Leading.
Trusted.
Changing lives.
Annual Report and
Accounts 2022
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Staffline is one
of the UK and
Ireland’s leading
recruitment
and training
providers.
Our purpose.
Our vision.
Enabling the future of
work by developing
and deploying a
highly flexible, robust
and skilled workforce.
To be a world class
recruitment and training
group, the clear market
leader and trusted partner
known for excellent
service and integrity,
driven forward by
digital innovation.
Strategic Report
Corporate Governance
Financial Statements
1
Financial Highlights
What’s inside
Strategic Report
Financial Highlights
At a Glance
Interim Chairman’s Statement
Business Model
Strategy
1
2
5
6
8
10 Chief Executive Officer’s Review
14 Operational Review – Recruitment GB
18 Operational Review – Recruitment Ireland
20 Operational Review – PeoplePlus
22 Financial Review
28 ESG Report
45 Section 172 statement
46 Principal Risks and Uncertainties
Corporate Governance
Interim Chairman’s Introduction
53
54 Board of Directors
56 Corporate Governance Report
62 Nominations Committee Report
63 Audit Committee Report
68 Remuneration Committee Report
74 Report of the Directors
77 Statement of Directors’ Responsibilities
78
Independent Auditor’s Report
Financial Statements
93 Consolidated Statement
of Comprehensive Income
94 Consolidated Statement
of Changes in Equity
95 Company Statement of Changes in Equity
96 Consolidated and Company Statements
of Financial Position
97 Consolidated Statement of Cash Flows
98 Notes to the Financial Statements
137 Staffline Group plc Unaudited Five-Year
Summary of Financial Data
138 Company Details
For more information visit:
www.stafflinegroupplc.co.uk/investor-relations/
results-reports-and-presentations/
Revenue
Gross profit
£940.5m
£83.2m
(0.2)%
0.5%
2021: £942.7m
2021: £82.8m
Gross sales value*
£1,031.3m
3.5%
2021: £996.5m
Reported profit after tax
Underlying** operating profit
£3.8m
£2.2m
2021: £1.6m
£12.0m
16.5%
2021: £10.3m
Basic and diluted
earnings per share
(continuing operations)
Underlying** diluted
earnings per share
(continuing operations)
2.3p
1.0p
2021: 1.3p
Net cash
£0.1m
£(2.2)m
5.7p
(1.4)p
2021: 7.1p
Pre-IFRS 16 net cash
£5.0m
£(1.9)m
2021: £2.3m
2021: £6.9m
*
Gross sales value represents the fair value
of consideration received or receivable for
the supply of services, including agency
sales, (excluding fees) net of VAT.
** Underlying results exclude goodwill
impairment, amortisation of intangible
assets arising on business combinations,
reorganisation costs and other non-
underlying charges.
2
Staffline Group plc Annual Report and Accounts 2022
At a Glance
Enabling the
future of work.
All three of Staffline’s divisions delivered an excellent
performance during 2022. In the Group’s Recruitment
divisions, whilst operating against a backdrop of the
well-publicised labour shortages, our Recruitment
GB and Recruitment Ireland businesses continued
to successfully support clients in what has become
a rapidly evolving market. In PeoplePlus, due to the
advancement of digital learning models and the
Government’s relaxation of social distancing measures,
we were pleased to see significantly greater numbers
supported in our classrooms and centres over the
course of the year, both in-person and online.
Our values.
We have a clear set of values that drive
everything we do. They influence the way we
interact with staff, clients and candidates
on a daily basis and can be measured in the
strong results that we consistently achieve.
Teamwork:
Working together across the business
to achieve more for our customers.
Creativity:
Solving problems and suggesting new
ideas and insights.
Reliability:
Fulfilling all our customer requirements,
getting the job done.
For more information on
Our Values see page 28.
Group
Recruitment GB
Group
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Recruitment GB
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Group
Group
Group
Recruitment GB
Recruitment Ireland
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Group
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Recruitment GB
Recruitment Ireland
Group
Recruitment GB
Recruitment Ireland
Strategic Report
Corporate Governance
Financial Statements
3
Group
Group
Recruitment GB
Group
Recruitment GB
Recruitment Ireland
Workers deployed
every day (average)
c.31,000
Recruitment Ireland
Group
Recruitment GB
Recruitment Ireland
Unemployed people supported
towards getting a job
16,850
Commitment:
Demonstrating a relentless and driven
ambition to exceed expectations.
Respect:
Taking time to understand,
trust and support each other
to achieve shared success.
Integrity:
Doing things the right way, for the right
reason, ethically, honestly, every time.
Group
Recruitment GB
Recruitment Ireland
Workers deployed
every day (average)
c.4,500
Our locations.
Recruitment GB: customer sites,
branches and offices
Recruitment Ireland: customer
sites, branches and offices
PeoplePlus: teaching locations
and offices
Locations
486
Group
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Recruitment GB
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Group
Group
Recruitment GB
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Recruitment Ireland
4
Staffline Group plc Annual Report and Accounts 2022
At a Glance continued
Unprecedented
strong jobs market.
Investment in headcount and technology, improved customer fulfilment,
despite widespread labour shortages, and expansion of the Group’s branch
network have helped to create a solid platform for future growth.
Group
Group
Recruitment GB
Recruitment Ireland
Group
Recruitment GB
Recruitment GB
Recruitment Ireland
Group
Recruitment GB
Group
Group
Group
Group
Recruitment Ireland
Recruitment GB
Group
Recruitment Ireland
Recruitment GB
Recruitment Ireland
Recruitment GB
Recruitment Ireland
Recruitment Ireland
Recruitment GB is one of the largest
recruitment businesses operating across
England, Scotland and Wales. Its services
encompass branches, permanent and
contract recruitment (UK and Portugal),
as well as Managed Service Provision and
Recruitment Process Outsourcing delivered
through its portfolio of brands. Recruitment
GB is also a market leading provider of
flexible, blue-collar workers supplying an
average of circa 31,000 staff per day to
its customers. It operates from around 400
sites across the UK with sectors including
supermarkets and retail, drinks, driving, food
processing, logistics and manufacturing.
Recruitment Ireland is a leading end-to-
end solutions provider with twelve branch
locations, sixteen onsite customer locations,
all of which operate across multiple industries
and supply c.4,500 staff per day on
average. Staffline Ireland offers Recruitment
Procurement Outsourcing, Managed Service
Provision as well as Temporary and Permanent
solutions across the Island of Ireland. It
services a diverse range of clients, including
the sizeable agri-food sector, blue-collar
customers and major white-collar private
sector employers in the banking and telecoms
sectors, the Public Sector in the South of
Ireland and Northern Ireland (where it is the
largest employer in the region) and also recent
new clients in the legal sector across Ireland.
PeoplePlus is a leading skills and
employability business whose purpose is
to help people transform their lives, get jobs
and keep jobs, and develop their careers.
The division works with employers to develop
inclusive workforces and with central, local
and devolved governments to support their
economic and social policy ambitions.
Creating Social Value in this way, PeoplePlus
aims to ensure that every person of working
age can participate in paid work, including
vulnerable and disadvantaged people,
as part of a more dynamic economy with
greater levels of social inclusion in which
no-one is left behind.
Revenue by sector
Revenue by sector
Revenue by sector
Food and related
Manufacturing
Retail
Driving
Other
60%
14%
11%
11%
4%
Food and related
Local government
Banking
Health
Manufacturing
Other
29%
15%
11%
14%
7%
24%
Adult Education Skills 16%
36%
Justice
36%
Employability
Community Services 9%
1%
Partner Services
2%
Other
For more information on
Recruitment GB see page 14.
For more information on
Recruitment Ireland see page 18.
For more information on
PeoplePlus see page 20.
Strategic Report
Corporate Governance
Financial Statements
5
Interim Chairman’s Statement
“
I firmly believe that
despite the broader
macro uncertainty,
Staffline has the means
and expertise to both
protect, and indeed
expand, its enviable
market position.
Introduction
This is my first statement as Interim Chairman
and I would like to take this opportunity to
express my passion for ensuring the Staffline
Group communicates as effectively as possible
regarding our strategy, operational progress,
and crucially, the financial health of our
business going forward.
I believe all shareholders should remain
fully informed about the growth plans and
ambitions of the Group, so they continue to
have confidence in Staffline as an investment.
Year in review
The Group’s performance over the last
12 months has been strong. We delivered on our
promise to grow underlying operating profit to
£12.0m (2021: £10.3m), which is up 16.5% on
the prior year. Equally importantly, we further
strengthened the balance sheet with tight
management of working capital, control of costs
and capital expenditure, and through retaining
our trading cash flow to finance future growth.
As of 31 December 2022, the Group is operating
with significant financing headroom relative to
available committed banking facilities.
I have long been a strong advocate of prudent
cash management, making sure the business
remains self-financing and avoiding an over-
reliance on external borrowing.
I firmly believe Staffline has the means and
expertise to both protect, and indeed expand,
its enviable market position. Management is
highly in tune with the individual workings of
each of our divisions and, rest assured, will
act decisively to redeploy capital, be this to
new activities, or to existing operations with
historically higher margins, to ensure continued
progress across the Group. Our investors
rightly seek value, and we, as a Board and
management team, are working hard to
deliver enhanced shareholder value.
Tom Spain
Interim Chairman
Dividends and capital allocation
Our capital allocation policies will be guided by
the macro environment in which we operate,
we will strive first and foremost to maintain
the strength of our balance sheet and
deliver long-term value for our shareholders
considering share buy backs or dividends as
and when appropriate to do so. With regard
to any acquisitions or organic investment in
the business, management will seek to finance
these through trading cash flow alone, as
opposed to assuming fixed term debt.
Board changes
In March 2022, Richard Thomson advised the
Board that he would not stand for re-election
as Senior Independent Director, leaving in
May to pursue other opportunities after three
years of exceptional service to the Company.
May 2022 also saw the departure of our
former Chairman Ian Lawson, who resigned
after two years spent expertly guiding the
business through a period of significant
change. In addition, Ian Starkey, Senior
Independent Director, informed the Board
in November 2022 that he will not stand for
re-election at the Group’s AGM in 2023. Ian
has been a tremendous asset to the business
both in his capacity as the Chair of the Audit
Committee, and more recently as a Senior
Independent Director, supporting the Group
through its 2021 refinancing, transformation,
and return to growth. On behalf of the Board,
I extend our sincere thanks to each of them for
the truly instrumental roles they have played
in transforming Staffline into the strong and
resilient business we see today. We wish them
every success in the future. The process to
appoint a new Chair of the Audit Committee
is progressing well and will be updated soon.
Closing remarks
I would like to thank my extraordinary
colleagues at Staffline who continue to deliver
excellent results, as well as our Managing and
Executive Directors. I believe we are privileged
to have such a strong and experienced
operational team supported by top-quality
talent at the senior leadership level. One of
my first priorities when I assumed the role
of Interim Chairman was to ensure that our
talent was retained and locked in through a
variety of incentives both short and long term,
aligning the interests of management with the
Group’s shareholders and ensuring we have
the bench strength to execute on our plans.
Ultimately, we are not just a people business,
we are a people-focused business; striving
to match rewarding work opportunities
with those that seek them. Our passion for
helping our extraordinary clients achieve their
objectives through first-class recruitment is
evidenced by both the enduring relationships
we have forged with so many of our partners,
and our ability to consistently secure top-level
client wins.
In the new financial year, it is clear there
are a number of external headwinds we will
have to navigate. Despite this testing macro
environment, I remain hugely encouraged by
the nature of our business mix, which I believe
leaves Staffline well equipped to face these
challenges head-on and take advantage of
the opportunities they present.
Tom Spain
Interim Chairman
20 March 2023
6
Staffline Group plc Annual Report and Accounts 2022
Business Model
How we change lives
and communities.
DEDICATED PEOPLE
Experienced senior team with
recruitment, skills, training and
employability specialists.
BRAND AND VALUES
Well known brands committed to
high ethical standards and regulatory
compliance in recruitment and adult
skills and employability training.
NATIONAL SCALE
AND REACH
Long term relationships with some
of the best-known blue-chip brands
along with key central and local
government departments.
CUSTOMER RELATIONSHIPS
Presence across UK and the Island of
Ireland servicing customers with single
or multiple operating sites.
TECHNOLOGY
AND INNOVATION
Digital platforms support onboarding
and payrolling of workers, educational
platforms, in-cell digital education in
prisons and payments to carers.
WORKER DATABASES
Worker databases across GB
and Ireland of c.1.8m.
FINANCIAL STRENGTH
Strong balance sheet and
cash generation.
Customers
• Sector expertise
• High fulfilment of
customer demand
• Skills and employability training
Our People
• Specialist experience
• Access to jobs across the Group
• Regular learning and development
Workers and
Disadvantaged People
• Good work opportunities
• New skills and training
• Educational and payment support
Strategic Report
Corporate Governance
Financial Statements
7
Leads To
• Increased organic volumes
• New customers
• Disadvantaged getting jobs
Leads To
• Career development
• Wider Group opportunities
• Reward and recognition
Sustainable
growth for
the benefit
of our
stakeholders
Leads To
• Career progression
• Life enhancing opportunities
• Better life outcomes
EMPLOYEES
Supportive, inclusive
culture where they
experience real
opportunities for
development and
a rewarding career.
INVESTORS
Investment
growth under
sound stewardship.
CUSTOMERS
Provide them with
high-class specialist
recruitment services
and skills, training and
employability solutions.
COMMUNITIES
AND
GOVERNMENT
Need businesses that
have positive impact.
SUPPLIERS
Seek strong and
enduring partnerships
on fair terms.
8
Staffline Group plc Annual Report and Accounts 2022
Strategy
Leading. Trusted.
Changing Lives.
1. CAPITALISE ON MARKET
LEADERSHIP
Staffline’s Recruitment divisions have
market-leading positions in the supply
of blue-collar temporary workers. Our focus
is taking advantage of our strengthened
balance sheet to expandour market share
to drive growth.
2. BROADEN PORTFOLIO
OF SERVICES
Further expand existing expertise
and technology capabilities to grow
revenues from higher margin services
including permanent recruitment and
managed services.
3. DRIVE ONGOING PROFIT
GROWTH IN PEOPLEPLUS
Despite lingering headwinds in the
training sector, our focus remains on
winning new contracts, innovating to
drive additional business volumes,
and leveraging our experienced senior
leadership team to consolidate our positions
in prison education and Department for
Work & Pensions employability schemes.
4. GROW IN REPUBLIC
OF IRELAND (RoI)
RoI has an attractive recruitment market,
allowing us to invest in additional branches
and fee-earners. Our priority is expanding
our high-margin white-collar recruitment
service and retaining existing key public
sector contracts in Northern Ireland.
OPERATIONAL
EXCELLENCE
• Focus and simplicity
• Clear leadership
• Organisational design
• KPI reporting
TALENT
• Succession
and leadership
• Talent attraction and
retention
• Productivity
incentives
• Compensation
OPERATIONAL
PRIORITIES
CLIENTS AND
BRANDING
• Leveraging
existing clients
• Focus on growth sectors
• Growing sales pipeline
• Cross selling
Strategic Report
Corporate Governance
Financial Statements
9
GOVERNANCE
AND COMPLIANCE
• Main Board
• Group policies
• Strong balance sheet
and financing
• Internal audit and
compliance
OPERATIONAL
PRIORITIES
COST BASE
• Headcount
• Group overhead
synergies
• Working capital
management
• Profit and cash focus
• Competitive
positioning
DIGITAL AND TECHNOLOGY
• IT estate, shared services
• Technology supply chain
• Cyber security and
data management
• Automation and Al
• Digital transformation
Achievements
in 2022
Goals
for 2023
• Significant new
business wins –
BMW and VINCI
Construction
• Winning
market share in
current sectors
• New sectors such
as Aviation
• Substantial growth
• Further new
in permanent
recruitment
• Expansion of
the Managed
Service Provider
offering into
Sainsbury’s/Argos
• Prison Education
Funding contract
extension worth
£25m
• Youth Offenders
Institution new
£15m contract
Managed Service
Provider contracts
• New sectors for
recruitment such
as medical
• Extending activities
in the Justice sector
• New employability
contracts
• Build on
Restart delivery
• Grow Social
Recruitment and
Social Impact
opportunities
• Opened new
office in Limerick
• Record trading
performance in RoI
• Open further
offices in RoI
• Investment in
new fee-earner
headcount
10
Staffline Group plc Annual Report and Accounts 2022
Chief Executive Officer’s Review
Albert Ellis
Chief Executive Officer
Underlying operating profit
+16.5%
Closing net cash Pre-IFRS 16
£5.0m
“
I am pleased to say that
2022 can be characterised
as a year of consistent,
positive growth momentum
for Staffline.
Introduction
The Group traded strongly across 2022, and
I am delighted that the increased gross sales
and client activity throughout FY 2022 has
resulted in a positive flow through to operating
profit and trading cash flows. We continue
to see the benefits of the restructuring and
significant strengthening of the Group’s
balance sheet achieved in the previous
year. As a result, the Group delivered an
excellent trading performance with increases
in the Group’s gross profit, operating profit,
conversion ratios and profit before tax.
Following the pandemic-related volatility of
the past couple of years, 2022 continued to
provide eventful macroeconomic conditions.
The global economy was hit hard by
geopolitical uncertainty across the world,
with sharp rises in interest rates and faster
than expected inflation reducing consumers’
disposable income all contributing to a
slowing macroeconomic environment.
Nevertheless, despite the challenges facing the
Group, I am pleased to report our businesses
have proven highly resilient. Our commitment
to delivering excellent customer service at
scale, in a tight labour market, has proven to
be a key differentiator and our management
have forged even stronger relationships with
the Group’s customers.
In the year ended 31 December 2022, the
Group generated revenues of £940.5m (2021:
£942.7m), and a 0.5% increase in gross
profit to £83.2m (2021: £82.8m). Underlying1
operating profit increased 16.5% to £12.0m
(2021: £10.3m), with net cash (pre-IFRS
16)2 as at 31 December of £5.0m (2021:
net cash £6.9m).
This success could not have been achieved
without the outstanding quality of our people.
During 2022 we refreshed and reorganised our
management and organisational structure,
bringing exceptional talent into the Group
whilst promoting high performers from within
the business. The rollout of performance
related compensation and long-term equity
plans has further reduced churn and attracted
and retained the best people in preparation
for the growth journey over the next 3-5 years.
The business has moved from strength to
strength in financial terms too. In particular
our excellent Finance team has worked hard to
convert our trading profits into cash through
tight control of debtors and implementing
significant cost-saving initiatives, resulting in
a real term reduction in the Group’s cost base.
The interest rate cap purchased in October
2021 has delivered significant interest savings
and all outstanding historic Covid-related
liabilities have been settled over the course
of the year.
Strategic Report
Corporate Governance
Financial Statements
11
The Group delivered
“
an excellent trading
performance with
increases in gross
profit, operating profit,
conversion ratios and
profit before tax.
Increase in permanent
recruitment gross profit
+65%
A year of positive momentum
I am pleased to say that 2022 can be
characterised as a year of consistent,
positive growth momentum for Staffline.
Group gross profit grew by 0.5%, largely
attributable to the onboarding of two
significant new recruitment customers,
the first profit from our Restart contract,
and solid trading across the Christmas
peak period. Our strategy of growing
higher margin, cash generative permanent
recruitment contracts, (up 65% compared
to 2021), continues to yield positive results;
driving further increases in revenue, as well
as improvements to our cash position.
Within PeoplePlus, robust demand for labour
supported a strong performance for our
employability programmes, and we were
pleased to see the division recognise its first
operating profit from its Restart sub-contracts
during the second half.
As announced in H1 2022, Recruitment GB
successfully secured several substantial new
contracts, including a long-term agreement
with BMW Group to supply the flexible
operational workforces and a number of
specialist roles for its manufacturing sites
in England.
The division’s managed services arm,
Datum RPO, has delivered an impressive
performance, with record results driven by
consistently high levels of demand for its
services. New business wins include a five-year
contract extension with specialist construction
company, VINCI Construction UK, as well as
the onboarding of new customer Argos, part
of the Sainsbury’s Group, which appointed
Datum RPO in early 2022 as its temporary
labour Managed Service Provider (“MSP”) for
its sizeable driving estate.
The senior team at Datum RPO has committed
significant time and resource to developing the
business’ technology platform to meet Argos’
specific requirements, seamlessly rolling out its
MSP solution across 45 locations and Argos’
70-strong supplier network. Following on from
this success, Staffline has since become a
specialist supplier of driver resource for key
locations within Argos’ home delivery network.
Recruitment Ireland saw strong traction in its
permanent recruitment business, including for
the first time in the executive search sector,
and expanded its branch network in the
Republic of Ireland where it opened a new
office in Limerick and extended its Causeway
Coast and Glens Borough Council contract for
a further five years. Tight cost control and an
increase in gross margins led to an increase in
gross profit to operating profit conversion rate
to 24.8%, up from 22.1% in the year prior.
As we move further into 2023, management
will focus its efforts on delivering additional
organic growth across the Group through
both increasing business volumes in existing
customers, and by leveraging Staffline’s
enviable market position to capitalise on new
business opportunities and further expand
our market share.
Vision and strategy
Staffline’s business vision is clear: to be a
market leading, world-class recruitment and
training group, known for excellent service
and integrity, and driven by digital innovation.
Our strategic priorities for consistent,
sustainable growth are as follows:
• To further capitalise on the Group’s
market leadership in recruitment:
Staffline’s Recruitment divisions have
market leading positions in the supply
of temporary workers, especially in the
blue-collar warehouse and driving sectors.
Our focus now is on securing additional
organic growth in new and existing clients
which are actively growing their own market
share, and also introducing permanent
recruitment services to support our client’s,
core headcount requirements. The Group’s
strong governance and compliance offer will
be increasingly important going forward.
12
Staffline Group plc Annual Report and Accounts 2022
Chief Executive Officer’s Review
continued
• To broaden the portfolio of services:
The Group will continue to introduce Datum
RPO’s services to customers that will benefit
from a fully managed service and we
believe the current push for cost savings
is a key driver in increasing client demand
in this market. The Group will support
Omega’s ambitions to grow its technical
and engineering niche, which will expose the
Group to higher margin growth opportunities
in the white-collar recruitment sector.
• To drive ongoing profit growth within
PeoplePlus:
Our strategy remains focused on further
stabilising the annuity revenue and
profit streams of the business, winning
new contracts and consolidating our
market share in prison education
and employability.
• To grow in the Republic of Ireland:
The Republic of Ireland continues to be
an attractive recruitment market with
a positive growth outlook. The Group is
growing through investing in additional
branches and services and hiring additional
fee-earning headcount including during
the current downturn. We believe these
initiatives will help facilitate a step change
in scale and profitability in the recovery
when it comes.
Operational review
Recruitment GB
The Group’s Recruitment GB division delivered
a strong performance across 2022 having
successfully expanded its operational footprint
during the period. The implementation of the
BMW contract, a major win in 2022, remains
ongoing, with the Group seeing further
momentum from additional sectors, including
manufacturing and travel.
Investment in headcount and technology
remained a key theme for the business, and
despite much reported labour shortages,
the division continued to expand its branch
network, reinforcing the strong platform which
will underpin future growth. The Group’s
managed services business Datum RPO,
continued to perform well as customers seek
to consolidate their recruitment supply chains
using an independent expert, as evidenced by
the award of a five-year contract extension
with VINCI Construction UK. Omega, the
Group’s technical and engineering recruiter,
also posted strong increases in its permanent
recruitment fees, which across the wider
division were up c.80% over 2021, representing
a c.176% increase over the last two years.
The division continued to control overhead
costs tightly, increasing its gross profit to
underlying operating profit conversion rate
from 14.0% to 16.0%.
Recruitment Ireland
The Recruitment Ireland business, which
is more dependent on the permanent
recruitment market and less dependent upon
temporary placements than the Recruitment
GB business, produced an excellent trading
performance across the year. The division
delivered a 45% increase in permanent
recruitment fees, its strongest results since
2019, which offset marginally weaker blue-
collar demand. This, coupled with a record
trading performance in the Republic of
Ireland, which has been underpinned by
ongoing investment in fee-earning headcount,
further demonstrates the inherent strength
of our Recruitment Ireland platform. A pivot
to white-collar recruitment in the Republic
of Ireland, the opening of a new office in
Limerick, and the retention of key public sector
contracts in Northern Ireland, all contributed
to record growth across 2022. The strength
of permanent recruitment, and for the first
time, executive search, helped increase
gross margins. Additionally, our entry into
the executive search market alongside tight
control of the cost base resulted in the gross
profit to underlying operating profit conversion
rate improving to 24.8%, up from 22.1% in the
prior year.
PeoplePlus
PeoplePlus reported a solid performance in
2022, but as expected was held back by lower
revenues in Skills training. Labour shortages,
and the resulting demand squeeze, resulted
in potential candidates bypassing established
training programmes and moving straight
into employment. Conversely, these labour
market conditions aided our Employability
programmes which performed particularly
well, and we were pleased to see PeoplePlus
successfully deliver profit from the Restart
sub-contracts during the year, with the division
reporting its first operating profit from those
contracts in the second half of 2022. During
the year it was determined that PeoplePlus had
overstated revenues totalling £2.6m in relation
to the period prior to 31 December 2021, as
PeoplePlus had not met some of its revenue
related performance obligations. Due to the
legacy nature of these revenues, management
have accounted for the adjustment of these
errors through reserves.
The labour market and
recruitment landscape
The labour market experienced severe
shortages which were exacerbated by the
Covid-19 pandemic. Since then we have seen
a slight easing in supply but also in demand,
particularly in HGV driving. The logistics
and online sector which reported buoyant
results during the Covid-19 pandemic related
lockdowns has reduced demand for temporary
labour as online volumes returned to more
normalised levels and consumers reverted to
pre-pandemic behaviours. However, the labour
shortage continues as vacancies remain
above 1 million and combined with the cost-
of-living crisis, this has affected the training
market as candidates are going straight into
paid work without seeking additional training.
The Group has responded to these changes
by reducing its cost base in Skills to align
with the forecasted lower level of demand
going forward, and by reorganising its labour
delivery to leverage the Group’s strengths in
regional differences in supply and demand.
Strategic Report
Corporate Governance
Financial Statements
13
Board changes
In May 2022, Tom Spain was appointed Interim
Chairman following the announcement that
Ian Lawson would step down from his role as
Non-Executive Chairman. Additionally, in April
2022, Richard Thomson stepped down from
the Board as the Senior Independent Director,
a role assumed by Ian Starkey in May 2022.
In November 2022, we announced that Ian
Starkey, Chair of the Audit Committee and
Senior Independent Director, had informed the
Company that he would not be standing for
re-election at the 2023 AGM. Accordingly, the
Board has begun the process of searching for
a replacement. The search is at an advanced
stage and the Board expects to make an
announcement shortly.
Outlook
As a business, we are pleased with the
excellent progress delivered by Staffline
across 2022, achieving strong growth in
profitability and cash flows, investing in
the senior operational leadership, and
embedding governance at the core of our
company culture to further differentiate
our customer offering in a market that is
increasingly prioritising compliance.
As referenced in our January 2023 trading
update, we anticipate the current uncertainty
to persist through 2023, with continuing low
unemployment constraining volumes within
PeoplePlus’s Skills and Restart businesses.
Our Recruitment GB and Recruitment Ireland
divisions are likely to be affected by the
widely reported weakening in demand for
permanent hiring.
However, we are confident in our ability to
leverage our brand, geographic scale and
governance advantage to continue to expand
our market share in preparation for the
economic recovery when it comes.
Albert Ellis
Chief Executive Officer
20 March 2023
Alternative performance measures
1 Underlying results exclude goodwill impairment,
amortisation of intangible assets arising on business
combinations, reorganisation costs and other non-
underlying charges.
2 Presented on a pre-IFRS 16 basis, which excludes
lease liabilities, and also excludes refinancing costs.
Group
Group
Recruitment GB
Group
Recruitment GB
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Recruitment Ireland
14
Staffline Group plc Annual Report and Accounts 2022
Operational Review
Group
Recruitment GB
Recruitment Ireland
A balanced portfolio
provides stronger
foundations for
the future.
Against a range of challenging macro pressures,
2022 saw Recruitment GB deliver a strong
performance. Much of this has been down to the
strategy set out in 2020 to broaden the portfolio of
services, expanding permanent recruitment and
managed service offerings, and a drive for overall
operating efficiency. As a result, we ended 2022
with a gross profit to operating profit conversion
ratio of 16.0% (2021: 14.0%) which now stands at
a four-year high, double that of 2019.
In our core volume recruitment
business, we took steps to consolidate
relationships with our key clients, to
further unlock growth and increase
share of business, whilst also realising
opportunities to cross-sell other
portfolio services. We continued to
invest in our branch network and our
market leading Scottish Recruitment
business, Brightwork.
The year also saw us benefit from the
revival of our Aviation, Logistics and
Automotive segments following the
impacts of the Covid-19 pandemic.
We also secured major new business
wins including BMW Group, that are
transformational and a real source
of pride.
Frank Atkinson
Managing Director,
Recruitment GB
Key sectors and specialisms
Food and Drink
Production; Packaging; Warehouse
operations and Distribution Staff
and associated support functions.
Logistics
Third Party Logistics operations
and support functions across
multiple sub segments – including
many major UK manufacturers,
retail and grocery brands.
Technical and
Engineering
Technical and Engineering
specialist divisions Omega and
Techsearch; supplying highly
skilled personnel to the Aviation;
Construction; Automotive and
Engineering segments.
Aviation
Aviation Security-cleared personnel:
Front House; Drivers; Ramp Agents;
Baggage Handlers; Aircraft Cleaning.
Driving
HGV Class 1; HGV Class 2; Home
Delivery Drivers and associated
support functions.
Automotive
Engineers; Technicians;
Purchasing Controllers; Planners;
Linefeed Operations Staff;
Health and Safety Managers;
Warehouse Controllers; General
Administrative Staff.
Administrative
and Office
General office and associated
administrative roles across
all core sectors and general
business areas.
Recruitment Process
Outsourcing
Under the brand of Datum RPO
the business supports a range
of UK businesses to manage
the operation and compliance
of their entire recruitment
operations often facilitating
over 250 supply agencies
per customer. Key sectors
include, construction, facilities
management, food processors,
house builders and care.
Live candidates on our database
c.1.7m
Workers deployed every day (average)
c.31,000
Increase in permanent recruitment
gross profit
+80.1%
to £3.9m (£2.2m in 2021)
Recruitment GB's portfolio businesses
Strategic Report
Corporate Governance
Financial Statements
15
Case study
DHL Automotive.
Overcoming market forces
DHL Supply Chain, part of the DPDHL
Group, is the world’s leading contract
logistics provider. Providing supply
chain and third-party logistics solutions
across a range of industries including the
automotive sector.
For more information visit:
www.staffline.co.uk/for-
employers/case-studies
Case study
In the UK, DHL Supply Chain is a critical
part of the supply chain and manufacturing
operations for highly prestigious automotive
groups. DHL Supply Chain supports
manufacturers to deliver excellence for the
next automotive generation of vehicles and
the adoption of electrification.
Recruitment GB has been working with
DHL Supply Chain in the automotive sector
since 2005.
In recent times, the Covid-19 pandemic,
compounded by the outbreak of war in the
Ukraine, have both had a detrimental effect
on the automotive industry. These events have
caused acute issues in global supply chains,
particularly so for semi-conductors.
In common with other manufacturers, the
clients of DHL Supply Chain have needed
to adapt.
As the impacts of the Covid-19 pandemic have
begun to dissipate, automakers have begun to
reignite production levels at their UK plants.
This has meant that DHL Supply Chain and
Recruitment GB needed to bring large numbers
of skilled and semi-skilled workers back into
operations at a time when competition for such
workers was at a record high.
To meet production targets, DHL Supply Chain
needed to grow the contingent workforce
considerably. Working in partnership
with DHL Supply Chain and through a
robust recruitment and training campaign,
Recruitment GB was able to deliver and meet
these requirements.
From a starting point of less than 50 workers
on the books in January 2022, the teams
succeeded in increasing this essential
workforce more than 10-fold at the main sites
of DHL Supply Chain in less than 12 months.
Throughout the 17 years of working together,
DHL Supply Chain and Recruitment GB have
worked together to find effective solutions
to support evolving business requirements,
overcoming many challenges and delivering
on many high-profile vehicle launches.
A leading light in ESG For more information visit:
www.staffline.co.uk/for-
employers/case-studies
MOWI are the world’s largest producer
and processor of Atlantic salmon. They
are also ranked as a leader in the MSCI
Index* rating for their ESG performance.
Brightwork has been working with MOWI
since 2019, initially providing temporary
staffing solutions to bolster the 700-strong
permanent workforce within MOWI’s Scottish
manufacturing site at Rosyth.
The relationship between MOWI and
Brightwork has evolved over the years into a
strategic partnership with mutually cohesive
operational and social goals.
Brightwork, in conjunction with the
Scottish Government, Police Scotland
and the Gangmasters and Labour Abuse
Authority, was the founder of Scotland
Against Modern Slavery (“SAMS”). SAMS is
a movement committed to raising awareness
of human trafficking and labour exploitation
within the Scottish business community.
SAMS has grown to include more than 50
Corporate Partners, with MOWI being quick to
join as a corporate member of the forum.
SAMS has been instrumental in rescuing 17
victims of modern slavery, helping people
to rebuild their lives in sustainable roles with
responsible employers.
MOWI has directly supported a victim of
modern slavery, placing them into a full-time
permanent job within their site in the North
of Scotland.
Similarly, in the early stages of the Ukrainian
War, MOWI acted in support of a family
of refugees fleeing the conflict. Despite
the low-level English skills of the refugees,
MOWI partnered them with someone in their
team who spoke their language. MOWI then
continued to employ other Ukrainian refugees
throughout 2022.
Further details of the Group’s work to prevent
modern slavery and other social issues can be
found on page 32.
* MSCI is a leading provider of global indices and benchmark related products and services to investors worldwide
16
Staffline Group plc Annual Report and Accounts 2022
Operational Review continued
Case study
Samworth
Brothers.
Innovative, compliant,
delivery over the
long term.
Samworth is one of the nation’s largest
food manufacturers, employing around
10,000 people across its UK operations.
The business produces a range of premium
quality, chilled and ambient foods (food-
to-go, savoury pastry, “heat and serve”
meals, sausages and cooked meats) for both
own-label and branded customers. Among its
best-known brands are Ginsters and Melton
Mowbray pork pies.
Additionally, Samworth provides temperature-
controlled distribution services to companies
within the group and to external food
manufacturers, retailers and other distributors.
“
We are extremely
proud of our work
with Samworth. They
are always open to
ideas and looking to
the next thing.
Recruitment GB’s relationship with Samworth
is a long one. It goes back to 1995, when
Staffline’s A La Carte division started providing
flexible workforce solutions to Samworth
production sites. It’s a partnership that has
grown over time with a five-fold growth in the
hours supplied from c.1m in the late 1990s to
around 5m hours today.
As the country entered 2022, to meet an uplift
in demand, Staffline supported Samworth as it
sought to recruit skilled workers for its various
sites with a special ‘search and select’ Direct
Hire model. The Direct Hire scheme brought
workers in on a temporary contract with the
opportunity to take on a permanent role with
the business after a set period.
Like Staffline, Samworth is a purpose-led
business. Their motto, “We do GOOD things
with GREAT food” provides an anchor for a
business that is committed to being a force
for good in the communities it serves.
