Prime People Limited
Annual Report and Financial Statements
for the year ended 31 March 2022
2022
Contents
Page
Chairman’s Statement
Strategic Report
Report of the Directors
Statement of Directors’ responsibilities
Independent Auditor’s report
Consolidated statement of comprehesive income
Consolidated statement of changes in equity for the year ended 31 March 2021
Consolidated statement of changes in equity for the year ended 31 March 2022
Consolidated statement of financial position
Company statement of financial position
Company statement of changes in equity
Group and company cash flow statement
Notes to the financial statements
1
2
5
7
8
11
12
13
14
16
18
19
20
1
PRIME PEOPLE LIMITED
Chairman's Statement
Performance
2022 was an encouraging year for the Group and we
closed with headline Revenue of £22.3m (2021:
£17.8m) and Net Fee Income (“NFI”) of £15.9m
(2021 £10.9m), a 45.8% year-on-year increase.
NFI comprises the total fees for permanent
candidates and the margin earned in the placement
of contract staff.
The Group’s Operating Profit was £2.45m
compared to the prior year loss of £0.12m. The
increase is a result of improved NFI generation.
Dividend
The Board will be recommending a final dividend
of 4 pence per share for the year.
Tender Offer
In January 2022 the Group delisted from AIM and
made a tender offer for 2,282,628 shares at a price
of 87 pence per ordinary share.
We are pleased to report that the tender offer was
fully subscribed and the Group purchased 18.78%
of the issued ordinary share capital at a cost of £2m.
The Group expects to announce further tender
offers as cash and trading expectations allow.
Current trading and outlook
The current trading environment continues to be
favourable and our main performance indicators are
in line with the final quarter of 2022 across our main
geographic regions.
However, as a result of volatile macro-economic
forces and geopolitical uncertainty we are cautious
about the resilience of demand through the
remainder of 2023.
The Group maintains a healthy cash position and
we intend to continue to invest in our growth areas
while offering good returns to shareholders.
Robert Macdonald
Executive Chairman
2
PRIME PEOPLE LIMITED
Strategic Report
Overview
The Group provides Permanent and Contract
recruitment services to selected, niche industry
sectors.
Real Estate continues to be the Group’s largest
market, served through its main subsidiary,
Macdonald & Company. In addition, the Group also
serves infrastructure, construction, and design
sectors through its Command brand.
Our business model is built around our people, all
of whom are specialists in their industry verticals.
The Group has two locations in the UK (the London
head office and Manchester) with international
offices in Hong Kong (established in 2007),
Singapore
(established
in
2012),
Frankfurt
(established in 2019), Düsseldorf (established in
2021), Riyadh (established in 2021), Houston
(established in 2021) and a franchise in South
Africa (established in 2008).
Regional Performance
United Kingdom
2022
£m
2021
£m
Revenue
13.27
11.67
Net Fee Income (NFI)
6.84
4.89
Operating Profit /(Loss)
1.01
(0.02)
Operating Profit /(Loss) as % of NFI
14.8%
(0.4%)
Average number of employees
50
61
Revenue increased by 13.7% to £13.27m (2021: £11.67m) with NFI increasing by 39.9% to £6.84m (2021:
£4.89m).
Asia Pacific
2022
£m
2021
£m
Revenue
6.25
5.11
Net Fee Income (NFI)
6.25
5.01
Operating Profit
0.95
0.05
Operating Profit as % of NFI
15.20%
9.23%
Average number of employees
41
50
Rest of the World
2022
£m
2021
£m
Revenue
2.79
1.03
Net Fee Income (NFI)
2.79
1.03
Operating Profit/(Loss)
0.50
(0.13)
Operating Profit/(Loss) as % of NFI
17.92%
(12.73%)
Average number of employees
12
3
The region now covers our offices in Frankfurt, Düsseldorf, Houston, and a franchise in South Africa.
3
PRIME PEOPLE LIMITED
Strategic Report (Continued)
Financial Review
Revenue
The Group’s Revenue was £22.3m, which represents a 25.3% increase compared to 2021 (£17.8m).
Net Fee Income (NFI)
Overall Group NFI was £15.88m which is an increase of 45.3% compared to the prior year.
The split of net fee income was 96.3% from Permanent Sales (2021: 94.0%) and 3.7% from Contract Sales
(2021: 6.0%).
The Group generated 56.9% of its Net Fee Income from outside the UK (2021: 55.3%).
Administration Costs
Administration costs for the year were £13.4m, an increase of 13.6% on 2021 due to the end of the furlough
scheme and increased commission costs which are associated with higher NFI.
Profit before Taxation
Profit before taxation was £2.44m (2021: loss before taxation of £0.17m).
Taxation
The taxation expense is £0.48m on profit before taxation of £2.42m (2021: credit of £0.00m on loss before
taxation of £0.17m) which gives an effective tax rate of 18.6% (2021: 2.8%). The reasons for the difference
from the standard UK corporation tax rate of 19% are detailed in note 7.
Balance Sheet
Net Assets at 31 March 2022 were £9m compared to the prior year net assets of £8.8m. Trade Receivables net
of provisions for doubtful debts at the year end were £3.5m (2021: £2.2m). The increase reflects higher
invoicing in March 2022. The average credit period taken by clients reduced to 40 days (2021: 48 days).
Treasury Management and Currency Risk
Approximately 59% of the Group’s revenue in 2022 (2021: 65.6%) was denominated in Sterling. Consequently,
the Group has a currency exposure in accounting for overseas operations.
Currently the Group policy is not to hedge against this exposure, but it does seek to minimise the effect by
converting into Sterling all cash balances in foreign currency that are not required for local short-term working
capital needs.
Cash Flow and Cash Position
At the start of the year the Group had Cash of £3.98m. After net taxation payments of £0.03m (2021: £0.13m),
cash generated from operations was £2.1m (2021: £1.0m). At the end of the year, after share purchase payments
of £1.99m (2021: £0.00m), the Group had Cash of £2.68m.
4
PRIME PEOPLE LIMITED
Strategic Report (Continued)
Financial Review
Principal Risks and Uncertainties
The Board reviews the principal risks and uncertainties facing the Group on a regular basis. The Board’s approach
is to ascertain the key risks and develop plans to reduce the potential effects of these risks on the business. The
principal risks identified are as follows:
Dependence on Key People
The sustainable success of the Group is dependent on recruiting and retaining key staff. The loss of the services
of key people could impact trading and profitability. The Group is fortunate to have the loyalty of the senior
management team which allows the business to progress, even in uncertain markets.
Macro-economic factors
There is strong correlation between the business performance and that of the economies in which the Group
operates. High inflation and rising central bank interest rates will impact our clients and may affect demand.
However, Group is geographically diversified, spanning over different countries which reduces the reliance on the
success of any single market and, moreover, the board sees opportunities in the continued shortage of talent in the
markets we serve.
Regulatory position
The increase in regulatory scrutiny and demands on compliance are influencing hiring. The Group is aware of
continuing challenges as procurement practice evolves but remains committed to being fully compliant in each of
the regions in which it operates.
Cyber Security and data protection
The risk of sensitive information being accessed without authorisation has grown in the wider business
environment. We have invested resources in cyber security with close controls over personal information and
training to ensure we meet appropriate standards of security. As technology becomes more advance we continue
to monitor cyber security trends and adopt new measures and policies that reflect the changing environment.
Treasury Policies, Liquidity and Financial Risk
Surplus funds are held to support short term working capital requirements whilst providing the flexibility required
to fund on-going operations and to invest cash safely and profitably.
Although the financial risks to which the Group is exposed are currently considered to be minor, future interest
rate, liquidity and foreign currency risks could arise. The Board continues to focus on cash flow forecasting and
to manage financial and foreign exchange risk.
Credit Risk Management
The principal credit risks arise from the Group’s trade receivables. Client credit terms and cash collections are
managed carefully, and cash balances and cash flow forecast are reviewed weekly. Monthly credit evaluation is
performed on the financial condition of accounts receivable based on payment history and third-party credit
references with appropriate provisions being made.
Dugald Macdonald
Group Commercial Director
21 July 2022
5
PRIME PEOPLE LIMITED
Report of the Directors for the Year Ended 31 March 2022
Directors
The Directors who served during the year were:
Robert Macdonald
Peter Moore
Dugald Macdonald
Chris Heayberd
Sir John Lewis OBE
As permitted by legislation, the Group has chosen to set out the information regarding likely financial risk
management objectives and policies and future developments in the business of the company, which would
otherwise be required to be contained in the Director's Report, within the Strategic Report.
