Delivering on
our Promise
Annual Report and Accounts 2021
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
The Company
Impellam is a leading
Global Talent Acquisition
and managed Workforce
solutions provider
STRATEGIC REPORT
1_ Progress and performance
2_
Impellam at a glance
4_ our awards
5_ Chairman’s statement
6_ Ceo review
14_ our business model
16_ Key performance indicators
18_ Performance reviews
28_ CFo review
32_ Principal risks
36_ stakeholder engagement
and our s172 statement
39_ Responsible business
CORPORATE GOVERNANCE
43_ Governance report
44_ Board of Directors
46_ QCA Code compliance
48_ Corporate governance statement
54_ Directors’ report
57_ statement of Directors’ responsibilities
FINANCIAL STATEMENTS
Independent auditor’s report
59_
68_ Consolidated income statement
69_ Consolidated statement of
comprehensive income
70_ Consolidated balance sheet
71_ Consolidated statement of changes
in equity
72_ Consolidated cash flow statement
73_ Notes to the consolidated financial
statements
113_ Company balance sheet
114_ statement of changes in equity
115_ notes to the Company balance sheet
120_ Alternative Performance measures
122_ Glossary
124_ Company information
Alternative Performance Measures
Words with the symbol Δ are defined in the Alternative
Performance measures section of the Annual Report on
page 120.
Underpinning everything we do
is our Virtuoso strategy which
recognises it is our people who make
the difference. Virtuosos make and
deliver on promises, and grow with
their customers through sector,
service or international expansion
which ensures there is never a
need for a customer or candidate
to leave Impellam. Impellam is the
largest Global Talent Acquisition
and Managed Workforce Solutions
provider in the UK, and 8th1 in
the world.
Our Managed Services businesses
are enabled by talent-focused
Specialist Staffing brands with deep
heritages, vertical sector expertise
and loyal candidate networks. Clients
across the world trust us to deliver
Managed Services and Specialist
Staffing in the UK, North America,
Asia Pacific and Europe.
Working with them are 2,900
Impellam people, bringing a
wealth of expertise through our 13
market-leading brands across 70
locations. Every year, we connect
carefully chosen candidates with
good work at all levels. They include
technology and digital specialists,
scientists, clinical experts, engineers,
nurses, doctors, lawyers, teachers,
receptionists, drivers, chefs,
administrators, warehouse and call
centre operatives.
OUR VISION
To be the world’s most trusted staffing company
– trusted by our people, our customers and our investors in
equal measure.
OUR MISSION
To provide fulfilment and a sense of purpose for our
people, and help our customers build better businesses
in a changing world.
For more information visit
www.impellam.com
1 By revenue (2020 published numbers).
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Progress and performance
Headlines
Impellam delivered on its promise for the year with a strong return to growth
coupled with conversion improvement and further strategic progress. Group
revenue was up 13.1% (14.7%*) on the prior year at £2.3bn (2020: £2.0bn) and
1.8%* up on 2019. Adjusted operating profitΔ up 61.0% (70.5%*) to £29.3m
(2020: £18.2m).
OPERATIONAL
1. our new, regional organisation model, supported by our four key operating
segments – sTem, Global managed services (‘Gms’), Regional specialist
Staffing (‘RSS’) and Healthcare - enabled us to innovate and respond quickly
to rapidly changing customer needs and candidate availability whilst
enjoying the economic benefits of increased demand.
2. strong operational gearing in the UK region following strategic delayering
initiatives, with conversion of gross profit to adjusted operating profit
reaching 14.2% (2019: 10%).
3. Year one of our Customer Office exceeded our expectations, delivering
100% account retention and a 21% increase in Life Time Value (‘LTV’)2.
4. our key strategic investments were in people and technology with both
investment cases underpinning our core principle that Virtuosity makes the
difference. The core systems road map moved into the delivery phase with
on premises servers moved to the cloud and a staged delivery of new
systems and upgrades continuing through 2022.
5. In north America, following a strategic review of the scale and limited
geographic footprint of Corestaff, our light industrial business, and a
subsequent expression of interest resulted in its post year-end divestment
of Corestaff to swipejobs Inc, a US private digital staffing company, for a
cash consideration of approximately £14m ($19m).
FINANCIAL
1. Gross profit increase of 17.1% (19.5%*), with H2 2021 up 6.5%* on H2 2019.
2. Strong rebound in the UK and NA with gross profit growth on the prior year
of 22.6%* and 16.7%* respectively. In APAC, which experienced prolonged
lockdowns in 2021, gross profit increased by 4.9%*.
3. The Gms and the sTem portfolios, representing over 60% of the Group’s
gross profit, were up 14.8%* and 29.0%* respectively on 2020 and up 4.8%*
and 8.0%* on 2019 gross profit.
4. Strong rebound in RSS with gross profit up 26.9%* year on year, though still
12.1%* below 2019 levels.
5. Investment in headcount to support growth with 440 net joiners during
2021, although headcount remains 77 below the 2019 year end position.
Gross profit per FTE (productivity) was 12.8% above 2019 levels.
6. Adjusted operating profitΔ growth of 61.0% to £29.3m (2020: £18.2m).
7. net debtΔ increased by £5.2m to £31.5m (2020: £26.3m) following £38.9m
of deferred UK VAT and US federal taxes repayment, with the final VAT
repayment made in Q1 2022. Pre- IFRs 16 net debtΔ of £15.0m (2020:
£4.1m) with covenant leverage ratio less than 1x throughout 2021.
8. Following strong operational cash generation of 167.6%, excluding deferred
tax repayments, banking facilities replaced at £182.5m, representing a
£57.5m reduction on the previous facility. Net debt before IFRS 16Δ has
reduced by £57.3m since 2019.
GROUP REVENUE_£m
£2,262.4m
2021
2020
2019
2,262.4
2,000.9
2,254.8
GROUP GROSS
PROFIT_£m
£267.0m
2021
2020
2019
267.0
228.1
274.1
GROUP ADJUSTED
OPERATING
PROFIT∆_£m
£29.3m
2021
2020
2019
18.2
29.3
31.1
GROUP OPERATING
PROFIT_£m
£19.5m
2021
2020
2019
19.5
(15.0)
13.9
GROUP NET DEBT
(BEFORE IFRS 16)Δ _£m
£(15.0)m
2021
2020
2019
(15.0)
(4.1)
(72.3)
GROUP NET CASH
GENERATED FROM
OPERATIONS_£m
£10.2m
2021 10.2
2020
2019
49.5
94.5
For more information
Glossary: page_122
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
2 Life Time Value (LTV) is defined as average margin per client x average length of contract.
Page_01
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
At a glance
our operating segments
We organise our portfolio of Global Managed
Services and Specialist Staffing businesses regionally
and by specialist operating segments.
GLOBAL MANAGED SERVICES
We take care of the whole staffing
process, so that our customers can
focus on building better businesses.
We do this by providing robust
multidisciplinary and blended
talent solutions to enterprise-level
organisations, including partial and
complete outsourcing.
our Global managed services brands
are Guidant Global, Comensura
and Flexy.
KEY METRICS
Revenue_£m
Gross profit_£m
£456.3m
2020: £401.5m
2019: £413.8m
£76.5m
2020: £70.5m
2019: £73.9m
£1,741.4m
£172.5m
2020: £1,539.5m
2019: £1,767.5m
2020: £140.7m
2019: £179.6m
£64.7m
2020: £59.9m
2019: £73.5m
£18.0m
2020: £16.9m
2019: £20.6m
NORTH
AMERICA
UK &
EUROPE
APAC
Page_02
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
REGIONAL SPECIALIST STAFFING
STEM
HEALTHCARE
Our Regional Specialist Staffing
(‘Rss’) businesses in the UK leverage
our deep heritage, sector expertise
and extensive network of specialist
candidates, to provide expert
recruitment services and fulfilled,
engaged workers for our customers.
our dedicated teams build better
businesses by providing people for
permanent, temporary, contract and
fixed-price work; from the supply of
warehouse workers to secretaries, call
centre operatives, lawyers, drivers,
teachers, chefs, HR and marketing
professionals.
our Rss brands are Blue Arrow, Tate,
Career Teachers and Chadwick nott.
our portfolio of global sTem brands
brings together a wealth of specialist
recruitment expertise under one
umbrella. our sTem brands work
collaboratively to provide specialist
contract and permanent recruitment
services and statement of work
across the sTem sectors. By attracting
the very best of sTem talent, our
businesses combine the unique and
complementary skill sets of scientists,
clinicians, engineers, IT and digital
specialists to collaborate, innovate
and co-create a better future for us
all, by solving some of the world’s
toughest problems.
our sTem brands are Carbon60,
sRG and Lorien in the UK & europe
and Bartech, sRG and Lorien in
north America.
medacs Global Group (‘mGG’) is a leading
international healthcare workforce
solutions provider operating under a
variety of brands, including medacs
Healthcare, Global medics, and Litmus
Workforce solutions. mGG provides
healthcare staffing, managed services,
staff bank, occupational health, insourcing,
social care and home care services.
Within its healthcare brands, mGG
delivers locum, temporary and permanent
doctors, nurses, allied health professionals
and care workers. It is the largest provider
of locum doctors to the nHs in the UK
and to the Hse in Ireland and is the
largest supplier of specialist healthcare
managed services outside of the Us.
With operations across the UK, Ireland,
the middle east, India, Australia and new
Zealand, mGG enables customers to
deliver outstanding care globally.
For more information visit
www.impellam.com
Page_03
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
At a glance continued
Awards
Here are just some of the awards we have been recognised for…
Winner: Comensura
Winner: Comensura
Winner: Lorien
Winner: Lorien
Recruiting Back Better Award
Guidant Global
Winner: Blue Arrow
Best use of Technology Award
Guidant Global
Winner
Career Teachers
Winner
sRG
Platinum Accreditation Blue Arrow
Platinum Tate
Client Service Award
Guidant Global Lorien
NEAT Evaluation Industry Leader:
Lorien
Winner: Guidant Global
Page_04
Impellam Group
Impellam Group
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Chairman’s statement
A strong return
to growth
Despite disruption to our businesses across the world from on-
going Covid-19 restrictions, we have delivered an outstanding
performance in 2021, with a strong return to growth and
robust recovery in our adjusted operating profitsΔ. This is
testament to our resilient, collaborative business model and
commitment of our Virtuosos.
The year 2021 began with a return to lockdown in the UK and
our experience in 2020 enabled us to respond quickly, moving
to remote working once again. From this challenging start to
the year, demand increased rapidly across all our regions as
restrictions have eased, customer confidence has returned and
candidate shortages have intensified. Revenue is now ahead of
2019 and we are seeing the benefits of the decisive moves we
made to reshape our business in 2020 delivering results.
We have continued to transform our business, strengthening
our key brands, simplifying our organisational structure and
investing in our technology and our people to enable them
to perform to their upmost potential. our move to a regional
reporting structure is part of this process, underpinned by
our four key operating segments aligned to our primary
business activities.
We have focused on keeping our people safe and supported.
Their resilience and tenacity in the face of an uncertain
environment has been exemplary and on behalf of the
Board I would like to thank them all for their dedication
and hard work.
our Board agenda has broadened in response to the growing
interest in ESG – we have a well-defined culture encapsulated
in our Virtuoso model and strong sense of purpose that we
intend to build on as we begin our sustainability journey.
Whilst we learn to live with Covid-19, our customers and
candidates expect us to help them navigate the new world
of work. We will continue to invest in our people and our
technology to ensure we can deliver innovative solutions
for our customers and attract high-quality candidates in
a tightening labour market and whilst facing an uncertain
political landscape.
Page_05
Lord Ashcroft KCMG PC
Chairman
“WE HAVE
DELIVERED AN
OUTSTANDING
PERFORMANCE
IN 2021.”
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
CEO review
Delivering on
our Promise
OVERVIEW
We made enormous strides as a Group in 2021.
The promise we made to our customers, our people and our
investors during the pandemic was that we would accelerate
our strategy and emerge as a fighting fit Virtuoso organisation.
Our strategic and financial results for 2021 demonstrate that
we delivered on that promise. We entered 2021 in our new
formation: an agile Virtuoso operating model with fewer
layers, enabling us to innovate and respond quickly to rapidly
changing customer needs and candidate availability whilst
enjoying the economic benefits of a lean cost base.
early in the year we were able to demonstrate our new
organisational agility and the Q1 lockdown in the UK gave
us the opportunity to put it to the test. We relied on the
flexibility and resilience of our people as they juggled
competing responsibilities. We collaborated with our
customers to help them navigate the issues they faced while
we supported our communities by finding them good work,
supporting many to transfer their skills to buoyant sectors.
When the schools closed in January 2021, we immediately
seconded our talented education recruiters to support the
national effort in our healthcare and scientific businesses who
were busy fulfilling demands for Covid-19 testing and then
vaccination programmes. This is one example of our Virtuoso
agility which continued through the year as we responded to
the higher-than-expected bounce back in demand across all
our markets and territories.
With the wind in our sails, we focused hard on adapting quickly
to a swift and unprecedented change in market dynamics,
whilst preserving the efficiency and conversion gains made
during our transformation programme in 2020. Whilst
the challenges of the pandemic and resultant lockdowns
across our major territories continued, we soon saw the
upside opportunity from the major pressure on employers
globally due to the ‘great resignation’, high attrition and a
booming post-Covid-19 jobs market. In particular, we saw an
immediate impact on demand for tech, digital and analytical
skills following rapid global digitisation and, of course, for
our scientists and healthcare professionals for testing and
vaccination work.
Julia Robertson
Group Chief Executive Officer
Page_06
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
OUR STRATEGIC AND
FINANCIAL RESULTS FOR
2021 DEMONSTRATE
THAT WE HAVE
DELIVERED ON OUR
PROMISE.
• We entered 2021 in our new formation: an
agile Virtuoso operating model with fewer
layers
• We focused hard on adapting quickly to a
swift and unprecedented change in market
dynamics, whilst preserving the efficiency
and conversion gains made during our
transformation programme in 2020
•
• our key strategic investments in 2021
were in people and technology
•
• We invested in UK leadership to create a
compelling STEM offering and drive better
collaboration
GLOBAL
UK AND
EUROPE
NORTH
AMERICA
ASIA
PACIFIC
OPERATING SEGMENTS
MANAGED
SERVICES
STEM
REGIONAL
SPECIALIST
STAFFING
HEALTHCARE
Page_07
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
CEO review continued
KEY STRATEGIC MOVES AND DEVELOPING OUR
HIGH GROWTH MARKETS
our key strategic investments in 2021 were in people and
technology, with both investment cases underpinning our core
principle that Virtuosity is our strategic advantage.
OUR PEOPLE MAKE THE DIFFERENCE
We were pleased to welcome 440 (net increase) new purposeful
colleagues into our Group during the year who are all now
engaged in providing good work for people and people for
good work. Our investments in people focused on expanding
our teams in our high-growth markets with a 45% headcount
increase for STEM businesses in the UK and a 24% increase
in north America. our Global managed services (‘Gms’)
portfolio also invested in headcount but this was offset by the
efficiencies achieved through the collaboration of our Managed
Services brands and the formation of our Centre of Excellence.
The structural efficiencies made in 2020 were maintained
and improved in our shared services team where headcount
remained 16% below 2019 and in our Regional specialist
Staffing (‘RSS’) portfolio where headcount remained 15%
below 2019. Despite the overall increase in our headcount, we
increased our productivity by 18.7%.
our focus on our people has never been stronger, starting
first and foremost with their health and wellbeing, swiftly
followed by a redoubling of our efforts to make sure every
single person was engaged with our purpose and able to work
effectively in a blended model from home, our offices and our
client sites.
We ramped up support for our people while planning for a
post-pandemic world, continuing recruitment activity and
investing in the workforce of the future. During the year,
we invested in our talented people services team making
significant leadership appointments in the areas of culture,
equity, diversity and inclusion (‘eD&I’), talent acquisition and
development, and reward and recognition whilst further
refining our Virtuoso model to make it accessible and
meaningful for all 2,900 Impellam people.
In recognition of our colleagues’ hard work amidst the
challenges presented by the pandemic and an unprecedented
increase in demand from customers, we gave our people
two extra days off to focus on their wellbeing. We were
also careful to pause and recognise our successes whilst
encouraging collaboration and innovation along the way,
with townhalls, awards conferences, socials - both in person
when we could and virtual when we could not - which were
designed to lift morale and reinvigorate our culture after
lengthy lockdowns.
We continued to listen closely to the Virtuoso Alliance, our
shadow board. The role of the Virtuoso Alliance is to widen
and deepen the leadership team’s understanding of the
changing world of work and the challenges and opportunities
faced by our customers and candidates on the front line. They
tell it how it is.
This year, more than ever, it was critical to understand what
colleagues were experiencing day to day and how it impacted
them so that we could provide support as and where needed.
Across two cohorts, 27 Virtuosos contributed significantly
to the development of our people strategy, our approach to
blended working, wellbeing and morale, automation, shifting
candidate market dynamics and learning and development
planning.
our Virtuoso culture encourages our people to bring their
authentic selves to work and our goal is to provide them with
challenging and fulfilling work, supportive colleagues and a
career without limits.
TECHNOLOGY FREES UP OUR VIRTUOSOS
our investments in innovation, digital and core systems have
touched most brands, teams and colleagues across the world.
We are 100% focused on freeing up our Virtuosos to add value
to our customers and candidates, whilst also delivering an
enhanced digital experience. We have a strategic target to be
65% digital1 by the end of 2022 and we made solid progress
towards this during 2021.
As the global pandemic continues to disrupt the world of
work, accelerating our investment in technology remains key.
The ‘Digital Core’ is a substantive rolling replacement for all
our sales, operational and finance systems. This supports
our ambitious growth plans for Impellam north America in
addition to supporting organic growth in other geographies.
We completed the first phase of this programme during 2021,
with initial deployment to business users in Q4, to be followed
by a roll-out programme leading to completion by the end
of 2022. We also moved many of our existing systems to
the cloud and exited a large on-premises data centre, saving
property and technology costs.
“AS THE GLOBAL
PANDEMIC CONTINUES
TO DISRUPT THE
WORLD OF WORK,
ACCELERATING OUR
INVESTMENT IN
TECHNOLOGY
REMAINS KEY.”
1 Digital – Data and Digital Technology, supported by monetisable data, automated process, cloud-based systems and flexible, mobile channels.
Page_08
As these new systems come on stream, we plan to add a
range of additional modern, plug-in digital components
to meet the needs of individual regions, brands, markets,
categories and clients.
These additional systems will be rapidly deployed, on a cloud
subscription basis, and in a combination that adds competitive
advantage to the individual business units. Our existing
integration platform will give us the flexibility to change, as
better and newer plug-in products become available. Examples
of investments in plug-in digital components include enhanced
candidate attraction and database searching, recruitment task
automation and a range of analytics and intelligence tools.
our investment in technology will enable our people to work
more efficiently using self-service solutions and data analytics,
supported by digital process automation and integration tools.
Collectively, these new system combinations will allow
Impellam to operate in the nascent Platform Recruitment
market for high-volume demand and supply matching and will
enhance deal volume and profit per colleague.
Innovation and entrepreneurship are core behaviours of
Virtuosity. origin, our innovation hub, works closely with
the Virtuoso Alliance, IT, the Customer Office and across
regions through a virtual innovation community and actively
monitors emerging technologies. In 2021, we invested in
our ideation tool and DIY guides to crowd-source ideas
from across the business. our Virtuoso model ensures we
are close to our customers and innovate continuously. our
clients trust our people to provide access to the latest tools,
insights and trends to support fast, effective and informed
workforce decision-making. For example, our innovation
network helped to create a full end-to-end turnkey solution
that included a chatbot and video interviews to speed up an
ambitious hiring campaign. As the need for digital solutions
grows, our portfolio of proprietary digital solutions and our
global network of digital partners provides our customers and
candidates with access to a wide array of stand-alone or fully
integrated services to support them throughout their journey.
Our offering now spans zero touch transactional services
through proprietary and hybrid proprietary digital staffing
platforms through to payroll solutions as well as stand-
alone, third party solutions. For example, Flexy, acquired in
2019, uses leading technology to streamline the temporary
recruitment process for companies looking for flexible
labour, and individuals looking for flexible work. Flexy is now
embedded with customers in both APAC and the UK & europe.
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
FACING VOLATILE MARKETS IN
PARTNERSHIP WITH OUR CUSTOMERS
In support of our strategic goal that there should never be
a reason for a customer to leave Impellam, we continued
to optimise our organisation design to make sure that our
customers have access to the very best of Impellam’s
collective expertise.
This led to the creation of the Customer Office and the GMS
Centre of Excellence. Together, these teams leverage our
organisational Virtuosity, customer insight and combined
capability to ensure customer delight, growth and retention.
Our Customer Office is led by a newly appointed Chief Customer
Officer. This strategic function is designed to drive customer
engagement with the right experts at the right time, enabling
our brands to deliver in the short, medium and long term; deliver
advisory, innovative consultancy, best practice and benchmarking
and ensure a long-term strategy is in place for each customer.
Like all organisations, our customers are embracing change
as they adapt to a volatile and extremely challenging talent
market. They are turning to trusted partners like Impellam to
help drive innovation and offer unique perspectives on how
to build better businesses. The Customer Office plays a key
role in understanding our customers’ needs and tailoring our
services for them. In the first year of operation, the Customer
Office exceeded expectations, delivering 100% account
retention and a 21% increase in Life Time Value (‘LTV’).
Collaboration remained a key theme and, together with the
creation of our Customer Office, the introduction of our
GMS Centre of Excellence has played a vital role in reducing
duplication of effort and ensuring that our customers access
the best that Impellam has to offer. This dedicated, expert
global function provides services to our managed services
and STEM customers and expertise to our brands, including
access to technology, data management, reporting and
implementation expertise, sharing managed services best
practice. In short, our Centre of Excellence has enabled us to
deliver a higher quality, more consistent service globally whilst
improving our operational efficiency.
For more information visit
www.impellam.com
Page_09
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
CEO review continued
DRIVING SUSTAINABLE GROWTH
our new organisation design underpinned a strong strategic
focus on our key growth markets, geographically and
segmentally. We exited 2021 with over 70% of our revenue in
our digitally enabled GMS and STEM segments and are excited
by the growth opportunities we have seen and continue to see
in these markets in each of our territories. We will continue
to make strategic investments to support further growth in
these markets.
We saw strong performance from our Gms operating
segment, with robust growth in both revenue and gross profit
reflecting the positive results from increasing collaboration
across the portfolio. With 20 new customer wins, a 96%
renewal rate and over seven years average tenure, the
portfolio made significant progress. In the last 12 months
alone, GMS has expanded the scope of services delivered to
20% of our clients.
The implementation of our new Customer Office helped
us expand our service offering and support Group-fill
opportunities, alongside access to our Gms Global Centre
of Excellence.
Both the life sciences and technology sectors have played
pivotal roles amid the Covid-19 pandemic. Digitisation
and transformation have taken a significant leap at both
an organisation and industry level. To cope with the crisis,
companies have had to stand up digital, tech-enabled solutions
to meet new demand more quickly than thought possible
before the pandemic. With the introduction of this ‘new-
normal’, digitisation is also broadening the horizon of
new possibilities in the life sciences sector. Redefined
workplace environments; the shift in health care delivery;
and innovative collaborations between traditional companies
and entrepreneurial start-ups are a few examples that
are leading to this unprecedented change supported by
technological advancements.
As a result of pharmaceutical innovations saving the world
and with technology transformation widespread, customer
demand increased exponentially through the pandemic. In
response, Impellam created a focused sTem portfolio with
investments in specialist sTem leadership in both the UK and
North America yielding positive results in its first full year
of operation. The collaboration across our brands has been
critical in winning and fulfilling some of our largest healthcare
contracts to date, where we have been proud to play our part
in the fight against Covid-19 in the US, UK & Europe. With
significant global capability in this high-growth, future-facing
market, revenues grew by 6.7% (8.6%*) to £759.6m, and gross
profit reached £81.8m, up 25.7% (29.0%*) year on year.
Both our Rss and Healthcare businesses bounced back after
facing tough market conditions in 2020, with significant
increases in Covid-19 related demand and despite ongoing
candidate shortages, and challenges created by border
closures in our APAC region.
We are particularly proud of the increased collaboration
between our healthcare businesses and our staffing and
managed services businesses which delivered outstanding
services and people to hospitals, testing laboratories and
vaccination centres across all our territories, playing their
part in the fight against Covid-19, whilst also delivering to our
customers as demand increased.
FINANCIAL REVIEW
Revenue grew 13.1% (14.7%*) to £2.3bn in 2021 and has now
recovered to a pre-pandemic (2019) level. Gross profit grew by
17.1% (19.5%*) over 2020, only 0.8%* behind 2019.
With significant increases in customer demand, we made
investments in headcount and our People strategy and
continued enhancing our technology through our Digital Core
IT Systems Programme whilst delivering a strong adjusted
operating profitΔ performance of £29.3m, up 61.0% (70.5%*) on
2020 and just 2.0%* behind 2019.
our strong focus on cash ensured we managed our cash and
net debtΔ position very effectively and reduced Days Sales
outstanding (‘Dso’) by 1.7 days. net debtΔ increased by £5.2m
to £31.5m as we repaid £38.9m of the £48.0m cash support
received from both the UK and Us governments in 2020 with
the remaining balance due to be repaid in 2022. The ongoing
strong cash position has allowed us to reduce our revolving
credit facility by £57.5m whilst continuing to invest in our key
priorities of people and technology.
96%
Global Managed Services
customer renewal rate.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_10
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
12.4&
GLOBAL MANAGED SERVICES
With increasing talent shortages globally, organisations are
focused on comprehensive talent management, innovative
ways to engage staff with a focus on hiring teams rather
than individuals, all of which is driving demand for Gms
across the world. As businesses consider contingent or
extended workforces as the next frontier of innovation,
managed service providers that can advise on and deliver
agile and flexible workforce strategies are in demand.
Gms delivered a strong performance in each of our regions in
2021, with revenues of £838.7m and gross profit at £79.2m
up 12.5% (14.1%*) and 10.9% (14.8%*) respectively on 2020.
Our digitally enabled service offering secured 20 new
customers in the year representing £700m annualised
spend Under management (‘sUm’). Importantly, this strong
new business performance is coupled with the retention of
96% of our client base thereby increasing our resilience and
underpinning our revenue for this year.
ongoing investment in our technology is driving up
productivity and freeing up our Virtuosos to focus on
our clients and candidates. This includes the complete
overhaul of our approach to the deployment and
management of our proprietary Vendor management
system (‘Vms’) which has enabled us to deliver against
an ambitious development roadmap while improving
efficiency. The role of advanced analytics to generate
market insights around talent supply and demand for
different skills and roles across multiple disciplines and
locations has never been more important to our clients.
To deliver analytics seamlessly, an uninterrupted data flow
across multiple tools via automated linkages is provided.
The investment in our people – in particular, our partnership
with the open Data Institute – has been essential to
ensure our people are equipped with the knowledge and
expertise to improve the experience of our customers using
technology. our digitally enabled service allows us to better
support our clients as they focus on employer branding,
recruitment marketing and direct sourcing in a competitive
marketplace, where equity, diversity and inclusion (‘eD&I’) is
increasingly important to building a diverse workforce.
Revenue_£m
2021
2020
2019
838.7
745.8
785.3
For more information
Glossary: page_122
Gross profit_£m
2021
2020
2019
79.2
71.4
78.5
+12.5%
£838.7m
+10.9%
£79.2m
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_11
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
CEO review continued
UK & EUROPE (65% OF GROSS PROFIT)
Our businesses in the UK & Europe saw an unexpectedly rapid
bounce back from their Covid-19-driven revenue dip in 2020
and our dedicated teams were delighted to have a surplus of
roles to offer our talented candidates. As the year progressed
it became clear that we needed to become increasingly
resourceful to help our customers manage their requirements
and engage the right people to meet their growing needs.
Talent shortages across most sectors were exacerbated in the
UK due to Brexit and Off Payroll Working. Driver availability hit
the headlines resulting in fuel shortages at petrol stations and
empty supermarket shelves. A scarcity of nurses, residential
care workers and IT specialists drove an increase in demand
and pay rates for our candidates, and in response we rapidly
up-skilled our people to deal with these fast-changing
market dynamics.
The UK & europe segment recovered strongly across all our
markets with overall gross profit growth of 22.6% (22.6%*)
which resulted in an excellent adjusted operating profitΔ
performance, up 202.5% (223.3%*) on 2020. During Q4 2019,
through 2020 and continuing into 2021, we focused on right
sizing our cost base and this, together with record-breaking
productivity, led to the region ending the year 45.8%* ahead
of 2019 adjusted operating profitΔ even though gross profit
was 4.1%* lower.
Our GMS businesses in the UK increased gross profits by
8.7%*, with growth coming mainly from Comensura and
support for Covid-19-related work. A number of our Guidant
customers, particularly in the manufacturing and aviation sector,
experienced reduced demand due to the pandemic, and we
expect to see those volumes rise as confidence returns. The
new contracts secured in 2020 and 2021 will reap significant
financial benefits in 2022.
our sTem portfolio in the UK delivered impressive gross
profit growth of 43.4%* spread across all brands and vertical
markets, with our life science brand (sRG) also delivering
increased gross profit on 2019. The 2021 growth has been
achieved through a mixture of improved trading conditions in
the UK after the 2020 lockdowns, increased demand for tech,
digital and analytical skills at scale, collaboration and cross
selling across the portfolio and new contract wins
in our sTem brands. In addition, market leader sRG has been
very active providing scientists and clinical staff to support
Covid-19-related requirements for both government and
private companies.
The recovery in our Rss brands in the UK was particularly
strong as Covid-19 restrictions eased and pent-up demand
led to a gross profit increase of 26.3%* compared to 2020.
Despite this, the lockdowns in Q1 2021 continued to impact
hospitality and catering (Blue Arrow), and also led to school
closures, impacting our education business (Career Teachers)
where gross profit remained lower than 2019.
Across our Rss portfolio, permanent recruitment fees were
90% up on 2020 as market confidence returned, with positive
impact in office (Tate) and legal (Chadwick Nott). However,
in aggregate, the portfolio still lagged 2019 gross profit
by 17.4%*.
our Healthcare business in the UK (mGG) made good progress
in 2021 but with less pronounced growth against 2020 with
financial performance continuing to be affected by the
pandemic. The virus had a significant impact on availability
of front-line staff and resulted in the cancellation of elective
surgery and other non-urgent medical procedures. During
the year we are proud that mGG was heavily involved in the
management of testing and vaccination services as part of
the national effort against Covid-19 and, as a consequence,
facilitated good work for people in our life sciences (sRG) and
general staffing (Blue Arrow) businesses who report gross
profit separately. Gross profit in Healthcare UK and Ireland was
up 8.0%* on 2020 and 2.7%* up on 2019.
NORTH AMERICA (29% OF GROSS PROFIT)
In north America, our investments in sTem and Gms paid
dividends with strong momentum building for Gms and new
sTem leadership appointed to drive accelerated growth.
The region delivered strong gross profit growth of 8.5%
(16.7%*) on 2020 and was also 11.6%* higher than 2019.
This was driven by strong gross profit growth in GMS of
17.3%* reflecting a good level of new business secured across
a broad range of market sectors and positive results from
increased collaboration across the portfolio.
STEM gross profit was steady at 8.7%*, with a substantial
increase of 21.8%* in our IT business, Lorien, offset by declines
in life sciences and engineering.
Our light industrial business, Corestaff, benefited from
fewer restrictions and an increase in demand, and grew
gross profit by 38.3%. A particular feature of this growth
was the supply of workers into Covid-19-related activities
with our managed services customers. Following a strategic
review which considered the scale and limited geographic
footprint of Corestaff in North America, and a subsequent
expression of interest, we decided that our customers and
people would benefit from enhanced geographic reach for
their light industrial staffing requirements. As a result, in early
2022, Impellam sold the business and assets of Corestaff to
swipejobs Inc., a US private digital staffing company, for a cash
consideration of approximately £14m ($19m). The proceeds of
the sale will pay down net debtΔ to fund additional investment
to further accelerate the Group’s strategy. This transaction
will enable the leadership team in north America to focus our
sTem and Gms portfolios and accelerate our investments in
Virtuosity, technology and digital and innovation.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_12
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
APAC (6% OF GROSS PROFIT)
In Asia Pacific (APAC), border closures and extended
lockdowns were more severe in 2021 than in 2020 and
continued to frustrate performance in our healthcare
business despite some encouraging financial and operational
improvements in sequential quarters towards the end of the
year. Despite this, overall gross profit was up 6.5% (4.9%*) in
2021 with more resilient trading in Gms mitigating the decline
in Healthcare.
Our GMS business achieved gross profit growth of 19.4%*
on 2020 and a 7.2%* increase on 2019, whilst the Healthcare
business gross profit declined by 9.8%*, due to the cross-
border lockdowns.
We continued to build resilience in our managed services
business in APAC when we established our first foothold
in the private sector, securing one of our largest global
managed services Programmes (‘msP’) with a global mining
organisation. Led by our APAC region this will provide over
1,000 heads globally, across multiple functions from blue
collar skills to mining specialists.
In Australia, Global medics focused on transformation to equip
the business with the resources and tools to thrive in the next
evolution of the Australian medical recruitment market.
In 2020, we launched our digital platform Flexy into the
Australian market to support our managed services business.
Flexy now has 31 local councils connected directly to good
quality candidates in a digital marketplace, supplemented by a
digital payroll service that has already been extended into four
MSP clients in the region. In its first full year of trading, Flexy
delivered £0.4m of gross profit.
LOOKING FORWARD
The global pandemic has upended the world of work and
created huge societal change. our vision and mission have
never been more important as we continue to focus on
Virtuosity as our strategic advantage to further transform our
proposition and portfolio. We believe we are well placed for
further success in 2022 and beyond, although we are mindful
of the potential global economic impact of the current conflict
in Ukraine.
A Bold Promise
OUR STRATEGIC OBJECTIVE
Virtuosity makes the difference and will drive market-
beating value creation.
OUR STRATEGIC ADVANTAGE
We believe we retain customers, people and investors
for longer than our competitors because we’re trusted
to do what we say we are going to do. We work
collaboratively across our diverse portfolio with a
shared vision, mission, style and language we call ‘The
Virtuoso Way’. This enables us to deliver differentiated,
integrated solutions to our customers, and to find good
work for our people.
OUR STRATEGIC SCOPE
Customers
We work with customers who value engaged, fulfilled
and purposeful people, and who allow us to take our
share of the economic value we create as we help them
build a better business.
Offering
We are a leading Global Talent Acquisition and
managed Workforce solutions provider enabled
by talent-focused Specialist Staffing brands with
deep heritages, vertical sector expertise and loyal
candidate networks.
Geography
We offer multiple brands and services across North
America, the UK & europe and APAC. To further
support our mission, and to find exciting opportunities
for our people, we also invest in, and operate with,
specific clients in other regions.
Integration
We have a unique, differentiated and collaborative
model. This integrates managed services and specialist
Staffing into a full workforce solutions management
platform for our customers’ permanent, contingent
and statement of Work (‘soW’) spend. our work is
important, and we get it done.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_13
For more information visit
www.impellam.com
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Our integrated, collaborative business model
OUR MISSION
TO PROVIDE FULFILMENT
AND A SENSE OF PURPOSE
FOR OUR PEOPLE AND HELP
OUR CUSTOMERS BUILD
BETTER BUSINESSES IN A
CHANGING WORLD.
OUR VISION
TO BE THE WORLD’S MOST
TRUSTED STAFFING COMPANY –
TRUSTED BY OUR PEOPLE, OUR
CUSTOMERS AND OUR INVESTORS
IN EQUAL MEASURE.
OUR KEY
DIFFERENTIATORS
TO DELIVER EXCEPTIONAL SERVICE
TO OUR CUSTOMERS THROUGH:
OUR CULTURE OF VIRTUOSITY
Virtuosity is a mindset that means Impellam
people see opportunities where others
do not. Virtuosos look ahead to see how
customers’ and candidates’ needs are
changing and are always ready to adapt
and innovate. everyone at Impellam
contributes to our culture of Virtuosity by
making a difference and doing the common,
uncommonly well. At the heart of our
integrated, collaborative business model
is a virtuous circle of making and keeping
promises, engendering trust and loyalty. By
keeping our promises, we retain our clients,
candidates and our people for longer and
reap the benefits of that longevity.