At no time was this more evident than
during, and immediately after, the Covid-19
pandemic. The Samworth and Staffline teams
worked closely to develop a programme of
support for Samworth workers, ensuring they
stayed safe and Covid-19-compliant. Multiple
special measures were put in place both on
and off-site, from the provision of many tens
of thousands of tests and the sending out
of test kits to workers at home, through to
socially distanced dining and coach transport
to site. The business also managed more than
2,000 workers through the furlough scheme,
bringing them back into work as the Covid-19
pandemic eased.
Recruiting through this scheme, Samworth
was able to tap into Staffline’s high street
presence, its national resource centre, as well
as to an existing candidate database that has
more than 20,000 active job seekers registered
at any given period. Staffline ran the interview
and onboarding process and then managed
the new recruits through to gain a permanent
offer of work.
Recruitment GB Regional Director, Charles
Kennington, says of the partnership, “One
of the benefits of such a long and close
relationship is that when challenges come,
we face those challenges head-on and come
up with solutions together. It helps us to
anticipate what is coming over the horizon
and put measures in place ahead of times
that help us navigate our way through. We are
extremely proud of our work with Samworth.
They are always open to ideas and looking
to the next thing.”
For more information visit:
www.staffline.co.uk/for-
employers/case-studies
Strategic Report
Corporate Governance
Financial Statements
17
Case study
Sainsbury’s
Argos.
“
We are delighted to have
been able to support Argos.
Argos now has a stronger
Managed Service Provision in
place, with total visibility and
control of its costs.
For more information visit:
www.staffline.co.uk/for-
employers/case-studies
Best-fit platform for stronger performance
Argos, part of Sainsbury’s since 2016,
is one of the UK’s leading general
merchandise retailers, offering more
than 60,000 products through its
website, apps, stores and “Click & Collect”
points within Sainsbury’s supermarkets.
Argos is a technology-led retailer with a
website that receives in excess of 1bn visits
a year with circa 90% of its sales originating
online. Essential to its business model is a
market-leading fast track delivery service.
The Argos home delivery network has over 45
strategically placed locations across the UK.
Argos uses agency labour in two of its core
channels with the workers supplied requiring
varying skill sets to undertake activities to best
serve customers. The two channels are:
At the start of 2022, Argos already had an
existing MSP partner for its temporary labour
across its driving estate but approached
Datum RPO for a proposal that would
enhance capabilities in this area. Argos also
invited Staffline Recruitment GB to become a
supplier of driver resources for key locations
within the home delivery network.
From the outset of the MSP project, Datum
RPO Staffline GB’s RPO business worked
closely with key stakeholders within the Argos
Group to tightly scope requirements. Many
essential factors had to be considered: from
ensuring control and visibility of job cards
and complete visibility of data by the Argos
site teams, through to the need for complete
commercial confidentiality and ensuring
GDPR requirements were met.
• the small item parcel network serving in-
supermarket stores and fast track customers
from over 15 local fulfilment centres, which
require warehouse operatives for picking
and packing, van drivers for delivery, and
on-doorstep customer service; and
• the large item two-person delivery channel
in which they require warehouse operatives,
7.5 tonne delivery drivers and drivers’ mates
who can offer the customer an exemplary
level of customer service, delivering goods
to the customer’s room of choice.
To create a best-fit solution for Argos, Datum
RPO invested heavily in the development of
its technology so that the functionality would
be tailored to Argos’ specific requirements.
The Datum RPO MSP solution was then rolled
out seamlessly to 45 locations and circa 70
suppliers. The system is now embedded within
Argos and is fully utilised by all home delivery
depots across the network. Additionally,
Staffline continues to deliver temporary
driving resources to Argos as one of its
main agency suppliers.
Looking back at the achievements of the past
12 months, Lewis Furlong, Head of Productivity
and Efficiency, Supply Chain and Logistics,
Sainsbury’s Argos, said, “The initial transition
to Datum RPO from a long-standing neutral
vendor relationship has been seamless. It was
orchestrated well by the project team and
we didn’t lose any of our supplying agencies
or, more importantly, disrupt our operations
through the transition which is testament to
the execution and detailed planning.”
Lewis added, “We are looking forward to
taking it to the next level by fully utilising the
system platform to capture the entire life cycle
of using temporary workers. Datum RPO has
enabled better visibility of performance and
we have enlisted their services to proactively
spot issues and provide solutions in advance
of our operations experiencing disruption”.
From the perspective of Datum RPO Neil
Jackson, Director at Datum RPO says,
“We are delighted to have been able to
support Argos. Argos now has a stronger
Managed Service Provision in place, with total
visibility and control of its costs, complete
assured compliance for every agency and
every worker”.
Group
Group
Recruitment GB
Group
Recruitment GB
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Recruitment Ireland
18
Staffline Group plc Annual Report and Accounts 2022
Operational Review continued
Group
Recruitment GB
Recruitment Ireland
New and
emerging sectors
driving growth.
Recruitment Ireland built on its reputation
as a market leader for recruitment across
the Island of Ireland in 2022, pivoting
towards new and emerging sectors,
adapting to the changing nature of on-
sites and using the opening of strategic
branches in key geographical areas to
strengthen its recruitment offering.
Its ambition has also extended to the
successful launch of two significant new
divisions to the business; Staffline Medical
tapping into the significant gaps in the
healthcare market in the Island of Ireland and
finding an international solution to many of
the challenges that exist; Staffline Executive
Search is its new high-end and discreet
recruitment service which introduces the best
talent in the island of Ireland to a selection of
outstanding clients in professional services.
It has also invested in internal functions, with
the roll-out of “Stellar” a new, state of the
art system, which streamlines the process of
registering candidates and its payroll function,
which gives it new ways of analysing data
to help improve delivery for both clients and
candidates alike. A true digital transformation
which will help earmark Recruitment Ireland as
a market leader and a recruiter of choice for
those seeking work.
Banking
• Cash Handler
• Machine Operator
Other
• Temporary/
Contingent Resourcing
• Executive Search
and Selection
• Permanent Resourcing
• HR Consultancy
• Assessment Centres
• Psychometric Testing
and Ability Testing
• Outplacement
• MSP/RPO
• Master Vendor
Core activities
Blue collar
• Operatives (Production |
Packing | Warehousing)
• Technicians (Logistics |
Machine | Product)
• Supervisors
• Line Leaders
• Administrators
(Customer Service)
White collar
• Business Development
Manager
• HR Manager
• Finance Manager
• Executives
Public sector
• Groundskeeper
• Safety Officer
• Wardens
• Instructors
• Shared Services
Support Officer
• Environmental Health Officer
Tina McKenzie
Managing Director,
Recruitment Ireland
Revenue
£110.6m
Workers deployed every day (average)
4,500
Permanent recruitment gross profit
increased by
45%
Offices and on-site locations across the
Island of Ireland
28
Strategic Report
Corporate Governance
Financial Statements
19
Case study
Dale
Farm.
“
Recruitment Ireland
provides us with an
on-site service that
works well for the flexible
demands of our business.
Employing over 1,200 people across the
UK and Northern Ireland, Dale Farm is one
of the most expansive dairy companies
in the UK. Their business spans the food
chain from animal feed to collecting milk
from farms, from processing products to
store delivery. Their products are supplied
into retail, foodservice, and ingredients
markets in more than 45 countries.
Recruitment Ireland is proud to support
Dale Farm by providing an on-site solution for
the past eight years focused on the provision
of quality temporary staff to their six sites in
Northern Ireland.
The post Covid-19 pandemic economy in
Northern Ireland presented the business with
several challenges in sourcing staff with a
tightening local labour market. In Northern
Ireland, unemployment was the lowest in
the UK at 2.7% (NISRA Labour Force Survey)
and the introduction of settled status for
non-UK nationals had a detrimental effect
on new migration into Northern Ireland. This,
coupled with competition from other food
manufacturers in the immediate area offering
permanent opportunities, ensured that the
team needed to be on top of their game to
ensure the requirements of Dale Farm were
met, especially in peak periods.
Dale Farm is an innovative and constantly
evolving business and key to its growth
is a readily available pool of temporary
workers that it can flex-up and down as
business demands.
The account team works closely on-site with
the Dale farm HR and Production teams to
develop candidate attraction strategies and
to ensure it has a constant pipeline of suitably
experienced candidates available for work.
Recruitment Ireland has a permanent office
on the largest site at Dunman, Cookstown,
and this ensures the team are highly visible
and accessible to both the client and
candidates. This also enables us to provide
added value such as induction training, help
with onboarding, temporary worker clinics to
deal with any issues or queries, and progress
checks to ensure workers are happy in the
role and progressing in line with requirements
of the client.
Karen Gow, HR Director at Dale Farm, says:
“Staffline Ireland provides us with an on-
site service that works well for the flexible
demands of our business. The team can
supply the right people in the right place at
the right time and they partner with us to offer
people excellent jobs with the opportunity
to develop their skills in a range of different
areas. We are delighted to work with Staffline
Ireland as the largest provider of temporary
staff in Northern Ireland”.
For more information visit:
www.staffline.ie/blog
Group
Group
Recruitment GB
Group
Recruitment GB
Pantone 431C
C24 M0 Y0 K70
R91 G103 B112
HEX 5B6770
Pantone 485C
C1 M95 Y94 K0
R218 G41 B28
HEX DA291C
Recruitment Ireland
Recruitment Ireland
20
Staffline Group plc Annual Report and Accounts 2022
Operational Review continued
Group
Recruitment GB
Recruitment Ireland
Employability
driving growth.
PeoplePlus has been a pioneer in promoting and delivering the
benefits of socially responsible recruitment: meeting employer
needs while also positively impacting society and the
economy by ensuring that people from disadvantaged groups
can obtain sustainable employment. These disadvantaged
groups include many of the most vulnerable in society: young
people not in education, employment, or training; carers;
ex-offenders; and people with long-term health and
disability challenges.
Committed teams in PeoplePlus work across
Britain to deliver a range of employability
and skills services on behalf of central and
local government, including employability
support, skills training, assistance with self-
employment, independent living services,
prison education services, as well as the
support they give to help employers grow
and achieve their social value objectives, via
socially responsible recruitment practices
and wider social value initiatives. In 2018,
the organisation committed to an ambitious
mission to make a difference to the lives of 1m
people by 2022 and in December of that year,
this mission was achieved, with an astonishing
1,001,147 number of lives changed. The new
mission for 2023 and beyond reflects the
continued leadership of PeoplePlus in the field
of social value creation and the important
range of partner and employer services it
offers to organisations keen to develop their
own ESG programmes: their vision is for
a society where every individual is able to
reach their full potential, regardless of their
background or circumstances.
And the mission is to lead the way in making
this future a reality: working directly and
indirectly for those who need support and
with those who can support, to ensure that
every organisation in our society strives to
increase the value it brings to that society,
to our communities and to the lives of the
individuals in them.
PeoplePlus: leading the way in creating
social value.
Kenny Boyle
Managing Director, PeoplePlus
Key sectors
Skills – Adult
Education
• Training and qualifications to
enhance career prospects
• Work with Local Enterprise
Partnerships and
local authorities
• LearningPlus
e-learning platform
• Apprenticeships and
traineeships in Wales
Justice
• Largest independent provider
of prison education in the UK
• Education in prisons and
Young Offender Institutions
• Information Advice and
Guidance (“IAG”) services
• Wayout TV – in cell learning
Employability
• Restart Scheme in England
and Wales
• FairStart Scotland
• Self employment support in
Manchester and West Yorkshire
Key statistics
Community Services
• Helping people
Between January 2018 to December 2022, we made a difference to
the lives of 1,001,147 people
live independently
• Direct payments service
• Supporting carers through
Gloucestershire Carers Hub
Partner Services
• Social Recruitment Framework
• Social Recruitment
Advocacy Group
• Social impact Hub
• Network of over 650 partners
• Over 400 employers
• Wellbeing Programme ‘YouCan’
Since 2019 we have delivered over 137,000 qualifications
to 49,808 learners
10,506 learners in prisons started 26,233 courses in
2022 with 91% success rate
In-cell learning channel Wayout TV is shown in 72 prisons
Over 12,650 people have joined us on the Fair Start
Scotland service and 4,300 have started sustainable
work since 2017
16,850 people have joined the Restart Scheme, of which
5,562 have started work since 2021
We support in excess of 10,000 people every year with Direct
Payments, part of PeoplePlus Independent Living Services
Strategic Report
Corporate Governance
Financial Statements
21
Case study
Changing lives.
For more information visit:
peopleplus.co.uk/news
“ The Gloucestershire
Carers Hub is a Godsend.
I don’t know where we’d
be without their support,
they’re here for us 24 hours
a day and nothing is ever
too much trouble.
Bob and his wife Beryl.
The Community Services division at
PeoplePlus offers people the opportunity
to live independently by processing
direct payments for over 10,000 people
a year and running the PeoplePlus
Gloucestershire Carers Hub that
offers support to unpaid carers. The
Gloucestershire Carers Hub has helped
4,600 carers this year. One of those carers
is Bob. Bob’s wife Beryl was diagnosed
with dementia a couple of years ago, and
Bob relies on support, advice, respite
and social activities from the PeoplePlus
Gloucestershire Carers Hub to help him
with his caring role.
The Restart Scheme gives enhanced
support for eligible claimants to find jobs.
• a talent pool of candidates who are
actively looking for employment;
The service forms part of the
Government’s Plan for Jobs, which is
helping millions of people across the
country into employment. PeoplePlus
is delivering the Restart Scheme in
conjunction with Reed in Partnership
in Kent and the North East, and in
partnership with Serco in Wales.
The scheme gives personalised support
to individuals looking for work including
health and wellbeing advice and a
tailored action plan. The support ensures
that individuals are ready for the right job
at the right time.
PeoplePlus works with employers to help
them recruit in a socially responsible
way. By recruiting people who are on the
scheme they can access:
• candidates who have been pre-
screened and given prior support to
ensure they are job-ready;
• a full needs analysis of their business
in order to understand the culture, the
job opportunities available, progression
opportunities for the individual and a
true partnership experience to ensure
the right people are employed by the
right businesses; and
• security that employers are recruiting
in a socially responsible way, helping
those who are often hardest to reach
back into the labour market.
Once the individual has started work,
PeoplePlus will give up to 12 months
in-work support to that person; covering
travel and PPE costs, wellbeing advice and
much more, to ensure the individual feels
totally supported to do their job.
22
Staffline Group plc Annual Report and Accounts 2022
Financial Review
Strong
trading further
strengthens
the balance
sheet.
Gross profit to
underlying operating
profit conversion
improved to 14.4%
Closing net cash
Pre-IFRS 16
£5.0m
Daniel Quint
Chief Financial Officer
Introduction
The Group traded strongly during 2022
and exceeded both net cash and underlying
operating profit expectations, despite the
continuing economic challenges. Gross sales
for 2022 increased by 3.5% to £1,031.3m
(2021: £996.5m) driven by new managed
service provider customer wins. Total revenue
for the year of £940.5m (2021: £942.7m) was
lower than the previous year by 0.2%. Gross
profit across the recruitment businesses
increased by 4.7% to £64.9m (2021: £62.0m),
offset by a reduction in PeoplePlus’ gross
profit to £18.3m (2021: £20.8m). This resulted in
Group gross profit increasing to £83.2m (2021:
£82.8m), with gross profit margin stable at
8.8%. The Group continued to control overhead
costs tightly, increasing its gross profit to
underlying operating profit conversion rate
from 12.4% to 14.4%, delivering a 16.5% increase
in underlying operating profit to £12.0m (2021:
£10.3m). The Group’s reported profit after tax
increased to £3.8m (2021: £1.2m).
The Group has pursued a policy of organic
growth with a focus on cost control and
working capital, conserving its cash reserves,
and further strengthening its balance sheet.
The Group ended the year with pre-IFRS 16 net
cash of £5.0m (2021: £6.9m), notwithstanding
the two Covid-19 pandemic-related one-off
payments of the final repayment of deferred
VAT of £5.8m and £6.2m advance payments
from the Ministry of Justice. This means
that the Group generated an underlying
improvement in net cash of £10.1m.
The Group’s purchase of a 3-year interest rate
cap in October 2021, in order to manage its
debt financing costs, meant that the impact
of the increase in the Bank of England base
rate from 0.25% to 3.50% during 2022 was
largely mitigated.
The Group’s strengthened balance sheet
and its significant financing headroom
leaves it well placed to navigate the ongoing
global macroeconomic headwinds as well as
capitalise on market opportunities to further
grow market share.
Interest rate cap
product protects
against rising
interest rates
Strategic Report
Corporate Governance
Financial Statements
23
Gross sales value
increased by
3.5% to £1,031.3m
reflecting new client
opportunities in our
expanding Managed
Service Provider
(“MSP”) business,
Datum RPO
The Group comprises three divisions, namely, Recruitment GB, flexible blue-collar recruitment; Recruitment Ireland, generalist recruitment;
and PeoplePlus, adult skills and training provision.
Underlying1 divisional performance – continuing operations
Recruitment
GB 2022
£m
Recruitment
Ireland 2022
£m
PeoplePlus
2022
£m
Group
Costs 2022
£m
Total Group
2022
£m
Recruitment
GB 2021
£m
Recruitment
Ireland 2021
£m
PeoplePlus
2021
£m
Group Costs
2021
£m
Total Group
2021
£m
Revenue
752.0
110.6
77.9
Year-on-year revenue
increase/(decline)
0.5
(1.0)%
(6.3)%
Gross sales value3
842.8
110.6
77.9
Year-on-year gross
sales value increase
5.1%
(1.0)%
(6.3)%
Gross profit
52.0
12.9
18.3
2.6%
14.2% (12.0)%
6.9%
11.7%
23.5%
–
–
–
–
–
–
940.5
747.9
111.7
83.1
(0.2)%
1,031.3
2.2%
801.7
(7.3)%
10.8%
111.7
83.1
3.5%
5.6%
(7.3)% (10.8)%
83.2
50.7
11.3
20.8
0.5%
9.7%
7.6%
16.2%
8.8%
6.8%
10.1%
25.0%
–
–
–
–
–
–
942.7
1.6%
996.5
2.7%
82.8
11.0%
8.8%
8.3
3.2
3.8
(3.3)
12.0
7.1
2.5
4.1
(3.4)
10.3
1.1%
2.9%
4.9%
16.0%
24.8%
20.8%
–
–
–
–
–
–
–
–
–
–
1.3%
0.9%
2.2%
4.9%
14.4%
14.0%
22.1%
19.7%
5.0
0.1
–
–
–
–
–
–
–
–
–
–
1.1%
12.4%
6.9
2.3
Year-on-year gross
profit increase/(decline)
Gross profit as a %
of revenue
Underlying operating
profit/(loss) before tax
Underlying operating
profit as a % of revenue
Underlying operating
profit as a % of
gross profit
Pre-IFRS 162 net cash
excluding unamortised
refinancing costs
Post-IFRS 16 net cash
excluding unamortised
refinancing costs
24
Staffline Group plc Annual Report and Accounts 2022
Financial Review continued
Key performance indicators – continuing operations
Hours worked by temporary
workers
Gross profit per fee earner
Revenue per employee
Alternative performance measures
Recruitment
GB 2022
Recruitment
Ireland 2022
PeoplePlus
2022
Total Group
2022
Recruitment
GB 2021
Recruitment
Ireland 2021
PeoplePlus
2021
Total Group
2021
44.0m
£76.5k
–
6.7m
£102.2k
–
–
–
£55.7k
50.7m
£80.6k
–
51.1m
£71.5k
–
7.1m
£111.5k
–
–
–
£62.6k
58.2m
£76.5k
–
1 Underlying results exclude goodwill impairment, amortisation of intangible assets arising on business combinations, reorganisation costs and other non-underlying charges.
2 Presented on a pre-IFRS 16 basis, which excludes lease liabilities, and also excludes refinancing costs.
3 Gross sales value represents the fair value of consideration received or receivable for the supply of services, including agency sales, (excluding fees) net of VAT.
For management reporting purposes, the Recruitment GB division presents its “gross sales”, which includes sales under agency arrangements.
The reporting of gross sales gives an indication of the full level of activity undertaken by the division. This value is adjusted for revenue reporting
in accordance with IFRS 15. The adjustment relative to reported revenue for the Group is as follows:
Gross sales value
Agency sales
Revenue as reported
2022
£m
1,031.3
(90.8)
940.5
2021
£m
996.5
(53.8)
942.7
Recruitment GB
Revenues in the Recruitment GB division increased by £4.1m to
£752.0m. The division experienced some reduction of volumes from
retail and logistics customers that had benefited from increased
workload during the Covid-19 pandemic, which was more than
offset by significant new contracts, and increased demand from
some existing customers, BMW and Sainsbury’s/Argos being
prominent examples.
Gross profit of £52.0m (2021: £50.7m) resulted in gross profit margin
increasing to 6.9% (2021: 6.8%), reflecting the slight shift from lower
margin sectors such as food production, toward marginally higher
returns from recovering sectors such as travel and aviation, as well
as the increase in permanent recruitment activity commented on
below. Increases in general pay rates, in many cases double-digit
percentages, combined with the increase in the National Minimum
Wage in April 2022, from £8.91 to £9.50 per hour for over 23’s, do not
impact absolute gross profit but do negatively impact gross margin
percentage achieved.
Gross profit generated from temporary recruitment reduced as a
proportion of the total to 92.5% (2021: 95.7%), with the remaining 7.5%
(2021: 4.3%) of gross profit generated from permanent recruitment.
This represented a 77% increase in gross profit generated from
permanent recruitment to £3.9m (2021: £2.2m). Hours worked reduced
to 44.0m (2021: 51.1m) reflecting reduced year-over-year supermarket
and online retail volumes and the strategic exit from a significant high
volume, low margin contract during 2021. Revenues were boosted in the
second half by the successful implementation of the new contract with
BMW Group, whilst also generating strong organic growth with existing
customers. The division continued to control overhead costs tightly,
increasing its gross profit to underlying operating profit conversion rate
from 14.4% to 16.0%, delivering a 16.9% increase in underlying operating
profit to £8.3m (2021: £7.1m).
Recruitment Ireland
Revenues in the Recruitment Ireland division reduced by £1.1m to
£110.6m, reflecting the reduction in temporary worker hours to 6.7m
(2021: 7.1m). A 45% increase in permanent recruitment fees enabled
the division to deliver its strongest results since 2019, as well as a
record trading performance in the Republic of Ireland.
Gross profit of £12.9m (2021: £11.3m) resulted in gross profit
margin increasing to 11.7% (2021: 10.1%), reflecting the further shift
toward permanent recruitment business. Gross profit generated from
temporary recruitment accounted for 82.9% (2021: 86.7%) of the total,
with the remaining 17.1% (2021: 13.3%) of gross profit generated from
permanent recruitment.
Additionally, tight control of the cost base resulted in the gross profit
to underlying operating profit conversion rate improving to 24.8%, up
from 22.1% in the prior year, generating an underlying operating profit
of £3.2m (2021: £2.5m).
PeoplePlus
PeoplePlus revenues reduced by 6.3%, from £83.1m to £77.9m, primarily
as a result of reduced revenues from Skills training, which was severely
impacted by a significant reduction in the number of candidates
available as a result of the tight labour market which enabled workers
to enter jobs without workplace skills training. The division successfully
delivered its first operating profit of £1.2m from the Restart sub-contracts
in the second half of the year and the tight labour market conditions
aided other Employability programmes, which performed well.
Following the rebuild of the division’s overhead base that commenced
in 2021, the division has maintained its revenue to underlying operating
profit conversion at 4.9%, resulting in underlying operating profit of
£3.8m (2021: £4.1m).
During the year it was determined that PeoplePlus had overstated
revenues totalling £2.6m in relation to the period prior to 31 December
2021, as PeoplePlus had not met some of its revenue related
performance obligations. Due to the legacy nature of these revenues,
management have accounted for the adjustment of these errors
through reserves (see Note 3).
Revenue per employee was £55.7k during 2022 (2021: £62.6k), an
11% decrease, resulting from the reduced revenues from Skills training.
PeoplePlus achieved a gross margin of 23.5% in 2022, which compares to
25.0% in 2021, largely due to the reduced contribution from skills training.
Group costs
Group costs, which include Directors’ remuneration costs, have
decreased to £3.3m (2021: £3.4m) reflecting continued close
management of corporate spend.
Strategic Report
Corporate Governance
Financial Statements
25
Group result
Underlying operating profit was £12.0m (2021: £10.3m), an increase of
16.5%, and marginally ahead of market expectations for the year. Total
non-underlying charges on continuing activities before tax, which are
described below, were £7.4m (2021: £8.0m), which were all non-cash.
Non-underlying charges on continuing activities before tax amounted
to £7.4m in the year (2021: £8.0m), relating solely to amortisation of
intangible assets arising on business combinations. As stated below
the existing intangible assets on business combinations will all be fully
amortised by the end of 2023.
The underlying profit before taxation on continuing operations for
2022 was £9.3m (2021: £7.9m). Underlying profit before taxation as a
percentage of revenue was 1.0% (2021: 0.8%). The underlying profit
after tax on continuing operations for the year was £9.4m (2021: £8.7m).
The Group’s reported profit before taxation was £1.9m in the year
(2021: loss £(0.1)m).
Net Finance Charges
Net finance charges incurred in the year amounted to £2.7m
(2021: £2.4m), reflecting part of the increase in overnight SONIA
rates during 2022 from c.0.25% to c.3.40%. However, the Group
limited its exposure to these interest rate increases through the use
of an interest rate cap, which was purchased in October 2021. This
reduces exposure to interest rate increases above 1% of SONIA on an
aggregated two-thirds of the Receivables Finance Agreement (‘‘RFA’’)
(£26.0m at 31 December 2022) and the customer finance arrangements
(£51.7m at 31 December 2022). The instrument, which has a term of three
years from 13 October 2021, is based on quarterly notional amounts
varying between £39.5m and £62.5m, with an average of £51.9m.
Taxation
The total tax credit for the year was £1.9m (2021: £1.7m), which included
the movement of deferred tax balances. The Group has an estimated
current corporation tax liability of £0.1m (2021: £nil) in respect of the
year. Remaining tax losses of £17.8m carried forward in all divisions
have been recognised as a deferred tax asset.
The amortisation charge relating to intangible assets arising on
business combinations is not deductible under UK corporation tax
and is therefore added back to taxable profits. A deferred tax liability is
recognised in respect of other intangible assets. This liability is reduced
each year in line with the amortisation charge, giving rise to a deferred
tax credit each year.
Alternative Performance Measures
In the reporting of its financial performance, the Group uses a limited
number of alternative performance measures that are not defined
under IFRS, the Generally Accepted Accounting Principles (“GAAP”)
under which the Group reports. The Directors believe that these non-
GAAP measures assist with the understanding of the performance of
the business and are not given undue prominence in these financial
statements. These non-GAAP measures are not a substitute for,
or superior to, any IFRS measures of performance, but they have
been included as an additional means of comparing performance
year-on-year. The alternative performance measures used are
described in Note 3.
Non-underlying Items
Non-underlying items of income or expenditure are items that are either
non-recurring or of a particular size or nature such that they require
separate identification. Non-underlying items are included in total
reported results but are excluded from underlying results. Certain items
can vary significantly from year to year and therefore create volatility
in reported earnings. It should be noted that whilst the amortisation
of intangible assets arising on business combinations has been added
back, the revenue from those acquisitions has not been eliminated.
The charge in the year for amortisation of intangible assets arising
on business combinations relates to the following acquisitions:
Vital Recruitment (charge £3.0m: asset will be fully amortised by
February 2023); Passionate about People (charge £2.3m: asset will
be fully amortised by October 2023); Grafton (£1.3m: asset will be
fully amortised by June 2023); Brightwork (charge £0.2m: asset
fully amortised during 2022); and others (charge £0.6m: asset fully
amortised during 2022).
Non-underlying charges – continuing operations
Amortisation of intangible assets arising on
business combinations
2022
£m
7.4
2021
£m
8.0
Government Support
During the first year of the Covid-19 pandemic in 2020, the Group
took advantage of the forbearance scheme for the deferral of VAT due
between March and June 2020. The total deferral agreed with HMRC
under the UK scheme amounted to £42.4m after offset of a corporation
tax refund due in relation to the financial year 2018. Repayment of the
balance commenced in June 2021 and the final instalment of £5.8m
was paid in January 2022.
Earnings per share
Statutory basic and diluted loss per share on continuing activities
in 2022 were both 2.3p (2021: both 1.3p).
For the year, the weighted average number of shares (basic) is
163,753,217 (2021: 122,178,126).
Removing the non-underlying charges, and their respective taxation
impacts, results in underlying basic earnings per share of 5.7p
(2021: 7.1p) and diluted earnings per share of 5.7p on continuing
activities (2021: 7.1p).
The table below reconciles underlying EBITDA (earnings before interest,
taxation, depreciation and amortisation) on continuing operations to
operating profit.
Reconciliation of operating loss to EBITDA
Operating profit
Non-underlying costs
Underlying operating profit
Depreciation and loss on disposals
Underlying EBITDA
Lease rental payments
Underlying EBITDA (pre-IFRS 16)
2022
£m
4.6
7.4
12.0
5.6
17.6
(1.6)
16.0
2021
£m
2.3
8.0
10.3
6.6
16.9
(1.7)
15.2
Note: Underlying operating profit is before goodwill impairment, amortisation
of intangible assets arising on business combinations, reorganisation costs and
other non-underlying costs. EBITDA represents Earnings Before Interest, Taxation,
Depreciation and Amortisation.
26
Staffline Group plc Annual Report and Accounts 2022
Financial Review continued
Statement of Financial Position, Cash Generation and Financing
Since 2020 strong trading cash flows during both 2021 and 2022, alongside the equity raise in 2021, have increased the Group’s equity by
£54.1m to £71.7m.
The movement in net debt is shown in the table below. Strong trading cash flows were offset by working capital movements, which included the
final repayments of deferred VAT of £5.8m and £6.2m of the Covid-19 pandemic-related advance payments from the Ministry of Justice.
Movement in net debt
Opening net cash/(debt) (pre-IFRS 16)
Cash generated before change in working capital and share options
Principal repayment of lease liabilities
Change in trade and other receivables
Repayment of advance receipts from the MoJ
Deferred VAT (net of corporation tax offset)
Change in trade, other payables and provisions
Taxation and interest received
Capital investment (net of disposals)
Net proceeds from equity issue
Payments from restricted funds for NMW
Settlement of NMW liabilities from restricted funds
Other
Closing net cash (pre-IFRS 16)
IFRS 16 lease liabilities
Closing net cash (post-IFRS 16)
2022
£m
6.9
17.6
(1.6)
1.5
(6.2)
(5.8)
(0.9)
(2.3)
(3.6)
–
–
–
(0.6)
5.0
(4.9)
0.1
2021
£m
(8.8)
16.5
(1.7)
(12.2)
4.2
(36.6)
(0.7)
3.9
(4.5)
46.4
0.9
(0.9)
0.4
6.9
(4.6)
2.3
Note: Underlying operating profit is before goodwill impairment, amortisation of intangible assets arising on business combinations, reorganisation costs and other non-
underlying costs. EBITDA represents Earnings Before Interest, Taxation, Depreciation and Amortisation.
Net cash (pre-IFRS 16) bridge from January 2022 to December 2022
m
£
25
20
15
10
5
0
0.4
(3.6)
(2.7)
(6.2)
16.0
6.9
(5.8)
5.0
Net cash FY21
Underlying EBITDA
Corporation
Capex
Interest paid
Ministry of Justice
Deferred VAT
Net cash FY22
(Pre IFRS16)
tax received
Covid repayment
repayment
The Group’s headroom relative to available committed banking facilities as at 31 December 2022 was £75.9m (2021: £78.4m) as set out below:
Cash at bank
Undrawn receivables finance facility agreement
Banking facility headroom
2022
£m
31.0
44.9
75.9
2021
£m
29.8
48.6
78.4
Strategic Report
Corporate Governance
Financial Statements
27
Working capital financing
The Group manages its working capital requirements using an RFA, and a number of separate, non-recourse, customer financing arrangements
whereby specific customers’ invoices are settled in advance of their normal settlement date via a funding intermediary.
The principal terms of the RFA are described in Note 21. The RFA leverages the Group’s trade receivables with sufficient headroom and flexibility
to manage the variability and size of weekly cash outflows. The balance outstanding at 31 December 2022 was £26.0m (2021: £22.9m).
The balance funded under the customer financing arrangements at 31 December 2022 was £51.7m (2021: £42.3m).
Dividends
The Board is not proposing a final dividend payment for 2022 (2021: £nil).
Going Concern
For the period to 31 December 2024, the Group’s cash flow forecasts indicate ongoing headroom in the RFA and also full compliance with the
financial covenants contained therein. The Group has sufficient day to day liquidity to ensure that short-term liabilities can be satisfied as and
when they fall due.
The financial statements have been prepared on a going concern basis. The Directors have reviewed this basis and have made full disclosure in
Note 3, concluding that there is a reasonable expectation that the Group and Company have adequate resources to continue in operational
existence for the foreseeable future.
Daniel Quint
Chief Financial Officer
20 March 2023
28
Staffline Group plc Annual Report and Accounts 2022
ESG Report
“ Our focus is to make
a positive difference
to people’s lives and
deliver social value
to the communities
in which we operate.
A word from our Chief Executive
Officer, Albert Ellis
Welcome to Staffline’s 2022 ESG Report.
Albert Ellis
Chief Executive Officer
Staffline recognises the value of Environmental,
Social and Governance (“ESG”) and the vital
importance of delivering our purpose to put
people into work. As a business focused on
recruitment, skills and employability training,
we play a pivotal role in changing lives and
empowering communities in both the UK
and the Island of Ireland.
Given the size of our business, it is important that we provide leadership and set an example in
operating sustainably, not only in the corporate space but more widely as an organisation of
influence in society and in our communities. Our clear commitments outlined in this report –
overseen by our ESG Committee – align with many of the targets and ambitions of our partners
and stakeholders, many of whom are also leading by example.
People placed
into good work
c.93,000
Unemployed
people supported
towards getting a job
16,850
Inmates
educated in 2022
10,506
Strategic Report
Corporate Governance
Financial Statements
29
Our
approach.
Our purpose drives our activities. As a blue-collar
recruiter and training provider, we play an important
role in helping to enhance the prospects of those
looking for work and thus support local communities
and wider society.
Our commitment to the development of people and communities and related environmental,
social and governance responsibilities is integral to our business.
These responsibilities guide our activities and underpin our approach to sustainability.
Our strategy
Our sustainability strategy sets out how we deliver against our responsibilities and is
based around four key pillars, covering environmental, social and governance issues.
Making a positive difference
to people and society
Supporting and
developing our people
Our key focus and the area where we can deliver the
greatest positive impact. By developing skills and
delivering training and support services, we engage and
transform the lives, including many from disadvantaged
backgrounds, helping unlock potential to improve
prospects and get people into jobs.
• Providing good work
• Community engagement
• Delivering employability
and skills training
We share a commitment to change and improve the working
lives of our people every day. We invest in all stages of the
employee journey, driving a high-performance mindset
through effectively engaging our people, whilst supporting
and creating a sense of belonging, too.
• Wellbeing
• Training, development
• Diversity, equity, inclusion
and belonging (“DEIB”)
and reward
• Health and safety
Reducing our
environmental impact
Doing business
in a responsible way
We place great importance on seeking to minimise
our environmental impact, and we recognise that our
environmental responsibilities are integral to our business.
• Energy and
carbon reporting
• Carbon offsetting
• Task Force on Climate-
related Financial
Disclosures (“TCFD”)
Sound governance and doing business in a responsible way
supported by our policies and values are fundamental to the
way the Group operates. Overseen and guided by our ESG
Committee, we aim to demonstrate these responsibilities
within our corporate policies and through our actions.