Going concern
The Group has two revenue streams, Permanent and Contract recruiting, and provides these services across
several established international markets.
Trading and cash flow forecasts for a period of at least 12 months from the date of approval of the financial
statements have been prepared for, and are reviewed and challenged monthly by, a sub-committee of the Board.
The sub-committee reviews the monthly cash collection forecast, debtor collection assumptions for the
upcoming three months, disbursement control and change in cash balances 12 months forward. The forecast
models revenues and cash collections and cost outflows across the Group for the period July 2022 to July 2023.
After reviewing these forecasts, including careful consideration of downside risk trading scenarios, and having
made appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources
to continue operating for a period of at least 12 months. Consequently, the Board continues to adopt the going
concern basis when preparing the financial statements.
The Group continues to have access to an Invoice Discounting facility of up to £2m in the UK, which provides
working capital underpinned by the receivables ledger.
Environmental Policy
The Group recognises its responsibilities for the environment and gives due consideration to the possible effects
of its activities on the environment. As such, our environmental impact comes from the running of our business
generating carbon emissions through the consumption of gas and electricity, transport activities and commuting,
as well as office-based waste such as paper and toners. We do not consider that the Group’s activities have a
major effect on the environment.
Dividend
During the year no dividend was paid (2021: 0.0p).
6
PRIME PEOPLE LIMITED
Report of the Directors for the Year Ended 31 March 2022
Annual General Meeting (“AGM”)
The 2021 AGM was held on 1 September 2021 at 11:00am at 2 Harewood Place, London, W1S 1BX. All
resolutions put to Shareholders (as detailed in Note 17) were duly passed on a show of hands.
This year’s AGM will be held at 2 Harewood Place, London, W1S 1BX on 7 September 2022 at 10:00am. All
shareholders are encouraged to attend. The resolutions to be put forward to the AGM are detailed in the Notice
of AGM, which is being circulated separately to all shareholders.
Statement as to disclosure of information to auditors
The Directors, who were in office on the date of approval of these financial statements, have confirmed that, as
far as they are aware, there is no relevant audit information of which the auditors are unaware. The Directors
have confirmed that they have taken appropriate steps to make them aware of any relevant audit information
and to establish that it has been communicated to the auditors.
Auditor
Crowe U.K. LLP has expressed its willingness to continue in office and a resolution to re-appoint the firm as
Auditor and authorising the Directors to set their remuneration will be proposed at the forthcoming Annual
General Meeting.
On behalf of the Board
Peter Moore
Managing Director
21 July 2022
7
PRIME PEOPLE LIMITED
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors' 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 financial statements in accordance with UK adopted International
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 Company and the Group profit or loss for that period. In preparing these Financial
Statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently.
•
make judgments and accounting estimates that are reasonable and prudent.
•
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the Financial Statements.
•
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 enough to show and explain the
Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company
and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other
information included in the Annual Report and Financial Statements is prepared in accordance with applicable
law in the United Kingdom.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
8
PRIME PEOPLE LIMITED
Independent Auditor’s Report
Independent Auditor’s Report to the Members of Prime People Ltd
Opinion
We have audited the financial statements of Prime People Ltd (the “parent company”) and its subsidiaries (the
“group”) for the year ended 31 March 2022 which comprise
•
the Group statement of comprehensive income for the year ended 31 March 2022;
•
the Group and parent company statements of changes in equity for the year then ended
•
the Group and parent company statements of financial position as at 31 March 2021;
•
the Group and parent company statements of cash flows for the year then ended; and
•
the notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the financial statements is
applicable law and international accounting standards in conformity with the requirements of the Companies
Act 2006.
In our opinion:
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 March 2022 and of the group’s profit for the year then ended;
•
the group financial statements have been properly prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006;
•
the parent company financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 as applied in
accordance with the provisions of the Companies Act 2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are independent of the group 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, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
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 [entity]'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.
9
PRIME PEOPLE LIMITED
Independent Auditor’s Report
Other information
The directors are responsible for the other information contained within the annual report. The other information
comprises the information included in the annual report, 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 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
the information given in the strategic report and the directors' report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors' report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and their environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns;
or
•
certain disclosures of directors' remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 7, 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 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 company or to cease operations,
or have no realistic alternative but to do so.
10
PRIME PEOPLE LIMITED
Independent Auditor’s Report
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
•
We tested the appropriateness of journal entries recorded in the general ledger and other adjustments
made in the preparation of the financial statements through testing a sample of material and non-
material journal entries;
•
We made inquiries of individuals involved in the financial reporting process about inappropriate or
unusual activity relating to processing of journal entries and other adjustments
•
We reviewed accounting estimates for biases and evaluate whether the circumstances producing the
bias, if any, represent a risk of material misstatement due to fraud;
•
We perform a retrospective review of management judgements and assumptions related to significant
accounting estimates; and
•
We reviewed significant transactions outside the normal course of business, or those that appear
unusual.
A further description of our responsibilities for the audit of the financial statements 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 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 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 company and the
company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
26 July 2022
11
PRIME PEOPLE LIMITED
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2022
Note
2022
2021
£’000
£’000
Revenue
2, 3
22,308
17,802
Cost of sales
(6,429)
(6,870)
Net Fee Income
2, 3
15,879
10,932
Administrative expenses
(13,436)
(11,756)
Other operating income (Covid related
Governmental support)
-
707
Operating profit/(loss)
4
2,443
(117)
Net interest payable
(26)
(56)
Profit/(loss) before taxation
2,417
(173)
Income tax (expense)/credit
7
(479)
5
Profit/(loss) for the year
Other comprehensive income
Items that will or may be reclassified
to profit or loss:
Exchange gain/(loss) on translating
foreign operations
1,938
125
(168)
(267)
Other Comprehensive gain/(loss) for
the year, net of tax
125
(267)
Total comprehensive profit/(loss) for
the year
2,063
(435)
Profit/(loss) attributable to:
Equity shareholders of the parent
1,879
(36)
Non-controlling interest
59
(132)
Total comprehensive profit/(loss)
attributable to:
Equity shareholders of the parent
2,004
(303)
Non-controlling interest
59
(132)
The above results relate to continuing operations.