THE BEAUTIFUL BASICS
We make sure that ‘the Beautiful Basics’ are
in place and deeply embedded in all of our
businesses across our collaborative portfolio.
‘Beautiful Basics’ are caring for the smaller
details, as well as the bigger ones. They
are the difference Impellam people make
through our day-to-day actions to deliver on
our promises.
TAKING THE HIGH ROAD
We focus on partnering with organisations
that value engaged, fulfilled people and we
call this the ‘high road’ which serves to drive
clear market segmentation and a compelling
price point.
ENTREPRENEURIAL
VIRTUOSO LEADERS
All our businesses work in ‘The Virtuoso Way’
which embeds a consistent, collaborative
Group-wide culture, based on trusted
behaviours, delivered by entrepreneurial
Virtuoso leaders who can drive our
competitive advantage and deliver on our
promises to all our stakeholders.
Page_14
OUR REGIONS
NORTH
AMERICA
APAC
UK &
EUROPE
OUR OPERATING SEGMENTS
D I G I TA L PLATFORMS
COLLABORATION
DIGITAL PLATF O R M S
REGIONAL SPECIALIST STAFFINGHEALTHCAREGLOBAL MANAGED SERVICESSTEM STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
OUR CULTURE:
OUR VIRTUOSO MODEL
P S Y C H O LOGICAL SAFETY
e t e n c e Entrepren
o m p
e
u
r
s
h
i
p
LEADING
CHANGE
C
O
L
L
A
B
Tech nic a l C
RIOSITY
U
C
A
g
i
l
i
t
y
VIRTUOSITY
EMOTIONAL
INTELLIGENCE
P
r
o
m
is
INCLUSIV I T Y
e Focus
n
e
h
A u t
TRUST
O
R
A
T
I
O
N
n
o
i
t
a
v
o
n
n
I
COACHING
ticit y
TO CREATE VALUE FOR
OUR STAKEHOLDERS
CLIENTS
We tune in to our customers and work
closely with them to find people for good
work to help them build better businesses.
We retain them, continuing to listen and
partner with them to extend the scope and
tenure of our services, and in doing so, open
up more opportunities for organic growth.
CANDIDATES
From the outset, we listen to our
candidates and find them good work that
fulfils them and matches their aptitudes,
skills and aspirations. We reward our
candidates fairly, retain them by treating
them well, and by finding them work that
interests and develops them. In turn, this
encourages them to refer more people and
good work to us.
COLLEAGUES
We employ people who care about our
mission and our craft, and we develop
them, so they have the right skills and
experience to do their job by being
Virtuosos in their field. We free up our
Virtuosos and give them more influence so
they in turn develop a culture of Virtuosity
across the Company. Ultimately, we
trust them to make the right decisions,
collaborate and deliver on their promises.
INVESTORS
We take care to create relationships with
investors and we build on the trust we
create by delivering sustainable earnings.
SUPPLIERS
We build strong partnerships of mutual
trust with our suppliers, many of whom
are also our clients. our long-term
relationships with our suppliers enable
us to fill more jobs for our clients and by
building an engaged recruitment supply
chain which is passionate about finding the
right candidates with the right skills, we
can reduce the cost of recruitment; reduce
the time to hire; provide timely market
insight; and drive innovation.
For more information visit
www.impellam.com
Page_15
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Key performance indicators
We monitor our performance against our strategic
priorities by using key performance indicators (‘KPIs’).
Our KPIs include a set of financial and non-financial
measures and are discussed further in the CEO
and CFO reviews.
Financial KPIs
GROUP REVENUE
_£m
£2,262.4m
GROUP GROSS PROFIT
_£m
£267.0m
GROUP ADJUSTED
OPERATING PROFITΔ_£m
£29.3m
GROUP OPERATING
PROFIT_£m
£19.5m
2021
2020
2019
2,262.4
2,000.9
2,254.8
2021
2020
2019
267.0
228.1
274.1
2021
2020
2019
18.2
29.3
31.1
2021
2020
2019
19.5
(15.0)
13.9
MEASUREMENT EXPLAINED
Revenue generated from sales
of contract workers, permanent
placement fees and other income
generated from provision of
staffing services.
MEASUREMENT EXPLAINED
Revenue less cost of sales,
predominately the sum of
contract gross profit and fees
for the placement of permanent
candidates, less any directly
attributable adjustments or
rebates.
MEASUREMENT EXPLAINED
Underlying profitability of the
Group before interest and
taxes with adjustments for
impairments and amortisations
of acquired intangibles and
impairment of right-of-use leased
assets.
MEASUREMENT EXPLAINED
Profitability of the Group before
tax and finance costs.
RATIONALE
Indicates the volume of business
generated in the year.
RATIONALE
Indicates the profitability of
revenue before operating costs.
RATIONALE
Demonstrates the profitability
of the Group and how efficient
it is at managing its controllable
cost base.
RATIONALE
Demonstrates the profitability of
the Group.
CONVERSION RATIO –
ADJUSTED OPERATING
PROFITΔ %
11.0%
GROUP NET DEBTΔ
(PRE-IFRS 16)
_£m
£(15.0)m
GROUP NET CASH
GENERATED FROM
OPERATIONS_£m
£10.2m
ADJUSTED
EARNINGS PER
SHARE _PENCE
35.3p
2021
2020
2019
11.0%
8.0%
11.3%
2021
2020
2019
(15.0)
(4.1)
(72.3)
2021 10.2
2020
2019
49.5
94.5
2021
2020
2019
18.2
35.3
39.2
MEASUREMENT EXPLAINED
Adjusted operating profitΔ
expressed as a percentage of
gross profit.
MEASUREMENT EXPLAINED
Total Group debt excluding lease
liabilities, less any cash and cash
equivalents, after capitalised
financing costs.
MEASUREMENT EXPLAINED
The amount of cash generated
from operating activities and
after tax paid.
MEASUREMENT EXPLAINED
The amount of adjusted
operating profitΔ per one share
in the Group; calculated as
the adjusted operating profitΔ
attributable to the Group’s
shareholders, divided by the
average number of shares in
issue throughout the year.
RATIONALE
Indicates the efficiency of fee
earners in generating gross profit
and the Group’s ability to control
central costs.
RATIONALE
net debtΔ is a key element of the
Group’s capital structure.
RATIONALE
Demonstrates how efficient the
Group is in converting operating
activities to cash and therefore
the ability to manage its capital.
RATIONALE
A strong indication as to the
underlying profitability of a
company for its shareholders.
Page_16
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Operational KPIs
INTERNATIONAL
MIX %
38.1%
GROSS PROFIT
MIX %
29.7%
CLIENT RETENTION –
TOP 50 CLIENTS %
100%
GROUP ADJUSTED
EBITDAΔ_£m
£37.0m
2021
2020
2019
38.1
40.8
36.7
2021
2020
2019
29.7
31.1
28.2
2021
2020
2019
100
98
98
2021
2020
2019
37.0
27.6
41.8
MEASUREMENT EXPLAINED
Total gross profit from business
operations outside of the UK,
expressed as a percentage of
Group gross profit.
MEASUREMENT EXPLAINED
Total gross profit generated from
our Global managed services
businesses expressed as a
percentage of Group gross profit.
MEASUREMENT EXPLAINED
The percentage of the top 50
clients in 2020 who we continued
to supply in 2021 and have not
been exited during the year.
RATIONALE
Geographic diversification
spreads risk and reduces reliance
on any one economy.
RATIONALE
Gross profit from Global
managed services provides
visibility of income and generates
long-term relationships with our
clients and aligns to our strategic
priorities.
RATIONALE
Client retention links to improved
profitability and efficiencies in
service delivery alongside
improved quality of service.
MEASUREMENT EXPLAINED
Operating profit of the Group
before interest, tax, depreciation
and amortisation and excludes
IFRS 16 adjustments, separately
disclosed items and share-based
payments.
RATIONALE
The Group continues to measure
eBITDA which is used for
banking covenants and internal
performance measures. It is also
used externally for valuation
purposes.
CONVERSION RATIO –
ADJUSTED EBITDAΔ
%
13.9%
GROUP FILL
%
16%
2021
2020
2019
AVERAGE GROSS
PROFIT PER FTE
£’000
£98.7
16
17
17
2021
2020
2019
98.7
83.0
87.5
GROSS PROFIT PER £
STAFF COST
£1.53
2021
2020
2019
1.53
1.52
1.58
2021
2020
2019
13.9
12.1
15.2
MEASUREMENT EXPLAINED
The percentage of spend Under
management supplied from our
Group brands into our Global
managed services programmes.
MEASUREMENT EXPLAINED
Total gross profit divided by the
average number of full-time
equivalents in the Group.
MEASUREMENT EXPLAINED
Total gross profit divided by the
annual staff costs.
MEASUREMENT EXPLAINED
Adjusted EBITDAΔ expressed as a
percentage of gross profit.
RATIONALE
Enables our Specialist Staffing
brands to support the managed
services programmes and
generate gross profit with an
existing client.
RATIONALE
Indicator of staff productivity
and efficiency, with growth
demonstrating improved
efficiency or a higher percentage
of fee earners at full capacity.
RATIONALE
Indicator of staff productivity
and reflecting the operational
efficiency of the business as
a whole.
RATIONALE
Indicates the efficiency of fee
earners in generating gross profit
and the Group’s ability to control
direct costs.
For more information
Glossary: page_122
Page_17
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Performance reviews
north America
North America accounts for 29% of our
gross profit and is primarily focused on our
Global Managed Services (‘GMS’) and STEM
operating segments through the Guidant
Global brand for GMS and the SRG, Lorien and
Bartech Staffing brands for STEM.
OVERVIEW
The region delivered a strong growth in revenue and gross
profit during the year, making good progress against its
ambitious three-year plan. We have focused on diversifying
our client portfolio to increase our resilience and invested
in building the foundations for expansion. Targeting our
STEM business on specific sectors, supported by specialist
teams is already yielding results and we have benefited from
the significant recovery in the permanent recruitment and
managed services markets. The robust performance of our
GMS segment in North America reflected nine new customer
wins and over US$500m annual SUM in 2021 as customers
sought full talent management solutions in the face of
significant talent shortages across most sectors. As a result of
a strategic review, and to enable increased focus on Gms and
STEM, Corestaff, our light industrial business, was sold
to swipejobs Inc, a US private digital staffing platform in
early 2022.
FINANCIAL PERFORMANCE
A robust revenue increase of 13.6% (20.4%*) to £456.3m
followed a stable year (2020: £401.5m), demonstrating
positive underlying growth, rather than purely a Covid-19
bounce back. Gross profit rose by 8.5% (16.7%*) to £76.5m
(2020: £70.5m) This was driven by strong performance by our
GMS segment with a 17.3%* rise, reflecting the good level
of new business secured and positive results from increasing
collaboration across the portfolio. Growth in STEM gross profit
was steady at 8.7%*, with a substantial increase of 21.8%* in
our IT business, Lorien, offset by declines in life sciences and
engineering.
Adjusted operating profitΔ was £10.1m (2020: £13.4m) due
to the impact of investment in people and infrastructure to
support ambitious growth plans. Headcount increased by 136
in response to this expansion of the business in the region.
Reported adjusted operating profitΔ for the north America
region in 2021 was impacted by £1.9m increase in provisions
for historical legal cases and £1m of provision against pre-
2021 receivables. The reported results are also impacted
by the strengthening of £ Sterling against the US$ through
2021. Excluding these items, and on a constant exchange
rate basis, operating profit is higher when compared to both
2020 and 2019.
North America
Revenue
Gross profit
2021
£m
2020
£m
% change
LFL*
456.3
401.5
20.4%
76.5
70.5
16.7%
Admin expenses
(66.4)
(57.1)
24.8%
Adjusted operating
profitΔ
10.1
13.4
(16.4)%
Gross profit %
16.8%
17.6%
Adjusted operating
profitΔ conversion ratio %
13.2%
19.0%
Permanent fees %
3.9%
2.2%
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_18
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
“ INVESTMENT IN
SYSTEMS AND
TECHNOLOGY
SPECIFICALLY TO
SUPPORT OUR
REGIONAL BUSINESS
WILL HELP FREE UP
OUR VIRTUOSOS AND
IMPROVE CANDIDATE
EXPERIENCE.”
£456.3m
Revenue for North
America in 2021.
MARKET DYNAMICS
The candidate shortfall in the US continues to be a major
challenge for our clients and our recruiting operations.
Candidate sourcing, attraction and engagement remains a top
priority. The STEM sector expanded at an unprecedented rate,
making market insight and specialist knowledge essential to
competitive advantage.
SUPPORTING OUR VIRTUOSO CULTURE
Investment in systems and technology specifically to support
our regional business will help free up our Virtuosos and
improve candidate experience. The appointment of a Group
Head of Culture and Fulfilment based in the US has already
accelerated the pace of our eD&I initiatives. our Unity Council
has been relaunched, supported by new business resource
groups to develop our policies and raise awareness.
PORTFOLIO REVIEW
GMS
The robust performance of our Gms segment in north America
reflected a good level of new business secured across a broad
range of market sectors and positive results from increasing
collaboration across the portfolio. Our new Customer Office
provided both our key strategic clients and Virtuosos with
insight and expertise, helping us expand our service offering.
Alongside access to our GMS Global Centre of Excellence,
which provides functional experts across all our brands, we
are now providing a broader perspective to help develop our
clients and greater career opportunities for our people.
As demand recovered, the significant programme signed at
the end of 2020 with Travelport has now bedded in and is
delivering strong growth, while demonstrating the benefits
of collaboration between Group brands placing IT specialists
from Lorien alongside the outsourced recruitment services
contract won by Guidant. Revenue from a new customer, a
leading environmental services company, is already ahead of
expectations for the initial scope.
ongoing Covid-19-related requirements saw us continuing
to provide track and trace and health check services in both
Federal and state Governments, where our ability to respond
quickly to rapid surges in demand was key.
Page_19
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Performance reviews continued
STEM
This was a transitional year as we diversified and refocused
our portfolio by building on our existing specialisms and
moving into new vertical markets to broaden our expertise.
Lorien benefited significantly from early investment in 2021
and was able to take advantage of strong post-Covid-19
trading conditions. over the course of 2021, Lorien doubled
headcount and expanded their Specialist Markets team to
address the buoyant mobile development and salesforce
(a world-leading CRm solution) segments in the technology
space and the renewable energy and electric vehicle segments
in the engineering market, driven by demand from the Us
automotive powerhouse. The Lorien leadership team has also
been expanded, strengthening the expertise and knowledge
needed to underpin our rapid growth. Investing in these
sectors included hiring new teams to work virtually in key
strategic growth locations: Denver, san Diego and Austin,
ensuring we remain close to candidates and clients.
The notable increase in gross profit generated by Lorien
reflected the focus on more complex recruitment solutions
as demand for sTem skills continued to outstrip supply and
the well-documented candidate shortage has resulted in
increased appetite from customers to outsource their sTem
resource needs to specialist staffing providers. The demand
for more complex STEM recruitment solutions underpinned
by the creation of a new solutions Division resulted in three
new tech-focused Recruitment Process outsourcing (‘RPo’)
contracts; the first of these with Epsilon as a single source
supplier for this leading Us marketing organisation. As a result
of this investment strategy, Lorien delivered strong results,
growing gross profit by 21.8% year over year, with gross profit
from direct hire solutions also up over 200% on prior year.
The overall performance within our sTem portfolio was
mixed, delivering a gross profit growth of 7.5%. Collaboration
across the sTem portfolio of brands was particularly strong,
leveraging existing customer relationships across the portfolio
to deliver over $1m (£0.7m) of additional gross profit in the
year. Collaboration between the sTem brands and our Gms
business, Guidant Global, also continued to gain pace, with
specialist IT, Life Sciences and Engineering staffing provision
into Group Managed Service customers up 43% year-on-year.
Growth within our Life sciences business was below
expectations given the strong performance of this sector. SRG
was restructured during 2021 to reduce over-reliance on the
CRA vertical (which was impacted due to Covid-19 restrictions
reducing in-person clinical trials). The team was expanded
to support the diversification of the SRG business into the
Quality, Regulatory and Compliance (‘QRC’) segment of the
life sciences market, to extend its reach from its established
base in clinical research and move from supporting short-term
clinical trials to longer-term projects. This renewed focus,
combined with a change in leadership, is already delivering
early and significant improvements.
our engineering business, Bartech, was slower to recover from
the impact of Covid-19 within our core Automotive customer
base. Customer activity improved significantly in the second
half of the year, but headcount challenges in an extremely
competitive market did not allow us to grow the team quickly
enough to capitalise upon this rebound. In continuation of
our diversification strategy, we expanded into the renewable
energy and electric vehicle segments in the engineering
sector, driven by demand from existing customers.
LOOKING FORWARD
The underlying infrastructure we need to drive forward our
expansion plans is now in place with experienced hires on
board in strategic leadership roles and specialist teams fully
staffed to support the robust demand we see across the
market. Whilst the new Covid-19 variant had some impact on
candidate availability early in 2022, customer demand remains
high, and we are seeing a drop in absences due to Covid-19,
so we anticipate continued growth throughout the year. In
response to increasing demand for sTem candidates, we
will invest in building diverse sTem candidate communities
to address the talent shortages in these markets. equally,
significant customer demand for innovative GMS solutions will
continue through 2022 and we will reap the benefits of wins
in 2021.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_20
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
UK & europe
Our largest region, UK & Europe, accounts
for 65% of our gross profit generated by all
four of our operating segments – Guidant
Global, Comensura and Flexy in GMS, Lorien,
Carbon60 and SRG in STEM, Blue Arrow,
Tate, Career Teachers and Chadwick Nott
in Regional Specialist Staffing (‘RSS’) and
Medacs Global Group in Healthcare.
FINANCIAL PERFORMANCE
Revenue rose 13.1% (13.6%*) to £1,741.4m (2020: £1,539.5m)
reflecting higher volumes in both temporary and permanent
recruitment and contributing to a substantial increase in
gross profit of 22.6% (22.6%*) to £172.5m (2020: £140.7m).
Combined with productivity increases driving higher gross
profit per FTE, this delivered a significant recovery in adjusted
operating profitΔ to £24.5m (2020: £8.1m), well ahead of
2019 levels. Headcount was increased by 15% with 145 FTEs
recruited to meet the rise in demand across both national and
local clients.
OVERVIEW
With a strong bounce back in client demand along with high
levels of Covid-19-related business, revenue and adjusted
operating profitsΔ in the region delivered an impressive
recovery. We saw growth in all brands, significant new
business wins and were very proud of our contribution to
the national testing programme and to the delivery of the
vaccination programme in many UK counties. The UK lockdown
in Q1 impacted our education and catering businesses but
with restrictions lifting throughout the year, demand gradually
returned over the second half. Transportation of goods
remained buoyant and we responded well to the growing
opportunities in the healthcare sector.
UK & Europe
Revenue
2021
£m
2020
£m
% change
LFL*
1,741.4
1,539.5
13.6%
Gross profit
172.5
140.7
22.6%
Admin expenses
(148.0)
(132.6)
10.1%
Adjusted operating
profitΔ
24.5
8.1
223.3%
Gross profit %
9.9%
9.1%
Adjusted operating
profitΔ conversion
ration %
14.2%
5.8%
Permanent fees %
16.4%
11.6%
£1,741.4m
Revenue for UK & Europe
in 2021.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_21
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Performance reviews continued
“ AS MARKETS EMERGED
FROM COVID-19
RESTRICTIONS, WE
SAW A SIGNIFICANT
REBOUND IN
DEMAND FOR BOTH
PERMANENT AND
TEMPORARY STAFF
ACROSS ALL OUR
BRANDS.”
MARKET DYNAMICS
As markets emerged from Covid-19 restrictions, we saw
a significant rebound in demand for both permanent and
temporary staff across all our brands. This reflected major
pressures on employers facing ‘the great resignation’ as
employee turnover rose in a booming post-Covid-19 jobs
market. This led to a shortage of candidates with supply
outstripping demand in several sectors. many candidates in
the hospitality sector changed careers during lockdown
periods with Brexit and driver shortages impacting the
logistics sector. In the IT sector, the introduction of Off Payroll
Working changed the taxation requirements for contractors,
leading many to leave the freelance market, where talent
is already in short supply. Nursing continues to suffer a
substantial shortfall in candidates with over 110,000 vacancies
across the healthcare market. As a result, pay rates are rising
and clients are increasing incentives to attract candidates,
focusing on developing distinctive employee brands, their
eD&I strategies and their approach to climate change.
SUPPORTING OUR VIRTUOSO CULTURE
We continued to invest in enabling our Virtuosos, focusing on
their wellbeing, personal development and ways of working.
Career paths were introduced to provide our people with
advice and guidance on the skills and experience required to
progress their careers.
We offered blended working to retain the benefits of working
from home and bring back the collaboration that we enjoy
working together in the office. Tate, in particular moved to
a more virtual way of working broadening their geographic
coverage from a smaller number of offices, building on their
existing service delivery hub model.
Page_22
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
PORTFOLIO REVIEW
GMS
Our managed services business delivered an 8.7%* increase
in gross profit, benefiting from the upselling opportunities
created by the breadth of customers across the Impellam
portfolio in the UK and winning new contracts with existing
clients of other brands. For example, extensive collaboration
with our sTem businesses delivered new contract wins: Blue
Arrow introduced Guidant Global to Capita; and Comensura
and Guidant Global worked in partnership to deliver a large-
scale intake and screening programme for The British Council
and secured the management of Bristol Council’s statement
of Work (‘SOW’) requirement which will reap benefits in 2022.
In the UK & europe, 2021 was a pivotal year for our soW
c.net module and offering. We now have circa 120 projects
managed through 20 customers globally. Comensura
celebrated its 20th anniversary by breaking all revenue and
retention records, with our teams retaining 26 customers and
protecting over £3m in gross profit.
The strong recovery of revenue in Ireland was driven by an
innovative turnkey solution for a start-up business, providing
people, property and technology, underpinned by several
new contracts.
STEM
To take advantage of the attractive potential for sTem in
the UK & Europe, we brought our scientific, technology and
engineering brands - sRG, Lorien and Carbon60 together
under single leadership to deliver sTem talent at scale.
Combining our market-leading scientific, technology and
engineering brands into one operating segment (sTem
Portfolio) has yielded strong results in its first full year
of operations. It was pleasing to see record revenue and
gross profit growth in our STEM brands with cross-sell and
collaboration with the Group driving £55.8m in gross profit.
This focus has already yielded fruit with significant wins such
as our engineering experience leading to a technical MSP
with Tilbury Douglas, a leading UK building, engineering
and infrastructure company, and Lorien’s financial services
pedigree securing a new contract with one of the UK’s largest
long-term savings and retirement businesses. Lorien also
secured seven specialist msP wins and 78 new customers
across their specialist markets team. A focus on RPo solutions,
as customers turned their minds to permanent hiring, resulted
in Lorien winning Apsco RPo of The Year, the Client services
award at the Tiaras and the RPo In-house Recruitment Team
at the In-house Recruitment Awards.
SRG’s market-leading scientific division supported many private
and public sector organisations with the rapid recruitment
of PCR scientists, recruiting over 1,200 scientists to support
Covid-19 testing in less than 12 months and undertaking all the
compliance and regulatory requirements. The demand for soW
contracts continues to grow, particularly for sRG’s laboratory
services division (synergy) who partnered with Cignpost, a
diagnostic testing company to mobilise 350 scientists.
In order to respond with speed and agility to large shifts in
customer demand, we invested in developing our people
and building on our specialist sector capability by setting
up a Training Academy to upskill our recruiters with the
specific skills and knowledge they need to serve high-growth,
specialist markets.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_23
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Performance reviews continued
RSS
our portfolio evolved further as we focused on creating
stronger brands and a more streamlined organisation. We
strengthened our education business, bringing Celsian under
the Career Teachers brand, with integrated vetting and
compliance functions and a new updated CRm system. A
significant new contract with the Harris Federation saw Career
Teachers become one of three lead suppliers to 50 schools
in the south east, securing a three-year contract. In addition,
we secured a managed service contract with the University of
Southampton for all contingent staffing.
HEALTHCARE
our ability to collaborate across our brands enabled us to
fulfil requirements at pace as we supported the national
testing and vaccination programme. This enabled mGG to
provide over 2,000 staff to fulfil our exclusive managed service
contract awarded by the Department of Health and social Care
in December 2020 to support the national Covid-19 testing
programme. We also supported the nHs via the vaccination
programme for Buckinghamshire, Oxfordshire and Berkshire
health authorities, where we have delivered three million
vaccinations to date.
Covid-19 staffing for our public sector clients was a key focus
for Blue Arrow in 2021, with strong growth across our scotGov
and CCS frameworks for supporting 84 government and NHS
organisations across england, scotland and Wales. supply of
staff to our seven UK University clients was also a key focus
throughout 2021, where we saw a 15% increase in revenues
through our Higher education frameworks for catering,
administration and facilities support staff.
We moved into Phase two of the Blue Arrow transformation
programme, with a focus on creating efficiencies by operating
physical and virtual offices and centralising support for key
accounts through the Customer success Hub. set up in 2020,
this initiative enhanced our delivery to key national accounts,
reducing duplication across branches and enabling our Virtuosos
to concentrate on their local markets and higher margin clients.
In Phase two we moved more clients into the hub, adding to
the 20 industrial and warehousing clients transferred in 2020.
new customers included Hovis and Tesco where the provision of
pre-Christmas resources has already extended into warehousing
and distribution in some regions.
Rising demand for the services provided under our Tate brand
including our new marketing, HR and finance staffing, meant
that adjusted operating profitΔ more than doubled year on
year as a result.
Our clinical expertise is underpinning the provision of an
innovative insourcing service for University Hospital Leicester,
where we are supplying an end-to-end service, delivered on
the hospital premises, to help the nHs reduce its long waiting
lists for elective procedures. A second similar contract has
already been signed and is now live and this insourcing service
offering will be a key driver of growth for 2022 for MGG.
Doctors on Call was merged into our Global medics UK
business, simplifying our operating structure. We are already
the biggest supplier of locum doctors to the nHs and Hse and
with demand for healthcare professionals outstripping supply
in the UK our international placements division recruited over
1,100 overseas nurses in 2021 and have a pipeline in place to
deliver more in 2022. We also added significant Staff Bank/MSP
contracts to our portfolio at Cardiff & Vale, Central London
Community Healthcare, Bristol & Weston and Cheshire & Wirral.
LOOKING FORWARD
Whilst we anticipate Covid-19-related revenue will reduce
going forward, the extension of our major vaccination
programme combined with the shortage of healthcare
professionals, particularly the huge number of nursing
vacancies, and the return of the catering market, will continue
to drive demand in the UK. We expect our STEM and GMS
businesses to go from strength to strength as we respond
to talent scarcity across these disciplines and benefit from
customer wins and expansion through 2022. Collaboration
across our brands has yielded positive results this year and we
see this as key to building our customer base in the year ahead.
Page_24
Asia Pacific
The Asia Pacific region currently generates
6% of Impellam’s global gross profit, largely
from the Healthcare market in Australia and
New Zealand through Medacs Global Group
(‘MGG’) and the Guidant Global, Comensura
and Flexy brands (‘GMS’).
OVERVIEW
Covid-19 continued to have a material impact on our staffing
businesses across APAC due to frequent and prolonged
lockdowns in states and territories across Australia and in new
Zealand. Border restrictions limited candidate availability as
doctors were unable to travel either inbound from overseas
or internally as domestic borders closed. Demand from
healthcare providers across Australia returned strongly in Q4
2021 once lockdown restrictions lifted in new south Wales
and Victoria. Public sector revenue also began to recover. one
of Impellam’s largest global msP contracts was signed with
a global mining organisation, creating an important foothold
in the private sector alongside two additional new managed
services wins.
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
FINANCIAL PERFORMANCE
The region recorded a solid performance with revenue of
£64.7m and gross profit of £18.0m both ahead of the previous
year, with the decline in healthcare revenues mitigated by
more resilient trading in managed services including the
provision of Covid-19 tracers and vaccine administrators.
This contributed to an 22.2% (19.9%*) increase in adjusted
operating profitΔ to £2.2m. Positive trading for the first 12
months of the Flexy digital marketplace, the recovery of
healthcare demand and initial revenues from the new private
sector contracts bode well for a return to growth in the new
financial year.
APAC
Revenue
Gross profit
2021
£m
64.7
18.0
2020
£m
59.9
16.9
% change
LFL*
5.9%
4.9%
Admin expenses
(15.8)
(15.1)
1.9%
Adjusted operating
profitΔ
2.2
1.8
19.9%
Gross profit %
27.8%
28.2%
Adjusted operating profitΔ
conversion ration %
12.2%
10.7%
Permanent fees %
8.2%
9.0%
£64.7m
Revenue for APAC in 2021.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_25
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Performance reviews continued
MARKET DYNAMICS
Border controls and falling net migration into Australia have
led to a fall in worker population, creating candidate shortages
that are being exacerbated as customer demand recovers.
This is putting pressure on client budgets requiring new
ways of working enabled via technology and greater appetite
for digitalisation.
Candidates are now demanding more and some of our
customers are increasing supplier margin to attract suppliers
to work with them. The talent crunch is most pronounced in
the medical profession with demand outstripping supply.
SUPPORTING OUR VIRTUOSO CULTURE
Investment in technology is key to freeing up our Virtuosos
to spend more time on client relationships. our proprietary
systems such as c.net and evo provide enhanced digital
platforms to enable this. We continue to focus on training and
development, introducing feedback and coaching sessions for
our Comensura teams and performance enhancement training
for our Global medics team leaders.
“ ONE OF IMPELLAM’S
LARGEST GLOBAL
MSP CONTRACTS
WAS SIGNED WITH
A GLOBAL MINING
ORGANISATION,
CREATING AN
IMPORTANT
FOOTHOLD IN THE
PRIVATE SECTOR
ALONGSIDE TWO
ADDITIONAL NEW
MANAGED SERVICES
WINS.”
Page_26
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
PORTFOLIO REVIEW
GMS
By diversifying into the private sector, we have started to
expand our portfolio which in turn will increase our resilience
going forward. This was spearheaded by the substantial
global msP contract with a mining organisation to provide
1,000 staff across all functions internationally, with a further
managed services new business win with a large Australian
chemical company.
HEALTHCARE
In Australia, Global medics is focused on transformation to
equip the business with the resources and tools to prepare for
future developments in the Australian medical recruitment
market. During the year we brought together medacs nursing
and medacs Allied Health to create medacs Australia. This has
provided mGG with greater synergies and removed barriers to
providing our customers with access to the skills and talents
they need to deliver critical services.
This builds on our traditional, well-established public sector
business where we have retained and developed our clients,
for example, retaining 100% of our customer base at
Comensura, including adding a returning client lost in 2020. In
November 2021, we went live with the expanded New South
Wales (‘nsW’) Communities and Justice Cluster which saw
our revenue from this existing customer double to cover the
supply of 950 staff, and an extension of our services to include
our first SOW contract.
Significant contract extensions include a four-year managed
services contract with the Australian Capital Territory (‘ACT’)
Government which now has the scope to expand into a SOW
agreement during the extension period and a similar four-year
extension with icare for NSW, the largest public sector insurer
in Australia, which has now come under the umbrella of our
nsW framework agreement.
Extending our digital platform included the successful launch
of Flexy in 2020. In its first full year of trading in 2021, it closed
the year with 31 local councils connected directly to good
quality candidates in a digital marketplace, supplemented by a
digital payroll service that has already been extended into four
msP clients in the region and the UK.
our most recent signing, Gidgee Healing - an Aboriginal
medical service in Queensland - provides an opportunity
for us to work with the local indigenous community for the
first time. Collaboration between our Global Medics and
medacs Healthcare brands will supply doctors, nurses, and
healthcare professionals for remote communities in north
West Queensland.
LOOKING FORWARD
We anticipate a return to growth in our healthcare businesses
as new Zealand opens up after a prolonged period of
lockdown and Australian travel restrictions diminish. The
strong drive to automate and deliver efficiency will increase
demand for contingent labour in the public sector and we
expect our revenue in NSW to increase. The private contracts
secured in 2021 H2 will provide a springboard into expanding
our presence in this sector, building a more resilient business
in the region.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_27
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Chief Financial Officer’s review
A strong financial
recovery
Tim Briant
Chief Financial Officer
INTRODUCTION
Revenue for the year was up 13.1% (14.7%*) and gross
profit increased by 17.1% (19.5%*), reflecting the improved
economic conditions that followed the impact of the Covid-19
pandemic in 2020 and the rising demand for temporary and
permanent staff across our regions and segments in 2021.
The recovery has been strong and improved throughout 2021,
with gross profit in the second half of 2021 6.5%* above the
same period in 2019, and the final quarter of 2021 11.3%*
above the final quarter of 2019.
To support the growth, we invested in customer-facing staff
adding 282 to our headcount in the second half of 2021.
Despite this, headcount at the end of 2021 remained 77 lower
than at the end of 2019. Our staff productivity (gross profit
divided by FTe heads) was higher than in previous years and
this, together with cost reductions in other areas, including
travel, property and facilities, meant that adjusted operating
profitΔ increased by 61.0% to £29.3m (2020: £18.2m). On
a constant exchange rate basis the adjusted operating
profitΔ was 2.0% below 2019. With no required intangible
asset impairment charges this year, the Group recorded an
operating profit of £19.5m (2020: loss £15.0m) which also
exceeded the £13.9m reported in 2019.
The difference between adjusted operating profitΔ and
operating profit is reconciled on page 120 and relates to the
amortisation of acquired intangibles.
GOVERNMENT SUPPORT
The Group received £0.4m of rates relief in the final quarter
of 2020/21 and continued to administer the Job Retention
Scheme (‘JRS’) for a small number of temporary staff we
provide to clients. The net effect of these programmes on
our gross profit and cost of sales was not material as these
programmes were used to compensate the temporary
staff affected. It allowed us to maintain these temporary
colleagues on our payroll without charging these to clients and
preventing the ending of their contracts.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_28
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
OPERATING PROFIT TO NET CASH GENERATED 2021_£m
7.0
(1.7)
49.1
(38.9)
7.0
17.3
19.5
Operating
profit
Non-cash
IFRS 16
non-cash
Working
capital
Tax paid
10.2
Government
support
Net cash
generated
Net cash
generated
excluding
support
repayment
* Calculated by multiplying the prior year functional currency amount
by the current year foreign currency exchange rate.
NET CASH GENERATED FROM OPERATING ACTIVITIES
£10.2m
(2020: £94.5m)
MOVEMENT IN NET DEBTΔ (BEFORE IFRS 16)_£m
75
75
60
45
30
15
0
£72.3m
£48.0m government support received in 2020
£38.9m government support repaid in 2021
£4.1m
£15.0m
2021
* Calculated by multiplying the prior year functional currency amount
2019
2020
by the current year foreign currency exchange rate.
NET DEBT BEFORE IFRS 16Δ
£15.0m
(2020: £4.1m)
For more information
Glossary: page_122
Page_29
From a cash flow perspective, the Group repaid £33.1m of the
VAT payments deferred from 2020, leaving £3.3m to be repaid
in the first quarter of 2022. In the US, the first instalment of
$8m (£5.8m) of federal tax deferred under the CARES initiative
was repaid, with the second instalment due in December 2022.
FOREIGN EXCHANGE
Currency movements against sterling adversely impacted our
reported performance, largely due to the strengthening of
sterling against the Us Dollar. over the course of the year to
December 2021, the total impact of exchange movements
on gross profit and adjusted operating profitΔ were £4.9m
adverse and £1.3m adverse, respectively. Fluctuations in
the rates of the Group’s key operating currencies versus
sterling continue to represent a sensitivity for the reported
performance of our business. By way of illustration, each 1
cent movement in annual exchange rates of the US Dollar
impacts gross profit by £0.6m per annum and adjusted
operating profitΔ by £0.1m per annum. The rate of exchange
between the Us Dollar and sterling over the year ended 31
December 2021 averaged US$1.3757 (2020: US$1.2840)
and closed at US$1.3536 (2020: US$ 1.3494). As the Group
expands further in overseas territories the impact of changes
in exchange rates will be greater.