• Governance
• Regulatory compliance
• Responsible business
30
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Making
a positive
difference to
people and
society.
We are committed to making a positive
difference to society by delivering real social
value in our local communities and ensuring
our practices are socially responsible.
Across our employability programmes we were
able to support over 17,000 individuals in 2022.
In addition, we support people to set up and
run their own businesses. Since establishing
our self-employment provision in Manchester
and Yorkshire more than 10 years ago we have
helped over 100,000 people to become self-
employed, with an 80% sustainment rate.
Our #GetBritainWorking campaign supports
the Government’s Way to Work initiative.
Around 1,000 Jobcentre colleagues took part
in the launch of the chatbot Flin, which uses
our technology to allow claimants to book
interviews directly. Connecting our interview
booking technology with our wider services,
we provide support to prepare people for
work and connect those looking for work with
employer vacancies to offer interviews as and
when individuals are ready.
To complement our skills and employability
training, our PeoplePlus Wellbeing team
supported more than 500 people to better
understand emotion, reduce isolation, build
confidence, and improve resilience.
Providing good work
We work hand-in-hand with our clients as an
integrated business partner. Our candidates’
work experience is equally important to us
and we continue to focus on helping them find
good work with the most reputable employers.
We resource, recruit and mobilise large-scale
workforces to meet the ever-changing needs
of our customers, matching peaks and troughs
on a continual basis.
Delivering employability and
skills training
We recognise that by using our
employability and skills expertise and
partnering with government, employers
and local organisations we can make a real
difference to individual lives, communities,
and wider society, supporting individuals to
secure employment and helping employers
to fill vacancies.
Through our PeoplePlus business we deliver
skills and training, provide employment
support and prison education, as well as
working with over 400 employers to deliver
recruitment, training and employability
solutions so people can access the right
employment opportunities and enhance
their career prospects.
87%
of people who
started a course and
were subsequently
offered a job; started
employment
Between January 2018 to
December 2022, we made
a difference to the lives of
1,001,147
people
Since 2019 we have delivered
over 137,000 qualifications to
49,808
learners
c.500
people supported to improve
and maintain wellbeing
in 2022
c.8,500
people trained for vacancies
available via our Social
Recruitment Partners in 2022
14,096
prisoners used our Initial
Advice and Guidance
service in 2022
Strategic Report
Corporate Governance
Financial Statements
31
Case study
Our support ensures
that individuals are
ready for the right
job at the right time
Restart forms part of the
Government’s Plan for Jobs, which
is helping millions of people across
the country – many of whom had
their employment status impacted by
the Covid-19 pandemic. PeoplePlus
is delivering the Restart Scheme in
conjunction with Reed in Partnership
in Kent and the North East, and in
partnership with Serco in Wales.
The scheme gives personalised support
to individuals looking for work including
health and wellbeing advice and a
tailored action plan. Our support
ensures that individuals are ready for
the right job at the right time. 16,850
people have joined the Restart Scheme
with us and 5,562 have started work
since summer 2021 as a result.
Case study
Delivering education
and training to offenders
and ex-offenders
At PeoplePlus, the support offered
to offenders and ex-offenders in the
justice system includes face-to-face
classroom and in-cell learning, an
information, advice and guidance
service detailing employment
opportunities for ex-offenders
once they leave prison, as well as
a bespoke educational television
channel, Wayout TV, shown in 72
prisons throughout England.
• PeoplePlus has delivered education
in prisons for 15 years and is the
largest independent provider of prison
education in England. We deliver
education to 22 prisons and one
Youth Offender Institution (“YOI”),
and provide information, advice and
guidance to 16 prisons and 2 YOIs.
• Nearly a third of all PeoplePlus
colleagues work in the Justice
division of the business, and the
impact of their work supporting those
with some of the most challenging
barriers is truly life changing. During
2022, 10,506 prisoners started
26,233 courses, with 92% of these
successfully completing them.
In an average year, 2 million hours of
face-to-face learning are delivered
across PeoplePlus’ prison network, and
each hour of education has the potential
to persuade offenders to change their
lives for the better.
32
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Case study
Social Impact Hub
The Social Impact Hub is a suite of
social value programmes designed
to address barriers to employment,
harnessing the collective power of
employers, partners and trusted
local organisations to tackle
these barriers.
The programmes place particular emphasis on supporting:
• Ex-offenders
• Long-term unemployed
• BAME communities
• People with disabilities or learning differences
• Veterans
• Refugees
The Social Impact Hub is co-created with local communities, including
local authorities and trusted Voluntary, Community and Social
Enterprise (“VCSE”) providers, to ensure the solutions are based
on local needs and bring together the best quality services from
private and not-for-profit sectors. We use a social value calculator
to demonstrate the value of the Social Impact Hub work.
Enabling people into good work
Our recruitment businesses have national
coverage across Great Britain and Ireland
providing ‘good work’ to a total of around
93,000 different blue-collar workers in
the year.
They work at around 400 client sites, branches
and recruitment hubs across a wide range of
industries including supermarkets and retail,
drinks, driving, food processing, logistics
and manufacturing.
Prevention of
modern slavery
136,000 people in the UK are estimated to be
victims of modern slavery, around 1 in 500 people.
Staffline places up to c.36,000 people into
good work each day. We are committed
to protecting our workers from labour
exploitation and modern slavery, and
apply a robust seven stage red flag test to
inform how we recognise and react to signs
of human exploitation. We monitor and
analyse data to identify areas of risk and
work closely with our sites, which are key to
identifying possible victims. We spend time
building strong relationships with those we
work with to be better able to recognise the
signs that something may be wrong.
We train all permanent staff on how to spot
the signs, and we also marked the most recent
Anti-Slavery Day with a SPOT, THINK, ACT.
SPOT – the red flags
THINK – of your safety and those around you
ACT – by contacting the Compliance Team
During the year, we assisted the authorities
with 52 modern slavery investigations, which
led to the identification of 36 suspected
victims. In addition, we helped the Police/
Gangmasters and Labour Abuse Authority
(GLAA) in their enquiries with a further 34
confirmed victims.
We work continuously to prevent unlicensed
gangmasters from infiltrating our business
and exploiting our workers and engage with
authorities and charities to tackle modern
slavery, including Care and Justice, Avadu
Project, Hope for Justice and the GLAA. We
also work with the Stronger Together initiative,
using the Responsible Recruitment Toolkit to
keep modern slavery high on ethical agendas.
Over 59 businesses have now joined Scotland
Against Modern Slavery (‘SAMS’), which our
Scottish business Brightwork co-founded with
the Scottish Government and Police Scotland
to raise awareness of human trafficking and
exploitation with the business community and
support victims into permanent jobs through
Brightwork. Through SAMS we have supported
17 victims of Labour Exploitation into work
and have continued to run regular on line
and face-to-face business focussed events to
raise awareness of the current issues locally
and globally.
Through vigilance, caring, and the proactive
approach of our employees and our supply
chain, we strive to eliminate this complex and
evolving crime.
Our Modern Slavery Statement can be
found at: www.stafflinegroupplc.co.uk/about-
us/modern-slavery/.
Strategic Report
Corporate Governance
Financial Statements
33
Community engagement
Supporting our local communities
is a core part of our ethos. We help
people to live independently through
our direct payments service, and our
local services and volunteering activities
support individuals and community-
based organisations.
Working with 21 local authorities across
England and Wales, our community support
services enable thousands of people each
year across England and Wales to live
independently with direct payments.
Our Carers Hub in Gloucestershire gave free
support services to 4,600 people in 2022 while
our YouCan wellbeing programme supported
496 service users to build confidence and
connections, reduce isolation, and improve
wellbeing resilience.
During 2022, our employees delivered over
4,000 volunteer hours to local charities,
schools and community-based organisations.
Separately, the Group donated £19,086
to local and national charities.
4,000
volunteer hours to local charities,
schools and community-based
organisations during 2022
£19,086
donated to local and
national charities
AREA
AIMS FOR 2023
Providing good work
Delivering employability
and skills training
• Grow customer base and continue to diversify sector and service offering,
specifically managed service provision.
• Continue to increase engagement with our worker population.
• Identify further roles and employers with whom to address barriers
to employment.
• Implement skills and training solutions to support those in employment to
progress within their roles and develop their careers.
Prevention of modern slavery
• Continue to train our people and apply our processes to identify areas of risk,
and work with third parties to prevent cases of modern slavery.
Community engagement
• Encourage our people to support charitable initiatives by providing paid time
off for volunteering and promoting fundraising opportunities.
34
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Supporting
and developing
our people.
We share a
commitment to
improve the working
lives of our people
every day. We
invest in all stages
of the employee
journey, driving a
high-performance
mindset through
effectively engaging
our people, whilst
supporting and
creating a sense
of belonging.
8
Diversity, Equity and
Inclusion (“DEIB”)
campaigns
delivered
We listen, act and support.
The Group’s employees are central to
our ongoing success and future growth,
so Staffline strives to create a genuinely
inclusive environment in which employees
can flourish and develop through learning
and development opportunities, regular
performance reviews and career progression.
Financial wellbeing is of increasing
importance, therefore in addition to offering
regular salary reviews and benchmarking, we
offer financial wellbeing benefits that give all
employees access to discounts and vouchers
for a diverse range of products, in addition to
salary sacrifice schemes.
We communicate and engage with our people
via various channels, including in-person,
virtual and electronic communication, and
ensure the voice of our people is heard.
We regularly survey our employees and act
on feedback via transparent action plans.
In 2022, our Group employee turnover rate
was 40.5%. This figure includes all employee
attrition, redundancy, dismissals and TUPE
out. Our Group average sickness absence
rate, including long-term sickness, was 2.72%.
The wellbeing of our people is a key part of
our people strategy. We want our people to
feel safe and supported, and, in a world of
increasing uncertainty and mental health
challenges, we are committed to providing
our people with access to wellbeing initiatives
that support their whole lives, not only their
work lives.
All employees across our group have access
to wellbeing support, such as private medical
insurance or medical cash plans, telephone,
online, app or face-to-face professional
counselling support, and support programmes
for carers. We have provided comprehensive
mental health training, including Mental Health
First Aid, personal wellbeing and instigating
mental health conversations with others.
Our hybrid working and flexible working
policies continue to prove popular, offering
choice to our employees where possible.
2.72%
Absence rate
325
employees
earned promotions
37
Apprenticeships
Strategic Report
Corporate Governance
Financial Statements
35
Case study
YouCan Programme supporting
our people with their wellbeing
PeoplePlus Internal YouCan Programme is a bespoke wellbeing programme for colleagues
that provides information, advice and supportive discussion on four key topics:
YouCan Be You – explores emotions and
feelings and introduces coping strategies
for work and life.
YouCan Be Healthy – introduces small
changes that make big differences through
sleep, exercise and healthier lifestyles.
YouCan Bounce Back – looks to improve
resilience, confidence, self-esteem and
tackles burn out.
YouCan Do It – encourages positive thinking,
mindfulness techniques, being thankful and
creating a practical plan for the future.
Health and safety
Our workers’ health, safety and welfare remain a priority. In 2022, there were a total of
332 reported incidents/accidents at customer sites, 46 of which were reportable to the
Health and Safety Executive (the “HSE”) or equivalent.
Accident data is reported by each operating
division monthly, and the Group’s Governance
Director leads on evaluating themes and
learnings, and assessing our data against
national average comparators. Minor
accidents (such as cuts and bruises) and near-
miss incident reports made up 43% of the total
reported matters in 2022. “Struck by moving/
falling object” is the second most common
reported accident type (14% of the total),
seven of which were reportable
under RIDDOR.
This category does not include vehicles or
moving machinery; most cases involve pallets
and/or storage cages and occurred within a
warehouse/distribution centre environment.
“Injured while handling, lifting, or carrying” is
the joint-third most common reported accident
type (12% of the total), which is to be expected
given the nature of assignment tasks within
the many ‘general operative’ warehouse roles
supplied by Staffline. “Slips, trips, and falls on
the same level” is the joint-third most common
reported accident type (12% of the total).
Spotlight:
PeoplePlus
IIP Silver
In 2022, our PeoplePlus business was
proud to be awarded the prestigious
Investors In People Silver accreditation.
IIP focus on “making work better”, working
closely with organisations to measure
engagement and share insights to
improve their culture following a rigorous,
broad and deep assessment across the
whole organisation. This approach allows
PeoplePlus to better understand our
culture and identify areas for development
to drive sustainable success.
Our colleagues described a culture of
trust, where they feel their voice is heard
and they are recognised and rewarded.
36
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Leading our approach
Sarah Taylor
People Director
Staffline Recruitment GB
Jessica Chadwick
People Director
PeoplePlus
Sinead Sharpe
HR Director
Staffline Recruitment Ireland
2022 was the year we created our new normal,
balancing online communications with face-to-
face, encouraging our people to have their voice
heard through regular pulse surveys, in quarterly
town hall meetings and through our elected
Your Voice reps. We continue to celebrate our
differences through our bi-monthly campaigns,
raising awareness of the key Diversity, Equity,
Inclusion and Belonging topics that enable us
to create an inclusive culture.
I am delighted with the number of people that
we were able to recognise and promote in 2022,
enabling employees to develop their careers
with us and be showcased in our monthly
STARS awards.
In 2023, we will continue to drive a high
performance and experience culture,
ensuring every employee feels valued, is
engaged, developed and rewarded for
their performance.
A key focus in 2022 was to build our workforce
capacity in our core operational divisions of
Prison Education, Employability and Adult Skills,
and more recently in our new Youth Offending
Institute. We also set out to achieve an Investors
In People Accreditation, and were delighted to be
awarded a Silver Accreditation in August 2022.
Our distinct Trademarks at PeoplePlus were
further strengthened with the introduction of a 4th
Trademark ‘Customer First’, which was voted for
and chosen by our colleagues. Towards the end of
2022, we celebrated the significant milestone of
directly impacting the lives of 1m people by 2022 –
a mission that we set four years previously.
In 2023, we will continue to focus on developing
an environment that attracts, retains and develops
the very best talent for our business. We are also
excited to launch our new strategy for Learning
and Development; creating a culture of learning
and empowering employee growth through a new
learning ecosystem.
Staffline Recruitment Ireland has continued to
grow from strength to strength in 2022 – an
8% increase in headcount reflects our ability
to attract the talent so key to our position of
profitability, in spite of a competitive external
market. I am proud that this year, we committed
to ongoing people development via a programme
of funding as standard for professionally
recognised recruitment qualifications; in addition
to introducing six-monthly Talent Review Forums
which will consolidate our succession planning.
We launched our first Culture Audit Survey in 2022
which provided rich data and highlighted our high
performance culture. More importantly, it was an
opportunity for the business to listen and act on
suggested improvement to our benefits, which are
now more valuable and inclusive than ever. As a
result, we have introduced new Menopause and
Diversity, Equity, Inclusion and Belonging Policies,
and signed up to the Mental Health Charter.
Celebrating and recognising our people remains
critical to creating our culture of belonging. Our
Management Conference earlier this year was a
welcome opportunity for our people to network,
share and plan for growth in what promises to be
an exciting and rewarding 2023 for us all.
We invest in training and development
Just as our employees invest their time and effort into our clients, we in turn invest in their
potential. In 2022, we built upon our core learning and development foundations, offering:
• Funded professional qualifications
• Apprenticeship Programmes for a
range of roles
• Sales Skills training for client-facing
recruitment roles
• Blended learning opportunities – ranging
from online, interactive bespoke e-learning
to 1-2-1 expert sessions
Our people tell us that they want to know
that there’s a clear career path available
to them. Employees are supported to move
across traditional paths in order to gain a
wider view of how our businesses operate.
In 2022, 325 employees earned promotions
and robust succession planning remains a
key focus – Talent Review Forums take place
at least annually and involve the highest levels
of leadership across the Group.
Strategic Report
Corporate Governance
Financial Statements
37
We celebrate
success.
Rewarding our people
We are proud to recognise our people’s
wins, recognising and rewarding team
and individual success. In addition
to regular “instant” and “thank you”
gifts, vouchers or card recognitions,
our businesses recognise performance
excellence via formal monthly,
quarterly and annual awards – based
on achievement of sales targets, new
business wins, and manager or colleague
nomination schemes.
Our Long Service Award schemes recognise
and celebrate loyalty and commitment
to our businesses, and we also encourage
employees to use our referral schemes to
introduce new talent to our workforce.
Case study
Staffline Ireland
reward philosophy
All employees of Staffline Ireland have
the opportunity to participate in our
reward schemes, which are based
on three core principles to balance
rewarding high performance and
sustainable profit:
Accountability – our business commits
to pay the UK Living wage as a minimum,
and seeks employee accountability via
achievement of role and team-specific
KPI’s/targets
Incentivising – our reward schemes
motivate our talent, consistent with
being a high-performance business
Sustainability – our reward schemes
are fully sustainable and self-funding
In addition, our reward scheme includes:
• competitive, targeted commission
schemes, which pay regular
bonuses based on profit
margin targets achieved;
• quarterly bonuses for any top
commission earners;
• a monthly league table for individual
consultants and operational teams
with the opportunity to win valuable
vouchers; and
• an annual international trip for the
highest performing operational
teams/individual consultants/
back office superstar.
Case study
Staffline GB learning and development solutions
At Staffline, our ambition is to be the Netflix of
learning by creating a tailored and targeted
experience for every employee, based on their
development plan, personal interests and
job role. We do all of this using our learning
experience platform (“LXP”) through audience-
targeted home pages and banners with the
aim of increasing engagement and interest in
personal and professional development.
We offer a variety of learning solutions, from
traditional face-to-face learning through to
virtual learning bursts covering performance
conversations, career progression and
employee relations topics. In addition, we
were inspired by TikTok to create our systems
training within the LXP, embracing the theory
of micro learning to keep our training engaging,
quick to interact with and readily understood.
We also understand the importance of learning
through our internal experts and mentors, and
launched 30-minute “ask the expert” Q&A
sessions. These provide an opportunity for
individuals to learn more about a focus topic
and to ask questions.
38
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
How we’re supporting and
developing our colleagues
Dovile Kopacz
Account Manager
Staffline Ireland
Rik Molloy
Business Manager
PeoplePlus
After graduating from university in Lithuania as
a dental hygienist, I visited my family in Northern
Ireland and never left! Staffline Recruitment saw
my potential, quickly promoting me from Team
Leader to Trainee Account Coordinator, then
Senior Account Co-ordinator to Account Manager
for one of our biggest clients this year.
I have a natural drive to ensure I make the best
impact I can in meeting my clients’ expectations.
Recruitment gives us endless opportunities to
change people’s lives – it’s so rewarding to see
people being offered permanent roles.
Staffline has the same strong values as I do,
and makes me feel that my work is meaningful
and that what I do makes a difference. The
opportunities are endless and it’s important to
me to feel proud of my workplace – Staffline gives
me that and more.
I originally joined PeoplePlus in 2013 as a Job
Coach on The Work Programme, and worked in
three different branches during my first five years
with the company. This was my first step into
the world of employability and I’ve never looked
back! In 2018 I left PeoplePlus, stepping in to
work on a lottery-funded project that helped the
50+ community to combat loneliness and social
isolation. I missed the buzz of helping people
back into employment, so rejoined PeoplePlus
as Employment Advisor in the Folkestone branch.
Within three months I was promoted to a
Business Manager position as I wanted to help my
colleagues love this sector as much as I do. No two
days are the same in this business and I feel that
working for PeoplePlus is a privilege because we
make positive changes in people’s lives and make
a real difference in our community.
Jamie
Marshall
Process and
Systems Manager
Staffline GB
I started my recruitment career in 2004 as
a trainee recruiter working for one of our
competitors, progressed to become a branch
manager, then moved to another company as an
on-site Account Manager. I loved this role because
it had a greater focus on people and was a fast-
paced, agile working environment. In 2011, I joined
Staffline as an Account Manager at Fox’s Biscuits,
and was made to feel part of the Staffline family
from day one.
In 2018, I was promoted to an area Account
Manager role and was responsible for looking after
five sites and teams within the Yorkshire region.
I had always had an interest in systems and
ensuring we use them properly to drive efficient
practices and enable our people to spend time
with candidates, workers and clients. This interest
led me to move into a newly created role in 2011
as Process and Systems Manager. I enjoy the role
as it allows me to learn and share my knowledge
with people at all levels within the business and
I can see measurable results through the work I
am delivering. I love working for Staffline because
of the truly amazing people I get to work with
every day.
Gender pay gap
On 5 April 2022, the Group employed c.2,000 permanent employees and c.36,300 temporary contractors. Overall, amalgamating all business
areas and including the temporary workforce, the mean gender pay gap was 7.6% (2021: 7.9%). For the permanent employees, the mean gender
pay gap was 15.7% (2021: 16.4%). Further information can be found at www.stafflinegroupplc.co.uk/about-us/gender-pay-gap-report/.
AREA
Wellbeing
Training, development and reward
Diversity, Equity,
Inclusion and Belonging
AIMS FOR 2023
• Continue to maintain and improve positive engagement scores.
• Through effective recruitment, reward and engagement strategy, continue
to reduce levels of attrition and sickness absence.
• All employees continue to have regular performance reviews and personal
development plans.
• Continue to evolve how we encourage individuals to embrace the social
aspect of our LXP learning platform to drive learning through peer-to-
peer recommendation rather than relying solely on the Learning and
Development team.
• Completion of outstanding DEIB facets, as well as ongoing training to embed
these key values across the Group.
Strategic Report
Corporate Governance
Financial Statements
39
Creating an
inclusive culture.
Diversity, Equity, Inclusion and Belonging
Our aim is to create a culture
where every employee
belongs and feels included.
Nurturing a truly diverse
and inclusive Company is
not only the right thing to
do but is crucial to our long-
term success.
We are committed to three things:
1. We are aware: Through national
campaigns, employee development
and senior leadership sponsorship
we are committed to increasing
awareness of DEIB across the
Group and our employees.
2. We are trusted by our people and
our customers to create a working
environment that is inclusive and
encourages our people to talk openly,
authentically and without consequence.
3. We evolve: Through effective policy
change we strive to create a more
inclusive culture for our people.
60/40
women/men gender split
49
8
women in leadership positions
DEIB campaigns delivered
We are aware
Increasing awareness of Diversity,
Inclusion, Equity and Belonging
(“DEIB”) is the first step to creating
a more inclusive culture across
the Group. In 2022, we increased
awareness through internal campaigns,
employee development and deepening
our understanding of who our
employees are. Examples of what we
achieved in the year are below:
• Delivered eight campaigns:
International Women’s Day,
Neurodiversity, Earth Day, Mental
Health Awareness, Pride, Black
History Month, Menopause
Awareness and Movember, covering
seven of the ten DEIB facets
• 39 women attended the Remarkable
Women in Leadership programme
• Provided unconscious bias training
to 94% of employees
• Created e-learning modules
on unconscious bias, disability
awareness and inclusion training
• Enhanced our employee data to
include monitoring of all ten facets
of diversity to improve positive
action planning
• Introduced the option for colleagues
to inform us that they are a carer
so we can support them with their
caring responsibilities
We are trusted
Our people and customers trust us to
create a working environment that is
inclusive, and encourages our people
to talk openly, authentically and
without consequence. We recognise
the importance of listening to our
employees with the aim of creating
a more supportive and engaged
place to work. In 2022, we asked our
employees what they would like us
to talk about in 2023 with regards to
DEIB and this feedback will shape our
focus areas. Some examples of what
we did in 2022 are below:
• Received Diversity Mark NI
Bronze level accreditation for
our commitment to DEIB
• Provided Mental Health
Conversations training to 81% of
all employees, with 100% of our
employees in the Island of Ireland
having completed DEIB training
• Provided mental health awareness
sessions to 54% of line managers
in PeoplePlus
• Created a BAME forum aimed at
bringing together employees from
a BAME background to talk openly
about their experiences
• Supported a cross-section of UK
and international charities through
fundraising and volunteer days
We evolve
As a responsible employer we are
committed to continuing to review
and introduce policies that reflect
the changing nature of the world
of work, and to nurturing a more
inclusive culture. As part of those
regular reviews, not only are we
looking at what is included in our
policies, but also the language
within them to ensure they are
using inclusive language.
During the year, we adapted our
flexible working policies to ensure
that we respond to flexible working
requests from day one of an
employee’s career with us, offer
hybrid working where appropriate
and support all employees who
may require this.
Some examples of the new policies
and guidance that we introduced
in 2022 include:
• Menopause policy
• Gender identity guidance
• Additional paid time off for
maternity and paternity leave
40
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Reducing our
environmental
impact.
At Staffline, we place great importance on
the role we play in helping to protect the
environment surrounding us, and we recognise
that our environmental responsibilities are
integral to our business.
Energy and carbon reporting.
We aim to demonstrate these
responsibilities through our actions and
within our corporate policies. During
2022, the ISO 14001 Environmental
Certification was achieved within the
PeoplePlus business, and plans are now in
place to expand the Certification into the
Staffline GB business during 2023-2024.
Extensive work has been undertaken
throughout 2022 to strengthen our controls
and reporting arrangements for Scope 1
(gas) and Scope 2 (electricity) emissions. On
a like-for-like (properties occupied in both
the current and prior years) basis, the tCO2e
emissions for the Group were broadly equal to
the 2021 reported emissions (267.78 tCO2e in
2022, compared with 269.44 tCO2e in 2021),
and therefore show a 44% reduction against
the baseline year emissions, which Staffline
Group set in 2019.
There have been significant changes to our
physical estate and the number of properties
from which services are provided due to the
implementation of the PeoplePlus Restart
Scheme, providing unemployment support
services to people in Wales, the Home
Counties, and in the North East of England.
2022 is our first reporting year where, following
the introduction of a comprehensive survey
being issued to all of our remote and home-
based workers, we now have this additional
strand of data to help us understand the
emissions for colleagues within our workforce
working (mostly) outside of our property estate.
Due to the increasing scale of the PeoplePlus
operations and breadth of our reporting
coverage, the overall Scope 1 and Scope 2
carbon emissions for the business have risen
year-on-year, as shown in the table and
graphic within this section. The dashed line
within the graphic shows the total usage on
a like-for-like basis, as referenced above.
The reporting and monitoring arrangements
in place for current emissions for the sources
included in Scope 1 and 2 of the GHG Protocol
are embedded. The methodology used to
calculate our emissions is based on guidance
issued by the SECR and has been calculated
using the revised carbon conversion factors
published by BEIS for each of the years noted.
These disclosures are made in accordance
with Streamlined Energy and Carbon
Reporting guidelines. The data included covers
the 2019–2022 (inclusive) financial years.
Each of the Group’s trading divisions has
Carbon Reduction Plans in development
which will detail the divisional carbon footprint
and confirm the business’s commitment to
achieving Net Zero by 2050. Each Carbon
Reduction Plan, once finalised, will be subject
to regular review and, where required, shall be
published on the appropriate websites.
Working with our partner organisations, our
PeoplePlus has for the first time in its history
introduced a carbon off-setting scheme, with
the initial intention of achieving its 2022 target
to offset 20% of its carbon emissions produced
from all business travel (car, rail, and air)
within the year. In order to demonstrate
PeoplePlus’ total commitment to being a
greener and more responsible business, 100%
of the carbon emissions produced from all
business travel have been offset. 1,479 trees
have been planted as part of a reforestation
programme in Haiti, which equates to a
carbon offset of 233.94kg of CO2. Our
partnership will continue throughout 2023 and
beyond, as we continue to commit to reducing
our carbon emissions, as set out in our Carbon
Reduction Plans. The data covers energy
usage across all large UK entities in the Group.
Energy usage from subsidiaries outside of
the UK is outside the scope of this report and
therefore excluded from the figures below.
Strategic Report
Corporate Governance
Financial Statements
41
UK energy use
Consumption in metric tonnes CO2e
Group Total – Scope 1 (Gas)
Staffline Recruitment Limited
Staffline Northern Ireland
PeoplePlus Group Limited
Group Total – Scope 2 (Electricity)
Staffline Recruitment Limited
Staffline Northern Ireland
PeoplePlus Group Limited
Group Total – Scope 3 Partial (Business Travel)
Staffline Recruitment Limited
Staffline Northern Ireland
PeoplePlus Group Limited
Total Consumption in Metric Tonnes CO2e
Carbon Offset
Efficiency Ratio
Number of Employees
Total Emissions in Tonnes CO2e per Employee
UK Scope 1 and 2 emissions
(2019-2022) by tCO2e
2021
82.02
29.2
0
52.82
187.42
95.9
43.06
48.46
2019
123.47
41.95
0
81.52
351.37
128.23
36.35
186.79
2020
48.34
32.42
0
15.92
246.98
127.45
55.99
63.54
Not recorded
Not recorded
Not recorded
Not recorded
2022
256.83
114.58
0
142.25
572.10
154.44
47.04
370.62
606.01
332.35
39.72
233.94
474.84
295.32
Not recorded
269.44
1,433.94
233.94
2,457
0.19
2,163
0.14
2,326
0.12
1,763
0.81
474.84
295.33
269.44
828.93
267.78
e
2
O
C
t
900
800
700
600
500
400
300
200
100
0
2019
2020
2021
2022
S1 & S2 Emissions tCO2e
S1 & S2 Emissions tCO2e (2022 like-for-like)
Various research projects have been
undertaken during the year to develop our
early thinking in terms of stakeholder analysis,
and the extent to which we are considering
the influence and interest of various third
parties. Initial reviews have been carried out to
help our thinking on various ‘macro’ matters
and working through climate scenarios to
consider the long-term impacts of such things
as extreme temperatures and rising sea levels,
and the likely impacts on our business.
We have commenced the data gathering
process for our Scope 3 emissions for
categories 1 (Purchased Goods and Services)
and 6 (Business travel) and have put processes
in place so that moving forward we can fully
capture all elements. One of our supply
partners is able to provide the data for the
category 1 emissions for their deliveries to/
collections from one of the group businesses.
This partner has well established environmental
practices and has been instrumental in our
learning and has supported with our own
initiatives within the business, which included
an increase in the volume/scale of recycling
taking place within our offices.
Moving forward in to 2023, we will be investing
more time for categories 5 (Waste generated
in operations) and 7 (Employee commuting),
so that we have a better understanding of
our emissions in these areas and are already
planning a reporting survey/exercise to
collect the category 7 data. The certification
to ISO14001 (Environmental) in one of the
group businesses has naturally created the
framework for elements of environmental
reporting, which will grow as the practices
of the environmental standard are
further embedded.
42
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Carbon offsetting
Working with our partner organisation
Trees4Travel, PeoplePlus introduced a
carbon offsetting scheme, with the initial
intention of offsetting 20% of the carbon
emissions produced from business travel
(car, rail, and air) during 2022.
In order to demonstrate PeoplePlus’
commitment to being a greener and more
responsible business, 100% of business travel-
related carbon emissions were offset. 1,479
trees were planted as part of a reforestation
programme in Haiti, offsetting 233.94kg of
CO2. Our partnership will continue throughout
2023 and beyond, as we continue to commit
to reducing our carbon emissions in line with
our Carbon Reduction Plans.
TCFD
We are pleased
to report more
fully against the
requirements of the
Taskforce on Climate-
related Financial
Disclosures (“TCFD”),
and are working to
develop our reporting
next year.
Governance
The Board retains primary responsibility
for oversight of ESG matters including
climate-related risks but has delegated
responsibility for development of relevant
strategy, policies, monitoring and controls to
the ESG Committee. This was established in
2021 and comprises senior managers from
various functions across the Group. The
Committee has been chaired by the Group
Chief Financial Officer since October 2022,
providing a direct link to the Board.
The Committee met regularly during 2022 to
drive development of the Group’s overall ESG
strategy, risk management and monitoring
arrangements and both internal and external
reporting on ESG matters.
The Board received regular updates on ESG-
related matters throughout the year and has
been closely involved with the development
of Staffline’s external reporting in this area.
AREA
AIMS FOR 2023
Energy and
carbon reporting
• Expand ISO 14001 certification into the Staffline GB
business during 2023-2024.
• Finalise Carbon Reduction Plans for each of the
Group’s trading divisions.
• Develop data gathering and reporting of
Scope 3 emissions.
• Deepen climate change scenario analysis.
Carbon offsetting
• Continue to invest in carbon offsetting, while increasing
focus on renewable energy sources to reduce the need
for offsetting.
Delegation of responsibility for oversight of
climate-related risk to the Audit Committee
will be considered periodically by the Board.
Strategy
The Board recognises that climate change
will inevitably impact on the business
environment in which Staffline operates.
Whilst some changes, particularly transition
to a low or net zero carbon economy, will have
a direct impact on the Group’s operations
these are considered unlikely to be material.
Indirect impacts through changes to
customers’ business models, supply chains
and operations are a more significant
source of uncertainty.
Staffline has adopted a strategy of positive
engagement with stakeholders around ESG
matters including climate change and will
continue to pursue active dialogue with
all parties to better understand how their
respective requirements are likely to develop in
the short to medium term. This understanding
will inform the development of the Group’s
strategy in the medium term.
In the opinion of the Board, Staffline is a low
impact business in environmental terms but
as part of its commitment to doing business
responsibly should seek to reduce or eliminate
such impacts where it is commercially
sustainable to do so.
Risk management
A preliminary exercise to identify climate-
related risks and opportunities was
undertaken during the year. A further exercise
to evaluate the likelihood and impact of
potential exposures, both direct and indirect,
will be completed in early 2023.
Potential direct impacts on Staffline include
increased labour and energy costs (including
carbon-related taxes) that may not be fully
transferable to customers, disruption due to
extreme weather conditions and changes
in the type and/or level of taxation to which
the Group is exposed. Increased migration
into the UK, whether driven mainly or partly
by climate change, may increase the labour
pool and provide opportunities for Staffline.
Impacts on the Group’s customers are likely
to include all of the above plus other supply
chain challenges such as producer/supplier
relocation and more complex supply chains
to ensure continuity.
Identifying the impact measures to be
used and approach to assessing severity of
potential impacts will require the involvement
of functions from across the Group, including
individuals with customer-facing roles at a
senior level.
It is Staffline’s intention that any material
climate-related risks will be included in the
Group’s 2023 Annual Report and Accounts
along with information about mitigating
actions either in place or to be implemented.
Metrics and targets
Staffline measures and reports Scope 1 and
Scope 2 emissions and has in place Carbon
Reduction Plans to support the Group’s
commitment to achieving Net Zero by 2050.
More detailed information about the Group’s
activities and intentions in this area is provided
on pages 40 and 41.
Strategic Report
Corporate Governance
Financial Statements
43
1,479
trees were planted as
part of a reforestation
programme in Haiti
44
Staffline Group plc Annual Report and Accounts 2022
ESG Report continued
Doing business
in a responsible
way.
Staffline regards
sound governance
and doing business
in a responsible way
as fundamental
to the way the
Group operates.
This approach is endorsed by the Board
and cascaded through the business via the
policies, values and working practices that
are in place, which may be standard across
the Group or, where appropriate, tailored to
individual divisions. Key aspects of Staffline’s
approach are summarised here.
Governance
Significant effort has been put into
strengthening divisional control environments,
particularly around accounting and finance,
over recent years and all senior finance
staff are professionally qualified. Ongoing
investment in the development of operational
management information within Recruitment
GB is supporting continuous improvements in
data quality and providing increased insight
into the business at a detailed level.
Financial reports undergo multiple levels of
review including variance analysis as part of
month-end processes and material balances,
and external reporting and announcements of
financial results are subject to external audit.
Legal and regulatory risk, including both
compliance with existing legislation and the
potential impact of future developments, is a
standing item on the divisional and Group risk
registers. The Group makes use of a panel of
legal firms to provide advice when required,
and membership of trade bodies enables
participation in consultations regarding
future legislation and regulation. Professional
services firms provide regular updates on
regulatory developments and are engaged
to deliver specific pieces of work.