12
PRIME PEOPLE LIMITED
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Called up
share
capital
Capital
Redemption
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Translation
reserve
Retained
Earnings
Total
attributable to
equity holders
of the parent
Non-
controlling
interest
Total
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 31 March 2020
1,231
9
-
3,376
173
187
491
3,314
8,781
664
9,445
Loss for the year
-
-
-
-
-
-
-
(36)
(36)
(132)
(168)
Other comprehensive
loss
-
-
-
-
-
-
(267)
-
(267)
-
(267)
Total Comprehensive
loss for the year
-
-
-
-
-
-
(267)
(36)
(303)
(132)
(435)
Transactions with owners of the company
Adjustment in respect of
minority dividend
-
-
-
-
-
-
-
(152)
(152)
-
(152)
Adjustment in respect of
share schemes
-
-
-
-
-
76
-
-
76
-
76
Shares purchased for
treasury
-
-
(103)
-
-
-
-
-
(103)
-
(103)
Adjustment in respect of
share options
-
-
-
-
-
(24)
-
24
-
-
-
At 31 March 2021
1,231
9
(103)
3,376
173
239
224
3,150
8,299
532
8,831
13
PRIME PEOPLE LIMITED
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Called up
share
capital
Capital
Redemption
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Translation
reserve
Retained
Earnings
Total
attributable to
equity holders
of the parent
Non-
controlling
interest
Total
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 31 March 2021
1,231
9
(103)
3,376
173
239
224
3,150
8,299
532
8,831
Profit for the year
-
-
-
-
-
-
-
1,879
1,879
59
1,938
Other comprehensive
profit
-
-
-
-
-
-
125
-
125
-
125
Total Comprehensive
profit for the year
-
-
-
-
-
-
125
1,879
2,004
59
2,063
Shares bought back and
cancelled
(228)
228
-
-
-
-
-
(1,986)
(1,986)
-
(1,986)
Adjustment in respect of
share schemes
-
-
-
-
-
97
-
51
148
-
148
Shares issued from
treasury
-
-
4
-
-
-
-
-
4
-
4
At 31 March 2022
1,003
237
(99)
3,376
173
336
349
3,094
8,469
591
9,060
14
PRIME PEOPLE LIMITED
Consolidated Statement of Financial Position
As at 31 March 2022
2022
2021
Note
£’000
£’000
Assets
Non – current assets
Goodwill
10
6,509
6,509
Property, plant and equipment
9
751
1,284
7,260
7,793
Current assets
Trade and other receivables
12
4,281
3,061
Deferred tax asset
16
40
40
Cash at bank and in hand
21
2,683
3,980
7,004
7,081
Total assets
14,264
14,874
Liabilities
Current liabilities
Trade and other payables
14
3,592
3,140
Lease liabilities
396
533
Current tax liability
490
95
Deferred tax liability
16
22
22
4,500
3,790
Non-current liabilities
Borrowings
15
611
1,733
Lease liabilities
93
520
Total liabilities
5,204
6,043
Net assets
9,060
8,831
15
PRIME PEOPLE LIMITED
Consolidated Statement of Financial Position
As at 31 March 2022
2022
2021
Note
£’000
£’000
Capital and reserves attributable to the
Company’s equity holders
Called up share capital
17
1,003
1,231
Capital redemption reserve
18
237
9
Treasury shares
18
(99)
(103)
Share premium account
18
3,376
3,376
Merger reserve
18
173
173
Share option reserve
18
336
239
Translation reserve
18
349
224
Retained earnings
18
3,094
3,150
8,469
8,299
Non-controlling interest
591
532
Total equity
9,060
8,831
The financial statements on pages 11 to 51 were approved by the Board of Directors and authorised for issue
on 21 July 2022 and are signed on its behalf by:
D J G Macdonald
P H Moore
16
PRIME PEOPLE LIMITED
Company Statement of Financial Position
As at 31 March 2022
2022
2021
Note
£’000
£’000
Assets
Non-current assets
Investment in subsidiaries
11
7,286
7,189
7,286
7,189
Current assets
Trade and other receivables
12
5,562
4,054
Cash and cash equivalents
22
54
556
5,616
4,610
Total assets
12,902
11,799
Liabilities
Current liabilities
Trade and other payables
14
5,079
2,580
Current tax liability
5,079
2,580
Non-current liabilities
Borrowings
15
611
1,733
611
1,733
Total liabilities
5,690
4,313
Net assets
7,212
7,486
Called up share capital
17
1,003
1,231
Capital redemption reserve fund
18
237
9
Treasury shares
18
(99)
(103)
Share premium account
18
3,376
3,376
Merger reserve
18
173
173
Share option reserve
18
336
239
Retained earnings
18
2,186
2,561
Total equity
7,212
7,486
17
PRIME PEOPLE LIMITED
Company Statement of Financial Position
As at 31 March 2022
The Company’s retained earnings includes profit for the year of £1,610,740 (2021: £294,034).
The financial statements of Prime People Limited, Company Number 01729887 were approved by the Board
and authorised for issue on 21 July 2022 and are signed on its behalf by:
D J G Macdonald
P H Moore
18
PRIME PEOPLE LIMITED
Company Statement of Changes in Equity
For the year ended 31 March 2022
Company
Called-
up
share
capital
Capital
Redemp-
tion
reserve
Treasury
shares
Share
premium
account
Merger
reserve
Share
option
reserve
Retained
earnings
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
At 31 March
2020
1,231
9
-
3,376
173
187
2,267
7,243
Total
comprehensive
profit for the
year
-
-
-
-
-
-
294
294
Shares
purchased for
treasury
-
-
(103)
-
-
-
-
(23)
Adjustment in
respect of share
options
-
-
-
-
-
52
-
52
At 31 March
2021
1,231
9
(103)
3,376
173
239
2,561
7,486
Total
comprehensive
profit for the
year
-
-
-
-
-
-
1,611
1,611
Shares bought
back and
cancelled
(228)
228
-
-
-
-
(1,986)
(1,986)
Shares
purchased for
treasury
-
-
4
-
-
-
-
4
Adjustment in
respect of share
options
-
-
-
-
-
97
-
97
At 31 March
2022
1,003
237
(99)
3,376
173
336
2,186
7,212
19
PRIME PEOPLE LIMITED
Group and Company Cash Flow Statement
For the year ended 31 March 2022
Group
Company
2022
2021
2022
2021
Note
£’000
£’000
£’000
£’000
Cash generated from (used in) underlying
operations
20
2,118
2,016
(61)
10
Corporation tax (paid)/received
(26)
(125)
11
(9)
Net cash from/ (used in) operating activities
2,092
1,891
(50)
1
Cash flows (used in)/ from investing activities
Interest received
-
5
-
5
Purchase of property, plant and equipment, and
software
(190)
(75)
-
-
Dividend received
-
-
1,600
300
Net cash (used in)/from investing activities
(190)
(70)
1,600
305
Cash flows from financing activities
Interest paid
1
(13)
-
-
Purchase of ordinary share capital
(1,986)
-
(1,986)
-
Shares issued from treasury
4
-
4
-
Shares purchased for treasury
-
(103)
-
(103)
Dividend paid to non-controlling interest
-
(152)
-
-
Increase in / (repayment of) intercompany debt
-
-
958
(2,523)
Increase in / (repayment of) invoice discounting loan
301
(822)
-
-
Coronavirus Business Interruption Loan
(2,000)
2,000
(2,000)
2,000
Bank loan
972
-
972
-
Lease payments including interest
(591)
(519)
-
-
Net cash (used in) / from financing activities
21
(3,299)
391
(2,501)
(626)
Net (decrease)/ increase in cash and cash
equivalents
(1,397)
2,212
(501)
(320)
Cash and cash equivalents at beginning of the
year
3,980
2,055
556
876
Effect of foreign exchange rate changes
100
(287)
-
-
Cash and cash equivalents at the end of the year
22
2,683
3,980
55
556
20
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
1
Nature of Operations
Prime People Limited (‘the Company’) and its subsidiaries (together ‘the Group’) is an international recruitment
services organisation with offices in the United Kingdom, Europe, the United States, the Middle East and the
Asia Pacific region from which it serves an international client base. The Group offers both Permanent and
Contract specialist recruitment consultancy for large and medium sized organisations.
The Company is a private limited company which delisted from AIM on 25 January 2022 and is incorporated
and domiciled in the UK. The address of the registered office and the principal place of business is 2 Harewood
Place, London W1S 1BX. The registered number of the Company is 01729887.
2
Summary of Significant Accounting Policies
Basis of Preparation
The financial statements of Prime People Limited consolidate the results of the Company and all its subsidiary
undertakings. As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company
has not been included as part of these financial statements. The financial statements have been prepared on a going
concern basis.
The consolidated financial statements of the Group and Company have been prepared on going concern basis,
and in accordance with UK adopted International Accounting Standards. They are consistent with the previous
period, in conformity with the requirement of the Companies Act 2006 and comply with IFRIC interpretations
and company law applicable to companies reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention modified as necessary to include certain items at fair value,
as required by accounting standards.
The Parent Company’s Financial Statements have also been prepared in accordance with IFRS and the
Companies Act 2006. The consolidated financial statements for the year ended 31 March 2022 (including
comparatives) are presented in GBP ’000.
The accounting polices applied by the Group in these consolidated financial statements are the same as those
applied in its consolidated Financial Statements as at and for the year ended 31 March 2021.
International Accounting Standards (IAS/IFRS) and Interpretations in issue but not yet UK approved
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations
to existing standards have been published by the IASB but are not yet effective. These have not been adopted
early by the Group and the initial assessment indicates that either they will not be relevant or will not have a
material impact on the Group. The effective dates below are for reporting periods beginning on or after that
point:
International Accounting Standards (IAS/IFRS) and Amendments adopted by the UK but not yet
effective in the UK
•
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current (issued on 23 January 2020) and Classification of Liabilities as Current or Non-current
(issued on 15 July 2020), deferral of effective date to 1 January 2023
21
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
•
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure
of Accounting policies (issued on 12 February 2021), effective 1 January 2023
•
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (issued on 7 May 2021), effective 1 January 2023
The Group does not believe that the amendments to IAS 1 will have a significant impact on the classification
of its liabilities.
Consolidation
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date
that control ceases.
Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition
is measured at the aggregate of the fair value of the assets given, equity instruments issued, and liabilities
incurred or assumed at the date of exchange. Acquisition related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition date fair value. The excess of the cost of acquisition
over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill.
Inter-company transactions and balances on transactions between Group companies are eliminated in preparing
the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
22
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
Going Concern
The Directors have prepared cash flow forecasts for a period of at least 12 months from the date of issue of the
Annual Report and Accounts. The Directors also note that the Group is trading adequately and has sufficient
working capital and other finance available to continue trading for a period of at least 12 months from the date
of issue of the Annual Report and Accounts. As such, the Directors consider it appropriate to continue to prepare
the financial statements on a Going Concern basis.
