Annual Report
and Accounts
2022
The Company
Impellam is a connected
group providing global
workforce and specialist
recruitment solutions
Strategic report
1_
Progress and performance
2_
Impellam at a glance
4_
Chairman’s statement
5_
Our bold promise
6_
Group Chief Executive Officer’s review
10_
Our business model
12_
Key performance indicators
14_
Performance reviews
24_ Chief Financial Officer’s review
28_ Principal risks
32_ Stakeholder engagement and our S172
statement
35_ Responsible business
Corporate governance
39_ Governance report
40_ Board of Directors
42_ QCA Code compliance
44_ Corporate governance statement
50_ Directors’ report
53_ Statement of Directors’ responsibilities
Financial statements
54_ Independent auditor’s report
64_ Consolidated income statement
65_ Consolidated statement of
comprehensive income
66_ Consolidated balance sheet
67_ Consolidated statement of changes
in equity
68_ Consolidated cash flow statement
69_ Notes to the consolidated financial
statements
121_ Company balance sheet
122_ Statement of changes in equity
123_ Notes to the Company balance sheet
129_ Alternative Performance Measures
131_ Glossary
133_ Company information
Alternative Performance Measures
Words with the symbol Δ are defined in the
Alternative Performance Measures section of
the Annual Report on page 129.
Our 2,000 people and market-leading
brands work across a broad spectrum
of industries and job categories
throughout North America, UK &
Europe and APAC.
Our award-winning Global Managed
Services provide a diverse range of
digitally enabled, multidisciplinary
workforce solutions to organisations
around the world. We are upper
quadrant industry leaders in Managed
Service Provision and Services
Procurement, and the seventh1 largest
Managed Service Provider in the
world with over £4bn SUM (Spend
under Management).
Our STEM businesses are specialists
in recruiting and engaging talent
in the key growth markets of
technology, digital, data, science,
clinical and engineering. We work
with clients across all sectors
and sizes delivering services that
span Managed Services (MSP),
Recruitment Process Outsourcing
(RPO), Statement of Work (SOW) and
specialist recruitment.
Led by our Virtuosos, our capabilities
are underpinned by proprietary digital
technology and unique partnerships
with market-leading software
providers, enabling us to transform
and future-proof our services.
We believe in the power of work.
Through the power of work, we build
better businesses and help people
lead more fulfilling lives.
1
By revenue (2021 published numbers).
For more information visit
www.impellam.com
Our vision
To be the world’s most trusted
workforce and specialist
recruitment solutions group,
trusted by our people, our
customers and our investors
in equal measure.
Our mission
Through the power of work, we
build better businesses and help
people lead more fulfilling lives.
Page_01
Corporate Governance
Strategic Report
Financial Statements
Progress and performance
Headlines
Impellam delivered strong financial results in 2022 and our strategic progress has accelerated
as a result of the divestment of traditional businesses in our Regional Specialist Staffing and
Healthcare portfolios setting Impellam up for sustainable growth.
Full-year performance for the total Group led to record highs in revenue of £2.53bn
(2021: £2.26bn) and gross profit of £314.8m (2021: £267.0m). Adjusted operating profitΔ was up
41.6% to £41.4m (2021: £29.3m).
Special dividends of £50m were declared in 2022 (110.8 pence per share) with £25m paid in the
year. A further Special dividend of £35m (77.8 pence per share) was declared in March 2023
following the completion of the sale of the Healthcare and Regional Specialist Staffing businesses.
Going forward this allows the Group to return to a dividend policy. As previously announced,
it is the Company’s intention, subject to the Group’s trading performance, to recommence the
payment of annual dividends, starting in January 2024 of £25m. This represents a 9% forward yield
on closing share price on 28 March 2023.
All onward financial information, unless otherwise stated, is based on the continuing operations
of the Group.
Group revenue was up 23.2% (20.5%*) on the prior year at £1.95bn (2021: £1.58bn) and gross
profit was up 27.3% (19.8%*) to £204.9m (2021: £161.0m). Adjusted operating profitΔ up 38.3%
(27.9%*) to £27.8m (2021: £20.1m).
Strategic
• To accelerate progress with our long-term strategy to focus on high-value growth opportunities
across our UK & Europe, North America and APAC regions, in January 2023 we entered into an
agreement to sell Healthcare (Medacs Global Group in the UK, Ireland and APAC) and Regional
Specialist Staffing (Blue Arrow, Chadwick Nott, Career Teachers and Tate in the UK). This
transaction completed on 3 March 2023 for cash consideration of £85m on a debt-free, cash,
normalised working capital basis. This followed the sale in February 2022 of Corestaff in North
America to swipejobs Inc.
• Continuing operations are our digitally-enabled Managed Services (Guidant Global, Comensura
and Flexy in the UK & Europe, North America and APAC) and our talent-rich STEM businesses
(Lorien, SRG, Carbon60 and Bartech in the UK & Europe and North America).
• We are now a more focused and agile business, well positioned for growth globally across
attractive Managed Services and STEM markets.
• Throughout the year, we continued to make key investments in people, technology and
customer centricity.
Financial
• Exceptional performance across the Group delivered a 38.3% (27.9%*) increase in adjusted
operating profitΔ.
• Strong revenue and gross profit growth across all regions with APAC delivering a record
increase of 31.6% (30.8%*) in gross profit, UK & Europe up 26.2% (25.7%*) and North America up
28.3% (14.6%*).
• Net cash (pre IFRS 16) of £30.3m compared to net debtΔ of £(15.0)m in 2021 (includes net sale
proceeds from Corestaff of £15.4m and final repayments of Covid-19 related support of £9.1m
as well as a £25m special dividend paid in December 2022).
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Group revenue_£m
£2,528.3m
Group adjusted
operating profit∆_£m
£41.4m
Group gross profit_£m
£314.8m
Group net cash/(debt)
(pre IFRS 16)∆ _£m
£30.3m
For more information
Glossary: page_131
2022
2,528.3
2,262.4
2,000.9
2021
2020
2022
314.8
267.0
228.1
2021
2020
2022
41.4
29.3
18.2
2021
2020
Group operating
profit/(loss)_£m
£34.4m
2022
34.4
19.5
(15.0)
2021
2020
2022
30.3
(4.1)
(15.0)
2021
2020
Continuing revenue
_£m
£1,947.4m
2022
1,947.4
1,580.3
2021
1,425.7
2020
Continuing adjusted
operating profitΔ_£m
£27.8m
2022
27.8
20.1
2021
19.6
2020
Continuing gross profit
_£m
£204.9m
2022
204.9
161.0
2021
136.7
2020
Basic earnings per share_p
55.9p
2022
55.9
18.3
(46.2)
2021
2020
Continuing Group results
Continuing operating
profit/(loss)_£m
£21.0m
2022
13.7
2021
21.0
(3.7)
2021
Page_02
Impellam Group plc Annual Report and Accounts 2022
Impellam at a glance
Our
operating
segments
We organise our portfolio of
workforce and specialist recruitment
solutions businesses both regionally
and by specialist operating segments.
Global Managed Services
Impellam Group’s award-winning Global
Managed Service brands take care of
the whole staffing process, working
with household names from around the
world to provide innovative and specialist
workforce solutions.
Our portfolio includes the Guidant Global,
Comensura and Flexy brands, who
are recognised, top-quadrant industry
leaders in Managed Service Provision and
Statement of Work, with combined spend
under management of over £4bn.
Continued operations:
North
America
UK &
Europe
APAC
Continuing operations
Revenue_£m
Gross profit_£m
£394.1m
2021: £358.3m
2020: £329.7m
£81.7m
2021: £63.7m
2020: £60.3m
£1,506.2m
2021: £1,205.8m
2020: £1,089.6m
£112.8m
2021: £89.4m
2020: £70.0m
£47.1m
2021: £16.2m
2020: £6.4m
£10.4m
2021: £7.9m
2020: £6.4m
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Corporate Governance
Strategic Report
Financial Statements
Discontinued operations:
STEM
Impellam Group’s STEM businesses
have a wealth of specialist experience
providing MSP, RPO, contract,
permanent and SOW workforce
solutions. Our STEM brands are
Carbon60, SRG and Lorien in the
UK & Europe. Together, they are the
largest STEM group in the UK. In North
America, our STEM brands are Bartech,
Lorien and SRG.
They work collaboratively to provide
workforce and specialist recruitment
solutions, and to create a community of
the very best of STEM talent, including
IT, digital and data specialists, scientists,
clinicians and engineers. Impellam’s
STEM businesses innovate and solve
some of the world’s toughest problems
by believing in the power of work to
create a better future.
Regional Specialist Staffing
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.
The RSS brands are Blue Arrow, Tate,
Career Teachers and Chadwick Nott.
Healthcare
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_04
Impellam Group plc Annual Report and Accounts 2022
The Group has delivered record results in an exceptional year.
Adjusted operating profitsΔ were up significantly across all
segments and in all regions as we responded to talent scarcity
and a buoyant labour market. This was achieved against a
backdrop of political and economic uncertainty, the war in
Ukraine and resulting rising energy costs contributing to a cost-
of-living crisis, particularly in the UK. Our agile response to the
global skills shortage, the ‘great resignation’ and post pandemic
bounce back in the jobs market resulted in new customer wins
and increased levels of customer retention as we collaborated
across our brands.
In April 2022, I informed the Board that I wanted to explore
opportunities to dispose of my shareholding in the Group and
have worked constructively with the Company to ensure the
interests of all shareholders were properly considered. The
sale of Corestaff in North America in February 2022, followed
by the disposal of our Regional Specialist Staffing (RSS) and
Healthcare brands in Q1 2023 will enable the Group to focus on
the fast-growing Managed Services and Science, Technology
and Engineering markets (STEM) where our specialist expertise
and track record positions us for high growth in these attractive
market sectors. This is a bold step for Impellam, and I know
the Executive team have the experience and drive to ensure its
success and to use it as a springboard to accelerate the Group’s
long-term strategy.
Chairman’s statement
Record results in an
exceptional year
“Profits are up
significantly across
all segments and in
all regions.”
There have been no changes to the Board during the year,
providing a stable foundation to support the Group during
this period of transformation and I thank the Board for their
contributions through the year.
I am pleased that we announced two special dividends in
2022, which will return £50m to our shareholders. The Group
announced a further special dividend of £35m following
the disposal of the RSS and Healthcare brands in early 2023.
Going forward this allows the Group to return to a dividend
policy.
It’s been a fast-paced year and our people have risen to
the challenges and opportunities, building close working
relationships with their colleagues and customers. I would
like to thank each and every one of them for their hard work,
commitment, and ability to respond positively to a changing
environment.
Lord Ashcroft KCMG PC
Chairman
27 April 2023
For more information visit
www.impellam.com
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 that
we call ‘Virtuosity’. 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 workforce and specialist recruitment
solutions group enabled by market-leading brands working
across a broad spectrum of industries and job categories.
Geography
Our offering is delivered through diverse brands and services
across North America, 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 both our regional and specialist segments into a
full end-to-end workforce solutions platform for our customers’
permanent, contingent, managed services, RPO and Statement
of Work (SOW) spend. Our work is important, and we get
it done.
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Corporate Governance
Strategic Report
Financial Statements
Page_06
Impellam Group plc Annual Report and Accounts 2022
Group Chief Executive Officer’s review
Strong growth and a
bold strategic move
Overview
2022 was a defining year for Impellam. Not only did we deliver
strong and consistent operational performance and financial
growth but we also responded to our majority shareholder’s
intent to explore options around his shareholding. We entered
into negotiations that were substantially concluded in December
2022 and saw the Group complete the disposal of its Regional
Specialist Staffing and Healthcare businesses on 3 March 2023.
This followed the sale of Corestaff, our North America Specialist
Staffing business, to swipejobs Inc. in February 2022.
This bold strategic move enhances the investment case for
Impellam’s connected and collaborative, digitally-enabled
businesses. Our continuing operations are now focused
on the key growth markets of multidisciplinary workforce
solutions in the UK & Europe, North America and Asia Pacific
and the specialist talent verticals of Science, Technology and
Engineering.
The year began with optimism and confidence delivering
gross profit growth across all our regions when compared to
2021. This growth was achieved despite a backdrop of political
and economic upheaval caused by the combined factors of
the global pandemic, the war in Ukraine, the impact of Brexit
and the fast-emerging cost-of-living crisis, particularly in the
UK. Despite these headwinds, the labour market remained
tight driven by global skills and talent shortages, the ‘great
resignation’, the early retirement of over 50s, high attrition and
a booming post Covid-19 job market creating a positive trading
environment for all our businesses.
As a result, our continuing operations delivered gross profit
of £204.9m and operating profit growth of 53.3% (60.3%*).
Including discontinued operations we generated £69.1m of
operating cashflows and were able to declare dividends of
£50m to shareholders.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Impact of investment
We capitalised on the increased demand for our services
by continuing to invest in people, technology and customer
centricity.
We developed our service offerings to respond quickly and
decisively to meet our customers’ evolving needs, with our
key investments in 2022 underpinning our core principle that
Virtuosity is our strategic advantage.
People and Virtuosity
Our customers consistently tell us that they love what we
do, but even more importantly they love how we do it. That’s
Virtuosity. Our people are really close to our customers and that
means we take the utmost care of them. We hire, develop and
nurture our people to become Virtuosos, so that in turn they
support our customers to build better businesses.
During 2022 more than 268 colleagues joined our Group as
customer demand increased. We expanded our teams in key
growth markets with a 20.3% increase in headcount in our UK
and North America STEM businesses and a 8.3% increase in
our GMS businesses across the world, supporting exciting new
customer wins. Alongside this expansion in headcount, we also
increased our productivity with gross profit per FTE rising from
£100.2k in 2021 to £112.3k in 2022.
We supported our people’s performance and wellbeing,
enabling them to work flexibly between our offices, their
homes and customer sites. We worked hard to get the
balance right between providing collaboration technology
and ensuring they received maximum benefit from in-person
teamwork. Understanding that managers make the difference to
engagement, we also focused on reigniting the beautiful basics
of thoughtful people management. We made it a priority that all
our people enjoyed quality time with their manager to explore
how the things that mattered most to them personally aligned to
the goals and ambitions of our business.
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Corporate Governance
Strategic Report
Financial Statements
We have a diverse and talented global workforce who are
connected and who collaborate more than ever before to make
sure there is never a reason for a customer to leave Impellam.
We are keen to make sure that our people enjoy a fulfilling
career with us, and as we grow our goal is to create compelling
opportunities across our global business. In 2022, more than 50
colleagues embarked on exciting new careers in a different part
of the Group.
At Impellam, we listen to our people. Our Virtuoso Alliance
continued to influence our strategy. Across two cohorts, 22
Virtuosos made a significant contribution to our performance
and development strategy, our refreshed Impellam brand and
proposition, our EVP, our blended working strategy and our
response to shifting candidate market dynamics.
Similarly, our people shout loudly about the things that matter
to them and I am proud of the great strides we took in 2022 in
equity, diversity and inclusion (ED&I). We launched our Unity
council globally and we had highly active Business Resource
Groups helping us understand and celebrate our differences
as we came together for particularly memorable events for
International Women’s Day, Pride, Mental Fitness Month and
Disability Awareness.
As we say goodbye to almost 1,300 colleagues leaving the
Group for their new home following the divestment of our
Regional Specialist Staffing and Healthcare businesses, I would
like to thank all Impellam colleagues for the wonderful part they
have played in making our Company special and delivering such
impressive operational and financial results in 2022.
Customer centricity
Our Virtuoso strategy means that our people are close to their
customers and their voice is heard directly by the Executive
team. We have a non-hierarchical organisation structure with
few layers between our customers and me, ensuring that
decisions are always made with customers front of mind.
Our customers have trusted us to find their contingent and
permanent talent in a candidate short market. Following the
combined effect of the profound disruption in our markets
across the world outlined in my introduction, there has been
a huge increase in demand across all our vertical market
specialisms and within our 271 managed service and RPO
customers.
In particular rapid global digitisation led to a buoyant market
for those with tech, digital and analytical skills and we also
saw increased demand for engineers, scientists and clinicians,
as organisations began to invest again, all coming together to
create the future through the power of work.
In 2021, we established our Customer Office (CO) with the
intention that there should never be a reason for a customer
to leave Impellam. The CO celebrated its first anniversary in
July 2022 with an impressive 100% account retention and an
increase in the lifetime value1 of our CO customers of 5.6%.
Our customer focused Centre of Excellence (CoE) brought
new capabilities to our clients and important efficiencies to our
business. The CoE managed 55 discrete projects to launch,
enhance or expand customer relationships. The CoE Analytics
team developed new intelligence dashboards for use across
the customer portfolio while the Talent Marketing team’s
highly successful campaigns resulted in up to 2,000 hires
per individual customer. Our VMS team collaborated closely
with our technology channel partners and was subsequently
recognised through our Guidant Global brand as SAP Fieldglass
MSP partner of the year. We automated many key business
processes, eliminating thousands of hours of manual work
annually.
1
Life Time Value (LTV) is defined as average margin per client x average length of contract.
Page_08
Impellam Group plc Annual Report and Accounts 2022
As a Company, we came together in 2022 to secure and share
2,450 new client wins across our regions.
We also expanded our work within existing customers through
strong collaboration and service diversification leading to a
significant increase in customer spend, alongside deepening
those relationships leading to a 9.2% rise in customer retention
compared to 2021.
We trained and led our people to price confidently reflecting
our premium position in a buoyant market and were delighted
that our customers continued to value our people so highly.
We ended the year by launching our refreshed Impellam
branding. We are building a consistent and cohesive customer
narrative and proposition, confident of our belief in the power
of work and our combined and connected ability to deliver
market-leading workforce and specialist recruitment solutions in
the UK & Europe, APAC and North America.
Technology and digital
Our investments in digital technology are focused on our
strategic objective to free up our Virtuosos to do their best
work whilst enabling collaborative teamwork across our
diverse global workforce, wherever they are based. In 2022 we
enhanced our overall digital experience, achieving our target to
be 65% digital by the end of the year.
During the year, we completed the implementation of Bullhorn
CRM and RSM in our UK STEM businesses. We now operate
on a common platform across the front and back office, leading
to an enhanced customer and candidate experience, increased
collaboration and improved productivity and efficiency. Going
forward, we will invest in selected additional digital technology
to enhance operational productivity and increase the profit-per-
consultant.
In our Managed Services businesses, our investment in
digitising service delivery has been a key contributor to
increasing our productivity. Our investment in an Integration
Platform as a Service (IPaaS) has enabled us to bring together
the core functionality and benefits of multiple applications,
both proprietary and third party, improving customer and user
experience while removing manual data entry and workflows.
In addition, the deployment of Robotic Process Automation
(RPA) tools has enabled the automation of a significant number
of repetitive tasks allowing our Virtuosos to focus on higher
value activities while increasing our access to large volumes of
meaningful data. Using sophisticated reporting tools, we can
now benchmark our recruiters against market data showing
clear evidence that our productivity metrics are ahead of the
programmes run by our competitors and in-house teams.
We also made significant investments in technology platforms
to drive customer and candidate relationship management and
applicant tracking. Our priority is to drive initiatives that free up
time for our Virtuosos so they can focus on building trust and
delivering on their promises to clients and candidates.
We continued to invest in customer-facing digital solutions and
during 2022 we launched our first fully-integrated platform
solution, leveraging our proprietary technologies EVO and Flexy
as well as our newly launched payroll app. We are proud of
this solution and intend to introduce it to more of our managed
service customers in 2023, and to support new services such as
Direct Sourcing.
The divestment of our RSS and Healthcare businesses means
that we will now move away from legacy systems and will
operate entirely in the Cloud using either software-as-a-service
applications, or Microsoft Azure facilities. This transaction
removes complexity from the overall Group technology
estate by removing multiple overlapping legacy applications;
simplifying physical infrastructure and reducing manpower
costs to support diverse systems.
Group Chief Executive Officer’s review continued
Page_09
Corporate Governance
Strategic Report
Financial Statements
Outlook
Our strategic realignment following the disposal of our RSS and
Healthcare businesses in March 2023 enables us to focus our
investments and the efforts of our Virtuosos on high growth
and attractive markets where we have greater visibility of future
revenue with improved conversion of gross profit to adjusted
operating profitΔ.
The disposal also enables us to streamline operations whilst
increasing collaboration and removes significant complexity from
our technology, property estate and our back-office processes.
Trading in 2023 began above our expectations, albeit we have
noted some hesitancy during Q1 on permanent hiring, particularly
amongst professional and financial services clients. Pipelines
remain strong but we will continue to remain vigilant, given the
political and economic headwinds of inflationary pressure and
interest rate rises, continuing events in Ukraine and ongoing talent
shortages across all our regions.
We are confident that the strategic moves we have made will
continue to enhance the investment case for Impellam and will
return significant value to shareholders.
Julia Robertson
Group Chief Executive Officer
27 April 2023
“We are confident that
the strategic moves
we have made will
continue to enhance
the investment case for
Impellam.”
Page_10
Impellam Group plc Annual Report and Accounts 2022
Our integrated, collaborative business model
Our vision
To be the world’s most trusted workforce
and specialist recruitment solutions group,
trusted by our people, our customers and
our investors in equal measure.
Our mission
Through the power of work, we
build better businesses and help
people lead more fulfilling lives.
Our key differentiators
Our culture of Virtuosity
We are united by one purpose, one culture, one
driving force. We call it Virtuosity. It’s why we’re
different. It’s our determination to do even more
and to always be ambitious and brave for our
customers and candidates.
Our customers see our Virtuosity every day in
our innovation and creativity. We are close to our
customers, and because we care, we forge strong,
meaningful and trusted partnerships.
They see it in our authenticity, in the way we keep
our promises and in how we break down the
barriers to unleash people’s potential. None of
this would be possible without a culture based on
trust. That’s why we have an ambitious vision to be
the world’s most trusted workforce and specialist
recruitment solutions group, trusted by our people,
our customers and our investors in equal measure.
We trust our Virtuosos and give them the freedom
and autonomy to do the right thing, to adapt and
see the possible in the impossible. We make sure
people make the difference.
By keeping our promises, we retain our clients,
candidates and our people for longer and reap the
benefits of that longevity. We never want to give a
client reason to leave Impellam.
The Beautiful Basics
We make sure that ‘the Beautiful Basics’ are
in place and deeply embedded across our
collaborative portfolio. ‘Beautiful Basics’ are caring
for the smaller details, as well as the bigger ones.
Doing the common, uncommonly well. They are
the difference Impellam’s people make through
our day-to-day actions to deliver on our promises.
Entrepreneurial Virtuoso
leaders
All our businesses share a culture of Virtuosity
which embeds a 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.
To deliver exceptional service to our
customers through:
Our operating segments*
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STEM
Regional
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Collaboration
Global
Managed
Services
North
America
UK &
Europe
APAC
Our regions
* including discontinued operations.