Key policies are reviewed annually by the
Board or appropriate Board sub-committees,
and employees are provided with training to
ensure awareness of policies and Staffline’s
commitment to ensuring compliance. Whilst
the Board delegates responsibility for
oversight of policy implementation to the
Group Chief Executive Officer, day-to-day
operational responsibility is delegated to
management at specific locations or within
specific functions.
The Group does not, as a matter of stated
policy, make political donations.
Responsible business
Staffline operates a zero-tolerance approach
to unethical behaviour. The Group has in
place clear policies on health, safety and
environmental matters and prevention of
fraud, bribery, money laundering, facilitation
of tax evasion, modern slavery and other
ethics-related areas. These are supported
by the Group Whistleblowing Policy, which
covers all employees and by the separate
“Speakup” process for temporary workers
within Recruitment GB, which was introduced
during 2022. Appropriate monitoring and
periodic audits are also undertaken.
Staffline handles large volumes of both
employees’ and temporary workers’ personal
data, and maintaining the security of this
information is vital to the Group’s reputation.
Cyber security is a high priority for Staffline
so systems are constantly monitored, and
all employees are provided with regular
awareness training to reduce the risk of data
loss or leakage.
The Group seeks independent accreditation
of its processes and practices where it
is appropriate to do so. PeoplePlus has
held ISO 14001 and Cyber Essentials
Plus accreditations for several years,
and Recruitment GB will be seeking
both accreditations during 2023, having
achieved EcoVadis silver accreditation for
its environmental management practices
during 2022.
The Board is committed to supporting diversity
within the Group’s workforce and ensuring
that discrimination has no place in hiring,
promotion or termination decisions. We
endeavour to treat everyone fairly in relation
to job applications, training, promotion,
and career development. The executive
management team at 31 December 2022 was
made up as follows:
Identified
Ethnicity Female Male
Other/
PNTS
Total
White
White
Asian
British
Irish
British
14
2
–
16
16
2
1
19
–
–
–
–
30
4
1
35
The size of the Board is not expected to
increase beyond the current five members
but ensuring appropriate diversity will be
a key consideration in any future Board
appointments. Further information can be
found on page 62.
Strategic Report
Corporate Governance
Financial Statements
45
Section 172 and stakeholder engagement
Section 172 of the
Companies Act 2006
requires the Directors
to act in a way that
they consider, in
good faith, would
be most likely to
promote the success
of the Company for
the benefit of its
members as a whole,
and in doing so have
regard (amongst other
matters) to:
a) the likely consequences of any decision in
the long term;
b) the interests of the Company’s employees;
c)
the need to foster the Company’s
business relationships with suppliers,
customers and others;
d) the impact of the Company’s operations
on the community and the environment;
e)
the desirability of the Company
maintaining a reputation for high
standards of business conduct; and
f)
the need to act fairly as between members
of the Company.
In the decisions taken during the year ended
31 December 2022, the Directors have acted
in the way they consider to be in good faith,
most likely to promote the success of the
Company and its continuing reputation for
high standards of business conduct, and for
the benefit of its stakeholders, having regard
to the stakeholders and matters set out in
Section 172 of the UK Companies Act 2006.
Key decisions made by the Directors are
described more fully in the Strategic Report
on pages 5 to 13.
How we engage with our key stakeholders
Staffline as a
responsible employer
The Board is committed to being a
responsible employer and creating a
working environment where employees
are engaged, informed and involved.
2022 saw a welcome return to meeting
in-person, with employee forums,
annual conferences and quarterly
town hall meetings providing valuable
opportunities to share, listen and learn.
We aim to do more of what our people
like, and improve upon what they tell us
they want from an employer of choice.
We offer opportunities to feed back to
the top levels in each of our businesses
through regular management and
leadership events with our executive
teams. We gather and analyse HR
data through regular employee pulse/
voice surveys across each of the Group
businesses, and respond transparently to
what our people are telling us by sharing
our findings and planned actions at all
levels of each business. Colleagues tell us
that they value regular communication
with their managers, our medical benefits
and annual leave. We continue to review
our benefits on an ongoing basis.
Further information about Staffline as
a responsible employer can be found
on pages 34 to 39.
Staffline as a
responsible partner for
temporary workers
Temporary workers are an integral
part of Staffline’s customers’
businesses and the Group’s ethos
in respect of these workers is
summed up by its mission statement
“Providing Good Work”.
The Recruitment divisions are committed
to paying workers accurately and on
time and to ensuring all relevant rules
and regulations, such as Agency Worker
Regulations, National Minimum Wage
and holiday pay rules, are complied with.
Further information about
how Staffline partners with its
temporary workers can be found
on pages 30 to 33.
Staffline as a responsible
partner for job seekers
and learners
Through its PeoplePlus division,
Staffline supports those individuals
who are furthest from the labour
market through skills development
and access to good employment.
Over 1m people have received such
support through dedicated skills,
employability, community service
and justice-related contracts.
As a Merlin Standard organisation,
PeoplePlus has a solid network of partners
with relationships based on trust, good
communication and transparency.
This allows the right support to be put
in place to ensure that, whatever the
needs of our learners and job seekers, a
diverse network of experts is available to
support service delivery.
PeoplePlus also works with other providers
in the skills and employability sectors to
deliver the best outcome for every job
seeker or learner by understanding their
specific needs and matching them to
the right skills training or employment
opportunities. These may be anywhere
in the country, but PeoplePlus also
works at a local level, establishing strong
relationships to match individuals to the
right opportunities.
Further information about how
PeoplePlus works with job seekers
and learners can be found on
pages 30 to 33.
Staffline as a
responsible partner
for customers
Staffline is committed to developing
long-term partnerships with
its customers, supporting their
businesses as they adapt to meet
their own customers’ changing needs.
During 2022, this included working with
a major retailer to introduce new ways of
working that delivered productivity gains
to the customer and led to additional
revenue for Staffline.
Further information about how
Staffline works with its customers
can be found on pages 14 to 19.
46
Staffline Group plc Annual Report and Accounts 2022
Principal Risks and Uncertainties
Managing
our risks.
The Group operates in complex environments that present exposures
to a wide variety of risks and uncertainties which require ongoing
monitoring and management to mitigate against adverse implications
for long-term performance. The most significant risks and uncertainties
to which, in the opinion of the Directors, the Group is exposed are
described below, along with an overview of relevant mitigation
measures that are either in place or planned and an indication
of the year-on-year change in the level of risk exposure as follows:
The Board of Directors of Staffline Group
plc regards effective monitoring and
management of exposure to risk as critical
to the delivery of the Group’s strategic
objectives and the creation of sustainable
shareholder value.
Economic conditions
Risk
Any downturn in economic conditions in the UK and/or
the Republic of Ireland could have an adverse impact on
consumer confidence, leading to a knock-on effect on our
customers’ businesses and their labour requirements.
2022 saw a marked increase in global economic
uncertainty, driven largely by factors such as the conflict
in Ukraine, increased domestic political tensions and
mounting UK Government debt in the aftermath of the
Covid-19 pandemic. These have together had an
inflationary effect on energy, food and raw material
costs. Increases in interest rates intended to counter
these inflationary pressures have added to the financial
challenges faced by businesses and consumers.
Increasing costs have led to pressure on governments to
increase revenues from both personal and corporate taxes.
Public sector wage demands may lead to an expectation
of similar increases in the private sector and it may not
be possible for Staffline to pass additional costs on to
customers in full while maintaining current margins.
Economic conditions in the UK are also likely to be affected
by increasing political uncertainty as the December 2024
deadline for the next General Election draws nearer, and
this will be exacerbated if the government instability seen
during the second half of 2022 persists into 2023.
Should any downturn become prolonged, the risk
of customers being unable to meet their liabilities
is likely to increase, potentially impacting on both
profitability and cash flow.
Any increase in unemployment in the short to medium
term might increase the availability of labour but is also
likely to reduce consumers’ capacity and/or appetite for
discretionary spending. Securing a return to work for the
long-term unemployed, a key activity for PeoplePlus, may
become even more of a challenge should this happen.
Economic pressures are a key motivator for fraud, which
is an inherent risk in any business but particularly those
that, like Staffline, are heavily dependent on individuals
behaving with honesty and integrity.
The economic situation in Europe also affects how
attractive the UK is, relative to workers’ home countries
and/or other EU countries. Short-term relaxation of
immigration controls to address ongoing chronic labour
shortages in sectors such as hospitality and agriculture
and horticulture may combine with improving economic
conditions to increase the supply of EU workers in the
UK market. However, EU and non-EU immigration is a
politically sensitive area in which government policy
is not yet well defined and may be subject to change
following a General Election.
Increased since prior year
Similar to prior year
Reduced since prior year
The order in which the risks described below are presented is broadly
indicative of their relative significance to Staffline Group in the
opinion of the Board, ranked from most significant to least.
Mitigation
Flexible labour resourcing has historically provided an important mitigation strategy in times
of increased uncertainty for the Group’s customers, as use of temporary labour provides
crucial flexibility in an environment of unpredictable demand from their end customers.
Staffline provides temporary labour into a wide range of business sectors and customers in
both the UK and the Island of Ireland. The food production, food logistics, online retail and
public services sectors are typically more resilient than, for example, automotive or travel
and tourism, which dilutes the Group’s exposure to downturn in any specific business sector.
Recruitment GB has seen early signs that customers are now starting to reconsider the
headcount strategies that have been in place since the onset of the worker shortage
challenges that were first encountered during Q3 2021 and which were then relevant
throughout all of 2022. There are early signs that customers are starting to reconsider
their existing permanent vs temporary worker ratios, with a much reduced volume of
“temp to perm” activity than that encountered in previous years.
This may increase reliance on temporary workers in the short to medium term while
economic uncertainty persists, and in the event that worker shortage pressures continue
to ease as is increasingly the case across a mixture of regions and sectors. In time this may
present opportunities for Staffline through both increased demand generally and managed
service arrangements under which a single provider, such as Staffline, is responsible for
managing all of a customer’s temporary labour requirements across multiple suppliers.
Whatever resourcing model Staffline’s customers employ, we work closely with them to
understand their expected future needs and plan accordingly.
In October 2021, the Group entered into a three-year interest rate cap instrument that
mitigates its exposure to rises in interest rates through to October 2024. This arrangement
is kept under review to assess whether extension beyond the current expiry date would be
commercially prudent. The interest rate cap, coupled with the headroom available within
the Group’s current financing arrangements, provides opportunities for volume and market
share growth, particularly in Recruitment GB, because it provides a level of certainty around
debt and financing costs in the short to medium term that many competitors do not share.
Increases in taxation and the cost of living may also see workers coming out of retirement
and back into the labour pool, but this is not yet evident on any meaningful scale.
Staffline maintains close control over its credit terms and customer receivables and
maintains credit insurance at a level the Board considers appropriate.
The back-to-work education and skills support services delivered by PeoplePlus could see
increased demand should unemployment rates rise in the short to medium term. Restart,
the key programme within the UK Government’s Plan for Jobs, is underspent by £1.2bn
and PeoplePlus is well placed to benefit from any spike in unemployment or Government
initiative to address the increase in working age people who have opted out of the labour
market over the last two years.
The Group maintains robust anti-fraud controls, both preventative and detective. Appropriate
policies and staff training are in place and whistle-blowing processes are available to both
employees and temporary workers. Any suspected fraud is thoroughly investigated and
responsibility for remedial actions is clearly assigned and tracked to completion.
As a member of the Recruitment and Employment Confederation, Staffline actively engages
with government to inform development of relevant policy.
The Group takes a cautious approach to revenue forecasting. The business model operated
by PeoplePlus, the division that is most reliant on public sector contracts, seeks to minimise
fixed costs that could not be avoided should government funding be significantly reduced at
some point in the future.
Strategic Report
Corporate Governance
Financial Statements
4747
Risk management framework
The Group maintains policies, systems and processes to identify, monitor and respond
to the risks and uncertainties it faces. Risks are evaluated based on the likelihood of
occurrence and their potential impacts on the Group, which are considered in terms
of financial performance, liquidity, reporting, regulatory compliance and reputation.
Risk registers are regularly reviewed and updated at divisional level and consolidated
to provide a Group view annually as part of the strategic planning and budgeting
process. Both the risk register process and its outputs are formally reviewed by the
Audit Committee on behalf of the Board.
Legal and Regulatory Environment and Compliance
Mitigation
Staffline actively engages with customers, regulators, external professional advisers and
industry bodies to discuss the requirements and implications of relevant regulations and
working practices and any proposed changes.
New and existing employees in the Recruitment businesses are trained on the NMW
regulations and sites that pay minimum wage are regularly audited by in-house
compliance teams to ensure that practice is compliant with the relevant regulations.
An ongoing monitoring process has been established and emphasis is placed on
sites that are considered higher risk due to factors such as the nature of operations.
In-house compliance audit teams within the Recruitment businesses also monitor
compliance with laws and regulations such as ‘right to work’ checks, and Agency Worker
Regulations through both planned audits and investigation of exceptions identified
by data analysis.
2022 has seen further strengthening of the Group’s control environment through investment
in training and awareness programmes covering areas including bribery, fraud, competition
law and prevention of facilitation of tax evasion. A whistle-blowing process for temporary
workers in Recruitment GB was also introduced during 2022, supplementing the process
in place for Staffline employees.
Ensuring a periodic horizon scan for known or possible regulatory changes and emerging
case law is an important component of the Group’s risk management process.
Risk
The Group operates in a fluid and increasingly complex
legal and regulatory environment, particularly in relation
to the supply of temporary labour. Key elements of this
environment include employment and taxation laws
(including IR35 rules relating to workers operating via
personal service companies), immigration laws, which
establish “right to work” rules, Agency Worker Regulations,
National Minimum Wage (“NMW”) regulations, gangmaster
licensing and Modern Slavery regulations.
While in the workplace, temporary workers generally fall
under the direction and control of Staffline’s customers but
the complex and varied operational environments that exist
across the Group lead to a risk of inadvertent breach of
laws or regulations that could expose Staffline to liability.
As noted above in relation to economic conditions,
future government policy in areas including taxation
and immigration, both of which are highly relevant to
Staffline’s recruitment businesses, is currently uncertain.
The announcement and subsequent reversal of policy
decisions such as the Social Care Levy has added further
complexity and incurred additional costs to update systems
and advise customers about the effects of these changes.
Ongoing lack of clarity around future trading relationships
between the UK and the EU, not least the jurisdictional
position of Northern Ireland, also increases uncertainty
about potential impacts on our customers’ supply chains
and their future labour requirements.
The ongoing costs of compliance in terms of process
design and operation, monitoring and audit are built into
customer pricing models, but the costs of investigating
and remediating any regulatory breach and, where
relevant, fines or other penalties could adversely affect
the Group’s profitability.
48
Staffline Group plc Annual Report and Accounts 2022
Principal Risks and Uncertainties continued
Increased since prior year
Reduced since prior year
Similar to prior year
Customer contracts, new business pipeline and service delivery –
Recruitment GB and Recruitment Ireland
Risk
Much of Staffline’s recruitment business is derived from
long-term contracts or framework agreements and it
is essential that contractual service levels are achieved
and maintained to secure contract renewals or extensions.
A healthy pipeline of potential new business is also
vital to ensure both growth and sectoral diversity to
ensure resilience.
The marketplace for temporary labour is highly
competitive, with demand continuing to exceed supply
plus rising costs and a range of legislative and regulatory
factors. Taken together these could present additional
challenges around margins achievable on continuing
business, contract renewals and new business pipeline
conversion rates.
Unrealistic or unsustainable pricing of tenders by
competitors to secure new business is a constant threat.
Mitigation
The Group’s approach is to develop its business with the “right” customers, i.e. those that
pay appropriate pay rates to workers, focus on retention by putting the worker first and
provide appropriate margins for our market-leading services while extending its service
offer into potential growth areas such as white-collar and permanent recruitment. In order
to achieve this, Staffline has:
(i) defined a value proposition chain that clearly sets out how choosing Staffline allows
customers to secure a differentiated service with high levels of compliance and
explains the potential returns that offset any increase in service costs;
(ii) invested in market-leading technology to attract, onboard and communicate with
workers and provide rich management information and insight for both Staffline and
customer use; and
(iii) strengthened the Commercial teams that work with divisional Directors to analyse
the current customer portfolio, drive efforts to secure strategic new business wins and
ensure that robust pricing models are developed and maintained.
The Group continued investing in its branch network and digital technologies in the
Recruitment businesses in both GB and Ireland during 2022 to increase its market
presence and profile and speed up the process of attracting, onboarding and deploying
workers to meet customer requirements.
Staffline is seeing opportunities arising from competitors’ failure to deliver and is well
placed to step in and offer customers a quality alternative. The greater certainty around
debt and financing costs in the short to medium term referenced above is potentially a
source of competitive advantage over smaller competitors with less robust finances.
Both Recruitment GB and Recruitment Ireland have identified areas of growth through
extension of their service offering and expansion into new markets that are expected to
come on stream during 2023 and into 2024.
Strategic Report
Corporate Governance
Financial Statements
49
Customer contracts, new business pipeline and service delivery – PeoplePlus
Mitigation
PeoplePlus has identified a number of potential growth areas that form part of the
division’s medium-term plans. These include expansion into adjacent markets in which
existing expertise and contacts can be leveraged and potential new markets where a social
value-focused offering is not currently available.
Bid management capability in relation to commissioned services is focused on
maintaining tight bid disciplines.
For non-commissioned services PeoplePlus is developing capabilities that provide an
increasing opportunity for high-margin growth, through the provision of ancillary
services to the wider provider community within these sectors. The most notable of these
capabilities is our Social Recruitment Framework.
PeoplePlus has well-established contract mobilisation and contract management models
through which it has successfully implemented and delivered high-profile government
contracts over recent years.
The division maintains quality control and compliance monitoring processes that operate
independently of operational management. These include due diligence checks on service
delivery partners, ongoing monitoring of these partners’ compliance and a Quality
Improvement Board that provides external scrutiny though its independent Chair.
A transformation project to update systems and processes in the Independent Living
Services (“ILS”) business was launched during 2022 and following full implementation in
2023 will place the business on an advantageous footing in relation to a steady pipeline
of regional opportunities with the potential to yield market share growth.
Regular internal and external audits of PeoplePlus’ compliance against scheme rules
are undertaken.
Accreditations such as ISO9001, ISO27001 and Cyber Essentials Plus have been
maintained for several years and ISO14001 accreditation was achieved during 2022.
Risk
The PeoplePlus division delivers services through a
variety of national and, increasingly, regional schemes
aimed primarily at improving skills in the workforce and
employability of those currently out of work. These are
predominantly large, often complex, public sector contracts,
and individual contract wins or losses could have a material
impact on the Group’s revenue and profitability.
Schemes under which PeoplePlus delivers services are
funded by the UK Government, Welsh and Scottish
devolved governments and local government bodies and
have complex eligibility rules to control the use of public
funds. PeoplePlus’ responsibility extends to oversight of
delivery partners’ compliance with relevant scheme rules.
Poor or unsuccessful mobilisation of new contracts or poor
contract performance could also have an adverse impact
on the Group’s profitability and reputation.
The sectors in which PeoplePlus has historically operated
provide some limited potential for growth of either revenue
or market share through securing multiple large scale
contracts similar to those seen in the past, but initiatives
such as the UK Shared Prosperity Fund (“UKSPF”) and the
planned transformation of the Prisoner Education Service
(“PES”) present significant opportunities in the medium term.
A reduction in planned customer volumes on the three
contracts under the UK Government’s “Restart” programme
secured during 2021 led to renegotiation of contract pricing
during 2022, but timescales and performance targets
remain challenging, with any failure leading to a risk that
penalties will be incurred.
Meeting the standards required by Ofsted in England,
Estyn in Wales and Skills Development Scotland, who
collectively oversee education-related services provided by
PeoplePlus, remains an important ‘licence to trade’ for the
PeoplePlus business.
50
Staffline Group plc Annual Report and Accounts 2022
Principal Risks and Uncertainties continued
Increased since prior year
Reduced since prior year
Similar to prior year
Talent
Risk
Attracting and retaining the talent required to maintain and
develop Staffline’s business has remained challenging as
the UK economy recovers from the impacts of the Covid-19
pandemic and businesses seek to return to some level of
normality or even growth.
Competition for high-quality talent is intense and the risk
that existing and/or potential employees could be attracted
away from Staffline has increased. This is affecting not only
middle and senior management levels but is increasingly
extending to all levels of the permanent workforce.
There is also the risk and potential extent of disruption
due to attrition, additional recruitment costs and
increased salary costs.
Many organisations have restructured and reorganised to
reflect new ways of working post the Covid-19 pandemic
and employees’ expectations around pay, benefits, working
conditions and organisations’ stances on environmental and
social matters have shifted.
Mitigation
The Board recognises the importance of establishing Staffline as an employer of choice for
high-quality candidates. Remuneration and benefits packages are regularly benchmarked
against the market to ensure the Group’s proposition remains competitive.
Succession planning and future resourcing needs are kept under regular review.
Discretionary pay awards may be made where specific high performers are seen as at risk
of being attracted to roles outside Staffline. The pay of employees in the lower pay bands
is closely monitored and adjusted where necessary to mitigate the impact of tightening
financial conditions on potentially vulnerable employees.
All employees are encouraged to undertake personal and professional development
activities and coaching and mentoring programmes are in place alongside regular
performance reviews, both formal and informal.
All three Staffline divisions carry out annual employee engagement surveys. Findings are
shared with the senior management teams and action plans are communicated to all
staff. Employee benefits offerings are kept under regular review and were enhanced for
Recruitment GB staff during 2022 by initiatives including roll-out of a MediCash affordable
health care programme, which is similar to arrangements already in place in Recruitment
Ireland. PeoplePlus introduced new Long Service Awards for colleagues who reach five, ten,
fifteen and twenty-year service milestones.
The Board has in place Remuneration and Nominations Committees to ensure appropriate
governance of senior pay awards and promotions.
Further information about Staffline’s employee engagement, development and retention
programmes is set out in pages 34 to 39.
IT systems, data security and cyber threats
Risk
Like all large-scale businesses, Staffline is reliant on IT
systems to operate and support its business activities.
Failure or disruption due to old or poorly maintained
hardware or software, or deliberate cyber-attack,
could result in serious business interruption.
Mitigation
Investment in the Group’s cyber security arrangements continued during 2022 and
delivered both additional capabilities and remediation of known vulnerabilities. PeoplePlus
obtained SOC 2 certification in respect of its Restart contracts during 2022 and maintained
its established ISO27001 and Cyber Essentials Plus certifications. Recruitment GB is
currently pursuing Cyber Essential Plus accreditation.
IT infrastructure and both core operational and ancillary
support systems need to sufficiently support the business in
its day-to-day operations whilst also supporting the Group’s
growth and diversification plans.
The Recruitment divisions carry out weekly payroll runs
for temporary labour workforces in the UK and the Island
of Ireland. A failure in key operational systems, the payroll
system or BACS software could lead to workers not being
paid correctly and on time and to consequent reputational
damage and/or worker attrition.
PeoplePlus, through its Independent Living Services (“ILS”)
activities, helps over 10,000 people across England and
Wales manage their personal health budgets and pay for
the care services they require. Any systems failure could
have significant adverse impacts on service users and lead
to reputational damage.
During 2022, Recruitment Ireland invested in modernisation of its CRM systems,
both improving system functionality and greatly reducing the risks associated with
the legacy systems.
An ongoing programme of reducing the amount of infrastructure that resides outside the
direct control of the Group’s IT functions and standardising IT operating models across the
Group will continue during 2023.
IT Disaster Recovery Plans are in place and would be invoked in the event of critical
interruption to one or more of Staffline’s core IT services.
Disaster recovery capability in relation to core IT systems is tested regularly, and resilience
was further improved during 2022 by consolidation and re-platforming of data centre
services and transition to greater use of cloud-based services.
The Covid-19 pandemic tested the Recruitment divisions’ ability to run temporary worker
payrolls remotely and this operating model is now well established. Key payrolls could,
as a last resort, be run and paid via manual processes if necessary due to extended
system outages.
A transformation project to update systems and processes in the ILS business was launched
during 2022 and, following full implementation in 2023, will deliver significant improvements
in process efficiency, control and resilience.
The Group maintains both business interruption and cyber insurance policies. These may
not fully cover all risks and potential losses, but the Board is satisfied with the scope and
level of mitigation provided, which is reviewed annually.
Strategic Report
Corporate Governance
Financial Statements
51
Mitigation
The Board is responsible for ESG matters and has established an ESG Committee comprising
senior managers from across the Group. The Committee is tasked with helping the Board
shape its ESG strategy, recommending ESG management frameworks that are appropriate
to Staffline’s business and defining relevant performance metrics and targets.
Whilst understanding and meeting customers’ and other stakeholders’ expectations around
ESG is likely to lead to some incremental costs to the Group, the Board believes that ESG
matters, particularly around the social value contributed by PeoplePlus, offers significant
opportunities for Staffline to drive stakeholder engagement.
Further information about the ESG Committee’s remit and Staffline’s ESG-related actions
and targets are set out on pages 40 to 42.
Sustainability
Risk
Climate change presents both direct risks to the Group’s
own operations and indirect risks through uncertainty
about customers’ responses and how these will affect
their business models, supply chains and operations.
Whilst any changes will take place over a period of time,
allowing the Group to adapt alongside its customers,
some uncertainty remains.
In the view of the Board, any risks to Staffline arising from
climate change are likely to be low-impact, not material
and to have no implications for the long-term viability
of the Group.
Staffline’s own business operations produce relatively
low levels of greenhouse gas emissions (see page 41),
but many of the Group’s customers will be required to
make more extensive changes to their business models
and/or operations, which may affect their future labour
requirements in terms of both numbers of workers and
their skill sets.
There are also known challenges, such as developing
monitoring and reporting processes to comply with
increasing disclosure requirements such as the Task Force
on Climate-related Financial Disclosures (“TCFD”), which
applies to financial reporting periods commencing after
6 April 2022 in the case of AIM-listed companies.
Liquidity risk and compliance with banking facility agreements
Risk
On 20 May 2021, the Company and certain fellow
subsidiary undertakings entered into a £90m RFA to replace
the existing Group banking arrangements. The RFA has a
termination date of 1 December 2025 but this is potentially
subject to extension if agreed by all parties.
Mitigation
The Group has prepared financial forecasts covering the period to 31 December 2024
which show significant headroom is expected to be available within the existing facilities
and maintain compliance with the relevant covenants for the full period of the forecasts.
The Board’s confidence in the forecasting process has been bolstered by the Group’s
actual performance during 2022.
Under the RFA, the Group must comply with certain
undertakings and two principal financial covenants,
which cover EBITDA to net debt leverage and EBITDA to
interest cover. These covenants have been tested monthly
from September 2021 to 31 December 2022 and will be
tested quarterly thereafter subject to compliance being
maintained prior to that date.
Increases in central bank interest rates intended to
reduce inflationary pressures in the global economy are
forecast to continue into 2023 and will increase financing
costs for both businesses and consumers, in some
cases significantly.
The Group Finance team forecasts and monitors cash flows and banking facilities on a
daily and weekly basis and maintains compliance with the other information undertakings
required under the facility. The Group also prepares a rolling 13-week cash flow forecast
on a weekly basis to identify potential pinch points and ensure that sufficient cash reserves
(including undrawn facilities) are in place to meet the short-term needs of the business.
These forecasts and the potential availability of additional financing facilities are closely
monitored by the Board.
As noted in the commentary about risks associated with economic conditions above,
Staffline has in place an interest rate cap instrument covering the period through to
October 2024 and is therefore less exposed to fluctuations in interest rates.
52
Staffline Group plc Annual Report and Accounts 2022
Corporate
Governance.
Inside this section
Interim Chairman’s Introduction
53
54 Board of Directors
56 Corporate Governance Report
62 Nominations Committee Report
63 Audit Committee Report
68 Remuneration Committee Report
74 Report of the Directors
77 Statement of Directors’ Responsibilities
78
Independent Auditor’s Report
Strategic Report
Corporate Governance
Financial Statements
53
Interim Chairman’s
Introduction
“
Since my appointment
as Interim Chairman,
the Company and the
Board have continued to
build on the significant
progress already made
in improving the Group’s
governance, operational
and financial processes.
Tom Spain
Interim Chairman
As an AIM-listed company, Staffline Group plc has chosen to apply
the Quoted Companies Alliance Corporate Governance Code for
Small and Mid-Size Quoted Companies (the “QCA Code”). In doing
so, we have established internal governance processes that reflect
best practice. Ultimate accountability for the governance of Staffline
lies with our Board of Directors, the majority of whom are Non-
Executive Directors, who can draw on their considerable experience
in diverse areas of business. The Board is supported by Nominations,
Remuneration and Audit Committees, of which the Chair and the
majority of members are Non-Executive Directors. Our corporate
values of teamwork, respect, commitment, reliability, creativity
and integrity are driven by the Board and are at the heart of all
our processes and decisions.
Since my appointment as Interim Chairman on 26 May 2022, the
Company and the Board have continued to build on the significant
progress in improving the Group’s governance, operational and
financial processes. The Group has also further strengthened its
financial position.
During the year, there have been a number of Board changes. In May
2022, the Group announced the departure of Ian Lawson from his
role as Chairman. The position of Chairman was assumed in an
interim capacity by myself, and my tenure as Interim Chairman
remains ongoing.
Additionally, in April 2022, Richard Thomson resigned from the Board
as the Senior Independent Director, a role assumed by Ian Starkey
in May 2022. In November, we announced that Ian Starkey, Senior
Independent Director, had informed the Company that he will not be
standing for re-election at the 2023 AGM. The Company has begun
the process of searching for a replacement and a further update will
be given in due course. On behalf of the Board, I extend our sincere
thanks to Ian Lawson, Richard Thomson and Ian Starkey for the
instrumental roles that they have played in transforming the Group
into the strong and resilient business it is today.
I firmly believe that we have a strong, independent, highly qualified and
diverse Board, actively engaged in the strategic decision-making and
oversight of the Group. I look forward to working with my colleagues on
the Board to strengthen further our governance processes.
The following pages of this Corporate Governance Report set out
how the Group has complied with the QCA Code and the activities
of each Board Committee and the actions that we have taken to
strengthen further our internal processes and controls.
Tom Spain
Interim Chairman
20 March 2023
54
Staffline Group plc Annual Report and Accounts 2022
Board of Directors
A
N
R
Catherine Lynch
Independent Non-
Executive Director
Date of appointment
Appointed to the Board on
1 January 2021.
Background and experience
Catherine is a highly experienced
HR Director, with over 20 years’
experience and was formerly Chief
People Officer UK and Ireland at
Flutter Entertainment plc. Prior to
this, Catherine spent over three
years as Chief People Officer
at Virgin Media, with additional
experience including leading the
HR functions of Ardonagh Group
and BGL Group. Catherine is a
Fellow of the Chartered Institute
of Personnel and Development
(“CIPD”) and is currently a member
of the Advisory Board of Dial
Global, a community focused
on inclusion.
Catherine is Chair of
the Remuneration and
Nominations Committees.
External appointments
Catherine is currently Group HR
Strategy, Technology and Insight
Director at Rentokil Initial plc.
Tom Spain
Interim Chairman
Albert Ellis
Chief Executive Officer
Daniel Quint
Chief Financial Officer
Date of appointment
Appointed to the Board as Non-
Executive Director on 28 July 2021
and acting as Interim Chairman
from 26 May 2022.
Background and experience
In his early career Tom worked
as a stockbroker at Edward
Jones. Tom holds the Chartered
Institute for Securities and
Investment qualification in
Private Client Investment Advice
and Management, as well as
Chartered Insurance Institute
Financial Planner status. Tom is a
Chartered Wealth Manager and
member of the Chartered Institute
of Securities and Investment, as
well as a member of the Personal
Finance Society.
External appointments
Tom Spain founded the business
Henry Spain Investment Services
Limited in 2010.
Date of appointment
Appointed to the Board on
18 May 2020. Appointed as Chief
Financial Officer on 1 February
2021, having acted as Interim
Chief Financial Officer since
17 December 2019.
Background and experience
Daniel is an experienced Chief
Financial Officer and a Fellow
of the Institute of Chartered
Accountants in England and
Wales. With over ten years’ board
level experience with private
and public companies, Daniel
also spent five years at Robert
Walters plc, one of the world’s
leading professional recruitment
consultancies, where he held
the role of Finance Director (UK,
Middle East and Africa). Most
recently, Daniel was Interim Chief
Financial Officer at AIM-listed
Young and Co’s Brewery PLC. Prior
to this, Daniel spent three years
as Chief Financial Officer of SPIE
UK, the leading energy, safety and
environmental solutions provider.
External appointments
None.
Date of appointment
Appointed to the position of
Chief Executive Officer on
1 October 2020, having acted as
an Independent Non-Executive
Director for the Company from
17 March 2020.
Background and experience
Albert brings considerable
experience in the staffing and
human capital sector having spent
over 21 years at Harvey Nash, the
technology recruitment and IT
solutions group. Albert held the
position of Group Chief Executive
Officer for 14 years, and prior
to that, Chief Financial Officer.
Previously, Albert also held a
number of senior finance roles
within Hays Plc, the FTSE 250
recruitment company. Albert is a
qualified Chartered Accountant.
External appointments
Albert was appointed as a Non-
Executive Director of HRnet Group
with effect from 1 October 2022.
HRnet Group, one of the largest
Asia-based recruitment agencies,
listed on the Mainboard of the
Singapore Exchange (“SGX”), is
the second largest shareholder
in the Company (holding
approximately 15% of the current
issued share capital). Albert was
formerly a Trustee of Asia House.
Committee Membership
A
Audit Committee
N
Nominations Committee
R
Remuneration Committee
Denotes Chair
Strategic Report
Corporate Governance
Financial Statements
55
Managing Directors
A
N
R
Ian Starkey
Senior Independent
Non-Executive Director
Frank Atkinson
Managing Director,
Recruitment GB
Tina McKenzie
Managing Director,
Recruitment Ireland
Kenny Boyle
Managing Director,
PeoplePlus
Date of appointment
Appointed to the Board on
1 January 2021 and as Senior
Independent Director on
26 May 2022.
Background and experience
Ian has significant financial
expertise, specifically in financial
management, control and
reporting. Ian had a 35-year
career at KPMG, including 23
years as a lead audit engagement
partner in the UK and Switzerland
and as a member of the UK Board.
At KPMG, Ian worked with blue-
chip corporate clients including
BAE Systems, Diageo, Roche,
Unilever and Vodafone.
Ian is Chair of the
Audit Committee.
Ian Starkey, Senior Independent
Non-Executive Director and Chair
of the Audit Committee, has
informed the Company that he
will not be standing for re-election
at the Company’s AGM in 2023
and will, accordingly, resign from
the Board and as a Director.
External appointments
Ian is currently a Non-Executive
member of the Board at DAC
Beachcroft LLP and a member
of the Audit Committee of Historic
Royal Palaces. Ian is a qualified
Chartered Accountant.
Date of appointment
Having joined the business in
late 2019 as Chief Operating
Officer, Frank was appointed to
the role of Managing Director,
Recruitment GB in April 2020.
Date of appointment
Tina launched Recruitment
Ireland in 2013 as a start-up
after running various Randstad
companies across the UK for
over 11 years.