Revenue recognition
a) Revenue
Revenue, which excludes value added tax (“VAT”), constitutes the value of services undertaken by the Group
from its principal activities, which are recruitment consultancy and other ancillary services. These consist of:
-
Revenue from Contract placements, which represents amounts billed for the services of contract staff,
including the salary of these staff. This is recognised over the duration of the placement contract as the
service is provided; and
-
Revenue from Permanent placements, which is based on a percentage of the candidate’s remuneration
package and is derived from retained assignments (income is recognised after an offer is accepted and
candidate commences employment). Revenue is recognised once value has been received by the customer
and when the above performance obligation has been satisfied. A provision is made for certain
circumstances where a client may be entitled to a refund based on variable consideration if a candidate that
has been placed leaves the role within 3 months; and
-
Revenue from franchise, is recognised on an accruals basis in line with the period to which it relates
b) Cost of Sales
Cost of sales consists of the salary cost of contract staff and costs incurred on behalf of clients, principally
advertising costs.
c) Net Fee Income
Net Fee Income represents Revenue less Cost of Sales and consists of the total placement fees of Permanent
candidates and the margin earned on the placement of Contract candidates.
23
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
d) Foreign Currency Translation
(i) Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of
the primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Sterling, which is the Company’s functional and presentation currency.
(ii) Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the consolidated statement of comprehensive income.
(iii) Group Companies
On consolidation the results and financial position of all the Group entities that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:
•
assets and liabilities for each year end presented are translated at the closing rate of that year end;
•
income and expenses for each statement of comprehensive income are translated at average exchange
rates; and
•
all resulting exchange differences are recognised in other comprehensive income.
e) Government grants
Grants are accounted for under the accruals model. Grants of a revenue nature are recognised in the statement
of comprehensive income in the same period as the related expenditure and are shown within other operating
income.
f) Intangible Assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries
is included in ‘intangible’ assets.
Separately recognised goodwill is reviewed annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Determining whether goodwill is impaired
requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated.
The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate present value.
24
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
Intangible assets that are acquired separately are carried at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful life. The
estimated useful life and amortisation method are reviewed at the end of each reporting period, with any changes
being accounted for on a prospective basis.
g) Property, Plant and Equipment
All property, plant and equipment are stated at historical cost less accumulated depreciation less provisions for
impairment. Depreciation is provided on all property, plant and equipment using the straight-line method at
rates calculated to write off the cost less estimated residual values over their estimated useful lives, as follows:
•
Furniture, fittings and computer equipment 25% – 33%
The gain or loss arising on disposal or retirement of an asset is determined by comparing the sales proceeds
with the carrying amount of the asset and is recognised within profit and loss.
h) Impairment of Assets
Assets that have an indefinite useful economic life are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is
the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating
units).
i) Taxation
The tax expense represents the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported
in the statement of comprehensive income because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability
for current tax is calculated using tax rates that have been enacted or substantively enacted by the statement of
financial position reporting date.
Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined
using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
25
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
j) Leases
The Group recognises within the balance sheet a right-of-use asset and a corresponding lease liability for all
applicable leases except for short term leases (lease term of 12 months or less) and leases of low value assets
(less than £5,000). For those leases the Group has opted to recognise a leases expense on a straight line basis.
New right-of-use assets are measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
lease payments made at or before commencement of the lease.
•
initial direct costs incurred; and
•
the amount of any provision recognised where the group is contractually required to dismantle, remove
or restore the leased asset (typically leasehold dilapidations).
•
using hindsight in determining the lease term where the lease agreement contains options to extend or
terminate the contract
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case applying a single discount rate to leases with reasonably
similar characteristics. The Group does not have any leases with variable lease payments.
Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate of
return on the balance outstanding and are reduced for lease payments made. Right of use assets are depreciated
on a straight line basis over the remaining term of the lease.
When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability
of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted using a revised discount rate. An
equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount
being depreciated over the revised remaining lease term.
k) Pension Costs
The Group operates a defined contribution pension scheme in the United Kingdom. The Group adopts both the
minimum legally required employer contribution rate of 3% of qualifying earnings, and the maximum earning
threshold for automatic enrolment for 2021-22, as set by the Pension Regulator.
The assets of the scheme are held separately from those of the Group in independently administered workplace
pension - NEST. The pension costs charged to the income statement represent the contributions payable by the
Group to NEST during the year.
The Pension liabilities at the Balance Sheet date represent employer and employee pension contributions, that
are payable to the pension provider by the 22nd day of each month.
26
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
l) Segmental Reporting
IFRS 8 requires operating segments to be identified based on internal reports that are regularly reviewed by the
Board of Directors to allocate resources to the segment and to assess their performance.
m) Financial instruments
Financial assets and liabilities are recognised in the Group’s balance sheet when the Group becomes a party to
the contractual provision of the instrument.
n) Financial assets
The Group’s financial assets comprise cash and various other receivable balances that arise from its operations.
This includes the Group’s trade and other receivables. They are initially recorded at fair value and subsequently
measured at amortised cost. For trade receivables amortised cost includes an allowance for expected credit
losses. This is assessed applying a provision percentage of expected loss to each of these which is assessed by
reference to past default experience. Trade receivables are only written off once the potential of collection is
considered to be nil and any local requirements such as withholding sales taxes are met.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets
except for trade receivables, where the carrying amount is reduced using an allowance account. When a trade
receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of
amounts previously written off are credited against the allowance account. Changes in the carrying amount of
the allowance account are recognised in the profit or loss account.
Cash and cash equivalents include cash in hand and bank deposits that are readily convertible to a known amount
of cash and are subject to an insignificant risk of changes in value. Bank overdrafts are classified with current
liabilities in the statement of financial position.
o) Financial liabilities and equity
The Group’s operating activities in the UK are part funded by Invoice Financing facilities. Movements in the
Invoice Discounting balance are shown within financing activities in the Group’s Cash flow Statement. Interest
charges on invoice discounting are included in finance costs and service charges are included in administrative
costs in the Group’s Income Statement.
Financial liabilities and equity instruments are initially measured at fair value and are classified according to
the substance of the contractual arrangements entered. Financial liabilities are subsequently measured at
amortised cost. The Group’s financial liabilities comprise trade payables, bank overdrafts and other payable
balances that arise from its operations. They are classified as ‘financial liabilities measured at amortised cost’.
p) Share-Based Compensation
The Group operates equity-settled, share-based compensation plans. The fair value of the employee services
received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed
over the vesting period is determined by reference to the fair value of the options granted, excluding the impact
of any non-market vesting conditions (for example, profitability and sales growth targets). At the balance sheet
date, the number of outstanding options is adjusted to reflect those options that have been granted during the
year or have lapsed in the year.
27
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
Summary of Significant Accounting Policies (continued)
q) Dividend Distribution
A final dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders. Interim dividend
distributions are recognised in the period in which they are approved and paid.
r) Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates and judgements. It also requires management to exercise judgement in the process of applying the
Company’s accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amount recognised in the financial statements are described
below:
Critical judgements in applying the Group’s policies
Revenue Recognition
Revenue from permanent placements is recognised when a candidate commences employment as management
considers that to be when the performance obligation is satisfied.
Key sources of estimation uncertainty
Goodwill Impairment
The Group tests goodwill for impairment at least annually. The recoverable amount is determined based on
value-in-use calculations. This method requires the estimation of future cash flows and the assessment of a
suitable discount rate in order to calculate their present value. Details of the impairment review are disclosed in
note 10.
Trade Receivables
There is uncertainty regarding customers who may not be able to pay as their debts fall due. In reviewing the
appropriateness of the provisions in respect of recoverability of trade receivables, consideration has been given
to the ageing of the debt and the potential likelihood of default, considering current economic conditions. Details
of the total amount of receivables past due and the movement in allowance for doubtful debts are disclosed in
note 12.
28
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
3
Segment Reporting
a)
Revenue and Net Fee Income, by Geographical Region
Information provided to the Board is focused on regions and as a result, reportable segments are on a regional
basis.
