpose, strategy and overall commercial
objectives. The Board ensures that the
Group adopts policies and procedures that
it considers appropriate having regard to
its size and activities.
The Board is committed to ensuring that
a strong governance framework operates
throughout the Group, recognising that
good corporate governance is a vital
component to support management in
their delivery of the Group’s strategic
objectives and to operate a sustainable
business for the benefit of all stakeholders.
The process of identifying, developing and
maintaining high standards of corporate
governance is ongoing and dynamic,
to reflect changes in the Group and its
business, the composition of the Board and
developments in corporate governance.
Empresaria Annual report and accounts 2022 35
The QCA’s ten principles of corporate governance
QCA principles
Deliver growth
Compliant
Further reading
1. Establish a strategy and business model which promote
long-term value for shareholders.
2. Seek to understand and meet shareholder needs
and expectations.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
Maintain a dynamic management
framework
5. Maintain the board as a well-functioning, balanced team led
by the chair.
6. Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities.
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement.
8. Promote a corporate culture that is based on ethical values
and behaviours.
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the board.
4
4
4
4
4
4
4
4
4
For more information:
See pages 10 to 11 and 15
For more information:
See pages 32 and 39
For more information:
See pages 32 and 33
For more information:
See pages 28 to 31
For more information:
See pages 34 to 41
For more information:
See pages 34 to 41
For more information:
See pages 40
For more information:
See pages 2, 10, 11, 32, 33
and 40
For more information:
See pages 28 to 31 and 33
Build trust
10. Communicate how the company is governed and is
performance by maintaining a dialogue with shareholders
and other relevant stakeholders.
4
For more information:
See pages 32, 38 and 39
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
36
Board of Directors and Secretary
Penny Freer
Rhona Driggs
Tim Anderson
Chair
R
N
Chief Executive Officer
Chief Financial Officer
Committee membership
Appointed: December 2005
Appointed: November 2018
Appointed: March 2018
Committee Chair
Audit Committee
Remuneration Committee
Nomination Committee
A
R
N
Skills and experience:
Penny was appointed Interim
Chair of the Board in June 2022
and Chair in March 2023. Penny
has worked in investment
banking for over 25 years.
Until 2004 Penny was Head
of Equity Capital Markets at
Robert W Baird and from
2004 to 2005, Deputy Chair of
Robert W Baird Limited. Prior
to this she was Head of Small/
Mid Cap Equities for Credit
Lyonnais. Penny is Chair of AP
Ventures LLP and holds various
other board appointments.
Other key external
appointments:
Chair of Crown Place VCT plc
and Chair of The Henderson
Smaller Companies Investment
Trust plc
Skills and experience:
Tim has over 20 years’ post
qualified experience working
for listed and private equity
backed businesses across
a number of sectors. Tim
joined Empresaria in 2018
from a leading cellular
immunotherapy company,
where he was Group Finance
Director. Prior to this, Tim held
a number of finance positions
in three FTSE 100 businesses,
covering all aspects of finance.
Tim has a proven track record
in developing the finance
teams and structures of
organisations with a focus on
driving efficiencies, developing
strong control frameworks and
supporting strategic objectives.
Tim has significant experience
of mergers and acquisitions
having worked for a number of
acquisitive organisations.
Tim is a member of the Institute
of Chartered Accountants
in England and Wales, after
qualifying with KPMG.
Other key external
appointments:
None
Skills and experience:
Rhona was appointed as Chief
Executive Officer in June 2019
having previously served as
Chief Operating Officer since
November 2018. Rhona has
over 30 years’ experience
working in international
companies within the staffing
sector and has a proven
record of delivering growth
and driving innovation. She
has been recognised for the
past seven consecutive years
as one of the Staffing Industry
Analysts’ ‘Global Power 150,
a list of the Most Influential
Women in Staffing’ and was
recognised in 2022, for the
third consecutive year, as one
of Europe’s Top 100 most
influential leaders in staffing.
Rhona’s most recent role
before joining Empresaria
was President of Volt Global
Solutions, with responsibility
for the Managed Services
division. Prior to that, Rhona
was Executive Vice President
for the commercial and
technical staffing operations
in North America where she
ran a $1.2 billion staffing
business. She has an in-depth
knowledge of the latest trends
and operating models in
the sector. Rhona joined the
Women Business Collaborative
(WBC) Advisory Council in
January 2021.
Other key external
appointments:
None
Empresaria Annual report and accounts 2022 37
Zach Miles
Steve Bellamy
Ranjit de Sousa
James Chapman
Non-Executive Director
Non-Executive Director
Non-Executive Director
General Counsel and
Company Secretary
A R N
A
R
N
A
R
N
Appointed: October 2008
Appointed: January 2023
Appointed: February 2023
Appointed: June 2015
Skills and experience:
Zach has 30 years’ experience
working in the staffing sector,
as a Finance Director, CEO
and Chair. Before joining
Empresaria, Zach held the
position of Chair and Chief
Executive Officer of Vedior
N.V. until his retirement in
September 2008. He was
a member of the Board of
Management from 1999, and
Chair since February 2004.
Before joining Vedior, Zach
was CFO and a member of the
Board of Directors of Select
Appointments (Holdings) Plc.
His career in the recruitment
industry began in 1988. He
was formerly a partner in the
international accountancy
firm Arthur Andersen and
is a qualified Chartered
Accountant.
Other key external
appointments:
Chair of Bright Network (UK)
Limited
Skills and experience:
Steve is a Chartered
Accountant with extensive
experience as a Chair and
Non-Executive Director with
a wide range of both public
and private companies.
He is currently the Senior
Independent Director at
Caffyns PLC and prior,
recent appointments include
Non-Executive Director of
Advanced Medical Solutions
Group plc and Michelmersh
Brick Holdings plc, and
Chair of Becrypt Limited and
Concirrus Limited. Steve was
also formerly Chief Operating
Officer and Finance Director of
Sherwood International plc.
Other key external
appointments:
Senior Independent Director of
Caffyns PLC
Skills and experience:
Ranjit worked for The
Adecco Group for 16 years
and held a number of senior
executive roles. His most
recent appointment there was
Global President of Lee Hecht
Harrison where he delivered
market leading growth rates
and two consecutive years
of record performance. Ranjit
was also a Board Member
of the World Employment
Confederation. He is an
advisor to various businesses,
including in the work-tech
sector, advising on strategic
focus, growth acceleration and
funding of ventures.
Other key external
appointments:
None
Skills and experience:
James is a practising solicitor
with over 20 years’ experience
working with Empresaria. He
qualified as a solicitor in 2001
with international legal practice
Osborne Clarke, specialising in
corporate finance (principally
M&A, capital markets/IPO,
fundraising and restructuring)
and acting for a range of
corporate and investment
bank clients.
James joined Empresaria in
2009 to establish the Group’s
in-house legal team and was
appointed Company Secretary
in June 2015. He manages the
Group’s in-house legal and
company secretarial teams
and is responsible for advising
the Board on legal and
governance matters.
Other key external
appointments:
None
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 38
Corporate governance statement
The role and functioning
of the Board
The Board is comprised of a Non-
Executive Chair, two Executive Directors
and three Non-Executive Directors. The
Directors have a balance and depth of
skills, experience, independence and
knowledge of the Group and the staffing
industry, which enables them to discharge
their respective duties and responsibilities
effectively.
The Board is collectively responsible for
the long-term success of the Company.
The Group’s strategy, business model
and annual budget are developed by the
Chief Executive Officer and the senior
management team and approved by the
Board. The management team, led by the
Chief Executive Officer, is responsible for
implementing the strategy and managing
the business at an operational level. This
strategy and business model, designed to
promote long-term value for shareholders, is
described in the strategic report on pages 2
to 33 and on the Company’s website.
The Company is controlled through the
Board, which has established Committees
for Audit, Remuneration and Nominations,
to which it delegates clearly defined
powers. The terms of reference for the
Committees are reviewed annually. During
the year, the terms of reference for all the
Committees were reviewed and the Board
was satisfied they remain fit for purpose.
Each Committee’s terms of reference can
be found on the Company’s website.
There is a formal schedule of matters
reserved for consideration by the Board,
which includes responsibility for the
following:
• approval of overall strategy and
objectives;
• approval of the annual budget and
monitoring progress towards its
achievement;
• changes to the Group's principal
activities;
• changes to the senior management
structure;
• changes to capital structure;
• approval of annual and interim financial
statements;
• approval of related party transactions;
• approval of financing arrangements and
treasury policy;
• approval of material investments and
disposals;
• approval of material unbudgeted
expenditure; and
• approval of significant Group policies.
These reserved matters are reviewed by
the Board, at least annually, to ensure
they remain appropriate and complete. In
December 2022, the Board considered
and made changes to the schedule of
matters reserved for Board approval.
In tandem, the Board also reviews an
approved schedule of operational matters,
which are delegated to management of
the operating subsidiaries. During the
year, the Board reviewed the delegated
authority and determined that it remained
fit for purpose.
Non-Executive Directors are required to
devote such time as is necessary for the
proper performance of the duties of their
office. The Executive Directors are full-time
employees.
During the year, there was 100% eligible
attendance at all meetings of the Board
and Committees. The following table
shows the number of meetings held
during the year, the attendance of each
Director and their full years in office at the
forthcoming 2023 AGM:
Prior to the beginning of each year, Board
and Committee meetings are scheduled
in line with the key financial reporting
dates. A document pack, comprising a full
agenda and documents to be tabled, is
distributed to all relevant Directors a week
prior to each meeting. Any specific actions
arising during meetings are agreed by
the Board or Committee (as applicable)
and a follow-up procedure monitors
their completion. Monthly financial and
operational reviews are distributed to the
Board, irrespective of whether a scheduled
meeting is to take place. This assists the
Board to keep informed of developments
on a regular basis.
All Officers are invited to submit items for
discussion for each meeting agenda and
time is also allocated at each meeting
to discuss any other business, which all
Officers are invited by the Chair to raise.
All Non-Executive Directors participate
in strategy development and decisions
required to implement actions to progress
towards meeting the Group’s objectives.
During the year, the Group’s Leadership
Team presented the Three Year Strategy
to the Board.
The Chair is responsible for the
effective running of the Board and
for ensuring that all Directors play
a full and constructive part in the
development and determination of the
Group’s strategy and overall commercial
objectives. The Chief Executive Officer’s
primary role is to deal with the running
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Tenure
Tony Martin1
(Chair)
Penny Freer2
(Non-Executive Director / Chair)
Zach Miles
(Non-Executive Director)
Rhona Driggs
(Chief Executive Officer)
Tim Anderson
(Chief Financial Officer)
4/4
9/9
9/9
9/9
9/9
–
5/5
5/5
–
–
1 Resigned as a Director on 6 June 2022
2 Interim Chair from 6 June 2022 and Chair from 27 March 2023
–
4/4
4/4
–
–
–
N/A
1/1
17 years
1/1
14 years
–
–
4 years
5 years
Empresaria Annual report and accounts 2022 39
of the Group’s business and executive
management of the Group. There is a
clear division of responsibilities between
the Chair and Chief Executive Officer,
with no one individual having unfettered
powers of decision. The Company
Secretary, a solicitor since 2001,
advises the Board and reports directly
to the Chair on corporate governance
matters, supports the Chair in the
effective functioning of the Board and its
Committees and facilitates the receipt
by the Board of high quality information
in a timely manner. He also heads up the
Group’s in-house legal team and advises
the Board on legal and governance
matters, helping to make sure that Board
procedures and applicable rules and
regulations are observed.
The Directors are also able to take
independent professional advice in the
furtherance of their duties as necessary.
Engagement with shareholders
The Board seeks to engage with
shareholders to maintain a mutual
understanding of objectives between
them and the Company and to manage
their expectations. Relations with
shareholders and potential investors are
managed principally by the Executive
Directors. We will again be holding a
hybrid AGM, with shareholders able to
attend and ask questions either in person
or via an online platform. Shareholders
and potential investors are invited to
ask questions at any time by emailing
companysec@empresaria.com or via
the Company’s financial PR by emailing
empresaria@almapr.co.uk. In line with
our commitment to maintaining effective
communication structures for all sections
of our shareholder base, the Executive
Directors delivered online presentations
to investors (both existing and potential
shareholders), via the Investor Meet
Company platform to deliver our
preliminary results presentation in March
2022 and our interim results presentation
in August 2022. This platform allows
for questions to be submitted both
before and during the live presentation.
The annual and interim presentations
made to investors, interviews with the
Executive Directors and a description of
the Company’s investment case, strategic
objectives and business model are all
made available on the Company’s website.
In October 2022, the Company hosted a
Capital Markets Day at the London Stock
Exchange, with the Executive Directors
and the regional leadership setting out
the Group’s roadmap to double adjusted
operating profits in the medium term. In
November 2022, the Company appointed
Cenkos Securities plc as the Company’s
joint broker to broaden investor interest in
the Company. The Company also retains a
financial PR adviser, a house broker and an
equity research analyst, who each provide
feedback from existing shareholders and
potential investors.
Stakeholders and social
responsibilities
The Group’s business model relies on
developing and maintaining strong
relationships with our employees,
candidates/temporary workers, clients
and regulatory authorities. The Board is
conscious of its responsibility towards
all stakeholders and believes this is an
important consideration for the long-
term growth of the business. Stakeholder
engagement and feedback is taken
seriously throughout the Group. Regular
communication is made with all the
Group companies and employees. The
Group places considerable value on the
involvement of our employees and keeps
them informed on matters affecting them
as employees and on the various factors
affecting the performance of the Group.
This is achieved through formal and
informal meetings, information available
on the Company’s website and Workplace
from Meta. The Group uses social media to
engage directly with stakeholders through
various channels, including Facebook,
Workplace, Twitter and LinkedIn. The
Group also engages with regulators and
government agencies, for example in
response to consultations or proposals,
both directly and through membership of
worldwide trade associations.
Risk management
Risk management remains the
responsibility of the Board. The Audit
Committee has delegated responsibility
to keep under review the adequacy
and effectiveness of the Company’s
internal financial controls and the internal
control and risk management system.
Risk management is reviewed at Board
meetings as part of the formal Board
process. The Board has identified and
evaluated the significant risks faced by the
Group in delivering the Group’s strategy.
The Board has agreed how each risk is to
be addressed and the necessary actions
to be taken. Details of the principal risks
identified are set out on pages 28 to 31.
The Audit Committee meets specifically to
review the effectiveness of the Group’s risk
management and internal control systems
and to review the risks identified and
progress of actions taken to manage the
risks. Following the review, progress and
actions are reported to the Board.
Experience, skills and
capabilities
Biographical details of each of the
Company’s Officers, detailing relevant
experience, skills and capabilities,
can be found on pages 36 to 37. The
Nomination Committee meets at least
once a year to monitor and review the
structure, size and composition of the
Board. It considers succession planning
and makes recommendations to the
Board for any appointments, to ensure
that the right skills and expertise are
maintained by the Company for effective
management. All members of the Board
participate in the recruitment of members
to the Board. After a search led by the
Nomination Committee, in January and
February 2023 the Company announced
the appointments of Steve Bellamy and
Ranjit de Sousa as independent Non-
Executive Directors. Steve is a Chartered
Accountant with extensive experience as
a Chair and Non-Executive Director with
a wide range of both public and private
companies across a range of industries.
Ranjit has extensive experience in the
staffing industry, with particular expertise
in strategic and digital transformation.
The Directors determine the training
requirements appropriate to their role
and the needs of the Group. Directors
attend relevant industry conferences
and workshops throughout the year. The
members of the Committees refresh
their skills and knowledge by attending
briefings and seminars and reviewing
publications provided by various
professional services firms and by audit
and other regulatory bodies.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 40
Corporate governance statement continued
Board performance
Formal Executive Director performance
evaluations are conducted annually in
preparation for the review and approval
of annual remuneration packages. Each
Non-Executive Director’s performance
is evaluated as an outcome of the
formal performance evaluations of
the Committee(s) of which they are
a member. Performance evaluations
identify and record achievements, training
requirements and areas for improvement
in relation to annual objectives and
performance of their respective roles, in
order to consider effectiveness. Objectives
for the forthcoming year are defined along
with identification of how achievements
will be met, target dates and details of
resource constraints or issues to ensure
that actions are planned and taken as a
result of the evaluation process.
Following the recent changes to the
membership of the Board, it is anticipated
that a third-party Board effectiveness
advisor, with no connection to the
Company or individual Directors, will
be appointed to carry out an externally
facilitated evaluation of the Board.
Promotion of corporate culture
The Company actively promotes integrity
in its dealings with our employees,
candidates/temporary workers, clients,
suppliers and shareholders, and the
authorities of the countries in which our
brands operate. The Board recognises that
the reputations of our brands are valuable
assets gained over a long period and must
be protected. The Group has a number of
policies, including those for dealing with
bribery, gifts, hospitality, corruption, fraud,
tax evasion, modern slavery and inside
information. The Board requires that all
Group companies and employees adhere
to the Empresaria Code of Conduct.
All employees must comply with the laws
and regulations of the countries in which
they operate and those responsible for the
management of each operating subsidiary
confirm to the Board annually their
compliance with these and with the Group’s
policies and Code of Conduct. The Group’s
whistleblowing policy is publicised to all
employees and an established anonymous
whistleblowing system is in place. There
are several methods by which employees
may ask questions of and provide feedback
directly to members of the Company’s
senior management and the Board.
Executive Directors. Steve and Ranjit serve
on each of the Audit, Remuneration and
Nomination Committees, and Steve will
Chair the Audit Committee following the
forthcoming AGM.
In accordance with the Companies Act
2006 and the Company’s Articles of
Association, each of the Directors has
a duty to avoid a situation where they
have, or might have, a direct or indirect
interest that conflicts, or potentially may
conflict, with the Company’s interests. The
Company has established procedures for
the disclosure by Directors of any such
conflicts for the Board to consider and, if
appropriate, authorise. If such a conflict
exists, the relevant Director is excused
from consideration of the relevant matter.
All additional external responsibilities
taken on by Directors during the year were
considered by the Board for any actual
or potential conflicts that may arise. The
Board is satisfied that the independence of
the Directors who have additional external
responsibilities is not compromised.
Section 172 statement:
See page 33
Our operating subsidiaries are required
to ensure that advertising and public
communications avoid untruths or
overstatements. They are also expected
to build relationships with suppliers based
on mutual trust and endeavour to pay
suppliers on time and in accordance with
agreed terms of business. The work of
our Group-wide DE&I committee helps us
shape the Group’s approach to this critical
area and we remain committed to ensure
equal opportunities for all staff, at every
level, throughout the Group.
Independence
The independence of all Non-Executive
Directors is reviewed annually, with
reference to their tenure, independence
of character and judgement and whether
any circumstances or relationships exist
that could affect their judgement. The
Board assesses what would be the most
desirable number of Non-Executive
Directors for the Board, having regard
to the size of the Group, the scope of its
operations and the efficient functioning of
the Board and the executive management
team. The Board looks at the manner
in which the component parts of the
Board function together, the skills and
external experiences of the Non-Executive
Directors, their involvement and insight
in Board and Committee meetings and
their ability to challenge management
objectively. Having regard to all such
considerations, the Board is of the view
that Penny Freer and Zach Miles remain
independent, notwithstanding their
periods of tenure. The Company noted in
its previous Annual Report that the Board
believes the Company would benefit from
the additional experience and capacity
of a further Non-Executive Director. In
June 2022 the Chair of the Board retired
and the Board expanded the search to
two further Non-Executive Directors.
Following a search of suitable candidates,
in early 2023 the Company announced
the appointments of Steve Bellamy and
Ranjit de Sousa as independent Non-
Empresaria Annual report and accounts 2022 41
Governance structure
Board of Directors
Chair:
Executive:
Penny Freer
Rhona Driggs, Tim Anderson
Non-Executive:
Zach Miles, Steve Bellamy, Ranjit de Sousa
Secretary:
James Chapman
Responsible for protecting and advancing stakeholders’ interests, providing overall direction for the
Group and maintaining a framework of delegated authorities and controls.