Background and experience
Frank brings a wealth of
corporate leadership experience
within FTSE businesses. He
joined Staffline from Sky
where he served as Sales and
Commercial Director for the
Commercial division of the
UK and Republic of Ireland
business having joined the PLC
in 2010. Prior to that, Frank
was a main UK Board Director
of the membership division of
Homeserve PLC, leading the
Customer Sales, Retention and
Claims Handling operations
for seven years as a Financial
Conduct Authority Approved
Person. Before that, Frank spent
seven years in the business
process outsourcing sector.
Frank leads the operational
and strategic delivery of the
Recruitment GB recruitment
businesses focusing on
performance turnaround.
External appointments
None.
Background and experience
Tina is a high profile and multi
award winning Managing
Director with 25 years’
experience in the recruitment
industry. As Recruitment
Ireland’s first employee,
Tina has grown the business
to where it is today. Tina
also launched PeoplePlus
NI in 2014; successfully
delivering contracts for the
Justice Department, ESF,
the Department of Economy
and the Department
for Communities.
External appointments
Tina chairs the Federation
of Self Employed and Small
Businesses (“FSB”) in Northern
Ireland, is a member of the UK
FSB Policy Board, chairs the
Department of Economy sub-
group on the response to the
Covid-19 pandemic and holds
the office of Honorary Consul
to Finland for Belfast.
Date of appointment
Formerly Chief Operating
Officer of PeoplePlus and
Divisional Managing Director
of Employability, Kenny
was appointed to the role of
Managing Director, PeoplePlus,
in December 2021.
Background and experience
An experienced operator in
outsourced public services,
Kenny joined the PeoplePlus
business in 2018 from Capita
where, as Managing Director,
he oversaw the delivery of
the Government’s Pensions
Automatic Enrolment policy
to all UK employers and staff.
Kenny has a background
in managing large scale
communications and service
operations for consumer-facing
organisations, notably British
Airways, BT, Virgin Media, Avios
and VisitBritain.
External appointments
Kenny is the Chairman of
leading disability charity,
Tourism for All.
56
Staffline Group plc Annual Report and Accounts 2022
Corporate Governance Report
Staffline Group plc (the “Company”) is an AIM listed company and
is committed to maintaining the highest standards of corporate
governance throughout its operations and ensuring that all of its
activities are conducted transparently, ethically and efficiently.
The Company believes that scrutinising all aspects of its business and
reflecting, analysing and improving its procedures will result in the
continued success of the Company and improve shareholder value.
In compliance with the AIM Rules for Companies,
the Company has chosen to comply with
the Quoted Companies Alliance Corporate
Governance Guidelines for Small and Mid-Size
Quoted Companies (the “QCA Code”).
The requirements of the QCA Code and how the
Company complies with them are set out below:
Principle
Compliance
1
Establish a strategy
and business model
which promote
long-term value
for shareholders
2 Seek to
understand and meet
shareholder needs
and expectations
The Group’s vision is to be a world class recruitment and training Group, the clear market
leader and a trusted partner known for excellent service and integrity, driven forward by
digital innovation.
The Group’s strategy is to drive the long-term growth of the business. The Group’s business
model is set out on pages 6 and 7 and the strategic priorities of the Group are set out on
pages 8 and 9.
The Group comprises three operating divisions: Recruitment GB, Recruitment Ireland
and PeoplePlus.
Recruitment GB is a provider of flexible blue-collar workers across a wide range of industries.
Recruitment Ireland is a generalist recruitment solutions provider, operating via on-site
operations and a branch network covering all major cities across the Island of Ireland.
PeoplePlus is a provider of skills and employment training and support, delivering adult
education, prison education and skills-based employability programmes across England,
Scotland and Wales.
The principal risks and uncertainties faced by the Group in achieving its strategic objectives are
detailed on pages 46 to 51.
The Board is responsible for representing and promoting the interests of the Group’s
shareholders and is accountable to them for the long-term success of the Group.
All shareholders are encouraged to attend the Annual General Meeting (“AGM”).
Shareholders will be able to attend the 2023 AGM in person and arrangements will be made
to enable shareholders to submit written questions to the Board in advance of the meeting.
Shareholders will be invited to vote by proxy, the results of which will be published on the
website at www.stafflinegroupplc.co.uk following the meeting.
A dedicated email address exists to enable all current and prospective shareholders to contact
the Group directly at investors@staffline.co.uk. The Board recognises that, whilst the majority of
shareholders are large institutions, the Company’s private shareholders are important, and the
Board welcomes dialogue with them.
The Company uses the ‘Investor Meet’ platform for its investor presentations and the Board
studies closely the polls, feedback, questions, and analytics generated, demonstrating its
shareholder engagement activities.
The links to presentations slides, and the Q&A can be found in the Media Library at
www.stafflinegroupplc.co.uk/investor-relations/media-library.
In addition to the formal institutional meetings at the half-year and year-end, the Executive
Directors meet existing and prospective investors throughout the year as part of an ongoing
investor engagement strategy. The Interim Chairman also meets key shareholders during the
year to discuss corporate governance matters and listen to any concerns that are raised.
The Senior Independent Director is also usually available to meet with shareholders and
provides an independent point of contact on Board matters. During the year, the Interim
Chairman consulted with certain of the Company’s major shareholders who were opposed
to certain resolutions proposed at the Company’s 2022 AGM regarding the authority to
issue Ordinary Shares of the Company.
The Remuneration Committee Chair consulted with a number of the Company’s major
shareholders on certain remuneration issues, including the design and grant of options
under the Long-Term Incentive Plan for Executive Directors and senior management.
Strategic Report
Corporate Governance
Financial Statements
57
Principle
Compliance
3 Take into account
wider stakeholder
and social
responsibilities and
their implications for
long-term success
4 Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
The Board recognises its social, economic and environmental responsibilities to wider stakeholders
and is committed to act in a way which it considers to be most likely to promote the success of
the Group, having particular regard to:
• the likely consequences of any decision in the long term;
• the interests of the Group’s employees and temporary workers;
• fostering strong and transparent relationships with customers, suppliers, regulators and investors;
• reducing the risk of modern slavery and other labour abuse mechanisms in our supply chains;
• the impact of the Group’s operations on communities and the environment;
• maintaining a reputation for high standards of business conduct; and
• the need to act fairly between shareholders of the Company.
This underpins the Board’s approach to setting the overall strategic direction of the Group and
supports its core values, policies and procedures, which in turn, creates an environment in which the
business and its employees can act with integrity and effectiveness, whilst driving profitable growth.
This is demonstrated through Board decisions and within corporate policies. Information on how the
Board considered its stakeholders when making principal decisions is provided within the ESG Report
on pages 44 and 45.
The Board is responsible for maintaining a strong system of internal control to safeguard
shareholders’ interests and the Group’s assets and for reviewing its effectiveness. The system of
internal financial control in place is designed to provide reasonable but not absolute assurance
against material misstatement or loss.
The Group’s Head of Internal Audit oversees a robust, standardised approach to risk
management at Group level that complements and builds upon divisional risk management
processes, which are predominantly operationally focused.
Regular updates on risk matters are provided to the Audit Committee and the Board through
both management reports and the work of the Head of Internal Audit. Further information about
the risk management process and the criteria used to assess risk is provided in the Principal
Risks and Uncertainties section on pages 46 to 51 of this report.
Group-level policies intended to establish a standard approach across the business in relation to
matters such as fraud, bribery, competition, whistle-blowing and conflicts of interest were fully
rolled out during 2022 and now form part of mandatory training for most employees.
The Head of Internal Audit works closely with divisional Governance and Compliance teams
and plays an important role in the sharing of knowledge and good practice across the
divisions. The creation of a Group Governance Director role, which sits across Recruitment
GB and PeoplePlus, has led to a programme of continuous improvement that continued during
2022 and included greater standardisation and documentation of operational processes,
strengthening of compliance enforcement measures and driving accountability where
control failures are identified.
The Recruitment divisions maintain independent compliance audit functions that sit locally
within each division and are responsible for checking workers’ legal employment status and
compliance with industry body and regulatory standards e.g. Recruitment and Employment
Confederation (“REC”) and Gangmasters and Labour Abuse Authority (“GLAA”). The Payroll
teams in both Recruitment divisions also receive ongoing training to ensure compliance with
relevant legislation and procedures.
A clear structure of delegated authority levels covering a wide range of transactions is in
place along with a formalised Schedule of Matters Reserved for the Board, which is reviewed
annually. The framework provided by these documents provides clarity around the extent
to which the Board, as the body that has ultimate responsibility for managing the Group’s
business and safeguarding the interests of its stakeholders, has chosen to delegate its authority
in specific areas. Further delegation of authority within the divisions is also documented, with
arrangements aligned to each division’s particular organisational structure and operations.
There is also regular review of financial information, including year-to-date performance
against both current year budget, prior year, and latest forecast, at all management levels up
to and including the Board. Both risks to financial performance and potential opportunities are
monitored to ensure performance in line with expectations.
58
Staffline Group plc Annual Report and Accounts 2022
Corporate Governance Report continued
Principle
Compliance
5 Maintain the
Board as a well-
functioning,
balanced team
led by the Chair
The Board’s role is to provide leadership of the Group within a framework of prudent and
effective controls which enable risk to be assessed and managed.
The Board
The Board is satisfied that there is an appropriate balance of Executive and Non-Executive
Directors, with two Executive and three Non-Executive Directors, two of whom are independent.
Tom Spain, the Interim Chairman, leads the Board and is responsible for promoting the strategic
success of the Company and creating value for shareholders in the long term whilst ensuring
that sound, effective corporate governance practices are embedded in the Group and in its
decision-making processes.
Albert Ellis, Chief Executive Officer, is responsible for developing and delivering the Group’s
strategy within the policies and values established by the Board. Daniel Quint, Chief Financial
Officer, is responsible for managing the financial resources, reporting and planning of
the Group.
Ian Starkey and Catherine Lynch, the two Independent Non-Executive Directors, bring
independent and objective analysis to all matters considered by the Board and its Committees
using their substantial and wide-ranging experience. They monitor the executives’ delivery of
strategy within the risk and governance structure agreed by the Board. It is intended that the
Senior Independent Director supports the Interim Chairman and provides an independent point
of contact for shareholders on Board matters. Non-Executive Directors are expected to commit
two days per month to the Company. This includes attendance at Board and Committee
meetings, strategy sessions, the AGM and meetings with shareholders and employees.
The Board meets at least six times each year. During 2022, the Board held 13 formal Board
meetings. A minority of meetings were remote.
Individual directors’ attendance at the 13 Board meetings held in 2022 is summarised below:
Director
Tom Spain1 (Interim Chair)
Albert Ellis
Daniel Quint
Ian Starkey2
Catherine Lynch
Ian Lawson3 (Chair)
Richard Thomson4
Number of
meetings
attended
Maximum
number of
meetings
possible
13
13
13
13
12
4
4
13
13
13
13
13
4
4
1 Tom Spain was re-elected as a Non-Executive Director and appointed as Interim Chairman at the AGM on 26 May 2022.
2 Ian Starkey was appointed as Senior independent Director on 26 May 2022. Ian Starkey has informed the Company that
he will not be standing for re-election at the Company’s AGM in 2023 and will, accordingly, resign from the Board and as a
Director on 16 May 2023, or the Company’s AGM in 2023, whichever is the earlier.
3 Ian Lawson resigned as Independent Non-Executive Chairman and Director of the Company on 25 May 2022.
4 Richard Thomson resigned as Director and Senior independent Director on 26 April 2022.
In relation to this principle, the Board considered the ongoing Board restructuring with the
appointment of Tom Spain as Interim Chairman in May 2022 and the process of searching for a
replacement Independent Non-Executive and Audit Committee Chair, following the forthcoming
resignation of Ian Starkey.
Directors are given comprehensive, timely and relevant management information before each
Board meeting. Directors are able to obtain independent professional advice in the course of
their duties, at the Group’s expense. All Directors submit themselves for re-election annually.
Details of the members of the Board and its Committees are set out on pages 54 and 55.
Strategic Report
Corporate Governance
Financial Statements
59
Principle
Compliance
5 Maintain the
Board as a well-
functioning,
balanced team
led by the Chair
continued
6 Ensure that between
them the Directors
have the necessary
up-to-date
experience, skills
and capabilities
The Board delegates certain functions to its three principal Committees:
Nominations Committee
Responsible for ensuring that the Company has the executive and non-executive Board
leadership it requires.
Remuneration Committee
Responsible for the review, recommendation and implementation of the Group’s remuneration
strategy, its framework and costs.
Audit Committee
Responsible for the integrity of the Company’s financial statements and reporting, ensuring the
necessary internal controls and risk management systems are in place and effective.
Detailed reports for the: Nominations Committee; Remuneration Committee; and Audit
Committee are provided on pages 62, 63 to 67, and 68 to 73, respectively.
The Board currently comprises the Interim Chairman, two independent Non-Executive Directors
and two Executive Directors, who provide a range of different experience and backgrounds.
Tom Spain was re-elected as a Non-Executive Director and appointed as Interim Chairman at
the AGM on 26 May 2022. Tom Spain founded the business Henry Spain Investment Services
Limited in 2010.
Ian Starkey, a qualified chartered accountant, has significant financial expertise, specifically
in financial management, control and reporting. Ian had a 35-year career at KPMG, including
23 years as a lead audit engagement partner in the UK and Switzerland, and as a member of
the Board. Ian chairs the Audit Committee, but has informed the Company that he will not be
standing for re-election at the Company’s AGM in 2023 and will, accordingly, resign from the
Board on 16 May 2023 or at the AGM, whichever is the earlier. The Board is currently seeking a
suitably qualified and experienced non-executive to join the Board and accept appointment to
chairmanship of the Audit Committee.
Catherine Lynch is a highly experienced HR Director, with over 20 years’ experience, is
currently Group HR Strategy, Technology and Insight Director at Rentokil Initial plc, and was
formerly Chief People Officer UK and Ireland at Flutter Entertainment plc. She is a Fellow of the
Chartered Institute of Personnel and Development (“CIPD”), and is currently on the Advisory
Board of Dial Global, a community focused on inclusion. Catherine chairs the Remuneration and
the Nominations Committees.
Albert Ellis and Daniel Quint are both Chartered Accountants with over 40 years, board level
experience at private and public companies between them. Albert was appointed as a Non-
Executive Director of HRnet Group Limited with effect from 1 October 2022. HRnet Group
Limited is the second largest shareholder in the Company (holding approximately 15% of the
current issued share capital).
The Nominations Committee is responsible for the appointment of Directors but ensures that the
whole Board is involved in the process.
The Board believes that the Company has a strong, independent, highly qualified and
diverse Board with the right people in place to lead the business. Biographical details of the
Directors are set out on pages 54 and 55.
Directors are encouraged to keep their skills up to date by attending appropriate training
courses. A number of Directors are either currently, or have previously been, members of other
Boards where new skills can be learned. During the year, the Board undertook a review of
its executive talent management strategy with an external consultancy specialising in Chief
Executive Officer succession and assessment, leadership, succession and career management,
which worked with the senior management team and the Board as an independent adviser and
objective sounding board.
60
Staffline Group plc Annual Report and Accounts 2022
Corporate Governance Report continued
Principle
Compliance
7 Evaluate Board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
Tom Spain was re-elected as a Non-Executive Director and appointed as Interim Chairman at
the AGM on 26 May 2022.
During the latter part of 2022, the Board conducted an in-house self-evaluation with the use
of a questionnaire that focused on the remit and key issues facing the Board. In particular, the
Board considered how it discharges its strategic remit and reviews key issues facing the Group.
As required, directors discussed any matters with the Interim Chairman and Senior Independent
Director, as appropriate. The Interim Chairman and Senior Independent Director discussed the
outcome of the evaluation, including any recommendations and actions, with the Board.
The Board evaluation is conducted on an annual basis which will include an external evaluation
at least every three years. It is proposed that the first external Board evaluation be conducted
during 2023.
8 Promote a corporate
culture that is based
on ethical values
and behaviours
The Group’s corporate values are detailed on the website: www.stafflinegroupplc.co.uk/about-
us/strategy-vision-and-values/ and are as follows:
• teamwork: working together across the business to achieve more for our customers;
• respect: taking time to understand, trust and support each other to achieve shared success;
• commitment: demonstrating a relentless and driven ambition to exceed expectations;
• reliability: fulfilling all our customer requirements, getting the job done;
• creativity: solving problems and suggesting new ideas and insights; and
• integrity: doing things the right way, for the right reason, ethically, honestly, every time.
These values are driven by the Board and are at the heart of all Board processes and decisions.
Group policies including Anti-Bribery, Anti-Fraud, Anti-Money Laundering and Whistle-blowing,
are owned by the Board, details of which are provided in the Audit Committee report on pages
63 to 67.
The Board is committed to reducing the threat of modern slavery and human trafficking and the
Group works with like-minded organisations to try to achieve this as described in the ESG Report
on page 32, along with our commitment to health and safety and our approach to UK Data
Protection Regulations.
Strategic Report
Corporate Governance
Financial Statements
61
Principle
Compliance
9 Maintain governance
structures and
processes that
are fit for purpose
and support good
decision-making
by the Board
In accordance with best governance practice, the Board maintains a Schedule of Matters
Reserved for the Board, which is reviewed annually. These matters include:
• overall leadership of the Company and setting the Group’s strategy, objectives, values
and standards;
• oversight of the Group’s operations;
• approving any changes to the Company’s structure and capital;
• approval of annual budgets and any material changes to these;
• approval of the Annual Report and Accounts, half-yearly reports, dividend policy and any
significant changes in accounting policies or practices;
• communications with shareholders;
• approval of contracts of the Group or contracts proposed by any subsidiary not in the
ordinary course of business;
• approval and oversight of major investments and capital projects;
• ensuring maintenance of a sound system of internal controls and risk management that
adapts to changes in the Group’s business activities;
• Board and Committee membership;
• remuneration of Directors, the Company Secretary and senior executives;
• prescribing a matrix of authority limits for delegation to divisional senior management; and
• approval of key Group-level policies.
The Interim Chairman is responsible for leading the Board, facilitating the effective contribution
of all members and ensuring that it operates effectively in the interests of the shareholders.
As noted under Principle 5, the Board delegates certain functions to its three Committees:
Nominations Committee, Remuneration Committee and the Audit Committee.
10 Communicate
how the Company
is governed and
is performing
by maintaining
a dialogue with
shareholders and
other relevant
stakeholders
The Board is responsible for representing and promoting the interests of the Group’s
shareholders and is accountable to them for the long-term success of the Group.
The Executive Directors hold regular meetings with institutional shareholders. They also update
on the performance of the Group to shareholders and wider stakeholders at the interim and
annual results presentations.
The Executive Directors also hold regular meetings and maintain an ongoing dialogue with
the Group’s lenders.
62
Staffline Group plc Annual Report and Accounts 2022
Nominations Committee Report
The Nominations Committee reviews
the structure and composition of
the Board and its Committees,
particularly the skills, knowledge and
experience of Directors. Succession
planning and approval of Board
appointments form an important part
of the Committee’s responsibilities.
Catherine Lynch
Chair of
Nominations Committee
Membership and meetings
The Nominations Committee comprises two members, Catherine
Lynch, Independent Non-Executive Director and Ian Starkey, Senior
Independent Non-Executive Director. The Committee is chaired by
Catherine Lynch, unless the matter under discussion is her own
succession. Other Directors are invited to attend as appropriate and
only if they do not have a conflict of interest. The Committee is also
assisted by executive search consultants as and when required.
During 2022, the Committee met on two occasions, the second of
which was to review Board effectiveness and the appointment of Tom
Spain as Interim Chairman at the AGM on 26 May 2022. However, in
addition, several informal meetings and discussions were also held
with the Chief Executive Officer and others, as part of the process
to appoint a new Non-Executive Director and Chair of the Audit
Committee following the forthcoming resignation of Ian Starkey.
Role of the Committee
The Committee regularly reviews the structure, size and composition
of the Board and its Committees to ensure they continue to provide
informed and constructive support and challenge to the management
team. The Committee is responsible for identifying and reviewing
suitable candidates through a formal and transparent process, and
for ensuring that plans are in place for orderly succession to the Board.
It also oversees the development of a pipeline for succession to senior
management roles.
Key items considered by the Committee
Succession planning and talent management strategy
The Committee met with the Chief Executive Officer to review
succession plans. The focus of these discussions was to review our
succession planning strategy and ensure robust plans were in place for
members of the Executive and their direct reports. The Committee will
keep succession planning under close review in 2023 to implement the
actions identified by the evaluation.
The Committee also considered the position of Interim Chairman, the
reduction in the number of directors from seven to five and the reduced
number of Independent Directors.
Board diversity and inclusion
The Nominations Committee focuses on the leadership required for
the executive management team to fulfil its purpose, achieve its vision
and execute its strategy. This requires a clear focus on inclusion
and diversity to maximise the skills and capabilities from which the
executive management team can benefit. Our policy is to have a
broad range of skills, backgrounds and experience on the Board and
executive management team. Alongside the Board, the Committee
continues to champion the benefits of diversity and inclusion at
Board, Committee and senior management level. Appointments are
always based on merit, and we continue to challenge our external
search consultants where necessary, to ensure that diversity and
inclusion is always considered when drawing up candidate shortlists.
Meetings
The Nominations Committee meets at least once a year and otherwise,
as required. The meeting attendance for the two meetings held in 2022
is shown below, along with the key agenda items:
Director
Ian Lawson (Chairman)1
Richard Thomson2
Catherine Lynch (Chair)3
Ian Starkey4
Number of
meetings
attended
Maximum
number of
meetings
possible
1
–
2
2
1
–
2
2
1
Ian Lawson resigned as Independent Non-Executive Chairman and Director of the
Company on 25 May 2022.
2 Richard Thomson resigned as Director and Senior independent Director and member
of the Committee on 26 April 2022.
3 Catherine Lynch was appointed as Chair of the Committee on 1 June 2022.
4 Ian Starkey, Senior Independent Non-Executive Director and Chair of the Audit
Committee, has informed the Company that he will not be standing for re-election
at the Company’s AGM in 2023 and will, accordingly, resign from the Board and as a
Director on 16 May 2023, or at the Company’s AGM in 2023, whichever is the earlier.
Tom Spain, Interim Chairman, is invited to attend all meetings as
an observer and attended all relevant meetings during the year.
Strategic Report
Corporate Governance
Financial Statements
63
Audit Committee Report
The Audit Committee oversees
Staffline’s financial reporting
and internal control processes by
working with management, the
external auditor and the Group’s
internal audit and governance teams.
Sound understanding of the key risks
faced by the Group is key to the
Committee’s role.
Membership and meetings
The Audit Committee comprises two members, Ian Starkey, Senior
Independent Non-Executive Director and Catherine Lynch, Independent
Non-Executive Director. The Committee is chaired by Ian Starkey.
Ian Starkey has informed the Company that he will not be standing
for re-election at the Company’s AGM in 2023 and will, accordingly,
resign from the Board on 16 May 2023 or at the AGM, whichever is
the earlier. The Board is currently seeking a suitably qualified and
experienced Non-Executive to join the Board and accept appointment
to Chairmanship of the Audit Committee.
The Committee meets at least four times a year, as required by its
terms of reference, which are available at www.stafflinegroupplc.
co.uk/about-us/corporate-governance/. Meetings are scheduled at
appropriate intervals throughout the financial reporting and audit
cycle, with additional meetings held as required.
Director
Ian Starkey (Chair)
Ian Lawson1
Richard Thomson2
Catherine Lynch
Number of
meetings
attended
Maximum
number of
meetings
possible
5
1
1
4
5
1
1
5
1
2
Ian Lawson resigned as Independent Non-Executive Chairman, Director of the
Company and member of the Committee on 25 May 2022.
Richard Thomson resigned as Senior Independent Director, Director of the Company
and member of the Committee on 26 April 2022.
The Group Chief Executive Officer, Group Chief Financial Officer,
Group Financial Controller, Group Head of Internal Audit and the
Group’s external auditor are invited to attend all scheduled meetings
of the Committee and other meetings as appropriate to the business
to be considered. Tom Spain, Interim Chairman, is invited to attend all
meetings as an observer and attended all relevant meetings during
the year.
Ian Starkey
Chair of the
Audit Committee
Committee agendas are structured around an underlying annual cycle
of review and monitoring of financial reporting matters and the internal
control environment, whilst also maintaining ongoing oversight of risk,
internal control and other control matters through quarterly updates.
Key items covered by this annual cycle are summarised below:
Meeting
Financial Reporting Matters
Internal Control Matters
March
External audit findings and
results announcement
Internal control observations
arising from external audit
Approval of Annual Report
and Accounts
June
Requirements in relation
to half-year procedures
Internal control
presentations by Divisional
Finance Directors and
Divisional IT management
Review of key Group
compliance policies (e.g.
anti-fraud, anti-bribery
and anti-money laundering
policies)
Mid-year review of progress
against the internal audit
work programme
September Half-year results
announcement
Review of divisional and
Group risk registers
December
External audit planning and
fee proposal
Review of Committee
effectiveness
Review of external
auditor independence
Review of external and
internal audit effectiveness
and performance
Approval of next year’s
internal audit work
programme
64
Staffline Group plc Annual Report and Accounts 2022
Audit Committee Report continued
Role and responsibilities
The Audit Committee is an integral part of Staffline’s governance infrastructure, providing independent oversight of the Group’s financial
reporting, internal control and risk management arrangements.
The Committee’s key responsibilities, as defined by its terms of reference, and its approach to fulfilling them are summarised below:
Responsibility
Approach
Oversight of the effectiveness,
integrity and quality of
the Company and Group’s
financial reporting
Monitoring developments in
relevant financial reporting
legislation and regulation and
their adoption by the Group
Appointment of the external
auditor and oversight
of their independence
and performance
Oversight of the external audit
process, including meeting the
external auditor and reviewing
any reports from them
regarding financial reporting
and internal control systems
Oversight of the design,
implementation and
effectiveness of internal
financial controls,
including identifying and
commissioning specific
internal control reviews
The Committee Chair maintains ongoing contact with both executive management and the external auditor to
discuss the Group’s current practices in areas that might have a financial reporting impact or implication.
The Group operates a policy of early engagement with the external auditor when any change in accounting
policy or practice that might impact on the Group’s financial reporting is being considered.
The Committee reviews management reports assessing the impact on the Group’s financial reporting of both
proposed and enacted changes to relevant accounting standards, guidance and other regulatory matters.
The external auditor also provides regular updates on the regulatory environment and potential changes.
The Committee monitors the length of tenure of the incumbent external auditor, receives feedback from
management on the auditor’s performance and reviews regulatory reports such as the Audit Quality Inspection
and Supervision Reports published by the Financial Reporting Council (“FRC”). The Committee also reviews
findings arising from the auditor’s work and seeks feedback from management with regard to the auditor’s
performance, understanding of the Group’s business and operations and interaction with Staffline personnel.
Whist any tender process for audit services would be completed by executive management the Committee would
maintain oversight, and any recommendation by management would be subject to the Committee’s approval
prior to being put before shareholders at the Company’s AGM.
The Committee receives formal reports from the external auditor on the completion of their audit work. These are
reviewed by the Committee and discussed with the auditor and with executive management.
As noted above, the Committee Chair maintains ongoing contact with the external auditor both with and without
executive management involvement.
The Committee receives formal presentations on the financial control environment within each division from
Divisional Finance management. These cover accounting adjustments and any concerns in relation to internal
controls identified during the external audit, control improvement initiatives and resourcing of Finance and
Governance teams.
The Chairman of the Committee also meets with Divisional Finance Directors at least once a year to discuss
matters relating to financial reporting, internal controls and governance.
The Committee has historically commissioned specific internal audit reviews where concerns arisen or
independent insight and assurance is required.
Oversight of the internal
audit function, including
its independence
and effectiveness
The Committee reviews annually the charter under which the Group Head of Internal Audit operates.
This incorporates safeguards to protect the function’s independence including direct access to the Group
Chief Executive Officer or Committee Chair if required.
The Committee also meets with the Head of Internal Audit once a year without executive management in
attendance and seeks confirmation of the function’s freedom from inappropriate influence or interference.
Oversight of the Group’s risk
register, risk appetite and risk
mitigation arrangements
The Committee reviews outputs from the annual risk assessment process overseen by the Group Head of Internal
Audit (see Principal Risks and Uncertainties on page 46 for more detail), which considers potential threats,
existing controls and further mitigating actions where risk is seen as exceeding the appetite set by the Board.
Divisional management provide ongoing commentary on risk within their regular Board reports and the internal
audit work programme is closely linked to risk registers.
Review of the effectiveness
of the Group’s whistle-
blowing arrangements
Whistle-blowing reports are summarised and reported to the Committee every quarter as part of regular internal
controls updates from the Group Head of Internal Audit.
The Committee formally reviews and approves re-adoption of the Group Whistle-blowing Policy annually.
Strategic Report
Corporate Governance
Financial Statements
65
Financial reporting
Key matters considered by the Committee in relation to the Group’s financial reporting for the year ended 31 December 2022 comprised:
Description of matter
Committee actions and conclusions
PeoplePlus Clawback Provisions and prior
period adjustment
The Committee considered the adequacy of PeoplePlus’ provisions
against clawback claims for historical errors in revenue recognition.
The Committee considered a management paper covering the factual
background to clawback claims received during 2022 and the proposed
accounting treatment by way of prior period adjustment, it was satisfied
that the approach adopted was appropriate.
Going Concern
While business performance has improved during the year and
future financing is secured, current economic uncertainties present
an ongoing risk to Staffline’s performance and stability.
The Committee also noted the auditor’s finding, reported to its meeting
in March 2023, that no material errors or omissions in this area had
been identified.
The Committee and Board receive regular updates in respect of the
Group’s actual and forecast performance and its ability to maintain
compliance with its obligations under the financing agreement entered
into in June 2021. The Board received detailed presentations from
divisional management and Group executives as part of the annual
budgeting process, after which it approved the annual budget for the
year ending 31 December 2023 and the forecast for the following year.
The Committee reviewed a detailed year-end memorandum prepared by
the Group Finance team that set out the Group’s financing arrangements
and covenant obligations, FRC guidance in relation to assessment of
going concern matters, both budget/actual and forecast profitability
and cash flows and headroom against current funding arrangements.
In the opinion of the Committee, use of the going concern basis when
preparing the Group’s accounts for the year ended 31 December 2022
remains appropriate.
The Committee also noted that the auditor had highlighted no concerns
in this area when reporting on the findings of the 2022 audit at its
meeting in March 2023.
Accounting treatment of interest rate cap
The Group entered into an interest rate cap instrument during
2021. Accounting treatment of such arrangements is defined by
IFRS 9 Financial Instruments.
The Committee reviewed a paper prepared by the Group Finance team
covering accounting treatment of the interest rate cap instrument. In the
opinion of the Committee, the accounting treatment adopted remains
appropriate and the arrangement complies with the requirements of IFRS 9.
PeoplePlus income recognition on
significant contracts
PeoplePlus has had historical issues around retention of adequate
records to substantiate revenue invoiced to customers and
recognised in the accounts in respect of certain contracts.
In addition, it operates under three long-term Restart sub-
contracts where the recognition of revenue and costs at interim
stages depends on management estimates.
The Committee had considered in 2021 a management paper covering
revenue recognition that was compiled with input from external advisers.
The principles applied at that time remain relevant in respect of 2022
reporting, but an updated paper was considered by the Committee which
was satisfied that management had drawn appropriate conclusions, that
the accounting treatment complies with the requirements of IFRS 15 and
that there is no basis for identifying these contracts as either onerous or
potentially onerous.
The Committee considered the assumptions underlying the forecasts of
revenue and costs for the Restart sub-contracts.
Valuation of goodwill and intangible assets
IAS 36 “Impairment of Assets” requires that reporting entities
undertake periodic reviews of the carrying value of assets to
identify any indicators that assets may be overvalued in relation to
the future economic benefits that they are expected to generate.
The Committee reviewed a paper prepared by the Group Finance
team summarising the impairment review carried out on the goodwill,
intangibles and property, plant and equipment allocated to the Group’s
cash-generating units at 31 December 2022. Detailed assumptions used
in the review were considered by the Committee and deemed reasonable
and appropriate.
66
Staffline Group plc Annual Report and Accounts 2022
Audit Committee Report continued
Description of matter
Committee actions and conclusions
Valuation of investments
The external auditor’s planning document relating to the 2022
audit noted valuation of investments and the value at which they
are carried in the Group’s financial statements as an ‘other’ risk,
rather than a key audit risk.
Work performed as part of the auditor’s normal procedures
identified a potential understatement in the impairment
of Staffline Group plc’s investment in PeoplePlus Group
proposed by management.
Use and disclosure of Alternative
Performance Measures
The Committee considered the appropriateness of the APM’s,
including the reasons for their use, the definitions and prominence.
The Committee concurred with management’s view that an impairment of
£8.2m in the Company’s investment of £50.4m in PeoplePlus was required
and noted that this had no effect on the Group result.
The Committee noted the APM’s used were consistent with 2021,
with the exception of the Gross Sales Value metric, which it considers
a useful addition.
Other Matters Considered
Other financial reporting and external audit-related activities
undertaken by the Committee during the year included:
• review of key accounting judgements and estimates;
• approval of annual external audit plans, auditor’s fees and
engagement letter;
• review of year-end external audit findings, including reports on
internal controls;
• approval of the annual results announcement and the Annual
Report and Accounts;
External audit
Grant Thornton LLP was appointed as the Group’s external auditor
in November 2019 and was the reporting auditor for the Group’s
2019 financial year.
Every year, the Committee assesses the performance of the external
auditor and the effectiveness and efficiency of the audit process. In
carrying out its assessment in 2022 the Committee considered:
• feedback from the Group Chief Financial Officer and Group Finance
team, who monitor the external auditor’s performance, behaviour and
effectiveness during the audit and liaise with divisional Finance teams;
• approval of the interim results announcement and periodic
• key audit plans and reports, which were discussed and, where
trading updates; and
appropriate, challenged;
• approval of the Letters of Representation provided to the
external auditor.
• the nature, tone and content of engagement with the external
auditor during both Committee meetings and ad-hoc meetings,
including meetings without any member of management present;
• the Committee Chair’s discussions with the Senior Statutory Auditor
and audit management team ahead of Committee meetings at
which the external auditor is due to present to the Committee; and
• how the auditor supports the work of the Committee and how the
audit contributes insights and adds value.
The Committee was satisfied with the auditor’s performance during
the year ended 31 December 2022 and audit of the Group’s financial
results and reporting for this period.
Strategic Report
Corporate Governance
Financial Statements
67
Independence and non-audit Services
The Committee monitors the arrangements in place to safeguard the
external auditor’s independence. Whilst these are largely determined
by the external auditor, the Group also has in place a formal policy
covering provision of non-audit services. This clearly defines what
services may and may not be provided by the Group’s external auditor
as a matter of Staffline policy.
Non-audit services provided by the external auditor during the year
ended 31 December 2022 comprised agreed upon procedures on
the Group’s interim results and audit work on PeoplePlus’ defined
pension benefit scheme. Both are recurring engagements that were
approved by the Committee and are permitted under the Group’s
policy on non-audit services. The external auditor’s risk assessment
procedures identified no risk to the auditor’s independence as a result
of these engagements.
Internal controls, risk management and governance
The Committee took the following actions during 2022 to maintain and
support development of the Group’s internal control, risk management
and governance arrangements:
• ongoing monitoring of a project established to resolve process and
organisational challenges within one of PeoplePlus’ operating divisions;
Areas of focus in 2023
• development of a structured approach to annual review of the
Group’s financial controls framework;
• implementation of TCFD reporting requirements (see page 42
for further details);
• building on the use of risk appetite to target risk management
activity within the operating divisions;
• development of corporate governance and reporting arrangements
in response to expected legislation following publication of the UK
Government’s consultation on reform of corporate governance,
corporate reporting and audit systems; and
• Consideration of the Group’s policies for hedging interest rate risk
and the cost of share option awards.