Revenue
Net fee income
2022
2021
2022
2021
£’000
£’000
£’000
£’000
UK
13,273
11,668
6,844
4,894
Asia
6,248
5,105
6,248
5,009
Rest of World
2,787
1,029
2,787
1,029
22,308
17,802
15,879
10,932
All revenues disclosed by the Group are derived from external clients and are for the provision of recruitment
services. The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in note 2. Segment profit before taxation shown below represents the profit earned by each segment
after allocations of central administration costs.
b)
Revenue and Net Fee Income, by Classification
Revenue
Net fee income
2022
2021
2022
2021
£’000
£’000
£’000
£’000
Permanent
- UK
- Asia
- Rest of World
6,255
6,248
2,787
4,257
4,995
1,029
6,255
6,248
2,787
4,257
4,995
1,029
Contract
- UK
- Asia
7,018
-
7,411
110
589
-
637
14
Total
22,308
17,802
15,879
10,932
29
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
3
Segment Reporting (continued)
c)
Profit before Taxation by Geographical Region
2022
2021
£’000
£’000
UK
1,000
(33)
Asia
948
47
Rest of World
495
(131)
Operating profit/(loss)
2,443
(117)
Net finance income/(loss)
(26)
(56)
Profit/(loss) before taxation
2,417
(173)
Operating profit is the measure of profitability regularly reviewed by the Board, which collectively acts as the
Chief Operating Decision Maker. Consequently, no segmental analysis of interest or tax expenses is provided.
Segment operating profit is the profit earned by each operating unit and includes inter-segment revenues
totalling £1.64m (2021: £1.29m) for the UK, and charges of £1.24m (2021: £1.11m) for Asia and £0.40m for
the rest of the world (2021: £0.18).
Intersegmental revenue and charges relate to transfer of services from one subsidiary of the Group to another.
They are based on arm’s-length calculations and in proportion to segmental headcount as percentage of the total
Group headcount.
d)
Segment Assets and Liabilities by Geographical Region
Total assets
Total liabilities
2022
2021
2022
2021
£’000
£’000
£’000
£’000
UK
4,728
9,288
1,781
3,768
Asia
7,859
5,363
2,529
1,910
Rest of World
1,677
223
895
365
Total
14,264
14,874
5,205
6,043
The analysis above is of the carrying amount of reportable segment assets and liabilities. Segment assets and
liabilities include items directly attributable to a segment and include income tax assets and liabilities.
30
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
4 Loss on ordinary activities before taxation
2022
2021
£’000
£’000
Operating loss for the year is arrived at after charging:
Depreciation - owned assets and leased assets
706
701
Loss/(profit) on disposal of fixed assets
-
-
Exchange rate (gain)/loss
(70)
49
The analysis of auditor’s remuneration is as follows:
Audit of Company
26
31
Audit of subsidiaries
55
53
Total audit fees
81
84
5 Directors’ emoluments
2022
2021
£’000
£’000
Emoluments for qualifying services
734
521
Loss of office
-
80
734
601
Highest paid Director:
Emoluments for qualifying services
314
208
31
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
6
Employees
Group
2022
2021
Number
Number
The average monthly number of employees of the Group during the year,
including Directors, was as follows:
Consultants
76
87
Management and administration
27
30
Temporary staff
8
23
111
140
Company
2022
2021
Number
Number
The average monthly number of employees of the Company during the year,
including Directors, was as follows:
Management
5
6
Staff costs for all employees, including Directors, but excluding contract staff placed with clients are as follows
and have been included in Administration expenses in the Consolidated statement of comprehensive income:
Group
2022
2021
£’000
£’000
Wages and salaries
8,850
6,973
Social security costs
768
608
Pension contributions
66
43
Share option charge
147
76
9,831
7,700
Remuneration of key management
2022
2021
£’000
£’000
Short-term employee benefits
1,682
1,283
Social security costs
168
119
Share-based payments
132
76
Pension contributions
9
9
1,991
1,487
Key management includes executive Directors and senior divisional managers.
32
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
7
Taxation on Profits on Ordinary Activities
2022
2021
£’000
£’000
a) Analysis of tax charge in the year
Current tax
UK Corporation tax
325
50
Over provision in prior year
(11)
(41)
Foreign tax
165
(14)
Foreign tax over-provision in prior years
-
-
Total current tax
479
(5)
Deferred tax
Deferred tax on fair value share option charge
-
-
Total charge/(credit) on profit/(loss) for the year
479
(5)
UK corporation tax is calculated at 19% (2021: 19%) of the estimated assessable profits for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
b) The charge for the year can be reconciled to the profit per the consolidated statement of
comprehensive income as follows:
2022
£’000
2021
£’000
Profit/(loss) before taxation
2,443
(173)
Tax at UK corporation tax rate of 19% (2021: 19%) on profit on ordinary
activities
464
(33)
Effects of:
Expenses not deductible for tax purposes
24
4
Decelerated / (accelerated) capital allowances
-
19
Depreciation on non-qualifying assets
48
-
Increase in general debt provision
-
-
Difference on Right of use asset
-
22
Tax rate differences
(12)
-
Exchange rate differences
-
-
Tax losses carried forward
(84)
24
Temporary differences recognised
-
-
Permanent timing differences
-
-
Share option charge/exercised
28
14
468
50
Over provision in prior year
11
(55)
Tax charge/(credit) for the year
479
(5)
33
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
8
Dividends
2022
2021
£’000
£’000
Final dividend for 2021: 0.00p per share (2020: 0.00p per share)
-
-
Interim dividend for 2022: 0.00p per share (2021: 0.00p per share)
-
-
Command Recruitment Group (HK) Limited dividend to non-controlling
shareholders
-
-
-
-
An interim dividend of 2p was paid on 1 June 2022 to shareholders on the register at the close of business on
20 May 2022. The interim dividend was approved by the Board on 5 May 2022.
The Board has recommended a final dividend of 4p per share (2021: 0p) to be paid in October 2022, subject to
shareholder approval at the Annual General Meeting, making a total dividend paid to shareholders for the year
of 6p per ordinary share (2021: 0p).
34
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
9
Property, Plant and Equipment
Fixtures,
fittings, and
equipment
Right-of-use
assets - Land
and buildings
Total
Group
£’000
£’000
£’000
Cost
At 1 April 2020
2,111
3,206
5,317
Additions
75
107
182
Disposals
-
(93)
(93)
Exchange difference
(64)
(104)
(168)
At 1 April 2021
2,122
3,116
5,238
Additions
190
-
190
Disposals
(748)
(80)
(828)
Exchange difference
26
40
66
At 31 March 2022
1,590
3,076
4,666
Depreciation
At 1 April 2020
1,505
1,922
3,427
Provision for the year
258
443
701
Disposals
-
(93)
(93)
Exchange difference
(34)
(47)
(81)
At 1 April 2021
1,729
2,225
3,954
Provision for the year
253
415
668
Disposals
(748)
-
(748)
Exchange difference
18
23
41
At 31 March 2022
1,252
2,663
3,915
Net book value
At 31 March 2022
338
413
751
At 31 March 2021
393
891
1,284
At 31 March 2020
606
1,284
1,890
35
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
10 Goodwill
£’000
Cost
At 1 April 2021
6,509
Goodwill impairment
-
At 31 March 2022
6,509
The total carrying value of goodwill is £6.51m, which relates to the acquisition of the Macdonald & Company
Group in January 2006 and Command Recruitment Group (H.K.) Limited in October 2017. Goodwill is
reviewed and tested for impairment on an annual basis or more frequently if there is an indication that goodwill
might be impaired. Goodwill has been tested for impairment by comparing the carrying amount of the group of
cash generating units (CGUs) the goodwill has been allocated to, with the recoverable amount of those CGUs.
The recoverable amounts of the CGUs are their value in use.
The assessment for Macdonald & Company Group is based on UK projected operating profit. The recoverable
amount is determined on a value-in-use basis utilising the value of cash flow projections over four years with a
terminal value based on a growth rate in perpetuity. The first year of the projections is based on detailed budgets
prepared and approved by management. Subsequent years are based on extrapolations.
The key assumption in calculating the value in use was the Group would meet its budgeted growth in the UK.
For the year after the end of the period covered by the budget a growth rate of 5.00% is applied. This is deemed
reasonable and represents the average rate of growth in the markets in which the Group operates. A discount
rate of 11.81% has been applied, representing the weighted average cost of capital for the Group.
As a result of the impairment reviews carried out at 31 March 2022, no impairment charge (2021: £Nil) has
been recognised for the UK business segment, since the ‘recoverable amount’ (being the greater of the net
realisable value and the value in use) exceeds the carrying amount. A few potential sensitivity scenarios have
been considered. One of the scenarios would indicate impairment if the discount rate were to increase to 17%.
On the other hand if only 70% of the budgeted revenue for year ending 31 March 2023 is achieved then this
would not result in an impairment. Management are confident the assessment is reasonable as the NFI generated
in the first three months post 31 March 2022 is in line with the assumptions applied.