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Corporate Governance
Strategic Report
Financial Statements
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ol
la
b
or
at
io
n
Leading
Change
Emotional
Intelligence
Coaching
Virtuosity
To create value for
our stakeholders
Clients
We are close to our customers, and because we
care, we forge strong, meaningful and trusted
partnerships to find people for good work and
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 stay close to their customers and
candidates, 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
Our culture of Virtuosity
Page_12
Impellam Group plc Annual Report and Accounts 2022
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 (continuing operations)
Group revenue
_£m
£1,947.4m
2022
1,957.4
2021
1,580.3
2020
1,425.7
Measurement explained
Revenue generated from
sales of contract workers,
permanent placement fees and
other income generated from
provision of staffing services.
Rationale
Indicates the volume of business
generated in the year.
Conversion ratio –
adjusted operating
profitΔ_%
13.6%
2022
13.6
2021
12.5
2020
14.3
Measurement explained
Adjusted operating profitΔ
expressed as a percentage
of gross profit.
Rationale
Indicates the efficiency of fee
earners in generating gross
profit and the Group’s ability
to control central costs.
Group gross profit
_£m
£204.9m
2022
204.9
2021
161.0
2020
136.7
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.
Rationale
Indicates the profitability of
revenue before operating costs
year.
Group net cash/(debt)Δ
(Pre-IFRS 16)_£m
£30.3m
2022
30.3
2021
(15.0)
2020
(4.1)
Measurement explained
Total Group debt excluding lease
liabilities, less any cash and cash
equivalents, after capitalised
financing costs.
Rationale
Net debtΔ is a key element of the
Group’s capital structure.
Group adjusted
operating profitΔ_£m
£27.8m
2022
27.8
2021
20.1
2020
19.6
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.
Rationale
Demonstrates the profitability
of the Group and how efficient
it is at managing its controllable
cost base.
Group net cash
generated from
operations_£m
£69.1m
2022
69.1
2021 10.2
Measurement explained
The amount of cash generated
from operating activities
(including discontinued
operations) and after tax paid.
Rationale
Demonstrates how efficient the
Group is in converting operating
activities to cash and therefore
the ability to manage its capital.
Group operating
profit_£m
£21.0m
2022
21.0
2021
13.7
2020
(3.7)
Measurement explained
Profitability of the Group before
tax and finance costs.
Rationale
Demonstrates the profitability
of the Group.
Adjusted EPS
_pence
44.3p
2022
44.3
2021
18.2
2020
24.6
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
A strong indication as to the
underlying profitability of a
company for its shareholders.
Page_13
Corporate Governance
Strategic Report
Financial Statements
Operational KPIs (continuing operations)
International
mix_%
44.9%
2022
44.9
2021
44.5
2020
48.8
Measurement explained
Total gross profit from business
operations outside of the UK
and Europe, expressed as a
percentage of Group gross profit.
Rationale
Geographic diversification
spreads risk and reduces reliance
on any one economy.
Average gross
profit per FTE
_£’000
£115.8
Measurement explained
Total gross profit divided by
the average number of full-time
equivalents in the Group.
Rationale
Indicator of staff productivity
and efficiency, with growth
demonstrating improved
efficiency or a higher percentage
of fee earners at full capacity.
2022
115.8
2021
112.1
2020
91.5
Gross profit
mix_%
47.4%
Measurement explained
Total gross profit generated from
Managed Services businesses
expressed as a percentage of
Group gross profit.
Rationale
Gross profit from Managed
Services provides visibility of
income and generates long-term
relationships with our clients and
aligns to our strategic priorities.
Gross profit per
£ staff cost
£1.47
2022
1.47
2021
1.45
2020
1.49
Measurement explained
Total gross profit divided by the
annual staff costs.
Rationale
Indicator of staff productivity
and reflecting the operational
efficiency of the business as
a whole.
2022
47.4
2021
49.2
2020
52.3
Client retention –
Top 50 clients_%
100%
2022
100
2021
100
2020
98
Measurement explained
The percentage of the top 50
clients in 2021 who we continued
to supply in 2022 and have not
left during the year.
Rationale
Client retention links to improved
profitability and efficiencies in
service delivery alongside
improved quality of service.
Group adjusted
EBITDAΔ_£m
£34.2m
2022
34.2
2021
26..2
2020
25.7
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
EBITDAΔ which is used for banking
covenants and internal performance
measures. It is also used externally
for valuation purposes.
For more information
Glossary: page_131
Page_14
Impellam Group plc Annual Report and Accounts 2022
Performance reviews
North America
Following the sale of the Regional
Specialist Staffing brand (Corestaff)
early in 2022, our North America
business is now focused on our
Global Managed Services (GMS) and
STEM operating segments delivered
by our Guidant Global brand in GMS
and our SRG, Lorien and Bartech
brands for STEM.
Overview
The region delivered strong gross profit growth during 2022
and made good strategic progress. Following a strategic review,
Corestaff, our light industrial business, was sold to swipejobs
Inc, a US private digital staffing platform in early 2022, leaving
us with a streamlined portfolio focused on key growth markets.
This included moving into broader IT and energy verticals and
higher value life sciences work in our STEM business, yielding
positive results. Our GMS segment continued its steady
progress, underpinned by seven notable new customer wins
as customers sought full workforce management solutions to
combat significant talent shortages across most sectors.
Financial performance (continuing
operations)
Revenue for the year increased by 1.5% to £394.1m. Gross
profit rose by 14.6% to £81.7m (2021: £63.7m) underpinned
by a significant increase in gross profit to 20.7% from 17.8%
as average pay rates rose, our pricing improved and our
investments in productivity delivered gains in the way we
operate.
Adjusted operating profitΔ rose by 3.2% to £10.6m,
demonstrating the positive impact of the consolidation of the
North America business following the sale of Corestaff.
North America
2022
£m
2021
£m
% change
LFL*
Revenue
394.1
358.3
(1.5)%
Gross profit
81.7
63.7
14.6%
Admin expenses
(71.1)
(55.1)
Adjusted operating
profitΔ
10.6
8.6
3.2%
Gross profit %
20.7%
17.8%
Adjusted operating profitΔ
conversion ratio %
13.0%
13.5%
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_15
Corporate Governance
Strategic Report
Financial Statements
Market dynamics
The global workforce solutions market experienced significant growth,
with global spend under management increasing by circa 30% to circa
US$200 billion during 2022. In North America, the workforce solutions
outsourcing market experienced double-digit growth year on year
due to the rejuvenation in the Contingent Workforce Management
(CWM)/Managed Service Program (MSP) market. The region remains
the largest segment of the global CWM market, accounting for 53%
of global spend under management or US$104bn. Currently 12-15% of
deals have an element of Services Procurement with increasing traction
and further impetus for growth.
This growth was fuelled in part by the economic contraction of 2020,
which accelerated the search for more efficient business models. As
companies increasingly recognise the competitive advantage driven
by a diverse and engaged employee and non-employee workforce,
they are now seeking more sophisticated workforce solutions to assist
organisational innovation and business transformation.
Workforce solutions providers are expected to continue to evolve their
services to deliver more advanced strategic talent sourcing strategies
and solutions on a global scale. This will include direct sourcing,
advanced automation and digitisation, intelligence-driven talent
analytics, advisory services and expanding SoW capabilities. These
innovations will enable workforce solutions providers to add value and
support organisations in the wake of the ongoing talent supply-demand
gap, which is expected to persist despite economic volatility.
Talent scarcity continues to be a major challenge for our customers,
particularly in STEM sectors. Covid-19 accelerated investment in
IT, transforming digital channels and supporting remote working
and whilst many firms have retained hybrid working, customers are
increasingly recognising that employees can work from anywhere,
making Impellam’s broad pool of talent a differentiator.
Despite some well-publicised redundancy programmes from the major
global tech organisations, skilled candidates are still hard to find and
with many in-house recruitment teams laid-off, outsourced recruitment
solutions remain an important option for organisations across all
industry sectors. Unemployment rates remain low and combined with
wage inflation, candidates are still changing jobs more frequently than
before the pandemic.
“The region delivered
strong gross profit
growth during 2022
and made good
strategic progress.”
£81.7m
Gross profit for North America
in 2022.
Page_16
Impellam Group plc Annual Report and Accounts 2022
Performance reviews continued
North America continued
Portfolio review
GMS
GMS continued to benefit from the post Covid-19 bounce back,
delivering a robust performance in 2022, with a 7.9% increase
in gross profit. This reflected six new business wins in a wide
range of industry sectors including Indorama and Builder’s First
Source.
Customer retention remained exceptionally high at 93%, with a
number of customers extending or expanding the scope of their
contracts. Secured at the end of 2022, the global Recruitment
Outsourcing Programme (RPO) for Travelport is now live in
multiple countries delivering revenue in all three of our regions.
Teamwork between the STEM brands and our GMS business,
Guidant Global, also continued to gain pace with specialist IT,
Life Sciences and Engineering staffing provision integrated
into the delivery of many MSP contracts in our US client base
as we capitalised on the strength of combining our brands. IT
resourcing is now an important part of the extensive relationship
with a long-standing customer and a government technology
supplier, Maximus.
Whilst we minimised increases to our headcount, we continue
to build on significant corporate investment in our IT and digital
infrastructure to ensure we improve productivity as we grow.
Key to this is the Program Growth Intelligence (PGI) Dashboard,
which is driving continuous improvement and optimising
operational performance across our GMS portfolio.
STEM
Investment in our STEM portfolio last year delivered results in
2022 driving gross profit up by 24.7%. A focus on higher-quality
business enabled us to optimise pricing and increase average
gross profit margins by 1.9pps to 16.2% across the portfolio.
To support this growth, we increased our headcount by 33%
and added to our geographic footprint, opening a new Denver
location, alongside expanding our remote worker hubs in
California and Texas.
Our Life Sciences business met its strategic objective to
diversify into new market segments and reduce its focus on
clinical trials. The launch of the new Quality, Regulation and
Compliance (QRC) specialism at the end of 2021 has gained
traction fast with growth set to continue in 2023. It now
represents over 50% of the brand’s gross profit and has driven
our average Life Sciences gross profit margins up by 2.8pps to
24.3%.
Our IT business strengthened its position, with our investment in
the Salesforce and mobile app development market segments
paying dividends, as we secured multiple new client contracts
and created a strong platform in a sector where there is high
demand and short supply of candidates. We also expanded our
service lines and signed two new RPO customers whilst steadily
building our direct-hire recruitment business, increasing revenue
by over 100% when compared with last year.
Our Engineering business remains focused primarily on the
nascent Electric Vehicle market, whilst we develop a presence
in the renewable energy sector.
Looking forward
The key factors driving demand this year – talent shortages and
rising pay rates – are set to continue so our ablity to develop
innovative solutions to support customers remains critical. This
will create opportunities for Impellam’s omni-channel sourcing
approach and integrated workforce solutions combining
vertical STEM skills under our horizontal GMS service. We
will continue to invest in expertise to advance our RPO and
Services Procurement capabilities, seeking to address emerging
opportunities for Direct Sourcing and upskilling our Virtuosos
to deliver a consultative approach, giving proactive advice to
valued customers.
Page_17
Corporate Governance
Strategic Report
Financial Statements
UK & Europe
Following the sale of Regional Staffing
Specialist (RSS) and our Healthcare
business in the UK and Ireland in early
2023, the UK and Europe remains our
largest operating region. Our focus
going forward will be on our GMS
segment which includes Guidant
Global, Comensura and Flexy and
our STEM business which includes
Lorien, SRG and Carbon60.
Overview
The region delivered an impressive performance, with a boom in
the job market and skills shortages driving up revenue, margins
and adjusted operating profitsΔ. We saw growth in all brands,
significant new business wins and increased customer retention.
In recent years, Impellam’s strategic focus has been on our
high value digitally-enabled GMS and STEM businesses and
the recent divestment of RSS and MGG will allow us to further
develop our leading position in these attractive markets in the
UK & Europe.
£1,506.2m
Revenue for UK & Europe in 2022.
Financial performance (continuing
operations)
Revenue rose 25.1% to £1,506.2m reflecting higher volumes in
both temporary and permanent recruitment and contributing
to a substantial increase in gross profit of 25.7% to £112.8m.
Combined with productivity increases driving higher gross profit
per FTE, this delivered adjusted operating profitsΔ of £20.5m
(2021: £17.4m), up 15.7% on 2021.
UK & Europe
2022
£m
2021
£m
% change
LFL*
Revenue
1,506.2
1,205.8
25.1%
Gross profit
112.8
89.4
25.7%
Admin expenses
(92.3)
(72.0)
Adjusted operating
profitΔ
20.5
17.4
15.7%
Gross profit %
7.5%
7.4%
Adjusted operating
profitΔ conversion
ration %
18.2%
19.4%
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_18
Impellam Group plc Annual Report and Accounts 2022
Performance reviews continued
UK & Europe continued
Market dynamics
Post-pandemic we saw a significant rebound in demand for
both permanent and temporary staff across all our brands and
markets. This reflected major pressures on employers in the
private sector facing ‘the great resignation’ and high attrition
as employees took advantage of a buoyant labour market.
Hospitality and logistics sectors saw shortages of staff and
drivers continue. As a result, pay rates are rising and clients
are increasing incentives to attract candidates, focusing on
developing distinctive employer brands, ED&I strategies and
sustainability agendas. Rising energy costs and soaring inflation
resulted in a cost-of-living crisis and, with public sector pay
settlements under pressure, disruption across the public sector
brought widespread strikes and mounting vacancies.
This combination of market factors, along with a smaller
working population post Covid-19, has resulted in increasing
customer demand for specialist recruitment and workforce
solutions in many of Impellam’s key target markets, such as the
IT and Engineering sectors, which represent the UK’s second
and third largest markets generating revenues of £10.8bn
annually, and where Impellam has a strong market presence
through its STEM brands.
Portfolio review
GMS
Our GMS business, built on our Guidant Global and Comensura
brands, delivered a robust 21% increase in gross profit,
benefiting from the service expansion opportunities created
by the breadth of customers across the Impellam portfolio in
the UK and winning new contracts with existing clients of other
brands.
Headcount increased by 43 as we extended our portfolio across
both private and public sector organisations, with a number of
notable new business wins including University College London
(UCL) and EV Metals.
Our focus on building long-term client relationships is evidenced
by our exceptional customer retention and expansion record.
“Growth in all brands,
significant new business
wins and increased
customer retention.”
Page_19
Corporate Governance
Strategic Report
Financial Statements
Our ability to provide an integrated service across our brands
led to a significant expansion of the MSP programme in SSE
where we built on the success of the original contract and
introduced our technology sourcing capability into their IT
division.
Building on an exceptional year in 2021, revenue from SOW
projects increased in 2022 as new customers were added,
bringing the monthly average to over 220 projects. The services
provided under a Statement of Work are billed based on a
fixed price deliverable or for hitting specific milestones, and we
continue to invest in this high-growth proposition.
Sustained growth in Ireland continued, with strong margin
increases as this agile team were able to respond fast as
demand bounced back.
We continued to digitise our service delivery and investment
in technology such as Flexy yielded significant margin growth.
Flexy is now a consumer-grade application making it easy for
candidates looking for flexible work patterns to find hours that
suit them for retail or warehouse work.
Direct Sourcing is increasingly an integral part of an overall
talent acquisition strategy for UK organisations. Our new
contracts with UCL and EV Metals are good examples of this
trend and we expect to see this accelerate in 2023. It enables
forward thinking enterprises to showcase their Employer
Brand to attract talent and drive their ED&I objectives as well
as delivering targeted results. Our work with a major aircraft
company on their diversity objective to hire female aircraft
fitters delivered high numbers of female applicants and one in
every five aircraft fitter hirer since February 2022 is female.
* Working Futures data
STEM
Our market-leading scientific, technology and engineering
brands – Lorien, SRG and Carbon60 – have all delivered strong
results with significant gross profit growth of 27.6% driven by all
three brands. 2022 has seen both new client wins and contract
extensions supported by increased collaboration across brands.
Growth in STEM permanent contracts was particularly notable
with a 50% year-on-year increase, including several permanent
hiring projects for existing MSP customers. Supported by our
ongoing investment in our RPO service proposition, this enabled
us to deliver high-volume contracts in technology and life
sciences with our digital and technology business securing 181
new customers during the year.
In support of our goals that there should never be a reason for a
customer to leave Impellam our STEM brands retained 100% of
all RPO and MSP clients.
In the year, 150 colleagues joined our STEM brands to drive
our growth and we continued to invest in our Lorien Academy,
offering a six-week training programme to develop the skills
needed to become a successful technology recruiter. During
2022, 46 people successfully completed the Academy
programme and now enjoy careers with us. This will help
ensure we remain well positioned to help our customers meet
the continued competition for talent in STEM sectors.
Page_20
Impellam Group plc Annual Report and Accounts 2022
Performance reviews continued
UK & Europe continued
Looking forward
We expect our STEM and GMS businesses to go from strength
to strength as we respond to talent scarcity and benefit from
cross-selling and collaboration opportunities. This collaboration
has yielded positive results this year and we see this as key to
deepening and expanding our customer relationships in the
future. Our more focused portfolio in the UK & Europe leaves us
a leaner, more agile organisation with greater capacity to invest
in customers, people and technology.
Our investments in STEM coupled with market dynamics mean
our industry-leading brands have significant opportunities
ahead. Our STEM businesses have a wealth of specialist
experience and by bringing together the skill sets of IT and
digital specialists, scientists, data specialists, clinicians and
engineers, they can provide the innovative solutions customers
require in the fast-changing world of work.
Discontinued operations
RSS
The RSS portfolio experienced 16.0% growth in gross profit
as a result of a buoyant post-pandemic market. As well as
new client wins across the portfolio, all RSS businesses
performed well with permanent hiring performing particularly
well when compared to prior year. Blue Arrow saw a strong
overall performance with significant new customer wins and
the business was well-positioned for the return of the catering
market. The Tate Service Delivery Centre, that focuses on large
national accounts, continued to grow with Tate Professional
delivering higher margin business across HR, marketing
and finance. Career Teachers was reappointed to the CSS
framework for schools, while Chadwick Nott bolstered its team
of recruiters and benefited from the salary wars in a competitive
talent market.
Healthcare
The Healthcare portfolio experienced a particularly high
demand for nursing and care staff, alongside a challenging
shortage of candidates.
Insourcing, which involves supplying an end-to-end service,
delivered on the hospital premises, to help the NHS reduce
its long waiting lists for elective procedures, proved to be
a successful investment for MGG. In its first full year the
insourcing business supported more than 3,500 operations
for people on NHS waiting lists for more than two years. There
were also extensions for the Covid-19 UK Test and Trace
programme and the vaccination programme that ran for much
of 2022.
Page_21
Corporate Governance
Strategic Report
Financial Statements
Asia Pacific
Following the sale of our Healthcare
business, Medacs Global Group
(MGG) in March 2023, our continuing
APAC operation will be focused
on our Global Managed Services
and digital specialisms, building on
the strength of our Guidant Global,
Comensura and Flexy brands.
Overview
Through 2022, the APAC market experienced a significant
bounce back in demand and benefited from international
borders reopening with candidate mobility possible once again.
This resulted in significant revenue and gross profit growth with
all brands delivering strong financial and operational progress.
Our focus in APAC is to maintain this momentum in our GMS
and digital businesses and to broaden our service capabilities
in Statement of Work, Services Procurement and RPO whilst
building a STEM proposition.
Financial performance
(continuing operations)
The region recorded revenue of £47.1m and gross profit
of £10.4m up 30.8%* on the prior year. Flexy delivered an
unprecedented increase in gross profit, up 228% to £1.4m,
albeit from a small base. This advance in gross profit delivered
adjusted operating profitΔ of £2.0m, up a healthy 23.1% on the
previous year.
APAC
2022
£m
2021
£m
% change
LFL*
Revenue
47.1
16.2
168.8%
Gross profit
10.4
7.9
30.8%
Admin expenses
(8.4)
(6.3)
Adjusted operating
profitΔ
2.0
1.6
23.1%
Gross profit %
22.1%
46.7%
Adjusted operating
profitΔ conversion ration
%
19.2%
20.3%
£47.1m
Revenue for APAC in 2022.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Page_22
Impellam Group plc Annual Report and Accounts 2022
Performance reviews continued
Asia Pacific continued
Market dynamics
2022 represented a year of unprecedented employment growth
across Australia and New Zealand. The return-to-work post
Covid-19 lockdowns along with a significant drop in immigration
throughout the pandemic resulted in a 48-year record high level
of employment in Australia.
Consequently, there is an increasingly tight labour market
particularly pronounced in healthcare, construction, hospitality
and technology. Solid employment growth is projected
to continue through 2023 which, along with a return of
immigration, will continue to accelerate wage growth. Higher
inflation is expected to dampen demand going forward but this
will take time to filter through to the buoyant labour market.
Although spending is predicted to slow throughout 2023 as
interest rates continue to rise to tackle inflation, a positive
GDP growth rate of 4% is expected. Migration will continue to
recover with net overseas migration cushioning any slowdown
in the labour market.
This tight labour market presents a strong opportunity for our
managed services and digital businesses as customers seek
alternative methods to reach untapped talent pools.
“Flexy delivered an
unprecedented
increase in gross
profit.”
“
Page_23
Corporate Governance
Strategic Report
Financial Statements
Portfolio review
GMS
New business wins and expansion of existing customer
contracts delivered a strong 2022 for our GMS businesses.
A strong finish in the final quarter across our major private
and public sector customers means we are well positioned
to maintain this momentum into 2023.
Our core public sector customer base provides stable returns
on long-term contracts supplying Neutral Vendor supply chain
management across contingent labour agency providers. During
2022, we secured a major new contract with City of Canterbury
Bankstown, one of the largest councils in Australia which is
already one of our top five revenue generators.
Infrastructure projects that were on hold are now coming back
on stream, driving demand for contingent labour across our
public sector contracts. As we maintained our headcount during
Covid-19, we were able to respond immediately and are now
benefitting from the return to business as usual.
Our entry into the private sector last year continued to generate
strong returns, with revenue up 168% over the previous year
as the largest contract in the region, signed late 2021, became
operational. This contract with a global mining company has
now rolled out across Australia, North America, Canada and
Singapore and is set to extend into another major division. It
covers engineering and technology resources and in line with
the Group focus on STEM, these skills are increasingly part of
our major MSP contracts.
Digital
Our digital direct sourcing and payroll business, Flexy, has
maintained its fast-paced trajectory, supporting our MSP
customers with payroll provision and enabling them to solve
their temporary labour challenges by offering candidates more
flexible working patterns. Over 40 councils now use Flexy
and we won our first customer in the retail sector when a trial
to provide pre-Christmas temporary labour in Sydney was
extended for all temporary resources across Australia. 2022 also
saw the provision of our EVO vendor management software
on a standalone basis. Normally sold as part of an MSP, this is
the first time we have provided SAAS to a new Government
customer in Australia.