Internal audit
The Group has an in-house internal audit function, which was
established in 2020 and reports through the Group Chief Financial
Officer for administrative purposes.
During 2022, the Committee received internal reports covering:
• cyber security arrangements;
• business continuity planning in respect of temporary worker
• review and approval for re-adoption of the Group’s Schedule of
payrolling in the GB and the Island of Ireland recruitment businesses;
Matters Reserved to the Board, the Group Delegation of Authority
Policy and key compliance-related Group-level policies including the
Anti-Fraud Policy, Anti-Bribery Policy, Anti-Money Laundering Policy,
Anti-Facilitation of Tax Evasion Policy and Whistle-Blowing Policy;
• approval of various changes to the Group’s delegation of
authority matrix;
• review and approval for re-adoption of The Group’s policies on
non-audit services and treatment of bid-related costs;
• approval of a Group policy covering political and charitable donations
and sponsorships to formalise and standardise practice in this area;
• review of the external auditor’s findings in relation to internal control
matters and management’s responses to the items raised;
• review of divisional and Group risk registers and management’s
plans to mitigate the level of risk exposure;
• monitoring of progress made in delivering the transformation project
in PeoplePlus’ ILS business; and
• consideration of the implications for Staffline of proposed changes to
UK corporate governance regulations, including additional disclosure
requirements that will take effect in the coming financial year.
• site and branch-level anti-fraud controls in respect of temporary
worker payrolling in the Recruitment GB business;
• key financial controls in the Recruitment Ireland business;
• financial controls in PeoplePlus’ Independent Living
Services business;
• controls relating to prevention of bribery and facilitation of tax
evasion across Staffline Group; and
• follow-up of the 2021 internal audit review of temporary worker
payroll processes in the Recruitment GB business.
The 2023 internal audit work programme approved by the
Committee includes reviews of:
• PeoplePlus record-keeping and revenue recognition on
major contracts;
• talent management;
• major project governance;
• tax reporting processes in support of Senior Accounting Officer
(“SAO”) sign-off;
• contract approval processes; and
• specialist payrolls in the Recruitment GB business
Work on development of Staffline’s corporate governance arrangements
to comply with expected new UK reporting requirements will also form
part of the Internal Audit function’s 2023 activity.
68
Staffline Group plc Annual Report and Accounts 2022
Remuneration Committee Report
The Remuneration Committee
ensures that remuneration
arrangements support the
strategic aims of the business
and enable the recruitment,
motivation and retention of
senior executives in a manner
that is aligned to shareholder
interests, while also complying
with the requirements of
relevant regulations.
Catherine Lynch
Chair of the Remuneration Committee
The Remuneration Committee comprises two members, Catherine
Lynch, Independent Non-Executive Director and Ian Starkey, Senior
Independent Non-Executive Director. The Committee is chaired by
Catherine Lynch.
Independence will be considered as part of the process to appoint
a new Non-Executive Director and Chair of the Audit Committee.
The Remuneration Committee ensures that remuneration
arrangements support the strategic aims of the business and enable
the recruitment, motivation and retention of senior executives in a
manner that is aligned to shareholder interests, while also complying
with the requirements of relevant regulations. In addition to reviewing
and agreeing Directors’ remuneration, the Committee also approves
proposed remuneration packages for new appointments and
remuneration changes for all employees whose basic gross salary
is £125,000 or above.
The members of the Committee are Independent Non-Executive
Directors. Except as shareholders and Directors, none of the members
has any other personal financial interest in the Group.
The Remuneration Committee meets at least twice a year and
otherwise as required. The meeting attendance for the six meetings
held in 2022 is shown below:
Director
Catherine Lynch (Chair)
Ian Lawson1
Richard Thomson2
Ian Starkey3
Number of
meetings
attended
Maximum
number of
meetings
attended
6
3
1
6
6
3
1
6
1
Ian Lawson resigned as Independent Non-Executive Chairman and Director of the
Company on 25 May 2022.
2 Richard Thomson resigned as Director and Senior independent Director and member
of the Committee on 26 April 2022.
3
Ian Starkey, Senior Independent Non-Executive Director and Chair of the Audit
Committee, has informed the Company that he will not be standing for re-election
at the Company’s AGM in 2023 and will, accordingly, resign from the Board and as a
Director on 16 May 2023, or at the Company’s AGM in 2023, whichever is the earlier.
The Group Chief Executive Officer and Group Chief Financial Officer
are invited to attend all scheduled meetings of the Committee and other
meetings as appropriate to the business to be considered. Tom Spain,
Interim Chairman, is invited to attend all meetings as an observer.
Key items considered by the Committee during 2022
• consideration of remuneration arrangements to be offered to senior
management appointments within the Group;
• bonus objectives and annual bonuses for the Chief Executive Officer,
Chief Financial Officer, Divisional Managing Directors and Divisional
Finance Directors;
• discussion on Executive remuneration and Non-Executive fees;
• Non-Executive Directors’ fees, including additional fees for
Committee Chairs;
• approval to offer remuneration packages to proposed
senior appointments;
• current share option schemes;
• the design of the Long-Term Incentive Plan for Executive Directors
and senior executives; and
• standardisation of contracts for the Group’s senior
executive management.
Advisers to the Committee
During the year, the Committee Chair consulted with a number
of the Company’s major shareholders on the remuneration and
‘reward philosophy’ of Executive Directors and certain members
of the senior management team and, in particular, long-term
incentive arrangements.
Responsibilities
The Committee acts in accordance with its formal Terms of
Reference, which are available on the Company’s website.
The Committee makes recommendations to the Board on the
remuneration and other benefits, including bonuses and long-term
incentive plans, of the Executive Directors and members of senior
management, acting within its Terms of Reference and policy on
Executive Directors’ remuneration.
The Board sets the annual base fees payable to the Independent
Non-Executive Directors and they do not receive any additional
benefits, nor are they eligible to participate in any pension,
bonus, or share-based incentive arrangements.
No Director plays a part in any decision about his or her
own remuneration.
Executive Directors may accept appointments outside the Group
subject to prior Board approval.
Strategic Report
Corporate Governance
Financial Statements
69
Summary of policy on Directors’ remuneration
Component
Basic salary
Purpose and link to
strategy
Operation
The Executive Directors’
remuneration packages are
designed to attract, motivate,
and retain Directors of the
high calibre needed to help the
Group successfully compete in
its marketplace. The Group’s
policies are to pay Executive
Directors a salary at market
levels for comparable jobs in
the sector whilst recognising
the relative size and complexity
of the Group.
Reviewed annually after considering pay levels at
comparably sized listed companies and sector peers; the
performance, role and responsibility of each Director; the
economic climate, market conditions and the Company’s
performance; and the level of pay across the Group
as a whole.
The Committee reviews the basic salary of Executive
Directors annually. In addition, salary may be reviewed
if an individual changes position or responsibility.
In deciding appropriate levels, the Committee takes
into account objective research on, and benchmarking
with, comparable companies, general market conditions
and business and personal performance.
Maximum Performance
n/a
n/a
Benefits
To provide market-competitive
benefits package.
Offered in line with market practice, and include life
assurance, private medical insurance, car allowance
and permanent health insurance.
n/a
n/a
Pension
arrangements
To provide an appropriate level
of retirement benefit.
The Group has a defined contribution pension scheme
with Scottish Widows for all permanent employees.
15% of
base salary
n/a
Annual bonus
To reward performance against
annual targets which support
the strategic direction of
the Group.
Long Term
Incentive Plan
(“LTIP”)
To drive and reward the
achievement of longer term
objectives, support retention
and promote share ownership
for Executive Directors.
During 2022, Executive Directors were entitled to receive
a contribution from the Group equivalent to 15% of their
basic salary into this or another scheme of their choice.
Annual bonuses are awarded at the discretion of the
Remuneration Committee as an incentive and to reward
individual performance during the financial year pursuant
to specific performance criteria. In exercising its discretion,
the Committee takes into account the underlying
operating profit before interest and taxation performance
against budget, amongst other things. The Committee
believes that incentive compensation should recognise the
growth and profitability of the business, which should be
aligned to the interests of shareholders.
Awards are based on annual performance and are
normally payable in the proportion to following the
elements, 66.67% through payroll and 33.33% in the
Company’s Ordinary Shares.
Details of the 2022 annual bonus payable to Albert Ellis
and Daniel Quint on 31 March 2023 are provided below
on page 70.
Conditional shares and/or nil cost or nominal cost share
options. Vesting is normally subject to the achievement
of challenging performance conditions, normally over
a period of three years. Dividend equivalents may be
awarded to the extent awards vest. Awards may be
subject to malus/clawback provisions at the discretion
of the Committee.
Details of the LTIP awards to Albert Ellis and Daniel Quint
as at 31 December 2022 are provided on pages 70 and 71.
100%
of salary
Sliding scale
financial and/
or personal/
strategic
targets
100% of
salary
Performance
metrics will
be linked
to financial
and/or share
price and/
or strategic
and/or
performance
Save As You
Earn (“SAYE”)
share scheme
The SAYE scheme is open to all
permanent employees in the
UK, giving them the opportunity
to participate in the future
growth of the Group via share
option arrangements.
Details of the SAYE options awarded to Albert Ellis and
Daniel Quint as at 31 December 2022 are provided on
page 71.
n/a
n/a
70
Staffline Group plc Annual Report and Accounts 2022
Remuneration Committee Report continued
Purpose and link to
strategy
Operation
Maximum Performance
Component
Shareholding
guidelines
To promote share ownership for
Executive Directors.
Executive Directors are expected to build a shareholding
in the Group over time by retaining the net of tax LTIP
awards which vest.
n/a
200% of
salary for
the Chief
Executive
Officer, 200%
of salary for
the Chief
Financial
Officer.
n/a
n/a
Non-Executive
Directors
The Committee determines
the fees for the Non-Executive
Directors which are agreed by
the Board.
The remuneration of the Independent Non-Executive
Directors is determined by the Board and is based upon
independent surveys of fees paid to Non-Executive
Directors of similar companies.
Fees may include a basic fee and additional fees for
further responsibilities. Fees are paid in cash.
The remuneration of the Directors, which was all paid by the Group,
is detailed on page 73 of these financial statements.
Basic salary
The Committee reviewed the salaries of Albert Ellis and Daniel Quint
in December 2021, and their salaries received a 2.5% increase with
effect from 1 January 2021, following benchmarking with comparable
companies and in line with that of the wider population of permanent
employees. The Committee reviewed the salaries of Albert Ellis and
Daniel Quint in December 2022, but on this occasion, their salaries did
not receive an increase in the light of the economic outlook and in line
with the senior management team.
The Board of the Company comprised two Executive Directors during
the year. Details of their basic salary are provided below:
• details of the remuneration Albert Ellis received during the year
ended 31 December 2022 in his position as Chief Executive Officer
are provided on page 73; and
• during the period from 18 May 2020 to 31 January 2021, Daniel
Quint continued to receive payment in his capacity as Interim Chief
Financial Officer. Details of the remuneration he received during
the year ended 31 December 2022 in his position as Chief Financial
Officer are provided on 73.
Salary review
The Committee reviewed the salaries of Albert Ellis and Daniel Quint in
December 2022. Their salaries received a nil increase with effect from
1 January 2023, following benchmarking with comparable companies
and in line with that of the senior management team.
Entitlement to reduce salary
The Committee recognises that there may be circumstances where the
continual normal operation of the Company’s business is reasonably
perceived to be at risk due to exceptional and/or unexpected serious
national or international events which directly or indirectly impact on
the Company (including, but not limited to a catastrophe, pandemic,
war, terrorism, or financial crisis). In these circumstances, the
Company has reserved the right, acting reasonably, to reduce the
salary of Albert Ellis, Chief Executive Officer, or Daniel Quint, Chief
Financial Officer, by a maximum of 20%, without any corresponding
reduction in their normal working hours.
2022 Annual bonus
Albert Ellis and Daniel Quint received a bonus equivalent to a maximum
of 100% of their base salary pro-rata from their date of appointment,
subject to the achievement of pre-determined performance conditions.
The annual bonus was not contractual and was at the sole discretion of
the Committee.
Long-Term Incentive Plan
The Board believes it is key that the Group incentivises Executive
Directors and senior managers to drive the business forward, whilst
aligning their interests with those of shareholders. In 2021 and 2022,
the Board approved the award of, and granted, nil cost options (the
“Options”) over its Ordinary Shares of ten pence each in the Company
(“Ordinary Shares”) to certain employees, including Albert Ellis and
Daniel Quint, as set out below.
The vesting of the Options is subject to the satisfaction of the
Company achieving certain financial performance criteria for the
financial years ending 31 December 2024 and 31 December 2025,
respectively. 50% of the Options awarded are subject to achieving
earnings per share hurdles and 50% are subject to achieving EBITDA
hurdles. In addition, no Options will vest unless the average closing
price of the Ordinary Shares for the last 30 business days of 2024
and 2025, respectively, are above a minimum target.
Strategic Report
Corporate Governance
Financial Statements
71
The Options awarded to, and held as at 31 December 2022,
by Albert Ellis and Daniel Quint, are set out in the table below:
Director
Date of
award
Options
granted
Vesting
date
Vesting period
end date
Albert Ellis
June 2021
573,770
June 2024
June 2031
May 2022
711,806
May 2025
May 2032
1,285,576
Daniel Quint
June 2021
450,820
June 2024
June 2031
May 2022
559,276
May 2025
May 2032
1,010,096
On 17 February 2023, the Company awarded the following nil cost
share options to Albert Ellis and Daniel Quint:
Director
Albert Ellis
Daniel Quint
Date of
award
Options
granted
Vesting
date
Vesting period
end date
February
2023
February
2023
1,043,485
819,881
February
2026
February
2026
February
2033
February
2033
The vesting of these Options is subject to the satisfaction of the
Company achieving certain financial performance criteria for the
financial year ending 31 December 2025. The financial performance
criteria are based on Group performance, with 50% of the Options
awarded subject to achieving earnings per share hurdles and 50%
subject to achieving underlying operating profit hurdles.
The Group intends to fully satisfy the future exercise of options through
purchases of Ordinary Shares by the Employee Benefits Trust in order
to limit the level of dilution experienced by existing shareholders.
SAYE Share Scheme
The operation of SAYE demonstrates a level of employee engagement,
retention, and workforce advocacy.
In 2021, the Company announced the grant of options to employees
as part of its SAYE share scheme for 2021.
Eligible employees were invited to subscribe for options over the
Company’s Ordinary Shares of 10p each in the Company (“Ordinary
Shares”) with an exercise price of 50.56p, a 20% discount to the
closing middle market price of 63.20p on the trading day before the
invitation to participate was made on 8 October 2021. The options
have a contract start date of 1 December 2021 and are exercisable
between 1 December 2024 and 31 May 2025.
As at 31 December 2022, options over 925,392 Ordinary Shares remain
in the SAYE share scheme for 2021 (133 employees), representing 5.7%
of the permanent workforce. Details can be found on page 113.
Options totalling 71,202 shares were granted to the following Executive
Directors in respect of savings up to the £500 monthly savings limit
applicable to all SAYE contracts:
Director
Albert Ellis
Position
Chief Executive Officer
Daniel Quint
Chief Financial Officer
Shares granted
under option in
SAYE scheme 2021
35,601
35,601
Both directors forfeited the options they held under the SAYE
scheme for 2021.
On 9 November 2022, the Company announced the grant of options
to employees as part of its SAYE share scheme for 2022. The scheme
is open to all permanent employees in the UK, giving them the
opportunity to participate in the future growth of the Group via
share option arrangements.
Eligible employees were invited to subscribe for options over the
Company’s Ordinary Shares of 10p each in the Company (“Ordinary
Shares”) with an exercise price of 29.96p, a 20% discount to the
closing middle market price of 37.45p on the trading day before the
invitation to participate was made on 12 October 2022. The options
have a contract start date of 1 December 2022 and are exercisable
between 1 December 2025 and 31 May 2026.
A total of 196 employees elected to participate, and, pursuant to
these elections, a total of 3,277,333 options over Ordinary Shares
were granted on 8 November 2022, representing 19.8% of the current
issued share capital of 165,767,728 shares.
Options totalling 120,160 shares were granted to the following Executive
Directors in respect of savings up to the £500 monthly savings limit
applicable to all SAYE contracts:
Director
Albert Ellis
Position
Chief Executive Officer
Daniel Quint
Chief Financial Officer
Shares granted
under option in
SAYE scheme 2022
60,080
60,080
As at 31 December 2022, options over 3,230,472 Ordinary Shares
remain in the SAYE share scheme for 2022 (193 employees),
representing 8.2% of permanent workforce. Details can be
found on page 113.
72
Staffline Group plc Annual Report and Accounts 2022
Remuneration Committee Report continued
Following review in December 2022, it was agreed by the Remuneration
Committee that there would be no increase in the fee payable to the
Independent Non-Executive Directors for the year of 2023.
Tom Spain was elected as Interim Chairman at the Annual General
Meeting on 26 May 2022. Tom Spain is the Board representative of
Henry Spain Investment Services Limited (“Henry Spain”), the largest
shareholder in the Company. Tom Spain (on behalf of himself and
Henry Spain) agreed that no fee shall be payable in respect of his (or
any replacement representative director) appointment.
Service contracts
The Executive Directors have entered into service agreements with the
Company. Albert Ellis and Daniel Quint both have service agreements
which are terminable on 12 months’ notice given by either party.
Appointments
Up until their resignations on 26 May 2022 and 26 April 2022,
respectively, Ian Lawson and Richard Thomson each had contracts
terminable on six months’ notice given by either party. Ian Starkey and
Catherine Lynch each have contracts terminable on six months’ notice
given by either party. There are no contractual termination payments
other than as a result of the contractual notice period.
Tom Spain has a contract for a fixed term of one year from 28 July
2021. At the end of the Fixed Term appointment, Tom Spain and the
Board agreed to an extension and renewal with effect from 26 May
2022, terminable on one months’ notice. There is no contractual
termination payment.
Ian Starkey, Senior Independent Non-Executive Director and Chair
of the Audit Committee, has informed the Company that he will not
be standing for re-election at the Company’s AGM in 2023 and will,
accordingly, resign from the Board and as a Director on 16 May 2023,
or the Company’s AGM in 2023, whichever is the earlier.
Pension arrangements
Commencing from the date of their appointments as Executive
Directors on 1 October 2020 and 1 February 2021, respectively,
at their request, Albert Ellis and Daniel Quint each received
a monthly cash allowance of 10% of basic salary in lieu of a
company pension contribution.
Following a decision of the Remuneration Committee taken in
December 2022, based on benchmarking with comparable
companies and market data, the monthly cash allowance in lieu of
the company pension contribution payable to Executive Directors
was 15% of basic salary.
The Group also operates a defined benefit pension scheme, which
is closed to new entrants. No current Directors are members of
this scheme.
Other benefits and benefits in kind
Albert Ellis and Daniel Quint are entitled to receive the
following benefits:
1.
2.
life assurance cover of four times salary;
private medical insurance for themselves, their spouse, and
their children;
car allowance of £18,000 and £15,000 p.a. respectively; and
3.
4. permanent health insurance.
None of the Non-Executive Directors or the Interim Chairman received
any benefits or benefits in kind.
Non-Executive Directors’ remuneration
The Independent Non-Executive Directors do not receive any benefits
apart from their basic fees.
The remuneration of the Independent Non-Executive Directors, was
as follows:
• the basic fee of the Independent Non-Executive Directors
was £40,000;
• an additional fee of £5,000 p.a. payable to (i) the Chair of the Audit
Committee and (ii) the Chair of the Remuneration Committee; (iii)
with effect from 26 May 2022 to the Senior Independent Director;
and (iv) with effect from 1 June 2022 the Chair of the Nominations
Committee; and
• subject to prior agreement by the Remuneration Committee, a
day-rate can be charged at a rate of £1,500 per day (plus VAT, if
applicable), by any Independent Non-Executive Director, in the
event that there is work required in addition to their normal duties.
The normal duties of an Independent Non-Executive Director are
anticipated to take two days per month.
Strategic Report
Corporate Governance
Financial Statements
73
Directors’ remuneration summary (audited)
The table below sets out the remuneration received by the Directors in respect of the years ended 31 December 2022 and 2021:
Directors
Executive Directors
A Ellis
D Quint 1
Chair
T Spain 5
I Lawson 6
Non-Executive Directors
C Lynch 7
I Starkey 8
R Thomson 9
Salary,
fees
£000
Annual
bonus2
£000
Car
allowance
£000
Pension3
£000
Pay in lieu
of notice
£000
Others4
£000
Total
£000
359
350
282
292
–
–
42
96
48
45
48
45
13
43
359
350
282
252
–
–
–
–
–
–
–
–
–
–
18
12
15
11
–
–
–
–
–
–
–
–
–
–
54
35
42
25
–
–
–
–
–
–
–
–
–
–
792
871
641
602
33
23
96
60
–
–
–
–
–
–
–
–
–
–
–
–
20
–
20
–
2
2
2
2
–
–
–
–
–
–
–
–
–
–
4
4
792
749
623
582
–
–
42
96
48
45
48
45
33
43
1,586
1,560
Year
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
1 Daniel was appointed as Chief Financial Officer on 1 February 2021. He did not receive any pension, or any benefits and he was not entitled to a bonus in respect of the year
ended 31 December 2021.
2 The bonus was settled in the proportion to following the elements, 66.67% through payroll and 33.33% in the Company’s Ordinary Shares.
3 Pensions include both Company contributions and cash allowances where the Directors have elected not to have contributions paid into a pension fund.
4 Others represent medical insurance benefits.
5 Tom Spain was elected as Interim Chairman at the Annual General Meeting on 26 May 2022. Tom Spain agreed that no fee shall be payable in respect of his (or any replacement
representative director) appointment.
6 Ian Lawson became Independent Non-Executive Chairman on 1 January 2021.
7 Catherine Lynch was appointed as an Independent Non-Executive Director and Remuneration Committee Chair on 1 January 2021. She was appointed Nominations Committee
Chair on 1 June 2022.
8 Ian Starkey was appointed as an Independent Non-Executive Director and Chair of the Audit Committee on 1 January 2021. He was appointed Senior Independent Director on 26
May 2022. Ian Starkey has informed the Company that he will not be standing for re-election at the Company’s AGM in 2023 and will, accordingly, resign from the Board and as
a Director on 16 May 2023, or at the Company’s AGM in 2023, whichever is the earlier.
9 Richard Thomson resigned as Director and Senior independent Director on 26 April 2022.
74
Staffline Group plc Annual Report and Accounts 2022
Report of the Directors
The Directors present their Annual Report for the Group and the Company together with the audited financial statements for the year ended
31 December 2022.
Reporting requirements
The following information is provided in other appropriate sections and is included in this Directors’ Report by reference and so is deemed to be
part of it:
Information
Strategic Report
Corporate Governance
• Corporate Governance Report
• Statement of Directors’ Responsibilities
Nominations Committee Report
Remuneration Committee Report
Audit Committee Report
Reported
Pages 5 to 51
Pages 52 to 91
Page 77
Page 62
Pages 68 to 73
Pages 63 to 67
Future development and events occurring after the balance sheet date
Details can be found in the Strategic Report on pages 5 to 51
Stakeholder Engagement and Key Decisions
Details can be found in the Strategic Report on page 44 and in the s172
Statement on page 45
Greenhouse gas emissions – Streamlined Energy and Carbon Reporting
Details can be found in the ESG Report on page 41
Financial instruments
Details can be found in the Notes to the Financial Statements on pages
125 and 126.
Task Force on Climate-related Financial Disclosures (“TCFD”)
Reference can be found in the ESG Report on page 42
Principal activities
A review of the activities of the Group, including financial and non-financial information, can be found in the Strategic Report, along with details
of the Group’s future developments.
Dividends
The Board is not proposing a dividend payment for 2022 (2021: £nil).
Directors
The names and biographies of the Directors who held office at the date of this Annual Report are set out on pages 54 and 55. Changes to
Directors from 1 January 2022 and up until the date of this Report are provided in the table below:
Position
Date of appointment
Date of resignation
Director
Ian Lawson
Independent Non-Executive Chairman
Richard Thomson
Senior Independent Non-Executive Director
Ian Starkey1
Tom Spain2
Senior Independent Non-Executive Director
Interim Chairman
1 January 2021
17 September 2019
1 January 2021
28 July 2021
26 May 2022
26 April 2022
1
Ian Starkey was appointed as Senior independent Director on 26 May 2022. Ian Starkey has informed the Company that he will not be standing for re-election at the
Company’s AGM in 2023 and will, accordingly, resign from the Board and as a Director on 16 May 2023, or the Company’s AGM in 2023, whichever is the earlier.
2 Tom Spain was re-elected as a Non-Executive Director and appointed as the Interim Chairman at the AGM on 26 May 2022.
Strategic Report
Corporate Governance
Financial Statements
75
Qualifying third party indemnity provisions
A qualifying third-party indemnity provision as defined in Section
232(2) of the Companies Act 2006 is in force at the date of approval
of the financial statements for the benefit of each of the Directors in
respect of liabilities incurred as a result of their office, to the extent
permitted by law. In respect of those liabilities for which Directors may
not be indemnified, the Company maintained a directors’ and officers’
liability insurance policy throughout the financial year.
Branches
The Group has operations in the United Kingdom, Republic of Ireland
and Portugal.
Employee involvement
The Directors recognise the value of involving employees in the
business and ensure that matters of concern to them, including
the Group’s strategic objectives, vision, values and principles, are
communicated in an open and regular manner. Employees are kept
aware of progress versus these objectives and key developments
within the Group by regular briefings and SAYE schemes. Senior staff
participate in various bonus scheme and the LTIP arrangements linked
to financial performance. Further details can be found in the ESG
section of the Strategic Report on pages 34 to 39.
Employment of disabled persons
It is the Group’s policy to give full and fair consideration to suitable
applications for employment from disabled persons. Once employed,
disabled persons receive equal opportunities for training, career
development and promotion. Opportunities exist for employees of the
Group who become disabled to continue their role or to be trained for
other positions within the Group.
Payments to suppliers
The Group aims to comply with the payment terms agreed with
suppliers when goods or services have been provided in accordance
with the agreed conditions.
Political donations
The Group has made no political donations in the current or prior year.
Share options
The Company operates certain share option schemes for the benefit
of its employees. Details are provided in Note 7.
Going concern
The financial statements have been prepared on a going concern
basis. The Directors have reviewed this basis and have made full
disclosure in Note 3, concluding that there is a reasonable expectation
that the Group and Company have adequate resources to continue in
operational existence for the foreseeable future.
Annual General Meeting
The Annual General Meeting 2023 will be held at 09.30am on Monday,
12 June 2023 at the offices of DLA Piper LLP, 160 Aldersgate Street,
London, EC1A 4HT. The business to be considered at the meeting is set
out in a separate Notice of Meeting which can be viewed on the Group’s
website at: www.stafflinegroupplc.co.uk/investor-relations/agm.
Substantial shareholdings
The interests, by Parent Company, of the top ten shareholders in the
issued Ordinary Share capital of the Company, which have been
notified as at 31 December 2022, were as follows, representing 88.6%
of the total issued Ordinary Share capital:
Henry Spain Investment Services
HRnet Group Limited
Schroder Investment Management
Gresham House Asset Management
Fidelity International
Aberdeen Standard Investments
Lombard Odier Investment Managers
Hargreaves Lansdown, stockbrokers
Ordinary
Shares of
10p each
(‘000)
Percentage
of Ordinary
Shares
(%)
28,811
25,067
18,106
17,014
16,326
12,476
9,643
7,082
6,386
4,140
17.6
15.3
11.2
10.4
10.0
7.6
5.9
4.3
3.9
2.5
Charitable donations
The Group made charitable donations of £19,086 in the year
(2021: £18,488).
Interactive Investor
Teviot Partners
145,051
88.6
In accordance with AIM Rule 26, in so far as the Company is aware,
the percentage of the Company’s issued share capital that is not in
public hands is 56.7%.
The latest allocation can be viewed on the Group’s website at:
www.stafflinegroupplc.co.uk/investor-relations/shareholder-information.
Research and development
The Group continues to invest in and develop its digital platforms as
discussed in the Strategic Report.
Share capital
At 31 December 2022, the Company’s issued share capital consists
of 165,767,728 Ordinary Shares with a nominal value of 10 pence
each (“Ordinary Shares”), each share having equal voting rights, of
which 2,014,511 shares are held by the Employee Benefit Trust (“EBT”).
Therefore, the total voting rights in the Company are 163,753,217.
Shares held in the EBT are intended to be used to satisfy awards made
under employee share schemes. During the year the EBT acquired
1,050,000 shares and issued 176,164 shares to Executive Directors as
part settlement of a bonus award.
The Company currently has general authority to allot shares and
authority to purchase its own shares. Resolutions for the Company
to renew its general authority to allot shares and to purchase its own
shares will be proposed at the Annual General Meeting 2023.
w
76
Staffline Group plc Annual Report and Accounts 2022
Report of the Directors continued
Directors’ shareholdings
The beneficial holdings of the Directors as at 31 December 2022 in the
Company’s issued share capital at 31 December 2022 was as follows:
Director
Albert Ellis
Daniel Quint
Catherine Lynch
Ian Starkey
Tom Spain1
Ordinary
Shares of
10p each
in issue
472,407
349,077
10,000
50,000
% of total
0.33%
0.22%
0.01%
0.03%
1,300,000
0.90%
1
Tom Spain is the Board representative of Henry Spain Investment Services Limited,
the largest shareholder in the Company. Henry Spain Investment Services Limited
is considered to be a ‘person closely associated’ with Tom Spain by virtue of
him discharging managerial responsibilities over it (he is a director and the sole
shareholder). Henry Spain Investment Services Limited acts as discretionary
investment manager (including holding discretionary voting rights) to a number of
underlying private clients, resulting in a notifiable interest in 28,811,478 Ordinary
Shares at 31 December 2022.
Long-Term Incentive Plan
The Board believes it is key that the Group incentivises Executive Directors
and senior managers to drive the business forward, whilst aligning their
interests with those of shareholders. In 2021 and 2022, the Board has
approved the award of, and granted, nil cost options (the “Options”)
over its Ordinary Shares of 10 pence each in the Company (“Ordinary
Shares”) to certain employees, including Albert Ellis and Daniel Quint,
as set out below.
The vesting of the Options is subject to the satisfaction of the
Company achieving certain financial performance criteria for the
financial years ending 31 December 2024 and 31 December 2025,
respectively. 50% of the Options awarded are subject to achieving
earnings per share hurdles and 50% are subject to achieving EBITDA
hurdles. In addition, no Options will vest unless the average closing
price of the Ordinary Shares for the last 30 business days of 2024
and 2025, respectively, are above a minimum target.
The Options awarded to, and held as at 31 December 2022,
by Albert Ellis and Daniel Quint, are set out in the table below:
Director
Date of
award
Options
granted
Vesting
date
Vesting period
end date
Albert Ellis
June 2021
573,770
June 2024
June 2031
May 2022
711,806
May 2025
May 2032
1,285,576
Daniel Quint
June 2021
450,820
June 2024
June 2031
May 2022
559,276
May 2025
May 2032
1,010,096
On 17 February 2023, the Company awarded the following nil cost
share options to Albert Ellis and Daniel Quint:
Director
Albert Ellis
Daniel Quint
Date of
award
Options
granted
Vesting
date
Vesting period
end date
February
2023
February
2023
1,043,485
819,881
February
2026
February
2026
February
2033
February
2033
The vesting of these Options is subject to the satisfaction of the
Company achieving certain financial performance criteria for the
financial year ending 31 December 2025. The financial performance
criteria are based on Group performance, with 50% of the Options
awarded subject to achieving earnings per share hurdles and 50%
subject to achieving underlying operating profit hurdles.
The Group intends to fully satisfy the future exercise of options through
purchases of Ordinary Shares by the Employee Benefits Trust in order
to limit the level of dilution experienced by existing shareholders.
SAYE Share Scheme
The SAYE scheme is open to all permanent employees in the UK,
giving them the opportunity to participate in the future growth of
the Group via share option arrangements. During the year, eligible
employees were invited to subscribe for options over the Company’s
Ordinary Shares of 10 pence each (“Ordinary Shares”) with an exercise
price of 29.96p, a 20% discount to the closing middle market price
of 37.45p on the trading day before the invitation to participate was
made on 12 October 2022. The options have a contract start date of
1 December 2022 and are exercisable between 1 December 2025 and
31 May 2026. Options totalling 120,160 were granted to the Executive
Directors as follows:
Director
Albert Ellis
Daniel Quint
2022 SAYE
options granted*
60,080
60,080
* Each director listed above has forfeited their options held under the SAYE scheme
for 2021.
Post balance sheet events
There were no further events in addition to the 2023 grant of the
LTIP between the balance sheet date of 31 December 2022 and the
approval of these accounts on 22 March 2022 that are required to
be brought to the attention of shareholders.
Auditor
The Directors who hold office at the date of this Report confirm that,
so far as they are each aware, there is no relevant audit information of
which the Company’s auditor is unaware, and each Director has taken
all steps that he or she ought to have taken to make himself or herself
aware of any relevant audit information and to establish that the
Company’s auditor is aware of that information.
A resolution to appoint Grant Thornton UK LLP as auditor will
be proposed at the forthcoming Annual General Meeting.
The Report of the Directors was approved by the Board and signed
on its behalf by:
Louise Barber FCG
Company Secretary
20 March 2023
Strategic Report
Corporate Governance
Financial Statements
77
Statement of Directors’ Responsibilities
The Directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors have prepared
the Group financial statements in accordance with UK-adopted
international accounting standards and Company financial statements
in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 101
“Reduced Disclosure Framework” 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 profit or loss of the Group
and Company for that period. In preparing these financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable
and prudent;
To the best of our knowledge:
• the Group financial statements, prepared in accordance with UK-
adopted international accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or loss of
the Group and the undertakings included in the consolidation taken
as a whole;
• the Company financial statements, prepared in accordance with
United Kingdom Generally Accepted Accounting Practice, give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the Company; and
• the Strategic Report and Directors’ Report include a fair review of the
development and performance of the business and the position of
the Group and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and
uncertainties that they face.
By Order of the Board
Louise Barber FCG
Company Secretary
20 March 2023
• state whether applicable UK-adopted international accounting
standards have been followed for the Group financial statements
and United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS 101) have
been followed for the Company financial statements, subject to
any material departures disclosed and explained in the financial
statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company’s transactions
and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors confirm that:
• so far as each Director is aware, there is no relevant audit
information of which the Group and Company’s auditor is
unaware; and
• the Directors have taken all the steps that they ought to have taken
as Directors in order to make themselves aware of any relevant audit
information and to establish that the Group and Company’s auditor
is aware of that information.
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations.
78
Staffline Group plc Annual Report and Accounts 2022
Independent Auditor’s Report
to the members of Staffline Group plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Staffline Group plc (the “Company”) and
its subsidiaries (the “Group”) for the year ended 31 December 2022, which comprise the
consolidated statement of comprehensive income, the consolidated statement of changes
in equity, the Company statement of changes in equity, the consolidated and Company
statements of financial position, the consolidated statement of cash flows and notes to the
financial statements, including a summary of significant accounting policies. The financial
reporting framework that has been applied in the preparation of the Group financial statements
is applicable law and UK-adopted international accounting standards. The financial reporting
framework that has been applied in the preparation of the Company financial statements is
applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard
101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the
Company’s affairs as at 31 December 2022 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted
international accounting standards;
• the Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the ‘Auditor’s responsibilities
for the audit of the financial statements’ section of our report. We are
independent of the Group and the Company in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied
to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
A description of our evaluation of management’s assessment of the
ability to continue to adopt the going concern basis of accounting,
and the key observations arising with respect to that evaluation is
included in the Key Audit Matters section of our report.