CAPITAL INVESTMENT
Capital expenditure on tangible and intangible fixed assets
in the period was £5.8m (2020: £3.5m), as we recommenced
investment in our core systems to further digitalise the
business, following a freeze on non- essential capital
expenditure in 2020. In 2021 our core systems project involved
moving away from on-premises servers to the cloud, which
also allowed us to exit an on-premises back up site. In addition,
we began our digital programmes to deliver new front office,
bill and pay systems, as well as global finance and HR systems,
scheduled for full implementation in 2022. We also continued
investment in our proprietary vendor management systems
(‘VMS’) and the development of our digital platform, Flexy,
which was deployed in Australia. The net repayment of finance
leases amounted to £7.2m (2020: £8.3m).
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Chief Financial Officer’s review continued
INTEREST AND DEBT
net cash generated from operations during the period
was £10.2m (2020: £94.5m). In 2020, cash generated from
operations benefited from £48.0m of deferred tax payments
and £38.9m of these were repaid in 2021. Excluding the
impact of these tax deferrals, cash generated from operations
was £49.1m (2020: £46.5m). Excluding deferred taxes, the
conversion of adjusted operating profitΔ to net cash generated
is 167.6% (2020: 256%). Cash generation from operations
was further supported by an improvement in Days sales
Outstanding (‘DSO’) which stood at 35.4 days (2020: 37.1 days)
at the end of 2021.
Finance expenses were lower than the prior year at £4.3m
(2020: £5.7m). Lease interest was lower at £0.6m (2020:
£0.8m) and interest cost on financing facilities fell to £3.5m
(2020: £4.6m) as a result of reduced borrowings through
the year. At the balance sheet date net debtΔ, excluding the
adjustments for IFRS 16, was £15.0m compared to £4.1m in
2020, an increase of £10.9m. From the end of 2019, net debtΔ
has reduced by £57.3m (a £49.7m reduction when excluding
the remaining deferred tax repayments). Including IFRS 16
adjustments net debtΔ was £31.5m (2020: £26.3m). In addition
to the positive operating cash generation reducing the
underlying net debtΔ, we have continued to actively manage
our property portfolio with a net reduction in our lease liability
of £7.2m from 2020. The net cash flow from operations was
primarily utilised as follows:
Investment in fixed assets and software development: £5.8m
•
• Net lease repayment: £7.2m
• Share buybacks: £1.9m
• Net interest paid on borrowings and leases: £3.9m.
The Group’s operations are financed by retained earnings and
bank borrowings. With the benefits of the strong operational
cash flow the Group replaced the existing £240m global
revolving credit facility (‘RCF’) with a new facility agreement in
December 2021. This £182.5m RCF has an accordion element
of an additional £40m which is available for three years with
options to extend for a further two years. The new facility also
includes the appropriate replacements required following the
end of LIBOR. This provides the Group with the flexibility to
fund its working capital as well as future potential acquisitions.
Rates of interest for the RCF are based on SOFRA/SONIA plus
a margin calculated on the net debtΔ to adjusted EBITDAΔ
leverage. The RCF also includes a letter of credit facility which
amounted to £3.0m (2020: £3.2m) at the end of 2021.
The Group takes advantage of a number of nonrecourse
supplier finance arrangements organised by clients of the
Group to allow for the acceleration of payment of the Group’s
receivables. At the end of 2021, these amounted to £8.2m
received for invoices not yet due for payment (2020: £6.3m).
These agreements accrue interest at between 0.65% and
1.75% over sonIA applied to the number of days the
drawdown takes place before the due date. During 2021,
the Group paid less than £0.1m in other interest (2020: less
than £0.1m).
A significant priority for the Group remains the focus on the
conversion of operating profit into sustained positive cash
flow by controlling working capital. The Group measures
three covenants as required by the facility – interest cover,
adjusted leverage ratio (defined as net debtΔ less loan notes
and restricted cash to adjusted EBITDAΔ) and debtor cover.
All covenants were met during the year. Borrowing levels are
controlled by the Group Finance department, which manages
treasury risk in accordance with policies set by the Board.
The Group’s financial liabilities are denominated primarily in
Sterling. Exposure to currency risk at a transactional level is
generally minimal, with most transactions being carried out in
local currency.
TAXATION
The tax charge in the period of £7.1m (2020: £1.0m)
represents an effective tax rate of 45.8% (2020: -4.9%) and
arises on the Group’s activities in the UK and overseas. The
higher effective tax rate is driven by non-deductible expenses
and remeasuring and recognising deferred tax in the UK at
25%. Finance Act 2021 increases the UK corporation tax rate
from 19% to 25% effective 1 April 2023 for companies with
profits in excess of £0.25m. Under IAS 12, deferred tax assets
and liabilities should be measured at the tax rates that are
expected to apply to the period when the asset is realised or
the liability is settled.
The Group’s contribution to the UK Treasury in the period
amounted to £331.9m (2020: £212.3m) and consisted of
VAT, income tax, national insurance and corporation tax. Of
this amount, employer’s national insurance, apprenticeship
levy, irrecoverable VAT and corporation tax totalling £37.7m
(2020: £24.5m) was a cost to the business.
EARNINGS PER SHARE
Continuing basic earnings per share increased to 18.3p (2020:
Loss (46.2)p) as underlying profit after tax from continuing
operations increased by £29.7m.
The weighted average number of shares in 2021 was 45.5m,
0.7m lower than 2020 due to the ongoing share buyback
programme. Continuing adjusted earnings per share
increased to 35.3p (2020: 18.2p) and reflects the underlying
performance of the business, excluding impairment and
amortisation of acquired intangibles and their respective
taxation impact.
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STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
CAPITAL MANAGEMENT
The Group’s capital base (note 27) is primarily used to finance
its working capital requirement, the key component of which is
trade receivables. Trade receivables in the staffing and support
services sectors are managed according to a range of Dso
targets. Terms of trade are monitored, and the approval of
extended payment terms requires senior finance involvement.
In some of the Group’s managed services businesses, the
amounts payable to third party suppliers are not due until
shortly after the receipt of the client receivable. As noted
above, the Group has committed facilities that ensure there
is sufficient liquidity to meet ongoing business requirements.
The primary objectives of the Group’s capital management
are to ensure that it maintains a good credit rating in order
to support its business, maximise shareholder value and to
safeguard the Group’s ability to continue as a going concern.
GOING CONCERN
After making appropriate enquiries, the Directors have a
reasonable expectation that the Company and the Group
have adequate resources to continue in operational existence
for the foreseeable future. In coming to their conclusion,
the Directors have considered the Group’s profit and cash
flow plans for the coming period. The amount of borrowing
required to fund the Group’s activities is determined based
on these projections, together with expected returns to
shareholders and planned capital expenditure. This is then
compared to the bank lending facilities currently committed
and expected to be available to the Group.
Also considered is the projection of compliance with the
financial covenants implied by these plans. In addition, these
figures are tested for sensitivity to possible changes to the
economic environments in which the Group operates. The
Group has no operations in Ukraine or surrounding regions
and therefore there is no direct impact on the Group’s trading.
However, any indirect impact, such as a worsening in economic
conditions, would represent such a sensitivity.
The impact on Group liquidity and covenants of each of these
sensitivities is then evaluated together with the likelihood of
each of these occurring either individually or in combination.
on a regular basis, and at least quarterly, the Board reviews
updated projections of future borrowing requirements, facility
usage and resulting headroom, together with projected
covenant compliance; these are based upon the latest actual
results and borrowing position supplemented by regularly
updated profit forecasts. Based on the above, the Directors
consider it appropriate to continue to adopt the going concern
basis in preparing the financial statements.
DIVIDENDS AND SHARE BUYBACK
In January 2021, the Board announced a reduced share
buyback programme, to purchase ordinary shares in the
Company up to an aggregate market value of £0.5m per
calendar month until the next AGM which was held in June
2021. Under this programme, 466,753 shares were purchased
at a total value of £1.3m.
An updated programme was approved at the AGm authorising
the Board to purchase up to a maximum of 4,560,363 shares,
representing 10% of the issued ordinary share capital of the
Company (as at 17 may 2021) until the earliest of the 2022
AGM or 30 June 2022. Under this programme, 141,849 shares
were purchased during the period at a total value of £0.6m. No
dividend has been paid or is proposed for the year (2020: £nil).
INSURANCE
The Group maintains a comprehensive insurance programme
with several reputable third party underwriters. Insurance
is brokered at a Group level. The Group’s insurance policies
are reviewed and updated annually to ensure that there is
adequate cover for insurable risks and that the terms of those
policies are optimised.
OUTLOOK
2021 has seen a significant recovery in trading in our regions
and segments from the sharp declines experienced in 2020.
We maintained our focus on cost management whilst making
investments in revenue-generating headcount to drive further
growth in 2022. Operational cash flow was strong with
further improvements in Dso which enabled an underlying
reduction in borrowings and facility levels. This provides a
strong liquidity position for 2022. The strategic disposal of
Corestaff in February 2022 and the cash received will further
bolster this position. Trading as we exited 2021 was above pre-
pandemic levels and this has continued in the first few months
of 2022. Investments in our core systems and the subsequent
deployment will also enable our teams to deliver further
productivity gains.
We started 2022 positively, whilst being mindful of possible
economic headwinds, government fiscal easing, tax increases,
inflationary pressure, potential interest rises, as well as acute
talent shortages, these have now been overshadowed by the
events in Ukraine and the resulting political and economic
instability. Though we do not trade within the affected region,
the global economic impacts and knock-on effect to our
markets at this time is uncertain.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Principal risks
We recognise that effective risk management is fundamental to delivery of the Group’s strategic objectives. Each business
segment considers strategic, operational and financial risks on a regular basis, evaluates existing controls and identifies further
actions required to mitigate risks. Risks that are considered significant at Group level are set out below.
THREAT
MITIGATION
STATUS
STRATEGIC RISKS
ECONOMIC ENVIRONMENT
Global and regional economic conditions can be affected by numerous
factors, including political change or unrest, pandemic disease and
weather events.
There continues to be economic uncertainty in most nations due to the
Covid-19 pandemic and Ukrainian conflict which is clearly a significant
risk to our ability to maintain and grow gross profit, either through
reduced requirements for temporary staff, by discouraging clients to
hire permanent staff, or by encouraging clients to adopt lower cost
delivery options.
As a result of the pandemic and the conflict in Ukraine, we are now
seeing rising inflation and interest rates which will cause more
uncertainty for clients and candidates.
POLITICAL ENVIRONMENT
During the pandemic regional governments applied varying financial
stimuli. Countries are now reducing these through fiscal easing and tax
rises (for example, the NI increase in the UK from April 2022).
There is also increased political uncertainty in eastern europe,
particularly with the current conflict in Ukraine which could have wider
consequences for Western europe.
In the public sector, ongoing financial constraints may limit growth
and/or create pressure on margins on existing business.
Geographical diversity and the Group’s mixed portfolio
of Managed Services and Specialist Staffing businesses
mitigate the potential impacts of economic changes in
specific regions. Risk is further mitigated by the
diversity of sectors in which the Group’s clients operate
and close management of operating costs across all
brands and functions.
The diversity and mixed portfolio of the Group has also
supported resilient performance during the Covid-19
pandemic. some of our clients and sectors have been
able to operate relatively unaffected whilst others had
to close during lockdown periods.
Wage inflation will be incorporated into our billing
rates, pricing strategy and governance where it is not
already included in the contract.
We have completed our refinancing to December 2024.
This provides a level of fixed interest rate costs over
this period.
management continues to monitor the situation and
client contracts allow all state-related pay increases to
be charged on.
The Group continues to monitor political-related
exposures and developments, and communicate with
clients, employed staff and candidates where
applicable. The Group has no operations in Ukraine or
surrounding regions so there is no direct impact on our
trading at this time.
Though there may be contraction in some public
spending, areas such as Health are expected to increase.
our diverse portfolio allows us to pivot our services to
support public sector demands.
ATTRACTING AND RETAINING TALENT
Any constraints on the Group’s ability to attract and retain key talent
in an increasingly competitive market could result in loss or weakening
of client relationships, lack of appropriate leadership and/or erosion
of the Group’s talent base, impacting achievement of financial and
other objectives.
Wage inflation is increasing for both colleagues and candidates and we
must ensure the business operates in line with market expectations.
Planned business transformation initiatives will create a need for new
skill sets in the Group in the medium term. Factors such as Brexit and
changes to UK immigration rules may impact on the availability of
talent more generally. In addition, the impact of Covid-19 on travel has
restricted the movement of overseas workers creating shortages in
some markets.
In 2021, to support investment in our people, we
developed an ambitious three-year People strategy.
Significant leadership appointments were made in the
areas of culture, equity, diversity and inclusion (‘eD&I’),
talent acquisition and development and reward
and recognition.
The Group’s high-retention business model ensures that
brands and central functions are focused on talent
management and development, performance review
and succession planning.
Leadership development programmes are in place and
the Group’s culture of Virtuosity encourages talent
development and progression.
The Group’s eD&I policy is outlined on page 39.
H
m
m
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STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Risk trend
H: High risk
m: medium risk
L: Low risk
Increased compared to 2020
stable compared to 2020
Decreased compared to 2020
THREAT
MITIGATION
CUSTOMER CONCENTRATION
General decline in a particular industry sector, loss of a key customer or
a significant reduction in business volume on a key account could result
in reduced revenue and/or increased pressure on gross profit. The
Covid-19 pandemic has created significant economic uncertainty for
our clients.
management review market conditions and sales and
account management pipelines on an ongoing basis.
‘Top customer’ reporting includes analysis by sector and
geography, highlighting any emerging exposures.
management also hold regular meetings with key
customers to discuss sales pipelines, current service
performance and opportunities to add new service lines
or extend existing services. All clients are vetted and
credit checked prior to trading, and we hold credit
insurance across the Group.
DELIVERY OF STRATEGIC PROJECTS
The Group is committed to investing in a range of strategic
transformation projects that will drive revenue growth and/or improve
operational efficiency. Failure to operate rigorous control and
oversight of such projects may result in returns on such investment
being lower than expected.
Strategic projects, each owned by a senior
leader directly accountable to the Group Ceo, are
managed using a promise management platform
(mosaic).
A Group Pmo oversees and governs our
key strategic projects. An assurance
programme reports to the Audit Committee
to ensure delivery of our IT Roadmap.
DISRUPTIVE TECHNOLOGY
Use of digital technologies in the recruitment market is expanding
rapidly and disrupting ‘traditional’ people-based processes. This trend
is expected to accelerate as new technologies are developed and
enable new ways of working.
The relevance of relationships between candidates, clients and
recruitment agencies is declining and any failure by the Group to adapt its
business model appropriately could lead to competitive disadvantage.
The Group actively monitors and assesses emerging
technologies through both IT and origin, our innovation
hub. The origin team works closely with the Virtuoso
Alliance, IT and across regions. origin runs pilots and
experiments and partners with new service providers.
now under single, global leadership, Digital &
Innovation brings together our customer-facing
technology solutions under one compelling proposition.
We continue to invest in proprietary technology and
third party partnerships.
The Group began implementing the strategic IT
Roadmap during 2021, with key deliverables due in 2022.
The ‘Digital Core’ is a substantive rolling replacement for
all of our sales, operational and finance systems.
We completed the first phase of this programme during
2021, with initial deployment to business users in Q4, to
be followed by a roll-out programme leading to
substantial completion by the end of 2022. We also
moved many of our existing systems to the cloud and
exited a large on-premises data centre saving property
and technology costs.
STATUS
H
m
m
Page_33
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Principal risks continued
THREAT
MITIGATION
STATUS
OPERATIONAL RISKS
TECHNOLOGY SYSTEMS
The Group is reliant on many different technology systems that may
have limited useful life in a fast-changing business environment. The
legacy nature of some systems may also hinder optimisation of
end-to-end business processes.
systems may also be vulnerable to factors beyond the Group’s control,
e.g. power failures or internet connectivity outages.
The Group has a stable systems infrastructure and an
ongoing IT investment programme. Core systems are
replicated across two geographically separate data
centres and regular monitoring of systems performance
is undertaken.
In 2021 the Group also introduced an IT Governance
process.
H
CYBER AND INFORMATION SECURITY
The risk of external cyber-attacks continues to increase. A successful
attack could result in loss of sensitive data, business disruption and/or
damage to the Group’s reputation.
The ongoing political situation in eastern europe has increased this risk
to nATo member countries.
A programme to enhance security of the Group’s
systems against cyber-attack has been implemented.
Ongoing monitoring is in place and regular exercises
are undertaken. A cyber-security upgrade is under way
and Cyber Essentials Plus certification was achieved in
2021. The Group is already Iso 27001 and Cyber
essentials accredited.
GDPR was implemented across the relevant
parts of the Group in 2018 and annual training courses
have to be completed by all staff to ensure compliance
with GDPR and cyber policies.
BUSINESS CONTINUITY
A major disruptive event, such as a fire, severe weather or the current
Covid-19 pandemic affecting one or more of the Group’s operating
locations, could lead to loss of business and/or adverse impacts on
staff and assets.
The current focus on Covid-19 means attention is diverted from other
potential business critical risks.
Comprehensive systems and operational business
continuity plans are in place and tested on a regular
basis. These are updated at least annually.
Following the Covid-19 pandemic, the Group has had
two years of working in a hybrid remote environment
which has demonstrated the resilience of the business
and ability to implement its business continuity plans.
H
m
SERVICE AND CONTRACTUAL COMPLEXITY
In certain markets, the Group’s clients are becoming increasingly
sophisticated in their procurement and buying activity.
Competitive tendering activity and commercial contracts are
becoming increasingly complex, with longer lead times in decision
making. This necessitates constant development of the Group’s service
offer, the sophistication of our selling activities and the management
of tendering processes.
Complexity and changing client requirements also present challenges
around measuring and monitoring service delivery and compliance
with contract sLAs.
The Group has a standardised contract review process in
place involving operational, commercial and legal
oversight.
H
The Group also continues to invest in specialist resource
to support business development, implementation and
service delivery activities.
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STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Risk trend
H: High risk
m: medium risk
L: Low risk
Increased compared to 2020
stable compared to 2020
Decreased compared to 2020
THREAT
MITIGATION
STATUS
REGULATORY, COMPLIANCE AND FINANCIAL RISKS
REGULATORY ENVIRONMENT
Regulatory changes can lead to increased costs and workload,
particularly where they relate to candidates’ rights, eligibility to work
or corporate reporting, e.g. payment practices, diversity.
The extension of Off Payroll Working regulations to the private sector
in the UK in April 2021 has caused some short-term disruption as both
clients and contractors adapted.
Expansion into new geographies in support of clients’ needs brings
exposure to unfamiliar regulatory environments.
Legal, Finance and Compliance functions at both Group
and brand levels monitor risks and compliance, taking
appropriate action where necessary.
m
Appropriate policies and codes of conduct are in place
across the Group and regular training is provided
to colleagues.
Process and system changes required to ensure
effective management of Off Payroll Working changes
have been identified and are being implemented.
External professional advice is sought where
insufficient knowledge exists within the Group.
CASH AND LIQUIDITY MANAGEMENT
The Group has a central Treasury function in place with
regular forecasting, reporting and review procedures.
m
Poor cash and liquidity management may result in strain on the Group’s
credit facilities and/or operational cash flow issues.
The Covid-19 pandemic has created significant economic
uncertainty for our clients which could impact their ability to
settle outstanding liabilities.
The Group also maintains a revolving credit facility with
a syndicate of banks to provide additional flexibility in
its funding arrangements. This was renewed at the end
of 2021.
A Group Credit Policy sets out the policies and
procedures that must be implemented across the Group
to mitigate credit risk.
FINANCIAL CONTROL
A failure of financial control could lead to a material loss
to the business.
m
The Group operates several shared services
arrangements where transaction processing
and management accounting are independent
of operations.
A clearly defined schedule of delegated authority limits
for various types of decisions and transactions is in
place and appropriate segregation of duties is
maintained in all finance processes.
Key business processes are subject to periodic internal
audit review with clearly defined action plans
established to address any control weaknesses.
Page_35
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Stakeholder engagement and our S172 statement
INTRODUCTION
section 172 of the Companies Act 2006 requires Directors
to take into consideration the interests of stakeholders and
other matters in their decision-making. We believe we have a
history of collaborative, informative stakeholder engagement,
making decisions based on long-term success, and we maintain
governance structures and processes that support good
decision-making.
This section articulates how the Directors have acted to
promote the success of the Group for the benefit of its
stakeholders. In meeting this responsibility, the Directors have
had regard, amongst other matters, to:
a. the likely consequences of any decisions in the long term;
b. the interests of the Group’s colleagues;
c. the need to foster the Group’s business relationships with
suppliers, customers and others;
d. the impact of the Group’s operations on the community
and environment;
e. the Group’s reputation for high standards of business
conduct; and
f. the need to act fairly as between members of the Group.
STAKEHOLDER ENGAGEMENT
Impellam’s stakeholders are clients, candidates, colleagues,
suppliers, investors and lenders and the Board recognises the
need to regularly engage with its stakeholders as it makes
decisions. We develop and encourage long-term relationships
with our stakeholders based upon Impellam’s vision ‘to be
the world’s most trusted staffing company – trusted by our
people, our clients and our investors in equal measure’.
As part of this vision, our stakeholders’ interests are at the
forefront when the Board of Directors set the strategic
priorities of the Group. The strategic priorities: enabling
our Virtuosos; Transforming our Portfolio; and Improving
Resilience - include consideration of the key stakeholder
groups and how we engage with them.
In addition to regular stakeholder engagement, as the
Board of Directors, our intention is to take into account our
operational impacts on the community and environment,
and our wider societal responsibilities, in particular, how we
impact the regions we serve. We support our communities
by finding them good work, supporting local corporate social
responsibility initiatives and ensuring our impact on the
environment is minimal, as demonstrated by our ISO 14001
accreditation.
PRINCIPAL DECISIONS IN 2021
The Board considered the interests of, and the impact on, all
stakeholders when making a number of key decisions during
the year, as demonstrated by the following examples.
REGIONAL COVID-19 LOCKDOWNS
During 2021, regional lockdowns continued in the UK (Q1)
and APAC and we maintained operational capacity throughout
these periods of remote working before reopening our
offices safely.
Stakeholder considerations:
Colleagues
We continued the processes implemented across the Group
in 2020 to ensure our colleagues had the equipment and
infrastructure required to work from home or in our offices.
We committed to supporting our colleagues where they need
access to an office environment to work from, or the ability
to interact in person with colleagues safely. As local guidance
was released regarding opening of offices, we reviewed this
in detail and assessed each office against these requirements
and undertook the necessary steps to make them ‘Covid-19
safe’. We then prioritised which offices could reopen and
identified the colleagues who could use them.
Whenever the local guidance changed, immediate action
was taken to ensure we were operating within the updated
rules. We offered continued support to our colleagues who
continued to work remotely.
Suppliers
our property team worked with our landlords where necessary
to ensure each property was Covid-19 safe prior to reopening.
Clients, candidates, investors and lenders
By keeping our people safe in their working environment, we
continue to meet client requirements, support our candidates
and deliver effective business results throughout the pandemic.
Outcome
Our offices have opened safely where possible, enabling
suitable working environments for those who cannot work
remotely. We continue to review our property requirements
and are actively reducing the number of properties in our
portfolio.
BLENDED WORKING
Following the regional lockdowns due to Covid-19, the Group
reviewed its policy on work locations and the positive impact
of working from home.
Stakeholder considerations:
Colleagues
There have undoubtedly been operational, financial and
environmental benefits from enabling our workforce to work
remotely during the pandemic. However, our people also
thrive on face-to-face interaction, building collaboration and
rapport. In addition, some individuals have struggled from a
wellbeing perspective throughout this time.
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STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
We undertook a number of colleague surveys to understand
how people were coping as well as equipment and
infrastructure requirements. This helped to understand how
we could support our colleagues and develop longer-term plans
in the interests of our colleagues, customers and candidates.
SALE OF CORESTAFF
On the 24 January 2022 we announced the sale of Corestaff,
our US-based Light Industrial brand to swipejobs Inc., a US
private digital staffing business.
Stakeholder considerations:
Colleagues
By combining market-leading technology with the deep
heritage and staffing know-how of the Corestaff teams, the
transaction allows Corestaff to expand its service offering and
reach in a highly competitive market.
Clients, candidates and suppliers
The transaction will give enhanced geographic reach to our
clients, candidates and suppliers and continue to deliver
effective services and results.
Investors and lenders
The proceeds of the sale will be used to pay down net debtΔ to
fund additional investments, therefore returning value to our
shareholders and managing our lender requirements.
Outcome
Due to the scale and limited geographic footprint of Corestaff
in north America, we consider our colleagues and clients
will benefit from enhanced geographic reach for their light
industrial staffing requirements coupled with an accelerated
digital transformation brought about by the sale.
Clients and candidates
We have ensured that by allowing blended working we
continue to meet our clients’ and candidates’ requirements.
Investors and lenders
By ensuring our colleagues have the right blend, we
have increased productivity and reviewed our property
requirements, delivering both cost savings and gross profit
growth. This will drive increased shareholder value and enable
us to continue to meet our cash flow targets and manage our
lender requirements accordingly.
Outcome
We have offered all colleagues the opportunity to adopt
blended working, allowing them the flexibility of working from
home, at clients’ sites and in our offices.
CORE SYSTEMS
Following the decision in 2020 to accelerate the
transformation work, the Board agreed to invest in IT core
systems. This investment will update systems across the Group
in both front and back-office applications.
Stakeholder considerations:
Colleagues
The main driver to improve the core systems is to free up
our Virtuosos so they can spend more time with clients and
candidates and deliver the Virtuoso operating model.
Clients, candidates and suppliers
The investment in core systems will ensure the Group is easier
and quicker to deal with, generating efficiencies across the
supply chain, candidate journey and ensuring our clients never
have a reason to leave.
Investors and lenders
The investment in core systems will improve our digital
infrastructure, enhance our security and improve our
efficiency.
Outcome
The IT Core Systems project was launched in 2021 across the
Group. Key go live dates start in Q1 2022, with a new pay/bill
system for the UK STEM brands and the global finance system
in APAC.
Page_37
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Stakeholder engagement and our S172 statement continued
STAKEHOLDER GROUP WHY THEY ARE IMPORTANT
HOW WE ENGAGE
Clients
Colleagues
Candidates
Suppliers
We work with our clients to find people for
good work to help them build better
businesses. We retain them, continuing to
understand their evolving requirements.
We review client satisfaction and our
performance either quarterly, biannually or
annually. This is supported by feedback via
face-to-face meetings, net Promoter scores
and surveys.
our colleagues are fundamental to the
delivery of our vision, mission, strategic and
financial promises to our stakeholders.
our mechanisms for engaging with colleagues
include: a shadow board, the Virtuoso Alliance,
colleague councils across the Group, surveys,
net Promoter scores and Best Companies’
surveys, and our communication and
collaboration platform, Workplace, town hall
meetings and our global newsletter, strategy
in Action.
our mission as a business is to ‘provide a sense
of purpose and fulfilment for our people to
help our customers build better businesses in
a changing world’ which includes the
candidates we provide to our customers.
We engage with our candidates through
face-to-face and virtual meetings and by using
net Promoter scores, real-time feedback and
surveys, via our websites and apps that digitise
the job-seeking process.
We depend on a myriad of partners to meet
our needs – whether they are supplying
stationery or sourcing workers for our
programmes. We place the highest
expectations on our supply chain and, in turn,
we treat them as real partners.
All suppliers are expected to abide by our
supplier Code of Conduct. In 2020, we
introduced audits of key suppliers not only to
measure their progress against the Code of
Conduct but also to give them coaching and
guidance, where necessary, in achieving the
standards we expect.
Investors and lenders
Access to capital through the capital markets
and our lenders is important to the long-term
success of our business.
The Board has regular meetings with our
institutional investors and lenders to explain
the Company’s strategy, progress and plans,
and to share how we are addressing market
challenges. Due to Covid-19, these meetings
have continued through online forums rather
than in person.
The Annual General meeting is open to
all investors.
shareholders can view relevant information
about Impellam in the Investors section of
impellam.com.
Page_38
Responsible business report
Responsible
Business
Our commitment to sustainability underlines
our responsibility to build long-term value
for all our stakeholders, supported by sound
policies, good governance and positive actions.
PEOPLE AND CULTURE
Colleague engagement and communications
All 2,900 Impellam people across the world are connected
by Workplace, an internal communication and collaboration
network. Workplace combines the structure of a traditional
intranet with the capabilities of enterprise-wide social
networking software: a place to organise and disseminate
information securely, and also a place for our people to
connect, communicate and collaborate. The Group Ceo
holds quarterly town hall meetings across the Group and
connects with all 2,900 people on a regular basis through
Workplace, using video and written updates, wellbeing
check-ins, a monthly newsletter, live Q&A sessions, and other
multimedia to provide strategic information and financial
updates. Covid-19 has changed the way we work, and as a
consequence we have increased the frequency and media
we use to communicate with colleagues. our managers hold
regular 1:1 meetings with their people, team meetings, and
wider business-area conferences and Town hall meetings to
facilitate sharing of information, consultation and two-way
communication, supported by tools like openBlend.
The Virtuoso Alliance (our shadow Board) operates alongside
the Leadership Team to provide opinions, ideas, insight
and observations on the world in which we operate. Its
purpose is to make sure the Group Ceo and the Leadership
Team remain connected to our colleagues and in turn our
customers and candidates. The Impellam communications
model and associated technology means we can connect with
our colleagues quickly, wherever they are. The platform and
communication strategy facilitates faster knowledge-sharing,
communication and collaboration. This dynamic approach to
communications is key to our strategy and culture of enabling
our Virtuosos to achieve our vision of becoming the world’s
most trusted staffing company.
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
Covid-19 and our people
our response to Covid-19 in 2020 provided a robust and
flexible way of working which continued through 2021.
We adopted a blended working model which enabled our
people to work in the office, at home and on our client sites
as and when needed. We were careful to gather feedback
throughout the year to ensure our people were supported.
We’ve continued to invest in mental health and wellbeing
support by making available the Calm app, and in recognition
of our colleagues’ hard work amidst the challenges presented
by the pandemic and an unprecedented increase in demand
from customers, we gave our people two extra days off.
Equity, Diversity and Inclusion (‘ED&I’)
We actively encourage diversity in the workplace and have a
wide and varied colleague base, with a variety of social and
ethnic groups represented at all levels of the business. We
believe that breaking down the barriers that have traditionally
restricted access to the labour market will encourage job
opportunities for all. our global Impellam Group eD&I team
includes representation from our key regions: north America,
Australia and new Zealand, and the UK & europe. Under
the direction and leadership of the Group Ceo and newly
appointed Head of Culture and Fulfilment, it brings together
leadership and governance balanced with Group-wide,
regional and brand-specific actions. Our strategy is based on
data, qualitative intelligence from a global survey along with
participation from regional committees, and aims to make
Impellam a more diverse and inclusive business wherever
we operate.
our progress received several accolades in 2021. For the
second year running, Everest Peak Matrix recognised Guidant
Global and Lorien for Diversity and Inclusion in the 2021
TALiNT International Awards. ED&I is firmly on our agenda;
Guidant’s award-winning Influence programme is helping
clients with their eD&I strategies and to drive positive change.
Page_39
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
STRATEGIC REPORT
Responsible business report continued
Training
We provide our people with a multifaceted and agile
development pathway to enable high performance and
increase retention of our people and customers alike. We
focus on freeing our people from old habits, unlocking their
potential and enabling them to thrive through change. We
reinvigorated our mental Health and Wellbeing network with
mental health first aiders supporting our people globally,
along with campaigns running through Workplace every week
to signpost advice, helplines and the contact details of trained
colleagues who are well placed to help and listen. our people
also had access to Gladis, our online training platform as well
as live virtual and physical sessions.
Our culture of Virtuosity
At the heart of our integrated, collaborative business model is
a virtuous circle of making and keeping promises, engendering
trust and loyalty. By keeping our promises, we retain clients,
candidates, colleagues and investors for longer, and reap the
benefits of that longevity. Our culture of Virtuosity is created
by passionate people who are committed and driven to find
better ways to deliver the right solutions. We make sure that
‘the beautiful basics’ are in place and deeply embedded in all
of our businesses, all of the time.
Modern slavery
As part of the Group’s mission to find people fulfilling work,
we strongly oppose modern slavery in all its forms and will
try to prevent it by any means that we can. We expect anyone
who has any suspicions of modern slavery in our business or
our supply chain to raise their concerns without delay. In line
with the modern slavery Act 2015, we annually review internal
and external measures to ensure we are doing what we can to
prevent slavery and human trafficking in our businesses and
in our supply chains. our policy is available on our website at
www.impellam.com.
Health and safety
We are committed to meeting all the requirements of relevant
health and safety legislation. Formal policies are in place
throughout the Group and they are reviewed regularly and
updated to reflect changes in legislation and best practice. The
Group requires all colleagues to comply with these.
Anti-bribery
We have a commitment to carrying out business fairly,
honestly and openly. We also have zero tolerance towards
bribery. our Bribery Policy is in place to provide relevant
guidance and information to all our people in compliance with
the law relating to bribery and corruption, in particular the
Bribery Act 2010. We are determined to maintain
our reputation as a business that will not tolerate fraudulent
or corrupt dealings – whether they are attempted against us
from outside, from within our own workforce, or towards our
clients or suppliers.
Community
Impellam people work extensively with their local
communities. This includes supporting national and local
charities through volunteer work and raising funds.
ENVIRONMENT
Although we are a service-based organisation with no
manufacturing facilities and limited transportation
requirements, we are still committed to following
environmental best practices in the day-to-day conduct of our
business. This includes the use of sustainable and/or recyclable
materials when available. A regular review of the potential
impacts on the various businesses is undertaken and parts of
the Group have achieved accreditation to ISO 14001 in relation
to their environment management systems.
2021 energy and carbon reporting.
This year we have calculated our environmental impact across
scope 1, 2 and 3 (selected categories) emission sources for the
UK only. our emissions are presented on a location basis (using
the UK grid emissions intensity), and our emissions are 969,995
kgCo2e (2020: 1,082,778 kgCo2e), which is an average impact
of 582 kgCo2e per £m revenue (2020: 715 kgCO2e per £m
revenue). We have calculated the emission intensity metrics on
a revenue basis, which we will monitor to track performance in
our subsequent environmental disclosures. The methodology
used to calculate the Greenhouse Gas (‘GHG’) emissions is in
accordance with the UK Government GHG Conversion Factors
for Company Reporting (2021).
Energy and carbon action
our focus in the past year has been to both rationalise our
property footprint and to extend and encourage working
behaviours which were accelerated at the start of the
pandemic in 2020.
our overall property footprint continues to decrease as leases
expire; where the need for a physical location remains, we
have looked to shared spaces which can be used across the
business, relocate to more modern and energy-efficient sites
and utilise flexible working spaces where it is more practicable
to do so.
our strategy of increasing resilience by investing in technology
has enabled us to embed new ways of working within the
business which has seen our scope 1 travel emissions reduce
by 35%, despite an easing of travel restrictions from the
previous year. similar or greater reductions are also seen in our
other non-reportable scope 3 emissions.
Whilst not directly effecting the Scope 2 reporting, the
UK businesses completed their switch to purchasing 100%
renewable electricity generated only through wind, solar and
hydro for all of its UK operations.
Work will continue in certifying our carbon neutral strategy
to PAS2060 to achieve our objective of achieving carbon
neutrality for our entire UK business by the end of 2022.
Page_40
STRATEGIC REPORT | CoRPoRATe GoVeRnAnCe | FInAnCIAL sTATemenTs
969,569kg CO2e
Our 2021 emissions which is
an average impact of
582 kgCO2e per £m revenue.
35%
Reduction in Scope 1
travel emissions.