Audit Committee
Nomination Committee
Remuneration Committee
Audit Committee
Zach Miles (Chair)
Steve Bellamy
Ranjit de Sousa
Monitors and reviews
the integrity of financial
statements, oversees the
relationship with the external
auditor and has oversight for
internal control and risk.
Nomination Committee
Remuneration Committee
Penny Freer (Chair)
Zach Miles (Chair)
Zach Miles
Steve Bellamy
Ranjit de Sousa
Monitors and reviews
the structure, size and
composition of the Board
and considers succession
planning, to ensure the
right skills and expertise,
independence and
diversity are maintained for
effective management.
Penny Freer
Steve Bellamy
Ranjit de Sousa
Considers and sets
remuneration policy for
the Board and monitors
the level and structure
of remuneration and
incentive schemes for
senior management.
Audit Committee report: See pages 42 to 43Directors’ remuneration report: See pages 45 to 47Nomination Committee: See page 44Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 42
Audit Committee report
“I am honoured to have served as
Chair of the Committee and am
pleased to support Steve Bellamy
as he takes over the role of Chair
at the forthcoming AGM.”
The independent Non-Executive Directors who served on the
Committee during the year are:
Zach Miles (Chair)
Penny Freer
Date of appointment
to the Committee
Qualification
1 October 2008
Chartered accountant
2 November 2010
–
Zach Miles
Chair of the Audit Committee
Role and composition of the
Audit Committee
The Audit Committee has responsibility,
on behalf of the Board, to monitor the
integrity of the financial statements of
the Company, review the adequacy of
internal control and risk management
systems, and to oversee the relationship
with the external auditor. The Committee
makes recommendations to the Board
that it deems appropriate, on any area
within its remit, including where action
or improvement is needed. The terms of
reference for the Committee can be found
on the Company’s website.
The Committee’s activities are primarily
scheduled around the key events in the
Company’s annual financial reporting
cycle. In addition to financial reporting,
the Committee fulfils a vital role in the
Company’s governance framework,
providing valuable independent challenge
and oversight across the Group’s non-
financial reporting and internal control
procedures. At the start of the year,
the Audit Committee oversaw the first
audit carried out by the Company’s new
external auditor, CLA Evelyn Partners
(formerly Nexia Smith & Williamson Audit
Limited), who were appointed following a
competitive tender process in 2021.
The Committee is appointed by the Board
from the independent Non-Executive
Directors of the Company, with a minimum
requirement of two such Directors, one
of whom should be a financially qualified
member. Zach Miles is a qualified
accountant, and the Board considers him
to have relevant financial experience that
befits his role as Chair of the Committee.
Appointments are for a period of up to
three years, which may be extended
for further periods of up to three years,
provided the Director still meets the
criteria for membership of the Committee.
The Board considers that the Committee
has competence relevant to the sector in
which the Group operates.
In June 2022, Committee member Penny
Freer was appointed Interim Chair of the
Board. Under the Committee’s terms of
reference, the Committee shall comprise
at least two members and the Chair
of the Board shall not be a member of
the Committee. The Board determined
that it was preferable for the Committee
to continue to have two members,
notwithstanding her appointment as
Interim Chair. Penny therefore continued
temporarily as a second member of the
Committee until a replacement could
be appointed. In January 2023, Steve
Bellamy was appointed as an additional
independent Non-Executive Director and
member of each of the Audit, Remuneration
and Nomination Committees, enabling
Penny to stand down from the Committee.
Steve is also a qualified accountant
with extensive operational and financial
experience across a range of industries.
Steve will be replacing Zach as Chair of
the Committee following the forthcoming
AGM, although Zach will remain a member.
In February 2023, Ranjit de Sousa was also
appointed as an additional independent
Non-Executive Director and member
of each of the Audit, Remuneration and
Nomination Committees.
Meetings
The Committee is required to meet at
least three times per year. During 2022,
the Committee held five formal meetings,
which were scheduled around the
Company’s financial reporting timetable.
The Committee invites the Chief Financial
Officer and senior representatives of the
external auditor to attend all of its meetings,
although it reserves the right to request any
of these individuals to withdraw from the
meeting. A meeting is scheduled annually
for the external auditor to meet with the
Committee without management present,
and the external auditor and the Committee
can request additional such meetings at
any other time.
Empresaria Annual report and accounts 2022 43
Assessment of the Audit
Committee
Following completion of the 2022 audit
processes, the Committee conducted
a self-assessment of its performance.
The evaluation process measured
performance against its terms of
reference, including:
• presentation of risk register by the Chief
Financial Officer;
• review and implementation of
risk management processes by
subsidiaries;
• ongoing, regular reviews of internal
controls; and
• monitoring developments in corporate
governance and compliance.
The Board concluded that the Committee
has acted in accordance with its terms
of reference and had ensured the
independence and objectivity of the
external auditor.
At the forthcoming AGM, Steve Bellamy
will take over as Chair of the Committee.
I am honoured to have served as Chair
of the Committee and look forward to
working with Steve to handover the Chair
responsibilities and support him in this
role.
If there are any questions about the work of
the Committee, you are welcome to send
them to companysec@empresaria.com.
On behalf of the Audit Committee
Zach Miles
Chair of the Audit Committee
27 March 2023
Audit Committee activity
Financial and business reporting:
During the year, the Committee reviewed
the 2021 financial statements, the 2022
interim statement (unaudited) and carried
out a going concern review.
Reviews of the financial statements
included the accounting policies,
significant financial reporting issues
and key judgements and estimates
underpinning the financial statements,
including:
• going concern;
• carrying value of goodwill and other
intangible assets;
• appropriateness of provision balances;
• tax accounting, including deferred tax;
and
• IFRS 16 Leases.
For the going concern review, the
Committee examined the assumptions
supporting the Group’s profit and cash
flow forecasts and the sensitivities
applied to those forecasts, the banking
facilities available and the assessment
of the Group’s covenant compliance
based on the forecasts. Details of the
matters reviewed are included in notes 1,
3, 13 and 14 to the consolidated financial
statements.
For the areas discussed, the Committee
was satisfied with the assumptions made
and the accounting treatments adopted.
Risk management and internal
control
Risk management is the responsibility
of the Board. Further details about the
process followed and principal risks and
uncertainties that could affect business
operations can be found in the strategic
report on pages 28 to 31. The Committee
keeps under review the adequacy and
effectiveness of the Company’s internal
controls and risk management systems.
During the year, the Committee’s focus
on risk control focused on cyber security
and data protection issues as the rollout of
centralised technology around the Group
gathered pace and increased scale.
Due to the size of the Group, and the
costs involved, the Committee continues
to recommend to the Board that there
is no requirement for a separate internal
audit function. The Company has
established a framework of key financial
and operational controls across all the
brands with compliance monitored by
the central finance team. Any exceptions
are reported to the Audit Committee and
resolution thereof followed up by regional
management.
Every year the Committee reviews the
Group’s risk framework reports, to be
presented to, and discussed by, the Board.
The Group’s whistleblowing policy
contains arrangements for the Company
Secretary to receive, in confidence,
complaints on accounting, risk issues,
internal controls, auditing issues and
related matters.
All employees have access via Workplace
to the Group’s mandatory Code of
Conduct, which sets out the minimum
expected behaviours for all employees,
and the specific Group policies which are
applicable throughout the Group. The
Code of Conduct and Group policies are
under continual review and updates are
issued as appropriate.
External audit
The Committee is responsible for the
development, implementation and
monitoring of the Group’s policy on
external audit. The terms of reference
assign responsibility to the Committee
for overseeing the relationship with
the external auditor. During 2022, the
Committee managed the relationship
with the external auditor, oversaw their
first audit of the Company, the negotiation
and agreement of their fees and reviewed
and monitored their independence and
objectivity and the effectiveness of the
audit process. The Group’s policy on
non-audit related services prescribes
the types of engagements for which the
external auditor can be used and those
engagements which are prohibited.
For engagement for services which are
non-recurring in nature, prior approval
must be sought from the Committee.
Note 6 includes disclosure of the auditor’s
remuneration for the year, including an
analysis of audit services and audit related
services under those headings prescribed
by law. First appointed in 2021 following a
competitive tender process, a resolution to
reappoint CLA Evelyn Partners Limited as
the Company’s auditor will be proposed at
the forthcoming AGM.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 44
Nomination Committee report
“Following a thorough search
process, we have been delighted to
secure the appointments of Steve
Bellamy and Ranjit de Sousa.”
The independent Non-Executive Directors who served on the
Committee during the year are:
Penny Freer (Chair)
Zach Miles
Date of appointment
to the Committee
5 November 2013
5 November 2013
Penny Freer
Chair of the Nomination
Committee
Role and composition of the
Nomination Committee
The Nomination Committee has
responsibility, on behalf of the Board,
to keep under review the structure, size
and composition of the Board and the
leadership needs of the Group. The
terms of reference for the Committee
can be found on the Company’s website.
The Committee is required to report to
the Board on its proceedings and make
recommendations it deems appropriate,
on any area within its remit, including
where action or improvement is needed.
The Committee is appointed by the Board
from the Non-Executive Directors, with
a minimum requirement of two such
Directors. Appointments to the Committee
are made by the Board and are for a
period of up to three years, which may be
extended for further periods of up to three
years, provided the Director still meets the
criteria for membership of the Committee.
Steve Bellamy and Ranjit de Sousa
became members of the Committee
immediately on their appointment as
independent Non-Executive Directors in
January and February 2023 respectively.
Activities of the Nomination
Committee
As reported in the 2021 Annual Report,
the Board believed the Company would
benefit from the additional experience
and capacity of a further Non-Executive
Director and a search had commenced to
identify a suitable appointee. In June 2022,
the Company announced the retirement of
Tony Martin, CBE, from the Board. Having
served as Chair of the Board since 2004,
Tony's contribution to the Group has been
tremendous. The Board invited me to take
on the role of Interim Chair, which I accepted,
and the Nomination Committee expanded
the search process to identify two new
independent Non-Executive Directors. The
Committee met frequently throughout
the year on these matters and an external
executive search agency was engaged to
assist with the searches. On my appointment
as Interim Chair of the Board, Zach Miles
replaced me as Chair of the Remuneration
Committee.
By the end of the year, the Committee had
selected Steve Bellamy as its preferred
candidate. Steve has extensive experience
gained across a variety of roles working with
ambitious growth companies such as ours.
He will add significant value to the Board and
to the Group as a whole. Steve has a finance
background, qualifying as a Chartered
Accountant, and from his appointment in
January 2023, was able to replace me as
the second member of the Audit Committee
as required by the Committee's Terms of
Reference. Steve will replace Zach as Chair
of the Audit Committee at the forthcoming
AGM and Zach will remain as Chair of the
Remuneration Committee. In February 2023,
the search for the second new appointment
was concluded with the appointment of
Ranjit de Sousa. Ranjit has many years of
experience in the staffing industry, with
particular expertise in strategic and digital
transformation. All Non-Executive Directors
serve on all Board Committees, with the
exception that, as Chair of the Board, I no
longer serve on the Audit Committee.
The Committee continues to consider
the adequacy of the succession plan
approved by the Board and is pleased
with the progress made year on year
to strengthen the quality and depth of
operational leadership around the Group.
The Committee takes a lead role in
challenging the business's commitment
to diversity, equality and inclusion and it is
pleasing to note that both the Chair of the
Board of Directors and the Chief Executive
Officer are female.
If there are any questions about the work of
the Committee, you are welcome to send
them to companysec@empresaria.com.
On behalf of the Nomination Committee
Penny Freer
Chair of the Nomination Committee
27 March 2023
Empresaria Annual report and accounts 2022 45
Directors’ remuneration report
The information provided
in this part of the Directors’
remuneration report is not
subject to audit.
Role and composition of the Remuneration
Committee
The Remuneration Committee has responsibility, on behalf of the
Board, for determining the policy for Directors’ remuneration and
setting the remuneration for the Chair of the Board, Executive
Directors, Company Secretary and certain senior management.
The terms of reference for the Committee can be found on the
Company’s website.
The Committee is required to report to the Board on its
proceedings and all matters within its duties and responsibilities.
The Committee is appointed by the Board from the independent
Non-Executive Directors, with a minimum requirement of two
such Directors. No Director is involved in any decisions as to their
own remuneration.
The independent Non-Executive Directors who served on the
Committee during the year were:
Linking remuneration policy to business objectives
Executive remuneration packages must be competitive and
are designed to attract, retain and motivate the executive
management, while aligning rewards with the business objectives
and performance of the Group, and the long-term interests of
shareholders.
It is the Company’s policy for the largest proportion of the
performance-related pay of the executive management team
to be linked to key performance indicators of the Company. The
Company’s key objectives include developing sustainable growth
in earnings and profits, through a combination of organic growth
and investments, which should lead to an increase in distributions
to shareholders and in the share price. The key performance
measures chosen linking executive remuneration to the
achievement of these objectives were profits, earnings per share
and share price. The remainder of the executive performance-
related pay is linked to the achievement of personal objectives,
which are aligned with the Board’s strategy for the Group.
Directors’ contracts and letters of appointment
It is the Company’s policy that Executive Directors should have
contracts with indefinite terms providing for a maximum of
12 months’ notice. In the event of termination, the Executive
Directors’ contracts provide for compensation up to a maximum
of the basic remuneration package for the notice period.
The details of the Executive Directors’ contracts are summarised
as follows:
Date of appointment
to the Committee
Director
1 October 2008
Rhona Driggs
Effective date of contract
8 November 2018
13 December 2005
Tim Anderson
21 March 2018
Notice period
12 months
6 months
Non-Executive Directors serve under letters of appointment,
which either party can terminate on three months’ written notice.
The Non-Executive Directors have no right to compensation on
the termination of their appointments.
Zach Miles (Chair)
Penny Freer
Meetings
In June 2022, Zach Miles replaced Penny Freer as Chair of the
Committee following Penny's appointment as Interim Chair of the
Board. The Committee is required to meet at least twice a year
and at such times as the Chair of the Committee shall require.
During 2022, the Committee held four formal meetings and
maintained an active dialogue throughout the year. The Chief
Financial Officer is invited to attend meetings where appropriate.
Steve Bellamy and Ranjit de Sousa were appointed members
of the Committee on their appointments as independent Non-
Executive Directors in January and February 2023, respectively.
Remuneration practices
The Committee recommended and monitored the level and
structure of remuneration for senior management as well as
monitoring remuneration trends across the Group. An annual
review was carried out on the ongoing appropriateness and
relevance of the remuneration policy.
The basic annual salary of the executive management team is
reviewed annually by the Committee. The remuneration for the
Non-Executive Directors is determined by the Board within the
limits set by the Articles and is based on information on fees
paid in similar companies, and the skills and expected time
commitment of the individual concerned and their roles on the
Board’s Committees. The fees are reviewed each year as part
of the annual budgeting process. The fees for Non-Executive
Directors were not increased for 2023.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 46
Directors’ remuneration report continued
Long Term Incentive Plan (‘LTIP’)
The Committee has responsibility for supervising the Company’s LTIP and making awards (‘Awards’) under its terms. Awards are made
in the form of nil-cost options over Ordinary Shares, to the Company’s executive management team and senior leadership team.
The maximum value of Ordinary Shares that could be awarded to any individual in a year is 175% of their basic salary. The Committee
reviews the final audited results of the Company prior to agreeing if Awards are to be made and the extent to which Awards are to vest.
Non-Executive Directors do not participate in the LTIP.
Performance targets are growth in profitability, earnings per share and share price over the relevant (typically three-year) performance
period. During the year, the Awards that were granted in 2019 for vesting in March 2022, lapsed in full.
A summary of the vesting and lapsing of Awards over the past ten years is as follows:
Year of Award
Year of vesting
Awards
Awards vested
Percentage vested
Awards lapsed
Percentage lapsed
2013
2014
2016
2017
2018
2019
2020
2022
2017
2018
2019
2020
2021
2022
2023
2025
957,746
657,408
437,855
363,178
761,992
911,578
155,000
15,929
676,539
86,194
–
–
–
–
–
–
71%
13%
0%
0%
0%
0%
0%
0%
281,207
571,214
437,855
363,178
761,992
911,578
155,000
15,929
29%
87%
100%
100%
100%
100%
100%
100%
A summary of outstanding Awards (yet to vest or lapse) at 31 December 2022 is as follows:
Year of Award
2020
2021
2022
Year of vesting
2023
2024
2025
Awards
1,808,159
1,088,889
1,141,177
At 31 December 2022, there were vested unexercised options over 314,995 Ordinary Shares and unvested Awards over a maximum of
4,038,225 Ordinary Shares. Since 2020, the Company has conducted a share purchase plan where the Company transfers purchased
Ordinary Shares to the Company’s Employee Benefit Trust with the intention that they be used to satisfy the exercise of options vested
under the LTIP to reduce the dilutive effect of issuing new Ordinary Shares. The Board's policy is to satisfy the exercise of options
equally through the allotment of new Ordinary Shares and by transfer of Ordinary Shares from the Employee Benefit Trust.
Aggregate Directors’ remuneration (audited information)
The total amounts for Directors’ remuneration are as follows:
2023
2022
2021
Salary
& fees
£000
Salary
& fees
£000
Benefits
-in-kind
£000
Annual
bonuses
£000
Money
purchase
pension
contributions
£000
385
208
N/A
75
55
49
39
385
200
50
66
55
-
-
22
7
–
–
–
–
–
182
165
–
–
–
–
–
-
20
–
–
–
–
–
Year of Award
Executive
Rhona Driggs1
Tim Anderson
Non-Executive
Tony Martin2
Penny Freer3
Zach Miles
Steve Bellamy4
Ranjit de Sousa5
Salary
& fees
£000
Benefits
-in-kind
£000
Annual
bonuses
£000
Money
purchase
pension
contributions
£000
304
165
67
43
43
-
-
18
5
–
–
–
–
–
91
51
–
–
–
–
–
–
17
–
–
–
–
–
Total
£000
589
392
50
66
55
-
-
1,152
Total
£000
413
238
67
43
43
-
-
804
1 2021 figures translated from USD to GBP at the rate of GBP 1 : USD 1.3757. 2022 and 2023 figures translated from USD to GBP at the rate of GBP 1 : USD 1.2363.
2 Resigned as a Director on 6 June 2022
3
4 Appointed 16 January 2023
5 Appointed 20 February 2023
Interim Chair of the Board from 6 June 2022 and Chair from 27 March 2023
Empresaria Annual report and accounts 2022 47
Long-term incentives (audited information)
Details of the Awards for the executive management team who served during the year are as follows:
Name of Officer
Rhona Driggs
Tim Anderson
James Chapman
Year of Award
Awards at
1 January 2022
Awards granted
during 2022
Awards lapsed
during 2022
Vested Awards
(options granted)
Options exercised
2019
2020
2021
2022
2019
2020
2021
2022
2019
2020
2021
2022
261,233
932,401
505,051
205,000
500,000
333,333
162,586
375,758
250,505
–
–
-
374,209
–
–
–
252,844
–
–
–
164,348
261,233
–
-
205,000
–
–
162,586
–
–
–
–
-
–
–
–
–
–
–
–
–
-
–
–
–
–
–
–
Shareholding guidelines
There are no requirements for Executive Directors or senior executives to hold shares in the Company.
Details of the shareholdings of Directors who served during the year are as follows:
Tony Martin1
Penny Freer
Zach Miles
Rhona Driggs
Tim Anderson
Total
31 December 2022
31 December 2021
Number of
Ordinary Shares
13,924,595
15,000
–
85,000
140,000
14,164,595
Percentage
holding
Number of
Ordinary Shares
Percentage
holding
27.93%
0.03%
–
0.17%
0.28%
28.41%
13,924,595
15,000
–
45,000
100,000
14,084,595
27.93%
0.03%
–
0.09%
0.20%
28.25%
1 Resigned as a Director on 6 June 2022
No Director had any beneficial interest in the share capital of any other Group company.