Looking forward
We anticipate a softer economic slowdown regionally than
the rest of the world with the pronounced candidate shortage
and high employment rates resisting some of the impact from
inflationary pressures. As net migration returns to pre-pandemic
levels, we see demand continuing albeit at a slower rate than
2022. We are now a smaller, more focused organisation, with
our Managed Services businesses well placed for growth
in our core geography of Australia and New Zealand and
expansion potential across Asia as our private sector base
extends. We have a good foundation from which to build our
STEM revenues, both within MSP contracts and as standalone
services. Digital solutions remain an important asset to both
reduce costs and improve customer service alongside the
opportunity to sell these independently to both the public and
private sectors.
Discontinued operations
Healthcare
The Healthcare business made good strides in 2022 and
delivered strong growth in the region as a result of simplification,
streamlining and a return to pre-pandemic activity levels.
As internal borders opened up, doctors were able to travel
again and we benefitted from the pent-up demand for surgery
in particular.
Page_24
Impellam Group plc Annual Report and Accounts 2022
A strong financial
performance
across the Group
Introduction
Revenue from continuing operations for the year was up 23.2%
(20.5%*) and gross profit increased by 27.3% (19.8%*),
reflecting the buoyant labour market across our regions and
high demand for temporary and permanent staff.
To support this growth, we invested in customer-facing
staff, adding 268 to our headcount during the year. Our staff
productivity (gross profit divided by FTE heads) was higher
than in previous years and this, together with tightly controlled
costs, meant that adjusted operating profitΔ from continuing
operations increased by 38.3% to £27.8m (2021: £20.1m).
Operating profit after the amortisation of acquired intangibles
was £21.0m (2021: £13.7m).
The difference between adjusted operating profitΔ and
operating profit is reconciled on page 129 and relates to the
amortisation of acquired intangibles.
Discontinued operations
We completed the sale of Corestaff in the US to swipejobs Inc.
in February 2022, and in January 2023 we announced the sale
of our UK Regional Specialist Staffing businesses (Blue Arrow,
Tate, Chadwick Nott and Career Teachers) and the UK, Ireland
and APAC Healthcare business (MGG) to Twenty20 Capital
for a cash consideration of £85.0m on a debt-free, cash-free
normalised working capital basis. This sale completed on 3
March 2023. All financials, unless otherwise stated, are based
on the continuing operations of the Group.
* Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate.
Government support
Following support received in 2020 for Covid-19 the Group
repaid £3.3m of deferred VAT payments and US$8m (£5.8m)
of federal tax deferred under the CARES initiative. There are no
further payments due under these schemes.
Foreign exchange
Currency movements against Sterling positively impacted our
reported performance, largely due to the strengthening of US
Dollar against Sterling. Over the course of the year to December
2022, the total impact of exchange movements on gross profit
and adjusted operating profitΔ were £8.2m favourable and £1.1m
favourable, 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 exchange
rate between the US Dollar and Sterling over the year ended
30 December 2022 averaged US$1.2372 (2021: US$1.3757) and
closed at US$1.2077 (2021: US$ 1.3536). As the Group expands
further in overseas territories the impact of changes in exchange
rates will increase.
Capital investment
Capital expenditure on tangible and intangible fixed assets
in the period was £11.3m (2021: £5.8m), as we continued
our investment in our core systems to further digitalise the
business with roll outs of new front office systems, new bill and
pay systems and new finance systems. The deployment will
continue in 2023, though revisions will take into account the
disposed businesses and associated separation plans. As well
as some general IT equipment refreshes, we also continued
investment in our proprietary vendor management systems
(VMS) and the development of our digital platform, Flexy.
Chief Financial Officer’s review
Page_25
Corporate Governance
Strategic Report
Financial Statements
Operating
profit
Non-cash
Working
capital
IFRS 16
non-cash
Tax paid
Government
support repaid
Net cash
generated
34.4
15.0
5.5
31.1
(7.4)
(9.5)
69.1
0
10
20
30
40
(£4.1m)
2020
20
10
2021
2022
£30.3m
(£15.0m)
The net repayment of finance leases amounted to £5.5m
(2021: £7.2m).
Interest and debt
Net cash generated from operations (including discontinued
operations) during the period was £69.1m (2021: £10.2m). During
the year final deferred tax payments of £9.1m (2021: £38.9m)
were made. Excluding the impact of these tax deferrals,
cash generated from operations was £78.2m (2021: £49.1m).
Excluding deferred taxes, the conversion of adjusted operating
profitΔ to net cash generated is 248.7% (2021: 167.6%). Cash
generation from operations was enhanced by an improvement
in Days Sales Outstanding (DSO) which stood at 34.8 days
(2021: 35.4 days) at the end of 2022.
In addition to the strong operating cash flows £15.4m of cash
proceeds (net of disposal expenses) were received following the
disposal of Coretaff in February 2022.
Finance expenses for the Group, including discontinued
operations, were higher than the prior year at £5.2m (2021:
£4.3m). Lease interest was lower at £0.4m (2021: £0.6m) and
interest cost on financing facilities increased to £4.5m (2021:
£3.5m) as a result of interest rates rises. At the balance sheet
date net cashΔ, excluding the adjustments for IFRS 16, was
£30.3m compared to £(15.0)m net debt in 2021, an increase of
£45.2m.
The net cash flow from operations was primarily utilised as
follows:
• Special dividend £25m
• Investment in fixed assets and software development: £11.3m
• Net lease repayment: £5.5m
• Share buybacks: £1.2m
• Net interest paid on borrowings and leases: £4.9m.
The Group’s operations are financed by retained earnings
and bank borrowings. The Group manages working capital
requirements through a £182.5m global revolving credit facility
(RCF) approved 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.
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 £2.7m (2021: £3.0m) at the end of 2022.
Operating profit to net cash generated 2022_£m
Movement in net cash/(debt) (before IFRS 16)_£m
For more information
Glossary: page_131
Net cash generated_£m
£69.1m
(2021: £10.2m)
Net cash_£mΔ
£30.3m
(2021: £(15.0)m)
Page_26
Impellam Group plc Annual Report and Accounts 2022
Chief Financial Officer’s review continued
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 2022, we did not utilise these
arrangements (2021: £8.2m).
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 2022, the Group paid less
than £0.1m in other interest (2021: less than £0.1m).
Following the completion of the sale of the RSS and Healthcare
businesses in March 2023 the RCF was reduced to £132.5m and
the accordion reduced to £30m.
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 (including discontinued operations) in the period
of £4.1m (2021: £7.1m) represents an effective tax rate of 14.5%
(2021: 45.8%) and arises on the Group’s activities in the UK and
overseas. The higher effective tax rate is driven by adjustments
in respect of previous periods, primarily arising from transfer
pricing adjustments and a legacy US deferred tax disclosure
position. The lower effective tax rate is driven by prior year
adjustments to deferred tax on overseas intangibles to calculate
the opening deferred tax position at the local rate. Excluding
adjustments in respect of previous periods, the effective tax rate
is 23.8%.
The Group’s contribution to the UK Treasury in the period
amounted to £347.4m (2021: £331.9m) 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 £46.9m
(2021: £37.7m) was a cost to the business.
Earnings per share
Continuing basic earnings per share increased to 32.6p
(2021: 7.3p) as underlying profit after tax from continuing
operations increased by £11.4m. Total Group (including
discontinued operations) basic earnings per share increased to
55.9p (2021: 18.3p) with underlying profit after tax increasing by
£16.9m.
The weighted average number of shares in 2022 was 45.1m,
0.2m lower than 2021 due to the ongoing share buyback
programme. Continuing adjusted earnings per share increased
to 44.3p (2021: 18.2p) and reflects the underlying performance
of the business, excluding impairment and amortisation of
acquired intangibles and their respective taxation impact.
Capital management
The Group’s capital base (note 29) 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 extended
payment terms require senior finance approval. 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.
Page_27
Corporate Governance
Strategic Report
Financial Statements
Following the sale of the RSS and Healthcare business in 2023
the continuing requirements of the Group has been assessed
in line with revised profit and cash flow plans and bank lending
facilities.
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
Approval was gained at the 2021 AGM to commence an
updated programme 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 a total of 188,255 shares were purchased at a value
of £0.8m in 2022.
An updated programme was approved at the 2022 AGM
authorising the purchase of a maximum of £0.5m of Ordinary
shares (by market value) per calendar month until the 2023
AGM. Under this programme a total of 65,360 shares were
purchased at a value £0.4m in 2022. A further 106,597 shares
have been purchased in 2023 at a value of £0.7m.
On the 8 November 2022 the Board announced a special
dividend of 55.4p per share, amounting to £25m, which was
paid on 9 December 2022. On 22 December 2022 the Board
announced a second special dividend of 55.4p per share,
amounting to £25m, which was paid on 27 January 2023.
On 3 March 2023 the Board announced a further special
dividend in connection with the sale of the RSS and Healthcare
businesses of 77.8p per share, amounting to £35m to be paid on
6 April 2023.
See note 33 Post Balance Sheet Events – Important Information.
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
We experienced positive trading conditions in 2022 supported
by the investments made in revenue generating headcount in
2021 and through 2022 whilst maintaining our focus on cost
management. Operational cash flow was strong with further
improvements in DSO which enabled an underlying reduction
in borrowings and facility levels. This positive cash flow also
facilitated returns to shareholders with special dividends
totalling £50m paid or proposed during the year. The strategic
disposal of the RSS and Healthcare businesses in March
2022 and the cash received, net of a further distribution of
shareholders of £35m, will further bolster this position.
Tim Briant
Group Chief Financial Officer
27 April 2023
Page_28
Impellam Group plc Annual Report and Accounts 2022
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.
Economic uncertainty continues in most nations due to the Ukrainian
conflict and political instability in other countries 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.
Geographical diversity and the Group’s mixed portfolio
of Managed Services and STEM 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.
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.
H
Political environment
During the pandemic regional governments applied varying financial
stimuli. Countries are now reducing these through fiscal easing and
tax rises.
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.
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.
Our diverse portfolio allows us to pivot our services to
support public sector demands.
M
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 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 35.
M
Page_29
Corporate Governance
Strategic Report
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
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.
Management, enabled by the Group’s Customer Office,
reviews 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 assessed
and credit checked prior to trading, and we hold credit
insurance across the Group.
H
Delivery of strategic projects
The Group is committed to investing in a range of strategic
transformation projects, such as Digital Core Systems 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 bespoke IT platform that monitors progress against
commitments.
A Group Project Management Office (PMO) oversees and
governs our key strategic projects.
M
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 are continually changing 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 and
through 2023. The ‘Digital Core’ is a substantive rolling
replacement for some 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,
followed by a roll-out programme during 2022 which will
continue into 2023. The implementation of new systems
in the UK STEM business was completed in 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. The Roadmap will now be refined
to incorporate the disposal of the RSS and Healthcare
businesses.
M
Page_30
Impellam Group plc Annual Report and Accounts 2022
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 introduced an IT Governance process
which continues to operate. The business disposals during
2022 and 2023 will reduce the number of technology
systems and reduce the systems landscape.
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. The Group is ISO27001 and Cyber Essentials
Plus 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.
H
Business continuity
A major disruptive event, such as a fire, severe weather or the 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.
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
three years of working in a hybrid remote environment
which has demonstrated the resilience of the business
and ability to implement its business continuity plans.
The business disposals during 2022 and 2023 will reduce
the complexity of the business and potential for systems
and operational disruption.
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.
The Group also continues to invest in specialist resource
to support business development, implementation and
service delivery activities.
H
Principal risks continued
Page_31
Corporate Governance
Strategic Report
Financial Statements
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.
In the US, the application and interpretation of the Fair Labour
Standards Act (FLSA) results in the potential risk of claims.
In the UK there are risks associated with the application of National
Minimum Wage (NMW) as well as regulations associated with
operating int he Healthcare sector.
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.
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 have been implemented.
External professional advice is sought where insufficient
knowledge exists within the Group.
The business disposals in 2022 and 2023 will reduce
levels of complexity and risks of non-compliance,
particularly associated with the National Minimum Wage
and Healthcare regulations.
M
Cash and liquidity management
Poor cash and liquidity management along with rising interest
rates may result in pressure on the Group’s credit facilities and/or
operational cash flow issues.
The Group has a central Treasury function in place with
regular forecasting, reporting and review procedures.
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 for a further three years to December 2024 with
the option to extend for a further two years.
A Group Credit Policy sets out the policies and
procedures that must be implemented across the Group
to mitigate credit risk.
M
Financial control
A failure of financial control could lead to a material loss to
the business.
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.
M
Page_32
Impellam Group plc Annual Report and Accounts 2022
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,
and make decisions based on long-term success, whilst
maintaining 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, candidates 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 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 workforce and specialist recruitment
solutions group – 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 consider 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 2022
The Board considered the interests of, and the impact on, all
stakeholders when making a number of key decisions during the
year.
Sale of Corestaff
On 24 January 2022 we announced the sale of Corestaff, our
US-based Light Industrial business 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. For remaining colleagues the
business is focused on the stratgic growth areas of STEM and
GMS.
Clients, candidates and suppliers
The transaction will give enhanced geographic reach which will
benefit 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
and return value to our shareholders and manage our lender
requirements.
Our business in North America can focus on our digitally enabled,
high-value STEM and Global Managed Services markets.
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 enabled by the sale.
Page_33
Corporate Governance
Strategic Report
Financial Statements
Sale of regional specialist staffing and
healthcare businesses
On 30 January 2023 we announced the agreement to sell our
Regional Specialist Staffing businesses in the UK (Blue Arrow,
Tate, Chadwick Nott, Career Teachers) and our Healthcare
Staffing business in the UK, Ireland and APAC (Medacs Global
Group) to Twenty20 Capital, one of Europe’s largest specialist
investment funds focused in the human capital services sector.
The sale completed on 3 March 2023.
Stakeholder considerations:
Colleagues
Colleagues will benefit from being part of a more focused
global workforce and specialist recruitment group business
with opportunities to invest in people and technology, customer
solutions and ways of working suited to the sectors within which
they operate.
Clients, candidates and suppliers
The ongoing, more focused portfolio will enhance interaction
with clients, candidates and suppliers and allow further
investments in technology and people which will enhance our
STEM and Global Managed Services offering.
Investors and lenders
The proceeds of the sale will be used to return value to our
shareholders as dividend payments and pay down net debtΔ to
manage our lender requirements and reinvest in the business.
Outcome
The remaining Group will benefit from being more focused on
key growth markets and verticals creating increased agility and
efficiency to deliver higher margins and return on capital. The
Group is now a digitally enabled and collaborative workforce
solutions and specialist recruitment group dedicated to
Managed Services and STEM.
Special dividend
During the year two special dividends were declared which will
return £50m to shareholders. This follows a five-year period
where no dividends have been declared or paid.
Stakeholder considerations:
Colleagues
The financial performance of the Group is key to colleague
retention and ongoing investment and the special dividend
recognises our commitment to deliver to our people, customers
and investors.
Clients, candidates and suppliers
Whilst not having a direct impact on this group the declaration
of a dividend should build market confidence for all our
stakeholders as a strong reflection of the financial stability of the
Group.
Investors and lenders
The declaration of a special dividend returns value directly to the
shareholders, providing them and the market with confidence in
the Group’s ability to return value on investments. The lenders
have reduced exposure due to the reduction in the revolving
credit facility which reflects the smaller size of the Group.
Outcome
The first dividend (£25m) was paid in November 2022, with the
second (£25m) paid in January 2023. A further special dividend
of £35m was declared with the announcement of the sale of
RSS and MGG and will be due for payment in March 2023.
Page_34
Impellam Group plc Annual Report and Accounts 2022
Stakeholder
group
Why they are
important
How we
engage
Clients
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.
Colleagues
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, our communication and collaboration
platform, Workplace, town hall meetings and our
global newsletter, Strategy in Action.
Candidates
Through the power of work our mission as a
business is to ‘build better businesses and help
people lead more fulfilling lives’ which includes
the people we provide good work for, through
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.
Suppliers
We depend on a complex network of partners
to meet our needs – whether they are
supplying stationery or finding people for our
customer 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.
The Annual General Meeting is open to all
investors.
Shareholders can view relevant information
about Impellam in the Investors section of
impellam.com.
Stakeholder engagement and our S172 statement continued
Page_35
Corporate Governance
Strategic Report
Financial Statements
Responsible business report
Responsible
Business
Our commitment to sustainability
underpins 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 2,000 Impellam people across the world are connected by
Workplace, an internal social 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 where our
people can connect, communicate and collaborate. Our Group
CEO holds quarterly strategy briefings with all our people and
connects with them 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. Our managers hold
regular one-to-one meetings with their people in addition to
team meetings, wider business-area conferences and town halls
to facilitate sharing of information, consultation, and two-way
communication, supported by tools like OpenBlend, a coaching
platform.
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 12
members make sure our 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.
Equality, 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 Business Resource Groups (BRG) and
Unity Council include representation from our key regions:
North America, APAC, and UK & Europe. Under the direction
and leadership of our Group CEO the BRGs bring together ED&I
leadership and governance balanced with Group-wide, regional
and brand-specific actions. Our strategy is based on data,
qualitative intelligence from a global survey, participation from
regional committees and aims to make Impellam a more diverse
and inclusive business wherever we operate. We continue to be
recognised for our ED&I efforts receiving several accolades in
the year. In 2022, Guidant Global was ranked as the top EMEA
talent solutions provider for diversity and inclusion (D&I) in the
TALiNT Partners Talent Solutions Power List as well as being
named Disability Confident Leader.
Training
We provide our people with a multi-faceted and agile
development pathway to enable high performance and
increase retention of our people and customers alike. Our
approach to sustainable development is through fostering a
culture of curiosity. We offer a blend of digital ‘on demand’
learning complemented by live digital coaching and in-person
resources. The ‘Initiate and ‘Enhance’ learning collections
encourage people to be freed from old habits, unlock their
potential, and thrive through change. In 2022, we refreshed our
leadership development programme and launched the ‘Inspire
Collection’. As a result, 65% of our managers have embarked
on this personalised learning journey focusing on the key areas
of Virtuoso leadership – emotional intelligence, coaching and
leading change.
2,000
Impellam people arcoss the world
Page_36
Impellam Group plc Annual Report and Accounts 2022
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, and we invest to sustain and enhance
our business, underpinned by innovation in our combined
portfolio of services.
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 regularly reviewed 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
(‘the Act’). 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 brands individually work with charities that support
local communities and come together as a group when a big
impact is needed.
Responsible business report continued
Following the invasion of Ukraine, Impellam people quickly
mobilised a cross-brand taskforce to help displaced Ukrainian
people find jobs in the UK. A digital campaign was quickly
launched, complete with a chatbot in Ukrainian, and a Ukrainian
national was brought into the team to provide additional support
to those arriving in the UK with CV writing and interviews. Many
people have been supported to navigate job seeking in a new
country. All profit from placing refugees, combined with an
employee donation match scheme, has generated £27k for the
International Red Cross.
Other community support initiatives have included inspiring
the next generation of STEM talent with school visits, mock
interviews and learning to code, work with HMP Drake Hall on
inmate rehabilitation, taking part in Impellam-sponsored Pride
marches and cleaning beaches in the UK and Australia.
Impellam people have an additional day of paid leave that they
can use specifically for volunteering. They have used this time
to raise money for charities through running, swimming, cycling
and walking, as well as making donations to foodbanks around
the UK to help with the cost-of-living crisis.
A colleague from Guidant Global beat his own world-record
finishing time for completing the London Marathon in a non-
racing wheelchair, raising money for WhizzKids.
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.
2022 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
894,249 kgCO2e (2021: 969,569 kgCO2e), which is an average
impact of 442 kgCO2e per £m revenue (2021: 582 kgCO2e per
£m). We have calculated the emission intensity metrics on both
a revenue and colleague 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 (2022).
Page_37
Corporate Governance
Strategic Report
Financial Statements
Energy and carbon action
Our focus in the past year has been to extend and encourage
working behaviours that are less impactful, which has resulted
in us being able to continue to rationalise our property footprint
which continues to decrease as leases expire. Where the need
for a physical location remains, we have looked to share spaces
across multiple operating businesses and increasingly utilise
serviced offices and workspaces. Most businesses have also
reduced the amount of time they’re physically in the offices,
which itself drives reductions in energy consumption.
Whilst not directly affecting the Scope 2 emissions reporting,
the Group completed its first full financial year of purchasing
100% renewable electricity generated only through wind, solar
and hydro for all of its UK operations.
The business has also had in place an electric vehicle salary
sacrifice scheme available to all UK employees and to support
this initiative have invested in and installed nine EV Charging
Points at the UK Head Office.
Finally, the Group intends to fulfil its promise of achieving
Carbon Neutrality and we will be offsetting our carbon
emissions as stated above utilising the PAS2060 framework
which will be published on our website in due course.
The business remains committed to achieving Net Zero by
2050 and work will continue on the development and delivery
of a Net Zero strategy this year. The Group will also continue
to implement and formalise new processes in preparation for
our first TCFD reporting cycle in 2024, as well as participating
and reporting under the third phase of the Energy Savings
Opportunity Scheme (ESOS) throughout the year. The business
will continue its process of removing all company provided
vehicles with the aim of having no owned or leased vehicles by
the end of 2023 and will continue to offer the EV scheme to all
employees.
Emissions and energy usage
Emission source
2022
2021
Scope 1 (kgCO2e)
Company and
leased vehicles
198,801
99,656
Gas combustion
185,295
237,835
Total Scope 1
(kgCO2e)
384,096
337,491
Scope 2 (kgCO2e)
Electricity
283,044
576,976
Scope 3 (kgCO2e)
Colleague cars
227,109
55,102
Total kgCO2e
894,249
969,569
Total energy
usage (kWh)
4,299,344
4,631,709
Normaliser
kgCO2e per
£m revenue
442
582
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 2022 we continue the initial steps on the roadmap to TCFD
reporting and will include the required TCFD disclosures
when Impellam falls in scope for the financial year 2023. 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.
This Strategic report from pages 1 to 37 was approved by the
Board on 27 April 2023 and signed on its behalf by:
Tim Briant
Company Secretary
800 The Boulevard,
Capability Green,
Luton,
Bedfordshire
LU1 3BA
Page_38
Impellam Group plc Annual Report and Accounts 2022
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
39_ Governance report
40_ Board of Directors
42_ QCA Code compliance
44_ Corporate governance statement
50_ Directors’ report
53_ Statement of Directors’ responsibilities
For more information visit
www.impellam.com
Page_39
Financial Statements
Corporate Governance
Strategic Report
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 aligned to the Company’s objectives, strategy
and business model and to the principal risks and uncertainties
faced by the Company. 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
Code can be found on the Company website
www.investors. impellam.com/corporate-governance/.