In tandem, the business will also commence the development
and delivery of a formal Carbon net Zero strategy. In support
of both initiatives, we shall be launching a new electric
Vehicle Salary Sacrifice Scheme in early 2022, available to all
UK employees, which by utilising government incentives and
achieving economies of scale through Group purchasing will
provide access to electric vehicles at a much-reduced cost for
all colleagues. The additional benefit of this scheme will be to
accelerate the reduction of both scope 1 and scope 3 vehicle
emissions over the coming years. We shall continue to refine
our property portfolio in line with our existing strategy and
in conjunction with our developing hybrid working initiatives,
as well as launching a formal engagement project with all UK
colleagues on our environmental plans and actively seek their
contributions as to how we achieve our objectives.
Emissions and energy usage
Task Force on Climate-related
Financial Disclosures (‘TCFD’)
TCFD reporting is important to effective ESG and climate
risk management. It will also help us to meet the growing
stakeholder demand to understand how climate change could
affect Impellam, as well as the effects our operations have
on the climate. In 2021 we have taken initial steps on the
roadmap to TCFD reporting and this activity will be continued
throughout 2022. The Group will continue to monitor the
significance of climate-related risks (including existing and
emerging regulatory requirements), implement mitigating
activities, and disclose in line with materiality to the Group.
At present, these risks are not considered to have a material
impact for the Group.
scope 1 (kgCo2e)
Total Scope 1 (kgCO2e)
scope 2 (kgCo2e)
scope 3 (kgCo2e)
Total kgCO2e
Emission Source
natural gas
Company and leased vehicles
Heating oil
electricity
Colleague cars
2021
99,656
236,261
0
335,917
576,976
55,102
969,569
2020
154,496
306,146
5,516
466,158
557,263
59,357
1,082,778
Total energy usage (kWh)
4,631,709
4,904,605
normaliser
KgCo2e per £m revenue
582
715
This Strategic Report from pages 1 to 41 was approved by the Board on 5 April 2022 and signed on its behalf by:
Rebecca Watson
Company Secretary
800 The Boulevard,
Capability Green,
Luton,
Bedfordshire
LU1 3BA
Page_41
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
The primary responsibility of
the Chair is to lead the Board
effectively and this includes
overseeing the adoption,
delivery and communication
of the Company’s corporate
governance model.
CORPORATE GOVERNANCE
43_ Governance report
44_ Board of Directors
46_ Corporate governance statement
54_ Directors’ report
57_ statement of Directors’ responsibilities
For more information visit
www.impellam.com
Page_42
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
Governance report
Corporate governance
The Chair ensures that the Board as a whole plays a full and
constructive part in the development and determination of
the Company’s strategy and overall commercial objectives.
The Board has overall responsibility for corporate governance
within the Group and this is underpinned by a framework
aligned to the requirements of the business. The full Board
retains certain matters for its own review and decision-
making while other responsibilities are delegated to sub-
committees of the Board, namely the Audit Committee and
the Remuneration Committee.
As a company whose shares are traded on the AIm market of
the London Stock Exchange, the Company complies with the
Quoted Companies Alliance (‘QCA’) Corporate Governance
Code (‘the Code’) and its statement of Compliance with the
same can be found on the Company website www.investors.
impellam.com/corporate-governance/.
AUDIT COMMITTEE
BOARD OF DIRECTORS
• oversees the Group’s internal risk
and controls strategy, including
whistleblowing arrangements.
• Reviews the Annual Report and
interim financial statements prior
to submission to the full Board.
• Reviews reports from the external
auditor.
• Reviews the Group’s risk register.
• Approves financial policies.
• sets and reviews the activities of
internal audit.
Audit Committee
page_50
• monitors and reviews the strategy
and its development, the financial
and operational performance of the
Company and risk management.
• monitors and reviews internal and
external factors that affect the
Company.
• sets standards, values and policies.
• ensures the Company is meeting
its objectives and has the correct
resources in place.
• Approves financial policies.
• Reports to shareholders.
• oversees internal controls.
• Responsible for corporate
governance.
REMUNERATION
COMMITTEE
sets, reviews and recommends to the
Board remuneration for Directors and
other senior executives, and sets
overall remuneration strategy and
policy for the Group.
Remuneration Committee
page_52
STRATEGY AND DEVELOPMENT TEAM (VUCA)
• Devises the Group strategy and financial plan for approval by the Board.
• Approves the strategic and financial plans of the sub-brands and divisions and monitors the implementation and delivery of
those plans.
• VUCA (Volatile, Uncertain, Complexity, Ambiguity) focuses on Impellam’s overriding strategic and financial promises for the mid-
long term and the challenges and opportunities the team sees to achieve the promises.
SENIOR LEADERSHIP TEAM
(WAR ROOM)
VIRTUOSO TEAM
(THE VIRTUOSO ALLIANCE)
• Responsible for the day-to-day
management of the Group and its
operations.
• Implementation of the strategy and
financial plan.
• Provides advice, guidance and a fresh
perspective to the Group Ceo, our
Executive Team and Board on our
strategic priorities and their impact
on the business, our customers, the
industry and the wider world of work.
INVESTMENT COMMITTEE
• Reviews and monitors strategic
investments and makes investment
decisions.
Page_43
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Board of Directors
LORD ASHCROFT KCMG PC
Non-Executive Chairman
Appointed: December 2014
JULIA ROBERTSON
Group Chief Executive Officer
Appointed: April 2013
Julia Robertson was appointed as Group Chief Executive
Officer in April 2013 having previously been responsible for the
Group’s UK operations between 2008 and 2013. Julia’s career
in recruitment spans some four decades, always driven by the
burning belief that there has to be a ‘better way’. This belief has
guided her through her entire career which has included founding
her own recruitment business in 1986 which was sold to the
Group alongside Tate in 2000, and also serving as Chief Executive
of the Institute of employment Consultants (now known as the
ReC), the professional body for the UK recruitment industry.
Lord Ashcroft is an international businessman, philanthropist,
author and pollster. His many, varied business interests include
significant investments and participation in both public and
private companies in the UK, Us and the Caribbean. He was
appointed Non-Executive Chairman of the Company in December
2014. In 2012, he was appointed a member of the Privy Council
and was made the Prime minister’s special Representative for
Veterans’ Transition, working with all departments to ensure
military personnel receive the support they need when making
the transition to civilian life. He stepped down from this role in
2018. Lord Ashcroft supports a wide range of charities, including
those dealing with crime prevention and education. He is the
founder and Chairman of Trustees of both Crimestoppers and
the Ashcroft Technology Academy, a former Patron of the Forces
in mind Trust Research Centre, Vice Patron of the Intelligence
Corps museum and a Trustee of the Cleveland Clinic in the Us.
He resigned from the House of Lords in 2015 to concentrate on
other areas of his work. He is a former Trustee and President
of the West India Committee, a former Trustee of Imperial War
museums and former Chancellor of Anglia Ruskin University
(which awarded him an Honorary Doctorate in 1999). In 2016,
Lord Ashcroft was made Knight Grand Cross of the most sacred
order of the Holy Trinity (ethiopia) and a Fellow of the Royal
Canadian Geographical society. In 2017, he was made a senior
Fellow of the International strategic studies Association and in
the same year he became an Honorary Belize Rotarian. In 2021 he
was promoted to Grand Collor of the most sacred order of the
Holy Trinity (ethiopia). He has written 25 books, mainly on politics
and bravery, and is widely respected for his political polling.
TIM BRIANT
Chief Financial Officer
Appointed: February 2020
MIKE ETTLING
Independent Non-Executive Director
Appointed: september 2013
Tim Briant joined the Group on 1 October 2019 and was
appointed to the Board on 3 February 2020 as the Group Chief
Financial Officer. Tim is a Chartered Accountant and has over ten
years’ experience working within the recruitment sector within
listed and private equity backed global recruitment companies.
Tim spent over ten years at Adecco in a number of finance roles,
with his last there being the CFo of Adecco UK and Ireland. Prior
to this Tim worked for spring Group plc, a listed recruitment
company, where he was Group Financial Controller and Company
secretary and played a key role in its acquisition by Adecco. Prior
to this Tim worked at KPmG in audit and transaction services. Tim
has a strong background in mergers and acquisitions and business
integrations having been involved in the disposal and subsequent
integration of spring Group plc to Adecco and the acquisition and
integration of Penna plc by Adecco.
Mike Ettling was appointed a Non-Executive Director of the
Company in september 2013. With strong sector and non-
executive experience, Mike was President of SAP-Success factors
globally. He has had an extensive executive career in global
technology businesses including at nGA HR, Unisys, synstar and
EDS and was formerly a Non-Executive Director of Backoffice
Associates LLC, a Us Pe-backed data business, and also formerly
a Non-Executive Director of Telkom BCX Ltd, a South African IT
and telecommunications business. Mike is currently CEO of Unit4,
a world leader in enterprise applications for services and people
organisations. He is also a Non-Executive Director of NCC Group
PLC, a London listed cyber security business.
Page_44
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
Key to Committee membership
Audit Committee
Chair of Audit Committee
Remuneration Committee
Chair of Remuneration Committee
ANGELA ENTWISTLE
Non-Executive Director
Appointed: september 2012
MICHAEL LAURIE
Independent Non-Executive Director
Appointed: July 2014
Michael Laurie was appointed a Non-Executive Director of the
Company in July 2014. He is also Non-Executive Chairman of
sUsD Limited, a property development company that promotes
sustainable architecture. Michael was an army officer for 34 years.
He held the role of Major General at the Ministry of Defence
until 2003, when he became the Ceo of the Crimestoppers Trust,
retiring from that position in 2013.
Angela Entwistle was appointed a Non-Executive Director
of the Company in september 2012. Angela is a Corporate
Communications specialist working with companies in the private
sector including Deacon street Partners Limited and Conservative
Home Limited. She is a Non-Executive Director of Carlisle Support
services, one of the leading suppliers of value-added solutions
across the public and private sectors in the UK and Ireland, a
Non-Executive Director of Merit Group plc, a data and intelligence
business, and a Non-Executive Director of Biteback Publishing
Limited, Britain’s leading publisher of political and current affairs
titles. Angela was Corporate Communications Director of ADT
Limited, an international business services company and the
world’s leader in electronic security solutions, from 1986 to 1997.
Angela is significantly involved in a number of charities including
acting as Trustee of both Crimestoppers, the only UK charity
dedicated to solving crimes, and Prospect education (Technology)
Trust Limited, the umbrella charity of the Ashcroft Technology
Academy. Angela is not considered to be independent due to her
links with the major shareholder.
BARONESS TINA STOWELL OF BEESTON MBE PC
Independent Non-Executive Director
Appointed: october 2017
Tina stowell has held a number of senior positions in media and
government throughout her career. since 2011, she has been
a member of the House of Lords and was Leader of the House
from 2014 to 2016. Before entering the House of Lords, she
worked at the BBC between 2001 and 2010 and was Head of
Corporate Affairs. She is a Non-Executive Director of ABTA and
was Chairman of the Charity Commission for england and Wales
until February 2021.
REBECCA WATSON
Group Company Secretary and
General Counsel and Portfolio CEO
Appointed: may 2008
Rebecca Watson was appointed as Group Company secretary
and General Counsel of the Company in may 2008. she spent the
previous five years as Company Secretary and General Counsel
for The Corporate Services Group Plc, having joined the Group
in 1998 as Company solicitor. In addition, in July 2018 she was
appointed Portfolio Ceo responsible for the Regional specialist
Staffing brands within the Group. Prior to this, she was in a
private practice, acting for a range of corporate clients. she has
been a qualified solicitor since 1993.
Page_45
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Corporate governance statement continued
QCA Code Compliance
QCA PRINCIPLE
Deliver growth
EXPLANATION
FURTHER READING
1
2
3
4
Establish a strategy and
business model which promote
long-term value for
shareholders.
By providing staffing solutions and support
to both clients and candidates across a
wide spectrum of markets, we provide
good work for our candidates and people
for our clients.
For more information
page_14
Seek to understand and meet
shareholder needs and
expectations.
The Ceo and CFo communicate regularly
with shareholders, investors and analysts.
The full Board is available at the Annual
General meeting (‘AGm’) to communicate
with shareholders.
For more information
https://investors.
impellam.com/
corporate-governance/
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term
success.
In addition to our shareholders, our clients,
candidates, contractors, suppliers and
colleagues are our most important
stakeholders. We engage with these
communities via regular communications
in our day-to-day activities, and via formal
feedback requests.
For more information
page_38
Embed effective risk
management, considering both
opportunities and threats,
throughout the organisation.
Ultimate responsibility for risk
management rests with the Board,
but day-to-day management of risk is
delivered through the way we do business
and our culture.
For more information
pages_32 to 35
Maintain a dynamic management framework
5
Maintain the Board as a
well-functioning, balanced
team led by the Chair.
The Board has two established
Committees for Audit and Remuneration.
The composition and experience of the
Board is reviewed regularly.
For more information
pages_50 to 53
Page_46
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
QCA PRINCIPLE
EXPLANATION
FURTHER READING
6
7
8
9
Ensure that between them the
Directors have the necessary
up-to-date experience, skills
and capabilities.
The Board is satisfied that its current
composition includes an appropriate
balance of skills, experience and
capabilities.
For more information
pages_44 and 45
Evaluate board performance
based on clear and relevant
objectives, seeking continuous
improvement.
The Board regularly considers the
effectiveness and relevance of its
contributions, any learning and
development needs and the level of
scrutiny of the senior management Team.
For more information
page_48 and 49
Promote a corporate culture
that is based on ethical values
and behaviours.
our internal social network (Workplace)
sets out our corporate values and
behaviours, which are reinforced via
training and performance management.
For more information
page_55
Maintain governance structures
and processes that are fit
for purpose and support good
decision-making by the board.
The Board is responsible for the Group’s
overall strategic direction and
management, and for the establishment
and maintenance of a framework of
delegated authorities and controls to
ensure the efficient and effective
management of the Group’s operations.
For more information
page_43
Build trust
10
Communicate how the company
is governed and is performing
by maintaining a dialogue with
shareholders and other relevant
stakeholders.
The Investors section of our website
includes our results, presentations and
communications to shareholders. We
release the results of general meetings
through a regulatory news service and
also on the Regulatory news section of
our website.
For more information
https://investors.
impellam.com/
Page_47
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Corporate governance statement continued
The Board of Directors currently comprises the Non-Executive
Chairman, two Executive Directors and four other Non-
Executive Directors. The Board is responsible for overseeing
the management of the Group’s strategy and its businesses,
reviewing trading performance, ensuring adequate funding,
maintaining a system of internal controls and risk assessment,
ensuring good corporate governance and reporting to
shareholders. The Board meets when required and at least
eight times per annum, either in person or virtually.
The annual minimum time commitment is nine days for the
Non-Executive Directors based on eight Board meetings
per annum and the AGm. They are also required to spend
appropriate preparation time ahead of each meeting. The
Executive Directors are full-time colleagues.
During the period ended 31 December 2021, the Board
met on eight occasions. Relevant high-quality information,
consisting of detailed reports and presentations, is circulated
to the Directors in advance of meetings by the Company
secretary. The number of scheduled Board meetings and
Committee meetings attended as a member by each Director
during the period are set out below:
Lord Ashcroft
Julia Robertson
Tim Briant
Angela entwistle
mike ettling
michael Laurie
Baroness stowell
Board
8 (8)
8 (8)
8 (8)
8 (8)
7 (8)
8 (8)
8 (8)
Audit
Committee
Remuneration
Committee
n/a
n/a
3 (3)
n/a
3 (3)
3 (3)
n/a
n/a
n/a
n/a
1 (1)
n/a
1 (1)
n/a
Figures in brackets indicate the maximum number of meetings the individual could attend in
the period.
The Non-Executive Chairman and Angela Entwistle are not
considered to be independent due to their links with the
Company’s major shareholder. All the other Non-Executive
Directors are considered to be independent.
The role of the Chairman is to lead the Board and ensure
its effective operation. In chairing the Board, the Chairman
is responsible for setting the agenda, style and tone of the
Board discussions and ensuring that all Directors receive clear,
accurate and timely information. The Chairman is responsible
for ensuring effective communications with shareholders.
on appointment, the Directors receive relevant information
about the Group: the role of the Board and the matters
reserved for its decision-making; membership of the principal
Board Committees and the powers delegated to those
Committees; the Group’s corporate governance policies and
procedures and the latest financial information. Throughout
their period in office, the Directors are regularly updated on
the Group’s business and the environment in which it operates.
Page_48
All Directors receive regular and timely information on the
Group’s operational and financial performance and any legal or
governance requirements of the Group and those which affect
them as Directors.
The Directors have direct access to the advice and services of
the Company Secretary and Chief Financial Officer and are
able to take professional advice in the furtherance of their
duties at the Company’s expense, where required. The Board
is satisfied that, between the Directors, it has an executive and
appropriate balance of skills and experience, including in the
areas of HR, technology, finance, communications, media
and government.
The Board seeks advice from external sources on matters
as they arise in the business, including legal and accounting
advice. There is an appropriate gender balance with the Board
consisting of four male and three female members.
The biographies of all Directors appear on the Company
investor website: www.investors.impellam.com. The
Company secretary acts as the secretary to the Board and
its Committees, provides legal and governance support to
the Board as a whole and Directors individually, and ensures
the Group complies with all relevant legal, regulatory and
governance requirements. The Chairman assesses the
individual contribution of each of the members of the Board
to ensure a well-balanced and committed team.
The Board has carried out an annual assessment of its
performance to ensure its members collectively function in an
efficient and productive manner.
section 172 of the Companies Act 2006 requires Directors
to take into consideration the interests of stakeholders and
other matters in their decision-making. Within our section
172 report we set out how the Directors have addressed key
decisions that are consistent with the Company’s objectives,
strategy and the overall culture. We believe we have a history
of collaborative, informative stakeholder engagement and
decision-making based on long-term success, and we maintain
governance structures and processes that support good
decision-making. This section 172 report articulates how the
Directors have acted to promote the success of the Group for
the benefit of its stakeholders. In meeting this responsibility,
the Directors have had regard, amongst other matters, to:
•
•
•
•
•
•
the likely consequences of any decisions in the long term;
the interests of the Group’s colleagues;
the need to foster the Group’s business relationships with
suppliers, customers and others;
the impact of the Group’s operations on the community
and environment;
the Group’s reputation for high standards of business
conduct; and
the need to act fairly as between members of the Group.
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
Results of the AGm appear on the Company investor website:
www.investors.impellam.com with between 99.67% and 100%
of votes cast being for the resolutions.
BOARD TENURE AS AT MARCH 2022
Lord Ashcroft KCmG PC
Julia Robertson
Tim Briant
Angela entwistle
mike ettling
michael Laurie
Baroness Tina stowell
Rebecca Watson
7 years, 3 months
8 years, 11 months
2 years, 1 month
9 years, 6 months
8 years, 6 months
7 years, 8 months
4 years, 5 months
13 years, 10 months
RE-ELECTION OF DIRECTORS AT THE 2022 AGM
In accordance with the Company’s Articles of Association and
the principles of the Code, all Directors of the Company will
offer themselves for re-election by shareholders at the 2022
AGM. The Board is satisfied that each Director is qualified
for re-election by the quality of their skills, experience and
commitment to the Board.
THE BOARD AND ITS COMMITTEES
Board evaluation
The performance of the Board, its Committees and individual
Directors were reviewed at the Board meetings in April 2021.
The Board recognises the importance of the evaluation to
help the Board continuously improve its and the Company’s
performance and to address any areas where necessary. In its
evaluation the Board considers a number of areas including
the balance of the membership, its effectiveness as a team,
strategy and purpose and stakeholder engagement. Objectives
going forward are agreed and a review of succession planning
undertaken. The roles of the Chairman and Chief Executive
are separate, with a clear division of responsibilities between
them. This separation of roles enhances the independent
oversight of executive management by the Board and more
closely aligns the Board with shareholders. It also means that
no one individual within the Company has unfettered powers
of decision-making.
Page_49
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Corporate governance statement continued
Audit Committee
The Board has an Audit Committee whose
responsibilities include oversight of the Group’s internal
risk and controls strategy, including establishing
whistleblowing arrangements, reviewing interim and
Annual Reports and financial statements prior to their
submission to the full Board and reviewing reports
from the external auditor and internal audit. The Audit
Committee makes whatever recommendations to the
Board it deems appropriate, on any area within its remit,
including where action or improvement is needed.
COMMITTEE MEMBERS
mike ettling (Chair)
michael Laurie
MEETINGS ATTENDED
mike ettling
michael Laurie
3/3
3/3
MEETINGS
The Committee operates under written Terms of Reference,
and during the period ended 31 December 2021 it met
on three occasions. The Audit Committee invites the
Chief Financial Officer to all of its meetings and senior
representatives of the external auditor are routinely invited to
Committee meetings, although it reserves the right to request
any of these individuals to withdraw from the meeting. The
Audit Committee comprises two Non-Executive Directors:
mike ettling (Chair) and michael Laurie.
FINANCIAL AND BUSINESS REPORTING
During the year, the Audit Committee has reviewed the 2020
and 2021 financial statements, the 2021 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. 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 1 to 45. The
Audit Committee keeps under review the adequacy and
effectiveness of the Company’s internal controls and risk
management systems. A summary of the internal controls
for Group companies is presented to the Audit Committee,
including updates on the resolution of any control weaknesses
identified. The internal controls are reviewed by the Group
Finance function.
every year the Audit 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.
The Group has a mandatory Code of Conduct, which sets out
the minimum expected behaviours for all colleagues.
Page_50
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
External audit
The Audit 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 Audit Committee for overseeing the relationship with
the external auditor. During 2021, the Audit Committee
managed the relationship with the external auditor, 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 Audit Committee. Note 4 to the
consolidated financial statements includes disclosure of the
auditor’s remuneration for the year.
Financial Reporting Council
During the year the Financial Reporting Council (‘FRC’)
conducted a review of the 2020 Annual Report and Accounts.
The review can be found here https://www.frc.org.uk/
accountants/corporate-reporting-review/crr-reviews-of-
corporate-reporting/company-names-published-in-march-2022
and did not give rise to any substantive questions. The review
recommended a number of enhanced disclosures in relation
to non-recourse financing agreements, impairment testing
periods and lease terms to be included within the 2021 Annual
Report and Accounts which we have duly adopted.
Assessment of the Audit Committee
The Board conducted an assessment of the Audit Committee’s
performance at the April 2021 meeting. The Chair of the
Audit Committee will be available at the 2022 Annual General
meeting to answer any questions about the work of the
Audit Committee.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Corporate governance statement continued
Remuneration
Committee
The Board has a Remuneration Committee that is
responsible for making recommendations to the
Board on Directors’ remuneration. It also reviews
recommendations from the Group Chief Executive
Officer on other senior executives’ remuneration,
including performance-related remuneration.
The Committee operates under written Terms of
Reference, and during the period ended 31 December
2021 it met on one occasion. The Remuneration
Committee comprises two Non-Executive Directors:
Angela entwistle (Chair) and michael Laurie.
COMMITTEE MEMBERS
Angela entwistle (Chair)
michael Laurie
MEETINGS ATTENDED
Angela entwistle
michael Laurie
1/1
1/1
REMUNERATION PRACTICES
The Remuneration Committee recommends and monitors the
level and structure of remuneration for senior management
as well as monitoring remuneration trends across the Group,
and periodically reviews the ongoing appropriateness
and relevance of the remuneration policy; no review was
conducted during the year.
Assessment of the Remuneration Committee
The Board conducted an assessment of the performance
of the Remuneration Committee at the April 2021 meeting.
The Chair of the Remuneration Committee will be available
at the 2022 Annual General meeting to answer any questions
about the work of the Remuneration Committee.
Remuneration policy for the Executive Directors
Remuneration packages are designed to attract, retain,
motivate and reward Executive Directors, whilst aligning
rewards with the business objectives and performance of the
Group and the interests of shareholders.
Link between business objectives and remuneration policy
It is the Group’s policy for performance-related pay of
Executive Directors to be linked to key performance indicators
of the Group. The Group’s key objectives include developing
sustainable growth in earnings and profits through a
combination of organic growth, investments and increase in
share price. The key performance measures chosen in 2021
to link executive remuneration to the achievement of these
objectives were profits and a cash-related target.
Directors’ contracts and letters of appointment
It is the Group’s policy that Executive Directors should have
contracts with indefinite terms providing for a maximum of
12 months’ notice by the employing Group company or the
individual. 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.
Page_52
The details of the Executive Directors’ contracts are
summarised as follows:
The Effective date of contract and Notice period for Julia
Robertson were 5 April 2013 with 12 months’ notice from
either party. The Effective date of contract and Notice period
for Tim Briant were 1 October 2019 with six months’ notice
from either party. 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.
Annual fees of Directors
The basic annual salary of each Executive Director and senior
management is reviewed annually by the Remuneration
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. The fees are reviewed each year as part of the
annual budgeting process. The Non-Executive Directors
receive additional remuneration for chairing Committees.
Aggregate Directors’ remuneration is set out in note 5.
Annual bonus
The Remuneration Committee establishes the objectives that
must be met for each financial year if a cash bonus is to be
paid to the Executive Directors. Based on the Remuneration
Committee’s assessment of the performance against those
targets, it was determined that there was £1.0m bonus
payment for delivery of the financial targets, of which £0.4m is
deferred and made in three equal payments over three years.
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 set
out on page 55.
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
INTERNAL CONTROL
The Board has responsibility for the Group’s overall system
of internal controls and for reviewing their effectiveness.
They recognise that the system is designed to manage and
mitigate, rather than eliminate, the risk of failure to achieve
business objectives. It can provide only reasonable and not
absolute assurance against material financial misstatement
or loss. The Board has established an organisational structure
with clear Terms of Reference that must be adhered to by all
subsidiaries. There is a programme of regular review by the
Board and executive management, which provides assurance
that the control environment is operating as intended. A
key element of this review is strategic business planning
and subsequent performance monitoring. each business
has defined financial performance plans that are agreed
by the Board at the beginning of each financial period to
meet Company objectives. These plans contain measurable
performance targets, which are continuously monitored to
identify shortfalls, so that corrective actions can be taken.
In addition, the Company and its subsidiaries maintain risk
registers that are updated regularly. The Group risk register is
reviewed by the Audit Committee whilst reviewing generally
the effectiveness of the Company’s internal control system.
The Group Financial Controller is also responsible for reporting
to the Audit Committee on internal audit, utilising internal
and external expertise. The Group operates in ‘The Virtuoso
Way’, which embeds a consistent Company-wide culture,
based on trusted behaviours, delivered by entrepreneurial
Virtuoso leaders, who can drive competitive advantage and
deliver on the Group’s commitments. The Board is committed
to maintaining appropriate standards for all the Company’s
business activities and ensuring that these standards are set
out in written policies. Key examples of such standards and
policies include the ‘Code of Business Conduct’. The Company
‘Code of Business Conduct’ demonstrates its commitment
to maintaining the high levels of ethical standards and
behaviours, wherever it operates in the world.
DIALOGUE WITH SHAREHOLDERS
The Company remains committed to listening to and
communicating openly with its shareholders to ensure that its
vision, mission, strategy, business model and performance are
clearly understood. The Company communicates with
shareholders through the Annual Report and Accounts,
full-year and half-year announcements, the Annual General
Meeting (‘AGM’) and one-to-one meetings with large existing
or potential new shareholders. The Non-Executive Directors
will attend the AGm and are available to answer any questions
relevant to the Committees they chair. The Board receives
regular updates on the views of shareholders through
briefings and reports from the Group Chief Executive Officer,
Chief Financial Officer and Company Secretary. Corporate
information, including all Company announcements, is
available to shareholders, investors and the public on the
Company’s website www.investors.impellam.com).
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Directors’ report
The Directors present their Annual Report on the affairs of the Group and the Company, together with the audited consolidated
financial statements and auditor’s reports, for the period ended 31 December 2021.
PRINCIPAL ACTIVITIES
The principal activities of the Group comprise the provision of staffing solutions, human capital management and outsourced
people-related services in the UK, Ireland, north America, mainland europe, Australia and new Zealand. The principal activity of the
Company is that of a holding company that provides strategic planning and management services to its portfolio of subsidiaries.
RESULTS AND DIVIDENDS
The audited consolidated financial statements for the period ended 31 December 2021 are set out on pages 68 to 119. The
Group profit for the period was £8.3m (year ended 1 January 2021: £21.4m loss). In January 2021 the Board announced a reduced
share buyback programme, where it will purchase Ordinary shares in the Company up to an aggregate market value of £0.5m per
calendar month until the next AGM to be held in June 2021. It was approved at the AGM to commence an updated programme
whereby the Board can purchase up to a maximum of 4,560,363 shares, being 10% of the issued Ordinary share capital of the
Company (as at 17 may 2021) until the earliest of the 2022 AGm or 30 June 2022.
FUTURE DEVELOPMENTS
The Group’s future developments are outlined within the strategic Report. Key areas are covered within the strategic review,
Strategic priorities and Looking forward sections of the Chief Executive Officer’s review and within the Outlook section of the Chief
Financial Officer’s review.
CAPITAL STRUCTURE
The Company ‘Impellam Group plc’ has no limit to its authorised share capital. At 31 December 2021, there were 45,311,269 (2020:
45,919,871) allotted, fully paid shares of 1p in issue.
POST BALANCE SHEET EVENTS
Between the end of the year and 22 march 2022, a further 75,830 ordinary shares of 1p each have been repurchased in the market
for total consideration of £0.4m and have been cancelled.
On 24 January 2022 the Group announced that it has entered into an agreement to sell the business and assets of Corestaff, its
US-based Light Industrial brand, to swipejobs Inc., a US private digital staffing company, for cash consideration of approximately
£14m ($19m).
The transaction was completed on 7 February 2022. Following completion of the Disposal, the Group used the proceeds of sale
to pay down net debt to fund additional investment to further accelerate the Group’s strategy.
POLITICAL DONATIONS
The Group has made no political donations during the current or prior years.
MAJOR SHAREHOLDINGS
As at 23 February 2022, the Company had been notified of the following disclosable interests representing 3% or more of the
issued ordinary share capital of the Company:
Lombard Trust
Kempen Capital management
Hendrik M. Van Heijst
Lord Ashcroft
schroder Investment management Limited
InsingerGilissen Bankiers
Page_54
56.88%
8.31%
8.13%
5.02%
4.02%
3.52%
sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
DIRECTORS
The Directors who held office during the period and up to the date of signing these financial statements were:
Executive Directors
Julia Robertson
Tim Briant
Non-Executive Directors
Lord Ashcroft KCmG PC
Angela entwistle
mike ettling
michael Laurie
Baroness Tina stowell
Group Chief Executive Officer
Chief Financial Officer
Appointed April 2013
Appointed February 2020
Non-Executive Chairman
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Appointed December 2014
Appointed september 2012
Appointed september 2013
Appointed July 2014
Appointed october 2017
To read all of our Directors’ biographies, see pages 44 and 45.
DIRECTORS’ SHAREHOLDINGS
As at 23 February 2022 the following Directors held shares in the Company:
Lord Ashcroft (Non-Executive Chairman)
Julia Robertson (Group Chief Executive Officer)
Angela Entwistle (Non-Executive Director)
Mike Ettling (Non-Executive Director)
number of shares held
2,273,755
153,910
13,800
10,860
CONTROL
The Group has identified Lord Ashcroft as the ultimate controlling party as he has influence over more than 50%, but less than
75%, of both the shares and voting rights of Impellam Group plc and together with being Chairman of Impellam Group plc has
significant influence over the Group.
FINANCIAL RISK MANAGEMENT
The Group’s objectives and policies relating to financial risk management are fully explained in note 27 on pages 107 to 109.
PRINCIPAL RISKS
The Board’s assessment of the principal risks and uncertainties, the Group’s policy and its mitigations are detailed on pages
32 to 35.
ENGAGEMENT WITH COLLEAGUES AND OTHER STAKEHOLDERS
The Directors have given much focus as to how they engage and build relationships with colleagues, suppliers, customers
and other stakeholders; and how these stakeholders’ interests are considered when making significant decisions. The Group’s
engagement with colleagues and other stakeholders is explained in the Stakeholder engagement and Responsible business
sections of the Strategic Report, on pages 36 to 41.
We actively encourage diversity in the workplace and have a wide and varied colleague base with a variety of social and ethnic
groups represented at all levels of the business. We believe that breaking down the barriers that have traditionally restricted
access to the labour market will encourage job opportunities for all. We see it as our responsibility, both to understand and to
address, the root causes of gender pay gaps. We are pleased that Impellam is leading by example by appointing and promoting
women into senior roles. We are one of only a small number of AIM listed companies to be led by a woman, and in addition, 43%
of our Board members and 50% of our senior Leadership Team are women. With this in mind, we work hard to help our clients
and suppliers achieve their diversity objectives.
The Group is committed to providing all our colleagues with a work environment free of discrimination related to sex, race,
colour, orientation, religion, age, ethnicity, national origin, disability or any other inappropriate basis. Applications for
employment by people with disabilities are considered, like all others, bearing in mind the aptitudes of the candidate concerned.
In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the Group
continues and that appropriate adjustments are made. It is our policy that the training, career development and promotion of
people with disabilities should, as far as possible, be the same as for all other colleagues.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
CORPORATE GOVERNANCE
Directors’ report continued
STRATEGIC REPORT
Information in respect of the Group’s approach to Colleague engagement & Communications (including in respect of modern
slavery), Health & safety, Anti-Bribery, Community and environment are not shown within the Directors’ report because they are
presented within the Responsible business section of the Strategic Report on pages 39 and 40.
ANNUAL GENERAL MEETING
The Notice of AGM, to be held at 3.00pm on Wednesday 29 June 2022 at the Impellam offices, 9 Devonshire Square, London
EC2M 4HP, is contained in a separate circular to shareholders. It is being mailed or otherwise provided to shareholders, after the
publication of the Annual Report. The notice of meeting sets out the resolutions to be proposed at the AGm and gives details
of the voting record date and proxy appointment deadline for that meeting. The meeting may be held virtually if Covid-19
restrictions are in place.
DIRECTORS’ INDEMNITY PROVISIONS
During the year and to the date of these accounts, the Company had in force an indemnity provision in favour of one or more
Directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in
the Companies Act 2006.
DISCLOSURE OF INFORMATION TO AUDITOR
In the case of each Director in office at the date the Directors’ report is approved and in accordance with Section 418 of the
Companies Act 2006:
a. so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
b. he/she has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of any
relevant audit information and to establish that the Company’s auditor is aware of that information.
REAPPOINTMENT OF AUDITOR
In accordance with Section 489 of the Companies Act 2006, a resolution for the reappointment of BDO LLP as auditor
of the Company is expected to be proposed at the Annual General Meeting being held on 29 June 2022.
DIRECTORS’ REPORT
This report was approved by the Board on 5 April 2022 and is signed on its behalf by:
RJ Watson
Company Secretary
800 The Boulevard
Capability Green
Luton
Bedfordshire
LU1 3BA
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sTRATeGIC RePoRT | CORPORATE GOVERNANCE | FInAnCIAL sTATemenTs
Statement of Directors’ responsibilities
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. Under that law the Directors have
elected to prepare the Group financial statements in accordance with UK adopted International accounting standards and the
Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law). 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 Company and of the profit or loss
of the Group for that period. The Directors are also required to prepare financial statements in accordance with the rules of
the London Stock Exchange for companies trading securities on AIM. In preparing these 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 they have been prepared in accordance with UK adopted international accounting standards 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.
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 requirements of 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.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website.
Financial statements are published on the Company’s website 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.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Financial
statements
FINANCIAL STATEMENTS
Independent auditor’s report
59_
68_ Consolidated income statement
69_ Consolidated statement of comprehensive income
70_ Consolidated balance sheet
71_ Consolidated statement of changes in equity
72_ Consolidated cash flow statement
73_ Notes to the consolidated financial statements
113_ Company balance sheet
114_ statement of changes in equity
115_ notes to the Company balance sheet
120_ Alternative performance measures
122_ Glossary
124_ Company information
For more information visit
www.impellam.com/corporate-governance/
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Independent auditor’s report to the members of Impellam Group plc
OPINION ON THE FINANCIAL STATEMENTS
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 2021 and of the Group’s profit for the 52-week period 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.