Assessment of the Remuneration Committee
The Committee conducted a self-assessment of its performance during the year. The evaluation process measured performance
against its terms of reference, including:
• executive short and long term incentive plans reviewed and assessed considering current best practice, performance measures
and the long-term strategic goals of the Group; and
• widening the recipients of LTIP Awards to include all members of the senior leadership team.
If there are any questions about the work of the Committee, you are welcome to send them to companysec@empresaria.com.
This report was approved by the Board of Directors on 27 March 2023 and signed on its behalf by
Zach Miles
Chair of the Remuneration Committee
27 March 2023
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 48
Directors’ report
The Directors present their annual report on the affairs of
Empresaria Group plc, together with the financial statements
and auditor’s report, for the year ended 31 December 2022.
The strategic report set out on pages 2 to 33 and the corporate
governance statement set out on pages 38 to 40 form part of this
report.
Future developments
An indication of likely future developments in the business of
the Group is included in the strategic report. In March 2023,
the Group's revolving credit facility was refinanced for a three
year term to March 2026. Otherwise, there have not been any
significant events since the balance sheet date.
During the year ended 31 December 2022, the Company
purchased 457,755 of its own Ordinary Shares, at a net cost of
£297,698.86, and transferred the 457,755 Ordinary Shares from
treasury to the EBT, for nil consideration. At 31 December 2022,
the Company held no Ordinary Shares in treasury.
At the date of this annual report, the Company has 49,853,001
Ordinary Shares in issue, none of which are held by the Company
as treasury shares, and has an unexpired authority to purchase up
to a further 2,179,128 Ordinary Shares. Details of the new authority
being requested at the 2023 AGM will be contained in the circular
to shareholders, which will be available on the Company’s
website. Details of the Ordinary Shares held by the EBT are set
out in note 21 to the consolidated financial statements.
Financial risk management
Directors and their shareholdings
Information regarding financial risk management can be found in
note 22 to the consolidated financial statements.
Dividends
For the year ended 31 December 2022 the Directors recommend
a final dividend of 1.4p per Ordinary Share of 5p in the Company
to be paid on 15 June 2023 to shareholders on the register on
26 May 2023. A dividend of 1.2p was paid for the year ended 31
December 2021.
Share capital structure
At 31 December 2022, the Company’s issued share capital
was 49,853,001 Ordinary Shares with a nominal value of 5p per
share; all of the issued share capital was in free issue and all
issued shares are fully paid. The Company’s Ordinary Shares are
quoted and admitted to trading on the AIM market operated by
the London Stock Exchange plc. The holders of Ordinary Shares
are entitled to receive the Company’s Reports and Accounts, to
attend and speak at general meetings of the Company, to appoint
proxies and to exercise voting rights. None of the Ordinary Shares
carry any special rights with regards to control of the Company
or distributions made by the Company. There are no known
agreements relating to, or restrictions on, voting rights attached
to the Ordinary Shares (other than the 48 hour cut-off for casting
proxy votes prior to a general meeting). There are no restrictions
on the transfer of shares, and there is no requirement to obtain
approval for a share transfer. There are no known arrangements
under which financial rights are held by a person other than the
holder of the Ordinary Shares. There are no known limitations on
the holding of Ordinary Shares.
Power of Directors
The Directors are authorised to issue and allot shares and to buy
back shares subject to annual shareholder approval at the AGM.
Such authorities were granted by shareholders at the 2022 AGM,
and at the 2023 AGM it will be proposed that the Directors be
granted new authorities to allot and buy back shares.
Repurchase of shares
On 17 June 2020, the Company announced a share buyback
programme to purchase up to £25,000 per month of its own
shares (‘Programme’). All of the shares purchased under the
Programme are held as treasury shares until they are transferred
to the Empresaria Employee Benefit Trust (‘EBT’), with the
intention that they will be used to satisfy the exercise of options
vested under the Company’s Long Term Incentive Plan.
Details of the Directors who held office during the year, and their
shareholdings at 31 December 2022, are set out in the Directors’
remuneration report on page 47.
Directors’ indemnities and insurance
The Company maintains Directors’ and Officers’ liability insurance
which provides appropriate cover for any legal action brought
against its Officers. The Company has also granted indemnities
to each of its executive management team, being the Executive
Directors and the Company Secretary, to the extent permitted by
law. The qualifying third-party indemnity provisions as defined
by Section 234 of the Companies Act 2006, remain in force
in relation to certain losses and liabilities which the relevant
individual may incur to third parties in the course of acting as
officers or employees of the Company or of any associated
company. Neither the insurance nor the indemnities provide
cover where the relevant individual has acted fraudulently or
dishonestly.
Political contributions
Neither the Company nor any of its subsidiaries made any political
donations or incurred any political expenditure during the year
(2021: £nil).
Substantial shareholdings
At 31 December 2022, the following interests in 3% or more of
the issued Ordinary Share capital of the Company in the register
maintained under section 113 of the Companies Act 2006 were
identified:
Name of holder
A V Martin1
H M van Heijst
Kempen Capital Management
Close Brothers Asset Management
Beleggingsclub‘t Stockpaert
The Ramsey Partnership Fund
Ophorst van Marwijk Kooy
Allianz Global Investors
1 Resigned as a Director on 6 June 2022
No. of
Ordinary Shares
Percentage of voting
rights and issued
share capital
13,924,595
6,450,000
5,673,254
5,410,753
3,645,000
2,441,000
1,638,328
1,590,000
27.93%
12.94%
11.38%
10.85%
7.31%
4.90%
3.29%
3.19%
Empresaria Annual report and accounts 2022 49
Disabled employees
Annual General Meeting 2023
The 2023 AGM will be held at 1:00 pm on Tuesday 23 May 2023.
The AGM will again be hosted both in person and on a digital
platform, providing all shareholders with a facility to attend, vote
and submit questions. Instructions are detailed in the Notice of
AGM which is sent out at least 20 working days before the AGM
and is also made available on our website.
How to vote
Voting via proxy will be the only method available for voting at
the AGM. You are encouraged to submit your proxy vote online
at www.signalshares.com as early as possible. Our registrar, Link
Asset Services, must receive your online proxy appointment and
voting instructions by 1:00 pm on Friday 19 May 2023 at the latest
to ensure your vote is counted. Further instructions on how to vote
are set out in the Notice of AGM.
Approved by the Board and signed on its behalf by
James Chapman
General Counsel and Company Secretary
27 March 2023
Registered office:
Old Church House, Sandy Lane, Crawley
Down, Crawley, West Sussex RH10 4HS
Registered number: 03743194
Applications for employment by disabled persons are always
fully considered, having regard to the particular aptitudes of
the applicant concerned. In the event of employees becoming
disabled, every effort is made to ensure that their employment
with the Group continues and that appropriate training is
arranged. The Group supports disabled employees in all aspects
of their training, career development and promotion.
Employee involvement
The Group places considerable value on the involvement of
its employees and has continued to keep them informed on
matters affecting them as employees and on the various factors
affecting the performance of the Group. This is described further
in the corporate governance statement (stakeholders and social
responsibilities) and in the ‘engaging with our stakeholders’
section on page 32.
Energy and Carbon Reporting
The Group is subject to the UK Energy and Carbon reporting
regulations. All of the Group’s UK subsidiaries and Parent
Company are exempt based on the qualifying conditions
contained in those regulations. As a result, no further disclosures
are provided in this report.
Cautionary statement
The sole purpose and use of this annual report is to provide
information to the shareholders of the Company, as a body, to
assist them in exercising their governance rights. The Company
and its subsidiaries, their respective officers, employees, agents
or advisers do not accept or assume responsibility to any other
person to whom this document is shown or into whose hands
it may come and any such responsibility or liability is expressly
disclaimed. This annual report contains certain forward-looking
statements with respect to the operations, performance and the
financial position of the Company and the Group. By their nature,
these statements involve uncertainty since future events and
circumstances can cause results and developments to differ
from those anticipated. The forward-looking statements reflect
knowledge and information available at the date of preparation
of this annual report and nothing in this annual report should be
construed as a profit forecast.
Auditor
Each of the persons who is a Director at the date of approval of
this annual report confirms that:
• so far as the Director is aware, there is no relevant audit
information of which the Company’s auditor is unaware; and
• they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Company’s auditor
is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the Companies
Act 2006.
Following a competitive tender process, CLA Evelyn Partners
Limited (formerly Nexia Smith & Williamson Audit Limited) were
appointed as the Company’s independent auditor for the 2021
financial year. CLA Evelyn Partners Limited have expressed their
willingness to continue as auditor for the 2023 financial year and
a resolution will be proposed at the forthcoming AGM.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 50
Directors’ responsibilities statement
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to ensure
that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring the annual report
and financial statements are made available on a website.
Financial statements are published on the Company’s website
(empresaria.com) in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website is the
responsibility of the Directors. The Directors’ responsibility also
extends to the ongoing integrity of the financial statements
contained therein.
This responsibility statement was approved by the Board on
27 March 2023 and is signed on its behalf by order of the Board
by
Rhona Driggs
Chief Executive Officer
27 March 2023
Tim Anderson
Chief Financial Officer
The Directors are responsible for preparing the annual report and
the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial year. The Directors are required
to prepare the Group financial statements in accordance with
UK-adopted International Accounting Standards and the AIM
rules and have chosen to prepare the Parent Company financial
statements in accordance with Financial Reporting Standard 102
(‘FRS 102’). Under company law the Directors must not approve
the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and Parent
Company and of the profit or loss of the Group for that period.
In preparing the Parent Company financial statements, the
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
In preparing the Group’s financial statements, International
Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
Empresaria Annual report and accounts 2022
Independent auditor’s report
to the members of Empresaria Group plc
51
Opinion
Our approach to the audit
We have audited the financial statements of Empresaria Group
plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2022 which comprise the consolidated
income statement, consolidated statement of comprehensive
income, consolidated balance sheet, consolidated statement
of changes in equity, consolidated cash flow statement, Parent
Company balance sheet, Parent Company statement of changes
in equity and the notes to the financial statements, including
significant accounting policies. The financial reporting framework
that has been applied in the preparation of the Group financial
statements is applicable law and UK-adopted International
Accounting Standards. The financial reporting framework that has
been applied in the preparation of the Parent Company financial
statements is applicable law and United Kingdom Accounting
Standards, including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland” (United Kingdom
Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at 31
December 2022 and of the Group’s profit for the year then
ended;
• the Group financial statements have been properly prepared
in accordance with UK-adopted International Accounting
Standards;
• the Parent Company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Group and
Parent Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Of the Group’s 37 material reporting components, we subjected
16 to audits for Group reporting purposes and 4 to specific audit
procedures where the extent of our audit work was based on
our assessment of the risk of material misstatement and of the
materiality of that component. The latter were not individually
significant enough to require an audit for Group reporting
purposes but were still material to the Group.
The components within the scope of our work covered 90.7% of
Group revenue, 96.8% of Group profit before tax, and 84.3% of
Group total assets.
For the remaining 17 material components and the remaining
immaterial components, we performed analysis at a group level
to re-examine our assessment that there were no significant risks
of material misstatement within these.
For those audits which were carried out by overseas component
auditors, at both the planning and the completion stage, senior
members of the Group audit team, including the Senior Statutory
Auditor, participated in video and telephone conference meetings
with local audit teams. At these calls and meetings, the Group
audit team discussed the component auditors’ risk assessments
and planned audit approach. Once the audit work was
completed, the findings reported to the Group audit team were
discussed in more detail, and any further work required by the
Group audit team was then performed by the component auditor.
In addition to these planned calls and meetings, the Group audit
team sent detailed instructions to the component audit teams.
The Group audit team reviewed the comprehensive responses
to these instructions, and reviewed the audit working papers for
significant components.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period, and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 52
Independent auditor’s report
continued
Key audit matter
Description of risk
How the matter was addressed in the audit
Revenue recognition
(Group) - see note 2
of the consolidated
financial statements
Impairment of
goodwill and
other intangible
assets (Group)
and impairment
of investments
(Parent Company)
- see note 14 of
the consolidated
financial statements
and note 6 of the
parent company's
financial statements
The Group’s revenue relates to permanent
placement, temporary and contract
placement, and offshore services with
revenue from permanent placements
recognised on the start date of the
candidate placement and revenue from
temporary and contract and offshore
services recognised on the basis of work
performed by reference to approved
timesheets and contracted rates.
The key risk of fraud in relation to revenue
recognition is attributed to cut off,
specifically incorrect or missing accruals
for un-invoiced or late timesheets for
temporary and contract, and offshore
services revenue, or delayed invoices/
credit notes for placements. This impacts
whether all revenue and accrued revenue
that should have been accounted for,
and only such revenue, has in fact been
accounted for in the year.
The Group has significant goodwill and
other intangible asset balances and
the Parent Company has significant
investments in subsidiaries.
Accounting standards require
management to perform an impairment
review annually to consider possible
impairment in goodwill and consider
whether there are any indicators of
impairment impacting other intangible
assets or investments.
Management’s assessment of the carrying
value requires judgement in assessing
forecast future cash flows, growth rates
and discount rates. The assessment of
the carrying value of these balances and
consequently any required impairment is
sensitive to these estimates.
Our audit work included, but was not restricted to the following:
• We reviewed the Group’s accounting policy for revenue
recognition and assessed whether it was in line with International
Financial Reporting Standards (‘IFRS’).
• walkthrough design and implementation of controls over
revenue recognition which have been designed by the
Group to help prevent and detect fraud and errors in revenue
recognition;
• review of whether accounting for revenue is compliant with
the financial reporting standards with regards to principal
versus agent;
• detailed testing of a sample of revenue transactions to
contract terms, to ensure that revenue had been recognised
in accordance with the Group’s accounting policies;
• substantive cut-off testing to determine if revenue is
recognised in the correct period, including reviewing credit
notes issued post year end; and
• substantive completeness testing of completeness of
clawback provisions, if necessary, around permanent
placements.
Our audit work included, but was not restricted to, the following:
• we challenged the assumptions used in the impairment
model for goodwill, other intangible assets, investments in
subsidiaries and amounts owed by Group undertakings;
• assessed the appropriateness of the impairment review
methodology, assumptions concerning growth rates and
inputs to the discount rate against available market data with
the assistance of experts;
• compared previously forecast revenue growth rates and
gross profit margins with those achieved in previous years;
• compared current forecast revenue growth rates and gross
profit margins with those achieved in previous years; and
• review sensitivity analysis to calculate the minimum growth
rates needed to avoid an asset impairment and compare them
to those achieved in previous years.
Our application of materiality
The materiality for the Group financial statements as a whole
(‘Group FS materiality’) was set at £665k. This has been
determined with reference to the benchmark of the Group’s
profit before tax, which we consider to be one of the principal
considerations for members of the Company in assessing the
Group’s performance. Group FS materiality represents 9% of the
Group’s profit before tax and 7.4% of the Group’s adjusted profit
before tax.
The materiality for the Parent Company financial statements
as a whole (‘Parent FS materiality’) was set at £432k. This has
been capped at performance materiality for the Group financial
statements, calculated as explained below.
Performance materiality for the Group financial statements was
set at £432k, being 65% of Group FS materiality, for purposes of
assessing the risks of material misstatement and determining the
nature, timing and extent of further audit procedures. We have
set it at this amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected
misstatements exceeds Group FS materiality. We judged this
level to be appropriate based on our understanding of the Group
and its financial statements, as updated by our risk assessment
procedures and our expectation regarding current period
misstatements including considering experience from previous
audits. The level of 65% was set to reflect that there are some
areas of judgement and estimation in the financial statements.
Performance materiality for the Parent Company financial
statements was set at £346k, being 80% of Parent FS materiality.
The level of 80% was set to reflect that there are few areas of
judgement and estimation in the financial statements.
Empresaria Annual report and accounts 2022 53
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group and
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
• challenging the assumptions used in the detailed budgets
and forecasts prepared by management for the financial years
ending 2023 and 2024;
• considering historical trading performance by comparing
recent growth rates of both revenue and operating profit
across the Group’s geographical and market segments;
• assessing the appropriateness of the assumptions concerning
growth rates and macro-economic assumptions;
• comparing the forecast results to those actually achieved in
the 2023 financial period so far;
• reviewing bank statements to monitor the cash position of
the Group post year end, and obtaining an understanding
of significant expected cash outflows (such as capital
expenditure) in the forthcoming 12-month period;
• considering the Group’s funding position and requirements;
• reviewing and challenging management’s calculations
suggesting the Group is able to comply with all loan facility
covenants in the 12 months from approval of the financial
statements; and
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the strategic report and the Directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the Directors’ report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the Group
and the Parent Company and their environment obtained in the
course of the audit, we have not identified material misstatements
in the strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
• adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law
are not made; or
• considering the sensitivity of the assumptions and reassessing
headroom after sensitivity.
• we have not received all the information and explanations we
require for our audit.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Parent Company’s ability to continue as a going
concern for a period of at least 12 months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
Other information
The other information comprises the information included in the
annual report and accounts, other than the financial statements
and our auditor’s report thereon. The Directors are responsible
for the other information contained within the annual report
and accounts. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the
other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement
set out on page 50, the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Parent Company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the Directors either intend to liquidate
the Group or the Parent Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 54
Independent auditor’s report
continued
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below.
We obtained a general understanding of the Group’s legal
and regulatory framework through enquiry of management
concerning their understanding of relevant laws and regulations;
the Group’s policies and procedures regarding compliance; and
how they identify, evaluate and account for litigation claims. We
also drew on our existing understanding of the Group’s industry
and regulations. We obtained this understanding for significant
components through discussions with Group management,
component management and component auditors.
We understand that the Group complies with the framework
through:
• promoting corporate culture through the use of the Group’s
Code of Conduct, which all Group companies must adhere to;
• updating operating procedures, manuals and internal controls
as legal and regulatory requirements change; and
• for significant components, the Directors’ close involvement
in the day-to-day running of the business, meaning that any
litigation or claims would come to their attention directly.
In the context of the audit, we considered those laws and
regulations which determine the form and content of the financial
statements, which are central to the Group’s ability to conduct its
business, and/or where there is a risk that failure to comply could
result in material penalties. We identified the following laws and
regulations as being of significance in the context of the Group:
• The Companies Act 2006, IFRS (Group) and FRS 102 (Parent
Company) in respect of preparation and presentation of the
financial statements;
• AIM regulations and Market Abuse Regulations; and
• Requirements from UK and overseas tax legislation (including
IR35 and minimum wage).
We performed the following specific procedures to gain evidence
about compliance with the significant laws and regulations above:
• We have reviewed a sample of legal and professional invoices;
• Made inquiries with management as to any legal or regulatory
issues during the year;
• We have reviewed board minutes for evidence of non-
compliance; and
• We have obtained representation from management that they
have disclosed to us all known instances of non-compliance
or suspected non-compliance with laws and regulations.
The senior statutory auditor led a discussion with senior
members of the engagement team regarding the susceptibility
of the entity’s financial statements to material misstatement,
including how fraud might occur. The key areas identified as part
of the discussion were the risk of manipulation of the financial
statements through manual journal entries, incorrect recognition
of revenue and accounting estimates such as impairment,
expected credit loss and lease assumptions under IFRS 16.
These areas were communicated to the other members of the
engagement team who were not present at the discussion.