In our evaluation of the directors’ conclusions, we considered the
inherent risks associated with the Group’s and the Company’s business
model including effects arising from macroeconomic uncertainties such
as COVID-19 and the cost of living crisis, we assessed and challenged
the reasonableness of estimates made by the directors and the related
disclosures and analysed how those risks might affect the Group’s and
the Company’s financial resources or ability to continue operations
over the going concern period.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the
directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt
on the Group’s and the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to
modify the auditor’s opinion. Our conclusions are based on the audit
evidence obtained up to the date of our report. However, future events
or conditions may cause the Group or the Company to cease to
continue as a 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 Group’s and the
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.
Strategic Report
Corporate Governance
Financial Statements
79
Our approach to the audit
Materiality
Key Audit
Matters
Scoping
Overview of our audit approach
Overall materiality
Group: £1.71m, which represents 0.18% of the Group’s total revenue.
Company: £1.38m, which represents 2% of total assets capped at 80% of
Group materiality.
Key audit matters were identified as:
• Recruitment revenue unusual account combinations – occurrence (same as
previous year)
• PeoplePlus revenues with a variable element – occurrence (same as previous year
except for accuracy which is no longer considered to be a key audit matter)
• PeoplePlus revenue recorded under the Restart contract – occurrence and
accuracy (new)
• PeoplePlus clawback provisions – completeness and accuracy (same as previous year)
• Goodwill and other intangible assets – valuation (new)
• Going concern basis of accounting (new)
• Investments in the Company – valuation (new)
Our auditor’s report for the year ended 31 December 2021 included one key audit
matter that has not been reported as a key audit matter in our current year’s report.
This relates to:
• PeoplePlus Group unbilled revenue (accrued income) – occurrence (existence),
accuracy and valuation (Group)
We do not consider this to be a key audit matter this year as the risk surrounding
this item has reduced significantly due to the improved performance of the Group,
strengthening of the finance team, and reduction of errors identified in this area as
part of the audit. We therefore consider that this key audit matter is no longer relevant.
Our audit scope remained consistent with the previous year and our work performed
over components covered 97% of the Group’s revenue, and 99% of the Group’s profit
before tax. Our audit approach was consistent with the previous year.
80
Staffline Group plc Annual Report and Accounts 2022
Independent Auditor’s Report continued
to the members of Staffline Group plc
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. These matters included those that 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.
In the graph, we have presented the key audit matters, significant
risks and other risks relevant to the audit.
Description
Audit
Response
KAM
Disclosure
Key
Observations
HIGH
t
c
a
p
m
i
t
n
e
m
e
t
a
t
s
l
i
a
c
n
a
n
fi
l
a
i
t
n
e
t
o
P
1
4
12
2
5
3
6
7
17
23
16
8
21
18
22
10
9
11
19
15
13
14
20
Key audit matter
Significant risk
Other risk
LOW
Extent of management judgement
HIGH
1. Recruitment revenue – occurrence and accuracy
2. Temporary payroll - completeness and accuracy
3. Cash - existence
4. Defined benefit pension scheme assets -
10. PeoplePlus creditors - completeness
11. Deferred tax – accuracy and valuation
12. Recruitment rebates - completeness and
accuracy
existence and accuracy
13. Holiday pay accrual – completeness and
5. Borrowings – completeness and presentation
6. PeoplePlus payroll – accuracy and completeness
7. Hedge accounting - valuation and presentation
8. Defined benefit pension scheme liabilities -
accuracy
accuracy
14. Non underlying administrative expenses -
presentation
15. PeoplePlus accrued income –
occurrence and accuracy
17. Recruitment revenue unusual
account combinations - occurrence
18. Investments - valuation
19. PeoplePlus revenues recorded
under the Restart contract – occurrence
and accuracy
20. PeoplePlus clawback provisions –
completeness and accuracy
21. Goodwill and other intangible assets -
valuation
9. PeoplePlus revenue – occurrence and accuracy
16. Management override of controls
22. PeoplePlus revenues with a
variable element - occurrence
23. Going concern basis of accounting
Strategic Report
Corporate Governance
Financial Statements
81
Key Audit Matter – Group
How our scope addressed the matter – Group
Recruitment revenue unusual account
combinations – occurrence
We identified occurrence of recruitment revenue
unusual account combinations as one of the most
significant assessed risks of material misstatement
due to fraud.
Under ISA (UK) 240 revised there is a rebuttable
presumed risk that revenue may be misstated due
to the improper recognition of revenue. Revenue
recorded by the Group is one of the key factors
that impacts underlying operating profit and is a
Key Performance Indicator for the Group.
The majority of revenues within the recruitment
sector are considered non-complex. Unusual
account combinations outside of the normal
business process therefore pose a risk of fraud
due to their abnormality.
In responding to the key audit matter, we performed the following audit procedures:
• Assessed and documented the design and implementation of controls around the
recording of revenue, ensuring they were appropriately designed and implemented
to mitigate the risk of fraud in revenue recognition;
• Performed a walkthrough of the process for initiating and recording revenue
transactions to ensure processes and controls were designed and implemented
effectively across the population of revenue transactions;
• Assessed whether the accounting policies adopted by the directors are consistent
and appropriate, in accordance with the requirements of IFRS 15, and whether
management accounted for revenue in accordance with the accounting policies,
including journal entries outside of the normal business process;
• Utilised audit data analytics techniques to identify potentially unusual transactions
within revenue. For recruitment revenues we expect the majority of transactions to
follow a simple process through revenue, receivables and VAT, followed by settlement
in cash, with a limited number of other related accounts. We have analysed the
account combinations of every transaction which impacts revenue or receivables in
the recruitment streams during the period and selected for testing any transactions
which were not in line with our understanding of the business. We then obtained
sufficient and appropriate evidence to support those transactions; and
• Supported the audit data analytic via the testing the design, implementation and
operating effectiveness of bank reconciliation controls, and a substantive test of
detail on a sample of revenue transactions.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance: Audit Committee
Our results
Our audit did not identify any material adjustments in relation to the occurrence of
recruitment revenue unusual account combinations.
Report, The key audit matters considered by
the Audit Committee
• Financial statements: Note 3, Accounting Policies
• Financial statements: Note 4, Segment Reporting
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Independent Auditor’s Report continued
to the members of Staffline Group plc
Key Audit Matter – Group
How our scope addressed the matter – Group
PeoplePlus revenues with a variable
element – occurrence
We identified occurrence of variable revenue
earned on significant contracts within PeoplePlus
Group as one of the most significant assessed risks
of material misstatement due to fraud.
Revenue contracts with a variable element are
more likely to be subject to manipulation through
reporting revenues earlier than the performance
obligation has been met.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance: Audit Committee
Report, The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
• Financial statements: Note 4, Segment Reporting
In responding to the key audit matter, we performed the following audit procedures:
• Assessed and documented the design and implementation of controls around the
recording of revenue, ensuring they were appropriately designed and implemented
to mitigate the risk of fraud in revenue recognition;
• Performed a walkthrough of revenue transactions to ensure processes and
controls were designed and implemented effectively across the population of
revenue transactions;
• Assessed whether the accounting policies adopted by the directors are consistent
and appropriate, in accordance with the requirements of IFRS 15, and whether
management accounted for revenue in accordance with the accounting policies,
including journal entries outside of the normal business process; and
• Tested a sample of variable fee income earned in the period back to supporting
documentation in order to ensure the training and related validation procedures
have been provided, being the trigger for revenue recognition, and that the revenue
can be substantiated.
Our results
Our audit work did not identify any material adjustments in relation to the occurrence of
income earned on variable fee contracts within PeoplePlus Group.
Strategic Report
Corporate Governance
Financial Statements
83
Key Audit Matter – Group
How our scope addressed the matter – Group
PeoplePlus revenue recorded under
the Restart contract – occurrence
and accuracy
We identified the occurrence and accuracy of
revenue earned on the Restart contract as one
of the most significant assessed risks of material
misstatement due to fraud.
In responding to the key audit matter, we performed the following audit procedures:
• Assessed and documented the design and implementation of controls around the
recording of revenue, ensuring they were appropriately designed and implemented
to mitigate the risk of fraud in revenue recognition;
• Performed a walkthrough of revenue transactions to ensure processes and
controls were designed and implemented effectively across the population of
revenue transactions;
Management judgement exists in determining the
transaction price (fixed and variable elements),
its allocation to performance measures and the
period of recognition using an input method as a
measure of completion of performance obligations.
The opportunity therefore exists to manipulate
revenue recognition.
• Assessed whether the accounting policies adopted by the directors are consistent
and appropriate, in accordance with the requirements of IFRS 15, and whether
management accounted for revenue in accordance with the accounting policies,
including journal entries outside of the normal business process;
• Tested a sample of income earned on the Restart contracts in the period back to
supporting documentation in order to ensure the relevant milestones have been met
meaning revenue occurred and can be substantiated; and
• Assessed the accuracy of management’s forecasts by considering the reliability of
past forecasting with reference to actual results.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance Code: Audit Committee,
Our results
Our audit work did not identify any material adjustments in relation to the occurrence
and accuracy of income earned on the Restart contract within PeoplePlus Group.
The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
• Financial statements: Note 4, Segment Reporting
84
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Independent Auditor’s Report continued
to the members of Staffline Group plc
Key Audit Matter – Group
How our scope addressed the matter – Group
PeoplePlus clawback provisions –
completeness and accuracy
We identified the PeoplePlus contractual clawback
provision as one of the most significant assessed
risks of material misstatement due to error.
During the year additional claims have been made
against PeoplePlus regarding the level of revenue
recognised in prior periods, which has resulted in
a prior period adjustment.
In responding to the key audit matter, we performed the following audit procedures:
• Assessed and documented the design and implementation of controls around the
recording of revenue, to understand how revenue was incorrectly claimed in prior
periods and recognition of provisions;
• Assessed whether the accounting policies adopted by the directors are consistent
and appropriate, in accordance with the requirements of IFRS 15, and whether
management accounted for revenue in accordance with the accounting policies,
including journal entries outside of the normal business process;
• Obtained management’s judgement paper to support their assessment of the quantum
and recognition of the prior period adjustment and challenged key assumptions within;
Judgement exists in determining the appropriate
level of the prior period adjustment to be recorded.
• Recalculated and challenged the calculations behind the clawback prior period
adjustment recorded and corroborated the underlying assumptions;
• Challenged the appropriateness of the adjustments determined by management,
including considering and assessing the completeness of the adjustment by
considering whether a similar issue may exist.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance Code: Audit Committee,
Our results
Our audit did not identify any material adjustments in relation to the accuracy and
completeness of the contractual clawback provisions within PeoplePlus Group.
The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
Strategic Report
Corporate Governance
Financial Statements
85
Key Audit Matter – Group
How our scope addressed the matter – Group
Goodwill and other intangible
assets - valuation
We identified valuation of goodwill and other
intangible assets as one of the most significant
assessed risks of material misstatement due
to error.
International Accounting Standard (IAS) 36
‘Impairment of Assets’ requires management to
assess at the end of each reporting period whether
there is any indication that an asset may be
impaired, and to perform an annual assessment to
determine whether the Group’s goodwill and other
intangible assets within a cash generating unit
(‘CGU’) are impaired.
At 31 December 2022 the Group’s market
capitalisation was equivalent to the net asset
value of the Group, indicating that an impairment
adjustment may be required. Additionally,
rising inflation and interest rates have resulted
in an increased weighted average cost of
capital (‘WACC’).
In responding to the key audit matter, we performed the following audit procedures:
• Obtained management’s assessment of the allocation of assets to either Recruitment
GB, Recruitment Ireland or PeoplePlus, being the relevant CGUs used in their
impairment calculations and challenged those against our understanding of the
business units and operating structure of the Group;
• Obtained and challenged management’s assessment of impairment indicators relating
to intangible assets by assessing whether any CGUs showed further indicators of
impairment such as a decline in performance or performance below budget;
• Checked the arithmetical accuracy of each CGU impairment calculation, including the
associated sensitivity analysis;
• Considered and evaluated the competence, capability and objectivity of
management’s expert, Evelyn Partners;
• Used our internal valuation specialists to inform our challenge of management and
their valuation expert, that the assumptions used within the calculation of weighted
average cost of capital are reasonable and consistent with other similar groups in
the market;
• Assessed whether trading, working capital and cash flow assumptions are reasonable
based on the historical performance of each different CGU and that the assumptions
are consistent with our knowledge of the business; and
• Assessed the accuracy of management’s forecasting through a comparison of budget
to actual data and historical variance trends, as well as industry benchmarking and
inspecting the forecast cash flows.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance Code: Audit Committee,
Our results
Our audit did not identify any material adjustments in relation to the valuation of
goodwill and other intangible assets.
The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
• Financial statements: Note 11, Goodwill
• Financial statements: Note 12, Intangible Assets
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Independent Auditor’s Report continued
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Key Audit Matter – Group
How our scope addressed the matter – Group
Going concern basis of accounting
We identified going concern basis of accounting
as one of the most significant assessed risks of
material misstatement due to error.
Performance in the year has improved, however
there is significant uncertainty around the current
economic environment.
There are uncertainties arising from increasing
energy prices and the cost of living crisis.
In responding to the key audit matter, we performed the following audit procedures:
• Obtained an understanding of how management prepared their base case forecasts
for the period to 31 December 2024;
• Assessed the accuracy of management’s forecasts by considering the reliability of past
forecasting with reference to actual results;
• Performed arithmetical and consistency checks on management’s model with support
from our internal financial modelling specialists;
• Obtained an understanding of key assumptions underpinning the model,
including future borrowing requirements, key trading assumptions and testing
these assumptions;
• Assessed the accuracy of the debt covenant calculations within the forecasts and
agreeing these to the finance facilities agreement; assessing and challenging the
robustness of management’s forecasts by applying our own sensitivities, including
reverse stress testing;
• Considered the feasibility of mitigating actions available to management to continue
as a going concern if downside sensitivities were to crystallise; and
• Assessed the adequacy of related disclosures within the annual report.
Relevant disclosures in the Annual Report
and Accounts
• Principal risks and uncertainties: Risk one
Our results
We have nothing to report in addition to that stated in the ‘Conclusions relating to going
concern’ section of our report.
• Corporate Governance Code: Audit Committee,
The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
Strategic Report
Corporate Governance
Financial Statements
87
Key Audit Matter – Company
How our scope addressed the matter – Company
Investments in the Company – valuation
We identified the valuation of investments in the
Company as one of the most significant assessed
risks of material misstatement due to error.
International Accounting Standard (IAS) 36
‘Impairment of Assets’ requires management to
assess at the end of each reporting period whether
there is any indication that an asset may be
impaired, and to perform an annual assessment
to determine whether the Company’s investments
are impaired.
At 31 December 2022 the Group’s market
capitalisation was equivalent to the net
asset value of the Group, indicating that an
impairment adjustment may be required.
Additionally, rising inflation and interest rates
have resulted in an increased weighted average
cost of capital (‘WACC’).
In responding to the key audit matter, we performed the following audit procedures:
• Checked the arithmetical accuracy of the impairment calculation;
• Considered and evaluated the competence, capability and objectivity of
management’s expert, Evelyn Partners;
• Utilised our internal valuation experts to inform our challenge of management and their
valuation specialist, and that the assumptions used within the calculation of weighted
average cost of capital are reasonable and consistent with other similar groups in
the market;
• Checked trading, working capital and cash flow assumptions are reasonable based on
the historical performance of each different investment and that the assumptions are
consistent with our knowledge of the business;
• Tested the accuracy of management’s forecasting through a comparison of budget to
actual data, historical variance trends and inspected the forecast cash flows; and
• Compared the investments held to the net assets of the subsidiary and challenging
management on whether there were indicators of impairment.
Relevant disclosures in the Annual Report
and Accounts
• Corporate Governance Code: Audit Committee,
Our results
Our audit did not identify any material adjustments in relation to the valuation
of investments.
The key audit matters considered by the
Audit Committee
• Financial statements: Note 3, Accounting Policies
• Financial statements: Note 13, Fixed Asset
Investments
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Independent Auditor’s Report continued
to the members of Staffline Group plc
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements on the
audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure
Group
Company
Materiality for
financial statements
as a whole
We define materiality as the magnitude of misstatement in the financial statements that, individually or in the
aggregate, could reasonably be expected to influence the economic decisions of the users of these financial
statements. We use materiality in determining the nature, timing and extent of our audit work.
Materiality threshold
£1.71m which is 0.18% of Group revenue
£1.38m which is 2% of total assets capped at 80%
of Group materiality
Significant judgements
made by auditor
in determining
the materiality
In determining materiality, we made the following
significant judgements:
• The selection of an appropriate benchmark
• The selection of an appropriate percentage to
In determining materiality, we made the following
significant judgements:
• The consideration of other qualitative factors,
including the previous year materiality
apply to that benchmark
• The consideration of other qualitative factors
including the previous year materiality and results
of competitor benchmarking
Total assets is considered to be the most appropriate
benchmark as the company’s purpose is that of holding
of investments in subsidiary entities. The company does
not undertaking any trading activities.
Revenue is considered to be the most appropriate
benchmark as it is a key performance indicator for the
Group, and the Group has been close to breakeven for
several years.
Materiality for the current year is higher than the level
that we determined for the year ended 31 December
2021 to reflect the increased stability of the group and
underlying operating profit improving.
The materiality determined was not revised during
the audit.
Materiality for the current year is higher than the level
that we determined for the year ended 31 December 2021
due to the 80% benchmark being higher. This is as a
result of the way materiality has been allocated to each
component and reflects the improved performance and
stability of the Group and company.
The materiality determined was not revised during
the audit.
We set performance materiality at an amount less than materiality for the financial statements as a whole
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
£1.28m, which is 75% of financial statement materiality
£1.04m which is 75% of financial statement materiality
In determining performance materiality, we made the
following significant judgements:
• Our experience with auditing the financial statements
In determining performance materiality, we made the
following significant judgements:
• Our experience with auditing the financial
of the Group in previous years – based on the
number of identified misstatements in the prior year
audit and management’s attitude to correcting
misstatements identified
statements in previous years – based on the
number of identified misstatements in the prior year
audit and management’s attitude to correcting
misstatements identified
• The number of components within the Group and the
extent of audit procedures planned and performed at
these components
The performance materiality determined was not revised
during the audit
The performance materiality determined was not
revised during the audit.
Performance
materiality used to
drive the extent of
our testing
Performance
materiality threshold
Significant judgements
made by auditor
in determining
performance materiality
Strategic Report
Corporate Governance
Financial Statements
89
Materiality measure
Group
Company
Specific
materiality
We determine specific materiality for one or more particular classes of transactions, account balances or disclosures
for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
Specific materiality
We determined a lower level of specific materiality for the
following areas:
• Non-routine related party transactions
We determined a lower level of specific materiality for the
following areas:
• Non-routine related party transactions
• Directors remuneration and transactions with Directors
• Directors remuneration and transactions with Directors
We determine a threshold for reporting unadjusted differences to the audit committee.
Communication
of misstatements
to the audit
committee
Threshold for
communication
£85,500 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£69,000 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group
Overall materiality – Company
Total Revenue
£940.5m
FSM
£1.71m
0.18%
PM
£1.28m
75%
TFPUM
£0.43m
25%
Total assets
£98.5m
FSM
£1.38m
1.4%
PM
£1.04m
75%
TFPUM
£0.34m
25%
FSM: Financial statements materiality
PM: Performance materiality
TFPUM: Tolerance for potential uncorrected misstatement
90
Staffline Group plc Annual Report and Accounts 2022
Independent Auditor’s Report continued
to the members of Staffline Group plc
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the
Group’s and the Company’s business and in particular matters related to:
Understanding the group, its components, and their
environments, including group-wide controls
• The engagement team obtained an understanding of the Group and
its environment, including Group-wide controls, and assessed the risks
of material misstatement at the Group level.
• Management identified three operating segments: Recruitment
GB, being the provision of workforce recruitment and management
to industry, Recruitment Ireland being the provision of generalist
recruitment services, and PeoplePlus, being the provision of skills
services. These segments are monitored by the Chief Operating
Decision Maker, and the Group’s Board. Strategic decisions are
made on the basis of these operating segments.
Identifying significant components
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information
contained within the annual report. 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 there is 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.
• In determining our audit scope and identifying significant
We have nothing to report in this regard.
components, we determined any individual component which
contributed more than 15% to consolidated revenues, consolidated
gross profit or absolute consolidated profit before taxation to be
financially significant to the Group.
Type of work to be performed on financial information
of Company and other components (including how it
addressed the key audit matters)
The audit of financial information of each of the following components
was completed using the relevant component materiality as determined
for each component:
• Staffline Group plc
• Staffline Recruitment Limited
• Staffline Recruitment (NI) Limited
• PeoplePlus Group Limited
Performance of our audit
The audit of the Recruitment GB component was carried out by a
Grant Thornton UK team from London. We engaged a different Grant
Thornton UK team to audit the key component within the PeoplePlus
segment and we engaged Grant Thornton Ireland to audit the
key component in the Recruitment Ireland reporting segment. The
Group team performed reviews of the component auditors’ work. We
determined the level of involvement we needed to have in their audit
work at those reporting units to be able to conclude whether sufficient,
appropriate audit evidence had been obtained as a basis for our
opinion on the Group financial statements as a whole. Detailed audit
instructions were issued to the component auditors where a full scope
audit approach had been identified. The audit instructions detailed
the significant risks to be addressed through the audit procedures and
indicated the information we required to be reported back to the Group
audit team. We were involved in the planning of the audit work for all
full scope audit components and communicated with all component
auditors throughout the planning, fieldwork and concluding stages of
their audit work.
Changes in approach from previous period
• Our approach to in scope components remains unchanged from
the previous period.
Audit approach
Full-scope audit
Specific audit procedures
Analytical procedures
No. of
components
% coverage
Revenue
% coverage
PBT
6
0
23
97%
0%
3%
99%
0%
1%
Our opinion on other matters prescribed by the Companies
Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matter on which we are required to report under the
Companies Act 2006
In the light of the knowledge and understanding of the Group and 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.
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 Company,
or returns adequate for our audit have not been received from
branches not visited by us; or
• the 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 77, 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 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 Company or to
cease operations, or have no realistic alternative but to do so.
Strategic Report
Corporate Governance
Financial Statements
91
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. The extent to which our procedures are capable
of detecting irregularities, including fraud, is detailed below:
• We obtained an understanding of the legal and regulatory frameworks
that are applicable to the Group through our inquiries of management,
knowledge of the business, and review of minutes from board meetings
and determined that the most significant which are directly relevant to
specific assertions in the financial statements are those related to the
reporting frameworks (International Financial Reporting Standards,
United Kingdom Generally Accepted Accounting Practice the
Companies Act 2006 and the QCA Corporate Governance Code);
• We assessed the susceptibility of the Group’s financial statements to
material misstatement, including how fraud might occur, by evaluating
management’s incentives and opportunities for manipulation of
the financial statements. This included the evaluation of the risk of
management override of controls. We determined that the principal
risks were in relation to the estimation and judgemental areas with a
risk of fraud including potential management bias of:
– Revenue journal entries to unexpected accounts within the
recruitment segment, including post year end consolidation journals;
– Potential management bias in determining revenue recognition
on certain significant contracts (being those with a variable
element) within PeoplePlus Group; and
– Potential management bias in determining revenue recognition
on the Restart contract within PeoplePlus Group.
• Our audit procedures involved:
– evaluating the design effectiveness and assessing the design
and implementation of controls that management has in place
to prevent and detect fraud;
– using data interrogation software to perform journal entry
testing, with a focus on journals that met our unusual criteria,
including those with unusual account combinations and those
posted directly to the consolidation that increased revenue
or that reclassified costs from the income statement to the
balance sheet;
– challenging assumptions and judgements made by
management in its significant accounting estimates including
provisions made by management;
– understanding performance obligations within key contracts and
testing the related accounting, including variable consideration;
– testing the completeness of the Group’s related party
transactions through information obtained at the Company
and component entities and testing that these transactions had
a valid business purpose; and
– assessing the extent of compliance with the relevant laws and
regulations as part of our procedures on the related financial
statement item.
• These audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud or
error. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error and
detecting irregularities that result from fraud is inherently more
difficult than detecting those that result from error, as fraud may
involve collusion, deliberate concealment, forgery or intentional
misrepresentations. Also, the further removed non-compliance with
laws and regulations is from events and transactions reflected in the
financial statements, the less likely we would become aware of it;
• The engagement partner assessed whether the engagement team
collectively had the appropriate competence and capabilities to
identify or recognise non-compliance with laws and regulations
through the following:
– understanding of, and practical experience with audit
engagements of a similar nature and complexity through
appropriate training and participation; and
– knowledge of the industry in which the client operates.
• Matters in respect of potential non-compliance with laws and
regulations and fraud included the potential for fraud in revenue
recognition through manipulation of revenue earned on non-routine
contracts in PeoplePlus Group (Restart and those with a variable
element), and manipulation of recruitment revenue have been
communicated with the audit team. These areas are also reported
as key audit matters in the Key Audit Matter section of our report
where the matters and specific procedures that were performed in
response are described in more detail.
• For components at which audit procedures were performed, we
requested component auditors to report to us instances of non
compliance with laws and regulations that gave rise to a risk of
material misstatement of the Group financial statements.
A further description of our responsibilities for the audit of the financial
statements is located 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.
Marc Summers, BSc (Hons), FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
20 March 2023
92
Staffline Group plc Annual Report and Accounts 2022
Financial
Statements.
Inside this section
93 Consolidated Statement of
Comprehensive Income
94 Consolidated Statement of Changes in Equity
95 Company Statement of Changes in Equity
96 Consolidated and Company Statements
of Financial Position
97 Consolidated Statement of Cash Flows
98 Notes to the Financial Statements
137 Staffline Group plc Unaudited Five-Year
Summary of Financial Data
138 Company Details
Strategic Report
Governance
Financial Statements
93
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Underlying operating profit before non-underlying administrative expenses
Administrative expenses (non-underlying)
Operating profit
Finance income
Finance charges
Net finance charges
Profit/(loss) for the year before taxation
Tax credit
Profit from continuing activities
Loss from discontinued operations
Profit for the year
Items that will not be reclassified to profit and loss – actuarial gains net of deferred tax
Items that will be reclassified to profit and loss:
– effective portion of gain on hedging instrument measured at fair value net of deferred tax
– cumulative translation gain/(loss)
Other comprehensive income for the year net of deferred tax
Total comprehensive income
Earnings per Ordinary Share
Continuing operations: Basic and diluted
Discontinued operations: Basic and diluted
Total earnings per share: Basic and diluted
The accompanying Notes form an integral part of these financial statements.
Note
2022
£m
2021
£m
4
5
5
5
6
6
8
10
9
940.5
(857.3)
83.2
(78.6)
4.6
12.0
(7.4)
4.6
0.7
(3.4)
(2.7)
1.9
1.9
3.8
–
3.8
0.4
1.5
0.1
2.0
5.8
2.3p
–
2.3p
942.7
(859.9)
82.8
(80.5)
2.3
10.3
(8.0)
2.3
–
(2.4)
(2.4)
(0.1)
1.7
1.6
(0.4)
1.2
0.7
0.2
(0.3)
0.6
1.8
1.3p
(0.3)p
1.0p
94
Staffline Group plc Annual Report and Accounts 2022
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share-
based
payment
reserve
£m
Cash flow
hedge reserve
£m
Share
premium
£m
At 31 December 2020 (reported)
Prior year adjustment (Note 3)
At 31 December 2020 (restated)
Cancellation of JSOP shares
Save As You Earn (“SAYE”) share scheme –
equity-settled
Proceeds from share issue
Transactions with owners
Profit for the year
Cash flow hedge reserve
Actuarial gain on pension scheme, net
of taxation
Cumulative translation adjustments
Total comprehensive income for the
year, net of tax
Share
capital
£m
6.9
–
6.9
–
–
9.7
9.7
–
–
–
–
–
Own
shares
£m
(4.8)
–
(4.8)
–
–
–
–
–
–
–
–
–
75.1
–
75.1
–
–
36.7
36.7
–
–
–
–
–
At 31 December 2021
16.6
(4.8)
111.8
Save As You Earn (“SAYE”) share scheme –
equity-settled
Issue of shares to management
Own shares purchased
Transactions with owners
Profit for the year
Cash flow hedge reserve
Actuarial gain on pension scheme, net
of taxation
Cumulative translation adjustments
Total comprehensive income for the
year, net of tax
–
–
–
–
–
–
–
–
–
–
0.7
(0.4)
0.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.6
–
0.6
(0.4)
0.1
–
(0.3)
–
–
–
–
–
0.3
0.3
–
–
0.3
–
–
–
–
–
At 31 December 2022
16.6
(4.5)
111.8
0.6
The accompanying Notes form an integral part of these financial statements.
Profit
and loss
account
£m
(57.9)
(2.3)
(60.2)
0.4
–
–
0.4
1.2
–
0.7
(0.3)
1.6
(58.2)
–
(0.6)
–
(0.6)
3.8
–
0.4
0.1
4.3
(54.5)
Total
equity
£m
19.9
(2.3)
17.6
–
0.1
46.4
46.5
1.2
0.2
0.7
(0.3)
1.8
65.9
0.3
0.1
(0.4)
–
3.8
1.5
0.4
0.1
5.8
71.7
–
–
–
–
–
–
–
–
0.2
–
–
0.2
0.2
–
–
–
–
–
1.5
–
–
1.5
1.7
Strategic Report
Governance
Financial Statements
95
Company Statement of Changes in Equity
For the year ended 31 December 2022
At 1 January 2021
Proceeds from share issue
Transactions with owners
Profit for the year
Cash flow hedge reserve
Total comprehensive income for the year, net of tax
At 31 December 2021
Loss for the year
Cash flow hedge reserve
Total comprehensive income for the year, net of tax
Share
premium
£m
Cash flow
hedge reserve
£m
Share
capital
£m
6.9
9.7
9.7
–
–
–
Own
shares
£m
(4.8)
–
–
–
–
–
75.1
36.7
36.7
–
–
–
16.6
(4.8)
111.8
–
–
–
0.3
–
0.3
–
–
–
Profit
and loss
account
£m
(25.7)
–
–
1.4
–
1.4
(24.3)
(2.9)
0.2
(2.7)
(27.0)
Total
equity
£m
51.5
46.4
46.4
1.4
0.2
1.6
99.5
(2.6)
–
(2.6)
96.9
–
–
–
–
0.2
0.2
0.2
–
(0.2)
(0.2)
–
At 31 December 2022
16.6
(4.5)
111.8
The accompanying Notes form an integral part of these financial statements.
96
Staffline Group plc Annual Report and Accounts 2022
Consolidated and Company Statements
of Financial Position
As at 31 December 2022
Assets
Non-current
Goodwill
Other intangible assets
Investments
Property, plant and equipment
Deferred tax asset
Retirement benefit net asset
Current
Trade and other receivables
Current tax asset
Derivative financial instruments
Cash and cash equivalents
Restricted cash
Debtors: amounts falling due after more than one year
Total assets
Liabilities
Current
Trade and other payables
Borrowings
Provisions
Lease liabilities
Non-current
Borrowings
Other liabilities
Provisions
Lease liabilities
Deferred tax liabilities
Total liabilities
Equity
Share capital
Own shares
Share premium
Share-based payment reserve
Cash flow hedge reserve
Profit and loss account
Total equity
Total equity and liabilities
Note
11
12
13
14
24
16
17
8
18
19
17
20
21
23
15
21
22
23
15
24
25
Consolidated
Company
2022
£m
59.6
9.4
–
7.6
5.0
0.2
81.8
119.8
0.3
3.0
31.0
–
154.1
–
235.9
130.3
26.0
0.9
1.5
158.7
–
–
0.6
3.4
1.5
5.5
2021
Restated
£m
1 January 2021
Restated
£m
59.6
16.5
–
8.0
4.9
–
89.0
113.6
0.6
0.5
29.8
–
144.5
–
233.5
134.3
22.9
1.4
1.3
159.9
–
0.3
1.4
3.3
2.7
7.7
59.6
24.3
–
9.6
4.7
–
98.2
102.2
1.7
–
24.5
0.9
129.3
–
227.5
155.6
13.0
3.8
1.6
174.0
20.0
7.3
1.2
3.9
3.5
35.9
164.2
167.6
209.9
16.6
(4.5)
111.8
0.6
1.7
(54.5)
71.7
235.9
16.6
(4.8)
111.8
0.3
0.2
(58.2)
65.9
233.5
6.9
(4.8)
75.1
0.6
–
(60.2)
17.6
227.5
2022
£m
–
–
59.6
–
0.4
–
60.0
3.2
–
3.0
0.1
–
6.3
32.2
98.5
1.0
–
–
–
1.0
–
–
–
–
0.6
0.6
1.6
16.6
(4.5)
111.8
–
–
(27.0)
96.9
98.5
2021
£m
–
–
67.8
–
0.8
–
68.6
3.0
–
0.5
–
–
3.5
30.8
102.9
3.4
–
–
–
3.4
–
–
–
–
–
–
3.4
16.6
(4.8)
111.8
–
0.2
(24.3)
99.5
102.9
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these
financial statements. The Company’s loss for the year was £(2.9)m (2021: profit of £1.4m). The accompanying Notes form an integral part of
these financial statements.
The financial statements were approved by the Board of Directors on 20 March 2023 and signed on their behalf by:
Albert Ellis
Director
20 March 2023
Daniel Quint
Director
20 March 2023
Strategic Report
Governance
Financial Statements
97
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Cash flows from operating activities
Taxation received
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities – trading
Purchases of property, plant and equipment
Sale of property, plant and equipment
Purchase of intangible assets – software
Total cash flows arising from investing activities
Total cash flows arising from operating and investing activities
Cash flows from financing activities
Net movements on Receivables Finance Agreement
Loan repayments
Principal repayment of lease liabilities
Net interest paid
Payment from restricted fund
Settlement of NMW liabilities from restricted fund
Own shares purchased
Gross proceeds from the issue of share capital
Costs relating to the issue of share capital
Net cash flows from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
The accompanying Notes form an integral part of these financial statements.
Note
30
8
14
12
21
21
15
25
25
19
2022
£m
5.5
0.4
5.9
(1.0)
–
(2.3)
(3.3)
2.6
3.1
–
(1.6)
(2.5)
–
–
(0.4)
–
–
(1.4)
1.2
29.8
31.0
2021
£m
(28.7)
5.8
(22.9)
(2.4)
–
(2.1)
(4.5)
(27.4)
9.9
(20.0)
(1.7)
(1.9)
0.9
(0.9)
–
48.4
(2.0)
32.7
5.3
24.5
29.8
98
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements
The year ended 31 December 2022
1 Nature of operations
The principal activities of Staffline Group plc and its subsidiaries (the “Group”) include the provision of recruitment and outsourced human
resource services to industry and the provision of skills and employment training and support.
2 General information and statement of compliance
Staffline Group plc, a Public Limited Company limited by shares listed on AIM (the “Company”), is incorporated and domiciled in England,
United Kingdom. The Company acts as the holding company of the Group. The registered office and principal place of business of the
Group and its subsidiary companies is disclosed on the Company details page to these financial statements, page 138 and within Note 13.