We have audited the financial statements of Impellam Group plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the 52-week period ended 31 December 2021 which comprise:
Composition
Financial reporting framework
Group
Parent Company
• Consolidated Income statement
• Consolidated statement of Comprehensive Income
• Consolidated Balance sheet
• Consolidated statement of Changes in equity
• Consolidated Cash Flow statement
• Notes to the consolidated financial statements
• Alternative performance measures
• Company Balance sheet
• Company statement of Changes in equity
• Notes to the Company financial statements
• Applicable law and international
accounting standards in conformity
with the requirements of the
Companies Act 2006
• Applicable law and United Kingdom
Accounting standards, including
Financial Reporting standard 101
Reduced Disclosure Framework
(United Kingdom Generally Accepted
Accounting Practice)
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the 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.
CONCLUSIONS RELATING TO GOING CONCERN
Conclusion & key
observations
•
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.
• 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 the Parent Company’s ability to continue as a going concern for a period of at
least twelve months from when the financial statements are authorised for issue.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Impellam Group plc
continued
Approach
our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to
continue to adopt the going concern basis of accounting included:
• Reviewing and challenging, through enquiry and consideration of historical performance, key
assumptions applied by the Directors in preparation of cash flow forecasts, including growth
assumptions and movements in headcount and base costs, and the Group’s ability to meet
working capital requirements over the going concern period.
• Reviewing the Directors’ stress tested forecasts, including the impact of the ‘downside’
scenarios on covenant and cash ’headroom’ and consideration of the likelihood of occurrence
and feasible actions to increase headroom.
• Review of the Group’s new financing agreement effective 17 December 2021 and its key terms
and covenants. Considering the adequacy of the disclosure requirements against the associated
accounting standards.
our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
Coverage1
73% (2020: 67%) of Group absolute* adjusted operating profit
69% (2020: 83%) of Group absolute* profit before tax
79% (2020: 82%) of Group revenue
85% (2020: 86%) of Group gross assets
Key audit matters
Key audit matter
2021
2020
* Absolute refers to the cumulative value of figures regardless of whether it is a positive or negative value.
Risk of fraud or cut-off error in revenue recognition on temporary
contractor revenue and complex accounting on managed service
contracts
Compliance with laws and regulations
Goodwill, brand intangibles and Parent Company investment
recoverability
new accounting treatments as a result of Covid-19
✓
✓
x
x
✓
✓
✓
✓
Goodwill, brand intangibles and Parent Company investment recoverability is not considered to be a
key audit matter as the risk of impairment of goodwill or investments in subsidiaries is significantly
reduced following a return to profitable growth.
new accounting treatments as a result of Covid-19 is no longer considered to be a key audit matter
due to the reduced utilisation of Government Covid-19 relief schemes from the prior period and
enhanced knowledge for the accounting for these schemes.
Group financial statements as a whole
£1.45m (2020: £1.10m) based on 5.0% of adjusted operating profit (2020: 3.5% of the average of
adjusted operating profit for last three periods). A three-period average was used in the prior period
due to the impact of the Covid-19 pandemic.
materiality
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
We designed an audit strategy to ensure we have obtained the required audit assurance for each component for the purposes
of our Group audit opinion (ISA 600 (UK)). Components were scoped in to address aggregation risk and to ensure sufficient
coverage was obtained of Group balances on which to base our audit opinion. The coverage of our audit procedures is
summarised graphically below and then detailed in the following table.
1 These are areas which have been subject to a full scope audit.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Significant components
Specified audit procedures
Analytical review
73%
69%
79%
21%
6%
Absolute adjusted
operating profit
26%
Absolute profit
before tax
5%
17%
Revenue
4%
Significant components
• We focused our Group audit scope primarily on the audit work at seven significant
Specified audit procedures
components, which were subject to full scope audit procedures.
• These significant components contribute 73% (2020: 67%) of the Group Absolute
Adjusted Operating Profit, 69% (2020: 83%) of the Group Absolute Profit before Tax,
69% (2020: 82%) of the Group Revenue and 85% (2020: 86%) of Group Gross Assets.
• Three of the full scope audits of significant components were performed by component
auditors, under the direction and supervision of the Senior Statutory Auditor; who issued
detailed instructions, reviewed component audit files and attended local audit close
meetings. All significant components were audited by BDO LLP (BDO UK), other than one
component, which was audited by BDo in the Us (BDo Us).
• Specified audit procedures were performed to address the risk of material misstatement
arising from key balances in non-significant components, with testing performed on all
material balances within these components.
• All testing was performed by BDo UK, other than for the components in Australia and
new Zealand, which were performed by BDo Australia Limited. All testing was under the
direction and supervision of the senior statutory Auditor via detailed instructions and via
review of selected working papers on significant risk areas.
• This specific scope testing was performed on components that contribute 21%
(2020: 11%) of the Group Absolute Adjusted Operating Profit, 26% (2020: 3%) of the
Group Absolute Profit before Tax, 17% (2020: 9%) of the Group Revenue and 13%
(2020: 9%) of Group Gross Assets.
Remaining components
• All other components were scoped in for analytical review procedures to confirm
Parent Company and
consolidation
our conclusion that there were no significant risks of material misstatement of the
aggregated financial information. These were performed by the teams in BDO LLP
(BDo UK), BDo Us and BDo Australia.
• Specified audit procedures were performed on any material balances from these
components.
• The Parent Company is located in the UK and was audited by the Group audit team
(BDO UK). The Parent Company is treated as a significant component for the Group.
• The Group audit team have performed testing of the consolidation and related
consolidation adjustments posted in preparation of the Group financial statements.
Page_61
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Impellam Group plc
continued
Our involvement with component auditors
For the work performed by component auditors on significant components, we determined the level of involvement needed
in order to be able to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion
on the Group financial statements as a whole. Our involvement with component auditors on significant components included
the following:
We assessed the competence and independence of the component auditors. Direction and supervision over their work
performed was also provided by the Group audit team. We attended the component entities’ planning and completion
meetings. The component auditors also transferred documentation of their work performed which was reviewed by the Group
audit team in order to gain comfort over the audit of the significant components, specified audit procedures on specific scope
entities, and reviews over the remaining insignificant components.
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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) that 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.
Key audit matter
Description
How we addressed the key audit matter in the audit
Risk of fraud or
cut-off error in
revenue recognition
on temporary
contractor revenue
and complex
accounting on
Managed Service
Contracts
The accounting
policy and related
disclosures are shown
in notes 2, 3 and 15.
This can involve
complex and
subjective judgements
in determining
temporary revenue
recognised around
period end and the
application of IFRs 15
to complex contracts.
• Under ISA 240 (UK), there is a
Temporary contractor revenue
•
•
presumed risk that revenue may
be misstated due to improper
recognition, whether from fraud
or error. Given that revenue is a
key performance indicator for the
Group, the risk of improper revenue
recognition is elevated.
The risk of fraudulent revenue
recognition arises from revenue in
relation to temporary contractors.
Management applies judgements
and estimates concerning the
completeness, accuracy and cut-off of
revenue around period end; therefore
a risk of material misstatement exists
either through error or in order to
meet financial targets or performance
related bonuses.
The risk of erroneous revenue
recognition arises from complex
accounting on rebates related to
managed service contracts. Accounting
and potential understatement of
these rebate agreements could result
in a material error within the revenue
stated for the period.
• This results in the cut-off of temporary
revenue and complex accounting
on managed service Contracts being
assessed as a significant risk of
material misstatement and a key
audit matter.
• To address the risk around existence and cut-off
of revenue, on a sample basis, revenue around the
period end was tested against underlying supporting
documentation, such as engagement letters, timecards,
payments to temporary workers and monies received
from the clients.
• Cut-off was further addressed by reviewing timecards
submitted after period end and ascertaining the period
they relate to.
• The completeness of revenue was tested by sampling
timecards and tracing them to the revenue and accrued
income and ensuring they have been recognised in the
correct period.
• A sample of credit notes raised in January 2022
that relate to FY21 were reviewed in order to
assess the validity of the sales invoices raised
in the financial period.
Complex accounting on Managed Service Contracts
• The period end rebate liabilities were tested by assessing
estimates against the contacts and/or correspondences.
The year-end rebate liability was further analysed against
the prior period’s rebate liability in order to understand
key movements in rebates and form an expectation on
the liability position at the period end.
• A sample of rebates were recalculated using the terms
of the supplier contracts and/or correspondences and
volume of placements obtained from the information
held on the audited entity’s system.
Key observations
We did not identify any indications that temporary or
managed service revenue were materially misstated.
The judgements and estimates applied were therefore
consistent with our expectations.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Key audit matter
Description
How we addressed the key audit matter in the audit
Compliance
with laws and
regulations
The accounting policy
and related disclosures
are shown in note 2
and 20.
• The Group is subject to both local and
international legal and regulatory
requirements that vary between the
different industries and jurisdictions
that the Group operates. The Group
has an in-house legal team who assist
management in the determination of
its financial obligations.
In accordance with
IAs 37 ‘Provisions,
Contingent Liabilities
and Contingent
Assets’, provision is
made for claims for
potential and actual
non-compliance with
laws and regulations
where there is a
present obligation as a
result of a past event
that gives rise to a
probable payment and
when the quantum of
the payment can be
reliably estimated.
•
• The Group holds a number of balances
in relation to its ongoing obligations
to comply with the regulatory and
legal environment – varying levels of
judgement are required to estimate
the impact of these on the financial
statements.
The key areas of compliance relate
to workers’ rights, such as PAYe
underpayment, national minimum
wage, Fair Labour standards Act (UsA)
and holiday pay.
Provisions have been made for the
expected cost of settling these
matters, these are inherently
judgemental.
Any non-compliance may result in
fines, unrecorded liabilities and
reputational damage to the Group.
The compliance with laws and
regulations has been assessed
as a significant risk of material
misstatements and related disclosures
and a key audit matter.
•
•
•
• We held meetings with the Group’s legal counsel to
understand areas of non-compliance with laws or
regulation and the progress of any significant ongoing
legal areas.
• We circulated legal confirmations to key external
counsel to gain external confirmation of any potential
claims or areas of non-compliance.
• The outcome of prior period claims has been evaluated
against the current period provisions to gain assurance
over the historical reliability and completeness of the
liability.
• We specifically assessed by brand, the Group’s policies
and practices in relation to holiday pay, in the context
of relevant legal requirements. We reviewed the basis
and appropriateness of holiday pay accruals and level
of pay-out by sampling contractors and employees to
underlying contracts and system generated reports.
• We assessed the Group’s control environment around
national minimum wage compliance and made enquires
to determine areas of potential exposure, inspecting
and assessing associated correspondence. We evaluated
and challenged management’s experts competence and
exposure assessment.
Key observations
We did not identify, either from external or internal
sources, any material compliance issues not already
included in the provisions.
Based on the work performed, we did not identify
any inappropriate judgements or estimates made by
management, all provisions fell within our range of
potential outcomes.
We did not identify any disclosure deficiencies in relation
to notes 2 and 20 that describes the degree of inherent
uncertainty in the assumptions and estimates used in
assessing the value of associated non-compliance provisions.
Page_63
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Impellam Group plc
continued
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
2021
£1.45m
2020
£1.10m
5.0% of Adjusted Operating Profit2
3.5% of Adjusted Operating Profit
Adjusted Operating Profit is considered the most appropriate benchmark based on market practice
and investor expectations. Adjusted operating profit is derived by adding back interest expense
and income, impairments, and amortisation of brand values and client relationships from profit
before tax.
Our materiality benchmark (Adjusted Operating Profit) has remained the same from the prior 52-
week period, although in the prior period we used an average of the last three periods to normalise
profits for the impact on Covid-19.
our materiality percentage threshold has been increased from 3.5% in 2020 to 5% in 2021.
We increased the percentage in the current period, following a change in benchmark from three
period average profits in the prior period. We used auditor judgement to ensure the chosen
percentage derived an appropriate materiality level in the context of the current period profits
and trading activities.
£1,015k
£715k
70% of materiality
65% of materiality
The application of materiality at the individual account or balance level is set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
The increase from 65% in 2020 to 70% in the current period is due to our improving knowledge of
the Group, being our third period of audit, and improvement in the Group’s financial reporting and
control environment over that time. These factors reduce the inherent risk of small uncorrected or
undetected errors becoming material in aggregate.
GROUP MATERIALITY
Materiality
Basis
Rationale
Performance
Materiality
Measure
Application
2 (See page 1 for definition).
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
PARENT COMPANY MATERIALITY
Materiality
Basis
Rationale
Performance
Materiality
Measure
Application
2021
£1.38m
2020
£1.04m
net assets
net assets is considered the most appropriate benchmark as the Parent Company does not trade,
and is focused on a share buyback programme that relies on sufficient reserves to achieve this.
This has been capped at 95% of Group materiality stated above.
£964k
£676k
70% of materiality
65% of materiality
The application of materiality at the individual account or balance level is set at an amount to
reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
The increase from 65% in 2020 to 70% in the current period is due to the factors noted in our
Group materiality rationale above.
Component materiality
We set materiality for each component of the Group based on a percentage of between 11.7% and 95.0% of Group materiality
dependent on the size and our assessment of the risk of material misstatement of that component. Significant component
materiality ranged from £170k to £1.38m. In the audit of each significant component, we further applied performance
materiality levels of 70% of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £58k (2020:
£22k). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
OTHER INFORMATION
The directors are responsible for the 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. 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.
Page_65
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Impellam Group plc
continued
OTHER COMPANIES ACT 2006 REPORTING
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and IsAs (UK) to report on certain opinions and matters as described below.
Strategic and
Directors’ report
Matters on which
we are required
to report by
exception
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 period
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.
In the light of the knowledge and understanding of the Group and Parent Company and its
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
• we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Statement of Directors’ responsibilities, 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.
Extent to which the audit was capable of detecting irregularities, including fraud
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 an understanding of the legal and regulatory frameworks that are applicable to Impellam Group plc. We
determined that the most significant laws and regulations which are directly relevant to specific assertions in the financial
statements are those related to the reporting framework (IFRs, UK GAAP and the Companies Act 2006), labour regulations and
tax laws in key territories which the Group operates.
• We understood how the Group is complying with those legal and regulatory frameworks by making enquiries of
management and those responsible for legal and compliance procedures. We corroborated our enquiries through our
review of board minutes, legal correspondence or confirmations (where relevant) and specific audit testing within significant
component and full scope entities.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
• We obtained an understanding of the significant laws and regulations which the Group is affected by and understood
how the Group is complying with the laws and regulations. This was corroborated against our review of board minutes,
confirmations from legal counsel and audit procedures on provisions and compliance with laws and regulations.
• We assessed the susceptibility of the Group’s financial statements to material misstatement, including how fraud might occur
by meeting with management to understand where it is considered there was a susceptibility of fraud. our considerations
included enquiries with component management and component auditors.
• We also considered potential fraud drivers: including financial or other pressures, opportunity, and personal or corporate
motivations. We considered the policies and controls that the Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls. Where
the risk was considered higher, we performed audit procedures to address each identified fraud risk. These procedures
included testing manual journals, testing compliance with laws and regulations and key areas of estimation uncertainty or
judgement, for example: recoverability of trade debtors, valuation of accrued income at period-end, revenue recognition on
temporary contractor revenue and complex contract accounting on managed service contracts as set out in the key audit
matters section.
• We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
and the component auditors, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are
inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
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.
Mark Cardiff (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
5 April 2022
BDo LLP is a limited liability partnership registered in england and Wales (with registered number oC305127).
Page_67
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Consolidated income statement
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment losses from receivables
Operating profit/(loss)
Operating profit before impairments, amortisation of brand value and customer relationships
Amortisation of brand value and customer relationships
Impairment of goodwill
Impairment of other intangible assets
Operating profit /(loss)
Finance income
Finance expense
Profit/(loss) before tax
Tax charge
Profit/(loss) for the period
Profit/(loss) for the period attributable to:
equity holders of the Parent Company
non-controlling interest
Earnings per share
Attributable to equity holders of the Parent Company:
– basic
– diluted
notes
3
15
3 & 4
3
13
12
13
3 & 4
6
7
8
24
9
31 December
2021
£m
1 January
2021
£m
2,262.4
(1,995.4)
2,000.9
(1,772.8)
267.0
(244.2)
(3.3)
228.1
(239.5)
(3.6)
19.5
29.3
(9.8)
–
–
19.5
0.2
(4.3)
15.4
(7.1)
8.3
8.2
0.1
8.3
(15.0)
18.2
(11.0)
(16.6)
(5.6)
(15.0)
0.3
(5.7)
(20.4)
(1.0)
(21.4)
(21.4)
–
(21.4)
18.3p
18.3p
(46.2)p
(46.2)p
Page_68
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
Profit/(loss) for the period
Other comprehensive income:
Items that may be subsequently reclassified into income:
Foreign currency translation differences – foreign operations
Reduction in non-controlling interests
Total comprehensive income for the period, net of tax
Total comprehensive income for the period attributable to:
equity holders of the Parent Company
non-controlling interest
31 December
2021
£m
notes
1 January
2021
£m
8.3
(21.4)
23
24
24
(1.4)
(0.3)
6.6
6.6
–
6.6
(2.0)
–
(23.4)
(23.4)
–
(23.4)
Page_69
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Consolidated balance sheet
As AT 31 DeCemBeR 2021
Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
other intangible assets
Financial assets
Deferred tax assets
Trade and other receivables
Current assets
Trade and other receivables
Tax receivable
Cash and cash equivalents
Total assets
Current liabilities
short-term borrowings
Lease liabilities
Trade and other payables
Tax payable
Provisions
Net current assets
Non-current liabilities
Long-term borrowings
Lease liabilities
Provisions
Deferred tax liabilities
Total liabilities
Net assets
Equity
Issued share capital
share premium account
other reserves
Retained earnings
Total equity attributable to equity holders of the Parent Company
Non-controlling interest
Total equity
31 December
2021
£m
notes
1 January
2021
£m
10
11
12
13
14
21
15
15
16
18
11
17
20
19
11
20
21
22
22
23
24
4.2
15.9
128.9
85.3
1.7
8.3
0.9
245.2
605.5
0.9
90.9
697.3
942.5
0.1
5.1
568.7
0.7
8.3
582.9
114.4
101.9
11.4
3.8
18.7
135.8
718.7
223.8
0.5
30.1
30.6
116.9
76.2
223.7
0.1
223.8
5.1
21.3
129.1
96.2
1.6
10.3
3.3
266.9
563.9
2.8
117.9
684.6
951.5
0.1
9.2
558.0
0.5
7.2
575.0
109.6
119.0
17.3
3.3
18.1
157.7
732.7
218.8
0.5
30.1
30.6
118.3
70.2
219.1
(0.3)
218.8
The consolidated financial statements of Impellam Group plc (registered number: 06511961) on pages 68 to 112 were approved
by the Board on 5 April 2022.
Tim Briant
Chief Financial Officer
Page_70
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Consolidated statement of changes in equity
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
Total share
capital and share
premium
(note 22)
£m
other reserves
(note 23)
£m
Total equity
attributable to
equity owners of
the parent
£m
Retained
earnings
£m
non-controlling
interest
(note 24)
£m
4 January 2020
Loss for the period
other comprehensive income (note 23)
Total comprehensive income in period
Transactions with owners, recorded directly in equity
Purchase and cancellation of own shares (note 24)
1 January 2021
2 January 2021
Profit for the period
other comprehensive income from reducing the
NCI component (note 24)
other comprehensive income from foreign
currency translation (note 23)
Total comprehensive income in period
Transactions with owners, recorded directly in equity
Purchase and cancellation of own shares (note 22)
30.6
–
–
–
–
30.6
30.6
–
–
–
–
–
120.3
–
(2.0)
(2.0)
–
118.3
118.3
–
–
(1.4)
(1.4)
–
31 December 2021
30.6
116.9
95.9
(21.4)
–
(21.4)
(4.3)
70.2
70.2
8.2
(0.3)
–
7.9
(1.9)
76.2
246.8
(21.4)
(2.0)
(23.4)
(4.3)
219.1
219.1
8.2
(0.3)
(1.4)
6.5
(1.9)
223.7
(0.3)
–
–
–
–
(0.3)
(0.3)
0.1
0.3
–
0.4
–
0.1
Total
equity
£m
246.5
(21.4)
(2.0)
(23.4)
(4.3)
218.8
218.8
8.3
–
(1.4)
6.9
(1.9)
223.8
Page_71
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Consolidated cash flow statement
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
Cash flows from operating activities
Profit/(loss) before tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Amortisation of other intangible assets
Impairment of goodwill
Impairment of other intangible assets
Profit on disposal of property, plant and equipment
Finance income
Finance expense
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Increase in provisions
Cash from operations
Tax paid
Net cash from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Receipt from lease debtors
Increase in other financial assets
Interest received
Net cash from investing activities
Cash flows from financing activities
Drawdown of short-term borrowings
Repayment of short-term borrowings
Increase/(decrease) in overdraft
Purchase and cancellation of own shares
Interest paid on lease liabilities
Interest paid on borrowings
Repayment of lease liabilities
Net cash from financing activities
net decrease in cash and cash equivalents
opening cash and cash equivalents
Effect of foreign exchange rate movements
Closing cash and cash equivalents
Page_72
31 December
2021
£m
notes
1 January
2021
£m
15.4
(20.4)
10
11
13
12
13
4
6
7
20
10
13
26
14
6
26
26
26
22
26
26
16
2.4
7.0
15.1
–
–
(0.2)
(0.2)
4.3
43.8
(46.0)
12.1
2.0
11.9
(1.7)
10.2
(1.5)
(4.3)
1.7
–
0.2
(3.9)
292.0
(308.7)
1.0
(1.9)
(0.6)
(3.5)
(8.9)
(30.6)
(24.3)
117.9
(2.7)
90.9
2.8
9.5
17.6
16.6
5.6
(0.2)
(0.3)
5.7
36.9
8.1
50.8
1.4
97.2
(2.7)
94.5
(1.2)
(2.3)
3.2
(0.1)
0.3
(0.1)
167.1
(213.4)
(36.1)
(4.3)
(0.8)
(4.6)
(11.5)
(103.6)
(9.2)
132.3
(5.2)
117.9
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Notes to the consolidated financial statements
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
1. CORPORATE INFORMATION
The financial statements of Impellam Group plc and all of its subsidiaries (‘the Group’) for the 52 weeks ended 31 December
2021 were authorised for issue by the Board of Directors on 5 April 2022 and the balance sheet was signed on behalf of the
Board by Tim Briant.
The Group provides staffing solutions, human capital management and outsourced people-related services from offices located
in the UK, Ireland, north America, mainland europe, Australia and new Zealand.
Impellam Group plc (‘the Company’) is a public limited company incorporated and registered in england and Wales and domiciled
in the UK under the Companies Act 2006 with a listing on the London Stock Exchange, trading on AIM.
Its registered office is located at:
800 The Boulevard
Capability Green
Luton
Bedfordshire LU1 3BA
United Kingdom
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation and going concern
The consolidated financial statements have been prepared on a going concern basis in accordance with UK adopted
international accounting standards. In coming to their conclusion the Directors have considered the Group’s profit and cash flow
plans for the coming period, together with outline projections for 2023 and 2024. The Group had a net debt position of £15.0m
(excluding IFRS 16 lease liabilities) and has a further £73.5m available to drawdown on the Group’s revolving credit facility (see
note 27). The amount of borrowing required to fund the Group’s activities is determined based on these projections, together
with expected returns to shareholders and planned capital expenditure. Also considered is the projection of compliance with
the financial covenants implied by these plans. In addition, these figures are tested for sensitivity to possible changes to the
economic environments in which the Group operates. The Group has no operations in Ukraine or surrounding regions and
therefore there is no direct impact on the Group’s trading, however, any indirect impact such as a worsening in economic
conditions, would represent such a sensitivity. The impact on Group liquidity and covenants of each of these sensitivities is then
considered together with the likelihood of each of these occurring either individually or in combination. Given this analysis, the
Directors have determined that there are no likely downside scenarios which would cause the Group a concern.
Following the september 2021 assessment by the IFRs Interpretations Committee of ‘Cash received via electronic transfer as
settlement for financial assets’, the Group has reassessed its policy for the treatment of BACs. BACs receipts are now recognised
on a settlement rather than remittance basis. The prior period comparatives have not been restated for this change as the
impact on both trade receivables and cash was not material to the prior period. Further, the change has had no impact on
profit recognised in either period, and the change has had no significant impact on key performance indicators or on covenant
compliance.
The financial statements have been prepared on the historical cost basis except where otherwise identified and as modified
for the revaluation of certain financial assets at fair value through the income statement. The principal accounting policies
adopted are set out below. The financial statements are presented in Pound Sterling and all values are rounded to the nearest
£0.1 million (£0.1m) except where otherwise indicated. Foreign operations are included in accordance with note 2(C) below.
Any references to 2021 in these statements refer to the 52-week financial period ended 31 December 2021. Any references to
2020 in these statements refer to the 52-week financial period ended 1 January 2021.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 31 December 2021. The financial
statements of subsidiaries are prepared for the same reporting period as the Parent Company. each company, including the
parent, uses locally applicable generally accepted accounting practice (‘GAAP’) for the preparation of their individual financial
statements. Adjustments are made to bring these into line with the IFRS policies adopted by the Group, as required. Subsidiaries
are consolidated from the date on which the Group obtains control using the acquisition method and cease to be consolidated
from the date on which the Group ceases its control. Accounting policies have been applied consistently.
Page_73
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ConTInUeD
Basis of consolidation continued
A component of the Group’s business is classified as a discontinued operation if the operations and cash flows of the component
can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Group and if the component
either has been or is classified as held for sale, and:
•
•
•
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
When an operation is classified as a discontinued operation the consolidated income statement and consolidated cash flow
statement are restated and presented as if the operation has been classified as such from the start of the comparative year.
A) Changes in accounting policies and disclosures
New standards, amendments and interpretations effective in financial year 2021
•
Interest Rate Benchmark Reform Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The above amendment has not materially impacted the Group’s results. The Group adopted Covid-19-related Rent Concessions –
Amendments to IFRs 16 in the prior period.
Standards and interpretations to existing standards that are not yet effective and have not been early adopted by the Group
The following new standards and interpretations to existing standards have been published that are mandatory for the Group’s
future accounting and effective for the Group as follows, which are all effective for periods starting on or after 31 December
2021 or later periods:
• Property, Plant and equipment: Proceeds before intended use – Amendments to IAs 16
• Reference to the Conceptual Framework – Amendments to IFRs 3
• Covid-19-Related Rent Concessions beyond 30 June 2021 – Amendment to IFRs 16 Leases
•
•
• Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37
• Annual Improvements to IFRs standards 2018-2020
• Classification of Liabilities as Current or Non-current – Amendments to IAS 1
Definition of Accounting Estimates - Amendments to IAS 8
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
The above standards and interpretations are not expected to materially impact the Group’s results.
B) Significant accounting judgements and estimates
In applying the Group’s accounting policies, the following judgements and estimates have been made that may have a significant
effect on the amounts recognised in the financial statements in the current or future years:
i) Judgements
Agent versus principal
The Group assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the
Group, whether the Group has the primary responsibility for providing the services and whether the Group contracts directly
with either the worker placed or any other recruitment agency. Account is also made of the degree of latitude the Group has in
establishing the charging rates with all parties.
Where the Group provides a managed service, in which it acts as agent for the client (which is mainly managed services
contracts), the amount of revenue recognised is limited to the management fee receivable for that service after making
provision for any losses foreseen, volume rebates and amounts payable under gain-share arrangements rather than the full
amount invoiced. Trade receivables and payables related to these sales are recorded at full invoice value.
Lease end dates
IFRS 16 Leases requires a lessee to determine whether it is reasonably certain: to exercise an option to extend the term
of the lease; to exercise an option to purchase the underlying asset at the end of the lease; or not to exercise an option to
terminate the lease early. The Group makes this assessment to derive an expected lease term, which may not be the same as
the contractual term of the lease. This has led to a level of judgement over the leases in our portfolio on the expected lease
termination date. Depending on the circumstances of the individual lease, the Group has taken either the break date (for those
circumstances where the Group is reasonably certain to exercise the break), the actual lease end date or an estimate of how long
the Group will stay in a property for those leases which have been held over at the end of the year.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Ageing of borrowing
The Group has signed up to a revolving credit facility which is committed until at least December 2024 (note 27). Borrowings
made under this facility are over a set period, which is usually less than a year, but are available to be renewed as and when
they fall due. The Group assesses if any element of this borrowing would be due in less than one year based upon optimal cash
holding positions and planned repayments of the debt, in total, over the coming 12 months.
Deferred tax asset recoverability
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.
Software
Capitalised software costs are amortised from when the relevant software is ready and available for use. This requires
judgement over when software has exited the testing phase and is normally determined by how many of the planned users have
been migrated to the new platform. All costs relating to the ‘research’ phase of the software development cycle, together with
costs not separately identifiable and attributable to particular program development, are expensed directly to administrative
expenses in the income statement in the period in which they are incurred. Some software can be treated as “Software as a
service” and so expensed as the service is provided rather than capitalised on spend and amortised over the useful economic life.
The Group assesses the treatment of such software on a case-by-case basis with reference to facts including whether the right to
transfer the software to another platform or to control the method of operation is within the control of the Group.
Post year end disposal of Corestaff
The Directors have disposed of Corestaff to swipejobs Inc. a US private digital staffing company and consider this to be a post
balance sheet event. Under IFRs 5, there are certain criteria that are required to be met to allow a subsidiary to be considered
to be Held for sale. The Directors have considered the criteria in IFRs 5 and have noted that whilst some of these had been met
at the year end, the sale of Corestaff was not determined to be highly probable until after the period end date. As such, the
Directors have considered that the transaction did not meet the criteria of Held for Sale in the financial period.
ii) Estimates
Impairment of goodwill and other intangible assets
The Group determines whether goodwill and other intangible assets are permanently impaired on an annual basis or otherwise
when changes in events or situations indicate that the carrying value may not be recoverable. This requires an estimation of
the recoverable amount of the cash-generating unit to which the assets are allocated. estimating the value-in-use requires the
Group to make an estimate of the future cash flows from the cash-generating unit and also to choose a suitable discount rate
in order to calculate the present value of those cash flows. More details of the carrying value and impairment review, including
sensitivities, are given in notes 12 and 13.
Legal provision
The Group measures and recognises provisions related to pending litigation or other outstanding claims subject to negotiated
settlement, mediation and arbitration. A significant level of estimation is required to quantify the possible ranges of financial
settlement. Due to the inherent uncertainty in this evaluation process, actual losses may be different from the originally
estimated provision (see note 20).
Lease interest rates
The Group has estimated the interest rates implicit in the lease when calculating the lease liability and related right-of-use
asset under IFRs 16 Leases. Unless stipulated clearly when taking on the liability, the Group uses an incremental borrowing rate
calculation to determine the relevant rate. Consideration is taken over the term of the lease, the credit risk of the acquirer and
any specific risks relating to the assets acquired by an individual lease.
C) Currencies and foreign currency translation
The functional and presentational currency of the Company and its UK subsidiaries is Pound sterling. Foreign operations
are located mainly in north America, europe, Australia and new Zealand, which use their local currencies as their
functional currencies.
Page_75
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
C) Currencies and foreign currency translation continued
on consolidation, at the reporting date, the assets and liabilities of the Group’s foreign operations are translated into the
presentation currency of the Group at rates ruling on the balance sheet date. Income and expense items are translated at
average exchange rates monthly during the reporting period, as this is considered a reasonable approximation to actual
translated rates.
The exchange differences arising from this retranslation are recognised in the Consolidated Statement of Other Comprehensive
Income and accumulated to a foreign currency translation reserve in equity.
Transactions in foreign currencies are initially recorded in the functional currency using the rate of exchange ruling at the date
of the transaction. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. All differences are taken to the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
as at the date of the initial transaction. non-monetary items measured at fair value in a foreign currency are translated using
exchange rates at the date when the fair value was determined.
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, and the tax charges and
credits attributable to the exchange differences on these balances, are dealt with in the statement of comprehensive income
and accumulated to a foreign currency translation reserve in equity.
D) Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any impairment in value. Historical
cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on
a straight-line basis over the estimated useful life of the asset as follows:
Freehold property:
short leasehold property improvements:
Furniture, fixtures and fittings:
Computer equipment:
over 50 years
over the term of the lease
between three and ten years or to the end of the lease, whichever is
shorter at the start of the asset’s life
between two and five years
The residual value and estimated useful lives of assets are reviewed, and adjusted if appropriate, at each balance sheet date.
The carrying value of property, plant and equipment is reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying value of the item) is included in the income statement in the period the item
is derecognised.
E) Goodwill
Goodwill acquired in a business combination represents the excess of the consideration paid (at the date of exchange) over the
fair value of the identifiable assets, liabilities and contingent liabilities acquired on the date of acquisition.
Acquisition-related costs are expensed to the income statement as incurred.
Goodwill is recognised as an asset in the consolidated balance sheet of the Group and is recorded at cost less any accumulated
impairment losses. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. Any impairment charge is recognised immediately in the income
statement and is not subsequently reversed.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to
each of the Group’s cash-generating units (business segments) that is expected to benefit from the combination. Each group of
cash-generating units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill
is monitored for internal management purposes. Impairment is determined by assessing the recoverable amount of the cash-
generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the
carrying amount, an impairment loss is recognised.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
F) Other intangible assets
Other intangible assets represent the carrying value of brands and client relationships, identified on business combinations, and
of computer software and licences. Carrying value is equal to cost less accumulated amortisation and impairment or, in the case of
assets acquired through business combinations, fair value at date of acquisition less accumulated amortisation and impairment.
Brand values
Brands are defined as having finite useful lives and the costs are amortised on a straight-line basis over the estimated useful
lives of each of the assets (ranging between three and twenty years). The expense is taken to the income statement through the
‘depreciation and amortisation’ line within administrative expenses.
Client relationships
Client relationships are defined as having finite useful lives and the costs are amortised on a straight-line basis over the
estimated useful lives of each of the assets (ten years). The expense is taken to the income statement through the ‘depreciation
and amortisation’ line within administrative expenses.
Software
Externally acquired computer software and licences are capitalised at the costs incurred to acquire and bring into use the
specific software. Internally generated computer software programs are capitalised to the extent that costs can be separately
identified and attributed to particular software programs, measured reliably, and where the asset developed can be shown to
generate future economic benefits and the Group intends to and has the technical ability and sufficient resources to complete
development. Computer software and licences are defined as having finite useful lives and the costs are amortised on a straight-
line basis over the estimated useful lives of each of the assets, considered to be between three and five years. The expense is
taken to the income statement through the ‘depreciation and amortisation’ line within administrative expenses.
Some software can be treated as “Software as a service” and so expensed as the service is provided rather than capitalised on
spend and amortised over the useful economic life. The Group assesses the treatment of such software on a case-by-case basis
with reference to facts including whether the right to transfer the software to another platform or to control the method of
operation is within the control of the Group.
All costs relating to the ‘research’ phase of the software development cycle, together with costs not separately identifiable and
attributable to particular program development, are expensed directly to administrative expenses in the income statement in
the period in which they are incurred.
Impairment
All intangible assets are also reviewed for impairment whenever there is an indication that the carrying amount may be impaired,
or where the asset is not yet available for use. Useful lives are also examined on an annual basis and adjustments, where
applicable, are made on a prospective basis.
G) Implementation costs
Costs directly attributable to the implementation of a contract and which can be separately identified and measured reliably
are capitalised when income from that contract is virtually certain and where they relate directly to the specific contract and are
directly incremental to the implementation. These costs are included within trade and other receivables on the balance sheet so
long as the estimated future cash flows from the contract are not less than the capitalised amount. These capitalised costs are
amortised over the life of the contract on a straight-line basis. If the contract becomes loss-making, any unamortised costs are
written off immediately.
H) Financial assets
Financial assets are classified as ‘financial assets at fair value through the income statement’, ‘financial assets at fair value
through other comprehensive income’, or as ‘financial assets at amortised cost’, as appropriate. The Group determines the
classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at
each financial period end. When financial assets are recognised initially, they are measured at fair value, being the transaction
price plus, in the case of financial assets not at fair value through the income statement, directly attributable transaction costs.