The procedures we carried out to gain evidence in the above
areas included:
• testing a sample of revenue transactions to underlying
documentation;
• testing a sample of manual journal entries, selected through
applying specific risk assessments based on the Group’s
processes and controls surrounding manual journal entries;
and
• challenging management regarding the assumptions used in
the estimates identified above, and comparison to market data
and post-year-end data as appropriate.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we
are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Nicholas Jacques
Senior Statutory Auditor,
for and on behalf of
CLA Evelyn Partners Limited
Statutory Auditor
Chartered Accountants
45 Gresham Street
London
EC2V 7BG
United Kingdom
27 March 2023
Empresaria Annual report and accounts 2022 Consolidated income statement
for the year ended 31 December 2022
Revenue
Cost of sales
Net fee income
Administrative costs (including £nil (2021: £0.3m) in respect of trade receivables impairment
losses)
Adjusted operating profit
Impairment of goodwill
Impairment of other intangible assets
Amortisation of intangible assets identified in business combinations
Operating profit
Finance income
Finance costs
Net finance costs
Profit before tax
Taxation
Profit for the year
Attributable to:
Owners of Empresaria Group plc
Non-controlling interests
Earnings per share
Basic
Diluted
Details of adjusted earnings per share are shown in note 11.
55
2021
£m
258.4
(198.9)
59.5
(50.2)
9.3
(0.9)
(0.3)
(1.4)
6.7
0.3
(1.0)
(0.7)
6.0
(3.1)
2.9
2.3
0.6
2.9
Note
4
4
4
13
14
14
4,6
8
8
8
9
2022
£m
261.3
(195.9)
65.4
(55.2)
10.2
–
–
(1.4)
8.8
0.3
(1.5)
(1.2)
7.6
(2.8)
4.8
3.4
1.4
4.8
Pence
Pence
11
11
6.9
6.7
4.6
4.5
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 56
Consolidated statement of comprehensive income
for the year ended 31 December 2022
Profit for the year
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Exchange differences on translation of foreign operations
Items that will not be reclassified to the income statement:
Exchange differences on translation of non-controlling interests in foreign operations
Other comprehensive income/(loss) for the year
Total comprehensive income for the year
Attributable to:
Owners of Empresaria Group plc
Non-controlling interests
2022
£m
4.8
2.6
0.3
2.9
7.7
6.0
1.7
7.7
2021
£m
2.9
(1.7)
(0.6)
(2.3)
0.6
0.6
–
0.6
Empresaria Annual report and accounts 2022 Consolidated balance sheet
as at 31 December 2022
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Other intangible assets
Deferred tax assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Borrowings
Lease liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium account
Merger reserve
Retranslation reserve
Equity reserve
Other reserves
Retained earnings
Equity attributable to owners of Empresaria Group plc
Non-controlling interests
Total equity
57
2021
£m
1.6
7.5
30.5
9.3
3.4
52.3
50.5
21.1
71.6
123.9
34.8
1.9
23.2
4.6
64.5
11.2
3.3
2.6
17.1
81.6
42.3
2.5
22.4
0.9
2.5
(10.2)
(0.6)
19.9
37.4
4.9
42.3
Note
12
23
13
14
20
16
17
18
23
18
23
20
21
2022
£m
2.8
7.5
31.9
8.2
4.4
54.8
46.7
22.3
69.0
123.8
33.3
1.5
29.1
5.3
69.2
0.5
2.6
2.5
5.6
74.8
49.0
2.5
22.4
0.9
5.1
(10.2)
(0.3)
22.4
42.8
6.2
49.0
These consolidated financial statements of Empresaria Group plc, registered number 03743194, were approved by the Board of
Directors and authorised for issue on 27 March 2023.
Signed on behalf of the Board of Directors
Rhona Driggs
Tim Anderson
Chief Executive Officer
Chief Financial Officer
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
58
Consolidated statement of changes in equity
for the year ended 31 December 2022
Equity attributable to owners of Empresaria Group plc
Share
capital
£m
Share
premium
account
£m
Merger
reserve
£m
Retrans-
lation
reserve
£m
Equity
reserve
£m
Other
reserves
£m
Retained
earnings
£m
(10.2)
(0.6)
18.1
2.3
–
2.3
At 31 December 2020
Profit for the year
Exchange differences on translation of
foreign operations
Total comprehensive income for the year
Dividend paid to owners of Empresaria
Group plc (see note 24)
Dividend paid to non-controlling interests
Purchase of own shares in Employee
Benefit Trust
Exercise of share options
Share-based payments (see note 27)
At 31 December 2021
Profit for the year
Exchange differences on translation of
foreign operations
Total comprehensive income for the year
Dividend paid to owners of Empresaria
Group plc (see note 24)
Dividend paid to non-controlling interests
Purchase of own shares in Employee
Benefit Trust
Share-based payments (see note 27)
2.4
22.4
0.9
–
–
–
–
–
–
0.1
–
2.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22.4
0.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.2
–
(1.7)
(1.7)
–
–
–
–
–
2.5
–
2.6
2.6
–
–
–
–
–
–
–
–
–
–
–
–
(10.2)
–
–
–
–
–
–
–
At 31 December 2022
2.5
22.4
0.9
5.1
(10.2)
–
–
–
–
–
–
(0.3)
0.3
(0.6)
–
–
–
–
–
–
Non–
con-
trolling
interests
£m
5.2
0.6
Total
£m
37.2
2.3
Total
equity
£m
42.4
2.9
(1.7)
(0.6)
(2.3)
0.6
(0.5)
(0.5)
–
–
0.6
(0.5)
–
–
(0.3)
(0.3)
(0.3)
(0.3)
0.3
–
19.9
3.4
–
3.4
0.1
0.3
37.4
3.4
2.6
6.0
–
–
–
4.9
1.4
0.3
1.7
(0.3)
0.1
0.3
42.3
4.8
2.9
7.7
(0.6)
(0.6)
–
(0.6)
–
–
(0.4)
(0.4)
(0.3)
(0.3)
0.3
(0.3)
–
22.4
0.3
42.8
–
–
6.2
(0.3)
0.3
49.0
Empresaria Annual report and accounts 2022 Consolidated cash flow statement
for the year ended 31 December 2022
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment, and software amortisation
Depreciation of right-of-use assets
Impairment of goodwill
Impairment of other intangible assets
Amortisation of intangible assets identified in business combinations
Share-based payments
Net finance costs
Taxation
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables (including pilot bonds outflow of £0.1m (2021:
outflow of £0.3m))
Cash generated from operations
Interest paid
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment, and software
Finance income
Net cash outflow from investing activities
Cash flows from financing activities
Decrease in overdrafts
Proceeds from bank loans
Repayment of bank loans
Decrease in invoice financing
Payment of obligations under leases
Purchase of shares in existing subsidiaries
Purchase of own shares in Employee Benefit Trust
Dividends paid to owners of Empresaria Group plc
Dividends paid to non-controlling interests
Net cash outflow from financing activities
Net increase in cash and cash equivalents
Foreign exchange movements
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Bank overdrafts at beginning of the year
Decrease in the year
Foreign exchange movements
Bank overdrafts at end of the year
Cash, cash equivalents and bank overdrafts at end of the year
59
2021
£m
2.9
1.0
5.3
0.9
0.3
1.4
0.3
0.7
3.1
15.9
(8.2)
3.5
11.2
(0.9)
(2.7)
7.6
(1.7)
0.3
(1.4)
(3.3)
5.5
(0.2)
–
(5.3)
(0.6)
(0.3)
(0.5)
(0.3)
(5.0)
1.2
(0.9)
20.8
21.1
2021
£m
(22.1)
3.3
0.6
(18.2)
2.9
Note
12,14
23
13
14
14
8
9
18
2022
£m
4.8
1.1
5.4
–
–
1.4
0.3
1.2
2.8
17.0
6.9
(3.5)
20.4
(1.5)
(4.2)
14.7
(2.1)
0.3
(1.8)
(1.8)
–
(2.7)
(1.2)
(5.3)
(0.1)
(0.3)
(0.6)
(0.4)
(12.4)
0.5
0.7
21.1
22.3
2022
£m
(18.2)
1.8
(0.7)
(17.1)
5.2
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 60
Notes to the consolidated financial statements
1 Basis of preparation and general information
Empresaria Group plc (the ‘Company’) is a company incorporated in the United Kingdom under the Companies Act 2006. The address
of the registered office is Old Church House, Sandy Lane, Crawley Down, Crawley, West Sussex, RH10 4HS. Its company registration
number is 03743194.
The consolidated financial statements are for the year ended 31 December 2022. The financial statements have been prepared in
accordance with UK-adopted International Accounting Standards, and therefore the Group financial statements comply with AIM rules.
The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial
assets and liabilities at fair value. The measurement bases and principal accounting policies of the Group are set out below.
These consolidated financial statements are presented in Pounds Sterling (£), rounded to £0.1m, because that is the presentational
currency of the Group. Foreign operations are included in accordance with the policies set out in note 2.
Changes in accounting policies
Adoption of new and revised standards and interpretations
In the current year, the following new and revised standards have been adopted:
Amendments to IFRS 3
Amendments to IAS 16
Amendments to IAS 37
Reference to the Conceptual Framework
Property, Plant and Equipment – Proceeds before Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Annual Improvements to IFRS Standards
Amendments to IFRS 1 First-time Adoption of International Financial Reporting
2018–2020
Standards, IFRS 9 Financial Instruments and IFRS 16 Leases
Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in
these financial statements were in issue but not yet effective:
Amendments to IAS 1
Amendments to IAS 1
Amendments to IAS 8
Amendments to IAS 12
Classification of Liabilities as Current or Non-current
Disclosure of Accounting Policies
Definition of Accounting Estimates
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to IFRS 16 Leases
Lease Liability in a Sale and Leaseback
The Group does not expect these to have a significant impact on the consolidated financial statements. This list excludes any
standards or amendments which are expected to have no relevance to the Group.
Going concern
The Group’s activities are funded by a combination of long-term equity capital and bank facilities, primarily a revolving credit facility,
invoice financing and overdrafts. The Board has reviewed the Group’s profit and cash flow projections and applied a significant
downside scenario to the underlying assumptions in order to stress-test the Group’s financial position. This scenario assumes a
progressive fall off such that adjusted operating profit for 2023 falls back to 2020 levels, a fall of around 30% from 2022. While the
Directors consider this scenario to be possible, they believe it is more pessimistic than a reasonable worst-case scenario, given current
market forecasts and current trading.
These projections demonstrate that the Group expects to meet its obligations as they fall due through the use of existing facilities and
to continue to meet its covenant requirements. At 31 December 2022 the Group had undrawn facilities (excluding invoice financing)
of £17.9m. The revolving credit facility was refinanced after the reporting date in March 2023 and the new facility has a term until
March 2026. The Group’s main overdraft facilities are with our primary banker and based on informal discussions the Board has had
with its lenders, we have no reason to believe that these or equivalent facilities will not continue to be available to the Group for the
foreseeable future.
As a result, the Directors consider it appropriate to continue to prepare the financial statements on a going concern basis.
Empresaria Annual report and accounts 2022
61
2 Summary of significant accounting policies
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiaries, including the Empresaria Employee
Benefit Trust (‘EBT’), from the date on which the Group obtains control and cease to be consolidated from the date on which the Group
no longer has control.
Control is achieved when the Group has all of the following:
• power over the investee;
• exposure, or has rights, to variable return from its involvement with the investee; and
• the ability to use its power to affect its returns.
Intra-group transactions and profits are eliminated fully on consolidation. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of disposal, as appropriate.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein.
Non-controlling interest consists of the amount of those interests at the date of the original business combination and the non-controlling
interest’s share of changes in equity since the date of the combination, taking into account any restrictions on non-controlling interests.
Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interest having a deficit
balance.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.
The carrying amount of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value
of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.
Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate
of the fair value, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group
in exchange for control of the acquiree. Acquisition related costs are recognised in profit or loss as incurred. Where applicable, the
consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its
acquisition date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as
measurement period adjustments. The measurement period is the period from the date of acquisition to the date the Group obtains
complete information about facts and circumstances that existed as at the acquisition date and is a maximum of one year. All other
subsequent changes in the fair value of contingent consideration classified as an asset or liability are recognised in the income
statement. Consideration linked to post-combination employee services is identified separately from the business combination.
Payment for these services is accounted for as post-acquisition remuneration separately from the acquisition accounting.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition are recognised at their fair
value at the acquisition date, except for deferred tax assets and liabilities or assets related to employee benefit arrangements which
are recognised and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits, respectively.
Any non-controlling interest at acquisition is assessed as the proportionate share in the recognised amounts of the acquiree’s
identifiable net assets.
Management equity
In applying the Group’s management equity philosophy, subsidiary management may be offered the opportunity to acquire shares
in the subsidiary that they are responsible for, at market value. There are no services supplied by any employee in relation to this
purchase of the shares in the subsidiary. After an agreed period, management may offer to sell the shares back to the Company. The
Company does not have any obligation to acquire these shares.
If amounts are paid for non-controlling interests in a subsidiary that exceed the fair value of the equity acquired, this excess amount is
charged to the income statement.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 62
Notes to the consolidated financial statements continued
Goodwill
Goodwill arising on a business combination is recognised as an asset at the date that control is acquired and is stated after separating
out identifiable intangible assets.
Goodwill represents the excess of acquisition cost over the fair value of the Group’s share of the identifiable net assets of the acquired
subsidiary at the date of acquisition.
Goodwill is not amortised but is tested at least annually for impairment. Goodwill is allocated to groups of cash-generating units as
appropriate. If the recoverable amount of the cash-generating units is less than the carrying amount of the units, the impairment loss is
first allocated against goodwill and then to the other assets of the units on a pro rata basis. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable goodwill is included in the calculation of profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS (1 January 2006) has been retained at the previous UK GAAP
carrying amount.
Intangible assets
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is
probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured
reliably.
Intangible assets acquired separately
Intangible assets that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over their estimated useful life. The estimated useful life and amortisation method
are reviewed at the end of each reporting period, with any changes being accounted for on a prospective basis.
Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair
value at the acquisition date (regarded as their cost). They are subsequently reported at cost less accumulated amortisation and
accumulated impairment on the same basis as intangible assets acquired separately.
Amortisation is charged to the income statement and calculated using the straight-line method over its estimated useful life as follows:
Customer relations
Trademarks
Software
Exceptional items
up to 15 years
up to 15 years
up to five years
Exceptional items are those items that in the Directors’ view are required to be separately disclosed by virtue of their size, nature
or incidence. Adjusted operating profit, adjusted profit before tax and adjusted earnings are considered to be key measures in
understanding the Group’s financial performance and exclude exceptional items.
Property, plant and equipment
Property, plant and equipment is stated at historical cost, net of accumulated depreciation and any recognised impairment loss.
Depreciation is calculated using the straight-line method to write off the cost or valuation of the assets less their residual values over
their useful lives as follows:
Leasehold property
over the term of the lease up to a maximum of ten years
Fixtures, fittings and equipment
up to five years
Motor vehicles
up to five years
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with any
changes accounted for on a prospective basis.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in administrative
costs in the income statement.
Empresaria Annual report and accounts 2022
63
Impairment (excluding goodwill)
The carrying amounts of the Group’s tangible and intangible assets are reviewed at the end of each reporting period for any
indication of impairment. An impairment loss is recognised in the income statement whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its
recoverable amount, such that it does not exceed the carrying amount that would have existed had no impairment loss been
recognised. The reversal of the impairment loss is recognised in profit or loss.
In respect of financial assets, other than those at fair value through profit or loss, a loss allowance for expected credit losses is
determined at the end of each reporting period. Details of the expected credit loss model can be found in note 22.
Borrowing costs
Interest costs are recognised as an expense in the period in which they are incurred. Facility arrangement fees incurred in respect of
borrowings are amortised over the term of the agreement.
Cash and cash equivalents
Cash and cash equivalents comprise cash-in-hand, deposits held at call with banks and other short-term highly liquid investments with
original maturities of three months or less. Bank overdrafts are included within the balance sheet in current liabilities as borrowings
except where there is a right of offset in which case they are netted against the relevant cash balances.
Invoice financing
The Group’s operating activities in the UK are part-funded by invoice financing facilities. The debt provider has full recourse to the
Group for any irrecoverable debt; these debts are presented within current borrowings and the asset due from the client in current
assets in the Group’s balance sheet. Movements in the invoice finance balance are shown within financing activities in the Group’s cash
flow statement.
Interest charges on invoice finance are included in finance costs and service charges are included in administrative costs in the Group’s
income statement.
Financial assets
Financial assets are divided into the following categories:
• financial assets at fair value through profit or loss; and
• amortised cost.
The Group does not have material derivative financial instruments.
Fair value through profit or loss
Forward currency contracts and contingent consideration are held in the balance sheet at fair value with changes in the fair value
being recorded through the income statement and are classified as financial instruments at fair value through profit or loss.
Amortised cost
Assets accounted for at amortised cost are initially recorded at fair value and subsequently measured at amortised cost. For trade
receivables, amortised cost includes an allowance for expected credit losses. This is assessed by grouping assets into categories
with similar risk profiles and applying a provision matrix to each of these which is assessed by reference to past default experience
and various other sources of actual and forecast economic information. Trade receivables are only written off once the potential of
collection is considered to be nil and any local requirements such as around sales taxes are met.
Financial liabilities
The Group’s financial liabilities include borrowings and trade and other payables (including finance lease liabilities). They are
recognised initially at fair value, net of transaction costs, and are subsequently measured at amortised cost using the effective interest
method.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument.
All interest-related charges and, if applicable, changes in the instrument’s fair value that are reported in the profit or loss are included in
the income statement line items finance costs or finance income.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
12 months after the balance sheet date.
Trade and other payables are initially stated at fair value and subsequently measured at amortised cost.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 64
Notes to the consolidated financial statements continued
Revenue
Revenue comprises the fair value of the consideration received or receivable for the sale of services provided in the ordinary course of
the Group’s activities. Revenue is shown net of value added tax, trade discounts, rebates and other sales-related taxes.
Permanent placement revenue is recognised at the point when the candidate commences employment. Temporary and contract
revenue is recognised over time on the basis of actual work performed in the relevant period based on timesheets submitted. Revenue
from offshore services is recognised over time as the services are delivered.
In situations where the Group is the principal in the transaction, the transactions are recorded gross in the income statement. When the
Group acts as an agent, revenues are reported on a net basis.
In certain circumstances a client may be entitled to a replacement hire or refund if a candidate that has been placed leaves the role
within a certain time period. Revenue is recognised based on the most likely amount of revenue to be received, taking account of all
available information including historical, current and forecast.
Net fee income
Net fee income represents revenue less the remuneration cost of temporary workers. For permanent placements, net fees are equal to
revenue. For offshore services, net fee income represents revenue less costs of staff directly providing those services.
Employee benefits
Retirement benefit costs
Payments made to defined contribution retirement benefit schemes are charged to the income statement as they fall due.
Share-based payments
The Group issues equity-settled share-based payments to senior management, which are measured at fair value (excluding the effect
of non-market-based vesting conditions) at the date of grant and expensed on a straight-line basis over the vesting period, based on
the Group’s estimate of shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions.
The fair value of the options granted is measured using a Monte Carlo simulation model and Black-Scholes model, taking into account
the terms and conditions upon which the options were granted.
The Group acquires shares and transfers these to an Employee Benefit Trust (‘EBT’) to partly meet the obligation to provide shares
when employees exercise their options or awards. Costs of running the EBT are charged to the income statement. Shares held by the
EBT are deducted from other reserves. A transfer is made between other reserves and retained earnings when the share options are
exercised.
Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for short-term leases for office equipment
(lease term of 12 months or less) and leases of low value assets (less than £5,000). For those leases the Group has opted to recognise
a lease expense on a straight-line basis.
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably
certain not to be exercised.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount
rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which
case the Group’s incremental borrowing rate on commencement of the lease is used.
Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased
for:
• lease payments made at or before commencement of the lease;
• initial direct costs incurred; and
• the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations).
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use assets are depreciated on a straight-line basis over the remaining
term of the lease.