Senior
Leadership Team
Virtuoso Team
(Virtuoso Alliance)
Investment
Committee
• 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
• Reviews and monitors strategic
investments and makes investment
decisions
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
Audit Committee
• 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_46
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_48
Board of Directors
• 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
Page_40
Impellam Group plc Annual Report and Accounts 2022
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,
a Trustee of the Cleveland Clinic in the US and a Life Governor of
the Royal Humane Society. 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 Collar of the Most Sacred Order of the
Holy Trinity (Ethiopia). He has written 26 books, mainly on politics
and bravery, and is widely respected for his political polling.
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.
Board of Directors
Lord Ashcroft KCMG PC
Non-Executive Chairman
Appointed: December 2014
Julia Robertson
Group Chief Executive Officer
Appointed: April 2013
Tim Briant
Chief Financial Officer and
Group Company Secretary
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, eventually
becoming 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 integration
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.
Tim Briant was appointed as Company Secretary on 3 March 2023.
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_41
Financial Statements
Corporate Governance
Strategic Report
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. She is Chair of Total Politics, a media, events and training
company focused on politics, government and public policy
which also owns Biteback Publishing Limited, Britain’s leading
publisher of political and current affairs titles and Conservative
Home, Britain’s leading independent conservative news, comment,
analysis and campaigns blog. 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 and a Non-Executive Director of Merit Group
plc, a data and intelligence business. 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 and Deputy Chair
of Crimestoppers, the only UK charity dedicated to solving crimes,
and Trustee of 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.
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.
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 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.
Rebecca resigned as Group Company Secretary on 3 March 2023.
Angela Entwistle
Non-Executive Director
Appointed: September 2012
Michael Laurie
Independent Non-Executive Director
Appointed: July 2014
Baroness Tina Stowell of Beeston MBE PC
Independent Non-Executive Director
Appointed: October 2017
Rebecca Watson
Group Company Secretary and
General Counsel and Portfolio CEO
Appointed: May 2008; Resigned: March 2023
Key to Committee membership
Audit Committee
Remuneration Committee
Chair of Remuneration Committee
Chair of Audit Committee
Page_42
Impellam Group plc Annual Report and Accounts 2022
QCA principle
Explanation
Further reading
Deliver growth
1
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.
2
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/
3
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_34
4
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_28 to 31
For more information
page_10
QCA Code Compliance
Corporate governance statement continued
Page_43
Financial Statements
Corporate Governance
Strategic Report
QCA principle
Explanation
Further reading
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_46 to 49
6
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_40 and 41
7
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_44 and 45
8
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_35
9
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_39
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_44
Impellam Group plc Annual Report and Accounts 2022
Corporate governance statement continued
Governance report
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 30 December 2022, 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:
Board
Audit
Committee
Remuneration
Committee
Lord Ashcroft
7 (8)
n/a
n/a
Julia Robertson
8 (8)
n/a
n/a
Tim Briant
8 (8)
3 (3)
n/a
Angela Entwistle
8 (8)
n/a
1 (1)
Mike Ettling
8 (8)
3 (3)
n/a
Michael Laurie
8 (8)
3 (3)
1 (1)
Baroness Stowell
8 (8)
n/a
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. Mike Ettling has
served as a Non-Executive Director for more than nine years
and the Board do not consider his long service as an impairment
to his independence.
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.
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. During the year legal and regulatory advice was taken in
connection with the business disposals. 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.
Page_45
Financial Statements
Corporate Governance
Strategic Report
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.
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 2023
(or date of resignation)
Lord Ashcroft KCMG PC
8 years, 3 months
Julia Robertson
9 years, 11 months
Tim Briant
3 years, 1 month
Angela Entwistle
10 years, 6 months
Mike Ettling
9 years, 6 months
Michael Laurie
8 years, 8 months
Baroness Tina Stowell
5 years, 5 months
Rebecca Watson – Company Secretary
(resigned 3 March 2023)
14 years, 10 months
Re-election of Directors at the 2023 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 2023
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 2022.
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. No recommendations were made following the
review. 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.
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.
Page_46
Impellam Group plc Annual Report and Accounts 2022
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
3/3
Michael Laurie
3/3
Meetings
The Committee operates under written Terms of Reference,
and during the period ended 30 December 2022 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 2021
and 2022 financial statements, the 2022 interim statement
(unaudited) and carried out a going concern review. Reviews
of the financial statements included the accounting policies,
significant financial reporting issues and key judgements and
estimates underpinning the financial statements. 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 37. The Audit Committee
keeps the adequacy and effectiveness of the Company’s
internal controls and risk management systems under review.
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_47
Financial Statements
Corporate Governance
Strategic Report
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 2022, 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.
Assessment of the Audit Committee
The Board conducted an assessment of the Audit Committee’s
performance at the April 2022 meeting. The Chair of the
Audit Committee will be available at the 2023 Annual General
Meeting to answer any questions about the work of the Audit
Committee.
Page_48
Impellam Group plc Annual Report and Accounts 2022
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 30 December 2022 it met once.
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 1/1
Michael Laurie
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 2022 meeting. The Chair
of the Remuneration Committee will be available at the 2023
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 2022
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.
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.
Page_49
Financial Statements
Corporate Governance
Strategic Report
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 51.
Page_50
Impellam Group plc Annual Report and Accounts 2022
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 30 December 2022.
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 & Europe, APAC and
North America. 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 30 December 2022 are set out on pages 64 to 128.
The Group profit for the period was £25.2m (year ended
31 December 2021: £8.3m). At the 2021 AGM approval was
given 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. Under this programme £0.8m shares were purchased
in 2022.
An updated programme was approved at the 2022 AGM
whereby a maximum of £0.5m of Ordinary shares (by market
value) can be purchased per calendar month until the 2023
AGM. Under this programme £0.4m shares were purchased
during 2022.
On 8 November 2022 the Board announced a special dividend
of 55.4p per share, amounting to £25m, to be paid 9 December
2022. On 22 December 2022 the Board announced a second
special dividend of 55.4p per share, amounting to £25m, to be
paid on 27 January 2023.
Future developments
The Group’s future developments are outlined within the
Strategic report. Key areas are covered within the ‘Strategic
report’, ‘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 30 December 2022, there were 45,057,654
(2021: 45,311,269) allotted, fully-paid shares of 1p in issue.
Post balance sheet events
Between the end of the year and 30 March 2023, a further
106,597 Ordinary shares of 1p each have been repurchased in the
market for total consideration of £0.7m.
The Board has become aware of an administrative oversight
concerning technical compliance with the Companies Act
2006 (“CA 2006”) in respect of the special dividend paid on
27 January 2023 (the “Dividend”) and share buybacks effected
by the Company following this date (the “Post January 2023
Share buybacks”). The amount of the Dividend was £25m and
the total amount of the Post January 2023 Share buybacks was
approximately £0.6m representing 94,822 shares. The Group’s
historic reported trading results and financial condition, and
ability to pay future dividends are entirely unaffected by this
matter. The CA 2006 requires the amount of any dividend
distribution and share repurchases to be justified by reference to
relevant accounts which show the requisite level of distributable
reserves. If a company’s last annual accounts do not show the
necessary reserves, then the company must prepare interim
accounts and, in the case of a public company, file those interim
accounts with the Registrar of Companies prior to the payment
of the relevant dividend or share repurchase. The Company’s
last annual accounts did not show the necessary reserves,
interim accounts should have been prepared and filed with the
Registrar of Companies prior to the payment of the Dividend
and the Post January 2023 Share buybacks, but were not. This
therefore has the consequent effect on the Dividend and the
Post January 2023 Share buybacks.
Due to this administrative oversight the Company has been
advised that, as a consequence of the Dividend having been
paid otherwise than in accordance with the 2006 Act, the
Dividend is technically unlawful and that the Company may
have claims against past and present shareholders who were
recipients of the Dividend and against persons who were
Directors of the Company at the time of the payment of the
Dividend. In addition, the Company has been advised that the
purported purchase and cancellation of the Post January 2023
Share buybacks is void. The Ordinary shares of the Company
purportedly subject to the Post January 2023 Share buybacks
remain technically in issue but the voting rights which attach
to them are not capable of being exercised by any person. The
Company intends to take action to resolve this matter as soon
as practicable.
Page_51
Financial Statements
Corporate Governance
Strategic Report
The Board notes, however, that the Company has no intention of bringing any such claims or to seek the return of funds and that
the Group’s historic reported trading results and financial condition and ability to pay future dividends and to continue its previously
announced buyback programme are entirely unaffected by this matter.
The Company will post to shareholders an explanatory circular in due course and convene a general meeting, at which resolutions
authorising various rectifying actions will be proposed which will, if passed and once such actions are completed, put all potentially
affected parties, so far as possible, in the position in which they were always intended to be.
On 30 January 2023 the Group announced the sale of its Regional Specialist Staffing businesses in the UK (Tate, Blue Arrow
Group, Chadwick Nott, Career Teachers) and its Healthcare Staffing business in the UK, Ireland and APAC (Medacs Global Group)
to Twenty20 Capital, one of Europe’s largest specialist investment funds focused in the human capital services sector, for cash
consideration of £85m on a debt-free, cash-free, normalised working capital basis. The disposal was completed on 3 March 2023.
Political donations
The Group has made no political donations during the current or prior years.
Major shareholdings
As at 23 January 2023, 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
57.14%
Hendrik M. Van Heijst
14.39%
Lord Ashcroft
5.05%
Ophorst van Marwijk Kooy
4.60%
Schroder Investment Management Limited
3.82%
Directors
The Directors who held office during the period and up to the date of signing these financial statements were:
Executive Directors
Julia Robertson
Group Chief Executive Officer
Appointed April 2013
Tim Briant
Chief Financial Officer
Appointed February 2020
Non-Executive Directors
Lord Ashcroft KCMG PC
Non-Executive Chairman
Appointed December 2014
Angela Entwistle
Non-Executive Director
Appointed September 2012
Mike Ettling
Independent Non-Executive Director
Appointed September 2013
Michael Laurie
Independent Non-Executive Director
Appointed July 2014
Baroness Tina Stowell
Independent Non-Executive Director
Appointed October 2017
To read all of our Directors’ biographies, see pages 40 and 41.
Directors shareholdings
As at 23 February 2023 the following Directors held shares in the Company:
Lord Ashcroft (Non-Executive Chairman)
2,273,755
Julia Robertson (Group Chief Executive Officer)
153,910
Angela Entwistle (Non-Executive Director)
13,800
Mike Ettling (Non-Executive Director)
10,860
Page_52
Impellam Group plc Annual Report and Accounts 2022
Directors’ report continued
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 29 on pages 114 to 117.
Principal risks
The Board’s assessment of the principal risks and uncertainties,
the Group’s policy and its mitigations are detailed on pages
28 to 31.
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 32 to 37.
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 44%
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.
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 including energy and carbon reporting are not
shown within the Directors’ report because they are presented
within the Responsible business section of the Strategic report
on pages 35 and 36.
Annual General Meeting
The Notice of AGM, to be held at 3.00pm on Wednesday
28 June 2023 at 107-112 Leadenhall Street, London, EC3A
4AF, 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.
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 28 June 2023.
Directors’ report
This report was approved by the Board on 27 April 2023 and
is signed on its behalf by:
Tim Briant
Company Secretary
Page_53
Financial Statements
Corporate Governance
Strategic Report
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:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and accounting estimates that are
reasonable and prudent;
c. 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
d. 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.
Statement of
Directors’ responsibilities
Page_54
Impellam Group plc Annual Report and Accounts 2022
Financial statements
55_ Independent auditor’s report
64_ Consolidated income statement
65_ Consolidated statement of comprehensive
income
66_ Consolidated balance sheet
67_ Consolidated statement of changes in
equity
68_ Consolidated cash flow statement
69_ Notes to the consolidated financial
statements
121_ Company balance sheet
122_ Statement of changes in equity
123_ Notes to the Company balance sheet
129_ Alternative performance measures
131_ Glossary
133_ Company information
For more information visit
www.impellam.com
Page_55
Strategic Report
Financial Statements
Corporate Governance
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 30/12/2022
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 30 December 2023 which comprise:
Composition
Financial reporting framework
Group
• 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
• Applicable law and UK adopted
international accounting standards and,
as regards the Parent Company financial
statements, as applied in accordance
with the provisions of the Companies Act
2006
Parent Company
• Company Balance Sheet
• Company Statement of Changes in Equity
• Notes to the Company financial statements
• 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 public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
Conclusion
• 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 2022
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.
• A check was performed on the mathematical accuracy of the forecasts produced.
• Review of the Group’s financing agreement effective 17 December 2021 and its key terms and
covenants.
• Evaluation of the Directors’ future plans for the Group and checking these are appropriately
modelled within the forecasts.
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
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
Overview
Coverage1
• 77% (2021: 88%) of Net fee income
• 69% (2021: 73%) of Group absolute* adjusted operating profit
• 72% (2021: 70%) of Group absolute* profit before tax
• 82% (2021: 79%) of Group revenue
• 85% (2021: 82%) of Group gross assets
* Absolute refers to the cumulative value of figures regardless of whether it is a positive or negative value.
Key audit matters
Key audit matter
2022
2021
Risk of fraud or cut-off error in revenue recognition on temporary contractor
revenue and complex accounting on managed service contracts
✓
✓
Compliance with employment laws and regulations
✓
✓
Materiality
Group financial statements as a whole
£3.8m (2021: £1.45m) based on 1.2% of net fee income (Gross profit) (2021: 5.0% of the average of
adjusted operating profit).
1
These are areas which have been subject to a full scope audit.
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 obtain 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 percentage coverage of key financial statement areas by our audit
procedures is summarised graphically below and then detailed in the following table.
Independent auditor’s report to the members of Impellam Group plc
continued
Page_57
Strategic Report
Financial Statements
Corporate Governance
Absolute adjusted
operating profit
Net Fee Income
Significant components
Absolute profit
before tax
Revenue
69%
77%
24%
14%
9%
7%
72%
21%
7%
82%
10%
8%
Specified audit procedures
Analytical review
Significant components
• We identified eight significant components, which were subject to full scope audit
procedures.
• 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 utilising the Group audit
team and UK component auditors, other than one component, which was audited by a BDO
member firm in the US.
Specified audit procedures
• 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 LLP, other than for the components in Australia, which
were performed by a BDO member firm in Australia. 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 14% (2021: 8%)
of Net fee income, 24% (2021: 21%) of the Group Absolute Adjusted Operating Profit, 21%
(2021: 25%) of the Group Absolute Profit before Tax, 10% (2021: 16%) of the Group revenue
and 11% (2021: 15%) of Group Gross Assets.
Remaining components
• All other components, not included in the above, were scoped in for analytical review
procedures to confirm our conclusion that there were no significant risks of material
misstatement of the aggregated financial information.
Parent Company and
consolidation
• The Parent Company is located in the UK and was audited by the Group audit team.
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.
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Impellam Group plc Annual Report and Accounts 2022
Our involvement with component auditors
For the work performed by component auditors, 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 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 through group audit instructions. We attended the component auditors’
planning and completion meetings. The Group audit team reviewed the work of the component auditors 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 note 2, 3
and 16
• The risk of fraudulent revenue
recognition arises from revenue in
relation to temporary contractors
and permanent placements.
Management applies judgements
and estimates concerning the
completeness, accuracy and cut-
off of revenue around the 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.
Temporary contractor revenue
• To address the risk around 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 to check revenue was recognised in the correct period.
• We recalculated late timecard accrued revenue and cost based
on timecards submitted after period end that relate to services
provided in the period with historical trends.
• The completeness of revenue was tested by sampling timecards
around period end and tracing them to the revenue and accrued
income and checking they have been recognised in the correct period.
• A sample of credit notes raised after the period end that relate to
the FY22 period were reviewed in order to assess the validity of
the sales invoices raised in the financial period.
Complex accounting on Managed Service Contracts
• Revenue recognition on a sample of Managed Services
Contracts was assessed for compliance with IFRS 15 Revenue
from Contracts with Customers recognition requirements, with
a specific focus on the principal v agent treatment of the whole
arrangement or specific service elements therein.
• The period 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
From the work performed, we did not identify any evidence that
temporary or managed service revenue has not been recognised in
the correct period or at the correct value.
The judgements and estimates applied were consistent with our
expectations.
Independent auditor’s report to the members of Impellam Group plc
continued
Page_59
Strategic Report
Financial Statements
Corporate Governance
Key audit matter
Description
How we addressed the key audit matter in the audit
Compliance with
employment laws
and regulations
The accounting
policy and related
disclosures are
shown in note 2
and 21
• 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.
• The Group has recorded 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 employment
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 obtained confirmation from external counsel concerning any
potential claims or areas of non-compliance.
• The outcome of prior period claims has been evaluated against
the current period provisions settlements to gain assurance over
the historical reliability and completeness of the liability.
• We 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 payout 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 assess areas of
potential exposure, inspecting and assessing correspondence and
management’s expert assessment of exposure.
• We assessed the appropriateness of the disclosures covering
provisions, estimates and judgements within the financial
statements from our work performed.
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 21 that describes the degree of inherent uncertainty in the
assumptions and estimates used in assessing the value of associated
non-compliance provisions.
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.
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Impellam Group plc Annual Report and Accounts 2022
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group materiality
2022
2021
Materiality
£3.8m
£1.45m
Basis
1.2% of Net Fee Income (Gross profit)
5.0% of Adjusted Operating Profit2
Rationale
During the period, we have reconsidered the most appropriate benchmark on which to set materiality
and this has resulted in a change to the benchmark. We consider Net Fee Income (Gross profit)
to be the most appropriate benchmark as it is less volatile than Adjusted Operating Profit, in a low
margin / high volume business such as the Group, and it is also a key measure of trading activities for
stakeholders. In setting our materiality percentage of Net Fee Income, we have benchmarked against
recruitment company peers, using a variety of income statement metrics, to derive an appropriate
materiality metric and value.
Performance
Materiality
£2,660k
£1,015k
Measure
70% of Materiality
70% of Materiality
Application
Based on history of adjustments and an assessment of the aggregated risk.
2 (See page 129 for definition)
Parent company materiality
2022
2021
Materiality
£2.09m
£1.38m
Basis
95% Group materiality
Rationale
Calculated as a percentage of the Group materiality given the assessment of the aggregation risk.
Performance
Materiality
£1,460k
£964k
Measure
70% of Materiality
70% of Materiality
Application
Based on history of adjustments and an assessment of the aggregated risk.
Component materiality
We set materiality for each component of the Group based on a percentage of between 10% (2021: 12%) and 95% (2021: 95%) of
Group materiality dependent on the size and our assessment of the risk of material misstatement of that component. Significant
component materiality ranged from £377k (2021: £170k) to £1.19m (2021: £1.38m). In the audit of each significant component, we
further applied performance materiality levels of 70% (2021: 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 £190k (2021:£58k).
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Independent auditor’s report to the members of Impellam Group plc
continued
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Strategic Report
Financial Statements
Corporate Governance
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.
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 report and
Directors’ report
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.
Matters on which we
are required to report by
exception
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.
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Impellam Group plc Annual Report and Accounts 2022
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:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance and those responsible for legal and compliance procedures; and
• Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations
we considered the significant laws and regulations to be the reporting framework (UK adopted international accounting standards,
UK GAAP and the Companies Act 2006), labour regulations and tax laws in key territories which the Group operates.
Our procedures in respect of the above included:
• Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
For further details, please see the Key Audit Matter titled “Compliance with employment laws and regulations” earlier in this report.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management, those charged with governance and the Audit Committee regarding any known or suspected
instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be compliance with employment laws and
regulations and revenue recognition on temporary contractor revenue and complex contract accounting on managed service
contracts as set out in the key audit matters section.
Independent auditor’s report to the members of Impellam Group plc
continued
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Strategic Report
Financial Statements
Corporate Governance
Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting
documentation;
• Testing compliance with employment laws and regulations:
• Assessing significant estimates made by management for bias; and
• Key areas of estimation uncertainty or judgement, for example; recoverability of trade receivables, valuation of accrued income
at period-end, revenue recognition on temporary contractor revenue and complex contract accounting on managed service
contracts.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
including component engagement teams who were all deemed to have appropriate competence and capabilities and remained
alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. For component engagement
teams, we also reviewed the result of their work performed in this regard.
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
27 April 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Impellam Group plc Annual Report and Accounts 2022
Notes
30 December
2022
£m
Re-presented (note 10)
31 December
2021
£m
Revenue
3
1,947.4
1,580.3
Cost of sales
(1,742.5)
(1,419.3)
Gross profit
204.9
161.0
Administrative expenses
(183.9)
(147.3)
Operating profit
3 & 4
21.0
13.7
Operating profit before impairments, amortisation of brand value and customer
relationships
3
27.8
20.1
Amortisation of brand value and customer relationships
14
(6.8)
(6.4)
Operating profit
3 & 4
21.0
13.7
Finance income
6
0.1
0.2
Finance expense
7
(5.0)
(4.1)
Profit before tax
16.1
9.8
Tax charge
8
(1.4)
(6.5)
Profit from continuing operations
14.7
3.3
Profit from discontinued operations, net of tax
10
10.5
5.0
Profit for the period
25.2
8.3
Profit for the period attributable to:
Equity holders of the Parent Company
25.0
8.2
Non-controlling interest
26
0.2
0.1
25.2
8.3
Earnings per share
9
Total profit attributable to equity holders of the Parent Company:
– basic
55.9p
18.3p
– diluted
55.9p
18.3p
Earnings per share
9
Continuing profit attributable to equity holders of the Parent Company:
– basic
32.6p
7.3p
– diluted
32.6p
7.3p
Consolidated income statement
For the 52 weeks ended 30 December 2022
Page_65
Strategic Report
Financial Statements
Corporate Governance
Notes
30 December
2022
£m
31 December
2021
£m
Profit for the period
25.2
8.3
Other comprehensive income:
Items that may be subsequently reclassified into income:
Foreign currency translation differences – foreign operations
25
14.0
(1.4)
Reduction in non-controlling interests
26
–
(0.3)
Total comprehensive income for the period, net of tax
39.2
6.6
Total comprehensive income for the period attributable to:
Equity holders of the Parent Company
39.0
6.6
Non-controlling interest
26
0.2
–
39.2
6.6
Consolidated statement of comprehensive income
For the 52 weeks ended 30 December 2022
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Impellam Group plc Annual Report and Accounts 2022
Notes
30 December
2022
£m
31 December
2021
£m
Non-current assets
Property, plant and equipment
11
3.4
4.2
Right-of-use assets
12
9.1
15.9
Goodwill
13
109.5
128.9
Other intangible assets
14
49.8
85.3
Financial assets
15
1.0
1.7
Deferred tax assets
22
3.2
8.3
Trade and other receivables
16
0.7
0.9
176.7
245.2
Current assets
Trade and other receivables
16
636.8
605.5
Tax receivable
4.0
0.9
Assets held for sale
10
171.2
–
Cash and cash equivalents
17
112.4
90.9
924.4
697.3
Total assets
1,101.1
942.5
Current liabilities
Short-term borrowings
19
–
0.1
Lease liabilities
12
3.0
5.1
Trade and other payables
18
677.7
568.7
Tax payable
0.4
0.7
Liabilities held for sale
10
87.1
–
Provisions
21
2.0
8.3
770.2
582.9
Net current assets
154.2
114.4
Non-current liabilities
Long-term borrowings
20
77.8
101.9
Lease liabilities
12
6.9
11.4
Provisions
21
1.7
3.8
Deferred tax liabilities
22
7.7
18.7
94.1
135.8
Total liabilities
864.3
718.7
Net assets
236.8
223.8
Equity
Issued share capital
23
0.5
0.5
Share premium account
23
30.1
30.1
30.6
30.6
Other reserves
25
130.9
116.9
Retained earnings
75.0
76.2
Total equity attributable to equity holders of the Parent Company
236.5
223.7
Non-controlling interest
26
0.3
0.1
Total equity
236.8
223.8
The consolidated financial statements of Impellam Group plc (registered number: 06511961) on pages 64 to 119 were approved by
the Board on 27 April 2023.