Page_77
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
H) Financial assets continued
Investments
The Group’s investments are classified as held at fair value through the income statement. They are further classified as non-
current unless management expects to dispose of the investment within 12 months of the balance sheet date.
These investments relate to the deferred compensation plan detailed in note 2(P) below, where the employee’s entitlement is
limited to the market value of the fund. on this basis, the use of fair value through the income statement is permitted because it
eliminates a measurement inconsistency (‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities
or recognising the gains or losses on them on a different basis. Subsequent to initial recognition these investments are held
at fair value; the fair values are based upon bid prices ruling at the balance sheet date. Fair value adjustments are recognised
through the income statement.
I) Other non-current financial assets
Other non-current financial assets represent security deposits with non-financial institutions that have no fixed date of
repayment and that are not expected to be repaid within the next 12 months. On initial recognition these assets are held at cost
and subsequently at amortised cost.
Impairment
The Group assesses at each balance sheet date whether a financial asset is impaired by reference to any known evidence
indicating that the Group may not be able to collect all amounts due in full.
J) Trade and other receivables
Trade receivables, which have various terms, are non-interest-bearing and are recognised and carried at fair value and
subsequently measured at amortised cost, being the original invoice amount less an allowance for uncollectible amounts, credit
notes and expected credit losses.
supplier Finance Arrangements (sFA) are utilised by the Group. These arrangements, organised by clients of the Group, are
non-recourse and irrevocable as the trade receivable has been sold to the relevant bank providing the sFA. The designated
trade receivable is duly derecognised in accordance with IFRs 9, with the associated cash payment debited to the Group’s cash
position. The utilisation charge for drawing down on the sFA is included in interest costs and is recognised from the drawdown
date to the contractual payment term of the relevant trade receivable subject to the arrangement. Any other trade receivables
related to those clients, which have not been utilised for the sFA, remain within trade receivables and will be paid when due
under the client payment terms. The cashflows arising from the derecognition of trade receivables under the SFA arrangements
are treated as ‘movements in trade and other receivables’ and therefore form part of ‘cash from operations’.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables
and contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics to
the trade receivables for similar types of contracts. The expected loss provision is based on the Group’s expectation of future
credit losses over the current receivables balance. These expectations are based upon known issues affecting specific debtors as
well as general forward-looking information on factors affecting the Group’s customers as a whole, as well as an awareness of
the economic conditions in the countries where the Group operates. These risk factors are considered both on initial recognition
of the receivable and as part of the ongoing assessment. If there has been a significant increase in the credit risk since the initial
recognition then an increased loss provision is recognised.
Trade and other receivables also include contract assets which primarily arise either as costs incurred when implementing a new
contract or where services have been provided but the amount incurred and margin earned has yet to be invoiced to the client
due to timing of the completion of the performance obligation and are considered contract assets for disclosures required
under IFRs 15 revenue from contracts with customers.
K) Cash and cash equivalents
Cash and short-term deposits in the consolidated balance sheet comprise cash at bank and in hand and short-term deposits with
an original maturity of three months or less. For the purpose of the consolidated cash flow statement, cash and cash equivalents
consist of cash and short-term deposits as defined above. BACs and similar electronic cash transfers are recognised on a
settlement basis. Bank overdrafts are used as a form of short term financing arrangement for the Group and are shown within
trade and other payables on the consolidated balance sheet and disclosed as a financing activity on the consolidated statements
of cash flows.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
L) Trade and other payables
Trade and other payables are classified as financial liabilities and measured at amortised cost which approximates to the fair
value. The balances are not interest-bearing.
M) Taxes
Current tax
Current tax assets and liabilities for the current and prior periods 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.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the
income statement. Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Deferred tax liabilities are not recognised on unremitted earnings from subsidiaries where the Group can control the timing of
the reversal and the temporary difference is not expected to reverse in the foreseeable future.
Sales taxes
Revenues, expenses and assets are recognised net of the amount of sales tax except:
• where the sales tax incurred on a purchase of goods or services or assets is not recoverable from the taxation authority,
in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
receivables and payables that are stated with the amount of sales tax included.
•
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables
in the balance sheet.
N) Provisions
Provisions, such as those over property or ongoing legal cases, are recognised when the Group has a present legal or constructive
obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at
a pre-tax rate that reflects current market assessments of the time value of money. When discounting is used, the increase in the
provision due to the passage of time is recognised as an interest expense in the income statement.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
N) Provisions continued
As part of the normal course of business the Group is exposed to various claims. Provisions are made for amounts that satisfy
the recognition criteria in IAs 37 and accordingly are not recognised when the likelihood of any claim being settled and the
associated settlement amount cannot be estimated.
O) Financial liabilities
Financial liabilities are classified on initial recognition as either ‘financial liabilities at fair value through the income statement’ or
‘at amortised cost’. All Group borrowings have initially been recognised as ‘at amortised cost’ and measured at fair value
of the consideration received less directly attributable issue costs.
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost. This cost is computed
as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation, using the effective
interest rate method of any difference between the initially recognised amount and the maturity amount. Amortised cost
is calculated by taking into account any issue costs, and any discount or premium on settlement.
Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the
amortisation process.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
P) Employee benefits
Short-term benefits – bonus arrangements
The Group operates a number of annual bonus arrangements for Directors and employees. The cost of these arrangements is
recognised in the income statement when the entity has an obligation to make such payments as a result of the achievement of
Board-approved performance targets and when a reliable estimate of this obligation can be made.
Defined contribution pension obligations
The Group provides pension arrangements for its UK-based Directors and employees through defined contribution schemes
administered by third party providers. The Group has no further payment obligations once the contributions have been made.
Contribution costs are expensed to the income statement as they become due.
Other post-employment obligations
In the Us, the Group operates a deferred compensation plan for certain key employees. The plan allows the employee to defer
receipt of a portion of their emoluments together with, in some cases, a contribution from the Group. The deferred amounts
plus the Group contribution are paid into an external trust fund. Employees’ entitlement is limited to the market value of
the fund; therefore, both the investment and the liability to the employee are marked to market on an annual basis, with
movements passing through the administrative expenses line (salaries and wages) in the income statement.
Q) Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for leases of low-value assets and
leases with an expected full term of 12 months or less.
Lease liabilities are measured at the present value of the unpaid contractual payments over the recognised 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.
On initial recognition, the carrying value of the lease liability also includes amounts expected to be payable under any residual
value guarantee; the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to exercise
that option; and any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the
termination option being exercised.
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 and initial direct costs incurred. 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 amortised on a straight-line basis over the remaining term of the
lease or over the remaining economic life of the asset if this is judged to be shorter than the lease term.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
When the Group revises its estimate of the term of any lease, it adjusts the carrying amount of the lease liability to reflect the
payments to make over the revised term, which are discounted at a revised discount rate that is implicit in the lease for the
remainder of the lease term. The carrying value of lease liabilities is similarly revised if any variable element of future lease
payments dependent on a rate or index is revised. In both cases, an equivalent adjustment is made to the carrying value of the
right-of-use asset, with the revised carrying amount being amortised over the remaining lease term.
When the Group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the
modification. If the renegotiation results in one or more additional assets being leased for an amount similar to the standalone
price for the additional rights-of-use obtained, the modification is accounted for as a separate lease in accordance with the
above policy. In all other cases where the renegotiation increases the scope of the lease (whether that is an extension to the
lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount rate applicable
on the modification date, with the right-of-use asset being adjusted by the same amount. If the renegotiation results in a
decrease in the scope of the lease, both the carrying amount of the lease liability and right-of-use asset are reduced by the same
proportion to reflect the partial or full termination of the lease with any difference recognised in profit or loss. The lease liability
is then further adjusted to ensure the carrying amount reflects the amount of the renegotiated payments over the renegotiated
term, with the modified lease payments discounted at the rate applicable on the modification date. The right-of- use asset is
adjusted by the same amount.
Right-of-use assets are reviewed regularly to ensure that the useful economic life of the asset is still appropriate based on the
usage of the asset. Where the asset has reduced in value the Group considers the situation on an asset-by-asset basis and either
treats the reduction as an acceleration of depreciation or as an impairment under IAs 36 Impairment of Assets. An acceleration
of depreciation occurs in those cases where there is no opportunity or intention to utilise the asset before the end of the lease.
An impairment is recognised in those few cases where the current value-in-use of the asset is significantly less than the carrying
amount and there is no intention or opportunity known of that mitigates this impairment.
For contracts that both convey a right to the Group to use an identified asset and require services to be provided to the Group
by the lessor, the Group has elected to account for the entire contract as a lease.
Where the Group acts as a lessor by sub-letting specific leases, each such lease is classed either as a finance lease, if the sub-let
transfers substantially all the risks and rewards of the underlying asset to the lessee, or an operating lease, if not. The Group
endeavours to ensure that any sub-lease covers the full remaining term of the lease.
Where the Group recognises an asset from a finance lease, such asset replaces the right-of-use asset arising from the head lease
and is recorded as a receivable called net investment in the lease. subsequent to initial measurement, the net investment in the
lease increases as a result of interest charged at a constant rate on the balance outstanding and is reduced for lease payments
made. These assets are reviewed for recoverability using the simplified arrangements under the expected credit loss model
creating a lifetime expected credit loss provision.
Where the Group recognises an operating lease, lease payments received are treated as income on a straight-line basis.
R) Revenue
Revenue derived from temporary staffing services is recognised and accrued by reference to hours worked (representing the
service provided) in accordance with submitted authorised timesheets and pre-agreed charge rates (which include an element
of salary and related costs) which are together used to determine the transaction price. This applies both when there is a direct
supply as well as when there is supply of a managed service to the client, as the timing of performance obligations and the
raising of invoices can vary. Timesheets are submitted mainly on a weekly basis, with a limited number being submitted either
daily or monthly, so any variable aspect of contract assets is limited due to the financial period finishing at the end of a week.
The Group assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the
Group, whether the Group has the primary responsibility for providing the services and whether the Group has control of or
holds the inventory risk over the worker placed.
Where the Group acts as a principal in the supply, revenue is recognised as the gross amount due, net of applicable sales taxes, rebates
and discounts and after eliminating sales made within the Group. Where the Group provides a service in which it acts as agent for the
client, the amount of revenue recognised is limited to the management fee receivable for that service after making provision for any
losses foreseen, volume rebates and any other amounts payable rather than the full amount invoiced. Trade receivables and payables
related to these sales are recorded at full invoice value. The Group does conduct business on both a principal and an agent basis and
each new contract is reviewed to identify the most appropriate basis. most segments within the Group act as principals as they have
the primary relationship with the worker placed and can control when and where they are placed. The examples of the agent-basis
relationship are all found in the Global managed services segment. These contracts have secondary relationships with the
Page_81
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ConTInUeD
R) Revenue continued
workers placed and act more as intermediaries for providing services regarding administering and processing rather than sourcing
the individual workers. The contractual obligations around both the billing of clients and payments to suppliers in these cases also
highlight the lack of control over the specific service provided and so reinforces the recognition of revenue on an agent basis.
Revenue derived from permanent placements is recognised and accrued when the employment of the individual commences
with provision made for potential refunds which can be payable if the placement is terminated within a set period ranging from
14 to 100 days. Revenue recognised from a permanent placement uses a transaction price typically based on a percentage of
the candidate’s remuneration package and is recognised when the candidate commences work with the client, which is the only
performance obligation and point at which control was transferred involved in the supply.
For revenue derived from both temporary staffing and permanent placements, payment is due following the completion of
the performance obligations and an agreed period of credit dependent on the agreed contract with the client. other revenue,
including fees received for one-off services which are not dependent on hours worked or placed workers, is recognised when all
parties agree the relevant performance obligations have been performed. Interest income receivable on deposits with financial
institutions is recognised on an accrued basis. Contract liabilities are recognised when an invoice has been raised in advance of
the service provision discussed above.
S) Borrowing costs
Borrowing costs are recognised as an expense when incurred unless they are qualifying assets under IAS 23 Borrowing costs
when they are capitalised.
T) Equity instruments
The Ordinary shares issued by the Company are classified as equity. They are recorded as the proceeds received, net of direct
issue costs.
Where any Group company purchases the Company’s equity instrument (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of taxes) is deducted from equity attributable to the Company’s equity shareholders,
until the shares are cancelled or reissued. Upon cancellation, a reserve equal to the nominal value of the shares is transferred
from retained earnings into a capital redemption reserve.
U) Retained earnings
Retained earnings represents all other net gains and losses and transactions with owners which are not recognised elsewhere.
V) Dividend distribution policy
Dividend distributions to the Company’s shareholders are recognised as an expense in the Group financial statements in the
period in which the dividends are paid or approved by the Company’s shareholders.
W) Government grants
Government grants are recognised against expenses in the period in which they are intended to compensate. Grants are only
recognised when there is reasonable assurance that any conditions attached to the grant will be complied with and that the
grant will be received.
3. SEGMENT INFORMATION
The Group is reporting under IFRS 8 Operating Segments which requires that the Group firstly:
•
identifies its ‘Chief Operating Decision Maker’ (‘CODM’), which has currently been assessed as the Group Chief Executive
Officer who, along with the ‘Leadership Team’, reviews the Group’s internal reporting in order to assess performance and
allocate resources; and secondly
• by reference to the information supplied to the CoDm, identify its operating segments and, from these, identify its
reportable segments.
The CODM discusses performance with management of the following reportable segments on a revenue and gross profit
basis only:
• Global managed services
• sTem
• Regional Specialist Staffing
• Healthcare
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
There is a change in segmental analysis from the prior year as Global Talent Acquisition and managed Workforce solutions
changed its name to Global Managed Services, and Global Specialist Staffing was removed in favour of STEM to better reflect the
management structures. The new STEM sector includes most of what was in Global Specialist Staffing, an element of Regional
Specialist Staffing as well as some other elements transferring to and from the other segments. The prior year segmental
reporting has been restated to incorporate these changes.
The CoDm does not review balance sheet reports in detail by segment, only in total for the Group. As such, no information
relating to assets and liabilities on a segmental basis has been presented.
31 December 2021
Global managed services
sTem
Regional Specialist Staffing
Healthcare
Inter-segment revenues
Operating segments
Restated
1 January 2021
Global managed services
sTem
Regional Specialist Staffing
Healthcare
Inter-segment revenues
Operating segments
Revenue
£m
Gross profit
£m
838.7
759.6
430.7
295.3
(61.9)
79.2
81.8
62.3
43.7
–
2,262.4
267.0
Revenue
£m
Gross profit
£m
745.8
712.2
356.4
231.3
(44.8)
71.4
65.1
49.8
41.8
–
2,000.9
228.1
The CoDm also discusses performance with management of the following geographic segments plus an allocation of shared
costs and corporate costs:
• UK & europe
• north America
• Asia Pacific
31 December 2021
UK & europe
north America
Asia Pacific
Operating segments
1 January 2021
UK & europe
north America
Asia Pacific
Operating segments
Revenue
£m
Gross profit
£m
1,741.4
456.3
64.7
2,262.4
172.5
76.5
18.0
267.0
Revenue
£m
Gross profit
£m
1,539.5
401.5
59.9
2,000.9
140.7
70.5
16.9
228.1
Adjusted
operating
profit
£m
24.5
10.1
2.2
36.8
Adjusted
operating
profit
£m
8.1
13.4
1.8
23.3
Page_83
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
3. SEGMENT INFORMATION ConTInUeD
Reconciliation of segment adjusted operating profit to profit from continuing operations is as follows:
Segment adjusted operating profit
Corporate costs
Adjusted operating profit
Amortisation of brand value and customer relationships (note 13)
Impairment of goodwill (note 12)
Impairment of intangible assets (note 13)
Operating profit/(loss) from continuing operations
Finance income (note 6)
Finance expense (note 7)
Tax charge (note 8)
Profit/(loss) for the year
31 December
2021
£m
1 January
2021
£m
36.8
(7.5)
29.3
(9.8)
–
–
19.5
0.2
(4.3)
(7.1)
8.3
23.3
(5.1)
18.2
(11.0)
(16.6)
(5.6)
(15.0)
0.3
(5.7)
(1.0)
(21.4)
Where the Group places workers between operational segments, the relevant segments each record the gross revenue for
placing the worker on an arm’s-length basis. An adjustment has been made to remove the impact of inter-segment revenues
from the Group results.
The Group has adopted adjusted operating profit as its Alternative Performance Measure, to include depreciation and
amortisation of assets but excluding amortisation of acquired intangibles.
Adjusted operating profit is not defined by IFRS and therefore may not be directly comparable with other companies’ alternative
profit measures. It is not intended to be a substitute, or superior to, IFRS measurements of profit.
IFRs 15 requires entities to disaggregate revenue recognised from contracts with customers into relevant categories that depict
how the nature, amount and cash flows are affected by economic factors. As a result, we consider the following information to
be relevant:
Global
Managed
Services
£m
650.9
171.6
16.2
838.7
828.5
3.4
6.8
838.7
838.7
838.7
Regional
Specialist
Staffing
£m
Healthcare
£m
Inter–segment
revenues
£m
Total
£m
332.7
98.0
–
430.7
421.6
9.1
–
430.7
430.7
430.7
246.8
–
48.5
295.3
286.4
8.0
0.9
295.3
295.3
295.3
(61.9)
–
–
1,741.4
456.3
64.7
(61.9)
2,262.4
(61.9)
–
–
2,203.0
40.8
18.6
(61.9)
2,262.4
(61.9)
2,262.4
(61.9)
2,262.4
STEM
£m
572.9
186.7
–
759.6
728.4
20.3
10.9
759.6
759.6
759.6
31 December 2021
Primary geographic markets
UK & europe
north America
Australasia
Total
Major service lines
Temporary placements
Permanent placements
other
Total
Timing of revenue recognition
service transferred at a point in time
Total
Page_84
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Restated
1 January 2021
Primary geographic markets
UK & europe
north America
Australasia
Total
Major service lines
Temporary placements
Permanent placements
other
Total
Timing of revenue recognition
service transferred at a point in time
Total
Global
managed
services
£m
597.2
142.2
6.4
745.8
738.2
2.7
4.9
745.8
745.8
745.8
Regional
specialist
Staffing
£m
Healthcare
£m
Inter-segment
revenues
£m
284.6
71.8
–
356.4
350.6
4.9
0.9
356.4
356.4
356.4
177.8
–
53.5
231.3
224.8
6.0
0.5
231.3
231.3
231.3
(44.8)
–
–
(44.8)
(44.8)
–
–
(44.8)
(44.8)
(44.8)
Total
£m
1,539.5
401.5
59.9
2,000.9
1,966.3
22.7
11.9
2,000.9
2,000.9
2,000.9
sTem
£m
524.7
187.5
–
712.2
697.5
9.1
5.6
712.2
712.2
712.2
The revenue information above is based on location of the Group entity directly involved in the supply.
4. OPERATING PROFIT/(LOSS)
a) Operating profit/(loss) has been arrived at after charging:
Depreciation of property, plant and equipment (note 10)
Amortisation of right-of-use assets (note 11)
Amortisation of intangible assets (note 13)
Impairment of goodwill (note 12)
Impairment of intangible assets (note 13)
Profit on disposal of fixed assets
Minimum lease payments recognised as an operating lease expense (note 11)
Charge for bad and doubtful trade receivables (note 15)
31 December
2021
£m
1 January
2021
£m
2.4
7.0
15.1
–
–
(0.2)
0.7
3.3
2.8
9.5
17.6
16.6
5.6
(0.2)
0.3
3.6
Operating profit is stated net of £0.5m (2020: £7.4m) income received from governments globally in respect of various support
schemes following the Covid-19 pandemic.
b) Auditor’s remuneration
Fees payable to the Auditor for the audit of the Group’s annual financial statements
Fees payable to the Group’s Auditor and their associates for other services:
The audit of the Company’s subsidiaries pursuant to legislation
Total
31 December
2021
£m
1 January
2021
£m
0.3
0.9
1.2
0.3
0.8
1.1
Page_85
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
5. EMPLOYMENT COSTS
a) Employees (including Directors) whose costs are included in administrative expenses
Costs of employment
Wages, salaries and bonuses
social security costs
Expenses related to defined contribution plan
Total
Monthly average number of employees
UK & europe
north America
Asia Pacific
Corporate staff (including Directors)
Total
31 December
2021
£m
1 January
2021
£m
157.5
14.4
2.9
174.8
31 December
2021
Number
1,894
623
179
11
2,707
134.3
12.2
3.4
149.9
1 January
2021
number
2,012
556
167
8
2,743
The table above includes a monthly average of zero staff who were placed on furlough during the period (2020: 262 staff). The
year end number of staff was 2,900 (2020: 2,500).
b) Employees whose costs are included in cost of sales
In addition to the above, the Group employs some of the staff who are supplied to clients and whose costs are part of the
Group’s cost of sales.
Costs of employment
Wages, salaries and bonuses
social security costs
Expenses related to defined contribution plan
Total
31 December
2021
£m
620.3
48.8
3.0
672.1
1 January
2021
£m
557.4
40.1
2.3
599.8
The costs above are net of government grants in respect to job support schemes that have been administered for staff supplied
to clients.
Monthly average number of employees
UK & europe
north America
Asia Pacific
Total
c) Information on Directors’ remuneration
The total emoluments for all Directors during the period were:
Emoluments (including benefits)
Contribution to defined contribution pension plans
Page_86
31 December
2021
Number
15,070
6,694
559
1 January
2021
number
12,717
5,474
353
22,323
18,544
31 December
2021
£m
2,053
92
2,145
1 January
2021
£m
1,102
91
1,193
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Total emoluments:
31 December 2021
Lord m Ashcroft
J Robertson
T Briant
Ae entwistle
me ettling
m Laurie
Baroness T stowell
Total
1 January 2021
Lord m Ashcroft
J Robertson
T Briant
Ae entwistle
me ettling
m Laurie
Baroness T stowell
Total
Salary and
benefits
£000
Pension
contributions
£000
Total fixed
costs
£000
50
477
314
40
49
40
40
1,010
–
68
24
–
–
–
–
92
50
545
338
40
49
40
40
1,102
salary and
benefits
£000
Pension
contributions
£000
Total fixed
costs
£000
46
454
275
38
40
38
38
929
–
68
23
–
–
–
–
91
46
522
298
38
40
38
38
Bonus
£000
–
345
270
–
–
–
–
615
Bonus
£000
–
90
55
–
–
–
–
Deferred
bonus
£000
Total variable
£000
Total
emoluments
£000
–
233
195
–
–
–
–
428
–
578
465
–
–
–
–
1,043
50
1,123
803
40
49
40
40
2,145
Deferred
bonus
£000
Total variable
£000
Total
emoluments
£000
–
–
28
–
–
–
–
28
–
90
83
–
–
–
–
46
612
381
38
40
38
38
173
1,193
1,020
145
All pension payments relate to defined contribution schemes.
The total emoluments for J Robertson and T Briant include benefits, both non-cash and cash, to the value of £95,000 (2020:
£95,000) and £37,000 (2020: £36,000) respectively. The £40,000 (2020: £38,000) paid for the services of AE Entwistle as a Non-
Executive Director is paid to Deacon Street Partners Limited. The £49,000 (2020: £40,000) paid for the services of ME Ettling as
a Non-Executive Director is paid directly to ME Ettling. No Director has been in receipt of either a loan from the Group or a long-
term incentive plan in the current or prior periods.
6. TOTAL FINANCE INCOME
Bank interest receivable
Interest on lease debtors
Total finance income
7. TOTAL FINANCE EXPENSE
Revolving credit facilities
Lease interest payable
Unwind discount on provisions
Other interest expense
Total finance expense
31 December
2021
£m
1 January
2021
£m
0.1
0.1
0.2
0.2
0.1
0.3
31 December
2021
£m
1 January
2021
£m
3.4
0.6
0.2
0.1
4.3
4.4
0.8
0.3
0.2
5.7
Page_87
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
8. TAXATION
a) Tax charge in the income statement
Current income tax
UK corporation tax on results for the period
Adjustments in respect of previous periods
Foreign tax in the period
Adjustments in respect of previous periods
Total current income tax
Deferred tax charge/(credit)
Total tax charge in the income statement
The deferred tax credit comprises the following:
Utilisation of tax losses brought forward
Recognition of assets not previously recognised
Origination and reversal of other temporary differences
Change in tax rate used for deferred tax carried forward
Adjustment in respect of previous periods
Total deferred tax charge/(credit) (note 21)
31 December
2021
£m
1 January
2021
£m
2.8
(0.5)
2.3
1.6
–
3.9
3.2
7.1
0.8
(0.9)
(0.1)
2.1
(0.8)
1.2
(0.2)
1.0
31 December
2021
£m
1 January
2021
£m
2.0
(0.9)
(1.5)
3.1
0.5
3.2
5.4
–
(7.6)
1.6
0.4
(0.2)
b) Reconciliation of the total tax charge
The standard rate of Corporation Tax in the UK is 19%. Accordingly, the Group’s result from this period is taxed at an effective
rate of 19.0% (2020: 19.0%). The tax charge for the period is £7.1m (2020: £1.0m) for the Group. A tax reconciliation explaining
differences from the expected statutory rate is summarised below:
Tax charge at UK standard rate
Differences in tax rates in other countries
(Income)/expenses not taxable/allowable in determining taxable profits
Losses in period carried forward but not recognised as assets
Utilisation of losses not previously recognised (note 21)
Change in tax rate used for deferred tax carried forward
Adjustments to deferred tax in respect of previous periods
Adjustments in respect of previous periods
Effective total tax rate
31 December
2021
%
1 January
2021
%
19.0
0.9
9.6
0.9
(4.8)
20.2
3.5
(3.5)
45.8
19.0
(1.2)
(22.8)
1.2
–
(7.7)
(1.8)
8.4
(4.9)
Income not taxable in determining taxable profits is comprised of various adjustments in respect of items not treated as taxable
under local tax rules (such as non-deductible interest and capital costs in administrative expenses), plus expenses previously
added back as non-deductible being treated as allowed for tax.
Adjustments in respect of previous periods (current and deferred) arise as a result of a reduction in non-tax-deductible expenses
and estimated timing differences in the prior year filed tax returns. See note 21 for an explanation of deferred tax balances.
Page_88
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Factors affecting tax charges in future periods
The Finance Act 2021 was substantively enacted on 24 May 2021 and included the increase to the UK corporation tax rate from
19% to 25% effective from 1 April 2023. As such, UK deferred tax balances that are forecast to unwind after 1 April 2023 have
been re-measured and recognised at 25%. The most significant impact has been to the deferred tax liability carried on intangible
assets. Based on the current net book value of intangible assets and the related expected future amortisation charge to 1 April
2023, the deferred tax liability has increased by approximately £2.5m.
9. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing the profit for the period attributable to the owners of the Company
by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated on the same basis but after adjusting the denominator for the effects of
dilutive options. The only dilutive effect relates to 19,841 shares owned by The Corporate Services Group Ltd Employee Share
Trust which hold the shares remaining after various historic option plans lapsed. Excluding these shares, the weighted average
number of shares in 2021 is 45,538,963 (2020: 46,208,380) and the fully diluted average number of shares is 45,558,804
(2020: 46,228,221). The calculations of both basic and diluted earnings per share (‘EPS’) are based upon the following
consolidated income statement data:
Profit/(loss) for the period
Impairment of goodwill
Impairment of other intangible assets (net of tax)
Acquired intangibles amortisation (net of tax)
Total adjusted profit for the period
EPS – basic calculation
Total unadjusted basic earnings per share
Impairment of goodwill
Impairment of other intangible assets (net of tax)
Customer relationship and brand amortisation (net of tax)
Adjusted basic earnings per share1
31 December
2021
£m
1 January
2021
£m
8.3
–
–
7.7
16.0
(21.4)
16.6
4.5
8.6
8.3
31 December
2021
Pence
1 January
2021
Pence
18.3
–
–
17.0
35.3
(46.2)
36.0
9.8
18.6
18.2
1 Additional earnings per share calculations have been presented in order to provide information on the underlying performance of the Group before
impairment of goodwill and intangible assets and the amortisation of customer relationships and brands.
EPS – diluted calculation
Total unadjusted diluted earnings per share
Impairment of goodwill
Impairment of other intangible assets (net of tax)
Customer relationship and brand amortisation (net of tax)
Adjusted diluted earnings per share1
31 December
2021
Pence
1 January
2021
Pence
18.3
–
–
16.9
35.2
(46.2)
36.0
9.8
18.6
18.2
1 Additional earnings per share calculations have been presented in order to provide information on the underlying performance of the Group before
impairment of goodwill and intangible assets and the amortisation of customer relationships and brands.
Page_89
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
10. PROPERTY, PLANT AND EQUIPMENT
Net carrying value – 4 January 2020
Cost – 4 January 2020
Additions
Disposals
Foreign exchange
Cost – 1 January 2021
Accumulated depreciation – 4 January 2020
Charge for the period
Disposals
Foreign exchange
Accumulated depreciation – 1 January 2021
Net carrying value – 1 January 2021
Cost – 2 January 2021
Additions
Disposals
Foreign exchange
Cost – 31 December 2021
Accumulated depreciation – 2 January 2021
Charge for the period
Disposals
Foreign exchange
Accumulated depreciation – 31 December 2021
Net carrying value – 31 December 2021
Freehold
property
£m
short leasehold
property
£m
Furniture,
fixtures
and fittings
£m
Computer
equipment
£m
0.2
0.2
–
–
–
0.2
–
–
–
–
–
0.2
0.2
–
–
–
0.2
–
–
–
–
–
0.2
1.3
2.8
0.2
(0.1)
0.1
3.0
1.5
0.4
(0.1)
0.1
1.9
1.1
3.0
0.2
–
–
3.2
1.9
0.5
–
–
2.4
0.8
3.4
7.9
0.6
(1.0)
–
7.5
4.5
1.3
(1.0)
–
4.8
2.7
7.5
0.1
(0.9)
–
6.7
4.8
1.1
(0.9)
–
5.0
1.7
1.7
6.5
0.4
(1.6)
0.1
5.4
4.8
1.1
(1.6)
–
4.3
1.1
5.4
1.2
(1.7)
0.1
5.0
4.3
0.8
(1.7)
0.1
3.5
1.5
Total
£m
6.6
17.4
1.2
(2.7)
0.2
16.1
10.8
2.8
(2.7)
0.1
11.0
5.1
16.1
1.5
(2.6)
0.1
15.1
11.0
2.4
(2.6)
0.1
10.9
4.2
Included in computer equipment are assets with net carrying value of £0.1m (2020: £0.2m) held under a finance lease.
Depreciation of £0.1m (2020: £0.1m) was charged on these assets.
11. LEASES
During the period, the Group accounted for 125 leased properties (2020: 149) under IFRS 16 across the jurisdictions in which
it operates. In some jurisdictions it is customary for lease contracts to provide for payments to increase each year by inflation
or at a fixed rate and in others to be reset periodically to market rental rates, whilst in others the periodic rent is fixed over the
lease term. Some leases have provisions for early termination (see lease end dates judgements 2(B)i). The Group also leased 99
vehicles (2020: 125), all of which have a fixed lease fee over the term. The weighted average incremental borrowing rate used to
calculate the lease liability was 2.96% (2020: 2.80%).
of the 125 property leases accounted for under IFRs 16 during the period, 12% recognised future uplifts in rent (2020: 10%).
Should the lease payments on these increase by 5% there could be a resulting increase in the right-of-use asset of £0.2m.
During the period, three leases which were sub-let in their entirety were assigned to the occupying tenant. As a result, there was
an equal and opposite reduction in both the lease receivable and the lease liability positions of the Group. The last property the
Group sub-let reached the termination date during the period and consequentially the Group has no lease receivable at the end
of the period.
Page_90
Right-of-use assets
Net carrying value – 3 January 2020
Cost – 4 January 2020
Additions
Disposals
Foreign exchange
Cost – 1 January 2021
Accumulated depreciation – 4 January 2020
Charge for the period
Disposals
Foreign exchange
Accumulated depreciation – 1 January 2021
Net carrying value – 1 January 2021
Cost – 2 January 2021
Additions
Remeasurement
Disposals
Foreign exchange
Cost – 31 December 2021
Accumulated depreciation – 2 January 2021
Charge for the period
Disposals
Foreign exchange
Accumulated depreciation – 31 December 2021
Net carrying value – 31 December 2021
Lease receivables
Net carrying value – 3 January 2020
Additions
Interest
Receipts
Disposals
Foreign exchange
Net carrying value – 1 January 2021
Additions
Interest
Receipts
Disposals
Foreign exchange
Net carrying value – 31 December 2021
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Land and
buildings
£m
Vehicles
£m
26.6
34.9
5.0
(4.6)
–
35.3
8.3
8.9
(2.8)
–
14.4
20.9
35.3
0.5
1.5
(4.0)
(0.2)
33.1
14.4
6.7
(3.8)
(0.1)
17.2
15.9
1.0
1.4
–
(0.2)
–
1.2
0.4
0.6
(0.2)
–
0.8
0.4
1.2
–
–
(0.5)
(0.1)
0.6
0.8
0.3
(0.5)
–
0.6
–
Land and
buildings
£m
Vehicles
£m
7.3
1.4
0.1
(3.2)
(1.4)
0.1
4.3
–
0.1
(1.7)
(2.5)
(0.2)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£m
27.6
36.3
5.0
(4.8)
–
36.5
8.7
9.5
(3.0)
–
15.2
21.3
36.5
0.5
1.5
(4.5)
(0.3)
33.7
15.2
7.0
(4.3)
(0.1)
17.8
15.9
Total
£m
7.3
1.4
0.1
(3.2)
(1.4)
0.1
4.3
–
0.1
(1.7)
(2.5)
(0.2)
–
Page_91
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
11. LEASES ConTInUeD
Due in year 1
Due in year 2
Due in year 3
Undiscounted lease payments
Unearned finance income
Total lease receivables (note 15)
Current
non-current
Total lease receivables (note 15)
Lease liabilities
Net carrying value – 3 January 2020
Additions
Interest
Payments
Disposals
Foreign exchange
Net carrying value – 1 January 2021
Additions
Remeasurement
Interest
Payments
Disposals
Foreign exchange
Net carrying value – 31 December 2021
Current
non-current
Total lease liabilities (notes 27 and 28)
Due in year 1
Due in year 2 to 5
Due after year 5
Undiscounted lease payments
Unearned finance income
Total lease payables (notes 27 and 28)
Page_92
31 December
2021
£m
1 January
2021
£m
–
–
–
–
–
–
2.5
1.3
0.7
4.5
(0.2)
4.3
31 December
2021
£m
1 January
2021
£m
–
–
–
Land and
buildings
£m
Vehicles
£m
32.8
6.1
0.8
(10.8)
(3.0)
0.3
26.2
0.4
1.3
0.6
(9.0)
(2.7)
(0.4)
16.4
1.0
–
–
(0.7)
–
–
0.3
–
–
–
(0.2)
–
–
0.1
31 December
2021
£m
5.1
11.4
16.5
31 December
2021
£m
5.5
9.2
3.0
17.7
(1.2)
16.5
2.4
1.9
4.3
Total
£m
33.8
6.1
0.8
(11.5)
(3.0)
0.3
26.5
0.4
1.3
0.6
(9.2)
(2.7)
(0.4)
16.5
1 January
2021
£m
9.2
17.3
26.5
1 January
2021
£m
9.9
14.0
4.5
28.4
(1.9)
26.5
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Included in operating lease expenditure for 2021 are expenses relating to leases which have not been recognised under IFRS 16.
The value of expense recognised for low-value leases for the period is £0.7m (2020: £0.3m) and for short-term leases is £0.1m
(2020: £nil).
12. GOODWILL
Opening balance at 3 January 2020
Impairment in the period
Foreign exchange and other movements
Closing balance at 1 January 2021
Foreign exchange and other movements
Closing balance at 31 December 2021
Cost
£m
Impairment
£m
net carrying
value
£m
158.2
–
(2.3)
155.9
(0.2)
155.7
(10.2)
(16.6)
–
(26.8)
–
148.0
(16.6)
(2.3)
129.1
(0.2)
(26.8)
128.9
Goodwill acquired through business combinations has been allocated for impairment testing purposes to nine principal cash-
generating unit (‘CGU’) groups as follows:
Information technology
• education
• engineering
• Healthcare
•
• online platform
• science and clinical
• UK General staffing
• US Staffing
• Vendor procurement
Foreign exchange and other movements to goodwill arises from the retranslation of goodwill balances held in foreign currencies
relating to the acquisition of Bartech Holdings Corporation, in the US Staffing CGU.