When the Group revises its estimate of the term of any lease (for example, it reassesses the probability of a lessee extension or
termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments over the revised term,
which are discounted using a revised discount rate. An equivalent adjustment is made to the carrying value of the right-of-use asset,
with the revised carrying amount being depreciated over the revised remaining lease term.
Empresaria Annual report and accounts 2022 65
Government grants
A government grant is recognised only when there is reasonable assurance that the Group will comply with any conditions attached to
the grant and that the grant will be received. The grant is recognised net against the costs that they are intended to compensate.
Forward contract for foreign currencies
Forward currency contracts are stated at fair value, with any gain or losses arising on remeasurement recognised in profit or loss.
Taxes
Current tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and the tax laws used to compute the amount are those that are enacted or substantively
enacted by the balance sheet date.
Deferred tax
Deferred income tax is provided, using the liability method, on temporary differences at the balance sheet date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised on an undiscounted basis for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised except:
• where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset
or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised
only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they
relate to items that are charged or credited directly to equity, in which case the related deferred tax is also charged or credited directly
to equity.
Foreign currencies
(i) Functional and presentational currency
Items included in the individual financial statements of each Group company are measured using the individual currency of the primary
economic environment in which that subsidiary operates (its ‘functional currency’). The consolidated financial statements are presented
in Pounds Sterling, which is the Company’s functional and presentational currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income
statement. Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned nor likely to occur (therefore forming part of the net investment in the foreign operation) are recognised initially in other
comprehensive income. These exchange differences are reclassified from equity to profit or loss on disposal or partial disposal of the
net investment.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 66
Notes to the consolidated financial statements continued
(iii) Group companies
The results and financial position of Group companies (none of which has the currency of a hyper-inflationary economy) that have a
functional currency different from the Company’s presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
• income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
• all resulting exchange differences are recognised as a separate component of equity within the retranslation reserve.
(iv) Net investments in foreign operations
Any gain or loss on retranslation of intercompany amounts considered to be part of a net investment, is recognised in equity in the
foreign currency translation reserve.
Equity
Equity comprises the following:
• Share capital represents the nominal value of equity shares.
• Share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of
expenses of the share issue.
• Merger reserve relates to premiums arising on shares issued subject to the provisions of section 612 Merger relief of the Companies
Act 2006.
• Retranslation reserve represents the exchange differences arising from the translation of the financial statements of foreign
subsidiaries.
• Equity reserve represents movement in equity due to acquisition of non-controlling interests under IFRS 3 Business Combinations.
• Other reserves represents the share-based payment reserve of £1.0m (2021: £0.6m) and exchange differences on intercompany
long-term receivables amounting to £(1.3)m (2021: £(1.2)m) which are treated as a net investment in foreign operations.
• Retained earnings represents accumulated profits less distributions and income/expense recognised in equity from incorporation.
• Non-controlling interest represents equity in a subsidiary not attributable, directly or indirectly, to the Group.
3 Critical accounting judgements and key sources of estimation uncertainty
In applying the Group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the
carrying values of assets and liabilities. These estimates and judgements are continually evaluated and are based on historical
experience and other relevant factors. Actual results may differ from these estimates.
Critical judgements in applying the Group’s policies
The following are the critical judgements that the Directors have made in applying the Group’s accounting policies:
Leases
Under IFRS 16 Leases the key area of judgement is lease length, including whether or not break clauses are expected to be exercised,
and the identification of the appropriate discount rate. Disclosures related to leases are provided in note 23.
Key sources of estimation uncertainty
The key sources of estimation uncertainty at the reporting date are discussed below:
Impairment of goodwill
The Group tests goodwill for impairment at least annually. The recoverable amount is determined based on value-in-use calculations.
This method requires the estimation of future cash flows and the assessment of a suitable discount rate in order to calculate their
present value. Details of the impairment review calculation and sensitivities are set out in note 13.
Empresaria Annual report and accounts 2022 67
4 Segment and revenue analysis
From 1 January 2022, following the appointment of regional leaders in 2021, information reported to the Group's Executive Committee,
considered to be the chief operating decision maker of the Group for the purpose of resource allocation and assessment of segment
performance, is based on the Group's four regions. The segmental information is therefore now presented by region, which represents
a change from the prior year which was reported by operating sector. Prior period information is re-presented by region.
The Group has one principal activity, the provision of staffing and recruitment services, delivered across a number of service lines,
being permanent placement, temporary and contract placement, and offshore services.
The analysis of the Group’s results by region is set out below:
UK & Europe
APAC
Americas
Offshore Services
Central costs
Intragroup eliminations
2022
2021
Net fee
income
£m
28.4
15.8
8.7
13.5
–
(1.0)
65.4
Adjusted
operating
profit
£m
4.7
0.8
1.5
7.1
(3.9)
–
10.2
Revenue
£m
133.1
40.3
71.0
15.3
–
(1.3)
258.4
Net fee
income
£m
29.0
14.1
9.9
7.7
–
(1.2)
59.5
Adjusted
operating
profit
£m
5.3
1.4
2.8
4.1
(4.3)
–
9.3
Revenue
£m
124.9
49.9
62.7
25.3
–
(1.5)
261.3
All revenue is from transactions with external clients with the exception of Offshore Services where £24.2m (2021: £14.2m) relates to
external clients and £1.1m (2021: £1.1m) relates to transactions with other regions, and APAC, where £49.5m (2021: £40.1m) relates to
external clients and £0.4m (2021: £0.2m) relates to transactions with other regions.
Revenue of UK & Europe includes £67.0m (2021: £70.9m) from Germany and £41.8m (2021: £44.0m) from UK.
In the current year and prior year no individual client exceeded 10% of the Group’s revenue.
In 2021, impairment of goodwill of £0.9m and impairment of other intangible assets of £0.3m was recognised in the APAC region.
The analysis of the Group’s revenue and net fee income by client destination is set out below:
UK & Europe
APAC
Americas
India
Africa
Intragroup eliminations
2022
2021
Revenue
£m
137.6
41.9
79.6
0.3
3.4
(1.5)
261.3
Net fee
income
£m
32.7
15.8
17.3
0.4
0.2
(1.0)
65.4
Revenue
£m
140.0
34.9
81.7
0.3
2.8
(1.3)
258.4
Net fee
income
£m
30.7
13.8
15.9
0.1
0.2
(1.2)
59.5
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 68
Notes to the consolidated financial statements continued
The following segmental analysis by region and service type has been provided in line with the requirements of IFRS 15:
Revenue
UK & Europe
APAC
Americas
Offshore Services
Intragroup eliminations
Net fee income
UK & Europe
APAC
Americas
Offshore Services
Intragroup eliminations
2022
Temporary
and
contract
£m
115.8
39.6
59.8
0.4
(0.5)
215.1
2022
Temporary
and
contract
£m
19.3
5.5
5.9
0.4
–
31.1
Offshore
services
£m
–
–
–
24.9
(1.0)
23.9
Offshore
services
£m
–
–
–
13.1
(1.0)
12.1
Permanent
£m
9.1
10.3
2.9
–
–
22.3
Permanent
£m
9.1
10.3
2.8
–
–
22.2
Total
£m
124.9
49.9
62.7
25.3
(1.5)
261.3
Total
£m
28.4
15.8
8.7
13.5
(1.0)
65.4
Permanent
£m
8.3
9.0
3.5
–
(0.1)
20.7
Permanent
£m
8.3
8.6
3.4
–
(0.1)
20.2
2021
Temporary
and
contract
£m
124.8
31.3
67.5
0.4
(0.1)
223.9
Offshore
services
£m
–
–
–
14.9
(1.1)
13.8
2021
Temporary
and
contract
£m
Offshore
services
£m
20.7
5.5
6.5
0.1
–
32.8
–
–
–
7.6
(1.1)
6.5
Total
£m
133.1
40.3
71.0
15.3
(1.3)
258.4
Total
£m
29.0
14.1
9.9
7.7
(1.2)
59.5
5 Shares acquired and sold in existing subsidiaries
2022
In 2022, a number of small shareholdings were acquired from management during the year, principally on their exit from the Group,
for consideration totalling £86,000. These shareholdings were accounted for as non-controlling interests and therefore have been
reflected as a movement in non-controlling interests of £14,000 and the remaining £72,000 was recorded in the equity reserve.
A number of small shareholdings were sold to management for a total consideration of £23,000 under commitments made under the
Group’s previous second generation equity plan (see note 26). These shares are not accounted for as non-controlling interests and the
£23,000 was recorded in the equity reserve.
2021
A shareholding was acquired from management during the year for £18,000. This shareholding was not accounted for as a
non-controlling interest and the £18,000 cost has been recognised in the income statement as fair value charge on acquisition of
non-controlling shares in line with the accounting policy set out in note 2.
On 1 January 2021, the Group disposed of its 100% investment in BWP Holdco Limited for a consideration equal to its net book value of
£33,000. No gain or loss has been recorded during the year. The Company did not contribute to the Group’s profit during the year or to
its net operating cash flows.
Empresaria Annual report and accounts 2022 6 Operating profit
Operating profit is stated after charging/(crediting):
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets identified in business combinations
Amortisation of software
Impairment of goodwill and other intangible assets
Net foreign exchange (gain)/loss
Share-based payments
Impairment of trade receivables
Auditor’s remuneration
The analysis of auditor’s remuneration is as follows:
Fees payable to the Company's auditor and its associates for:
The audit of the parent company and the consolidated financial statements
The audit of subsidiary financial statements pursuant to legislation
Other audit services
Fees payable to other auditors
The audit of subsidiary financial statements pursuant to legislation
Other audit services
69
2021
£m
0.8
5.3
1.4
0.2
1.2
0.2
0.3
0.3
0.4
2021
£000
115
235
50
7
–
407
2022
£m
0.9
5.4
1.4
0.2
–
(0.4)
0.3
–
0.4
2022
£000
139
72
53
143
29
436
The company's auditor, CLA Evelyn Partners Limited, was formerly a member of the Nexia network. Following their departure from this
network in 2022, fees payable to members to the Nexia network have been classified as fees payable to other auditors.
7 Directors and employees
Staff costs
Wages and salaries
Social security costs
Pension costs
Share-based payments
Staff costs include amounts included within cost of sales of £8.2m (2021: £6.1m).
Details of Directors’ remuneration are given on pages 45 to 47.
Average monthly number of persons employed – sales and administration
Number of persons employed as at 31 December – sales and administration
2022
£m
39.0
4.4
0.9
0.3
44.6
2022
No.
3,233
3,314
2021
£m
36.7
3.3
0.9
0.3
41.2
2021
No.
2,268
2,725
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 70
Notes to the consolidated financial statements continued
8 Finance income and costs
Finance income
Bank interest receivable
Finance costs
Invoice financing
Bank loans and overdrafts
Interest on lease liabilities
Interest on tax payments
Net finance costs
9 Taxation
(a) The tax expense for the year is as follows:
Current tax
Current year income tax expense
Adjustments in respect of prior years
Total current tax expense
Deferred tax
Deferred tax credit – on origination and reversal of temporary differences
Total income tax expense in the income statement
(b) Factors affecting the income tax expense for the year
2022
£m
0.3
0.3
(0.1)
(1.1)
(0.3)
–
(1.5)
(1.2)
2022
£m
3.9
(0.1)
3.8
(1.0)
2.8
The table below explains the differences between the expected income tax expense and the Group’s actual income tax expense
for the year. The expected income tax expense is assessed by applying the local tax rates to the profits in each business and
aggregating these amounts.
Profit before taxation
Tax at the relevant local rates
Effects of:
Expenses not deductible for tax purposes
Expenses with enhanced deduction for tax purposes
Impairment of goodwill not deductible for tax purposes
Impact of change in tax rate on deferred tax liabilities
Impact of change in tax rate on deferred tax assets
Current year losses not recognised for tax purposes
Prior year losses recognised for tax purposes
Overseas withholding tax suffered
Deferred tax on unremitted overseas earnings
Adjustments in respect of prior years
Tax expense
The movements in deferred tax are explained in note 20.
No tax was recognised in other comprehensive income (2021: £nil).
2022
£m
7.6
2.1
0.3
(0.2)
–
–
–
0.4
–
0.2
0.1
(0.1)
2.8
2021
£m
0.3
0.3
(0.1)
(0.7)
(0.3)
0.1
(1.0)
(0.7)
2021
£m
3.7
(0.1)
3.6
(0.5)
3.1
2021
£m
6.0
1.8
0.4
–
0.3
0.2
(0.1)
0.4
(0.2)
0.2
0.2
(0.1)
3.1
Empresaria Annual report and accounts 2022
71
2021
£m
6.0
0.9
0.3
1.4
8.6
2022
£m
7.6
–
–
1.4
9.0
10 Reconciliation of adjusted profit before tax to profit before tax
Profit before tax
Impairment of goodwill
Impairment of other intangible assets
Amortisation of intangible assets identified in business combinations
Adjusted profit before tax
11 Earnings per share
Basic earnings per share is assessed by dividing the earnings attributable to the owners of Empresaria Group plc by the weighted
average number of shares in issue during the year. Diluted earnings per share is calculated as for basic earnings per share but adjusting
the weighted average number of shares for the diluting impact of shares that could potentially be issued. For 2022 and 2021 these
are all related to share options and further details can be found in note 27 and the Directors’ remuneration report on pages 45 to 47.
Reconciliations between basic and diluted measures are given below.
The Group also presents adjusted earnings per share which it considers to be a key measure of the Group’s performance.
A reconciliation of earnings to adjusted earnings is provided below.
Earnings attributable to owners of Empresaria Group plc
Adjustments:
Impairment of goodwill
Impairment of other intangible assets
Amortisation of intangible assets identified in business combinations
Tax on the above
Non-controlling interests in respect of the above
Adjusted earnings
Number of shares
Weighted average number of shares – basic
Dilution effect of share options
Weighted average number of shares – diluted
Earnings per share
Basic
Dilution effect of share options
Diluted
Adjusted earnings per share
Basic
Dilution effect of share options
Diluted
2022
£m
3.4
–
–
1.4
(0.3)
–
4.5
2021
£m
2.3
0.9
0.3
1.4
(0.3)
(0.2)
4.4
Millions
Millions
49.4
1.5
50.9
49.8
1.6
51.4
Pence
Pence
6.9
(0.2)
6.7
4.6
(0.1)
4.5
Pence
Pence
9.1
(0.3)
8.8
8.8
(0.2)
8.6
The weighted average number of shares (basic) has been calculated as the weighted average number of shares in issue during the
year plus the number of share options already vested less the weighted average number of shares held by the Empresaria Employee
Benefit Trust. The Trustees have waived their rights to dividends on the shares held by the Empresaria Employee Benefit Trust.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
72
Notes to the consolidated financial statements continued
12 Property, plant and equipment
2022
Cost
At 1 January
Additions
Disposals
Foreign exchange movements
At 31 December
Accumulated depreciation
At 1 January
Charge for the year
Disposals
Foreign exchange movements
At 31 December
Net book value
At 31 December 2021
At 31 December 2022
2021
Cost
At 1 January
Additions
Disposals
Foreign exchange movements
At 31 December
Accumulated depreciation
At 1 January
Charge for the year
Disposals
Foreign exchange movements
At 31 December
Net book value
At 31 December 2020
At 31 December 2021
Leasehold
improvements
£m
Fixtures,
fittings and
equipment
£m
Motor
vehicles
£m
1.4
0.3
–
–
1.7
1.0
0.2
–
–
1.2
0.4
0.5
6.5
1.7
(0.6)
0.2
7.8
5.3
0.7
(0.6)
0.1
5.5
1.2
2.3
0.2
–
–
–
0.2
0.2
–
–
–
0.2
–
–
Leasehold
improvements
£m
Fixtures,
fittings and
equipment
£m
Motor
vehicles
£m
1.6
–
(0.1)
(0.1)
1.4
0.8
0.3
(0.1)
–
1.0
0.8
0.4
5.5
1.1
–
(0.1)
6.5
4.8
0.5
–
–
5.3
0.7
1.2
0.2
–
–
–
0.2
0.1
–
–
0.1
0.2
0.1
–
Total
£m
8.1
2.0
(0.6)
0.2
9.7
6.5
0.9
(0.6)
0.1
6.9
1.6
2.8
Total
£m
7.3
1.1
(0.1)
(0.2)
8.1
5.7
0.8
(0.1)
0.1
6.5
1.6
1.6
Empresaria Annual report and accounts 2022 13 Goodwill
At 1 January
Impairment charge
Foreign exchange movements
At 31 December
73
2022
£m
30.5
–
1.4
31.9
2021
£m
32.5
(0.9)
(1.1)
30.5
Goodwill is reviewed and tested for impairment on an annual basis or more frequently if there is an indication that goodwill might be
impaired. Goodwill has been tested for impairment by comparing the carrying amount of the group of cash-generating units (‘CGUs’)
the goodwill has been allocated to, with the recoverable amount of those CGUs. The recoverable amount of each group of CGUs is
considered to be its value in use. The key assumptions in assessing value in use are as follows:
Operating profit and pre-tax cash flows
The operating profit and pre-tax cash flows are based on the 2023 budgets approved by the Group’s Board. These budgets are
extrapolated using short-term growth rate forecasts over four years and long-term growth rates and margins that are consistent with
the business plans approved by the Group’s Board. These cash flows are discounted to present value to assess the value in use.
Discount rates
The pre-tax, country-specific rates used to discount the forecast cash flows range from 13.0% to 18.9% (2021: 10.4% to 18.4%) reflecting
current local market assessments of the time value of money and the risks specific to the relevant business. These discount rates
reflect the estimated industry weighted average cost of capital in each market and are based on the Group’s weighted average cost of
capital adjusted for local factors.
Pre-tax discount rates used by region are as follows:
UK & Europe:
13.0% to 18.0% (2021: 10.4% to 12.7%)
APAC:
Americas:
13.8% to 18.9% (2021: 11.6% to 17.6%)
13.3% to 16.0% (2021: 12.9% to 18.4%)
Offshore Services:
15.8% (2021: 17.3%)
Growth rates
The growth rates used to extrapolate beyond the most recent budgets and forecasts and to determine terminal values are based upon
IMF GDP growth forecasts for the specific market. Longer-term growth rates ranged from 0.4% to 6.2%. GDP growth is a key driver of
our business and is therefore an appropriate assumption in developing long-term forecasts.
Long-term growth rates used by region are as follows:
UK & Europe:
1.3% to 1.5% (2021: 1.1% to 1.5%)
APAC:
Americas:
0.4% to 5.1% (2021: 0.5% to 5.2%)
1.9% to 3.0% (2021: 1.7% to 3.2%)
Offshore Services:
6.2% (2021: 6.0%)
In 2022 no impairment of goodwill has been recognised.
In 2021, an impairment charge of £0.6m was recognised in respect of a business in the APAC region. This business supplies the
aviation industry which had not recovered from the severe impact of COVID-19 as quickly as was previously anticipated. As a result, an
impairment review was carried out at 30 June 2021 and an impairment charge booked. Before the impairment charge was recognised,
the carrying value of the goodwill was £2.0m and the recoverable amount, based on value in use, was assessed as £1.4m. A further
impairment review was carried out on this operation at 31 December 2021 and no additional impairment was identified. An impairment
charge of £0.3m was also recognised in respect of another business in the APAC region.