Tim Briant
Chief Financial Officer
Consolidated balance sheet
As at 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
Total share
capital and
share premium
(note 23)
£m
Other reserves
(note 25)
£m
Retained
earnings
£m
Total equity
attributable to
equity owners
of the parent
£m
Non-controlling
interest
(note 26)
£m
Total
equity
£m
2 January 2021
30.6
118.3
70.2
219.1
(0.3)
218.8
Profit for the period
–
–
8.2
8.2
0.1
8.3
Other comprehensive income from reducing the
NCI component (note 26)
–
–
(0.3)
(0.3)
0.3
–
Other comprehensive income from foreign currency
translation (note 25)
–
(1.4)
–
(1.4)
–
(1.4)
Total comprehensive income in period
–
(1.4)
7.9
6.5
0.4
6.9
Transactions with owners, recorded directly in equity
Purchase and cancellation of own shares (note 23)
–
–
(1.9)
(1.9)
–
(1.9)
31 December 2021
30.6
116.9
76.2
223.7
0.1
223.8
1 January 2022
30.6
116.9
76.2
223.7
0.1
223.8
Profit for the period
–
–
25.0
25.0
0.2
25.2
Other comprehensive income from foreign currency
translation (note 25)
–
14.0
–
14.0
–
14.0
Total comprehensive income in period
–
14.0
25.0
39.0
0.2
39.2
Transactions with owners, recorded directly in equity
Dividends (note 24)
–
–
(25.0)
(25.0)
–
(25.0)
Purchase and cancellation of own shares (note 23)
–
–
(1.2)
(1.2)
–
(1.2)
30 December 2022
30.6
130.9
75.0
236.5
0.3
236.8
Consolidated statement of changes in equity
For the 52 weeks ended 30 December 2022
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Impellam Group plc Annual Report and Accounts 2022
Notes
30 December
2022
£m
Re-presented
31 December
2021
£m
Cash flows from operating activities
Profit before tax – continuing operations
16.1
9.8
Profit before tax – discontinued operations
13.2
5.6
Adjustments for:
Depreciation of property, plant and equipment
11
2.6
2.4
Amortisation of right-of-use assets
12
5.5
7.0
Amortisation of other intangible assets
14
14.9
15.1
Impairment of asset held for sale
10
1.9
–
Loss / (profit) on disposal of property, plant and equipment
4
0.2
(0.2)
Gain on disposal of discontinued operations
10
(4.6)
–
Finance income
6
(0.1)
(0.2)
Finance expense
7
5.2
4.3
54.9
43.8
(Increase) in trade and other receivables
(111.7)
(46.0)
Increase in trade and other payables
136.3
12.1
(Decrease) / increase in provisions
21
(3.0)
2.0
Cash from operations
76.5
11.9
Tax paid
(7.4)
(1.7)
Net cash from operating activities
69.1
10.2
Cash flows from investing activities
Cash flow from disposal of operations, net of cash
10
15.4
–
Purchase of property, plant and equipment
11
(3.3)
(1.5)
Purchase of intangible assets
14
(8.0)
(4.3)
Receipt from lease debtors
28
–
1.7
Decrease in other financial assets
15
0.7
–
Interest received
6
0.1
0.2
Net cash inflow / (utilised) on investing activities
4.9
(3.9)
Cash flows from financing activities
Drawdown of short-term borrowings
28
151.2
292.0
Repayment of short-term borrowings
28
(175.3)
(308.7)
Increase in overdraft
28
0.4
1.0
Dividends paid
24
(25.0)
–
Purchase and cancellation of own shares
23
(1.2)
(1.9)
Interest paid on lease liabilities
(0.4)
(0.6)
Interest paid on borrowings
(4.5)
(3.5)
Repayment of lease liabilities
28
(5.5)
(8.9)
Net cash (outflow) from financing activities
(60.3)
(30.6)
Net increase / (decrease) in cash and cash equivalents
13.7
(24.3)
Opening cash and cash equivalents
90.9
117.9
Effect of foreign exchange rate movements
28
7.8
(2.7)
Closing cash and cash equivalents
17
112.4
90.9
Consolidated cash flow statement
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
1. Corporate information
The financial statements of Impellam Group plc and all of its subsidiaries (‘the Group’) for the 52 weeks ended 30 December
2022 were authorised for issue by the Board of Directors on 14 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 2024 and 2025. At the end of the period the Group had a net cash position
of £30.3m (excluding IFRS 16 lease liabilities) and has a further £105.0m available to drawdown on the Group’s revolving credit
facility (see note 29). Following the sale of the Regional Specialist Staffing and Healthcare businesses in March 2023 the Group’s
revolving credit facility was reduced by £50m to £132.5m in line with the revised projections of the Group’s activities. 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.
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 except
where otherwise indicated. Foreign operations are included in accordance with note 2(C) below.
Any references to 2022 in these statements refer to the 52-week financial period ended 30 December 2022. Any references to
2021 in these statements refer to the 52-week financial period ended 31 December 2021.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 30 December 2022. 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.
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.
Notes to the consolidated financial statements
For the 52 weeks ended 30 December 2022
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Impellam Group plc Annual Report and Accounts 2022
2. Summary of significant accounting policies continued
When an operation is classified as a discontinued operation the consolidated income statement is re-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 2022
• 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
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 period ended 1 January 2021.
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 30 December 2022
or later periods:
• Definition of Accounting Estimates – Amendments to IAS 8
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
• Classification of Liabilities as Current or Non-current – Amendments to IAS 1
• IFRS 17 Insurance contracts
• Disclosure of Accounting Policies – Amendment to IAS1 and IFRS Practice Statement 2
• Lease Liabilities in a Sale and Leaseback – Amendment to IFRS 16
• Non-current Liabilities with Covenants (Amendments to IAS 1)
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
Ageing of borrowing
The Group has signed up to a revolving credit facility which is committed until at least December 2024 (note 29). 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 Regional Staffing Services and Healthcare divisions
On 30 January 2023 the Group announced the disposal of the Regional Staffing Services and Healthcare divisions to Twenty20
Capital and consider this to be an asset held for sale and a discontinued operation at the end of the period (note 10). 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 these had been met at the period end and that the sale was determined
to be highly probable at 16 December 2022 and exercised significant judgement over the determination of this date. As such, the
Directors have considered that the transaction did meet the criteria of Held for Sale at the end of the financial period. The timing
of the held for sale determination had not been made earlier in the period as discussions had been continuing to complete the
transaction and it was only on 16 December 2022 that sufficient progress had been made across the majority of points that the
Directors considered that the deal could be described as highly probable and was the date by which it was expected that the
sale would complete within one year and without any significantly changes or the plan being withdrawn. Had this determination
been made at the start of October 2022, which was the start of the purchaser’s due diligence process and so the earliest date
considered for this determination, then under IFRS 5 certain accounting entries would have not been made, including up to £1.5m
of depreciation and amortisation which would have not been recognised.
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 13 and 14.
Allocation of goodwill to disposed divisions
Some of the divisions that have been either disposed of during the period or after the period end are part of larger cash-generating
units, at which level goodwill is allocated. As such, the Group has had to estimate the amount of goodwill which has been disposed
of as part of this transaction. This estimation has been done by using profit ratios which the directors believe give the best
approximation to the cash flows of the disposed divisions.
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 21).
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Impellam Group plc Annual Report and Accounts 2022
2. Summary of significant accounting policies continued
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.
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:
over 50 years
Short leasehold property improvements:
over the term of the lease
Furniture, fixtures and fittings:
between three and ten years or to the end of the lease, whichever is shorter at
the start of the asset’s life
Computer equipment:
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
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.
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.
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Impellam Group plc Annual Report and Accounts 2022
2. Summary of significant accounting policies continued
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.
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
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.
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.
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Impellam Group plc Annual Report and Accounts 2022
2. Summary of significant accounting policies continued
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.
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
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.
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.
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Impellam Group plc Annual Report and Accounts 2022
2. Summary of significant accounting policies continued
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 workers placed and act more as intermediaries for providing services regarding administering and
processing rather than sourcing the individual workers. The contractual obligations around the pricing of both the billing of clients
and payments to suppliers in these cases highlight the lack of control over the specific service provided and so reinforces the
recognition of revenue on an agent basis. All revenue recognised on an agent basis is recognised at a point in time.
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 the relevant
performance obligations have been performed. Interest income receivable on deposits with financial institutions is recognised on
an accrued basis at a point in time. Contract liabilities are recognised when an invoice has been raised in advance of the service
provision discussed above. The practical expedient in IFRS 15 has been taken, the amount of the transaction price allocated to
remaining performance obligations has not been disclosed, as these contracts expected duration is less than one year.
S) Interest
Borrowing costs are recognised as an expense when incurred unless they are qualifying assets under IAS 23 Borrowing costs when
they are capitalised. Interest income is recognised when incurred.
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 appropriately authorised and no longer at the discretion of the company.
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
X) Assets and liabilities held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary
are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-
controlling interest in its former subsidiary after the sale.
When the Group is committed to a sale plan involving disposal of an investment in an associate or, a portion of an investment
in an associate, the investment, or the portion of the investment in the associate, that will be disposed of is classified as held for
sale when the criteria described above are met. The Group then ceases to apply the equity method in relation to the portion that
is classified as held for sale. Any retained portion of an investment in an associate that has not been classified as held for sale
continues to be accounted for using the equity method.
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
The above segments reflect the reportable segments which the CODM made their decisions on during the year. The disposals
during the year and after the year-end comprised the entirety of the Regional Specialist Staffing and Healthcare segments but these
have been retained in this note to reflect what was reviewed by the CODM throughout the period.
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.
Pre discontinued operations
Continuing basis
Revenue
£m
Gross profit
£m
Revenue
£m
Gross profit
£m
30 December 2022
Global Managed Services
974.4
97.1
974.4
97.1
STEM
999.7
107.8
999.7
107.8
Regional Specialist Staffing
318.8
58.3
–
–
Healthcare
329.6
51.6
–
–
Inter-segment revenues
(94.2)
–
(26.7)
–
Operating segments
2,528.3
314.8
1,947.4
204.9
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Impellam Group plc Annual Report and Accounts 2022
3. Segment information continued
Re-presented
Pre discontinued operations
Continuing basis
Revenue
£m
Gross profit
£m
Revenue
£m
Gross profit
£m
31 December 2021
Global Managed Services
838.7
79.2
838.7
79.2
STEM
759.6
81.8
759.6
81.8
Regional Specialist Staffing
430.7
62.3
–
–
Healthcare
295.3
43.7
–
–
Inter-segment revenues
(61.9)
–
(18.0)
–
Operating segments
2,262.4
267.0
1,580.3
161.0
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
Pre discontinued operations
Continuing basis
Revenue
£m
Gross profit
£m
Adjusted
operating profit
£m
Revenue
£m
Gross profit
£m
Adjusted
operating profit
£m
30 December 2022
UK & Europe
2,011.6
208.2
32.1
1,506.2
112.8
20.5
North America
403.9
82.7
10.6
394.1
81.7
10.6
Asia Pacific
112.8
23.9
4.0
47.1
10.4
2.0
Operating segments
2,528.3
314.8
46.7
1,947.4
204.9
33.1
Re-presented
Pre discontinued operations
Continuing basis
Revenue
£m
Gross profit
£m
Adjusted
operating profit
£m
Revenue
£m
Gross profit
£m
Adjusted
operating profit
£m
31 December 2021
UK & Europe
1,741.4
172.5
24.5
1,205.8
89.4
17.4
North America
456.3
76.5
10.1
358.3
63.7
8.6
Asia Pacific
64.7
18.0
2.2
16.2
7.9
1.6
Operating segments
2,262.4
267.0
36.8
1,580.3
161.0
27.6
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_81
Strategic Report
Financial Statements
Corporate Governance
Reconciliation of segment adjusted operating profit to profit from operations is as follows:
Pre discontinued operations
Continuing basis
30 December
2022
£m
31 December
2021
£m
30 December
2022
£m
Re-presented
31 December
2021
£m
Segment adjusted operating profit
46.7
36.8
33.1
27.6
Corporate costs
(5.3)
(7.5)
(5.3)
(7.5)
Adjusted operating profit
41.4
29.3
27.8
20.1
Profit from disposal of operation (note 10)
4.6
–
–
–
Impairment of asset held for sale (note 10)
(1.9)
–
–
–
Amortisation of brand value and customer relationships (note 14)
(9.7)
(9.8)
(6.8)
(6.4)
Operating profit
34.4
19.5
21.0
13.7
Finance income (note 6)
0.1
0.2
0.1
0.2
Finance expense (note 7)
(5.2)
(4.3)
(5.0)
(4.1)
Tax charge (note 8)
(4.1)
(7.1)
(1.4)
(6.5)
Profit for the period
25.2
8.3
14.7
3.3
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:
30 December 2022
Global
Managed
Services
£m
STEM
£m
Inter-segment
revenues
£m
Total
£m
Primary geographic markets
UK
740.7
759.5
(26.7)
1,473.5
Europe
22.7
10.0
–
32.7
North America
163.9
230.2
–
394.1
Australasia
47.1
–
–
47.1
Total
974.4
999.7
(26.7)
1,947.4
Major service lines
Temporary placements
963.7
951.9
(26.7)
1,888.9
Permanent placements
5.1
35.0
–
40.1
Other
5.6
12.8
–
18.4
Total
974.4
999.7
(26.7)
1,947.4
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Impellam Group plc Annual Report and Accounts 2022
3. Segment information continued
Re-presented
31 December 2021
Global
Managed
Services
£m
STEM
£m
Inter-segment
revenues
£m
Total
£m
Primary geographic markets
UK
633.3
559.5
(18.0)
1,174.8
Europe
17.6
13.4
–
31.0
North America
171.6
186.7
–
358.3
Australasia
16.2
–
–
16.2
Total
838.7
759.6
(18.0)
1,580.3
Major service lines
Temporary placements
828.5
728.4
(18.0)
1,538.9
Permanent placements
3.4
20.3
–
23.7
Other
6.8
10.9
–
17.7
Total
838.7
759.6
(18.0)
1,580.3
The revenue information above is based on location of the Group entity directly involved in the supply.
4. Operating profit
a) Operating profit has been arrived at after charging:
30 December
2022
£m
31 December
2021
£m
Depreciation of property, plant and equipment – continuing operations (note 11)
1.6
1.4
Depreciation of property, plant and equipment – discontinued operations (note 11)
1.0
1.0
Amortisation of right-of-use assets – continuing operations (note 12)
3.4
4.2
Amortisation of right-of-use assets – discontinued operations (note 12)
2.1
2.8
Amortisation of intangible assets – continuing operations (note 14)
11.6
11.1
Amortisation of intangible assets – discontinued operations (note 14)
3.3
4.0
Impairment of asset held for sale (note 10)
1.9
-
Profit on disposal of fixed assets
0.2
(0.2)
Minimum lease payments recognised as an operating lease expense (note 12)
0.7
0.7
Gain/(loss) on foreign exchange
0.1
(0.4)
Total employee expenses (note 5)
822.9
846.9
Charge for bad and doubtful trade receivables (note 16)
0.8
3.3
Operating profit is stated net of £nil (2021: £0.5m) income received from governments globally in respect of various support
schemes following the Covid-19 pandemic.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_83
Strategic Report
Financial Statements
Corporate Governance
b) Auditor’s remuneration
30 December
2022
£m
31 December
2021
£m
Fees payable to the Auditor for the audit of the Group’s annual financial statements
0.3
0.3
Fees payable to the Group’s Auditor and their associates for other services:
The audit of the Company’s subsidiaries pursuant to legislation
1.0
0.9
Total
1.3
1.2
5. Employment costs
a) Employees (including Directors) whose costs are included in administrative expenses
Costs of employment
30 December
2022
£m
31 December
2021
£m
Wages, salaries and bonuses
185.2
157.5
Social security costs
17.7
14.4
Expenses related to defined contribution plan
3.5
2.9
Total
206.4
174.8
Continuing operations
139.7
111.3
Discontinuing operations
66.7
63.5
Total
206.4
174.8
Monthly average number of employees
30 December
2022
Number
31 December
2021
Number
UK & Europe
2,222
1,894
North America
631
623
Asia Pacific
187
179
Corporate staff (including Directors)
9
11
Total
3,049
2,707
Continuing operations
1,770
1,436
Discontinuing operations
1,279
1,271
Total
3,049
2,707
The period end number of staff was 3,064 (2021: 2,900) of whom 1,825 (2021: 1,606) are part of the continuing operations.
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.
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Impellam Group plc Annual Report and Accounts 2022
5. Employment costs continued
Costs of employment
30 December
2022
£m
31 December
2021
£m
Wages, salaries and bonuses
571.7
620.3
Social security costs
41.8
48.8
Expenses related to defined contribution plan
3.0
3.0
Total
616.5
672.1
Continuing operations
377.2
354.6
Discontinuing operations
239.3
317.5
Total
616.5
672.1
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
30 December
2022
Number
31 December
2021
Number
UK & Europe
13,427
15,070
North America
3,851
6,694
Asia Pacific
1,503
559
Total
18,781
22,323
Continuing operations
9,261
9,179
Discontinuing operations
9,520
13,144
Total
18,781
22,323
c) Information on Directors’ remuneration
The total emoluments for all Directors during the period were:
30 December
2022
£m
31 December
2021
£m
Emoluments (including benefits)
1,996
2,053
Contribution to defined contribution pension plans
92
92
2,088
2,145
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_85
Strategic Report
Financial Statements
Corporate Governance
Total emoluments:
30 December 2022
Salary and
benefits
£000
Pension
contributions
£000
Total fixed
costs
£000
Bonus
£000
Deferred
bonus
£000
Total
variable
£000
Total
emoluments
£000
Lord M Ashcroft
59
–
59
–
–
–
59
J Robertson
477
68
545
330
217
547
1,092
T Briant
313
24
337
255
180
435
772
AE Entwistle
40
–
40
–
–
–
40
ME Ettling
45
–
45
–
–
–
45
M Laurie
40
–
40
–
–
–
40
Baroness T Stowell
40
–
40
–
–
–
40
Total
1,014
92
1,106
585
397
982
2,088
31 December 2021
Salary and
benefits
£000
Pension
contributions
£000
Total fixed
costs
£000
Bonus
£000
Deferred
bonus
£000
Total
variable
£000
Total
emoluments
£000
Lord M Ashcroft
50
–
50
–
–
–
50
J Robertson
477
68
545
345
233
578
1,123
T Briant
314
24
338
270
195
465
803
AE Entwistle
40
–
40
–
–
–
40
ME Ettling
49
–
49
–
–
–
49
M Laurie
40
–
40
–
–
–
40
Baroness T Stowell
40
–
40
–
–
–
40
Total
1,010
92
1,102
615
428
1,043
2,145
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 (2021:
£95,000) and £38,000 (2021: £37,000) respectively. The £40,000 (2021: £40,000) paid for the services of AE Entwistle as a Non-
Executive Director is paid to Deacon Street Partners Limited. 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
30 December
2022
£m
31 December
2021
£m
Bank interest receivable
0.1
0.1
Interest on lease debtors
–
0.1
Total finance income
0.1
0.2
Continuing operations
0.1
0.2
Discontinuing operations
–
–
Total
0.1
0.2
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Impellam Group plc Annual Report and Accounts 2022
7. Total finance expense
30 December
2022
£m
31 December
2021
£m
Revolving credit facilities
4.6
3.4
Lease interest payable
0.4
0.6
Unwind discount on provisions
0.1
0.2
Other interest expense
0.1
0.1
Total finance expense
5.2
4.3
Continuing operations
5.0
4.1
Discontinuing operations
0.2
0.2
Total
5.2
4.3
8. Taxation
a) Tax charge in the income statement
30 December
2022
£m
31 December
2021
£m
Current income tax
UK corporation tax on results for the period
3.1
2.8
Adjustments in respect of previous periods
(0.6)
(0.5)
2.5
2.3
Foreign tax in the period
2.3
1.6
Total current income tax
4.8
3.9
Deferred tax (credit)/charge
(0.7)
3.2
Total tax charge in the income statement
4.1
7.1
Continuing operations
1.4
6.5
Discontinuing operations
2.7
0.6
Total
4.1
7.1
The deferred tax charge comprises the following:
30 December
2022
£m
31 December
2021
£m
Utilisation of tax losses brought forward
–
2.0
Recognition of assets not previously recognised
–
(0.9)
Origination and reversal of other temporary differences
1.2
(1.5)
Change in tax rate used for deferred tax carried forward
–
3.1
Adjustment in respect of previous periods
(2.0)
0.5
Total deferred tax (credit)/charge (note 22)
(0.8)
3.2
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_87
Strategic Report
Financial Statements
Corporate Governance
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 14.5% (2021: 45.8%). The tax charge for the period is £4.1m (2021: £7.1m) for the Group. A tax reconciliation explaining differences
from the expected statutory rate is summarised below:
30 December
2022
%
31 December
2021
%
Tax charge at UK standard rate
19.0
19.0
Differences in tax rates in other countries
1.7
0.9
(Income)/expenses not taxable/allowable in determining taxable profits
4.1
9.6
Losses in period carried forward but not recognised as assets
1.7
0.9
Utilisation of losses not previously recognised (note 22)
(2.8)
(4.8)
Change in tax rate used for deferred tax carried forward
0.2
20.2
Adjustments to deferred tax in respect of previous periods
(7.1)
3.5
Adjustments in respect of previous periods
(2.3)
(3.5)
Effective total tax rate
14.5
45.8
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 22 for an explanation of deferred tax balances.