No impairments were recognised over goodwill in the current period (2020: £16.6m across the Information technology,
Engineering and Online platform CGUs). There was also no impairment against other intangible assets (2020: £5.6m against the
brand value of the education CGU).
The carrying amount of goodwill and other indefinite assets allocated to cash-generating units at the period end is:
Healthcare
Information technology
science and clinical
UK General staffing
US Staffing
Total
31 December
2021
£m
1 January
2021
£m
7.9
11.4
8.5
28.6
72.5
7.9
11.4
8.5
28.6
72.7
128.9
129.1
Any CGU not shown above has no goodwill in the current or prior period. The Group tests this and other assets (note 13) for
impairment on an annual basis, and otherwise when changes in events or situations indicate that the carrying value may not be
recoverable. If such a test indicates that the carrying amount is too high, a recoverable amount is established for the asset, which
is the higher of the fair value less costs to sell and the value in use.
The recoverable amount for each of the above CGUs has been determined based upon a value-in-use calculation. Value-in-use is
established by discounting anticipated future cash flows attributable to each CGU that goodwill has been allocated to. Pre-tax
cash flow projections are based on financial budgets approved by the Board covering the next financial period and high level
management forecasts for the following four years with a perpetuity factor applied to the last forecast year.
Page_93
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
12. GOODWILL ConTInUeD
Key assumptions
The key assumptions are based upon a combination of market data tempered by our own historical experience. The calculation
of value-in-use is most sensitive to the following assumptions:
• Gross profit – this takes the average gross profit achieved in the two years preceding the start of the five plan years and
adjusts, as appropriate, for anticipated changes to business mix and market conditions over the five plan years and range
from 3.5% to 100.0% depending on the CGU;
• Discount rate – this reflects the Directors’ estimate of an appropriate market rate of return taking into account the relevant
risk factors; this has been adjusted to reflect current and expected future economic conditions as well as to account for
geographic influences (see table below for rates);
• Growth rate used to extrapolate beyond the plan year and terminal values are based upon the long-term average growth
rate of the UK and Us economies and range from 1.0% to 9.0% depending on how long it is anticipated the CGU will take to
recover from the impacts of Covid-19. Management recognises that the staffing and support services market growth rates
fluctuate both above and below this rate; and
• Terminal value growth rate – the cash flow projections include growth rates that are not expected to exceed the long-term
growth rates of the UK and Us economies, currently 2.0% (2020: 2.0%).
Sensitivity to changes in assumptions
The impairment calculation is sensitive to changes in the above assumptions. sensitivity analyses were performed over each
subsidiary CGU to model the effects of adverse changes in the forecasts and growth assumptions. The table below shows
how the results of the impairment tests for each significant CGU (being those subject to impairment, having limited excess of
recoverable amount over carrying amount, or representing a substantial amount of the total goodwill) would be impacted (with
all other variables being equal) by an increase in discount rate of 0.5% or a decrease of 0.5% in the long-term growth rate. The
impact of all of the scenarios together has also been considered and is disclosed in the final column.
education
Healthcare
Information technology
science and clinical
UK General staffing
US Staffing
Excess of
recoverable
amount over
carrying value
£m
1.6
9.2
24.4
15.8
13.1
75.1
Pre-tax
discount rate
0.5% increase
in discount rate
£m
13.9
13.9
13.9
13.9
13.9
16.5
(0.2)
(1.5)
(3.9)
(2.5)
(6.2)
(4.2)
Long-term
growth rates
decrease
by 0.5%
£m
(1.2)
(7.4)
(6.9)
(3.7)
(11.9)
(14.8)
Increase in
impairment
using
combined
sensitivity
£m
–
–
–
–
(4.0)
–
Combined
sensitivity
£m
(1.3)
(8.4)
(10.2)
(5.5)
(17.1)
(20.6)
The post-tax discount rate used for management’s best estimates in 2021 was between 11.3% and 12.0%. Management
continues to monitor closely the performance of all CGUs and considers the impact of any changes to the key assumptions.
In conclusion, management believes that, other than shown above, there is no reasonable possible change in the underlying
assumptions that would result in a further significant impairment charge in the consolidated income statement.
Page_94
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
13. OTHER INTANGIBLE ASSETS
Net carrying value – 3 January 2020
Cost – 4 January 2020
Additions
Disposals
Impairment
Foreign exchange
Cost – 1 January 2021
Accumulated amortisation – 4 January 2020
Charge for the period
Disposals
Foreign exchange
Accumulated amortisation – 1 January 2021
Net carrying value – 1 January 2021
Cost – 2 January 2021
Additions
Disposals
Foreign exchange
Cost – 31 December 2021
Accumulated amortisation – 2 January 2021
Charge for the period
Disposals
Foreign exchange
Accumulated amortisation – 31 December 2021
Net carrying value – 31 December 2021
software
£m
Brand values
£m
Client
relationships
£m
17.4
34.7
2.3
(1.3)
–
(0.2)
35.5
17.3
6.6
(1.3)
–
22.6
12.9
35.5
4.3
(3.6)
(0.1)
36.1
22.6
5.3
(3.6)
(0.1)
24.2
11.9
77.8
84.6
–
–
(5.6)
(0.5)
78.5
6.8
6.1
–
(0.2)
12.7
65.8
78.5
–
–
–
78.5
12.7
5.9
–
0.1
18.7
59.8
22.6
54.7
–
–
–
(0.5)
54.2
32.1
4.9
–
(0.3)
36.7
17.5
54.2
–
–
–
54.2
36.7
3.9
–
–
40.6
13.6
Total
£m
117.8
174.0
2.3
(1.3)
(5.6)
(1.2)
168.2
56.2
17.6
(1.3)
(0.5)
72.0
96.2
168.2
4.3
(3.6)
(0.1)
168.8
72.0
15.1
(3.6)
–
83.5
85.3
Included in software additions for the 52 weeks ended 31 December 2021 are internally generated software development costs
of £0.6m (2020: £0.7m) which have been capitalised at cost. These costs have been assessed as having a finite life of between
three and five years (2020: three and five years) and are amortised, from the date the software is available for use, on
a straight-line basis over this period.
Client relationships have resulted from business combinations and have been assessed as having a finite life of ten years. They
are amortised, from the date of acquisition, on a straight-line basis over this period. Brand values have resulted from business
combinations and have been assessed as having a finite life of between three and 20 years depending on the prominence of the
brand. They are amortised on a straight-line basis over this period.
A summary of the amounts in brand values and client relationships, together with the remaining amortisation period is below:
Brand values
£m
Remaining
amortisation period
years
Client
relationships
£m
Remaining
amortisation period
years
education
Healthcare
Information technology
UK General staffing
US Staffing
Vendor procurement
1.2
19.6
11.0
8.8
13.5
5.7
3.5
16.9
16.9
16.9
16.9
16.9
–
3.1
4.5
–
6.0
–
–
3.6
2.8
–
4.0
–
Page_95
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
13. OTHER INTANGIBLE ASSETS ConTInUeD
These assets are all reviewed for impairment when there are changes in events or situations that indicate the carrying value
may not be recoverable. Details of the sensitivities over such impairment reviews are included in note 12. no impairment was
recognised in the current period (2020: £5.6m against the Education brand value).
14. FINANCIAL ASSETS
Financial assets – non-current
marketable investments designated at market value through the income statement
Other financial assets (loans and receivables) – non-current
Deposits with non-financial institutions
Total
Financial assets include:
31 December
2021
£m
1 January
2021
£m
1.5
0.2
1.7
1.2
0.4
1.6
• The marketable investments at market value through the income statement represent investments held in trust on behalf
of certain Us employees (see note 2(P)). The plan allows certain key employees to defer receipt of a portion of their
compensation. These deferred compensation liabilities are funded by making contributions into a trust. The employees’
entitlements are limited to the market value of the fund. Investments in the trust comprise shares in Us mutual funds. At
31 December 2021, these investments have been adjusted to the market value of £1.5m (2020: £1.2m). This movement is
matched by an equivalent movement in other payables as disclosed in note 17; and
• Deposits with non-financial institutions represent amounts held by suppliers, clients and landlords as security for provision of
facilities and services.
Information on fair values and credit risks is given in notes 27 and 28.
15. TRADE AND OTHER RECEIVABLES
Current assets
Trade receivables (note 2(J))
other receivables
Lease debtor (note 11)
Prepayments
Contract assets
Total
31 December
2021
£m
539.2
3.6
–
5.0
57.7
605.5
1 January
2021
£m
496.5
5.1
2.4
5.5
54.4
563.9
• Trade receivables also include gross receivables of £268.5m (2020: £274.7m) under master-vendor agency arrangements in
the UK and US where the Group only recognises the management fee element of the receivable as revenue – note 2(R);
• Contract assets comprise accrued income and costs incurred in the implementation of new contracts; and
• The above trade and other receivables fall into the ‘loans and receivables’ category of the Group’s financial assets.
Non-current assets
Contract assets
Lease debtor (note 11)
Total
Information on fair values and credit risks is given in notes 27 and 28.
Page_96
31 December
2021
£m
1 January
2021
£m
0.9
–
0.9
1.4
1.9
3.3
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Contract balances
At the beginning of the period
net amounts recognised as revenue in the period
At the end of the period
Contract assets
31 December
2021
£m
1 January
2021
£m
55.8
1.9
57.7
52.2
3.6
55.8
Contract assets are included within ‘trade and other receivables’ on the face of the statement of financial position. Contract
assets comprise accrued income and costs incurred in the implementation of new contracts (note 2(J)).
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables and contract assets. To measure expected credit losses on a collective basis, trade receivables and
contract assets are grouped based on similar credit risk and ageing. The contract assets have similar risk characteristics to the
trade receivables for similar types of contracts.
The expected loss provision is based on the Group’s expectation of future credit losses over the current receivables balance
based on an analysis of the aging and sector of the receivable. These expectations are based upon known issues effecting
specific debtors as well as a combination of historic and general forward-looking information on factors affecting the Group’s
customers as a whole as well as an awareness of the economic conditions in the countries where the Group operates. These risk
factors are considered both on initial recognition of the receivable and as part of the ongoing assessment.
The lifetime expected loss provision for trade receivables is as follows:
1 January 2021
Expected loss rate (%)
Gross carrying amount
Loss provision
31 December 2021
Expected loss rate (%)
Gross carrying amount
Loss provision
Current
£m
0.3%
428.5
1.4
Current
£m
0.4%
449.6
1.6
<60 days past
due
£m
60–120 days
past due
£m
>120 days
past due
£m
4.5%
51.0
2.3
7.3%
6.1
0.4
<60 days
past due
£m
60–120 days
past due
£m
1.9%
84.1
1.6
6.3%
6.4
0.4
6.3%
16.1
1.1
>120 days
past due
£m
54.2%
5.9
3.2
Total
£m
1.0%
501.7
5.2
Total
£m
1.2%
546.0
6.8
All non-current receivables are due within three years of the end of the period.
movements in the provision for impairment of trade receivables were as follows:
Balance at beginning of period
Charged/(released) for the period
Utilised for the period
Foreign exchange
Balance at end of period
31 December
2021
£m
1 January
2021
£m
5.2
3.3
(1.7)
–
6.8
2.2
3.6
(0.5)
(0.1)
5.2
Page_97
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
15. TRADE AND OTHER RECEIVABLES ConTInUeD
The creation and release of provisions for impaired trade receivables have been included in ‘administrative expenses’ in the
income statement. Amounts are generally written off to the provision account where there is no expectation of recovery.
Included in the Group’s receivables are the following balances denominated in foreign currency:
Trade receivables (note 2(J))
other receivables
Lease debtors
Prepayments
Accrued income
Total
31 December
2021
£m
1 January
2021
£m
313.7
2.6
–
2.5
12.5
331.3
312.9
3.9
4.1
2.3
15.8
339.0
16. CASH AND CASH EQUIVALENTS
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following:
Cash
Included within cash is £8.5m (2020: £2.5m) of cash which is restricted for use on specific clients.
Information on fair values, credit risks and interest rates is given in notes 27 and 28.
17. TRADE AND OTHER PAYABLES
Current liabilities
Bank overdraft
Trade payables
Other tax and social security costs
Accruals
Contract liabilities
other payables
Total
31 December
2021
£m
90.9
1 January
2021
£m
117.9
31 December
2021
£m
1 January
2021
£m
3.9
376.7
63.9
77.3
0.5
46.4
568.7
2.9
375.2
86.5
54.7
0.6
38.1
558.0
Trade payables include £332.5m (2020: £341.0m) of amounts payable under master-vendor arrangements in the UK and US,
which are related to certain of the trade receivables – note 15. Arrangements are such that the payable amount is not due by the
Group until a few days after receipt of the receivable.
Other tax and social security costs include £9.1m (2020: £48.0m) of taxes deferred under government schemes across
various jurisdictions.
Included in other payables and accruals are:
a.
b.
c.
d.
£1.4m (2020: £1.2m) in respect of liabilities accruing to certain US employees in respect of a deferred compensation plan.
These amounts are payable to members of the plan on retirement (note 14);
£6.6m (2020: £3.5m) for contributions due to be made to defined contribution pension schemes on behalf of certain
employees of the Group;
£3.6m (2020: £4.2m) for customer unclaimed payments; and
Remaining amounts within other payables are largely payroll-related creditors.
Page_98
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
17. TRADE AND OTHER PAYABLES ConTInUeD
Terms and conditions of the above financial liabilities:
e. Trade payables are non-interest-bearing and are normally settled within one month from the end of the month of invoice;
f. Other tax and social security costs are non-interest-bearing and are normally settled within one to three months; and
g. other payables and accruals are non-interest-bearing and have an average term of three months.
Information on fair values and credit risks is given in notes 27 and 28.
18. SHORT-TERM BORROWINGS
Financial liabilities measured at amortised cost:
Revolving credit borrowings – secured
Hire purchase – secured
Total
Information on fair values, risks and terms are given in notes 26, 27 and 28.
19. LONG-TERM BORROWINGS
Financial liabilities measured at amortised cost:
Revolving credit borrowings – secured
Hire purchase – secured
Total
Information on fair values, risks and terms are given in notes 26, 27 and 28.
20. PROVISIONS
Current – 1 January 2021
non-current – 1 January 2021
At 1 January 2021
Additions in the period
Remeasurement in the period
Utilised during the period
Unwind of discount
Foreign exchange
At 31 December 2021
Current – 31 December 2021
non-current – 31 December 2021
Total
31 December
2021
£m
1 January
2021
£m
–
0.1
0.1
–
0.1
0.1
31 December
2021
£m
1 January
2021
£m
101.9
–
101.9
118.9
0.1
119.0
Property
£m
Workers’
compensation
£m
Legal &
contractual
£m
1.4
3.3
4.7
0.3
0.1
(0.9)
0.2
(0.1)
4.3
1.1
3.2
4.3
0.2
–
0.2
–
–
–
–
–
0.2
0.2
–
0.2
5.6
–
5.6
2.4
–
(0.5)
–
0.1
7.6
7.0
0.6
7.6
Total
£m
7.2
3.3
10.5
2.7
0.1
(1.4)
0.2
–
12.1
8.3
3.8
12.1
Property
Property provisions relate to the full expected cost of dilapidations and have been discounted to a present value using the
relevant lease interest rate.
Page_99
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
20. PROVISIONS ConTInUeD
Workers’ compensation
The US operations maintain, or maintained, insurance policies with significant excesses, below which claims are borne by the
operations. Provision is made for estimated costs of claims or losses arising from past events.
The level of provision made is based upon independent actuarial estimates. These estimates take into account the ultimate
cost, less amounts paid to date, in respect of accidents occurring between the inception of the policy and the end of the current
period, the period covered by these self-insurance arrangements. An allowance is made for claims incurred but not reported in
line with standard actuarial practice.
Claims are expected to be settled within one year.
Legal & contractual
The Group holds a provision for expected legal and contractual costs that are probable to cause an outflow of resources
over an extended period. Management exercises judgements to determine the amount of this provision on a case-by-case
basis. Provision is made for known issues based on past experience of similar items and other known factors. Each provision is
considered separately, and the amount provided reflects the best estimate of the most likely amount, being the single most
likely amount in a range of possible outcomes. owing to the inherent uncertainty within many legal proceedings, the amount
and timings of such outflow could differ significantly from the amount and ageing provided.
With reference to the prejudicial exemption in IAS 37, the Group will not disclose any further information about the assumptions
for the provision, including any details about current and the expected number of lawsuits and settled claims. The disclosure of
such information is believed to be detrimental to the Group in connection with the ongoing confidential negotiations and could
inflict financial losses on the Group and its shareholders.
Contingent liabilities
The Group is aware of a contingent liability in relation to late filing penalties within the US which may become due. To date no
penalties have been raised for any company in the US due to this issue and all relevant documents have been filed. This has not
been accounted for as a provision as there are significant uncertainties over the financial impact as well as the likelihood and
timing of any potential outflow.
31 December
2021
£m
1 January
2021
£m
1.9
6.4
8.3
1.9
8.4
10.3
31 December
2021
£m
1 January
2021
£m
18.7
18.7
18.1
18.1
21. DEFERRED TAXATION
Non-current deferred tax assets:
Total deferred tax asset – UK
Total deferred tax asset – overseas
Total deferred tax asset
Deferred tax liabilities:
Non-current deferred tax liabilities
Total deferred tax liabilities
Page_100
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Deferred tax liabilities primarily relate to fair value adjustments on acquisitions.
At 4 January 2020
Recognised in income
Foreign exchange
At 1 January 2021
Deferred tax assets – 1 January 2021
Deferred tax liabilities – 1 January 2021
At 2 January 2021
Recognised in income
Foreign exchange
At 31 December 2021
Deferred tax assets – 31 December 2021
Deferred tax liabilities – 31 December 2021
Property,
plant and
equipment
£m
Intangible
assets
£m
Provisions
£m
Tax value of
loss
carry-forwards
£m
Total
deferred
taxation
£m
1.4
0.1
–
1.5
1.5
–
1.5
1.5
(0.3)
–
1.2
1.2
–
1.2
(20.0)
2.1
(0.2)
(18.1)
–
(18.1)
(18.1)
(18.1)
(0.7)
0.1
(18.7)
–
(18.7)
(18.7)
3.1
3.4
(0.2)
6.3
6.3
–
6.3
6.3
(0.6)
–
5.7
5.7
–
5.7
7.6
(5.4)
0.3
2.5
2.5
–
2.5
2.5
(1.6)
0.5
1.4
1.4
–
1.4
(7.9)
0.2
(0.1)
(7.8)
10.3
(18.1)
(7.8)
(7.8)
(3.2)
0.6
(10.4)
8.3
(18.7)
(10.4)
The Group has gross deductible temporary differences relating to provisions and deferred capital allowances of £29.8m
(2020: £33.0m). Deferred tax assets of £8.4m (2020: £7.8m) have been recognised in respect of these temporary differences,
leaving £7.2m (2020: £4.1m) as unrecognised differences. They have no expiry date.
The Group has gross tax losses that arose in the UK of £32.8m (2020: £33.5m) and tax losses that arose outside the UK (mostly
in the US) of £9.0m (2020: £13.5m) that are available for offset against future taxable profits of the right type arising in the
companies in which the losses arose. The reduction in tax losses in the US at the end of the current period compared to the
previous period is due to the utilisation of these losses against taxable profits in the current period. There is no expiry date on
the UK losses, but the US losses expire between 2028 and 2033. The Group has performed sensitivity analysis on the utilisation
of US losses looking at forecasts of profitability and these show that the tax losses will be fully utilised by the end of 2022, well
in advance of their expiry. All losses are subject to legislation restricting the right to offset them. Deferred tax assets of £1.4m
(2020: £2.5m) have been recognised as they relate to companies that are trading profitably or can expect to have taxable profits
in the foreseeable future. Deferred tax assets have not been recognised in respect of UK losses of £32.6m (2020: £33.5m) and
outside the UK of £2.7m (2020: £1.8m) as they may not be used to offset taxable profits elsewhere in the Group and they have
either arisen in subsidiaries where future use is uncertain, or are capital losses for which there is limited scope for future offset.
22. ISSUED SHARE CAPITAL
4 January 2020
shares repurchased
1 January 2021
2 January 2021
shares repurchased
31 December 2021
number of
issued shares
m
Issued share
capital
£m
share premium
account
£m
Total
share capital
£m
47.3
(1.4)
45.9
45.9
(0.6)
45.3
0.5
–
0.5
0.5
–
0.5
30.1
–
30.1
30.1
–
30.1
30.6
–
30.6
30.6
–
30.6
Transactions with shareholders
In 2021, 608,602 Ordinary shares of 1p each (2020: 1,413,789), representing 1.3% (2020: 3.0%) of the opening number of issued
shares, were repurchased in the market for consideration of £1.9m (2020: £4.3m), and cancelled.
On 25 June 2021 the shareholders approved a new share purchase plan allowing the Company to purchase up to 4,560,363
Ordinary shares up to the earlier of the date of the Company’s next Annual General Meeting or 30 June 2022.
Page_101
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
22. ISSUED SHARE CAPITAL ConTInUeD
Impellam Group plc
The Company has no limit to its authorised share capital. The above number represents the number of allotted, fully paid shares
of 1p in issue.
23. OTHER RESERVES
4 January 2020
Currency translation differences
1 January 2021
2 January 2021
Currency translation differences
31 December 2021
Foreign
currency
translation
reserve
£m
9.1
(2.0)
7.1
7.1
(1.4)
5.7
Total other
reserves
£m
120.3
(2.0)
118.3
118.3
(1.4)
116.9
other
reserve
£m
92.2
–
92.2
92.2
–
92.2
merger
reserve
£m
19.0
–
19.0
19.0
–
19.0
Merger reserve
The merger reserve arises under section 612 of the Companies Act 2006 as a result of the acquisition of Bartech Holding
Corporation and Lorien Limited using the issue of shares as part consideration. The excess of fair value over nominal value of
shares is transferred to a merger reserve rather than share premium. This reserve is not distributable.
Other reserve
The other reserve comprises £92.2m contributed surplus arising on a historical demerger transaction (2020: £92.2m). It also
contains £41,000 contributed surplus arising on a historical demerger transaction and a special reserve arising from the
capital reduction in December 2012 (2020: £41,000); and £47,000 capital redemption reserve arising from the purchase and
cancellation of treasury shares (2020: £47,000). This reserve is not distributable.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
24. NON-CONTROLLING INTEREST
The following table summarises the information relating to each of the Group’s subsidiaries that has material non-controlling
interest (‘nCI’), before any intra-Group eliminations.
31 December 2021
Net assets attributable to NCI
Profit allocated to NCI
other comprehensive income allocated to nCI
other comprehensive income from reducing the nCI component
1 January 2021
Net assets attributable to NCI
Loss allocated to nCI
other comprehensive income allocated to nCI
Page_102
Individual
immaterial
subsidiaries
£m
0.1
0.1
–
0.3
Individual
immaterial
subsidiaries
£m
Total
£m
0.1
0.1
–
0.3
Total
£m
(0.3)
(0.3)
–
–
–
–
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
The individually immaterial subsidiaries include the share of results for Barpellam Inc and Bartech Belgium nV (2020: Barpellam
Inc, Bartech Belgium NV and Younifi Limited) which are not wholly owned by the Group (note 25). During the year the Group
purchased the minority interest of Younifi Limited for a nominal value.
25. RELATED PARTY DISCLOSURES
The consolidated financial statements include those of the holding company, Impellam Group plc, and all of its subsidiaries. All
subsidiaries have the same period end as the Group and are wholly owned at the period end unless otherwise specified.
800 The Boulevard
Capability Green
Luton
LU1 3BA
United Kingdom
– Blue Arrow Financial Services Limited*
– Blue Arrow Holdings Limited
– Blue Arrow Limited
– Bms Limited
– Carbon60 Limited
– Career Teachers 2006 Limited (formerly Career Teachers Limited)
– Career Teachers Limited (formerly Celsian Group Limited)
– Carlisle Cleaning Services Holdings Limited*
– Carlisle Events Services Limited*
– Carlisle Group Limited
– Carlisle Nominees Limited*
– Carlisle Staffing plc
– Carlisle Staffing Services Holdings Limited
– Carlisle Staffing Services Limited
– Chadwick nott (Holdings) Limited
– Chrysalis Community Care Group Limited
– Comensura Limited(a)
– Doctors on Call Limited
–
Flexy Corporation Limited
– Global Group (UK) Limited
– Global medics Limited
– Guidant Global-europe Limited
Impellam Holdings Limited
–
Impellam UK Limited
–
Laybridge Limited*
–
Litmus Workforce solutions Limited
–
Lorien Limited
–
–
Lorien Resourcing Limited
– medacs Global Group Limited
– medacs Healthcare Australasia Group Limited
– medacs Healthcare plc
– oneTrue Limited
– PRn Recruitment Limited
–
– Younifi Limited
science Recruitment Group Limited
Level 2
14 Martin Place
sydney
nsW 2000
Australia
straatsburgdok-noordkaai 3
2030 Antwerp, Belgium
– Allied employment Group Pty Limited(b)
– Carbon60 Pty Limited(b)
– Comensura Pty Limited(b)
– Flexy Services Pty Limited(b)
– Global medics Pty Limited(b)
–
– medacs Healthcare (Pty) Limited(b)
– medacs Healthcare Australia Pty Limited(b)
Litmus Workforce solutions Pty Ltd(b)
– Bartech Belgium nV(h) (73% owned)
Page_103
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
25. RELATED PARTY DISCLOSURES ConTInUeD
PO Box 71, Road Town
Tortola VG1110
British Virgin Islands
250 Howe street
20th Floor Vancouver
BC V6C 3R8
Canada
Anna-schneider-steig 22
50678 Cologne, Germany
Beethovenplatz 2
80336 munich, Germany
–
sabertooth services Limited
– Bartech Technical services of Canada Limited(c)
– Canada Corporate employment Resources ULC(c)
– Global & medical Recruitment Consultancy Inc.(c)
– Guidant Group Canada ULC(c)
– Guidant Global Germany GmbH(c)
–
Impellam GmbH(c)
57/63 Line Wall Road, Gibraltar
– Kenard Investments Limited
Block 9, Blackrock Business Park
Blackrock
Co. Dublin, A94 E4X2
Ireland
Via Filippo Turati 29
20121 milan, Italy
Rio Tiber 40 102
Col Cuauhtemoc 06500
Cuauhtemoc, Distrito Federal, Mexico
98 Alicia street
Colony Guadalupe Tepeyac.
Mexico City CP07840, Mexico
Level 6, 3 Ferncroft street
Graft, Auckland 1010
new Zealand
oriental Center, suite p1
254 Muñoz Uñoz Rivera Avenue San Juan
PR 00918 Puerto Rico
133 new Bridge Road
#10-05, Chinatown Point
Singapore 059413
martin-Disteli-strasse 9
4600 Olten, Switzerland
2711 Centerville Road Suite 400
Wilmington
Delaware 19808
UsA
17199 n Laural Park Drive
Suite 224 Livonia
Michigan 48152 USA
Page_104
– Carlisle security (Holdings) Limited(e)
– Carlisle security Limited(e)
– Carlisle Staffing Services Ireland Limited(e)
Irish Recruitment Consultants Limited(e)
–
–
Litmus Workforce solutions Ireland Limited(h)
– medacs Global Group Limited(h)
– Guidant Global Italy sRL(h)
– Bartech Mexico S, de RL de CV(c)
– Guidant Global Mexico, S.A. de C.V.(c)
– Global medics nZ Limited(f)
– Healthlink new Zealand Group Limited(f)
– medacs Healthcare Limited(f)
– Guidant Global Puerto Rico Inc(c)
– Guidant Global sG Pte Ltd(g)
–
Latitudes Group International management Pte Limited(g)
– Carbon60 AG(d)
– Guidant Global Switzerland AG(d)
Impellam NA Support Services Inc (formerly Corestaff Support Services Inc.)(c)
– Barpellam Inc (49% owned)(c)
– CeR Canada Holding Inc.(c)
–
– Corporate employment Resources Inc.(c)
– Corporate services Group Holdings Inc.(c)
– Guidant Global Canada Holding Inc.(c)
– Guidant Global Holding Corporation(c)
– Guidant Global Inc.(c)
– Guidant Group Inc.(c)
– Bartech Mexico Holding LLC(c)
– Bartech Technical services LLC(c)
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Companies marked with a * above are exempt from the Companies Act 2006 requirements relating to the audit of their
individual accounts by virtue of Section 480 of the Act relating to dormant companies.
All subsidiaries are indirect holdings of the Company other than Impellam Holdings Ltd, Impellam UK Ltd and the medacs Global
Group Ltd which has its registered office in the UK.
Shares for all companies are classed as Ordinary and a nominal value of £1 per share except as disclosed below:
(a) ‘A’ Ordinary shares of £1
(b) Ordinary shares of A$1
(c) Common stock with no par value
(d) ordinary shares of 1000 CHF
(e) ordinary shares of €1.27
(f) Ordinary shares of NZ$1
(g) Ordinary shares of SG$1
(h) ordinary shares of €1
The Group owns 49% of the issued stock of Barpellam Inc but exercises control of the company in accordance with the
definitions of power and exposure to variability in returns required under IFRS 10 Consolidated Financial Statements.
The subsidiary undertakings listed below are exempt from the Companies Act 2006 requirements relating to the audit of
their individual accounts by virtue of Section 479A of the Act as this Company has guaranteed the subsidiary company under
Section 479C of the Act:
Career Teachers 2006 Limited
Flexy Corporation Limited
Guidant Global-europe Limited
medacs Healthcare Australasia Group Limited
oneTrue Limited
ownership
Registered
number
Class of
shares held
31 December
2021
1 January
2021
05749194
09524785
07130856
03120991
01189888
ordinary
ordinary
ordinary
ordinary
ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Compensation of key management personnel of the Group
The Directors have considered the levels of responsibility delegated to senior management of the Group and have concluded
that, in addition to the Directors themselves, disclosure should include the senior Leadership Team which comprises the
Portfolio CEO and Group General Counsel and Company Secretary, the Chief Executives of STEM, Global Managed Services,
Impellam North America and Impellam APAC as well as the Chief Technology Officer, the Group Director of Corporate
Development and the Group Director of Investment & Innovation. The total number of positions included in the disclosure is 15
(2020: 17). The Directors receive dividends in proportion to their shareholdings held during the current and prior periods.
Short-term employment benefits
Post-employment benefits
Total
31 December
2021
£m
1 January
2021
£m
6.8
0.2
7.0
4.3
0.2
4.5
Lord Ashcroft has an interest in Puma International Holdings Limited. The Group paid Puma International Holdings Limited
£425,000 (2020: £nil) for the provision of consultancy services. Nothing was owed to or by Puma International Holdings Limited
at the start or end of the period. Angela entwistle is also a Director of a company called Deacon street Partners Limited. The
Group pays Deacon Street Partners Limited for its provision of Angela Entwistle’s services as a Non-Executive Director – £40,000
(2020: £38,000). The Group owed £4,000 to Deacon Street Partners Limited at the end of the period (2020: £4,000). Also, a
company within the Impellam Group provides a payroll bureau service to Deacon street Partners Limited for which no charge is
made as the arm’s-length cost of such service is negligible.
Page_105
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
25. RELATED PARTY DISCLOSURES ConTInUeD
In 2016, a company within the Group advanced a loan of $1,300,000 to David Barfield, a Director of various Group companies.
This loan was due for repayment on or before 25 January 2021 and $nil was outstanding at the period end (2020: $725,000).
Interest accrues at a rate of 1.81% per annum and during the period $nil (2020: $14,000) interest had been accrued. David
Barfield is also a significant shareholder in Bartech Acquisition Corporation LLC. At the end of the period, the amount owed to
or by the Group was $nil (2020: $nil). Bartech Acquisition Corporation LLC is a shareholder in Techcentral LLC and the Group
provides accounting and programme management services at an arm’s length rate to TechCentral LLC. During the period, the
Group charged TechCentral $116,000 (2020: $175,000) for these services. At the end of the period, TechCentral LLC owed the
Group $116,000 (2020: $155,000).
During the period the Group entered into the following transactions with related parties who are not 100% owned by the Group.
31 December 2021
Barpellam Inc
Bartech Belgium nV
Total
1 January 2021
Barpellam Inc
Bartech Belgium nV
Younifi Limited
Total
Sale of
services to
related parties
£m
Purchase of
services from
related parties
£m
Amounts owed
to related
parties
£m
Amounts owed
by related
parties
£m
–
–
–
37.5
0.1
37.6
30.0
0.9
30.9
2.5
–
2.5
sale of
services to
related parties
£m
Purchase of
services from
related parties
£m
Amounts owed
to related
parties
£m
Amounts owed
by related
parties
£m
–
–
0.1
0.1
36.5
0.2
–
36.7
26.1
–
–
26.1
18.8
0.2
4.2
23.2
Sales to related parties relate to expenditure transferred at cost to encourage the expansion of the related party. As these
companies are controlled by the Group, no allowance has been made for bad and doubtful debts. Transactions with Younifi
Limited cover the period when there was a minority owner.
26. NET DEBT
Cash and short-term deposits (note 16)
Bank overdraft (note 17)
Revolving credit (notes 18 and 19)
Hire purchase (notes 18 and 19)
Lease liabilities (note 11)
Lease debtors (note 11)
Net debt
Cash and short-term deposits (note 16)
Bank overdraft (note 17)
Revolving credit (notes 18 and 19)
Hire purchase (notes 18 and 19)
Lease liabilities (note 11)
Lease debtors (note 11)
Net debt
Page_106
1 January
2021
£m
117.9
(2.9)
(118.9)
(0.2)
(26.5)
4.3
Cash
flow
£m
(24.3)
(1.0)
16.7
0.1
8.8
(1.7)
(26.3)
(1.4)
Interest
charged
£m
Interest
paid
£m
Drawdown
£m
Foreign
exchange
£m
31 December
2021
£m
(0.2)
–
(3.4)
–
(0.6)
0.1
(4.1)
0.2
–
3.4
–
0.4
(0.1)
3.9
–
–
–
–
1.0
(2.5)
(1.5)
(2.7)
–
0.3
–
0.4
(0.1)
(2.1)
90.9
(3.9)
(101.9)
(0.1)
(16.5)
–
(31.5)
3 January
2020
£m
132.3
(39.0)
(165.3)
(0.3)
(33.8)
7.3
(98.8)
Cash
flow
£m
(9.2)
36.1
46.2
0.1
11.5
(3.2)
81.5
Interest
charged
£m
Interest
paid
£m
Drawdown
£m
Foreign
exchange
£m
–
–
(4.4)
–
(0.8)
0.1
(5.1)
–
–
4.4
–
0.8
(0.1)
5.1
–
–
–
–
(3.9)
–
(3.9)
(5.2)
–
0.2
–
(0.3)
0.2
(5.1)
1 January
2021
£m
117.9
(2.9)
(118.9)
(0.2)
(26.5)
4.3
(26.3)
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
The Group takes advantage of a number of non-recourse financing agreements organised by clients of the Group to allow for
the acceleration of payment of the Group’s receivables (see note 2(J)). At the end of 2021, these amounted to £8.2m (2020:
£6.3m). These agreements accrue interest at between 0.65% and 1.75% over SONIA and interest of £0.1m was charged during
the period (2020: £0.1m) and is included in other interest in note 7.
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial liabilities comprise bank overdrafts, revolving credit facilities, leases and trade payables.
Overdrafts and revolving credit facilities are used to satisfy short-term cash flow requirements. The main purpose of these
financial liabilities is to raise finance for the Group’s trading operations. The Group also has various financial assets such as
investments, trade receivables, cash and short-term deposits which arise directly from trading operations.
The main risks arising from the Group’s financial instruments are set out below. The Board reviews and agrees policies for
managing each of these risks and these are summarised below.
It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments such as
derivatives shall be undertaken. The Group’s policy with regard to interest rate and foreign exchange contracts is to only hedge
specific risks with a determinable date that arise from operations or financing.