As part of the impairment review, reasonably possible changes in the growth rate and discount rate assumptions have been
considered to assess the impact on the recoverable amount of each business. Were the long-term growth rate to reduce to nil an
impairment charge of £0.2m (2021: £nil) would be recorded in respect £0.1m for one business in our APAC region and £0.1m for one
business in our Americas region. If the discount rate were to increase by 2% an impairment charge of £0.2m (2021: £nil) would be
recorded in respect £0.1m for one business in our APAC region and £0.1m for one business in our Americas region.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
74
Notes to the consolidated financial statements continued
The carrying amount of goodwill by region is as follows:
UK & Europe
APAC
Americas
Offshore Services
2022
£m
24.0
2.8
4.6
0.5
31.9
2021
£m
23.2
2.8
4.0
0.5
30.5
Included within the above are significant goodwill balances as set out in the table below along with the relevant discount rate and
growth rate assumptions:
Headway
ConSol Partners
14 Other intangible assets
2022
Cost
At 1 January
Additions
Foreign exchange movements
At 31 December
Accumulated amortisation
At 1 January
Charge for the year
Foreign exchange movements
At 31 December
Net book value
At 31 December 2021
At 31 December 2022
Goodwill
£m
13.0
4.2
2022
Discount
rate %
13.1
15.0
Growth
rate %
1.3
1.5
Goodwill
£m
12.3
4.2
2021
Discount
rate %
10.4
11.2
Intangible assets identified in business combinations
Customer
relationships
£m
Trade name &
marks
£m
Sub total
£m
Software
£m
13.9
–
1.0
14.9
10.2
0.9
0.8
11.9
3.7
3.0
8.8
–
0.5
9.3
3.9
0.5
0.3
4.7
4.9
4.6
22.7
–
1.5
24.2
14.1
1.4
1.1
16.6
8.6
7.6
1.8
0.1
0.1
2.0
1.1
0.2
0.1
1.4
0.7
0.6
Growth
rate %
1.1
1.5
Total
£m
24.5
0.1
1.6
26.2
15.2
1.6
1.2
18.0
9.3
8.2
As required under IFRS, the Group reviewed its assets for indications of impairment as at 31 December 2022. Following this review, no
impairment charges have been reflected.
Empresaria Annual report and accounts 2022 2021
Cost
At 1 January
Additions
Foreign exchange movements
At 31 December
Accumulated amortisation
At 1 January
Charge for the year
Impairment
Foreign exchange movements
At 31 December
Net book value
At 31 December 2020
At 31 December 2021
Intangible assets identified in business combinations
Customer
relationships
£m
Trade name &
marks
£m
Sub total
£m
Software
£m
14.4
–
(0.5)
13.9
9.7
0.9
0.1
(0.5)
10.2
4.7
3.7
9.0
–
(0.2)
8.8
3.5
0.5
0.2
(0.3)
3.9
5.5
4.9
23.4
–
(0.7)
22.7
13.2
1.4
0.3
(0.8)
14.1
10.2
8.6
1.2
0.7
(0.1)
1.8
0.9
0.2
–
–
1.1
0.3
0.7
75
Total
£m
24.6
0.7
(0.8)
24.5
14.1
1.6
0.3
(0.8)
15.2
10.5
9.3
As required under IFRS, the Group reviewed its assets for indications of impairment as at 31 December 2021.
As a result of those impairment reviews, an impairment charge of £0.3m was booked in respect of an operation in our Professional
sector in the APAC region, which supplies the aviation industry. This industry was hit hard by COVID-19 and the recovery was slower
than we previously anticipated.
15 Subsidiaries
A list of the Group’s subsidiaries, including the name, country of incorporation and proportion of ownership interest, is given in note 6 to
the Company’s financial statements.
The following consolidated UK subsidiary companies are exempt from an annual audit under section 479A of the Companies Act 2006
and the Company has provided a guarantee under section 479C of the Companies Act 2006. This guarantees all outstanding liabilities
to which the subsidiary is subject to as at 31 December 2022 until they are settled in full. The guarantee is enforceable against the
Company by any person to whom the subsidiary is liable in respect of those liabilities.
Name of subsidiary
Ball & Hoolahan Limited
ConSol Partners (Holdings) Limited
ConSol Partners Europe Limited
CP101 Limited
Empresaria 2021 Limited (formerly Beresford Wilson & Partners Limited)
Empresaria Americas Finco Limited
Empresaria Americas Limited
Empresaria Asia Limited
Empresaria China Holdings Limited
Empresaria GIT Holdings Limited
Empresaria GIT Limited
Empresaria Healthcare Europe Limited
Empresaria Healthcare Holdings Limited
Empresaria Indonesia Holdings Limited
Empresaria Limited (formerly Empresaria Services Limited)
Empresaria Malaysia Holdings Limited
Empresaria Mexico Holdings Limited
Empresaria North America Limited
Company number
02174109
09338986
13498660
13498839
09995863
09917053
08926961
07384224
05150663
05669458
05669176
13697746
13696636
10362003
09946765
08701593
08929375
09799784
Type of subsidiary
Active Trading
Holding Non-Trading
Active Non-Trading
Active Non-Trading
Active Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Active Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 76
Notes to the consolidated financial statements continued
Name of subsidiary
Empresaria NZ Finco Limited
Empresaria NZ Limited
Empresaria Peru Holdings Limited
Empresaria Philippines Holdings Limited
Empresaria T&I Holdings Limited
Empresaria T&I Limited
Empresaria Technology (Holdings) Limited
Empresaria Thailand Holdings Limited
Empresaria Vietnam Holdings Limited
EMR1000 Limited
Interim Management International Limited
Mansion House Recruitment Limited
McCall Limited
Oval (888) Limited
Team Resourcing Limited
The Recruitment Business Limited
The Recruitment Business Holdings Limited
Material non-controlling interests
Company number
Type of subsidiary
10804049
10164295
09949926
08584315
08772122
10432476
10322758
07839625
10485853
04154134
04067140
03276279
04605123
04819545
03693098
03322411
07593863
Holding Non-Trading
Holding Non-Trading
Active Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Holding Non-Trading
Active Non-Trading
Holding Non-Trading
Active Non-Trading
Active Trading
Active Non-Trading
Active Trading
Active Trading
Holding Non-Trading
Summarised consolidated financial information in respect of Interactive Manpower Solutions Private Limited (‘IMS’) is set out below.
Summarised income statement
Revenue
Profit for the year
Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Net assets
Dividends of £0.4m (2021: £0.3m) were paid to non-controlling interests during the year.
16 Trade and other receivables
Current
Gross trade receivables
Less provision for impairment of trade receivables
Trade receivables
Prepayments
Accrued income
Corporation tax receivable
Other receivables
2022
£m
26.1
5.3
2022
£m
15.5
4.4
(8.2)
11.7
2022
£m
34.1
(0.8)
33.3
2.4
7.4
0.9
2.7
46.7
2021
£m
15.6
2.9
2021
£m
11.5
1.5
(4.8)
8.2
2021
£m
40.4
(0.9)
39.5
1.7
5.0
0.9
3.4
50.5
Trade receivables include £20.1m (2021: £21.6m) on which security has been given under bank facilities.
All amounts are due within one year. The carrying value of trade and other receivables is considered to be their fair value.
Further analysis on trade receivables is set out in note 22.
Empresaria Annual report and accounts 2022 17 Trade and other payables
Current
Trade payables
Other tax and social security
Pilot bonds
Client deposits
Temporary recruitment worker wages
Other payables
Accruals
77
2021
£m
2.0
7.1
0.7
0.5
3.3
1.2
20.0
34.8
2022
£m
2.4
5.1
0.6
0.4
3.4
1.6
19.8
33.3
All amounts are payable within one year with the exception of pilot bonds as discussed below. The carrying value of trade and other
payables is considered to be their fair value.
Pilot bonds represent unrestricted funds held by our aviation business at the request of clients that are repayable to the pilot over the
course of a contract, typically between three and five years. If the pilot terminates their contract early, the outstanding bond is payable
to the client. For this reason the bonds are shown as a current liability. As at 31 December 2022, if the bonds were to be repaid in line
with existing contracts, £0.3m (2021: £0.3m) would be repayable in more than one year.
18 Borrowings
Current
Bank overdrafts
Invoice financing
Bank loans
Non-current
Bank loans
Borrowings
2022
£m
17.1
3.5
8.5
29.1
0.5
0.5
29.6
2021
£m
18.2
4.6
0.4
23.2
11.2
11.2
34.4
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 78
Notes to the consolidated financial statements continued
The following key bank facilities are in place at 31 December 2022:
Currency
Maturity
Interest rate
Bank overdrafts
UK1
Germany
USA
GBP2
EUR
USD
On demand with annual
review
1% above applicable
currency base rates
On demand with annual
review
On demand with annual
review
EURIBOR + 3.0%
LIBOR + 2%
New Zealand
NZD
On demand with annual
review
New Zealand Base Lending
Rate + 2%
Invoice financing
UK
Chile
Bank loans
UK – Revolving
Credit Facility
GBP
CLP
On demand with annual
review
UK base rate + 1.82%
On demand with annual
review
Weighted average rate
15.7% (2021: 5.5%)
GBP
2023
SONIA + 2% to 3%
Japan
JPY
2025-2028
Weighted average rate 0.6%
(2021: 0.5%)
Facility limit
Outstanding
2022
£m
2021
£m
2022
£m
2021
£m
10.0
11.5
1.7
0.5
10.0
10.9
1.5
0.5
10.0
10.0
2.9
4.2
15.0
0.7
15.0
0.9
6.3
8.7
–
–
2.0
1.5
8.0
0.7
6.9
8.4
1.5
–
3.0
1.6
10.5
0.9
1
The UK overdraft is a net overdraft arrangement across a number of UK entities. For facility utilisation purposes these amounts are presented net in the table above, but for
accounting purposes cash and overdrawn balances are presented gross in the balance sheet. The utilisation amount in the table is net of £1.9m of cash shown within cash and
cash equivalents in the balance sheet (2021: £1.2m).
2
The UK overdraft can be drawn in a number of different currencies with the overall facility limit expressed in GBP.
The UK revolving credit facility is secured by a first fixed charge over all book and other debts given by the Company and certain of its
UK, German and New Zealand subsidiaries. It is also subject to financial covenants and these are disclosed in the finance review on
page 26. The UK invoice financing facility is also secured by a fixed and floating charge over trade receivables.
The UK revolving credit facility was refinanced in March 2023 for three years with the same facility limit of £15.0m. The interest rate
margin continues to vary based on the Group’s net debt to EBITDA ratio and ranges from 2.0% to 2.75%.
19 Net debt
a) Net debt
Cash and cash equivalents
Borrowings
Net debt
b) Adjusted net debt
Cash and cash equivalents
Less cash held in respect of pilot bonds
Adjusted cash
Borrowings
Adjusted net debt
2022
£m
22.3
(29.6)
(7.3)
2022
£m
22.3
(0.6)
21.7
(29.6)
(7.9)
2021
£m
21.1
(34.4)
(13.3)
2021
£m
21.1
(0.7)
20.4
(34.4)
(14.0)
The Group presents adjusted net debt as its principal debt measure. Adjusted net debt is equal to net debt excluding cash held in
respect of pilot bonds within our aviation business. Where required by the client, pilot bonds are taken at the start of the pilot’s contract
and are repayable to the pilot or the client during the course of the contract or if it ends early. There is no legal restriction over this
cash, but given the requirement to repay it over a three-year period, and that to hold these is a client requirement, cash equal to the
amount of the bonds is excluded in calculating adjusted net debt.
Empresaria Annual report and accounts 2022 c) Movement in adjusted net debt
At 1 January
Net increase in cash and cash equivalents per consolidated cash flow statement
Decrease/(increase) in overdrafts and loans
Decrease in invoice financing
Foreign exchange movements
Adjusted for decrease in cash held in respect of pilot bonds
At 31 December
d) Movement in borrowings
Borrowings at 1 January
Cash flow movements:
Decrease in overdrafts
Proceeds from bank loans
Repayment of bank loans
Decrease in invoice financing
Non-cash movements:
Foreign exchange movements
Borrowings at 31 December
20 Deferred tax
Deferred tax assets
At 1 January
Recognised in the income statement
Foreign exchange movements
At 31 December
Deferred tax liabilities
At 1 January
Recognised in the income statement
Foreign exchange movements
At 31 December
Holiday
pay
£m
Retirement
provision
£m
0.3
–
–
0.3
0.1
0.1
–
0.2
Tax
losses
£m
1.4
0.8
–
2.2
Other
temporary
differences
£m
1.6
–
0.1
1.7
Intangible
assets
£m
Unremitted
overseas
earnings
£m
Other
temporary
differences
£m
(2.0)
0.2
–
(1.8)
(0.5)
(0.1)
–
(0.6)
(0.1)
–
–
(0.1)
79
2021
£m
(13.6)
1.2
(2.0)
–
0.1
0.3
(14.0)
2021
£m
(33.4)
3.3
(5.5)
0.2
–
1.0
(34.4)
Total
2021
£m
2.8
0.6
–
3.4
Total
2021
£m
(2.4)
(0.1)
(0.1)
(2.6)
2022
£m
(14.0)
0.5
4.5
1.2
(0.2)
0.1
(7.9)
2022
£m
(34.4)
1.8
–
2.7
1.2
(0.9)
(29.6)
Total
2022
£m
3.4
0.9
0.1
4.4
Total
2022
£m
(2.6)
0.1
–
(2.5)
At the balance sheet date, the Group has unused tax losses of £16.2m (2021: £12.4m) available for offset against future taxable profits.
A deferred tax asset has been recognised in respect of £8.7m (2021: £6.8m) of such losses. No deferred tax asset has been recognised
in respect of the remaining £7.5m (2021: £5.6m) as it is not considered probable that there will be future taxable profits available against
which these losses could be offset. Of these, £6.3m have no expiry date, £1.0m expires in 2026 and 2027, while £0.2m expires in 2029
and 2030.
No deferred tax liability is recognised on temporary differences of £17.3m (2021: £13.1m) relating to the unremitted earnings of overseas
subsidiaries as the Group is able to control the timing of the reversal of these temporary differences and it is considered probable that
they will not reverse in the foreseeable future. The potential tax impact of these temporary differences is £1.6m (2021: £1.2m) assuming
all unremitted earnings were remitted in full in the year.
A deferred tax liability of £0.6m (2021: £0.5m) has been recognised in respect of the unremitted earnings of overseas subsidiaries
amounting to £8.0m (2021: £6.4m) as it is probable that these earnings will be remitted and the tax cost incurred.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 80
Notes to the consolidated financial statements continued
21 Share capital and shares held by Employee Benefit Trust
Share capital
Issued, allotted and fully paid
Ordinary Shares of 5p each
2022
Number of
shares
2021
£m
Number of
shares
49,853,001
2.5
49,853,001
£m
2.5
The Company has one class of Ordinary Share which carries no rights to fixed income. All Ordinary Shares are entitled to receive
dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally
with regard to the Company’s residual assets.
Shares held by Employee Benefit Trust
Allotted and fully paid
Ordinary Shares of 5p each
2022
Number of
shares
2021
Number of
shares
1,017,528
559,773
The Trustees have waived their rights to dividends on the shares held by the Empresaria Employee Benefit Trust.
22 Financial risk management
The Group is exposed to a variety of financial risks arising from its operations, being principally credit risk, market risk (foreign exchange
risk and interest rate risk) and liquidity risk.
The Group’s treasury function is managed centrally and the policies for managing each of these risks and their impact on the results of
the year are summarised below.
The principal financial assets of the Group are cash and cash equivalents, and trade and other receivables. The principal financial
liabilities are borrowings, and trade and other payables that arise directly from operations.
Fair value
The carrying value of all financial instruments equates to fair value.
Credit risk
Credit risk is the risk of financial loss if a client or counterparty fails to meet an obligation under a contract. Credit risk arises primarily
from trade receivables but also from the Group’s other financial assets including cash deposits.
Classes of financial assets – carrying amounts
Cash and cash equivalents
Trade and other receivables1
2022
£m
22.3
43.4
2021
£m
21.1
47.9
1
Trade and other receivables are held at amortised cost and exclude prepayments and corporation tax receivable amounting to £3.3m (2021: £2.6m) and presents the maximum
exposure to credit risk for trade and other receivables.
The Group’s credit risk on its cash balances is managed by limiting exposure to banks with a credit rating lower than BBB and through
adhering to authorised limits for all counterparties.
The Group manages its exposure to trade receivables through its credit policy. New clients are assessed through a review process
including obtaining credit ratings and reviewing available financial and other information. Ongoing risk exposure is mitigated through
the credit control process, setting credit limits and regular review of clients and trade receivable balances.
The amounts presented in the balance sheet are net of allowances for impairment. An allowance for impairment is made based on the
expected credit loss. The Group has no significant concentration of risk, with exposure spread over a large number of third parties and
clients. A provision of £0.8m (2021: £0.9m) has been recorded.
Empresaria Annual report and accounts 2022 81
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision
for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar ageing
and credit risk assessed by giving regard to factors such as market and sector. The Group also considers forward-looking factors,
including known credit issues and changes in market risks, and reflects these as necessary.
The expected loss rates are based on the Group’s historical credit losses experienced over the five-year period prior to the balance
sheet date and adjusted as appropriate for current and forward-looking information on macroeconomic factors affecting the Group’s
clients in the countries where the Group operates.
At 31 December 2022 the lifetime expected loss provision for trade receivables was as follows:
Average expected loss rate (%)
Gross carrying amount (£m)
Loss provision (£m)
Current
1.0%
28.8
0.3
Overdue
by up to
30 days
4.1%
2.1
0.1
Overdue
by up to
60 days
6.1%
1.3
0.1
Overdue
by up to
90 days
8.2%
1.0
0.1
Overdue
by more
than
90 days
10.2%
0.9
0.2
Total
34.1
0.8
Included within the loss provision at 31 December 2022 was a specific loss provision of £0.1m in respect of certain debtor balances
with specific credit risk profiles.
At 31 December 2021 the lifetime expected loss provision for trade receivables was as follows:
Average expected loss rate (%)
Gross carrying amount (£m)
Loss provision (£m)
Current
1.0%
31.4
0.3
Overdue
by up to
30 days
3.9%
5.2
0.2
Overdue
by up to
60 days
5.8%
1.4
0.1
Overdue
by up to
90 days
7.8%
0.7
0.1
Overdue
by more
than
90 days
9.7%
1.7
0.2
Total
40.4
0.9
Included within the loss provision on current debts due at 31 December 2021 was a specific loss provision of £0.1m in respect of certain
debtor balances with specific credit risk profiles.
The movement in the provision for impairment of trade receivables during the year was as follows:
Balance at 1 January
Impairment loss recognised
Impairment loss utilised
Balance at 31 December
Market risk
(a) Foreign exchange risk
2022
£m
0.9
–
(0.1)
0.8
2021
£m
0.9
0.3
(0.3)
0.9
The majority of the Group’s transactions are carried out in the local currency of the respective country the business is operating in.
However, the Group does undertake transactions denominated in foreign currencies and consequently exposures to exchange rate
fluctuation arise. In many cases this exposure is mitigated by incurring costs in the same currency.
To mitigate the Group’s exposure to foreign currency risk, non-local currency cash flows are monitored and, if applicable, forward
exchange contracts are entered into in accordance with the Group’s risk management policies. Where the amounts to be paid and
received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken.
As at 31 December 2022 there were a small number of forward currency contracts in place. The amount covered by these at
31 December 2022 was £1.0m (2021: 0.6m). These are recorded in the balance sheet at fair value, which at 31 December 2022
was £nil (2021: £nil).
During the year the Group has recognised a net foreign exchange gain of £0.4m (2021: loss of £0.2m) in the consolidated income
statement.
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 82
Notes to the consolidated financial statements continued
The carrying amounts of the Group’s significant monetary assets and liabilities held in currencies other than a business’s functional
currency at 31 December are set out in the table below along with sensitivity analysis showing the approximate impact of a 10%
weakening of the foreign currency against the relevant functional currency as at 31 December. The analysis assumes that all other
variables remain constant.