Factors affecting tax charges in future periods
The UK Government announced an increase in the corporation tax rate from 19% to 25%, with an effective date of 1 April 2023,
which was substantively enacted on 24 May 2021. Temporary differences were remeasured in the prior year using the enacted tax
rates that are expected to apply when the liability is settled or the asset realised.
To address concerns about uneven profit distribution and tax contributions of large multinational corporations, various agreements
have been reached at the global level, including an agreement by over 135 jurisdictions to introduce a global minimum tax rate
of 15%. In December 2021, the Organisation for Economic Co-operation and Development (OECD) released a draft legislative
framework, followed by detailed guidance released in March 2022, that is expected to be used by individual jurisdictions that
signed the agreement to amend their local tax laws. Once changes to the tax laws in any jurisdiction in which the Group operates
are enacted or substantively enacted, the Group may be subject to the top-up tax.
At the date when the financial statements were authorised for issue, none of the jurisdictions in which the Group operates had
enacted or substantively enacted the tax legislation related to the top-up tax. Management does not consider that any subsidiary
resides in a territory which will give rise to a material top-up tax. However, are closely monitoring the progress of the legislative
process in each jurisdiction the Group operates in.
Page_88
Impellam Group plc Annual Report and Accounts 2022
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 nil (2021: 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 2022 is 45,147,337 (2021: 45,538,963) and the fully diluted average number of shares is 45,152,679 (2021:
45,558,804). The calculations of both basic and diluted earnings per share (‘EPS’) are based upon the following consolidated
income statement data:
30 December
2022
£m
31 December
2021
£m
Continuing profit for the period
14.7
3.3
Discontinued profit for the period
10.5
5.0
Profit/(loss) for the period
25.2
8.3
Impairment of asset held for sale (net of tax) - discontinued (note 10)
1.9
–
Customer relationship and brand amortisation (net of tax) - continuing (note 4)
5.3
5.0
Customer relationship and brand amortisation (net of tax) - discontinued (note 4)
2.3
2.7
Total adjusted profit for the period
34.7
16.0
Continuing adjusted profit for the period
20.0
8.3
Discontinued adjusted profit for the period
14.7
7.7
EPS – basic calculation
30 December
2022
Pence
31 December
2021
Pence
Continuing unadjusted basic earnings per share
32.6
7.3
Discontinued unadjusted basic earnings per share
23.3
11.0
Total unadjusted basic earnings per share
55.9
18.3
Impairment of asset held for sale (net of tax) - discontinued (note 10)
4.2
–
Customer relationship and brand amortisation (net of tax) - continuing (note 4)
11.7
10.9
Customer relationship and brand amortisation (net of tax) - discontinued (note 4)
5.1
6.1
Adjusted basic earnings per share1
76.9
35.3
Continuing adjusted basic earnings per share
44.3
18.2
Discontinued adjusted basic earnings per share
32.6
17.1
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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_89
Strategic Report
Financial Statements
Corporate Governance
EPS – diluted calculation
30 December
2022
Pence
31 December
2021
Pence
Continuing unadjusted diluted earnings per share
32.6
7.3
Discontinued unadjusted diluted earnings per share
23.3
11.0
Total unadjusted diluted earnings per share
55.9
18.3
Impairment of asset held for sale (net of tax) - discontinued (note 10)
4.2
–
Customer relationship and brand amortisation (net of tax) - continuing (note 4)
11.7
10.8
Customer relationship and brand amortisation (net of tax) - discontinued (note 4)
5.1
6.1
Adjusted diluted earnings per share1
76.9
35.2
Continuing adjusted diluted earnings per share
44.3
18.1
Discontinued adjusted diluted earnings per share
32.6
17.1
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.
10. Discontinued operations
Total profit and loss relating to discontinued operations
52 weeks
30 December
2022
£m
52 weeks
31 December
2021
£m
Turnover
580.9
682.1
Cost of Sale
(471.0)
(576.1)
Gross Profit
109.9
106.0
Admin expenses
(99.2)
(100.2)
Impairment of goodwill
(1.9)
–
Operating profit
8.8
5.8
Interest
(0.2)
(0.2)
Profit before tax
8.6
5.6
Taxation
(1.3)
(0.6)
Profit from discontinued operations
7.3
5.0
Post tax gain on disposal
3.2
–
Total profit from discontinued operations
10.5
5.0
Total cash flows relating to discontinued operations
52 weeks
30 December
2022
£m
52 weeks
31 December
2021
£m
Net cash generated by operating activities
4.7
2.9
Net cash generated on investing activities
12.1
(0.6)
Net cash outflow from financing activities
(2.4)
(2.9)
Net cash flows for discontinued operations
14.4
(0.6)
Page_90
Impellam Group plc Annual Report and Accounts 2022
10. Discontinued operations continued
A. Disposal of Corestaff
On 24 January 2022 the Group announced the sale of the business and assets of Corestaff, the US-based Light Industrial brand,
to swipejobs Inc., a US private digital staffing company, for cash consideration of approximately $19 million (£14.1 million) (the
“Disposal”). This consideration was based on an agreed net working capital of $10 million on the date of disposal with a $ for $
adjustment to consideration if the net working capital was above or below this amount. The final working capital position was to
be determined between 90 and 120 days post completion date and, on 29 June 2022, a final position of $12.9 million was agreed.
As a result, an additional $2.9 million (£2.2 million ) of consideration was received in July 2022 giving a total of $21.9 million (£16.3
million).
Corestaff is not a separate legal entity, but is included within the trade of two US registered legal entities (Corporate Employment
Resources Inc and Corestaff Support Services Inc). Assets, liabilities and trade relating to Corestaff are identified by way of specific
cost centre combinations that are identified as relating to Corestaff.
Profit from disposal of Corestaff:
£m
Cash consideration received
16.3
Cash disposed of
–
Expenses relating to disposal
(0.9)
Net cash inflow on disposal of discontinued operation
15.4
Net assets disposed (other than cash):
Right-of-use asset
(0.2)
Trade and other receivables
(10.9)
Trade and other payables
0.8
Lease liabilities
0.2
Provisions
0.3
(9.8)
Gain on disposal of discontinued operation before allocated goodwill and tax
5.6
Allocated goodwill
(1.0)
Pre-tax gain on disposal of discontinued operation
4.6
Related tax expense
(1.4)
Gain on disposal of discontinued operation
3.2
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_91
Strategic Report
Financial Statements
Corporate Governance
Profit and loss relating to discontinued operations
52 weeks
30 December
2022
£m
52 weeks
31 December
2021
£m
Turnover
9.8
98.0
Cost of Sale
(8.7)
(85.1)
Gross Profit
1.1
12.9
Admin expenses
(1.1)
(11.4)
Operating profit
–
1.5
Interest
–
–
Profit before tax
–
1.5
Taxation
–
(0.4)
Profit from discontinued operations
–
1.1
Post tax gain on disposal
3.2
–
Total profit from discontinued operations
3.2
1.1
Cash flows relating to discontinued operations
52 weeks
30 December
2022
£m
52 weeks
31 December
2021
£m
Net cash generated by operating activities
(0.5)
0.7
Net cash generated on investing activities
13.8
–
Net cash outflow from financing activities
–
0.1
Net cash flows for discontinued operations
13.3
0.8
Page_92
Impellam Group plc Annual Report and Accounts 2022
10. Discontinued operations continued
Effect of disposal on the financial position of the Group
At disposal
£m
Allocated goodwill
1.0
Right-of-use
0.2
Trade and other receivables
10.9
Trade and other payables
(0.8)
Lease liabilities
(0.2)
Provisions
(0.3)
Net assets and liabilities
10.8
B. Disposal of Regional Specialist Staffing and Healthcare Staffing divisions
On 30 January 2023 the Group announced the sale of the business and assets of its Regional Specialist Staffing businesses in the
UK (Tate, Blue Arrow Group, Chadwick Nott, Career Teachers) and its Healthcare Staffing business in the UK, Ireland and APAC
(Medacs Global Group) to Twenty20 Capital for cash consideration of £85m on a debt-free, cash-free, normalised working capital
basis (the “Transaction”). This consideration was based on an agreed nil cash position and target net working capital of £30.8
million on the date of disposal with a £ for £ adjustment to consideration if the net working capital was above or below this amount.
The final working capital position is to be determined 60 days after the completion date. The deal had been deemed to be highly
probable on 16 December 2022 and at that time was treated as a discontinued operation and as an asset and liability held for sale.
The transaction was completed on 3 March 2023.
Profit and loss relating to discontinued operations
52 weeks
30 December
2022
52 weeks
31 December
2021
Turnover
571.1
584.1
Cost of Sale
(462.3)
(491.0)
Gross Profit
108.8
93.1
Admin expenses
(98.1)
(88.8)
Impairment of goodwill
(1.9)
–
Operating profit
8.8
4.3
Interest
(0.2)
(0.2)
Profit before tax
8.6
4.1
Taxation
(1.3)
(0.2)
Profit from discontinued operations
7.3
3.9
Post tax gain on disposal
–
–
Total profit from discontinued operations
7.3
3.9
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_93
Strategic Report
Financial Statements
Corporate Governance
Cash flows relating to discontinued operations
52 weeks
30 December
2022
£m
52 weeks
31 December
2021
£m
Net cash generated by operating activities
5.2
2.2
Net cash generated on investing activities
(1.7)
(0.6)
Net cash outflow from financing activities
(2.4)
(3.0)
Net cash flows for discontinued operations
1.1
(1.4)
Effect of disposal on the financial position of the Group
30 December
2022
£m
Property, plant and equipment
1.5
Right-of-use
3.4
Goodwill
25.2
Other intangible assets
30.4
Financial assets
0.1
Deferred tax assets
1.7
Trade and other receivables
107.8
Lease receivables
1.1
Total assets held for sale
171.2
Lease liabilities
(4.4)
Trade and other payables
(68.8)
Tax payable
(0.5)
Provisions
(6.6)
Deferred tax payable
(6.8)
Total liabilities held for sale
(87.1)
Net assets and liabilities
84.1
Page_94
Impellam Group plc Annual Report and Accounts 2022
11. Property, plant and equipment
Freehold
property
£m
Short
leasehold
property
£m
Furniture,
fixtures
and fittings
£m
Computer
equipment
£m
Total
£m
Net carrying value – 1 January 2021
0.2
1.1
2.7
1.1
5.1
Cost – 2 January 2021
0.2
3.0
7.5
5.4
16.1
Additions
–
0.2
0.1
1.2
1.5
Disposals
–
–
(0.9)
(1.7)
(2.6)
Foreign exchange
–
–
–
0.1
0.1
Cost – 31 December 2021
0.2
3.2
6.7
5.0
15.1
Accumulated depreciation – 2 January 2021
–
1.9
4.8
4.3
11.0
Charge for the period
–
0.5
1.1
0.8
2.4
Disposals
–
–
(0.9)
(1.7)
(2.6)
Foreign exchange
–
–
–
0.1
0.1
Accumulated depreciation – 31 December 2021
–
2.4
5.0
3.5
10.9
Net carrying value – 31 December 2021
0.2
0.8
1.7
1.5
4.2
Cost – 1 January 2022
0.2
3.2
6.7
5.0
15.1
Re-analysis
–
0.8
(0.8)
–
–
Additions
–
0.1
0.6
2.6
3.3
Disposals
–
(0.7)
(1.1)
(0.6)
(2.4)
Transferred to assets held for sales (note 10)
(0.2)
(1.0)
(1.9)
(1.6)
(4.7)
Foreign exchange
–
0.2
0.2
0.2
0.6
Cost – 30 December 2022
–
2.6
3.7
5.6
11.9
Accumulated depreciation – 1 January 2022
–
2.4
5.0
3.5
10.9
Re-analysis
–
0.4
(0.4)
–
–
Charge for the period
–
0.4
0.9
1.3
2.6
Disposals
–
(0.7)
(1.1)
(0.6)
(2.4)
Transferred to assets held for sales (note 10)
–
(0.7)
(1.7)
(0.8)
(3.2)
Foreign exchange
–
0.1
0.3
0.2
0.6
Accumulated depreciation – 30 December 2022
–
1.9
3.0
3.6
8.5
Net carrying value – 30 December 2022
–
0.7
0.7
2.0
3.4
Included in computer equipment are assets with net carrying value of £nil (2021: £0.1m) held under a finance lease. Depreciation of
£0.1m (2021: £0.1m) was charged on these assets.
12. Leases
During the period, the Group accounted for 94 leased properties (2021: 125) 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 27 vehicles (2021:
99), all of which have a fixed lease fee over the term. The weighted average incremental borrowing rate used to calculate the lease
liability was 3.26% (2021: 2.96%).
Of the 94 property leases accounted for under IFRS 16 during the period, 13.8% recognised future uplifts in rent (2021: 12%). Should
the lease payments on these increase by 5% there could be a resulting increase in the right-of-use asset of £0.1m.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_95
Strategic Report
Financial Statements
Corporate Governance
Right-of-use assets
Land and
buildings
£m
Vehicles
£m
Total
£m
Net carrying value – 1 January 2021
20.9
0.4
21.3
Cost – 2 January 2021
35.3
1.2
36.5
Additions
0.5
–
0.5
Remeasurement
1.5
–
1.5
Disposals
(4.0)
(0.5)
(4.5)
Foreign exchange
(0.2)
(0.1)
(0.3)
Cost – 31 December 2021
33.1
0.6
33.7
Accumulated depreciation – 2 January 2021
14.4
0.8
15.2
Charge for the period
6.7
0.3
7.0
Disposals
(3.8)
(0.5)
(4.3)
Foreign exchange
(0.1)
–
(0.1)
Accumulated depreciation – 31 December 2021
17.2
0.6
17.8
Net carrying value – 31 December 2021
15.9
–
15.9
Cost – 1 January 2022
33.1
0.6
33.7
Additions
1.6
–
1.6
Remeasurement
0.4
–
0.4
Disposals
(5.1)
(0.2)
(5.3)
Transferred to assets held for sales (note 10)
(9.7)
(0.2)
(9.9)
Foreign exchange
1.1
–
1.1
Cost – 30 December 2022
21.4
0.2
21.6
Accumulated depreciation – 1 January 2022
17.2
0.6
17.8
Charge for the period
5.4
0.1
5.5
Disposals
(4.8)
(0.2)
(5.0)
Transferred to assets held for sales (note 10)
(6.2)
(0.3)
(6.5)
Foreign exchange
0.7
–
0.7
Accumulated depreciation – 30 December 2022
12.3
0.2
12.5
Net carrying value – 30 December 2022
9.1
–
9.1
Lease receivables
Land and
buildings
£m
Vehicles
£m
Total
£m
Net carrying value – 1 January 2021
4.3
–
4.3
Additions
–
–
–
Interest
0.1
–
0.1
Receipts
(1.7)
–
(1.7)
Disposals
(2.5)
–
(2.5)
Foreign exchange
(0.2)
–
(0.2)
Net carrying value – 31 December 2021
–
–
–
Net carrying value – 30 December 2022
–
–
–
Page_96
Impellam Group plc Annual Report and Accounts 2022
12. Leases continued
Lease liabilities
Land and
buildings
£m
Vehicles
£m
Total
£m
Net carrying value – 1 January 2021
26.2
0.3
26.5
Additions
0.4
–
0.4
Remeasurement
1.3
–
1.3
Interest
0.6
–
0.6
Payments
(9.0)
(0.2)
(9.2)
Disposals
(2.7)
–
(2.7)
Foreign exchange
(0.4)
–
(0.4)
Net carrying value – 31 December 2021
16.4
0.1
16.5
Additions
1.3
–
1.3
Remeasurement
0.5
–
0.5
Interest
0.4
–
0.4
Payments
(5.7)
(0.1)
(5.8)
Disposals
(0.3)
–
(0.3)
Transfer to liabilities held for sale (note 10)
(3.3)
–
(3.3)
Foreign exchange
0.6
–
0.6
Net carrying value – 30 December 2022
9.9
–
9.9
30 December
2022
£m
31 December
2021
£m
Current
3.0
5.1
Non-current
6.9
11.4
Total lease liabilities (notes 29 and 30)
9.9
16.5
30 December
2022
£m
31 December
2021
£m
Due in year 1
3.3
5.5
Due in year 2 to 5
6.0
9.2
Due after year 5
1.5
3.0
Undiscounted lease payments
10.8
17.7
Unearned finance income
(0.9)
(1.2)
Total lease payables (notes 29 and 30)
9.9
16.5
Included in operating lease expenditure for 2022 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 £0.4m (2021: £0.7m) and for short-term leases is £0.3m
(2021: £0.1m).
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Corporate Governance
13. Goodwill
Cost
£m
Impairment
£m
Net carrying
value
£m
Opening balance at 1 January 2021
155.9
(26.8)
129.1
Foreign exchange
(0.2)
–
(0.2)
Closing balance at 31 December 2021
155.7
(26.8)
128.9
Transfer to assets held for sale (note 10)
(37.3)
10.2
(27.1)
Disposal
(1.0)
–
(1.0)
Foreign exchange
8.7
–
8.7
Closing balance at 30 December 2022
126.1
(16.6)
109.5
Goodwill acquired through business combinations has been allocated for impairment testing purposes to seven principal cash-
generating unit (‘CGU’) groups as follows:
• Engineering
• Information technology
• 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 in the current or prior periods over goodwill or other intangible assets. During the period the
Group disposed of the trade of Corestaff which is held under the US Staffing CGU and accounted for £1.0m of the holding of the
goodwill. On 30 January 2023 the Group announced the sale of the Regional Specialist Staffing and Healthcare divisions. These
divisions comprise the entirety of the Education and Healthcare CGUs and a portion of the UK General Staffing CGU. As a result,
£37.3m of goodwill cost and £10.2m of associated impairments were transferred to assets held for sale.
The carrying amount of goodwill and other indefinite assets allocated to cash-generating units at the period end is:
30 December
2022
£m
31 December
2021
£m
Healthcare
–
7.9
Information technology
11.4
11.4
Science and clinical
8.5
8.5
UK General staffing
9.4
28.6
US Staffing
80.2
72.5
Total
109.5
128.9
Any CGU not shown above has no goodwill in the current or prior period. The Group tests this and other assets (note 14) 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.
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Impellam Group plc Annual Report and Accounts 2022
13. Goodwill continued
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.
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 3.2% 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% (2021: 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.
Excess of
recoverable
amount over
carrying value
£m
Pre-tax
discount rate
0.5% increase
in discount rate
£m
Long-term
growth rates
decrease
by 0.5%
£m
Combined
sensitivity
£m
Increase in
impairment
using
combined
sensitivity
£m
Information technology
31.5
16.1
(3.6)
(6.2)
(9.3)
–
Science and clinical
8.0
16.1
(0.8)
(1.8)
(2.5)
–
UK General staffing
5.2
16.1
(1.9)
(3.3)
(5.0)
–
US Staffing
31.8
18.8
(2.3)
(12.5)
(15.7)
–
The post-tax discount rate used for management’s best estimates in 2022 was between 13.0% and 13.7%. 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.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
14. Other intangible assets
Software
£m
Brand values
£m
Client
relationships
£m
Total
£m
Net carrying value – 1 January 2021
12.9
65.8
17.5
96.2
Cost – 2 January 2021
35.5
78.5
54.2
168.2
Additions
4.3
–
–
4.3
Disposals
(3.6)
–
–
(3.6)
Impairment
–
–
–
–
Foreign exchange
(0.1)
–
–
(0.1)
Cost – 31 December 2021
36.1
78.5
54.2
168.8
Accumulated amortisation – 2 January 2021
22.6
12.7
36.7
72.0
Charge for the period
5.3
5.9
3.9
15.1
Disposals
(3.6)
–
–
(3.6)
Foreign exchange
(0.1)
0.1
–
–
Accumulated amortisation – 31 December 2021
24.2
18.7
40.6
83.5
Net carrying value – 31 December 2021
11.9
59.8
13.6
85.3
Cost – 1 January 2022
36.1
78.5
54.2
168.8
Additions
8.0
–
–
8.0
Disposals
(2.7)
–
–
(2.7)
Transfer to assets held for sale (note 10)
(2.5)
(37.9)
(15.1)
(55.5)
Foreign exchange
0.6
1.8
1.8
4.2
Cost – 30 December 2022
39.5
42.4
40.9
122.8
Accumulated amortisation – 1 January 2022
24.2
18.7
40.6
83.5
Charge for the period
5.2
5.6
4.1
14.9
Disposals
(2.7)
–
–
(2.7)
Transfer to assets held for sale (note 10)
(1.9)
(10.3)
(12.9)
(25.1)
Foreign exchange
0.5
0.8
1.1
2.4
Accumulated amortisation – 30 December 2022
25.3
14.8
32.9
73.0
Net carrying value – 30 December 2022
14.2
27.6
8.0
49.8
Included in software additions for the 52 weeks ended 30 December 2022 are internally generated software development costs of
£nil (2021: £0.6m) which have been capitalised at cost. These costs have been assessed as having a finite life of between three and
five years (2021: 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.
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Impellam Group plc Annual Report and Accounts 2022
14. Other intangible assets continued
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
Information technology
10.3
15.9
2.9
1.8
US Staffing
11.9
15.9
5.1
3.0
Vendor procurement
5.4
15.9
–
–
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 13. No impairment was recognised in
the current period (2021: £nil).
15. Financial assets
30 December
2022
£m
31 December
2021
£m
Financial assets – non-current
Marketable investments designated at market value through the income statement
0.9
1.5
Other financial assets (loans and receivables) – non-current
Deposits with non-financial institutions
0.1
0.2
Total
1.0
1.7
Financial assets include:
• 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 30 December 2022,
these investments have been adjusted to the market value of £0.9m (2021: £1.5m). This movement is matched by an equivalent
movement in other payables as disclosed in note 18; and
• Deposits with non-financial institutions represent amounts held by suppliers, clients and landlords as security for provision of
facilities and services.
Information on credit risks and fair values is given in notes 29 and 30.
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
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Strategic Report
Financial Statements
Corporate Governance
16. Trade and other receivables
Current assets
30 December
2022
£m
31 December
2021
£m
Trade receivables (note 2(J))
558.6
539.2
Other receivables
3.7
3.6
Prepayments
5.1
5.0
Contract assets
69.4
57.7
Total
636.8
605.5
• Trade receivables also include gross receivables of £364.2m (2021: £268.5m) 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
30 December
2022
£m
31 December
2021
£m
Contract assets
0.7
0.9
Lease debtor (note 12)
–
–
Total
0.7
0.9
Information on credit risks and fair values is given in notes 29 and 30.