Goodwill recognised on the business combination in 2018 with Command recruitment Group (HK) limited was
£758k. The assessment of Command Recruitment Group (H.K) Limited is based on projected results in Hong
Kong. The approach is the same as that used for Macdonald & Company Group. In assessing value in use, the
estimated future cash flows are calculated by preparing cash flow forecasts derived from the most recent
financial forecasts for four years. This analysis does not indicate any impairment. Multiple sensitivity scenarios
have been considered and, Command does not show an impairment if either the cost of capital increases to 17%,
or if only 70% of the budgeted revenue for year ending 31 March 2023 is achieved.
36
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
11
Investments
Company shares in subsidiary undertakings
2022
2021
£’000
£’000
Cost
At 1 April 2021
7,189
7,137
Impairment of investment asset
-
-
Increase in shares from subsidiary from share option reserve
97
52
At 31 March 22
7,286
7,189
The investment value is linked to the Goodwill. The model and assumptions applied to assessing the Goodwill
impairment have been applied to the carrying value of the investment and based on that no impairment has been
recognised in the period.
Non-Controlling Interest
The following table summarises the information relating to Command Recruitment Group (HK) Limited, that
is a subsidiary with material non-controlling interest (“NCI”), before any intra-group eliminations.
2022
2021
£’000
£’000
NCI percentage
40%
40%
Non-current assets
80
175
Current assets
2,587
1,749
Current liabilities
(1,345)
(753)
Non-current liabilities
-
(64)
Net assets
1,321
1,107
Net assets attributable to NCI
528
443
Revenue
2,140
1,700
Operating profit/(loss)
147
(322)
Profit/(loss) after interest and tax
147
(330)
Other comprehensive income/(loss)
67
(158)
Total comprehensive income
214
(448)
Profit after interest and tax allocated to NCI
59
(132)
Other comprehensive income/(loss) allocated to NCI
27
(63)
Cash flows from operating activities
109
(300)
Cash flows from financing activities
-
-
Net increase/(decrease) in cash and cash equivalents
109
(300)
37
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
11
Investments (Continued)
The following are subsidiary undertakings at the end of the year and have all been included in the consolidated
financial statements:
Country of
incorporation
Principal activity
Registered address
Macdonald & Company
Group Limited
England and Wales
Holding Company
2 Harewood Place, Hanover
Square, London, W1S 1BX
Macdonald & Company
Property Limited
England and Wales
Recruitment
2 Harewood Place, Hanover
Square, London, W1S 1BX
Macdonald and Company
Freelance Limited
England and Wales
Recruitment
2 Harewood Place, Hanover
Square, London, W1S 1BX
Macdonald & Company
(Overseas) Limited
England and Wales
Dormant
2 Harewood Place, Hanover
Square, London, W1S 1BX
Macdonald & Company Ltd
Hong Kong
Recruitment
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
Ru Yi Consulting Limited
Hong Kong
Dormant
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
Macdonald & Company
(Shenzhen) Limited
P.R. China
Recruitment
1503M, 15/F, Tower 2, Kerry
Plaza, No.1 Zhong Xin Si Road,
Futian District, Shenzhen 518048,
P.R. China
Macdonald and Company
Pte Limited
Singapore
Recruitment
63 Market Street #05-02, Bank of
Singapore Centre, Singapore
048942
Macdonald & Company Pty
Ltd
Australia
Dormant
Storey Blackwood & Co, Level 4,
222 Clarence Street, Sydney NSW
2000 Australia
Macdonald & Company
Recruitment Proprietary Ltd
South Africa
Dormant
1 Emfuleni, 79 Crassula Crescent,
Woodmead, Johannesburg, 2052
South Africa
The Prime Organisation Ltd
England and Wales
Dormant
2 Harewood Place, Hanover
Square, London, W1S 1BX
Command Recruitment
Group (H.K.) Limited
Hong Kong
Recruitment
29th Floor
3 Lockhart Road
Wan Chai, Hong Kong
Prime People Inc.
U.S.A.
Recruitment
1209 Orange Street, Wilmington,
New Castle County, Delaware
19801
Macdonald Consulting GmbH
Germany
Dormant
District Court, Frankfurt am Main,
HRB 121950
For all undertakings listed above, the country of operation is the same as its country of incorporation.
The Group holds 100% of all classes of issued share capital except in the case of Command Recruitment Group
(H.K.) Limited, where it owns 60%, The percentage of the issued share capital held is equivalent to the
percentage of voting rights for all companies.
38
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
12
Trade and other receivables
Group
Company
2022
2021
2022
2021
£’000
£’000
£’000
£’000
Current
Trade receivables
3,890
2,582
-
-
Allowance for doubtful debts
(410)
(380)
-
-
Other receivables
301
453
176
159
Amounts owed by subsidiary company
-
-
5,350
3,868
Prepayments and accrued income
500
406
36
27
4,281
3,061
5,562
4,054
At 31 March 2022 the average credit period taken on sales of recruitment services was 40 days (2021: 48 days)
from the date of invoicing. An allowance of £409,541 (2021: £380,000) has been made for estimated
irrecoverable amounts. Due to the short-term nature of trade and other receivables, the Directors consider that
the carrying value approximates to their fair value.
A provision for impairment of trade receivables has been made. In reviewing the appropriateness of the
provision, consideration has been given to the ageing of the debt and the potential likelihood of default, taking
into account current economic conditions.
The ageing of group trade receivables at the reporting date was:
Gross trade
receivables
Provisions
Expected
Loss rate
Gross trade
receivables
Provisions
Expected
Loss rate
2022
2022
2022
2021
2021
2021
£’000
£’000
%
£’000
£’000
%
Not
past
due
0 -30 days
2,468
76
3.1%
1,475
71
4.8%
Past due 30-90 days
1,023
56
5.4%
631
18
2.9%
Past due more than
90 days
399
278
69.5%
476
291
61.1%
3,890
410
2,582
380
The expected loss rates for trade receivables are based on the payment profile and the shared credit risk
characteristics arising in the different industries in which the Group operates. The Company has incorporated
forward-looking information based on the clients’ industries and financial position, including the assessment of
any perceived impact of Covid-19.
39
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
12
Trade and other Receivables (continued)
Movement in allowance for doubtful debts:
2022
2021
£’000
£’000
1 April 2021
380
340
Impairment losses recognised
230
164
Amounts written off as uncollectable
(13)
(63)
Amounts paid by the client
(49)
(22)
Impairment losses reversed
(138)
(39)
31 March 2022
410
380
13
Financial Instruments
Group
Company
2022
2021
2022
2021
Note
£’000
£’000
£’000
£’000
Financial assets at amortised cost
Trade and other receivables
12
3,781
2,655
176
159
Amounts owed by subsidiary company
12
-
-
5,350
3,868
Cash and cash equivalents
2,683
3,980
54
556
6,464
6,646
5,580
4,583
Cash is held either on current account or on short-term deposits at floating rates of interest determined by the
relevant bank's prevailing base rate.
Group
Company
2022
2021
2022
2021
Note
£’000
£’000
£’000
£’000
Financial liabilities at amortised cost
Trade and other payables
14
798
742
4,685
2,247
Accruals
14
1,776
1,335
32
65
Bank loan
972
972
Coronavirus Business Interruption
Loan
2,000
2,000
3,546
4,077
5,689
4,312
There is no material difference between the book values of the Group's financial assets and liabilities and their
fair values.
Neither the Group nor the Company hold any derivative financial instruments.
40
PRIME PEOPLE LIMITED
Notes to the financial statements
For the year ended 31 March 2022
14
Trade and other Payables
Group
Company
2022
2021
2022
2021
£’000
£’000
£’000
£’000
Current
Trade payables
304
203
28
30
Other payables
494
539
-
-
Amount owed to subsidiary
undertakings
-
-
4,657
2,217
Taxation and social security
657
796
1
1
Coronavirus Business Interruption
Loan
-
267
-
267
Bank loan
361
-
361
-
Accruals
1,776
1,335
32
65
3,592
3,140
5,079
2,580
Due to the short-term nature of the trade and other payables, the Directors consider that the carrying value
approximates to their fair value. Trade payables are generally on 30–60-day terms. No payables are past their
due date.
15
Borrowings due after more than one year
Group
Company
2022
2021
2022
2021
£’000
£’000
£’000
£’000
Borrowings due after more than one year
Coronavirus Business Interruption Loan
-
1,733
-
1,733
Bank loan
611
-
611
-
611
1,733
611
1,733
The loan is repaid in 36 equal instalments from March 2022 to February 2025.