2022
US Dollars
Euro
2021
US Dollars
Euro
Foreign currency
monetary items
Sensitivity analysis impact of non-functional
currency foreign exchange exposure
Assets
£m
6.8
2.2
Liabilities
£m
Sensitivity
2.8
1.4
US Dollars (10%)
Euro (10%)
Profit
and loss
£m
(0.3)
(0.1)
Foreign currency
monetary items
Sensitivity analysis impact of non-functional
currency foreign exchange exposure
Assets
£m
5.5
2.7
Liabilities
£m
Sensitivity
(4.4) US Dollars (10%)
(1.6)
Euro (10%)
Profit
and loss
£m
(0.1)
(0.1)
Equity
£m
(0.3)
(0.1)
Equity
£m
(0.1)
(0.1)
A 10% strengthening of the above currencies against relevant functional currency at 31 December would have had the equal but
opposite effect to the amounts shown above, on the basis that all other variables remain constant.
In management’s opinion, the sensitivity analysis presented does not completely represent the inherent foreign exchange risk as the
year-end exposure does not reflect the exposure during the year.
The Group also has currency exposure on the translation of overseas subsidiaries’ results into Pounds Sterling. The Group does not
actively hedge this exposure although there is an element of natural hedge by having operations in different countries. The amount of
currency retranslation gain recognised in equity was £2.6m (2021: loss of £1.7m).
(b) Interest rate risk
Interest rate risk comprises both cash flow and fair value risks. Fair value risk is the risk that the fair value of financial instruments will
fluctuate as a result of changes in interest rates. The Group is not exposed to fair value risks as it has no financial instruments that are
revalued to fair value at the balance sheet date. Cash flow risk arises on the future cash flows of a financial instrument. The Group
is exposed to cash flow risk on its variable rate borrowings. The Group manages its interest rate risk through a combination of
cash pooling, shareholder funding and borrowing, and management monitors movements in interest rates to determine the most
advantageous debt profile for the Group. The Group’s policy is for the majority of its debt to be at variable rates as this is expected to
better match interest costs with the economic cycle as staffing is typically a cyclical business.
At 31 December 2022, the Group is exposed to changes in market interest rates through its borrowings, which are subject to variable
interest rates. For further information see note 18.
Effective interest rate on borrowings in the year
2022
5.6%
2021
2.6%
An increase of 100 basis points in interest rates would have decreased equity and the income statement by the amounts shown below.
The analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Net result for the year
Equity
Liquidity risk
2022
£m
(0.3)
(0.3)
2021
£m
(0.3)
(0.3)
Liquidity risk is managed to ensure that the Group is able to meet its payment obligations as they fall due. The Group’s funding strategy
is to ensure a mix of financing methods offering flexibility and cost effectiveness to match the requirements of the Group. The Group
monitors its liquidity risk on an ongoing basis with regular cash flow forecasts. In order to ensure continuity of funding, the Group seeks
to arrange funding ahead of business requirements and maintain sufficient undrawn committed borrowing facilities. Details of the
Group’s borrowings are provided in note 18.
Empresaria Annual report and accounts 2022 83
As at 31 December 2022, the Group’s financial liabilities have contractual maturities as follows:
Borrowings
Trade and other payables1
Forward currency contracts payments
Forward currency contracts receipts
Lease liabilities
Total
Current
within 6 months
6 to 12 months
Non-current
1 to 5 years
2022
£m
29.0
28.2
1.0
(1.0)
2.6
59.8
2021
£m
23.0
27.7
0.6
(0.6)
2.6
53.3
2022
£m
0.1
–
–
–
2.9
3.0
2021
£m
0.2
–
–
–
2.4
2.6
2022
£m
0.5
–
–
–
2.9
3.4
2021
£m
11.2
–
–
–
3.4
14.6
Total
2022
£m
29.6
28.2
1.0
(1.0)
8.4
66.2
2021
£m
34.4
27.7
0.6
(0.6)
8.4
70.5
1
Trade and other payables exclude other tax and social security of £5.1m (2021: £7.1m). Pilot bonds have been included as due within six months in line with the disclosure in
note 17.
Lease liabilities in the table reflect the gross cash flows, which differ from the carrying value at the balance sheet date. All bank loans
are on floating interest rates.
At the year end the Group had £17.9m (2021: £12.9m) of undrawn bank facilities (excluding invoice financing).
Capital structure
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the
return to stakeholders through the optimisation of the balance between debt and equity. The capital structure of the Group consists
of net debt, which includes borrowings and cash and cash equivalents (see note 19) and equity attributable to equity holders of the
Company, comprising issued capital, reserves and retained earnings as disclosed in note 21 and in the consolidated statement of
changes in equity.
The Board reviews the capital structure of the Group on an ongoing basis, considering the cost of capital and the risks associated with
each class of capital. The Board closely monitors the level of borrowings, its debt to debtors ratio and compliance with any covenants
on its borrowings. Further details on covenants are given in the finance review on page 26.
Debt to debtors ratio
Adjusted net debt (see note 19)
Trade receivables
Debt to debtors ratio
23 Leases
2022
£m
7.9
33.3
24%
2021
£m
14.0
39.5
35%
The Group’s leases are predominantly property leases. These include leases for the offices from which the businesses across the
Group operate and these have terms of typically one to five years. Additionally, in Germany, accommodation is provided to temporary
workers with lease lengths typically estimated at between zero and two years.
The movements in the carrying value of right-of-use assets is provided below.
2022
Cost
At 1 January
Additions and modifications
Disposals
Foreign exchange movements
At 31 December 2022
Property
£m
17.0
4.9
(3.3)
0.8
19.4
Other
£m
2.2
0.5
(0.8)
0.2
2.1
Total
£m
19.2
5.4
(4.1)
1.0
21.5
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 84
Notes to the consolidated financial statements continued
2022
Accumulated depreciation
At 1 January
Depreciation
Disposals
Foreign exchange movements
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
2021
Cost
At 1 January
Additions and modifications
Disposals
Foreign exchange movements
At 31 December 2021
Accumulated depreciation
At 1 January
Depreciation
Disposals
Foreign exchange movements
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
The maturity analysis of lease liabilities is provided in note 22.
Additional disclosures required under IFRS 16 Leases are provided in the table below:
Depreciation of right-of-use assets
Interest on lease obligations
Cash outflow for leases
Additions to right-of-use assets
24 Dividends
Amount recognised as distribution to equity holders in the year:
Final dividend for the year ended 31 December 2021 of 1.2p (2020: 1.0p) per share
Proposed final dividend for the year ended 31 December 2022 of 1.4p (2021: 1.2p) per share
Property
£m
10.5
4.7
(3.0)
0.6
12.8
6.5
6.6
Property
£m
17.0
4.3
(3.5)
(0.8)
17.0
9.1
4.6
(2.8)
(0.4)
10.5
7.9
6.5
Other
£m
1.2
0.7
(0.8)
0.1
1.2
1.0
0.9
Other
£m
2.2
0.5
(0.5)
–
2.2
1.1
0.7
(0.5)
(0.1)
1.2
1.1
1.0
2022
£m
5.4
0.3
5.6
5.4
2022
£m
0.6
0.7
Total
£m
11.7
5.4
(3.8)
0.7
14.0
7.5
7.5
Total
£m
19.2
4.8
(4.0)
(0.8)
19.2
10.2
5.3
(3.3)
(0.5)
11.7
9.0
7.5
2021
£m
5.3
0.3
5.6
4.8
2021
£m
0.5
0.6
The proposed final dividend for the year ended 31 December 2022 is subject to approval by shareholders at the Annual General
Meeting and has not been included as a liability in these financial statements.
Empresaria Annual report and accounts 2022 85
25 Profit of the Company
As permitted by Section 408 of the Companies Act 2006, the income statement of the Company is not presented as part of these
financial statements. The Company’s loss for the financial year was £2.5m (2021: profit of £2.9m).
26 Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note. These transactions include franchise fees, interest charges and revenue, which amounted to £2.9m
(2021: £3.4m), £1.1m (2021: £1.3m) and £1.5m (2021: £1.3m), respectively.
Remuneration of key management personnel
The Group delegates operational decision-making and day-to-day running of the operating companies to the subsidiary
management, however, key strategic decisions must be approved by the Company. Therefore, overall authority and responsibility for
planning, directing and controlling the entities of the Group sit with the Company’s Board of Directors, who are considered the key
management personnel.
The remuneration of key management personnel is set out below in aggregate for each of the categories specified in IAS 24. Further
information about the remuneration of individual Directors is provided in the Directors’ remuneration report on pages 45 to 47.
Short-term employee benefits
Post-employment benefits (contributions to defined contribution pension schemes)
Share-based payments
Directors’ transactions
2022
£m
0.9
–
0.3
1.2
2021
£m
0.8
–
0.3
1.1
Dividends totalling £169,255 (2021: £140,846) were paid in the year in respect of Ordinary Shares held by the Company’s Directors.
Transactions with subsidiary directors
The Group was originally built on a management equity philosophy, with key management holding a meaningful stake in the business
they were responsible for. Although the Group has moved away from offering this to new management, existing shareholdings remain
in place and continue to be reflected in these accounts. The model typically operated as follows:
Acquisition of shares
At least 51% of shares are held by Empresaria with the balance being held by management, either having been retained when
Empresaria initially invested, or subsequently acquired by them at fair value. Shares retained by management upon initial investment
typically have no material changes to their rights and are termed first generation shares. Shares subsequently sold to management,
either because first generation shares have been acquired by Empresaria or issued to incentivise the next tier of management,
are termed second generation shares. Second generation shares are acquired by management at a fair value which is made more
affordable by setting a profit threshold level such that these shares only create value once that threshold is exceeded. Second
generation shares typically have restrictions such as limited or no entitlement to dividends.
Holding period
Shares can be offered for sale after a specified holding period, typically four or five years. Shares cannot all be sold in one year,
requiring a minimum of two or three years for full disposal. While management can choose to offer their shares for sale, the decision
to purchase these is solely at the discretion of Empresaria and there are no put or call options in place. Empresaria’s decision to buy
shares is based on each specific situation, with consideration given to management succession plans, recent trading performance and
the potential of the business in the next few years.
Valuation
In most cases the valuation basis is agreed up front and documented in the shareholders’ agreements. The valuation is typically based
on the average profit after tax for the previous three years using Empresaria’s trading multiple (share price divided by adjusted EPS)
less 0.5 with a cap of 10, to ensure that it is earnings accretive to Empresaria’s shareholders.
In 2022 the Group has had the following transactions in subsidiary shares with directors of subsidiaries:
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 86
Notes to the consolidated financial statements continued
Purchased by the Group
Company
headwaypersonal GmbH
Interactive Manpower Solutions Private Limited
McCall Limited
McCall Limited
Rishworth Holdco Limited
Sold by the Group
Company
Empresaria Philippines Holdings Limited
Empresaria Vietnam Holdings Limited
Empresaria Vietnam Holdings Limited
27 Share-based payments
% of shares
10.0%
0.1%
8.0%
8.0%
7.0%
% of shares
20.0%
15.0%
5.0%
Aggregate
consideration
£000
–
58
9
9
Seller
M Delwel
Polad Traders Pvt Ltd
J O’Neill
N Bancroft
10
Zajatwa International Ltd
Aggregate
consideration
£000
23
–
–
Purchaser
M Viladot
L Laurel
J Tolmie
The Group operates a Long Term Incentive Plan (‘LTIP’) for Executive Directors and senior executives. The scheme is equity settled
with the granting of nil cost options and is subject to performance conditions. Further details of the LTIP are provided in the Directors’
remuneration report. The expense is recognised in the income statement based on the fair value of the equity instrument awarded
as determined at the grant date. The expense is recognised on a straight-line basis over the vesting period based on estimates of the
number of shares that are expected to vest.
In 2022 a charge to the income statement of £0.3m (2021: charge of £0.3m) was recognised. Movements in the number of options
outstanding are as follows:
Outstanding as at 1 January
Lapsed during the year
Granted during the year
Exercised during the year
Outstanding as at 31 December
Vested and exercisable as at 31 December
2022
Number
of share
options
thousands
4,124
(928)
1,157
–
4,353
315
2021
Number
of share
options
thousands
5,620
(917)
1,089
(1,668)
4,124
315
The options outstanding as at 31 December 2022 had a weighted average remaining contractual life of 5.3 years (2021: 5.0 years).
The fair value of options granted during the year is estimated using a Black-Scholes model for the element with an earnings per share
performance condition and a Monte Carlo model for the element with a total shareholder return performance condition. Details of the
performance conditions can be found in the Directors’ remuneration report on pages 45 to 47.
The inputs into these models for the principal awards made in the year were as follows:
Share price at date of grant
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
Vesting dates
Fair value assessed per share
Award in
2022
77.5p
nil
38.8%
Award in
2021
81.0p
nil
39.5%
3.0 years
2.6 years
1.5%
1.45%
0.21%
1.77%
March 2025 March 2024
62.7p
69.0p
The expected volatility is determined from the daily log normal distributions of the Company share price over a period equal to the
expected holding period calculated back from the date of grant. The risk-free rate was the zero coupon bond yield derived from
UK government bonds at the date of grant, with a life equal to the expected holding period.
Empresaria Annual report and accounts 2022 Parent Company balance sheet
Non-current assets
Tangible assets
Investments in subsidiaries
Current assets and liabilities
Debtors
Creditors: amounts falling due within one year
Net current liabilities
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Net assets
Capital and reserves
Called-up share capital
Share premium account
Merger reserve
Other reserves
Equity reserve
Profit and loss account
Shareholders’ funds
87
2021
£m
–
49.3
49.3
12.3
(15.5)
(3.2)
46.1
(10.5)
35.6
2.5
22.4
0.9
0.7
(0.2)
9.3
35.6
Note
5
6
7
8
9
10
2022
£m
–
47.1
47.1
9.3
(23.9)
(14.6)
32.5
–
32.5
2.5
22.4
0.9
1.0
(0.2)
5.9
32.5
The loss for the financial year ended 31 December 2022 was £2.5m (2021: profit of £2.9m).
These financial statements of Empresaria Group plc (Company registration number 03743194) were approved by the Board of Directors
and authorised for issue on 27 March 2023.
Signed on behalf of the Board of Directors
Rhona Driggs
Chief Executive Officer
Tim Anderson
Chief Financial Officer
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
88
Parent Company statement of changes in equity
At 1 January 2021
Profit for the financial year and total comprehensive
income
Dividends paid on equity shares
Share-based payments
Purchases of own shares by Employee Benefit Trust
Exercise of share options
At 31 December 2021
Loss for the financial year and total comprehensive
income
Dividends paid on equity shares
Share-based payments
Purchases of own shares by Employee Benefit Trust
Called-up
share
capital
£m
2.4
Share
premium
account
£m
22.4
Merger
reserve
£m
0.9
Other
reserves
£m
0.7
Equity
reserve
£m
(0.2)
–
–
–
–
0.1
2.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22.4
0.9
–
–
–
–
–
–
–
–
–
–
0.3
–
(0.3)
0.7
–
–
0.3
–
1.0
–
–
–
–
–
(0.2)
–
–
–
–
(0.2)
Profit
and loss
account
£m
Total
shareholders’
funds
£m
6.9
2.9
(0.5)
–
(0.3)
0.3
9.3
(2.5)
(0.6)
–
(0.3)
5.9
33.1
2.9
(0.5)
0.3
(0.3)
0.1
35.6
(2.5)
(0.6)
0.3
(0.3)
32.5
At 31 December 2022
2.5
22.4
0.9
Equity comprises the following:
• Share capital represents the nominal value of equity shares.
• Share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of
expenses of the share issue.
• Merger reserve relates to premiums arising on shares issued subject to the provisions of section 612 Merger relief of the Companies
Act 2006.
• Equity reserve represents amounts recognised in relation to historic expired options over a subsidiary company.
• Other reserves primarily represents movements in relation to share-based payments.
• Retained earnings represents accumulated profits less distributions and income/expense recognised in equity from incorporation.
Empresaria Annual report and accounts 2022 89
Notes to the Parent Company financial statements
1 Basis of preparation, general information and summary of significant accounting policies
(a) Basis of preparation and general information
The financial statements are for the year ended 31 December 2022. The financial statements have been prepared under the historical
cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (‘FRS 102’)
issued by the Financial Reporting Council.
These financial statements are presented in Pounds Sterling (£) as the functional and presentational currency.
The accounting policies have been applied consistently throughout the period for the purposes of preparation of these financial
statements.
The Company has taken advantage of a disclosure exemption and has elected not to present a cash flow statement.
(b) Summary of significant accounting policies
Going concern
These accounts are prepared on the going concern basis. Details of the assessment of going concern are given in note 1 to the Group
accounts.
Foreign currencies
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.
Tangible fixed assets
Tangible fixed assets are stated at cost, net of accumulated depreciation and any provision for impairment. Depreciation is calculated
using the straight-line method to write off the cost of the assets over their useful lives as follows:
Fixtures, fittings and equipment: between one and five years.
Investments in subsidiaries
Investments are stated at cost less provision for any impairment in value.
Leases
Leases that result in the Company receiving substantially all of the risks and rewards of ownership of an asset are treated as finance
leases. An asset held under a finance lease is recorded in the balance sheet as a tangible fixed asset and depreciated over the shorter
of its estimated useful life and the lease term. Future instalments net of interest charges are included within liabilities. Minimum lease
payments are apportioned between the interest charge element, which is allocated to each period to produce a constant periodic
rate of interest on the remaining liability and charged to the profit and loss account, and the principal element which reduces the
outstanding liability.
Rental costs arising from operating leases are charged on a straight-line basis over the period of the lease. Where an incentive is
received to enter into an operating lease, such incentive is treated as a liability and recognised as a reduction to the rental expense on
a straight-line basis over the period of the lease.
Financial instruments
Short-term debtors and creditors are measured at transaction price, less any impairment. Loans receivable and other financial
liabilities, including amounts due from and to subsidiary undertakings, are measured initially at fair value, net of transaction costs, and
are measured subsequently at amortised cost using the effective interest method, less any impairment.
Pension costs
Payments made to defined contribution retirement benefit schemes are charged to the profit and loss account as they fall due.
2 Profit for the year
As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own income statement for the
year. The Company reported a loss after tax for the financial year ended 31 December 2022 of £2.5m (2021: profit of £2.9m).
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 90
Notes to the Parent Company financial statements continued
3 Directors and employees
Staff costs
Wages and salaries
Social security costs
Other pension costs
Share-based payments
Average monthly number of persons employed (including Directors)
Details of Directors’ remuneration are given on pages 45 to 47.
4 Dividends
2022
£m
1.9
0.2
0.2
0.3
2.6
2021
£m
2.4
0.3
0.2
0.3
3.2
2022
Number
16
2021
Number
19
During 2022 Empresaria Group plc paid a dividend of 1.2p per Ordinary Share (2021: 1.0p). This amounted to £0.6m to its equity
shareholders (2021: £0.5m). See note 24 of the Group accounts for information on proposed dividends for the year ended 31 December
2022.
5 Tangible assets
The following table shows the significant additions and disposals of property, plant and equipment.
Cost
At 1 January 2022
Additions
31 December 2022
Accumulated depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
Fixtures,
fittings and
equipment
£m
0.5
–
0.5
(0.5)
–
(0.5)
–
–
Empresaria Annual report and accounts 2022
6 Investments in subsidiaries
Cost
At 1 January 2022
Additions
At 31 December 2022
Impairment
At 1 January 2022
Impairment charge
At 31 December 2022
Net book value
At 31 December 2021
As 31 December 2022
91
Shares in
subsidiary
undertakings
£m
61.5
0.1
61.6
12.2
2.3
14.5
49.3
47.1
During the year an impairment charge of £0.8m was recognised in relation to the investment in Empresaria NZ Limited and £1.5m was
recognised in relation to the investment in The Recruitment Business Holdings Limited following an assessment of the recoverable
amount at the year end.