Contract balances
Contract assets
30 December
2022
£m
31 December
2021
£m
At the beginning of the period
57.7
55.8
Net amounts recognised as revenue in the period
23.8
1.9
Transfer to assets held for sale
(12.1)
–
At the end of the period
69.4
57.7
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.
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Impellam Group plc Annual Report and Accounts 2022
16. Trade and other receivables continued
The lifetime expected loss provision for trade receivables is as follows:
31 December 2021
Current
£m
<60 days past
due
£m
60–120 days
past due
£m
>120 days
past due
£m
Total
£m
Expected loss rate (%)
0.4%
1.9%
6.3%
54.2%
1.2%
Gross carrying amount
449.6
84.1
6.4
5.9
546.0
Loss provision
1.6
1.6
0.4
3.2
6.8
30 December 2022
Current
£m
<60 days
past due
£m
60–120 days
past due
£m
>120 days
past due
£m
Total
£m
Expected loss rate (%)
0.1%
3.1%
7.4%
8.1%
0.6%
Gross carrying amount
497.1
41.4
2.7
21.0
562.2
Loss provision
0.4
1.3
0.2
1.7
3.6
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:
30 December
2022
£m
31 December
2021
£m
Balance at beginning of period
6.8
5.2
Transfer to assets held for sale
(2.6)
–
Charged for the period
0.8
3.3
Utilised for the period
(1.6)
(1.7)
Foreign exchange
0.2
–
Balance at end of period
3.6
6.8
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:
30 December
2022
£m
31 December
2021
£m
Trade receivables (note 2(J))
382.9
313.7
Other receivables
4.4
2.6
Prepayments
1.4
2.5
Accrued income
1.6
12.5
Total
390.3
331.3
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_103
Strategic Report
Financial Statements
Corporate Governance
17. Cash and cash equivalents
For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following:
30 December
2022
£m
31 December
2021
£m
Cash
112.4
90.9
Included within cash is £10.7m (2021: £8.5m) of cash which is restricted for use on specific clients.
Information on credit risks, fair values and interest rates is given in notes 29 and 30.
18. Trade and other payables
Current liabilities
30 December
2022
£m
31 December
2021
£m
Bank overdraft
4.3
3.9
Trade payables
530.2
376.7
Other tax and social security costs
31.4
63.9
Accruals
70.8
77.3
Contract liabilities
0.1
0.5
Other payables
40.9
46.4
Total
677.7
568.7
Trade payables include £448.5m (2021: £332.5m) of amounts payable under master-vendor arrangements in the UK and US, which
are related to certain of the trade receivables – note 16. 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 £nil (2021: £9.1m) of taxes deferred under government schemes across
various jurisdictions.
Included in other payables and accruals are:
a. £0.9m (2021: £1.4m) 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 15);
b. £4.5m (2021: £6.6m) for contributions due to be made to defined contribution pension schemes on behalf of certain employees
of the Group;
c. £2.2m (2021: £3.6m) for customer unclaimed payments; and
d. Remaining amounts within other payables are largely payroll-related creditors.
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 credit risks and fair values is given in notes 29 and 30.
Page_104
Impellam Group plc Annual Report and Accounts 2022
19. Short-term borrowings
30 December
2022
£m
31 December
2021
£m
Financial liabilities measured at amortised cost:
Hire purchase – secured
–
0.1
Total
–
0.1
Information on terms, credit risks and fair values are given in notes 28, 29 and 30.
20. Long-term borrowings
30 December
2022
£m
31 December
2021
£m
Financial liabilities measured at amortised cost:
Revolving credit borrowings – secured
77.8
101.9
Total
77.8
101.9
Information on terms, credit risks and fair values are given in notes 28, 29 and 30.
21. Provisions
Property
£m
Workers’
compensation
£m
Legal &
contractual
£m
Total
£m
Current – 31 December 2021
1.1
0.2
7.0
8.3
Non-current – 31 December 2021
3.2
–
0.6
3.8
At 31 December 2021
4.3
0.2
7.6
12.1
Additions in the period
0.2
–
–
0.2
Utilised during the period
(0.9)
–
(2.1)
(3.0)
Unwind of discount
0.1
–
–
0.1
Transfer to liabilities held for sale
(1.6)
–
(5.0)
(6.6)
Foreign exchange
0.1
–
0.8
0.9
At 30 December 2022
2.2
0.2
1.3
3.7
Current – 30 December 2022
0.5
0.2
1.3
2.0
Non-current – 30 December 2022
1.7
–
–
1.7
Total
2.2
0.2
1.3
3.7
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_105
Strategic Report
Financial Statements
Corporate Governance
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.
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.
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
While the Group seeks to act with the highest levels of integrity and professionalism, it operates in an environment where the
application of employment laws and associated taxation legislation to temporary workers’ pay can be complicated to apply in
practice. This is particularly the case around the application of minimum pay rates, holiday pay compensation and the applicability
of taxes to certain temporary worker expenses. The Group makes specific provision for such liabilities where there is a present
obligation, payment is probable and the amount can be estimated reliability. As such provisions include a degree of estimation
uncertainty, any amounts eventually settled may be greater or less than the original provision and therefore the Group may have
associated contingent liabilities.
22. Deferred taxation
30 December
2022
£m
31 December
2021
£m
Non-current deferred tax assets:
Total deferred tax asset – UK
0.9
1.9
Total deferred tax asset – overseas
2.3
6.4
Total deferred tax asset
3.2
8.3
30 December
2022
£m
31 December
2021
£m
Deferred tax liabilities:
Non-current deferred tax liabilities
7.7
18.7
Total deferred tax liabilities
7.7
18.7
Deferred tax liabilities primarily relate to fair value adjustments on acquisitions.
Page_106
Impellam Group plc Annual Report and Accounts 2022
22. Deferred taxation continued
Property,
plant and
equipment
£m
Intangible
assets
£m
Provisions
£m
Tax value of
loss
carry-forwards
£m
Total
deferred
taxation
£m
At 2 January 2021
1.5
(18.1)
6.3
2.5
(7.8)
Recognised in income
(0.3)
(0.7)
(0.6)
(1.6)
(3.2)
Foreign exchange
–
0.1
–
0.5
0.6
At 31 December 2021
1.2
(18.7)
5.7
1.4
(10.4)
Deferred tax assets – 31 December 2021
1.2
–
5.7
1.4
8.3
Deferred tax liabilities – 31 December 2021
–
(18.7)
–
–
(18.7)
1.2
(18.7)
5.7
1.4
(10.4)
At 1 January 2022
1.2
(18.7)
5.7
1.4
(10.4)
Recognised in income - continuing
(1.1)
5.5
(3.7)
0.9
1.6
Recognised in income - discontinued
0.3
(1.3)
0.3
(0.2)
(0.9)
Transferred to liabilities held for sale
(0.3)
6.8
(1.1)
(0.2)
5.2
Foreign exchange
–
–
–
–
–
At 30 December 2022
0.1
(7.7)
1.2
1.9
(4.5)
Deferred tax assets – 30 December 2022
0.1
–
1.2
1.9
3.2
Deferred tax liabilities – 30 December 2022
–
(7.7)
–
–
(7.7)
0.1
(7.7)
1.2
1.9
(4.5)
Unrecognised deferred tax assets
Deferred tax assets in relation to continuing operations have not been recognised in respect of the following items (because it is not
probable that future taxable profits will be available against which the Group can utilise the benefits):
30 December
2022
£m
31 December
2021
£m
Gross value of loss carry-forwards
27.7
32.6
As at the end of 2022, the Group has pre-entry capital losses of £27.7m (2021: £27.7m). No deferred tax asset has been recognised
in respect of these losses due to their nature. There are no losses that will expire included in unrecognised tax losses. All losses are
subject to legislation restricting the right to offset them. None of the losses held by the Group have an expiry date.
23. Issued share capital
Number of
issued shares
m
Issued share
capital
£m
Share premium
account
£m
Total
share capital
£m
2 January 2021
45.9
0.5
30.1
30.6
Shares repurchased
(0.6)
–
–
–
31 December 2021
45.3
0.5
30.1
30.6
1 January 2022
45.3
0.5
30.1
30.6
Shares repurchased
(0.2)
–
–
–
30 December 2022
45.1
0.5
30.1
30.6
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_107
Strategic Report
Financial Statements
Corporate Governance
Transactions with shareholders
In 2022, 253,615 Ordinary shares of 1p each (2021: 608,602), representing 0.6% (2021: 1.3%) of the opening number of issued shares,
were repurchased in the market for consideration of £1.2m (2021: £1.9m), and cancelled.
On 29 June 2022 the shareholders approved a new share purchase plan allowing the Company to purchase up to 4,513,446
Ordinary shares up to the earlier of the date of the Company’s next Annual General Meeting or 30 June 2023.
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.
24. Dividends
30 December
2022
£m
31 December
2021
£m
Special dividend paid 9 December 2022 at 55.4p per share
25.0
–
Paid in period
25.0
–
On 22 December 2022 the company announced a further special dividend of 55.4p per share totalling £25.0m to be paid on
27 January 2023 which has not be recognised in these accounts.
On 6 March 2023 the company announced a further special dividend of 77.8p per share totalling £35.0m to be paid on 6 April 2023
which has not be recognised in these accounts.
25. Other reserves
Merger
reserve
£m
Other
reserve
£m
Foreign
currency
translation
reserve
£m
Total other
reserves
£m
2 January 2021
19.0
92.2
7.1
118.3
Currency translation differences
–
–
(1.4)
(1.4)
31 December 2021
19.0
92.2
5.7
116.9
1 January 2022
19.0
92.2
5.7
116.9
Currency translation differences
–
–
14.0
14.0
30 December 2022
19.0
92.2
19.7
130.9
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 (2021: £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 (2021: £41,000); and £55,000 capital redemption reserve arising from the purchase and cancellation of
treasury shares (2021: £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.
Page_108
Impellam Group plc Annual Report and Accounts 2022
26. 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.
Individual
immaterial
subsidiaries
£m
Total
£m
30 December 2022
Net assets attributable to NCI
0.3
0.3
Profit allocated to NCI
0.2
0.2
Other comprehensive income allocated to NCI
–
–
Other comprehensive income from reducing the NCI component
–
–
Individual
immaterial
subsidiaries
£m
Total
£m
31 December 2021
Net assets attributable to NCI
0.1
0.1
Profit allocated to NCI
0.1
0.1
Other comprehensive income from reducing the NCI component
0.3
0.3
The individually immaterial subsidiaries include the share of results for Barpellam Inc and Bartech Belgium NV (2021: Barpellam Inc
and Bartech Belgium NV) which are not wholly owned by the Group (note 27).
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_109
Strategic Report
Financial Statements
Corporate Governance
27. 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
– Blue Arrow Financial Services Limited* †
Capability Green
– Blue Arrow Holdings Limited †
Luton
– Blue Arrow Limited †
LU1 3BA
– BMS Limited
United Kingdom
– Carbon60 Limited
–
Career Teachers 2006 Limited †
–
Career Teachers 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 †
–
Science Recruitment Group Limited
–
Tate Recruitment Limited †
–
Younifi Limited
Level 2
– Allied Employment Group Pty Limited(b) †
14 Martin Place
– Comensura Pty Limited(b)
Sydney
– Flexy Services Pty Limited(b)
NSW 2000
– Global Medics Pty Limited(b) †
Australia
–
Litmus Workforce Solutions Pty Ltd(b) †
–
Medacs Healthcare (Pty) Limited(b) †
–
Medacs Healthcare Australia Pty Limited(b) †
Page_110
Impellam Group plc Annual Report and Accounts 2022
Straatsburgdok-Noordkaai 3
–
Bartech Belgium NV(h) (73% owned)
2030 Antwerp, Belgium
PO Box 71, Road Town
–
Sabertooth Services Limited
Tortola VG1110
British Virgin Islands
250 Howe Street
–
Bartech Technical Services of Canada Limited(c)
20th Floor Vancouver
–
Canada Corporate Employment Resources ULC(c)
BC V6C 3R8
–
Global & Medical Recruitment Consultancy Inc.(c) †
Canada
–
Guidant Group Canada ULC(c)
Anna-Schneider-Steig 22
50678 Cologne, Germany
–
Guidant Global Germany GmbH(c)
Beethovenplatz 2
80336 Munich, Germany
–
Impellam GmbH(c)
Block 9, Blackrock Business Park
–
Carlisle Security (Holdings) Limited(e)
Blackrock
–
Carlisle Security Limited(e)
Co. Dublin, A94 E4X2
–
Carlisle Staffing Services Ireland Limited(e)
Ireland
–
Irish Recruitment Consultants Limited(e)
–
Litmus Workforce Solutions Ireland Limited(h) †
–
Medacs Global Group Limited(h) †
Via Filippo Turati 29
20121 Milan, Italy
–
Guidant Global Italy SRL(h)
Rio Tiber 40 102
–
Bartech Mexico S, de RL de CV(c)
Col Cuauhtemoc 06500
Cuauhtemoc, Distrito Federal, Mexico
98 Alicia Street
–
Guidant Global Mexico, S.A. de C.V.(c)
Colony Guadalupe Tepeyac.
Mexico City CP07840, Mexico
Level 6, 3 Ferncroft Street
–
Global Medics NZ Limited(f) †
Graft, Auckland 1010
–
Healthlink New Zealand Group Limited(f) †
New Zealand
–
Medacs Healthcare Limited(f) †
Oriental Center, Suite p1
254 Muñoz Uñoz Rivera Avenue San Juan
PR 00918 Puerto Rico
–
Guidant Global Puerto Rico Inc(c)
133 New Bridge Road
–
Guidant Global SG Pte Ltd(g)
#10-05, Chinatown Point
Singapore 059413
–
Latitudes Group International Management Pte Limited(g) †
Martin-Disteli-Strasse 9
–
Carbon60 AG(d)
4600 Olten, Switzerland
–
Guidant Global Switzerland AG(d)
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
27. Related party disclosures continued
Page_111
Strategic Report
Financial Statements
Corporate Governance
2711 Centerville Road Suite 400
–
Barpellam Inc (49% owned)(c)
Wilmington
– CER Canada Holding Inc.(c)
Delaware 19808
– Impellam NA Support Services Inc(c)
USA
– 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)
17199 N Laural Park Drive
–
Bartech Mexico Holding LLC(c)
Suite 224 Livonia
–
Bartech Technical Services LLC(c)
Michigan 48152 USA
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.
Companies marked with a † above have been sold after the year end (see note 10).
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.
Page_112
Impellam Group plc Annual Report and Accounts 2022
27. Related party disclosures continued
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:
Registered
number
Class of
shares held
Ownership
30 December
2022
31 December
2021
Flexy Corporation Limited
09524785
Ordinary
100%
100%
Guidant Global-Europe Limited
07130856
Ordinary
100%
100%
OneTrue Limited
01189888
Ordinary
100%
100%
Younifi Limited
09898687
Ordinary
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 (2021: 15). The Directors receive
dividends in proportion to their shareholdings held during the current and prior periods.
30 December 2022
£m
31 December 2021
£m
Short-term employment benefits
6.8
6.8
Post-employment benefits
0.2
0.2
Total
7.0
7.0
Lord Ashcroft has an interest in Puma International Holdings Limited. The Group paid Puma International Holdings Limited
£100,000 (2021: £425,000) 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 (2021: £40,000). The Group owed £8,000 to Deacon Street Partners Limited at the end of the period (2021: £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.
David Barfield, a Director of various Group companies is a significant shareholder in Bartech Acquisition Corporation LLC. 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 $14,000 (2021: $116,000) for
these services. At the end of the period, TechCentral LLC owed the Group $12,000 (2021: $116,000).
During the period the Group entered into the following transactions with related parties who are not 100% owned by the Group.
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
30 December 2022
Barpellam Inc
–
31.0
61.6
1.3
Bartech Belgium NV
–
0.1
1.1
–
Total
–
31.1
62.7
1.3
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_113
Strategic Report
Financial Statements
Corporate Governance
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
31 December 2021
Barpellam Inc
–
37.5
30.0
2.5
Bartech Belgium NV
–
0.1
0.9
–
Total
–
37.6
30.9
2.5
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.
28. Net debt
31 December
2021
£m
Transfer to
liabilities held
for sale
Cash
flow
£m
Interest
charged
£m
Interest
paid
£m
New Leases
£m
Foreign
exchange
£m
30 December
2022
£m
Cash and short-term deposits (note 17)
90.9
–
13.7
(2.4)
2.4
–
7.8
112.4
Bank overdraft (note 18)
(3.9)
–
(0.4)
–
–
–
–
(4.3)
Revolving credit (notes 19 and 20)
(101.9)
–
24.1
(2.0)
2.0
–
–
(77.8)
Hire purchase (notes 19 and 20)
(0.1)
–
0.1
–
–
–
–
–
Lease liabilities (note 12)
(16.5)
3.3
5.4
(0.4)
0.4
(1.8)
(0.3)
(9.9)
Lease debtors (note 12)
–
–
–
–
–
–
–
–
Net cash / (net debt)
(31.5)
3.3
42.9
(4.8)
4.8
(1.8)
7.5
20.4
1 January
2021
£m
Cash
flow
£m
Interest
charged
£m
Interest
paid
£m
New Leases
£m
Foreign
exchange
£m
31 December
2021
£m
Cash and short-term deposits (note 17)
117.9
(24.3)
(0.2)
0.2
–
(2.7)
90.9
Bank overdraft (note 18)
(2.9)
(1.0)
–
–
–
–
(3.9)
Revolving credit (notes 19 and 20)
(118.9)
16.7
(3.4)
3.4
–
0.3
(101.9)
Hire purchase (notes 19 and 20)
(0.2)
0.1
–
–
–
–
(0.1)
Lease liabilities (note 12)
(26.5)
8.8
(0.6)
0.4
1.0
0.4
(16.5)
Lease debtors (note 12)
4.3
(1.7)
0.1
(0.1)
(2.5)
(0.1)
–
Net debt
(26.3)
(1.4)
(4.1)
3.9
(1.5)
(2.1)
(31.5)
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 2022, these amounted to £nil (2021: £8.2m). These
agreements accrue interest at between 0.65% and 1.75% over SONIA and interest of £0.1m was charged during the period (2021:
£0.1m) and is included in other interest in note 7.
Page_114
Impellam Group plc Annual Report and Accounts 2022
29. 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).
Increase/
decrease in
basis points
Effect on profit
before tax
£m
Effect on equity
£m
30 December 2022
Pound Sterling
+50
(0.6)
(0.5)
-25
0.3
0.2
US Dollar
+50
–
–
-25
–
–
31 December 2021
Pound Sterling
+75
(0.9)
(0.7)
-25
0.3
0.2
US Dollar
+75
(0.1)
(0.1)
-25
–
–
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.
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 (2021: £182.5m) which includes an overdraft facility of £5m. The amount utilised
at 30 December 2022 was £77.8m (2021: £103.8m). 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
30 December 2022, and throughout the period, the Group was in compliance with its financial covenants and expects to continue
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_115
Strategic Report
Financial Statements
Corporate Governance
to be so. With effect from 3 March 2023 and following the disposal of the Regional Specialist and Healthcare divisions, the Group
has stepped down its facility to £132.5m with an agreed accordion of £30m, all other elements remain the same.
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 2022, these amounted to £nil (2021: £8.2m). These
agreements accrue interest at between 0.65% and 1.75% over SONIA and interest of £0.1m was charged during the period (2021:
£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 30 December 2022 and 31 December 2021
based on contractual undiscounted payments.
On demand
£m
Less than 3
months
£m
3–12
months
£m
1–5
years
£m
5 years
or more
£m
Total
£m
30 December 2022
Revolving credit facilities (notes 19 and 20)
–
–
–
77.8
–
77.8
Trade and other payables (note 18)
4.3
633.7
8.0
0.3
–
646.3
Finance lease liabilities (notes 19 and 20)
–
–
–
–
–
–
Undiscounted lease liabilities (note 12)
–
0.8
2.5
6.0
1.5
10.8
Total
4.3
634.5
10.5
84.1
1.5
734.9
On
demand
£m
Less than
3 months
£m
3–12
months
£m
1– 5
years
£m
5 years
or more
£m
Total
£m
31 December 2021
Revolving credit facilities (notes 19 and 20)
–
–
–
101.9
–
101.9
Trade and other payables (note 18)
3.9
490.6
10.3
–
–
504.8
Finance lease liabilities (notes 19 and 20)
–
0.1
–
–
–
0.1
Undiscounted lease liabilities (note 11)
–
1.4
4.1
9.2
3.0
17.7
Total
3.9
492.1
14.4
111.1
3.0
624.5
Page_116
Impellam Group plc Annual Report and Accounts 2022
29. Financial risk management objectives and policies continued
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 16).
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 16. 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.
At 30 December 2022, the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.
30 December
2022
£m
31 December
2021
£m
UK
242.6
275.0
North America
365.9
290.5
Europe
11.2
20.5
Australasia
17.8
20.4
Total
637.5
606.4
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:
Percentage
change
in rate
Effect on profit
before tax
£m
Effect on equity
£m
30 December 2022
US Dollars
+10
0.9
1.0
-10
(1.1)
(1.2)
Euros
+10
0.3
0.1
-10
(0.4)
(0.1)
31 December 2021
US Dollars
+10
0.7
–
-10
(0.9)
–
Euros
+10
0.1
0.2
-10
(0.1)
(0.2)
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_117
Strategic Report
Financial Statements
Corporate Governance
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 15).
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 30 December 2022, and throughout the period, the Group was in compliance with these financial covenants whilst this facility
was in place.
30. 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.
30 December 2022
31 December 2021
Carrying
amount
£m
Fair
value
£m
Carrying
amount
£m
Fair
value
£m
Financial assets
Investments (note 15)
0.9
0.9
1.5
1.5
Other financial assets (non-current) (note 15)
0.1
0.1
0.2
0.2
Cash and cash equivalents (note 17)
112.4
112.4
90.9
90.9
Financial liabilities
Bank overdraft (note 18)
4.3
4.3
3.9
3.9
Short-term borrowings (note 19)
–
–
0.1
0.1
Long-term borrowings (note 20)
77.8
77.8
101.9
101.9
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).
Page_118
Impellam Group plc Annual Report and Accounts 2022
30. Financial instruments continued
The following table presents the fair value hierarchy of assets measured at fair value:
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
30 December 2022
Investments (note 15)
0.9
–
–
0.9
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
31 December 2021
1.5
–
–
1.5
Investments (note 15)
1.5
–
–
1.5
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.
Interest rate risk
At 30 December 2022 and 31 December 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.