41
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
16
Deferred Tax
Group (Liability)
Other
temporary
differences
Total
£’000
£’000
At 1 April 2020
22
22
Credit to income
-
-
At 31 March 2021
22
22
Debit to income
-
-
At 31 March 2022
22
22
Group (Asset)
Share Options
Total
£’000
£’000
At 1 April 2020
40
40
Debit to income
-
-
At 31 March 2021
40
40
Debit to income
-
-
At 31 March 2022
40
40
17
Share Capital
2022
2021
Number
£’000
Number
£’000
ALLOTTED CALLED UP
Ordinary shares of 10p each
As at 1 April
12,307,273
1,231
12,307,273
1,231
Shares bought back and cancelled
(2,282,628)
(228)
-
-
At 31 March
10,024,645
904
12,307,273
1,231
Share capital includes unpaid shares of nil (2021: nil).
The Company has one class of ordinary shares which carries no right to fixed income and which represents
100% of the total issued nominal value of all share capital.
Each share carries the right to one vote at general meetings of the Company. No person has any special rights
of control over the company’s share capital and all its issued shares are fully paid.
42
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
17
Share Capital (continued)
Pursuant to shareholder resolutions at the AGM of the Company on 1 September 2021, the Company has the
following authorities during the period up to the next AGM:
-
to issue new/additional ordinary shares to existing shareholders through a rights issue up to a maximum
nominal amount of £405,242 representing one- third of the Company’s issued share capital;
-
to issue new/additional ordinary shares to new shareholders up to a maximum nominal amount of £405,242
representing one third of the issued shares capital of the Company;
-
to allot equity securities for cash, without the application of pre-emption rights, up to a maximum nominal
amount of £121,573 representing 10% of the Company’s issued share capital of the Company;
-
to purchase its ordinary shares through the market up to a maximum of 1,823,590, representing 15% of the
Company’s issued share capital, subject to certain restrictions on price; and
-
to make off-market purchases of its ordinary shares for the purposes of or pursuant to an employee ‘share
scheme with the maximum aggregate number of ordinary shares authorised to be purchased is 4,052,424
representing approximately one-third of the Company’s issued ordinary share capital.
Capital Risk Management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising
returns to shareholders through the optimisation of debt and equity balances. The capital structure of the Group
consists of cash and cash equivalents and equity attributable to equity holders of the parent comprising issued
capital reserves and earnings.
The Group manages the capital structure and adjusts it in the light of changes to economic conditions and risks.
In order to manage capital, the Group has continued to consider and adjust the level of dividends paid to
shareholders and made purchases of its own shares which are held as Treasury Shares.
Employee Share Schemes
The Company operates two share options schemes with one of them, the Save as You Earn scheme, being
dormant.
43
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
17 Share Capital (continued)
Enterprise Management Incentive Share Option Scheme
At 31 March 2022 the following options had been granted and remained outstanding in respect of the
Company’s ordinary shares:
* These options have fully vested
Year of
grant
Exercise
Price
Pence
Exercise
Period*
Number of
options
31 March
2021
Granted
Exercised
Cancelled Number of
Options 31
March 2022
2011/12
68.00
2014-2019
3,000
-
-
(3,000)
-
2013/14
10.00
10.00
2016-2021
2019-2021
9,000
6,000
-
-
-
-
-
-
9,000
6,000
2014/15
10.00
10.00
2016-2021
2019-2021
10,000
25,000
-
-
-
-
-
-
10,000
25,000
2015/16
10.00
58.00
58.00
2020-2022
2017-2022
2020-2022
30,000
15,000
40,000
-
-
-
(30,000)
-
-
-
-
-
-
15,000
40,000
2016/17
50.00
90.00
90.00
2022-2027
2019-2024
2022-2027
10,000
15,000
20,000
-
-
-
-
-
-
-
-
-
10,000
15,000
20,000
2018/19
10.00
2020-2028
50,000
-
(10,000)
-
40,000
2019/20
50.00
50.00
42.50
2022-2029
2024-2029
2022-2029
15,000
50,000
30,000
-
-
-
-
-
-
-
-
(30,000)
15,000
50,000
-
2020/21
50.00
10.00
2022-2029
2023-2033
20,000
725,000
-
-
-
-
-
-
20,000
725,000
2021/22
50.00
2021-2028
0
30,000
30,000
Total 2022
1,073,000
30,000
(40,000)
(33,000)
1,030,000
Weighted average exercise price
2022
19.68p
50.00p
10.00p
44.82p
20.14p
Total 2021
368,000
745,000
-
(40,000)
1,073,000
Weighted average exercise price
2021
35.73p
11.07p
-
22.00p
19.68p
44
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
17 Share Capital (continued)
There were 1,030,000 options outstanding at 31 March 2022 (2021: 1,073,000) which had a weighted average
price per share of 20.14p (2021: 19.68p) and a weighted average contractual life of 2.4 years. The options vest
over a period of two to four years conditional upon the option holders continued employment with the Company.
The conditions applying to those options which are fully vested have been achieved. The number of outstanding
options that will vest is dependent on the achievement of several key performance measures of the group,
measured at a regional and consolidated level for the financial years 2021 and 2022. The fair value of the
employee services received in exchange for the grant of the share options is charged to the profit and loss
account over the vesting period of the share option, based on the number of options which are expected to
become exercisable.
2022
2021
Option pricing model used
Black-Scholes
Black-Scholes
Weighted average share price at grant date (in pence)
68.5
57.50 & 61.00
Exercise price (in pence)
50
50.00 & 10.00
Fair value of options granted during the year
19.79
25.53 & 51.29
Expected volatility (%)
15
67 & 40
Risk-free interest rate (%)
1
1
Vesting period of options (years)
2
2 & 2.7
Expected volatility was determined by reference to historical volatility of the Company’s share price.
The share-based payment expense recognised within the income statement during the period was £147,425
(2021: expense £75,974).
45
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
18 Reserves
Capital Redemption Reserve Fund
The capital redemption reserve relates to the cancellation of the Company’s own shares.
Treasury Shares
At 31 March 2022, the total number of ordinary shares of 10p held in Treasury and their values were as follows:
2022
2021
Number
£’000
Number
£’000
As at 1 April
190,000
103
-
-
Shares purchased for treasury
-
-
190,000
103
Shares issued from treasury
(40,000)
(4)
-
-
Loss on treasury shares disposal
-
-
As at 31 March
150,000
99
190,000
103
The maximum number of shares held in treasury during the year was 190,000 shares representing 1.6% of the
called-up ordinary share capital of the Company (2021: 190,000 representing 1.6% of the called-up ordinary
share capital of the Company).
Merger Reserve
The merger reserve represents the fair value of the consideration given in excess of the nominal value of ordinary
shares issued to acquire subsidiaries.
Share Option Reserve
The reserve represents the cumulative amounts charged to profit in respect of employee share option
arrangements where the scheme has not yet been settled by means of an award of shares to an individual.
Share Premium Account
The balance on the share premium account represents the amounts received in excess of the nominal value of
the ordinary shares.
Translation Reserve
The foreign currency translation reserve comprises all presentation foreign exchange differences arising from
translation of the financial statements of foreign operations into the presentation currency of the Group accounts.
Retained Earnings
The balance held on this reserve is the accumulated retained profits of the Group/Company.
46
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
19
Leases
The Group measure its lease liabilities under IFRS 16 Leases. The Group’s leases are property leases. These
include leases for the offices from which the businesses across the Group operate and these have terms of
typically 1 to 10 years. The movements in the carrying value of right-of-use assets is provided below.