Investments comprise the following subsidiary companies:
Company
Registered office: Old Church House, Sandy Lane, Crawley Down,
West Sussex, RH10 4HS UK
Ball and Hoolahan Limited
Become Recruitment Limited
ConSol Partners (Holdings) Limited
ConSol Partners Europe Limited
ConSol Partners Limited
CP101 Limited
Empresaria 2021 Limited (formerly Beresford Wilson and Partners Limited)
Empresaria Americas Finco Limited
Empresaria Americas Limited1
Empresaria Asia Limited1
Empresaria China Holdings Limited
Empresaria GIT Holdings Limited1
Empresaria GIT Limited
Empresaria Healthcare Europe Limited1
Empresaria Healthcare Holdings Limited1
Empresaria Indonesia Holdings Limited
Empresaria Limited (formerly Empresaria Services Limited)1
Empresaria Malaysia Holdings Limited
Empresaria Mexico Holdings Limited
Empresaria North America Limited
Empresaria NZ Finco Limited
Empresaria NZ Limited1
Empresaria Peru Holdings Limited
Empresaria Philippines Holdings Limited
Empresaria T&I Holdings Limited1
Empresaria T&I Limited
Class of
share held
2022
Effective %
holding
2021
Effective %
holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
‘A’ Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
‘A’ Ordinary
‘A’ Ordinary
Ordinary
Ordinary
Ordinary
‘A’ Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
88
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
100
90
100
100
100
100
100
100
100
100
88
100
100
100
100
100
100
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 92
Notes to the Parent Company financial statements continued
Company
Empresaria Technology (Holdings) Limited1
Empresaria Thailand Holdings Limited
Empresaria Vietnam Holdings Limited
EMR1000 Limited1
FastTrack Management Services Limited1
Global Crew UK Limited
Greycoat Placements Limited1
Interim Management International Limited1
LMA Recruitment Limited1
Mansion House Recruitment Limited
McCall Limited1
Oval (888) Limited1
Teamsales Recruitment Limited (formerly 4ward Talent Limited)
Team Resourcing Limited (formerly Teamsales Limited)1
The Recruitment Business Holdings Limited1
The Recruitment Business Limited
Registered office: Stanley & Williamson, Level 1 34 Burton Street,
Kirribilli NSW 2061, Australia
Class of
share held
Ordinary
‘A’ Ordinary
‘A’ Ordinary
Ordinary
Ordinary
Ordinary
‘A’ Ordinary
Ordinary
‘A’ and ‘C’ Ordinary
Ordinary
‘A’ Ordinary
Ordinary
Ordinary
‘A’ Ordinary
Ordinary
Ordinary
2022
Effective %
holding
2021
Effective %
holding
100
80
80
100
100
83
90
100
94
94
98
100
100
97
100
100
100
80
100
100
100
83
90
100
94
94
82
100
100
97
100
100
The Recruitment Business Pty Limited
Ordinary
100
100
Registered office: Durisolstraße 1/WDZ II, 4600 Wels, Austria
headwayaustria GesmbH
Ordinary
100
100
Registered office: Ave. Isidora Goyenechea 3250, 13th Floor, Santiago,
District of Las Condes, Chile
Empresaria Group Chile Limitada1
Ordinary
100
100
Registered office: Alcade Jorge Monckeberg 77, Santiago, Chile
A–Consulting Limitada
Alternattiva Empresa De Servicios Transitorios Limitada
Instituto De Capacitacion Complementaria De La Empresa Limitada
Marketing y Promociones S.A.
Ordinary
Ordinary
Ordinary
Ordinary
56
56
56
56
56
56
56
56
Registered office: Cerro El Plomo #5420, Oficina 703, 7th Floor, Las Condes, Santiago,
7560742
Monroe Chile S.A.
Ordinary
55
55
Registered office: Room 16F02, No. 828-838, Zhangyang Road, Pudong New Area,
Shanghai, China
Monroe Consulting Group China
Ordinary
90
90
Registered office: Hämeenkatu 30 C 32 20700 Turku, Finland
Medikumppani Oy1
Ordinary
100
100
Registered office: Brokenheimer Anlarge 2, 60322, Frankfurt am Main, Germany
ConSol Partners GmbH
Ordinary
100
100
Empresaria Annual report and accounts 2022 93
Class of
share held
2022
Effective %
holding
2021
Effective %
holding
84
84
84
84
84
84
100
90
Company
Registered office: Dekan-Wagner-Str. 4a, 84032 Altdorf, Germany
headwaylogistic administration GmbH
headwayindustrie GmbH
Series A and Series B
Ordinary
Registered office: Herner Strasse 35, D-45657 Recklinghausen, Germany
headwaylogistic GmbH
Ordinary
Registered office: Mendelstrasse 4, 84030 Ergolding, Germany
Empresaria Holding Deutschland GmbH1
headwaypersonal GmbH
Ordinary
Series A and Series B
100
100
Registered office: Rooms 2702-3, 27th Floor Bank of East Asia Harbour View Centre,
56 Gloucester Road, Wan Chai, Hong Kong
The Recruitment Business Limited
Ordinary
100
100
Registered office: Unit 1002, Unicorn Trade Centre, 127-131 Des Voeux Road Central,
Hong Kong
LMA Recruitment (HK) Limited
Ordinary
100
100
Registered office: Ground Floor, 001 Raghupati Niketan, Opp. Ishita Appartments,
Navrangpura, Ahmedabad, Gujarat, 380 009, India
Interactive Manpower Solutions Private Limited1
IMS Workforce Solutions Private Limited
IMS Oneworld Private Limited
IMS Payroll Solutions Private Limited
Ordinary
Ordinary
Ordinary
Ordinary
72
72
72
72
72
72
72
72
Registered office: South Quarter Building, Tower C, Level 10, Jl. RA. Kartini,
Kav. 8, Cilandak, Jakarta, SELATAN 12430, Indonesia
PT. Monroe Consulting Group
‘A’ Ordinary
100
100
Registered office: Daiwa Daikanyama Building, 8–7 Daikanyamacho, Shibuya-ku, Tokyo,
Japan
FINES K.K.
FINES Tokyo K.K.
FINES Osaka K.K.
Ordinary
Ordinary
Ordinary
51
51
–
51
51
51
Registered office: 8-27 Toranomon 3-chome, Minato-ku, Tokyo, Japan
Skillhouse Staffing Solutions K.K.
Ordinary
90
90
Registered office: 14A Jalan Tun Mohd Fuad, Taman Tun Dr Ismail, 60000, Kuala Lumpur,
Wilayah Persektuan, Malaysia
Agensi Pekerjaan Monroe Consulting Group Malaysia Sdn. Bhd.
Ordinary
100
100
Registered office: Insurgentes 1796 4to Piso, Colonia Florida, DF 01030, Mexico
Monroe Consulting Mexico, S.A. de C.V.
Class I and Class II
Ordinary
100
100
Registered office: De Cuserstraat 93, tweede en derde verdieping, 1081 CN,
Amsterdam, Netherlands
Global Crew Netherlands B.V.
Ordinary
90
83
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 94
Notes to the Parent Company financial statements continued
Company
Registered office: GVW Accountants Limited, Level 1, 109 Carlton Gore Road,
Newmarket, 1023 New Zealand
Global Resources Asia Limited
Rishworth Holdco Limited
Rishworth Aviation Asia Limited
Rishworth Aviation Asia Pacific Limited
Rishworth Aviation Europe Limited
Rishworth Aviation Limited
Rishworth Aviation International Limited
Rishworth Aviation Services Limited
Rishworth Solutions Limited
Class of
share held
2022
Effective %
holding
2021
Effective %
holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
90
90
90
90
90
90
90
90
90
83
83
83
83
83
83
83
83
83
Registered office: Gilligan Sheppard Limited, Level 4 Smith & Caughey Building,
253 Queen Street, Auckland, 1010 New Zealand
The Recruitment Business Limited
Ordinary
100
100
Registered office: Unit 605 Richville Corporate Tower, 1107 Alabang-Zapote Road,
Madrigal Business Park, Alabang, Muntinlupa C, 1780, Philippines
HR Philippines Holdings, Inc.
Ordinary
100
100
Registered office: High Street South Corporate Plaza, Tower 1, Unit 906 – 908, Bonifacio
Global City, Manila, 1634, Philippines
Monroe Consulting Philippines, Inc.
Ordinary
100
100
Registered office: 10 Anson Road #05-01/15, International Plaza, 079903, Singapore
Global Crew Asia Pte Ltd
Global Resources Aviation Singapore PTE Ltd
Ordinary
Ordinary
83
83
83
83
Registered office: Level 28 Clifford Centre, 24 Raffles Place, Singapore 048621,
Singapore
LMA Recruitment Singapore Pte. Limited
‘A’ and ‘B’ Ordinary
70
70
Registered office: Postova 3, 811 06, Bratislava, Slovakia
Gate1234 s.r.o.
Ordinary
100
100
Registered office: Global Redovisning, Rehnsgatan 5, 11357, Stockholm, Sweden
Rishworth Aviation AB
Ordinary
90
83
Registered office: 28th Floor, Lake Rajada Office Complex Bldg, 193/119
Ratchadapisek Rd, Klongtoey, Bangkok, 10110, Thailand
Monroe Holdings (Thailand) Company Limited
Monroe Recruitment Consulting Group Company Limited
Ordinary
Ordinary
80
80
80
80
Registered office: 1409 3rd Street Promenade, Suite A, Santa Monica, CA 90401, USA
ConSol Partners LLC
Ordinary
100
100
Registered office: 251 Little Falls Drive, City of Wilmington, County of New Castle,
Delaware 19808-1674, USA
Empresaria Americas Services Inc
Empresaria USA Inc.
Common Stock
Common Stock
100
88
100
88
Empresaria Annual report and accounts 2022 95
Company
Registered office: 8 The Green Ste B, Dover, Kent, DE 19901, USA
Class of
share held
2022
Effective %
holding
2021
Effective %
holding
IMS Oneworld Inc.
Ordinary
72
72
Registered office: 8500 Normandale Lake Blvd. Suite 350, Bloomington,
MN 55437-3805, USA
IMS Payroll Solutions Inc.
Ordinary
Registered office: 477 Main Street, Stoneham, MA 02180, USA
Medical Recruitment Strategies, LLC
Pharmaceutical Strategies, LLC
Recruitment Strategies Group, LLC
‘A’ and ‘B’ Ordinary
‘A’ and ‘B’ Ordinary
‘A’ and ‘B’ Ordinary
72
88
88
88
72
88
88
88
Registered office: SFC Building, Floor 4, No.9, Dinh Tien Hoang Street, Da Kao Ward,
District 1, Ho Chi Minh City, Vietnam
Monroe Consulting Group Vietnam Limited Liability Company
Ordinary
80
100
Registered office: Av. Alfredo Benavides No 1551, Office No 901, District of Miraflores,
province and dept of Lima, Peru
Grupo Solimano S.A.C.
People Intermediacion S.A.C.
People Outsourcing S.A.C.
Solimano Asociados S.A.C.
Talentos, Servicios & Ingenieria S.A.C.
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
60
60
60
60
60
1
These companies are directly held by Empresaria Group plc. The remaining investments are indirectly held. The percentage shown is as at 31 December.
The nature of each investment is the provision of staffing services and each entity operates in its country of incorporation.
7 Debtors
Amounts owed by subsidiary undertakings
Other debtors
Corporation tax
Deferred tax asset
Prepayments and accrued income
£0.5m (2021: £0.7m) of the deferred tax asset is expected to be recoverable after more than one year.
8 Creditors: amounts falling due within one year
Bank overdraft and loans due within one year
Trade creditors
Amounts owed to subsidiary undertakings
Other creditors
Accruals
2022
£m
6.3
0.3
0.4
1.5
0.8
9.3
2022
£m
13.7
0.4
7.9
0.1
1.8
23.9
60
60
60
60
60
2021
£m
9.3
0.3
0.6
1.2
0.9
12.3
2021
£m
5.0
0.2
8.1
0.5
1.7
15.5
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022
96
Notes to the Parent Company financial statements continued
9 Creditors: amounts falling due after more than one year
Bank loans
2022
£m
–
2021
£m
10.5
At 31 December 2022, the UK revolving credit facility of £15.0m (2021: £15.0m), expiring in September 2023, had a balance of £8.0m
(2021: £10.5m). This facility is based on the SONIA (Sterling Over Night Index Average) interest rate. The margin on the facility is
based on the Group’s net debt to EBITDA ratio and ranges from 2.0% to 3.0%. This facility was refinanced after the reporting date in
March 2023 as detailed in note 18 of the Group accounts.
The interest rate on the UK bank overdraft was fixed during the year at 1.0% above applicable currency base rates.
Bank loans
Repayable within one year
Repayable between one and two years
10 Called up share capital
Issued, allotted and fully paid
Ordinary Shares of 5p each
2022
£m
8.0
–
8.0
Number
of shares
2022
£m
Number
of shares
49,853,001
2.5
49,853,001
2021
£m
–
10.5
10.5
2021
£m
2.5
Please see note 21 of the Group accounts for details on the share capital.
11 Contingent liabilities
The Company is part of a bank overdraft arrangement that operates across a number of subsidiaries of the Company. This facility gives
the Company greater access to readily available cash resources. Cross guarantees exist between the companies within this facility.
The total amount owed by the Group under this arrangement as at 31 December 2022 was £6.3m (2021: £6.9m).
12 Related party transactions
Please see note 26 of the Group accounts for details on related party transactions.
Empresaria Annual report and accounts 2022
97
Officers and professional advisers
Solicitors
Osborne Clarke LLP
2 Temple Back East
Temple Quay
Bristol
BS1 6EG
Bankers
HSBC plc
West & Wales Corporate Banking
3 Rivergate
Temple Quay
Bristol
BS1 6ER
Independent auditor
CLA Evelyn Partners Limited
45 Gresham Street
London
EC2V 7BG
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
West Yorkshire
LS1 4DL
Directors
Penny Freer
Zach Miles
Steve Bellamy
Ranjit de Sousa
Rhona Driggs
Tim Anderson
Secretary
James Chapman
Registered office
Old Church House
Sandy Lane
Crawley Down
Crawley
West Sussex
RH10 4HS
Company registration number
03743194
Nominated Adviser &
Joint Broker
Singer Capital Markets
1 Bartholomew Lane
London
EC2N 2AX
Joint Broker
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London
EC2R 7AS
Strategic ReportGovernanceFinancial StatementsEmpresaria Annual report and accounts 2022 98
Glossary
Adjusted earnings per share
Earnings per share adjusted to exclude
amortisation of intangible assets identified
in business combinations, impairment
of goodwill and other intangible assets,
exceptional items, fair value charges on
acquisition of non-controlling shares and
related tax.
Adjusted net debt
Borrowings less cash and cash
equivalents excluding cash held in respect
of pilot bonds.
Adjusted operating profit
Operating profit adjusted to exclude
amortisation of intangible assets identified
in business combinations, impairment
of goodwill and other intangible assets,
exceptional items and fair value charges
on acquisition of non-controlling shares.
Adjusted profit before tax
Profit before tax adjusted to exclude
amortisation of intangible assets identified
in business combinations, impairment
of goodwill and other intangible assets,
exceptional items and fair value charges
on acquisition of non-controlling shares.
Change in constant currency
Year-on-year movement assessed after
converting prior year amounts at the
current year exchange rates.
Managed Service Provider
(‘MSP’)
Vendor Management System
(‘VMS’)
Technology used by MSPs to enable
them to deliver to their end clients. This is
used to manage the end-to-end process
including the distribution of roles to
staffing agencies, collection of candidate
submissions, coordination of interviews,
job offers, billing and timesheets.
An outsourced agency that manages the
staffing requirements of an end client by
managing its preferred staffing agencies.
Net fee income
Revenue less cost of sales. Cost of
sales includes the remuneration cost of
temporary and contract workers and the
cost of staff directly providing offshore
services. For permanent placements, net
fee income is typically equal to revenue
with only limited costs of sales in some
cases.
Offshore Services
Outsourced services provided from our
Offshore Services operations in India
and Philippines to clients operating in
the staffing sector and based in other
countries, primarily in the UK and US.
Services are tailored to our clients needs
and include any stage of the recruitment
process, compliance and credentialling,
and accounting, finance and back-office.
Pilot bonds
Pilot bonds are sometimes required by
airline clients to be taken at the start of
a pilot’s contract. These are returned to
pilots or paid to clients through the course
of the pilot’s contract or when it ends in
line with the terms of the agreement.
Conversion ratio
Roadmap to £20m
Adjusted operating profit as a percentage
of net fee income.
Debt to debtors ratio
The Group’s ambition to double adjusted
operating profit to £20m in the medium
term as communicated in the October
2022 Capital Markets Day.
Adjusted net debt as a percentage of
trade receivables.
RPO
Free cash flow
Free cash flow measures the amount
of cash generated that is available for
investing in the business, reducing debt or
returning to shareholders. It is measured
as the net cash from operating activities
per the cash flow statement adjusted to
exclude movements in pilot bonds and
after deducting payments made under
lease agreements.
Free cash (pre-tax)
Free cash flow excluding cash outflows on
income taxes.
Recruitment Process Outsourcing (‘RPO’)
is where an employer transfers all or part
of its recruitment process to an external
provider.
SIA
Staffing Industry Analysts (‘SIA’) is a global
adviser on staffing and workforce solutions
and a provider of data and publications
related to the staffing industry.
Staff productivity
Net fee income divided by total staff costs
within administrative costs.
Empresaria Annual report and accounts 2022 Empresaria
Annual report and accounts 2022
Our purpose
is to positively
impact the
lives of people,
while delivering
exceptional
talent to our
clients globally.
For more information visit our website
www.empresaria.com
Strategic Report
Investment case
1 Highlights
2 Purpose led approach
3 Chair’s statement
4 At a glance
6
8 Current market conditions
10 Our business model
12 Chief Executive’s Q&A
15 Strategic objectives
16
18 Operating review
24 Finance review
28 Risks and uncertainties
32 Engaging with our stakeholders
Key performance indicators
Governance
34 Introduction to corporate governance
35 The QCA’s ten principles of corporate governance
36
Board of Directors and Secretary
38 Corporate governance statement
42 Audit Committee report
44 Nomination Committee report
45 Directors’ remuneration report
48 Directors’ report
50 Directors’ responsibilities statement
Consolidated statement of changes in equity
Independent auditor’s report
Consolidated income statement
Financial Statements
51
55
56 Consolidated statement of comprehensive income
57 Consolidated balance sheet
58
59 Consolidated cash flow statement
60 Notes to the consolidated financial statements
87 Parent Company balance sheet
88 Parent Company statement of changes in equity
89 Notes to the Parent Company financial statements
97
98 Glossary
Officers and professional advisers
Cautionary statement
The sole purpose and use of this annual report is to provide information to the shareholders of the Company, as a body, to assist
them in exercising their governance rights. The Company, its Directors, employees, agents or advisers do not accept or assume
responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility
or liability is expressly disclaimed. This annual report contains certain forward-looking statements with respect to the operations,
performance and the financial position of the Company and the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and developments to differ from those anticipated. The forward-looking
statements reflect knowledge and information available at the date of preparation of this annual report and nothing in this annual
report should be construed as a profit forecast.
This document is printed to the
EMAS standard and Environmental
Management System certified to
ISO 14001.
100% of the inks used are HP Indigo
Electroink which complies with RoHS
legislation and meets the chemical
requirements of the Nordic Ecolabel
(Nordic Swan) for printing companies.
95% of press chemicals are recycled
for further use and, on average 99%
of any waste associated with this
production will be recycled and the
remaining 1% used to generate energy.
This document is printed on a paper
made of material from well-managed,
FSC®-certified forests and other
controlled sources.
Designed and
printed by:
perivan.com
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Stronger together
Stronger together
Empresaria Group plc
Old Church House
Sandy Lane
Crawley Down
Crawley
West Sussex
RH10 4HS
T: +44 (0)1342 711430
www.empresaria.com/contact
www.empresaria.com
Empresaria Group plc
Annual report and accounts 2022