Interest rate risk
None of the Group’s borrowings are at a fixed rate of interest. All borrowings are subject to changes in market interest rates,
primarily the revolving credit facility, which is subject to floating rates. The floating rate borrowings are not exposed to changes
in fair value; however, the Group is exposed to interest rate risk as costs increase if market rates rise or cash flow opportunity as
costs decrease if market rates fall.
The Group also earns interest on credit bank balances at a floating rate of interest. The Group’s policy is to manage its interest
rate cost by the use of variable rate debts while rates are low.
Interest rate risk table
The following table demonstrates the sensitivity to a reasonably (based upon market expectations for the next 12 months)
possible change to interest rates, with all other variables held constant, of the Group’s profit before tax (through the impact of
floating rate borrowings).
31 December 2021
Pound sterling
Us Dollar
1 January 2021
Pound sterling
Us Dollar
Increase/
decrease in
basis points
Effect on
profit
before tax
£m
Effect on
equity
£m
+75
-25
+75
-25
+50
-25
+50
-25
(0.9)
0.3
(0.1)
–
(0.6)
0.3
(0.1)
0.1
(0.7)
0.2
(0.1)
–
(0.5)
0.2
(0.1)
0.1
Liquidity risk
The Group’s funding strategy is to maintain funding flexibility through the use of cash, deposits, revolving credit facilities,
overdrafts, supplier financing arrangements and leasing contracts. The Group aims to ensure that it has committed borrowing
facilities in place in excess of its peak forecast borrowings for at least the next 12 months. Short-term flexibility is achieved by
the use of deposits and revolving credit facilities and supplier financing arrangements.
Page_107
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
27. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES ConTInUeD
The Group renewed its revolving credit facilities on 17 December 2021 for a further three years with an option to extend for a
further two years; £182.5m was available for drawdown (2020: £240m) which includes an overdraft facility of £5m. The amount
utilised at 31 December 2021 was £103.8m (2020: £114.9m). This facility includes an accordion element of an additional £40m
which could be added to the facility. There are no restrictions to the free transfer of funds between fully owned subsidiaries. The
facilities cover all territories the Group operates in. The revolving credit facility includes financial covenants linked to the Group’s
debtor cover, leverage cover and interest cover using adjusted EBITDA (before separately disclosed items and share-based
payment) – note 3. At 31 December 2021, and throughout the period, the Group was in compliance with its financial covenants
and expects to continue to be so.
The Group takes advantage of a number of non-recourse financing agreements organised by clients of the Group to allow for
the acceleration of payment of the Group’s receivables (see note 2(J)). At the end of 2021, these amounted to £8.2m (2020:
£6.3m). These agreements accrue interest at between 0.65% and 1.75% over SONIA and interest of £0.1m was charged during
the period (2020: £0.1m) and is included in other interest in note 7.
The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2021 and 1 January 2021
based on contractual undiscounted payments.
31 December 2021
Revolving credit facilities (notes 18 and 19)
Trade and other payables (note 17)
Finance lease liabilities (notes 18 and 19)
Lease liabilities (note 11)
Total
Restated
1 January 2021
Revolving credit facilities (notes 18 and 19)
Trade and other payables (note 17)
Finance lease liabilities (notes 18 and 19)
Lease liabilities (note 11) – restated
Total
On demand
£m
Less than 3
months
£m
–
3.9
–
–
3.9
–
490.6
0.1
1.4
492.1
on
demand
£m
Less than
3 months
£m
–
2.9
–
–
2.9
–
446.5
–
2.5
449.0
3–12
months
£m
–
10.3
–
4.1
14.4
3–12
months
£m
–
22.1
0.1
7.4
29.6
1–5
years
£m
101.9
–
–
9.2
111.1
1– 5
years
£m
118.9
–
0.1
14.0
133.0
5 years
or more
£m
–
–
–
3.0
3.0
5 years
or more
£m
–
–
–
4.5
4.5
Total
£m
101.9
504.8
0.1
17.7
624.5
Total
£m
118.9
471.5
0.2
28.4
619.0
The lease liabilities have been restated for the prior year as the original disclosure was the contractual discounted value of
£26.5m.
Credit risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in relation to transactions
where the Group provides services on deferred terms (note 15).
Group policies are aimed at minimising such losses. It is the Group’s policy that all clients who wish to trade on credit terms are
subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that
the Group’s exposure to bad debts is kept to a minimum. The maximum exposure is the carrying amount as disclosed
in note 15. The Group has a credit risk policy that covers all clients except public sector, local government and pay when paid
contracts. There is a £500,000 aggregate first loss and maximum policy liability of £44.5m. This policy was renewed in February
2022 for three years.
With respect to credit risk from other financial assets of the Group, which comprise cash and cash equivalents and investments,
the Group’s exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying
amount of these assets. These risks are primarily minimised by restricting deposits and investments to those available from
well-established reputable, financial institutions.
Page_108
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
At 31 December 2021, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.
UK
north America
europe
Australasia
Total
31 December
2021
£m
275.0
290.5
20.5
20.4
606.4
1 January
2021
£m
228.4
295.0
20.0
23.8
567.2
Foreign currency risk
The Group has a significant investment in its operations in North America with some smaller interests in Europe and Australasia.
The Group’s consolidated balance sheet can be affected significantly by the movements in the US Dollar exchange rate;
however, movements in the exchange rates for Euro, Australian Dollar, Canadian Dollar, Swiss Franc, New Zealand Dollar or other
currencies have only a marginal impact on the Group’s results and balance sheet.
The Group does not hedge against the impact of exchange rate movements on the translation of foreign currency denominated
profits. Transactional currency exposures across the Group are minimal.
The following table demonstrates the sensitivity to a reasonably possible change in the exchange rates:
31 December 2021
Us Dollars
1 January 2021
Us Dollars
Percentage change
in rate
Effect on profit
before tax
£m
Effect on equity
£m
+10
-10
+10
-10
0.7
(0.9)
0.8
(1.0)
–
–
0.3
(0.4)
Price risk
The Group has investments in marketable securities and as such is exposed to price risk. These securities are held in trust
on behalf of certain Us employees and the underlying risk is borne by those employees. The Group’s liability is limited to the
market value of the securities (note 14).
Capital management
Capital consists of the total equity attributable to the equity holders of the Parent Company.
The primary objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern, to
ensure that it maintains a good credit rating in order to support its business and maximise shareholder value. No changes were
made to the objectives, policies or processes during either period.
The Group considers capital less any net cash as components of funding. It monitors funding by reference to its ability to borrow
and to satisfy debt covenants. The principal measure is the eBITDA ratio, which is calculated by dividing the funding of the Group
by the Group’s adjusted earnings before interest, tax, adjusted depreciation and amortisation.
The revolving credit facility included a financial covenant linked to the Group’s leverage, interest cover and debtor cover.
At 31 December 2021, and throughout the period, the Group was in compliance with these financial covenants whilst this facility
was in place.
Page_109
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
28. FINANCIAL INSTRUMENTS
Set out below is a comparison by category of the carrying amounts and fair values of all the Group’s financial instruments that
are carried in the consolidated balance sheet.
31 December 2021
1 January 2021
Financial assets
Investments (note 14)
Other financial assets (non-current) (note 14)
other debtors
Cash and cash equivalents (note 16)
Financial liabilities
Bank overdraft (note 17)
short-term borrowings (note 18)
Long-term borrowings (note 19)
Carrying
amount
£m
1.5
0.2
–
90.9
3.9
0.1
101.9
Fair
value
£m
1.5
0.2
–
90.9
3.9
0.1
101.9
Carrying
amount
£m
1.2
0.4
0.5
117.9
2.9
0.1
119.0
Fair
value
£m
1.2
0.4
0.5
117.9
2.9
0.1
119.0
The carrying value of trade receivables less impairment and trade payables are assumed to approximate fair value and are
excluded from the above table.
Fair value estimation hierarchy:
• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is derived from prices); and
• Level 3 – Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
The following table presents the fair value hierarchy of assets measured at fair value:
31 December 2021
Investments (note 14)
other debtors
1 January 2021
Investments (note 14)
other debtors
Level 1
£m
Level 2
£m
Level 3
£m
1.5
–
Level 1
£m
1.2
0.5
–
–
–
–
Level 2
£m
Level 3
£m
–
–
–
–
Total
£m
1.5
–
Total
£m
1.2
0.5
Level 1
market values, based on published prices, have been used to determine the fair value of the marketable investments included in
other financial assets.
Fair value for short-term borrowings are equal to book value as they are repayable on demand and are subject to churn over a
period of less than three months.
Page_110
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
28. FINANCIAL INSTRUMENTS ConTInUeD
Interest rate risk
At 31 December 2021 and 1 January 2021, none of the Group’s borrowings are at fixed rates of interest. The following table sets
out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest rate risk.
31 December 2021
Floating rate
Cash and short-term deposits (note 16)
Bank overdrafts (note 17)
Revolving credit facilities (notes 18 and 19)
Hire purchase (notes 18 and 19)
1 January 2021
Floating rate
Cash and short-term deposits (note 16)
Bank overdrafts (note 17)
Revolving credit facilities (notes 18 and 19)
Hire purchase (notes 18 and 19)
Within
1 year
£m
1–3
years
£m
Total
£m
90.9
(3.9)
–
(0.1)
Within
1 year
£m
117.9
(2.9)
–
(0.1)
–
–
(101.9)
–
1–2
years
£m
–
–
(118.9)
(0.1)
90.9
(3.9)
(101.9)
(0.1)
Total
£m
117.9
(2.9)
(118.9)
(0.2)
The effective interest rate on bank balances and other short-term deposits was less than 0.5% (2020: less than 0.5%). US deposit
interest rates were less than 0.5% (2020: less than 0.5%).
Bank overdrafts and revolving credit borrowings are secured by a guarantee and debenture with a fixed charge over certain
assets of the Company and the subsidiary undertakings concerned plus a floating charge over all other assets of the Company
and those subsidiary undertakings, supported by a cross-guarantee given by the Company and the various subsidiary
undertakings. Borrowings under these facilities incurred interest (including margin) between 1.90% and 2.70% over sonIA rate
(2020: between 1.35% and 2.30% over LIBoR rate). All interest is charged monthly in arrears (note 27).
Collateral pledged
The self-insured workers’ compensation liability described in note 20 is covered by insurers on the basis that collateral is
provided sufficient to cover all potential claims. This collateral takes two forms:
• £3.0m – $4.0m (2020: £3.2m – $4.4m) in the form of letters of credit drawn upon the revolving credit facility in the US; and
• £0.2m – $0.2m (2020: £0.4m – $0.5m) in the form of cash deposits, shown on the balance sheet as non-current other financial
assets (note 14).
The Group has also issued various indemnities totalling £2.1m relating to rent guarantees, mainly in Australia. These expire
in 2022.
29. POST BALANCE SHEET EVENTS – SHARE PURCHASE AND CANCELLATION
Between the end of the year and 22 march 2022, a further 75,830 ordinary shares of 1p each have been repurchased in the
market for total consideration of £0.4m and have been cancelled.
Page_111
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the consolidated financial statements continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
30. POST BALANCE SHEET EVENTS – DISPOSAL OF CORESTAFF
On 24 January 2022 the Group announced that it has entered into an agreement to sell the business and assets of Corestaff, its
US-based Light Industrial brand, to swipejobs Inc., a US private digital staffing company, for cash consideration of approximately
£14m ($19 m).
In the year ended 31 December 2021, Corestaff, reported in the Group’s Regional Specialist Staffing portfolio, generated
revenue of £98m and gross profit of £12.8m and had an operating profit of £1.2m. Net assets at 31 December 2021 were
approximately £6.9m.
The details of the sale were completed and agreed after the year end and the transaction was completed on 7 February 2022.
Following completion of the Disposal, the Group used the proceeds of sale to pay down net debt to fund additional investment
to further accelerate the Group’s strategy.
31. CONTROL
The Group has identified Lord Ashcroft as the ultimate controlling party as he has influence over more than 50%, but less than
75%, of both the shares and voting rights of Impellam Group plc and together with being Chairman of Impellam Group plc has
significant influence over the Group.
Page_112
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Company balance sheet
As AT 31 DeCemBeR 2021
Non-current assets
Investments
other receivables
Current assets
other receivables
Cash at bank and in hand
Other payables: amounts falling due within one period
Net current liabilities
Total assets less current liabilities
other payables: amounts falling due in more than one period
Net assets
Capital and reserves
Called-up share capital
share premium account
merger reserve
other reserves
Retained profit
Total shareholders’ funds
31 December
2021
£m
notes
Restated
1 January
2021
£m
3
4
4
5
6
8
8
9
9
9
10
150.1
242.2
392.3
13.8
0.6
14.4
(211.1)
(196.7)
195.6
(101.9)
93.7
0.5
30.1
19.0
–
44.1
93.7
150.1
233.8
383.9
16.3
1.2
17.5
(178.2)
(160.7)
223.2
(118.9)
104.3
0.5
30.1
19.0
–
54.7
104.3
The accompanying notes are an integral part of this balance sheet.
The loss dealt with in the financial statements of the Company for the 52 weeks ended 31 December 2021 was £8.7m (2020:
£9.9m). Dividends totalling £nil (2020: £nil) were declared and paid during the period. As allowed by Section 408 of the
Companies Act 2006, no separate profit and loss account is presented for the Parent Company.
The financial statements on pages 113 to 119 were approved by the Board on 5 April 2022 and are signed on its behalf by:
Tim Briant
Chief Financial Officer
Registered number: 06511961
Page_113
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Statement of changes in equity
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
share capital
and premium
(note 8)
£m
other reserves
(note 9)
£m
Retained
profit
£m
4 January 2020
30.6
19.0
Loss for the period
Purchase and cancellation of own shares (note 8)
1 January 2021
2 January 2021
Loss for the period
Purchase and cancellation of own shares (note 8)
31 December 2021
–
–
30.6
30.6
–
–
30.6
–
–
19.0
19.0
–
–
19.0
68.9
(9.9)
(4.3)
54.7
54.7
(8.7)
(1.9)
44.1
Total
reserves
£m
118.5
(9.9)
(4.3)
104.3
104.3
(8.7)
(1.9)
93.7
The Company has considered the profits available for distribution to shareholders. At 31 December 2021, the Company had
retained earnings of £44.1m which were all available for distribution.
The Group also has retained profits in its subsidiary companies which are expected to flow up to the Company in due course to
further supplement its distributable reserves position.
Page_114
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Notes to the Company balance sheet
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Basis of accounting
Impellam Group plc (‘the Company’) is a company incorporated and registered in england and Wales and domiciled in the UK.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK
adopted international accounting standards and has set out below where advantage of the FRS 101 disclosure exemptions has
been taken.
Summary of disclosure exemptions
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following
disclosures:
• A cash flow statement and related notes.
• Disclosures in respect of transactions with wholly owned subsidiaries.
• Disclosures in respect of capital management.
• The effects of new but not yet effective IFRSs.
• Disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements of Impellam Group plc include the equivalent disclosures, the Company has also taken
the exemptions under FRS 101 available in respect of the following disclosures:
• Certain disclosures required by IAs 36 Impairment of Assets in respect of the impairment of investments.
• Certain disclosures required by IFRs 13 Fair Value measurement and the disclosures required by IFRs 7 Financial
Instruments Disclosures.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all years presented in these
financial statements.
A separate profit and loss account dealing with the results of the Company only has not been presented as permitted under
Section 408 of the Companies Act.
Changes in accounting policy
None of the standards, interpretations and amendments effective for the first time from 1 January 2021 have had a material
effect on the financial statements.
Accounting policies have been applied consistently.
B) Investments
Shares in subsidiary companies are held as fixed assets and are stated at cost less provision for impairment. Impairment reviews
are conducted when changes in events or situations indicate that the carrying value may not be recoverable. more details of the
impairment methodologies are given in note 12 of the consolidated accounts.
C) Other receivables
other receivables include amounts owed by Group companies which are assessed for impairment based upon the current
financial position and expected future performance of the subsidiary to which they relate. The transactions with Group
companies are interest-free demand loans. The Company assesses the expected recoverability period of receivables and, if they
are not expected to be realised within the following twelve months, are assessed as non-current.
The Company applies the IFRS 9 general approach to measuring expected credit losses. This approach requires an assessment
at the initiation of the loan as to the risk of default, and a further assessment when the credit risk profile of the loans change.
IFRS 9 applies a three-stage model that is applied when calculating the expected credit losses:
• Stage 1 is defined as having no Significant Increase in Credit Risk (‘SICR’) – a 12-month expected credit loss is recognised at
this point.
• Stage 2 is defined as having a SICR – a lifetime expected credit loss is recognised at this point.
• Stage 3 is defined as being credit impaired – a lifetime expected credit loss is recognised at this point.
There is no impact in relation to interest as the amounts owed by Group companies are interest free and repayable on demand.
Page_115
ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the Company balance sheet continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ConTInUeD
C) Other receivables continued
The Company defines the following:
• Definition of a default – A loan is considered to be in default when there is evidence that the borrower is in significant
financial difficulty such that it will have insufficient assets to repay the loan on demand.
• SICR assessment – the risk that the borrower will default on a demand loan depends on whether the subsidiary has sufficient
cash or other assets to repay the loan immediately (meaning that the risk of default is very low and the loan is in Stage 1); or
does not have sufficient cash or other assets to repay the loan immediately (meaning that the risk of default is higher, and
the loan could be in stage 2 or stage 3).
• The Company performs this assessment qualitatively by reference to the borrower’s immediate cash flow and asset position.
• Credit-impaired indicators – A loan is considered to be credit impaired if it meets the definition of a defaulted loan.
D) Deferred taxation
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 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.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the
income statement. Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
E) Employee benefits
Short-term benefits – bonus arrangements
The Company operates a number of annual bonus arrangements for Directors and employees. The cost of these arrangements is
recognised in the income statement when the entity has an obligation to make such payments as a result of the achievement of
performance targets and when a reliable estimate of this obligation can be made.
Pension obligations
The Company provides pension arrangements for its UK-based Directors and employees through defined contribution schemes.
Contribution costs are expensed to the income statement as they become due.
2. OPERATING COSTS
• The amount payable to the auditor in respect of the audit of the Company is £20,000 (2020: £20,000), all of which is payable
to BDo LLP.
• Details of emoluments for Directors can be found in note 5 of the consolidated financial statements.
• Monthly average staff numbers (including Directors) for the Company during 2021 was 31, eight Directors/Company
Secretary, nine managers and 13 administrators (2020: 28, eight Directors/Company Secretary, nine managers and
11 administrators).
• The total amount of employee costs charged to the Company’s income statement in the period is £7.9m (2020: £4.5m).
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
3. INVESTMENTS
Cost – 2 January 2021
Cost – 31 December 2021
Impairment provision – 2 January 2021
Charge for the period
Disposals
Accumulated amortisation – 31 December 2021
Net carrying value – 31 December 2021
Net carrying value – 1 January 2021
Subsidiary
undertakings
£m
150.1
150.1
–
–
–
–
150.1
150.1
Details of the principal subsidiary undertakings are given in note 25 of the consolidated financial statements. All of these
companies are unlisted.
Subsidiary undertakings
The carrying values of investments were tested against discounted future cash flows during the period using a discount rate of
between 13.9% to 16.5% (2020: between 14.0% to 18.0%), which include a country risk premium. The forecasts were based on
pre-tax cash flows derived from approved budgets for the 2022 financial period (2020: 2021 financial period).
4. OTHER RECEIVABLES
Current receivables
Amounts owed by subsidiary undertakings
other receivables
Prepayments
Total
non-current receivables
Amounts owed by subsidiary undertakings
Total
31 December
2021
£m
4.7
9.0
0.1
13.8
31 December
2021
£m
242.2
242.2
Restated
1 January
2021
£m
4.9
10.9
0.5
16.3
1 January
2021
£m
233.8
233.8
Amounts owed by subsidiary undertakings are unsecured, repayable on demand and are not interest-bearing. These have
been reviewed for any expected credit loss and a charge of £0.1m (2020: £0.4m) has been recorded in the period, bringing
the cumulative charge to £1.8m (2020: £1.7m). Amounts owed by subsidiary undertakings have been restated to show the
portion that is not expected to be realised in the following twelve months as a non-current receivable. The value of the prior
year receivables which have been classified to non-current is £233.8m. The impact of this on the 2020 opening balance is that
£239.0m of receivable balance of £246.2m was restated as non-current.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
FINANCIAL STATEMENTS
Notes to the Company balance sheet continued
FoR THe 52 WeeKs enDeD 31 DeCemBeR 2021
5. OTHER PAYABLES: AMOUNTS FALLING DUE WITHIN ONE PERIOD
Bank overdraft
Amounts owed to subsidiary undertakings
Contract liabilities
Accruals and other payables
Total
31 December
2021
£m
3.9
198.4
1.5
7.3
211.1
1 January
2021
£m
2.9
171.6
1.3
2.4
178.2
Amounts owed to subsidiary undertakings are unsecured, repayable on demand and are not interest-bearing. Contract liabilities
relate to amounts recharged to subsidiary undertakings for which the service has not been completed.
6. OTHER PAYABLES: AMOUNTS FALLING DUE IN MORE THAN ONE PERIOD
Revolving credit facilities
31 December
2021
£m
101.9
1 January
2021
£m
118.9
Details of security given over these liabilities are described in notes 27 and 28 to the consolidated accounts.
7. DEFERRED TAXATION
opening balance
Charged to profit and loss account in the period
Deferred tax asset
The total recognised and unrecognised deferred tax is as follows:
Assets
Losses
Other short-term timing differences
Total
8. ISSUED SHARE CAPITAL
3 January 2020
Purchase and cancellation of own shares
1 January 2021
Purchase and cancellation of own shares
Total – 31 December 2021
31 December
2021
£m
1 January
2021
£m
–
–
–
–
–
–
Recognised
31 December
2021
£m
Unrecognised
31 December
2021
£m
Recognised
1 January
2021
£m
Unrecognised
1 January
2021
£m
–
–
–
0.1
–
0.1
–
–
–
0.2
–
0.2
number of
issued
shares
millions
47.3
(1.4)
45.9
(0.6)
45.3
Issued share
capital
£m
share premium
account
£m
Total
share capital
£m
0.5
–
0.5
–
0.5
30.1
–
30.1
–
30.1
30.6
–
30.6
–
30.6
Impellam Group plc
The Company has no limit to its authorised share capital. The above number represents the number of allotted, fully paid shares
of 1p in issue.
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sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Transactions with shareholders
In 2021, 608,602 Ordinary shares of 1p each (2020: 1,413,789), representing 1.3% (2020: 3.0%) of the opening number of issued
shares, were repurchased in the market for consideration of £1.9m (2020: £4.3m), and cancelled.
On 25 June 2021 the shareholders approved a new share purchase plan allowing the Company to purchase up to 4,560,363
Ordinary shares up to the earlier of the date of the Company’s next Annual General Meeting or 30 June 2022.
9. RESERVES
1 January 2021
Loss for the period
Purchase and cancellation of own shares
31 December 2021
Merger
reserve
£m
19.0
–
–
19.0
Retained
profit
£m
Total
reserves
£m
54.7
(8.7)
(1.9)
44.1
73.7
(8.7)
(1.9)
63.1
Merger reserve
The merger reserve arises under section 612 of the Companies Act 2006 as a result of the acquisition of Bartech Holding
Corporation and Lorien Limited using the issue of shares as part consideration. The excess of fair value over the nominal value of
shares is transferred to a merger reserve rather than a share premium. This reserve is not distributable.
Other reserves
other reserves comprise the following:
• £41,000 contributed surplus arising on a historical demerger transaction and a special reserve arising from the capital
reduction in December 2012 (2020: £41,000); and
• £53,000 capital redemption reserve arising from the purchase and cancellation of treasury shares (2020: £47,000).
These reserves are non-distributable. All other reserves are distributable.
10. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Loss for the financial period
Purchase and cancellation of own shares
opening shareholders’ funds
Closing shareholders’ funds
31 December
2021
£m
(8.7)
(1.9)
104.3
93.7
1 January
2021
£m
(9.9)
(4.3)
118.5
104.3
11. RELATED PARTY TRANSACTIONS
The Board is not aware of any related party transactions other than those disclosed in note 25 to the consolidated
financial statements.
12. POST BALANCE SHEET EVENTS – SHARE PURCHASE AND CANCELLATION
Between the end of the year and 22 march 2022, a further 75,830 ordinary shares of 1p each have been repurchased in the
market for total consideration of £0.4m and have been cancelled.
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES
Certain discussions and analyses set out in this Annual Report
and Accounts include measures which are not defined by
generally accepted accounting principles such as IFRs.
The amortisation of acquired intangibles (brand value and
customer relationships) charge due to its size and nature is
disclosed separately to give a comparable view of the
year-on-year trading financial performance.
We believe this information, along with comparable IFRs
measurements, is useful to investors because it provides
a basis for measuring our operating performance on a
comparable basis. Our management uses these financial
measures, along with the most directly comparable IFRs
financial measures, in evaluating our operating performance
and value creation. Non-IFRS financial measures should not be
considered in isolation from, or as a substitute for, financial
information presented in compliance with IFRs. non-IFRs
financial measures as reported by us may not be comparable
with similarly titled amounts reported by other companies.
ADJUSTED OPERATING PROFIT
Definition: The Group calculates adjusted operating profit as
operating profit before amortisation of acquired intangibles
and impairment.
Closest equivalent IFRS measure: Operating profit.
Rationale for adjustment: The Directors believe that
adjusted operating profit is the most appropriate approach
for ascertaining the underlying trading performance and
trends as it reflects the measures used internally by senior
management for all discussions of performance, including
Directors’ remuneration, and also reflects the starting profit
measure used when calculating the Group’s banking covenants.
All discussions within the Group on segmental and individual
brand performance refer to adjusted operating profit.
Following the adoption of IFRs 16 in 2019 the Group has
moved from adjusted EBITDA to adjusted operating profit as
its alternative performance measure, to include depreciation
and amortisation of assets but excluding amortisation of
acquired intangibles.
Reconciliation of adjusted operating profit to operating
profit/(loss):
Segmental adjusted operating profit
Corporate costs
Adjusted operating profit
Amortisation of brand value and
customer relationships
Impairment of intangible assets
Operating profit/(loss)
2021
£m
36.8
(7.5)
2020
£m
23.3
(5.1)
29.3
18.2
(9.8)
–
(11.0)
(22.2)
19.5
(15.0)
The impairment charge due to its size is disclosed separately
to give a more comparable view of the year-on-year underlying
financial performance.
ADJUSTED EBITDA
Definition: The Group calculates adjusted EBITDA as operating
profit before interest, tax, depreciation and amortisation.
Closest equivalent IFRS measure: Operating profit.
Rationale for adjustment: The Group continues to measure
eBITDA which is used for banking covenants and internal
performance measures. It is also used externally for valuation
purposes.
Reconciliation of adjusted operating profit to operating
profit/(loss):
Adjusted EBITDA
Amortisation of software
Depreciation
Adjusted operating profit
Amortisation of brand value and
customer relationships
Impairment of goodwill and intangible assets
Operating profit/(loss)
2021
£m
37.0
(5.3)
(2.4)
2020
£m
27.6
(6.6)
(2.8)
29.3
18.2
(9.8)
–
(11.0)
(22.2)
19.5
(15.0)
SPEND UNDER MANAGEMENT (‘SUM’)
Definition: Total amount of client expenditure which our
managed services brands managed on behalf of their clients.
This equates to revenue earned where Impellam acts as
principal plus gross billings to customers where Impellam acts
as agent.
Closest equivalent IFRS measure: Group revenue.
Rationale for adjustment: The Group uses this measure
as it reflects the total value of the client spend to the Group,
not just the revenue generated.
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FINANCIAL STATEMENTS
sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
CONTINUING ADJUSTED EARNINGS PER SHARE
(‘EPS’)
Definition: Continuing adjusted profit divided by the weighted
average number of ordinary shares outstanding during the year.
NET DEBT EXCLUDING IFRS 16 ‘LEASES’
Definition: the Group calculates net debt as the total of cash
and short-term deposits, revolving credit and hire purchase.
Closest equivalent IFRS measure: Continuing basic earnings
per share.
Following the adoption of IFRs 16 the calculation also includes
lease liabilities and debtors.
Rationale for adjustment: The Group uses this measure
alongside the basic EPS calculation as it reflects the underlying
trading performance of the business.
Rationale for adjustment: the Group has used this measure
to maintain alignment to the covenant reporting during 2020.
Reconciliation of net debt excluding IFRS 16 to net debt:
Reconciliation of adjusted EPS to basic EPS:
Continuing profit/(loss) for the
period
Impairment of goodwill
Impairment of other intangibles
(net of tax)
Customer relationship and brand
value amortisation (net of tax)
Continuing adjusted profit
Weighted average number
of shares
Unadjusted continuing EPS
Adjusted continuing EPS
2021
£m
8.3
–
–
7.7
16.0
Cash and short-term deposits
Bank overdraft
Revolving credit
Hire purchase
Net debt excluding IFRS 16
Lease liabilities
Lease debtors
Net debt
2020
£m
(21.4)
16.6
4.5
8.6
8.3
45,538,963
46,208,380
18.3
35.3
(46.2)
18.2
2021
£m
90.9
(3.9)
(101.9)
(0.1)
(15.0)
(16.5)
–
(31.5)
2020
£m
117.9
(2.9)
(118.9)
(0.2)
(4.1)
(26.5)
4.3
(26.3)
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
Glossary
Adjusted EBITDA
eBITDA before separately disclosed items and impairment of goodwill
Adjusted EBITDA Conversion Ratio
Adjusted EBITDA divided by NFI/gross profit
Adjusted Operating Profit
Operating profit before amortisation of, and impairment in, acquired intangibles
Beautiful Basics
every brand in Impellam makes a simple promise to its customers and
candidates and then backs that promise up with whatever activities are needed
to fulfil, sustain and deliver the brand promise. We call these promises the
Beautiful Basics
Business Process Outsourcing (‘BPO’)
Solutions which help businesses address back office needs strategically and
increase operational efficiency
Cash Conversion
Constant Exchange Rates
Contingent Labour
Cross-sell
Net cash from operating activities divided by operating profit
Calculated by multiplying the prior year functional currency amount by the
current year foreign currency exchange rate
Temporary and contract workers
All Impellam people are encouraged to refer new business leads to one another.
This happens when a consultant identifies an opportunity that is outside the
scope of the brand specialism and it will be referred to a brand within the Group
which is aligned to the requirement
CRM
Customer relationship management
Days Sales Outstanding (‘DSO’)
Total trade receivables divided by average daily invoiced sales
EBITDA
Earnings before interest, tax, depreciation and amortisation
Facilities Management
Providing cleaning, security, events and retail facilities support services
GDPR
Group Fill
High Road
Hybrid Vendor
IFRS
Ignite
General data protection regulation which came into force on 5 may 2018
The percentage of spend Under management supplied from our Group brands
into our managed services programmes
Impellam provides good work for people and people for good work. We focus on
partnering with organisations that value engaged, fulfilled people which serves
to drive clear market segmentation and a compelling price point
Assignments are filled by a combination of suppliers that we manage for
the client and are filled directly by the Managed Services provider (including
Group supply)
International Financial Reporting standards
CRm (customer relationship management), our recruiter operating system
Independent Contractor Solutions
Helping to reduce the risk and cost of worker misclassification
Managed Services
These businesses optimise the productivity of people by designing,
implementing, coordinating and reporting on the whole staffing process. They
provide multi-disciplinary workforce solutions, including all forms of partial and
complete outsourcing
Managed Services Programme (‘MSP’)
The outsourcing of contingent labour
Master Vendor
The majority of assignments are filled by the Managed Services provider
(including Group supply) and second-tier agencies are used when the managed
services provider is unable to supply
Net Debt
Total debt of the Group less cash in hand
Net Fee Income (‘NFI’)
Equivalent to gross profit
Neutral Vendor
Assignments are filled by suppliers that we manage for the client, where the
managed services provider does not form part of the supply chain
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FINANCIAL STATEMENTS sTRATeGIC RePoRT | CoRPoRATe GoVeRnAnCe | FINANCIAL STATEMENTS
Non-UK
Origin
Payroll Services
All countries Impellam operates in outside of the UK. This is the Us, Australasia
and Europe (excluding the UK)
our innovation hub that acquires, invests in and partners with disruptive start-
ups in our markets as well as backing our Virtuosos’ ideas
Provide access to a fully compliant framework for managing and paying
contingent staff
Productivity
Gross profit divided by Full Time Equivalent (‘FTE’) heads
Recruitment Process Outsourcing (‘RPO’) Where a client outsources the management of the recruitment function (in
whole or part) to a third party expert
ShiftWise
Specialist Staffing
Spend Under Management (‘SUM’)
Statement of Work (‘SOW’)
Value Chain
Technology solution for the nHs to build our managed services capability
Dedicated brands which provide expert recruitment services and skilled workers
for permanent, temporary, contact and fixed-price work
Total amount of client expenditure which our Managed Services brands managed
on behalf of their clients. This equates to revenue earned where Impellam acts as
principal plus gross billings to customers where Impellam acts as agent
Solutions for spend in complex categories of service which include supplier
management, requisition facilitation, contract writing, negotiations and invoicing
and settlement support services
Different parts of our business share the belief that meaningful work really
matters to individuals, communities, societies and economies so they can work
together to create value that is greater than the sum of the parts
Vendor Management System (‘VMS’)
Vms technology enables the full procure-to-pay process, while providing robust
reporting and analytics
Vertical Specialist Managed Services
Our brands which have specialist focus and expertise delivering sector or
function staffing solutions
Virtuosity
Virtuoso
Virtuous Circle
Virtuoso Way
Virtuosity is the art of seeing possibilities where others see none. It is a mindset
that enables our people to adapt with agility to changing market conditions
People who see possibilities and can tune in to the needs of our customers
and candidates
A virtuous circle is at the core of our high-retention model. It provides the
continuous loop of making and keeping promises, which engenders trust and
ultimately builds loyalty
our consistent, collaborative Group-wide culture, based on trusted behaviours,
delivered by entrepreneurial leaders. At the heart of building trust is the
everyday practice in which people make promises to each other to bring about a
future that benefits all
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ImPeLLAm GRoUP PLC_AnnUAL RePoRT AnD ACCoUnTs_2021
Company information
Our Managed Services businesses are enabled by talent-focused Specialist Staffing brands with deep heritages, vertical sector
expertise and loyal candidate networks. Clients across the world trust us to deliver Managed Services and Specialist Staffing in
the UK, North America, Asia Pacific and Europe.
Working with them are 2,900 Impellam people, bringing a wealth of expertise through our 13 market-leading brands across 70
locations. every year, we connect carefully chosen candidates with good work at all levels. They include technology and digital
specialists, scientists, clinical experts, engineers, nurses, doctors, lawyers, teachers, receptionists, drivers, chefs, administrators,
warehouse and call centre operatives.
Underpinning everything we do is our Virtuoso strategy which recognises it is our people who make the difference. Virtuosos
make and deliver on promises, and grow with their customers through sector, service or international expansion which ensures
there is never a need for a customer or candidate to leave Impellam. Impellam is the largest Global Talent Acquisition and
managed Workforce solutions provider in the UK, and 8th1 in the world.
For more information about Impellam Group, please visit: www.impellam.com
Nominated adviser and broker
Canaccord Genuity Limited
88 Wood street
London
eC2V 7QR
Principal solicitors
Allen & overy LLP
one Bishops square
London e1 6AD
Registrars
Link Group
10th Floor, Central square
29 Wellington street
Leeds LS1 4DL
Principal bankers
Barclays Bank plc
1 Churchill Place
London E14 5HP
Independent auditor
BDo LLP
55 Baker street
London W1U 7eU
Registered address
Impellam Group plc
800 The Boulevard
Capability Green
Luton
Bedfordshire LU1 3BA
Registered number
06511961
LSE symbol
IPeL
1 By revenue (2020 published numbers).
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FINANCIAL STATEMENTS
CBP00019082504183028
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IMPELLAM GROUP PLC
800 The Boulevard
Capability Green
Luton
Bedfordshire LU1 3BA
Registered number: 06511961
www.impellam.com