Right-of-use asset - Property
2022
£’000
2021
£’000
Cost
At 1 April 2021
3,116
3,206
Exchange differences
40
(104)
Additions
-
107
Disposals
(80)
(93)
At 31 March 2022
3,076
3,116
Accumulated depreciation
At 1 April 2021
2,225
1,922
Exchange differences
23
(47)
Depreciation
415
443
Disposals
-
(93)
At 31 March 2022
2,663
2,225
Net Book Value as at 31 March 2022
413
891
Additional disclosures as required under IFRS 16 Leases are provided in the table below:
2022
£’000
2021
£’000
Depreciation of right-of-use assets
415
443
Interest on lease obligations
27
48
Cash outflow for leases
530
562
Additions to right-of-use-assets
-
107
Disposals of right-of-use assets
(80)
(93)
47
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
20
Reconciliation of Profit before Tax to Net Cash Inflow from Operating Activities
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Profit/(loss) before taxation
2,417
(173)
-
(5)
Adjust for:
Depreciation of property, plant and equipment and
software amortisation
253
258
-
-
Depreciation of right-of-use assets
415
443
-
-
Impairment of goodwill
-
-
-
-
Share-based payment expense
148
76
-
-
Loss on sale of right-of-use assets
80
-
-
-
Interest receivable
-
(5)
-
-
Interest payable
26
61
-
-
Operating cash flow before changes in working
capital
3,339
660
-
(5)
(Decrease)/increase in receivables
(1,278)
866
(26)
(41)
Increase/(decrease) in payables
57
(332)
(35)
56
Cash generated from / (used by) underlying
operations
2,118
1,194
(61)
10
21 Reconciliation of movements of liabilities to cash flows arising from financing activities
Group
At 1 April
2021
New loan
Net
(repayments)/
withdrawals
At 31 March
2022
£’000
£’000
£’000
£’000
Coronavirus business interruption loan
2,000
(2,000)
-
Bank loan
-
1,000
(28)
972
Invoice finance
(16)
301
285
Lease liabilities
1,053
(564)
489
Total financing liabilities
3,037
1,000
(2,291)
1,746
48
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
21 Reconciliation of movements of liabilities to cash flows arising from financing activities (continued)
Company
At 1 April
2021
New loan
Net
Repayments
At 31 March
2022
£’000
£’000
£’000
£’000
Coronavirus business interruption loan
2,000
(2,000)
-
Bank loan
-
1,000
(28)
972
Total financing liabilities
2,000
1,000
(2,028)
972
22
Analysis of Cash less overdrafts
Group
At 1 April
2021
Cash flow
Exchange
At 31 March
2022
£’000
£’000
£’000
£’000
Cash at bank and in hand
3,980
(1,397)
100
2,683
Total cash
3,980
(1,397)
100
2,683
Company
At 1 April 2021
Cash flow
At 31 March 2022
£’000
£’000
£’000
Cash at bank and in hand
556
(502)
54
Total cash
556
(502)
54
23
Financial Risk Management
The Board of Directors has overall responsibility for the risk management policies that are applied by the
business to identify and control the risks faced by the Group. The Group has exposure from its use of financial
instruments to foreign currency risk, credit risk and liquidity risk.
Foreign Currency
The Group publishes its consolidated financial statements in sterling. The functional currencies of the Group’s
main operating subsidiaries are sterling, the euro, the United States dollar, the Singapore dollar, the Hong Kong
dollar, the Saudi Arabian Riyal and the UAE dirham.
The Group’s international operations account for approximately 40.50% (2021: 34.46%) of revenue and
approximately 66.85% (2021: 29.12%) of the Group’s assets and consequently the Group has a degree of
translation exposure in accounting for overseas operations.
49
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
23
Financial Risk Management (continued)
Foreign Currency (continued)
The Group exposure to foreign currency risk is as follows:
As at 31 March 2022
Euro
AUD
USD
HK$
S$
AED
CNY
SAR
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cash at bank
189
77
1,230
154
295
79
366
190
Trade and other
receivables
348
-
691
3,462
1,568
353
31
263
Trade and other payables
(557)
-
(830)
(4,023)
(1,625)
(5)
(85)
(500)
Net exposure
(20)
77
1,091
(407)
238
427
312
(47)
As at 31 March 2021
Euro
AUD
USD
HK$
S$
AED
CNY
SAR
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cash at bank
410
26
634
313
877
6
378
104
Trade and other
receivables
46
-
28
952
293
28
-
-
Trade and other payables
(165)
-
(146)
(735)
(236)
(32)
-
-
Net exposure
291
26
516
530
934
2
378
104
Sensitivity analysis – currency risk
A 10% weakening or strengthening of Sterling against the above currencies at 31 March 2022 would have
increased/(decreased) equity and profit or loss by the amounts shown below. This analysis is applied currency
by currency in isolation, i.e. ignoring the impact of currency correlation, and assumes that all other variables,
interest rates, remain constant. The amounts generated from the sensitivity analysis are forward-looking
estimates of market risk assuming certain adverse market conditions occur. Actual results in the future may
differ materially from those projected, due to developments in the global financial markets which may cause
fluctuations in interest and exchange rates to vary from the hypothetical amounts disclosed in the table below,
which therefore should not be considered a projection of likely future events and losses.
Foreign Currency
Weakening
Strengthening
2022 equity
2022 PBT
2022 equity
2022 PBT
£'000
£'000
£'000
£'000
Euro
2
2
(2)
(2)
US dollar
(99)
(99)
109
109
Hong Kong dollar
37
37
(41)
(41)
Singapore dollar
(22)
(22)
24
24
UAE dirham
(39)
(39)
43
43
Australian dollar
(7)
(7)
8
8
Chinese yuan renminbi
(28)
(28)
31
31
Saudi riyal
4
4
(5)
(5)
50
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
23
Financial Risk Management (continued)
Foreign Currency (continued)
Currently the Group’s policy is not to hedge against this exposure, but it does seek to minimise this exposure
by converting into sterling all cash balances in foreign currency that are not required for capital monetary needs.
The settlement of intercompany balances held with foreign operations is neither planned nor likely to occur in
the foreseeable future. Therefore, exchange differences arising from the translation of the net investments are
recognised in Other Comprehensive income.
Credit Risk
The Group’s principal financial assets are bank balances, trade and other receivables. The Group’s credit risk
is primarily in respect of trade receivables. Credit risk refers to the risk that a client will default on its contractual
obligations resulting in financial loss to the Group. The Group’s largest credit risk exposure to a single client is
in the UK and represents 12.78% of the Group trade receivables balance. The amount owed by a client in Hong
Kong represents a further 10.16% of the balance. Although there is no indication that either debt is
uncollectable, the Directors are of the opinion that adequate provision is in place to cover any potential default
by these clients. A public investment fund in Hong Kong accounted for 4.93% of the Group trade receivables
balance. Apart from this exposure, at the year-end no other customer represented more than 2.39% (2021:
4.01%) of the total balance.
In reviewing the appropriateness of the provisions in respect of recoverability of trade receivables, consideration
has been given to the ageing of the debt and the potential likelihood of default, considering current economic
conditions.
It is the Directors’ opinion that no further provision for doubtful debts is required.
Liquidity Risk
The Group manages its liquidity risk by maintaining adequate cash and or credit facilities to meet forecast cash
requirements of the Group. Management monitors its forecasted cash flow requirements at a Group level based
on monthly returns made by the Group’s operating units.
The Group has short-term trade and other payables and accruals as disclosed in note 14, all due within one year
of the year end. In addition it has lease liabilities and a loan under the Coronavirus Business Interruption Loan
Scheme as set out below.
The Group has net funds of £2.58m (2021: £3.98m), which the Board considers are more than adequate to meet
future working capital requirements and to take advantage of business opportunities.
As at 31 March 2022, the Group’s financial liabilities have contractual maturities as follows:
Less than 6
months
6 – 12
months
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
At 31 March 22
£'000
£'000
£'000
£'000
£'000
Trade payables and other payables
3,202
489
-
-
-
Lease liabilities
243
153
36
57
-
Bank loan
194
167
333
278
-
Total contractual
cash flows
3,639
809
369
335
-
51
PRIME PEOPLE LIMITED
Notes to the Financial Statements
For the year ended 31 March 2022
23
Financial Risk Management (continued)
Less than
6 months
6 – 12
months
Between 1
and 2 years
Between 2
and 5 years Over 5 years
At 31 March 21
£'000
£'000
£'000
£'000
£'000
Trade payables and other
payables
2,676
197
-
-
-
Lease liabilities
281
281
437
99
-
CBILS
81
239
466
1,298
135
Total contractual
cash flows
3,038
717
903
1,397
135
24
Related Party Transactions
The Company provides corporate guarantees on the subsidiary bank accounts. At 31 March 2022 amounts
overdrawn by subsidiary bank accounts were £nil (2021: £nil).
The Group owes 2 directors £12,977 (2021: £40,330). There is no interest charged on this loan and no fixed
date for repayment.
The Directors receive remuneration from the Group, which is disclosed in the Directors’ Remuneration Report.
As shareholders, the Directors also eligible to receive dividends from the Company. In the year these amounted
to £nil (2021: £nil).
25 Subsequent events
The Group purchased the remaining 40% of the issued share capital of Command Recruitment Group (H.K.)
Limited in April 2022.
Prime People Plc
2 Harewood Place Hanover Square
London W1S 1BX
T: +44 (0) 20 7318 1785
F: +44 (0) 870 442 1737
E: connect@prime-people.com
W: prime-people.co.uk