Within
1 year
£m
1–3
years
£m
Total
£m
30 December 2022
Floating rate
Cash and short-term deposits (note 17)
112.4
–
112.4
Bank overdrafts (note 18)
(4.3)
–
(4.3)
Revolving credit facilities (notes 19 and 20)
–
(77.8)
(77.8)
Hire purchase (notes 19 and 20)
–
–
-
Within
1 year
£m
1–2
years
£m
Total
£m
31 December 2021
Floating rate
Cash and short-term deposits (note 17)
90.9
–
90.9
Bank overdrafts (note 18)
(3.9)
–
(3.9)
Revolving credit facilities (notes 19 and 20)
–
(101.9)
(101.9)
Hire purchase (notes 19 and 20)
(0.1)
–
(0.1)
The effective interest rate on bank balances and other short-term deposits was less than 0.5% (2021: less than 0.5%). US deposit
interest rates were 1.9% (2021: 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 (2021: between
1.90% and 2.70% over LIBOR rate). All interest is charged monthly in arrears (note 29).
Notes to the consolidated financial statements continued
For the 52 weeks ended 30 December 2022
Page_119
Strategic Report
Financial Statements
Corporate Governance
Collateral pledged
The self-insured workers’ compensation liability described in note 21 is covered by insurers on the basis that collateral is provided
sufficient to cover all potential claims. This collateral takes two forms:
• £2.7m – $3.3m (2021: £3.0m – $4.0m) in the form of letters of credit drawn upon the revolving credit facility in the US; and
• £0.1m – $0.2m (2021: £0.2m – $0.2m) 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 £0.2m (2021: £2.1m) relating to rent guarantees, mainly in Australia. These
expire in 2023.
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.
32. Post balance sheet events – share purchase and cancellation
Between the end of the year and 30 March 2023, a further 106,597 Ordinary shares of 1p each have been repurchased in the market
for total consideration of £0.7m (see note 34 for related important information).
33. Post balance sheet events – disposal of Healthcare and Regional Specialist Staffing
divisions
On 30 January 2023 the Group announced the sale of the business and assets of its Regional Specialist Staffing businesses in the
UK (Tate, Blue Arrow Group, Chadwick Nott, Career Teachers) and its Healthcare Staffing business in the UK, Ireland and APAC
(Medacs Global Group) to Twenty20 Capital for cash consideration of £85m on a debt-free, cash-free, normalised working capital
basis. This consideration was based on an agreed nil cash position and target net working capital of £30.8 million on the date of
disposal with a £ for £ adjustment to consideration if the final positions were above or below this amount. The final working capital
position is to be determined 60 days post completion date. The deal had been deemed to be highly probable on 16 December
2022 and at that time was treated as a discontinued operation and treated as an asset and liability held for sale. The transaction was
completed on 3 March 2023. (see note 10).
34. Post balance sheet events – important information
The Board has become aware of an administrative oversight concerning technical compliance with the Companies Act 2006 (“CA
2006”) in respect of the special dividend paid on 27 January 2023 (the “Dividend”) and share buybacks effected by the company
following this date (the “Post January 2023 Share buybacks”). The amount of the Dividend was £25m and the total amount of the
Post January 2023 Share buybacks was approximately £0.6m representing 94,822 shares. The Group’s historic reported trading
results and financial condition, and ability to pay future dividends are entirely unaffected by this matter. The CA 2006 requires the
amount of any dividend distribution and share repurchases to be justified by reference to relevant accounts which show the requisite
level of distributable reserves. If a company’s last annual accounts do not show the necessary reserves, then the company must
prepare interim accounts and, in the case of a public company, file those interim accounts with the Registrar of Companies prior to
the payment of the relevant dividend or share repurchase. The Company’s last annual accounts did not show the necessary reserves,
interim accounts should have been prepared and filed with the Registrar of Companies prior to the payment of the Dividend and the
Post January 2023 Share buybacks, but were not. This therefore has the consequent effect on the Dividend and the Post January
2023 Share buybacks.
Due to this administrative oversight the Company has been advised that, as a consequence of the Dividend having been paid
otherwise than in accordance with the 2006 Act, the Dividend is technically unlawful and that the Company may have claims
against past and present shareholders who were recipients of the Dividend and against persons who were directors of the
Company at the time of the payment of the Dividend. In addition, the Company has been advised that the purported purchase
and cancellation of the Post January 2023 Share buybacks is void. The ordinary shares of the Company purportedly subject to the
Post January 2023 Share buybacks remain technically in issue but the voting rights which attach to them are not capable of being
exercised by any person. The Company intends to take action to resolve this matter as soon as practicable.
The Board notes, however, that the Company has no intention of bringing any such claims or to seek the return of funds and that
the Group’s historic reported trading results and financial condition and ability to pay future dividends and continue its previously
announced buyback programme are entirely unaffected by this matter.
The Company will shortly post to shareholders an explanatory circular in due course and convene a general meeting, at which
resolutions authorising various rectifying actions will be proposed which will, if passed and once such actions are completed, put all
potentially affected parties, so far as possible, in the position in which they were always intended to be.
Page_120
Impellam Group plc Annual Report and Accounts 2022
Company balance sheet
As at 30 December 2022
Notes
30 December
2022
£m
31 December
2021
£m
Non-current assets
Investments
3
145.5
150.1
Other receivables
4
272.1
242.2
417.6
392.3
Current assets
Asset held for sale
14
4.6
–
Other receivables
4
44.5
13.8
Cash at bank and in hand
0.5
0.6
49.6
14.4
Other payables: amounts falling due within one year
5
(292.3)
(211.1)
Net current liabilities
(242.7)
(196.7)
Total assets less current liabilities
174.9
195.6
Other payables: amounts falling due in more than one year
6
(77.8)
(101.9)
Net assets
97.1
93.7
Capital and reserves
Called-up share capital
8
0.5
0.5
Share premium account
8
30.1
30.1
Merger reserve
9
19.0
19.0
Other reserves
9
–
–
Retained profit
9
47.5
44.1
Total shareholders’ funds
11
97.1
93.7
The accompanying notes are an integral part of this balance sheet.
The profit dealt with in the financial statements of the Company for the 52 weeks ended 30 December 2022 was £29.6m (2021: loss
of £8.7m). Dividends totalling £25.0m (2021: £nil) were declared 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 120 to 128 were approved by the Board on 27 April 2023 and are signed on its behalf by:
Tim Briant
Chief Financial Officer
Registered number: 06511961
Page_121
Strategic Report
Financial Statements
Corporate Governance
Statement of changes in equity
For the 52 weeks ended 30 December 2022
Share capital
and premium
(note 8)
£m
Other reserves
(note 9)
£m
Retained
profit
£m
Total
reserves
£m
2 January 2021
30.6
19.0
54.7
104.3
Loss for the period
–
–
(8.7)
(8.7)
Purchase and cancellation of own shares (note 8)
–
–
(1.9)
(1.9)
31 December 2021
30.6
19.0
44.1
93.7
1 January 2022
30.6
19.0
44.1
93.7
Profit for the period
–
–
29.6
29.6
Dividends (note 10)
–
–
(25.0)
(25.0)
Purchase and cancellation of own shares (note 8)
–
–
(1.2)
(1.2)
30 December 2022
30.6
19.0
47.5
97.1
The Company has considered the profits available for distribution to shareholders. At 30 December 2022, the Company had
retained earnings of £47.5m 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_122
Impellam Group plc Annual Report and Accounts 2022
Notes to the Company balance sheet
For the 52 weeks ended 30 December 2022
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 2022 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 13 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.
Page_123
Strategic Report
Financial Statements
Corporate Governance
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.
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.
Page_124
Impellam Group plc Annual Report and Accounts 2022
1. Summary of significant accounting policies continued
F) Assets and liabilities held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value
less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed
to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that
subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a
non-controlling interest in its former subsidiary after the sale.
When the Company is committed to a sale plan involving disposal of an investment in an associate or, a portion of an investment
in an associate, the investment, or the portion of the investment in the associate, that will be disposed of is classified as held for
sale when the criteria described above are met. The Company then ceases to apply the equity method in relation to the portion
that is classified as held for sale. Any retained portion of an investment in an associate that has not been classified as held for sale
continues to be accounted for using the equity method.
2. Operating costs
• The amount payable to the auditor in respect of the audit of the Company is £20,000 (2021: £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 2022 was 29, eight Directors/Company Secretary,
nine managers and 12 administrators (2021: 31, eight Directors/Company Secretary, nine managers and 13 administrators).
• The total amount of employee costs charged to the Company’s income statement in the period is £6.5m (2021: £7.9m).
3. Investments
Subsidiary
undertakings
£m
Cost – 1 January 2022
150.1
Transfer to assets held for sale
(4.6)
Cost – 30 December 2022
145.5
Impairment provision – 1 January 2022
–
Charge for the period
–
Disposals
–
Accumulated amortisation – 30 December 2022
–
Net carrying value – 30 December 2022
145.5
Net carrying value – 31 December 2021
150.1
Details of the principal subsidiary undertakings are given in note 27 of the consolidated financial statements. All of these companies
are unlisted. The transfer to assets held for sales represents the carrying value of the subsidiaries sold by the Company as part of the
disposal of the Regional Specialist Staffing and Healthcare divisions (note 14).
Subsidiary undertakings
The carrying values of investments were tested against discounted future cash flows during the period using a discount rate of
between 16.1% to 18.8% (2021: between 13.9% to 16.5%), which include a country risk premium. The forecasts were based on pre-tax
cash flows derived from approved budgets for the 2023 financial period (2021: 2022 financial period).
Notes to the Company balance sheet continued
For the 52 weeks ended 30 December 2022
Page_125
Strategic Report
Financial Statements
Corporate Governance
4. Other receivables
Current receivables
30 December
2022
£m
31 December
2021
£m
Amounts owed by subsidiary undertakings
32.3
4.7
Other receivables
10.2
9.0
Prepayments
2.0
0.1
Total
44.5
13.8
Non-current receivables
30 December
2022
£m
31 December
2021
£m
Amounts owed by subsidiary undertakings
272.1
242.2
Total
272.1
242.2
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 £0.7m (2021: £0.1m) has been recorded in the period, bringing the cumulative
charge to £2.5m (2021: £1.8m).
5. Other payables: amounts falling due within one period
30 December
2022
£m
31 December
2021
£m
Bank overdraft
4.3
3.9
Amounts owed to subsidiary undertakings
280.6
198.4
Contract liabilities
–
1.5
Accruals and other payables
7.4
7.3
Total
292.3
211.1
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
30 December
2022
£m
31 December
2021
£m
Revolving credit facilities
77.8
101.9
Details of security given over these liabilities are described in notes 29 and 30 to the consolidated accounts.
7. Deferred taxation
30 December
2022
£m
31 December
2021
£m
Opening balance
–
–
Charged to profit and loss account in the period
–
–
Deferred tax asset
–
–
Page_126
Impellam Group plc Annual Report and Accounts 2022
7. Deferred taxation continued
The total recognised and unrecognised deferred tax is as follows:
Assets
Recognised
30 December
2022
£m
Unrecognised
30 December
2022
£m
Recognised
31 December
2021
£m
Unrecognised
31 December
2021
£m
Losses
–
0.2
–
0.1
Other short-term timing differences
–
–
–
–
Total
–
0.2
–
0.1
8. Issued share capital
Number of
issued
shares
millions
Issued share
capital
£m
Share premium
account
£m
Total
share capital
£m
1 January 2021
45.9
0.5
30.1
30.6
Purchase and cancellation of own shares
(0.6)
–
–
–
31 December 2021
45.3
0.5
30.1
30.6
1 January 2022
45.3
0.5
30.1
30.6
Shares repurchased
(0.2)
–
–
–
30 December 2022
45.1
0.5
30.1
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.
Transactions with shareholders
In 2022, 253,615 Ordinary shares of 1p each (2021: 608,602), representing 0.6% (2021: 1.3%) of the opening number of issued shares,
were repurchased in the market for consideration of £1.2m (2021: £1.9m), and cancelled.
On 29 June 2022 the shareholders approved a new share purchase plan allowing the Company to purchase up to 4,513,446
Ordinary shares up to the earlier of the date of the Company’s next Annual General Meeting or 30 June 2023.
9. Reserves
Merger
reserve
£m
Retained
profit
£m
Total
reserves
£m
31 December 2021
19.0
44.1
63.1
Profit for the period
–
29.6
29.6
Dividends
–
(25.0)
(25.0)
Purchase and cancellation of own shares
–
(1.2)
(1.2)
30 December 2022
19.0
47.5
66.5
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.
Notes to the Company balance sheet continued
For the 52 weeks ended 30 December 2022
Page_127
Strategic Report
Financial Statements
Corporate Governance
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 (2021: £41,000); and
• £55,000 capital redemption reserve arising from the purchase and cancellation of treasury shares (2021: £53,000).
These reserves are non-distributable. All other reserves are distributable.
10. Dividends
30 December
2022
£m
31 December
2021
£m
Special dividend paid 9 December 2022 at 55.4p per share
25.0
–
Paid in period
25.0
–
On 22 December 2022 the company announced a further special dividend of 55.4p per share totalling £25.0m to be paid on 27
January 2023 which has not be recognised in these accounts.
On 6 March 2023 the company announced a further special dividend of 77.8p per share totalling £35.0m to be paid on 6 April 2023
which has not be recognised in these accounts.
11. Reconciliation of movements in shareholders’ funds
30 December
2022
£m
31 December
2021
£m
Profit/(loss) for the financial period
29.6
(8.7)
Dividends
(25.0)
–
Purchase and cancellation of own shares
(1.2)
(1.9)
Opening shareholders’ funds
93.7
104.3
Closing shareholders’ funds
97.1
93.7
12. Related party transactions
The Board is not aware of any related party transactions other than those disclosed in note 27 to the consolidated
financial statements.
13. Post balance sheet events – share purchase and cancellation
Between the end of the year and 30 March 2023, a further 106,597 Ordinary shares of 1p each have been repurchased in the market
for total consideration of £0.7m (see note 15 for related important information)
14. Post balance sheet events – disposal of subsidiaries
On 30 January 2023 the Group announced the sale of the business and assets of its Regional Specialist Staffing businesses in the UK
(Tate, Blue Arrow Group, Chadwick Nott, Career Teachers) and its Healthcare Staffing business in the UK, Ireland and APAC (Medacs
Global Group) to Twenty20 Capital for cash consideration of £85m on a debt-free, cash-free, normalised working capital basis. This
consideration was based on an agreed nil cash position and target net working capital of £30.8 million on the date of disposal with a £
for £ adjustment to consideration if the final positions were above or below this amount. The final working capital position was to be
determined 60 days post completion date. The deal had been deemed to be highly probable on 16 December 2022 and at that time
was treated as a discontinued operation and as an asset and liability held for sale. The transaction was completed on 3 March 2023.
(see note 10 of the consolidated accounts). The impact on the financial statements of the Company is just the realisation of the asset
held for sale which is just made up of the investment of £4.6m in the subsidiaries sold by the Company.
Page_128
Impellam Group plc Annual Report and Accounts 2022
Notes to the Company balance sheet continued
For the 52 weeks ended 30 December 2022
15. Post balance sheet events – important information
The Board has become aware of an administrative oversight concerning technical compliance with the Companies Act 2006 (“CA
2006”) in respect of the special dividend paid on 27 January 2023 (the “Dividend”) and share buybacks effected by the company
following this date (the “Post January 2023 Share buybacks”). The amount of the Dividend was £25m and the total amount of the
Post January 2023 Share buybacks was approximately £0.6m representing 94,822 shares. The Company’s historic reported trading
results and financial condition, and ability to pay future dividends are entirely unaffected by this matter. The CA 2006 requires
the amount of any dividend distribution and share repurchases to be justified by reference to relevant accounts which show the
requisite level of distributable reserves. If a company’s last annual accounts do not show the necessary reserves, then the company
must prepare interim accounts and, in the case of a public company, file those interim accounts with the Registrar of Companies
prior to the payment of the relevant dividend or share repurchase. The Company’s last annual accounts did not show the necessary
reserves, interim accounts should have been prepared and filed with the Registrar of Companies prior to the payment of the
Dividend and the Post January 2023 Share buybacks, but were not. This therefore has the consequent effect on the Dividend and
the Post January 2023 Share buybacks.
Due to this administrative oversight the Company has been advised that, as a consequence of the Dividend having been paid
otherwise than in accordance with the 2006 Act, the Dividend is technically unlawful and that the Company may have claims
against past and present shareholders who were recipients of the Dividend and against persons who were directors of the
Company at the time of the payment of the Dividend. In addition, the Company has been advised that the purported purchase
and cancellation of the Post January 2023 Share buybacks is void. The ordinary shares of the Company purportedly subject to the
Post January 2023 Share buybacks remain technically in issue but the voting rights which attach to them are not capable of being
exercised by any person. The Company intends to take action to resolve this matter as soon as practicable.
The Board notes, however, that the Company has no intention of bringing any such claims or to seek the return of funds and that the
Company’s historic reported trading results and financial condition and ability to pay future dividends and continue its previously
announced buyback programme are entirely unaffected by this matter.
The Company will shortly post to shareholders an explanatory circular in due course and convene a general meeting, at which
resolutions authorising various rectifying actions will be proposed which will, if passed and once such actions are completed, put all
potentially affected parties, so far as possible, in the position in which they were always intended to be.
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Financial Statements
Corporate Governance
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.
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 continuing adjusted operating profit to
operating profit/(loss):
2022
£m
Restated
2021
£m
Segmental adjusted operating profit
33.1
27.6
Corporate costs
(5.3)
(7.5)
Adjusted operating profit
27.8
20.1
Amortisation of brand value and
customer relationships
(6.8)
(6.4)
Operating profit
21.0
13.7
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.
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 continuing adjusted operating profit to
operating profit/(loss):
2022
£m
2021
£m
Adjusted EBITDA
34.2
26.2
Amortisation of software
(4.8)
(4.7)
Depreciation
(1.6)
(1.4)
Adjusted operating profit
27.8
20.1
Amortisation of brand value and
customer relationships
(6.8)
(6.4)
Operating profit
21.0
13.7
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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Impellam Group plc Annual Report and Accounts 2022
Continuing adjusted earnings per share
(‘EPS’)
Definition: Continuing adjusted profit divided by the weighted
average number of Ordinary shares outstanding during the year.
Closest equivalent IFRS measure: Continuing basic earnings
per share.
Rationale for adjustment: The Group uses this measure
alongside the basic EPS calculation as it reflects the underlying
trading performance of the business.
Reconciliation of adjusted EPS to basic EPS:
2022
£m
2021
£m
Continuing profit/(loss) for the
period
14.7
3.3
Customer relationship and brand
value amortisation (net of tax)
5.3
5.0
Continuing adjusted profit
20.0
8.3
Weighted average number
of shares
45,147,337
45,538,963
Unadjusted continuing EPS
32.6
7.3
Adjusted continuing EPS
44.3
18.2
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.
Following the adoption of IFRS 16 the calculation also includes
lease liabilities and debtors.
Rationale for adjustment: the Group has used this measure to
maintain alignment to the covenant reporting since 2020.
Reconciliation of net debt excluding IFRS 16 to net debt:
2022
£m
2021
£m
Cash and short-term deposits
112.4
90.9
Bank overdraft
(4.3)
(3.9)
Revolving credit
(77.8)
(101.9)
Hire purchase
–
(0.1)
Net cash/(debt) excluding IFRS 16
30.3
(15.0)
Lease liabilities
(9.9)
(16.5)
Net cash/(debt)
20.4
(31.5)
Alternative Performance Measures continued
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Strategic Report
Financial Statements
Corporate Governance
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
Net cash from operating activities divided by operating profit
Constant Exchange Rates
Calculated by multiplying the prior year functional currency amount by the current
year foreign currency exchange rate
Contingent Labour
Temporary and contract workers
Cross-sell
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
General data protection regulation which came into force on 5 May 2018
Group Fill
The percentage of Spend Under Management supplied from our Group brands
into our managed services programmes
High Road
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
Hybrid Vendor
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)
IFRS
International Financial Reporting Standards
Ignite
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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Impellam Group plc Annual Report and Accounts 2022
Glossary continued
Non-UK
All countries Impellam operates in outside of the UK. This is the US, Australasia and
Europe (excluding the UK)
Origin
Our innovation hub that acquires, invests in and partners with disruptive start-ups
in our markets as well as backing our Virtuosos’ ideas
Payroll Services
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
Technology solution for the NHS to build our Managed Services capability
Specialist Staffing
Dedicated brands which provide expert recruitment services and skilled workers
for permanent, temporary, contact and fixed-price work
Spend Under Management (‘SUM’)
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
Statement of Work (‘SOW’)
Solutions for spend in complex categories of service which include supplier
management, requisition facilitation, contract writing, negotiations and invoicing
and settlement support services
Value Chain
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
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
Virtuoso
People who see possibilities and can tune in to the needs of our customers
and candidates
Virtuous Circle
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
Virtuoso Way
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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Strategic Report
Financial Statements
Corporate Governance
Company information
Impellam is a connected group providing global workforce and specialist recruitment solutions. Our 2000 people and market
leading brands work across a broad spectrum of industries and job categories throughout North America, the UK and Europe and
APAC.
Our award-winning Global Managed Services provide a diverse range of digitally enabled, multi-disciplinary workforce solutions to
organisations around the world. We are upper quadrant industry leaders in Managed Service Provision and Services Procurement,
and the seventh largest Managed Service Provider in the world with over £4bn SUM (Spend under Management). Our STEM
businesses are specialists in recruiting and engaging talent in the key growth markets of technology, digital, data, science,
clinical and engineering and work with clients across all sectors and sizes delivering services that span Managed Services (MSP),
Recruitment Process Outsourcing (RPO), Statement of Work (SOW) and specialist recruitment.
Led by our Virtuosos, our capabilities are underpinned by our proprietary digital technology and unique partnerships with market-
leading software providers, enabling us to transform and future-proof our services.
We believe in the power of work. Through the power of work, we build better businesses and help people lead more fulfilling lives.
For more information about Impellam Group please visit: www.impellam.com
Nominated adviser and broker
Independent auditor
Canaccord Genuity Limited
BDO LLP
88 Wood Street
55 Baker Street
London
London W1U 7EU
EC2V 7QR
Registered address
Principal solicitors
Impellam Group plc
Allen & Overy LLP
800 The Boulevard
One Bishops Square
Capability Green
London E1 6AD
Luton
Bedfordshire LU1 3BA
Registrars
Link Group
Registered number
10th Floor, Central Square
06511961
29 Wellington Street
Leeds LS1 4DL
LSE symbol
IPEL
Principal bankers
Barclays Bank plc
1 Churchill Place
London E14 5HP
1 By revenue (2020 published numbers).
Impellam Group plc
800 The Boulevard
Capability Green
Luton
Registered number: 06511961
For more information visit
www.impellam.com