The Company’s registration number is 05268636.
The financial statements for the year ended 31 December 2022 (including the comparatives for the year ended 31 December 2021) were approved
and authorised for issue by the Board of Directors on 20 March 2023.
There have been no new accounting standards that have required adoption in the current year.
The Company does not have an ultimate controlling party. As noted on page 75, the largest shareholder held 17.6% of the Company’s issued
share capital as at 31 December 2022.
3 Accounting policies
Basis of preparation
The Consolidated financial statements are prepared for the year ended 31 December 2022. The Consolidated financial statements of the Group
have been prepared on a going concern basis using the significant accounting policies and measurement bases summarised below, and in
accordance with UK adopted International Accounting Standards. The financial statements are prepared under the historical cost convention
except for equity-settled share options, derivative financial instruments and the retirement benefit net asset, which are measured at fair value.
The Company financial statements of Staffline Group plc have been prepared under the historical cost convention and in accordance with
Financial Reporting Standard 101 (“FRS 101”) and the Companies Act 2006. The following exemptions from the requirements of IFRS have been
applied in the preparation of these financial statements, in accordance with FRS 101:
• paragraphs 45(b) and 46 to 52 of IFRS 2, Share-based Payment (details of the number and weighted-average exercise prices of share options,
and how the fair value of goods or services received was determined);
• IFRS 7, Financial Instruments: Disclosures;
• paragraphs 91 to 99 of IFRS 13, Fair Value Measurement (disclosure of valuation techniques and inputs used for fair value measurement
of assets and liabilities);
• paragraph 38 of IAS 1, Presentation of Financial Statements comparative information requirements in respect of:
– paragraph 79(a)(iv) of IAS 1;
– paragraph 73(e) of IAS 16;
– paragraph 118(e) of IAS 38;
– requirements of paragraphs 62 and B64 of IFRS 3 Business Combinations; and
– paragraph 33(c) of IFRS 5.
• The following paragraphs of IAS 1, Presentation of Financial Statements:
– 10(d) (statement of cash flows);
– 10(f) (a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy
retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its
financial statements);
– 16 (statement of compliance with all IFRS);
– 38A (requirement for minimum of two primary statements, including cash flow statements);
– 38B–D (additional comparative information);
– 40A–D (requirements for a third statement of financial position);
– 111 (cash flow statement information); and
– 134–136 (capital management disclosures).
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• IAS 7, Statement of Cash Flows;
• Paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (requirement for the disclosure of information
when an entity has not applied a new IFRS that has been issued but is not yet effective);
• Paragraph 17 of IAS 24, Related Party Disclosures (key management compensation); and
• The requirements in IAS 24, Related Party Disclosures to disclose related party transactions entered into between two or more members
of a group.
At the date of authorisation of these financial statements, there were no new Standards or amendments to existing Standards and Interpretations
that became effective in the year. No Standards or amendments to existing Standards have been adopted early by the Group.
The Directors anticipate that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the
pronouncement. New Standards, amendments and Interpretations not adopted in the current year have not been disclosed as they are not
expected to have a material impact on the Group’s financial statements.
The Consolidated and Company financial statements are presented in sterling, which is the functional currency of the Parent Company
and Group. The principal accounting policies of the Group and Company are set out below and have been consistently applied, unless
stated otherwise.
Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the
Chief Executive Officer’s Review on pages 10 to 13. The financial position of the Group, its cash flows, liquidity position and borrowing facilities
are described in the Financial Review on pages 22 to 27. The principal risks and uncertainties to which the Group is exposed are described on
pages 46 to 51.
As described in the Chief Executive Officer’s Review, despite the challenging trading conditions experienced across all divisions in the Group
during 2022, the Group reported an underlying operating profit for the year on continuing activities. In the recruitment divisions, the recovery
from the Covid-19 pandemic in early 2022 was mixed following the gradual return to work for most sectors, which was accompanied by
unexpected high levels of labour shortages, especially in logistics-based sectors. The Group’s PeoplePlus division continued to be impacted by
the disruption to its skills training as a result of the tight labour market with workers being able to go straight into jobs without pre-job training.
The Directors maintained tight cost control throughout with overheads at reduced levels, additionally benefiting from previous restructuring
programmes. These initiatives resulted in improved performance in the second half of the year generating increased underlying profit and
positive cash generation.
The Directors have prepared updated forecasts and cash flow projections to 31 December 2024, which is considered to be a reasonable period
over which a reasonable view can be formed. These forecasts have been used to assess going concern and have been stress-tested by applying
basic sensitivity analysis, involving a reduction to revenues across all three divisions, over the forecast period.
In forming their opinion, the Directors have performed a robust assessment of the principal risks and uncertainties facing the Group as set out on
pages 46 to 51. In addition, Note 29 to the accounts includes the Group’s objectives, policies and processes for managing its capital; its financial
risk management objectives; and its exposure to credit risk and liquidity risk. Consequently, the Directors believe that the Group is well placed to
manage its business risks successfully.
At 31 December 2022, the Group had net cash of £5.0m (2021: net cash of £6.9m), on a pre-IFRS 16 basis, and has committed debt facilities until
1 December 2025. For the period to 31 December 2024, the Group’s cash flow forecasts indicate ongoing headroom in the Receivables Finance
Agreement and also full compliance with the financial covenants contained therein. The Group has sufficient day to day liquidity to ensure that
short-term liabilities can be satisfied as and when they fall due. Further details of the financial position of the Group, its cash flows, liquidity
position and borrowing facilities are described in the Financial Review on pages 22 to 27.
As a result, the Directors have formed a judgement, at the time of approving the financial statements, that there is a reasonable expectation
that the Group has adequate resources to continue in operational existence and meet its liabilities as they fall due over the assessment period.
The Directors have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant
doubt on the Group’s ability to continue as a going concern for a period of at least 18 months from when the financial statements are authorised
for issue. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
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Notes to the Financial Statements continued
The year ended 31 December 2022
3 Accounting policies continued
Prior year restatement
During the year, it was determined that PeoplePlus had overstated revenues totalling £2.6m in relation to the period prior to 31 December 2021,
as PeoplePlus had not met some of its revenue related performance obligations.
As with any prior year adjustment, management have applied their judgement based on relevant information now available which management
should have had access to at the time. The £2.6m error is based on management’s best estimate of the amount of the revenue reversal but this
remains subject to final agreement between the respective parties.
Due to the legacy nature of these revenues, management have accounted for the adjustment of these errors through reserves.
The required adjustment is set out in the table below; trade receivables, as included in current assets, is overstated by £2.6m and deferred tax
assets, as included in non-current assets, is understated by £0.3m.
Restatement of Consolidated statement of financial position:
As at 1 January 2021 and at 31 December 2021
Assets
Non-current
Current
Total assets
Liabilities
Current
Non-current
Total liabilities
Equity
Total equity
Total equity and liabilities
2020
Reported
£m
Revenue
overstated
£m
2020
Restated
£m
2021
Reported
£m
Revenue
overstated
£m
2021
Restated
£m
97.9
131.9
229.8
174.0
35.9
209.9
19.9
229.8
0.3
(2.6)
(2.3)
–
–
–
(2.3)
(2.3)
98.2
129.3
227.5
174.0
35.9
209.9
17.6
227.5
88.7
147.1
235.8
159.9
7.7
167.6
68.2
235.8
0.3
(2.6)
(2.3)
–
–
–
89.0
144.5
233.5
159.9
7.7
167.6
(2.3)
(2.3)
65.9
233.5
Consolidation of subsidiaries
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as at 31 December 2022 in accordance
with IFRS 10. Subsidiaries are all entities to which the Group is exposed to or has rights to variable returns and the ability to affect those returns
through control over the subsidiary. The results of subsidiaries whose accounts are prepared in a currency other than sterling are translated at
the average rates of exchange during the period and their year-end balances at the year-end rate of exchange. Translation adjustments are
taken to the profit and loss reserves.
Material intra-group balances and transactions, and any unrealised gains or losses arising from intra-group transactions, are eliminated in
preparing these financial statements.
Non-GAAP measures of performance
In the reporting of its financial performance, the Group uses certain measures that are not defined under IFRS, the Generally Accepted
Accounting Principles (“GAAP”) under which the Group reports. The Directors believe that these non-GAAP measures assist with the
understanding of the performance of the business. These non-GAAP measures are not a substitute, or superior to, any IFRS measures of
performance but they have been included as the Directors consider them to be an important means of comparing performance
year-on-year and they include key measures used within the business for assessing performance.
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Gross value of sales
Gross sales value represents the fair value of the consideration received or receivable for the supply of services, including agency
sales (excluding fees) which are subject to an IFRS 15 agency adjustment, net of value added tax, rebates and discounts and after eliminating
sales within the Group.
Non-underlying items of income and expenditure
Non-underlying charges are regarded as either recurring or non-recurring items of income or expenditure of a particular size and/or nature
relating to the operations of the business that in the Directors’ opinion require separate identification. These items are included in “total”
reported results but are excluded from “underlying” results. These items can vary significantly from year to year and therefore create volatility
in reported earnings.
Underlying EBITDA
Underlying operating profit before the deduction of underlying depreciation and amortisation charges. This is considered a useful measure
because it approximates the underlying cash flow by eliminating depreciation and amortisation charges.
Net debt
Net debt is the amount of bank debt less available cash balances. This is a key measure as it is one on which the terms of the banking facilities
are based and shows the level of external debt utilised by the Group to fund operations. Net debt is also presented on a pre-IFRS 16 basis which
excludes lease liabilities.
The Directors acknowledge that the adjustments made to arrive at underlying profit may not be comparable to those made by other companies.
It should be noted that whilst the amortisation of acquisition-related intangible assets has been added back, the revenue from those acquisitions
has not been eliminated.
All of these alternative performance measures are utilised by the Board to monitor performance and financial position. They show a comparable
level of performance excluding one-off items, with which underlying performance and ability to service debt can be judged.
Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control
of a subsidiary is calculated as the sum of the acquisition-date fair value of assets transferred, liabilities incurred and the equity interests of the
Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed
as incurred.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the sum of a) fair value of consideration
transferred, b) the recognised amount of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity
interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum
calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in the statement of comprehensive income immediately.
Segment reporting
The Group has three material operating segments: the provision of recruitment and outsourced human resource services to industry, in Great
Britain (Recruitment GB) and also in the island of Ireland (Recruitment Ireland), plus the provision of skills and employment training and support,
together “PeoplePlus”. Each of these operating segments is managed separately as each requires different technologies, marketing approaches
and other resources. For management purposes, the Group uses the same measurement policies as those used in its financial statements.
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Notes to the Financial Statements continued
The year ended 31 December 2022
3 Accounting policies continued
Revenue recognition
Recruitment divisions
Income from the provision of temporary contractors is recognised as services are rendered, based on hours worked multiplied by the contracted
hourly rate, net of rebates. In the case of temporary contractors, there is deemed to be one performance obligation, being the satisfactory
completion of the daily hours. Income from permanent placements is recognised when the candidates start work, since there is deemed to be
one performance obligation, being the commencement of employment of the worker. In the occasional instances where a permanent worker is
deemed to be unsatisfactory and a suitable replacement cannot be found, a credit will be issued. No provision is held for this since the amounts
are not material. In each case, revenue is only recognised when the labour or service has been provided and the Group is contractually entitled
to the revenue.
Revenue is measured at the fair value of the consideration received or receivable for the supply of services, net of value added tax, rebates
and discounts and after eliminating sales within the Group. Provisions for rebates are accounted for in the period to which the sale relates and
are calculated in accordance with the contractual arrangements in place. The rebate provision recognised is the full amount invoiced less the
potential impact of other reasonably foreseen constraints. Management calculates an estimate of the most likely amount of the rebate based
upon the terms agreed within the contract and adopts a prudent approach.
The Group assesses whether it is acting as agent or principal depending on whether the customer has a direct relationship with the Group,
whether the Group has the primary responsibility for providing the services and whether the Group has control over the placement of the
worker. Where the Group acts as a principal in the supply, revenue is recognised as the gross amount due, net of value-added tax, rebates and
discounts. The Recruitment GB division has a limited number of second tier arrangements whereby another recruitment company will provide
contractors to the Group to enable the Group to fulfil a customer’s requirement. Where this arrangement constitutes an agency relationship
rather than principal, the amount of revenue recognised is limited to the management fee or margin 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.
Gross sales value represents the fair value of the consideration received or receivable for the supply of services, including agency sales which are
subject to an IFRS 15 agency adjustment, net of value added tax, rebates and discounts and after eliminating sales within the Group.
The Recruitment division recognises contract assets to reflect revenue recorded in relation to work that is part way through completion of a
performance obligation and is yet to be invoiced.
Deferred income is short-term in nature (less than one year) and is recognised in the profit and loss account in the year following recognition.
PeoplePlus division
Income is generated from skills-based contracts, and the provision of welfare to work services. The segment recognises revenue upon fulfilment
of the performance obligation, being the provision of a specified individual level of training, support or advice for a person enrolled in the
programme. There is one contract that has more than one performance obligation, however, the revenue was not material in either the current
or prior years.
For contracts where the contractual obligation relates to providing individuals with training, support or advice for a specific period of time,
ranging between 3-24 months, the revenue is recognised over time as this reflects when the individual receives the benefit, and the end client is
simultaneously receiving and consuming the benefits provided by PeoplePlus’ performance. Progress towards satisfaction of the performance
obligation is determined based upon, for example, activities carried out. Where income is received in advance this is initially held in the statement
of financial position as deferred income and released to the statement of comprehensive income as services are provided. Accrued income is
recognised where services have been provided in advance of invoiced income and, based on all available evidence, the division expects to receive
payment in accordance with the contract.
Revenue is accounted for over the period the services are provided in accordance with IFRS 15, including where the outcomes are variable in
nature. There are a few contracts that have a variable element of revenue associated with them, for example one contract has an element of
payment by results and potential penalties if insufficient activities are carried out. Detailed management information is used to support the basis
of the variable element of the revenue recognition calculation to provide the most likely amount. In some circumstances management is also
required to form judgements when determining the amount of revenue where there is uncertainty about the future performance of the contract.
This will take into account historical experience, as well as future expectations in terms of success rates and the anticipated length of period over
which the services are ultimately provided and ensure that a prudent approach is adopted.
In the early stages of a contract it may be difficult to reasonably measure the outcome of a performance obligation. During this period, revenue
is recognised only to the extent of the costs incurred until such time that the outcome of the performance obligations can be reasonably
measured. Where income is received in advance, this is initially held in the statement of financial position as deferred income and released to
the statement of comprehensive income as services are provided. Accrued income is recognised where services have been provided in advance
of invoiced income.
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In some instances the division receives income before the performance obligations have been fully satisfied. Accordingly, Income received in
advance is held in the statement of financial position. See Note 20.
Operating expenses
Operating expenses are recognised in the statement of comprehensive income when incurred and are classified according to their nature.
Furlough claims
Where the Group has been entitled to receive a government grant, it has determined the treatment of the grant under either a capital approach
or the income approach. The Group has only been in receipt of grants determined as appropriate to account for under the income approach.
The grant income has been matched with the related costs, for which they are intended to compensate, on a systematic basis. The grant income
has only been recognised where there is reasonable assurance that the Group will comply with all conditions attached to the grant and that the
grant will be received. During 2021, the Group utilised the Coronavirus Job Retention Scheme (“CJRS”) in the UK and claimed and received a
total of £1.6m. At the year-end there were no outstanding amounts receivable. There are no unfulfilled conditions and contingencies attached to
the grants recognised within these financial statements.
Goodwill
Goodwill represents the excess of the fair value of the cost of a business acquisition over the Group’s share of the fair value of assets and
liabilities acquired as at the date of acquisition. Goodwill is tested annually for impairment and carried at historic fair value less accumulated
impairment losses.
Intangible assets
Assets acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to the
Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the
future economic benefits embodied in the asset will flow to the Group. An independent valuation is undertaken in order to assess the fair value of
intangible assets acquired in a business combination.
The fair value is then amortised over the expected useful economic life of the asset as detailed below. Where an intangible asset might
be separable, but only together with a related tangible or intangible asset, the group of assets is recognised as a single asset separately
from goodwill where the individual fair values of the assets in the Group are not reliably measurable. Where the individual fair values of the
complementary assets are reliably measurable, the Group recognises them as a single asset provided the individual assets have similar
useful lives.
Customer contracts, customer lists, brands and licences
The fair value of acquired customer contracts, customer lists, brands and licences is capitalised and, subject to impairment reviews, amortised
over their estimated lives (estimated to be five years). The amortisation is calculated so as to write off their fair value less their estimated residual
values over their estimated lives. An impairment review is undertaken when events or circumstances indicate the carrying amount may not
be recoverable.
Computer software
Computer software is carried at historical cost less subsequent amortisation and impairment losses. Amortisation is charged on the cost less
the estimated residual value, which is assessed annually, of these assets on a straight-line basis over the estimated useful economic life of
each asset.
The useful lives of computer software are three to five years and are amortised on a straight-line basis.
104
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Notes to the Financial Statements continued
The year ended 31 December 2022
3 Accounting policies continued
Property, plant and equipment
Freehold land and property, computer equipment, fixtures and fittings and motor vehicles are carried at acquisition cost less subsequent
depreciation and impairment losses. Depreciation is charged on the cost less the estimated residual value, which is assessed annually, of these
assets over the estimated useful economic life of each asset.
The estimated useful economic lives of property, plant and equipment and the depreciation basis can be summarised as follows:
Land and buildings
Computer equipment
Fixtures and fittings
Motor vehicles
50 years straight-line
3-5 years straight-line
3-5 years straight-line
25% reducing balance
Right-of-use assets are depreciated over their lease term. Assets in the course of construction are not depreciated until they are available for use.
Impairment assessment
Goodwill, other intangible assets and property, plant and equipment are subject to impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-
generating units). As a result, some assets are tested individually for impairment, and some are tested at cash-generating unit level. Goodwill
is allocated to those cash-generating units that are expected to benefit from synergies of the related business combination and represent the
lowest level within the Group at which management monitors the related cash flows.
Individual intangible assets or cash-generating units that include goodwill with an indefinite useful life are tested for impairment at least
annually. All other individual assets or cash-generating units are tested 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 or cash-generating unit’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value-in-use based on an internal
discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited
initially to the carrying amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no
longer exist.
Investments
Investments in the subsidiary undertakings are held at cost less provision for impairment.
Leases
The Group is not party to any material leases where it acts as a lessor, but the Group does have a large number of material property and
equipment leases, under which it is a lessee.
Following the adoption of IFRS 16, for any new contracts entered into, the Group considers whether a contract is, or contains, a lease. A lease is
defined as “a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for
consideration”. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether:
• The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the
time the asset is made available to the Group;
• The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract; and
• The Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right to
direct “how and for what purpose” the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the statement of financial position. The right-
of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group,
an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease
commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the
right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted
using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Lease payments included
in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or
rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.
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Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any
reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising
a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis
over the lease term.
On the statement of financial position, right-of-use assets are included in property, plant and equipment and lease liabilities are
disclosed separately.
Taxation
Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior
reporting period, that are unpaid at the balance sheet date. They are calculated according to the tax rates and tax laws applicable to the
fiscal periods to which they relate, based on the taxable profit or loss for the year.
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amounts
of assets and liabilities in the Consolidated financial statements with their respective tax bases. However, in accordance with the rules set out
in IAS 12, no deferred taxes are recognised on the initial recognition of goodwill. This applies also to temporary differences associated with
shares in subsidiaries if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in
the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for
recognition as deferred tax assets.
Deferred tax liabilities are provided for in full if material. Deferred tax assets are recognised if it is probable that they will be able to be offset
against future taxable income. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or substantively enacted at the statement of financial position date.
Most changes in deferred tax assets or liabilities are recognised as a component of tax expense in the profit or loss. Only changes in deferred tax
assets or liabilities that relate to a change in value of assets or liabilities that are charged directly in other comprehensive income or equity are
charged or credited directly to other comprehensive income or equity.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents include cash at bank and in hand.
Pensions
The Group contributes to a number of pension arrangements. The schemes are generally funded through payments to insurance companies
or trustee-administered funds, determined by periodic actuarial calculations. The Group has both defined contribution and defined benefit
plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no
legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically,
defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors
such as age, years of service and compensation.
Defined benefit plan
The liability or asset recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by
independent actuaries using the projected unit credit method. The present value of the defined benefits obligation is determined by discounting
the estimated future cash outflows using interest rates of high-quality corporate bonds that have terms to maturity approximating to the terms
of the related pension obligations.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited within other
comprehensive income in the period in which they arise.
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Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
3 Accounting policies continued
Pensions continued
Defined Contribution Plan
A defined contribution plan is a pension plan under which the Group pays fixed contributions to an independent entity. The Group has no legal
or constructive obligations to pay further contributions after payment of the fixed contribution. Contributions recognised in respect of personal
pension plans are expensed as they fall due. Liabilities and assets may be recognised if an underpayment or prepayment has occurred and are
included in current liabilities or current assets as they are normally of a short-term nature.
Financial Assets
The Group’s financial assets include cash, trade receivables and other receivables. The Company’s financial assets relate to amounts owed by
subsidiary companies which are initially recorded at fair value and subsequently at amortised cost.
Trade receivables are initially recognised at transaction cost. Other financial assets are initially recognised at fair value, plus refinancing
costs. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where
the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of
financial instruments.
The Group uses a number of customer financing arrangements whereby specific customer invoices are settled in advance of their normal
settlement date. Under these arrangements the associated trade receivables are non-recourse to the Group and as such substantially all the
risks and rewards of ownership of these trade receivables are transferred at the point the trade receivables are transferred to third parties.
Consequently, those trade receivables are derecognised at the point of transfer.
The Group makes use of a simplified approach in accounting for trade and other receivables and records the loss allowance as lifetime expected
credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the
financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate
the expected credit losses using a provision matrix. The Group assesses impairment of trade receivables on a collective basis as they possess
shared credit risk characteristics, and they have been grouped based on the days past due. Refer to Note 29 for a detailed analysis of how the
impairment requirements of IFRS 9 are applied.
The Company assesses at each balance sheet date whether amounts owed by subsidiary companies are impaired by reference to any evidence
indicating that the Company may not be able to collect all amounts due in full.
Financial liabilities
The Group’s financial liabilities may include bank loans, receivables finance facilities, trade and other payables including liabilities for share-
based payments, and other liabilities, which include deferred and contingent consideration payable in respect of business acquisitions.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges
are recognised as an expense in “finance costs” in the statement of comprehensive income.
Bank funding is raised to support the working capital requirements of the Group’s operations. They are recognised at the proceeds received and
any direct issue costs are carried forward and amortised over the term of the relevant borrowings. Any exit fee liabilities are recognised on the
balance sheet at the time of refinancing. All other finance charges are charged to the income statement on an accruals basis. Working capital
funding is currently provided via an RFA and a number of separate Customer Financing arrangements. Details are provided in Note 21. Cash
flows in relation to the Customer Financing arrangements are recognised as operating cash flows. Cash flows arising from the RFA are included
as a movement in financing cash flows.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost less settlement payments.
Dividend distributions to shareholders are included in “other short-term financial liabilities” when the dividends are approved by the shareholders’
meeting prior to the financial year-end but remain unpaid at the year-end.
Derivative financial instruments and hedge accounting
The Group accounts for derivative financial instruments at fair value through profit and loss (“FVTPL”) except for derivatives designated as
hedging instruments in cash flow hedge relationships, which require a specific accounting treatment. To qualify for hedge accounting, the
hedging relationship must meet all of the following requirements:
• there is an economic relationship between the hedged item and the hedging instrument;
• the effect of credit risk does not dominate the value changes that result from that economic relationship; and
• the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges
and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item.
Strategic Report
Governance
Financial Statements
107
The Group has designated an interest rate cap contract as a hedged instrument in a cash flow hedge relationship. This arrangement has been
entered into to mitigate interest rate risk arising from future increases in the SONIA interest rate. All derivative financial instruments used for
hedge accounting are recognised initially at fair value and reported subsequently at fair value in the statement of financial position.
To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges
are recognised in other comprehensive income and included within the cash flow hedge reserve in equity. Any ineffectiveness in the
hedge relationship is recognised immediately in profit or loss. At the time the hedged item affects profit or loss, any gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss and presented as a reclassification adjustment within
other comprehensive income. However, if a non-financial asset or liability is recognised as a result of the hedged transaction, the gains and
losses previously recognised in other comprehensive income are included in the initial measurement of the hedged item.
If a forecast transaction is no longer expected to occur, any related gain or loss recognised in other comprehensive income is transferred
immediately to profit or loss. If the hedging relationship ceases to meet the effectiveness conditions, hedge accounting is discontinued, and
the related gain or loss is held in the equity reserve until the forecast transaction occurs.
Short-term employee benefits
Short-term employee benefits, including holiday entitlement, are current liabilities included in accruals, measured at the undiscounted amount
that the Group expects to pay as a result of the unused entitlement.
Provisions and contingent liabilities
Provisions are recognised when present obligations will probably lead to an outflow of economic resources from the Group and they can
be estimated reliably. The timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or
constructive commitment that has resulted from past events, for example, legal disputes or onerous contracts.
Provisions are measured as the estimated expenditure required to settle the present obligation, based on the most reliable evidence available
at the balance sheet date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar
obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. In
addition, long-term provisions are discounted to their present values, where the time value of money is material.
All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Contingent liabilities reflect those cases where the possible outflow of economic resource as a result of present obligations is considered
improbable or remote, or the amount to be provided for cannot be measured reliably. No liability is recognised in the consolidated statement
of financial position; instead, they are disclosed in Note 27.
Equity
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Share capital is determined using the nominal value of shares that have been issued.
Own shares represents the cost of shares acquired by the Employee Benefit Trust. This Trust is deemed to be controlled by the Group and
therefore consolidated, resulting in the “Own shares” deducted from equity.
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from share premium, net of any related income tax benefits.
The share-based payment reserve represents the value of shares granted under share-based payment arrangements.
The profit and loss account includes all current and prior period results as disclosed in the statement of comprehensive income.
Dividends
Final dividends are recognised as a distribution in the period in which they are approved by the shareholders. Interim dividends are recorded in
the period in which they are paid. Distributions to owners of the Company are not recognised in the statement of comprehensive income under
IFRS but are disclosed as a component of the statement of changes in equity.
108
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
3 Accounting policies continued
Share-based employee remuneration
All share-based payment arrangements are recognised in the Consolidated financial statements. The Group operates equity-settled share-
based remuneration plans for remuneration of certain of its Directors and employees.
Equity-settled share-based remuneration
All employee services received in exchange for the grant of any share-based remuneration are measured at their fair values at the date of grant.
These are indirectly determined by reference to the fair value of the share options awarded. Their value is appraised at the grant date and
excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). All share-based remuneration is
ultimately recognised as an expense in profit or loss in the statement of comprehensive income with a corresponding credit to the share-based
payment reserve, net of deferred tax where applicable.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the
number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are
expected to become exercisable. Estimates are subsequently revised, if there is any indication that the number of share options expected to vest
differs from previous estimates. No adjustment is made to the expense recognised in prior periods if fewer share options ultimately are exercised
than originally estimated.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs up to the nominal value of the shares
issued are allocated to share capital with any excess being recorded as share premium.
Critical judgements and estimate uncertainty in applying the Group’s accounting policies
Significant management judgements
The following are the judgements made by management in applying the accounting policies of the Group that have the most significant effect
on the financial statements.
Revenue recognition
The Group assesses whether it is acting as agent or principal depending on whether the customer has a direct relationship with the Group,
whether the Group has the primary responsibility for providing the services and whether the Group has control over the placement of the worker
and setting the price to be charged. When the Group acts as a principal, revenue is recognised as the full amount invoiced, net of value-added
tax, rebates and discounts. When the Group provides a secondary service in which it acts as agent for the customer, typically in partnership with
another employment agency, the amount of revenue recognised is limited to the margin receivable for that service after making provision for
any losses foreseen, volume rebates and any other amounts payable, rather than the full amount invoiced.
In most cases the Group acts as principal due to its direct relationship with its customers and its primary relationship with the worker, with
control over when and where they are placed, and pricing. Revenue is recognised on an agency basis when the Group does not have a direct
relationship with the worker for control or remuneration and does not have primary responsibility for their placement.
Non-underlying items
The Group supplements the performance disclosures that are required under IFRS with additional measures and information that is intended to
assist the understanding of exceptional income or charges, and to demonstrate the underlying results of the business.
Non-underlying income or expenditure items are typically non-recurring items of a particular size and/or nature relating to the operations of the
business that are judged to merit separate disclosure in the income statement. Additional explanation is given regarding the circumstances that
gave rise to each item and its likely outcome.
Strategic Report
Governance
Financial Statements
109
Borrowings
The Group has a Receivable Financing Agreement (“RFA”), which commenced on 10 June 2021. The Group receives advances against eligible
receivables but retains responsibility for collection. The amounts due are funded on a recourse basis and consequently the receivable remains
on the balance sheet until settled by the customer.
The Group receives additional funding by using a number of separate Customer Financing arrangements. In these separate arrangements the
associated trade receivables are considered to be settled on receipt of funds. Management consider the arrangements to be non-recourse to the
Group and consequently debt is removed from the total receivables balance on the date of settlement.
The effect of these receivables financing arrangements is that trade receivables are settled significantly in advance of normal commercial terms,
which can be 60–90 days for these customers. The Group incurs a cost for this service, which is judged to be financing in nature rather than
a settlement discount, or other form of price reduction, and it is therefore treated as a finance charge through profit and loss. Details of the
Group’s borrowings are given in Note 21.
Deferred tax asset
The Group recognises a deferred tax asset on unused tax losses carried forward and on the timing difference between depreciation charges
and tax allowances. The Group is profitable and management has determined that there is sufficient evidence to show that the tax losses will be
utilised in the foreseeable future.
Details of all deferred tax balances are provided in Note 24.
Estimation uncertainty
Information about estimates and assumptions that may have the most significant effect on recognition and measurement of assets, liabilities,
income and expenses is provided below. Actual results may be substantially different.
Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future
cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the
determination of a suitable discount rate.
The Company has previously recognised impairment losses on its investments in certain subsidiary undertakings and has recognised a further
impairment of £8.2m to its investment in PeoplePlus during the year. The carrying value of investments at 31 December 2022 is £59.6m (2021:
£67.8m), see Note 13.
Revenue and profit recognition – PeoplePlus
The ultimate profitability of long-term contracts is based on estimates of future revenue and costs and compliance with complex performance
obligations, which are reliant on the knowledge and experience of divisional management. Material changes in these estimates could affect the
profitability of individual contracts. Ongoing contract profitability is monitored monthly.
4 Segment reporting – continuing operations
Management currently identifies three operating segments: Recruitment GB, the provision of workforce recruitment and management to
industry; Recruitment Ireland, the provision of generalist recruitment services; and PeoplePlus, the provision of skills and employment training
and support. The Group’s operating segments are determined based on the Group’s internal reporting to the Chief Operating Decision Maker
(“CODM”). The CODM has been determined to be the Group Chief Executive, with support from the Board.
Whilst there are individual legal entities within the three operating segments, they are operated and reviewed as single units by the Board of
Directors. Each legal entity within an operating segment has the same management team, head office and similar economic characteristics.
Historically and going forward, management will integrate new acquisitions into the main trading entities within each operating segment.
110
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
4 Segment reporting – continuing operations continued
Segment information for the reporting year is as follows:
Recruitment
GB
2022
£m
Recruitment
Ireland
2022
£m
PeoplePlus
2022
£m
Group
Costs
2022
£m
Total
Group
2022
£m
Recruitment
GB
2021
£m
Recruitment
Ireland
2021
£m
PeoplePlus
2021
£m
Group
Costs
2021
£m
Sales revenue from
external customers
Cost of sales
752.0
(700.0)
Segment gross profit
52.0
110.6
(97.7)
12.9
77.9
(59.6)
18.3
–
–
–
940.5
(857.3)
747.9
(697.2)
111.7
(100.4)
83.2
50.7
11.3
83.1
(62.3)
20.8
–
–
–
Total
Group
2021
£m
942.7
(859.9)
82.8
Administrative
expenses
Depreciation, software
& lease amortisation
Segment underlying
operating profit*
Amortisation of
intangibles arising on
business combinations
Segment profit from
operations
Finance (costs)/income
Segment profit/(loss)
before taxation
Tax credit
Segment profit/(loss)
from continuing
operations
(40.5)
(9.3)
(12.5)
(3.3)
(65.6)
(40.4)
(8.4)
(14.0)
(3.4)
(66.2)
(3.2)
(0.4)
(2.0)
–
(5.6)
(3.2)
(0.4)
(2.7)
–
(6.3)
8.3
3.2
3.8
(3.3)
12.0
7.1
2.5
4.1
(3.4)
10.3
(5.9)
(1.3)
(0.2)
–
(7.4)
(6.4)
(1.4)
(0.2)
–
(8.0)
2.4
(3.1)
(0.7)
1.8
1.9
(0.1)
1.8
–
3.6
–
3.6
(0.2)
(3.3)
0.5
(2.8)
0.3
4.6
(2.7)
1.9
1.9
0.7
(2.0)
(1.3)
0.3
1.1
(0.3)
0.8
(0.1)
3.9
–
3.9
–
(3.4)
(0.1)
(3.5)
1.5
2.3
(2.4)
(0.1)
1.7
1.1
1.8
3.4
(2.5)
3.8
(1.0)
0.7
3.9
(2.0)
1.6
*
Segment underlying profit before goodwill impairment, amortisation of intangible assets arising on business combinations, reorganisation costs and other non-underlying
costs.
Recruitment
GB
2022
£m
Recruitment
Ireland
2022
£m
PeoplePlus
2022
£m
Total non-current assets
Total current assets
28.4
117.6
12.2
19.9
36.2
13.3
Staffline
Group
2022
£m
–
3.3
Total
Group
2022
£m
76.8
154.1
Recruitment
GB
2021
£m
Recruitment
Ireland
2021
£m
PeoplePlus
Restated
2021
£m
36.0
106.6
11.6
20.1
36.5
17.3
Staffline
Group
2021
£m
–
0.5
Total
Group
Restated
2021
£m
84.1
144.5
Total assets
(consolidated)
Total liabilities
(consolidated)
Cash capital
expenditure inc
software
146.0
32.1
49.5
3.3
230.9
142.6
31.7
53.8
0.5
228.6
135.1
11.0
17.5
0.6
164.2
128.0
13.2
26.3
0.1
167.6
2.0
0.5
0.8
–
3.3
2.8
–
1.7
–
4.5
The analysis above excludes deferred tax assets as required by IFRS 8 Operating segments.
Strategic Report
Governance
Financial Statements
111
Revenues can be analysed by country as follows (96.7% of revenues arising within the UK in 2022, 97.0% in 2021):
UK
Republic of Ireland
Portugal
Recruitment
GB
2022
£m
Recruitment
Ireland
2022
£m
PeoplePlus
2022
£m
751.8
–
0.2
752.0
80.0
30.6
–
110.6
77.9
–
–
77.9
Total
Group
2022
£m
909.7
30.6
0.2
940.5
Recruitment
GB
2021
£m
Recruitment
Ireland
2021
£m
PeoplePlus
2021
£m
747.8
–
0.1
747.9
83.9
27.8
–
111.7
83.1
–
–
83.1
No customer contributed more than 10% of the Group’s revenue during either 2022 or 2021.
5 Expenses by nature
Expenses by nature are as follows:
Underlying expenses
Employee benefits expenses – cost of sales
Other cost of sales
Employee benefits expenses – administrative expenses
Depreciation and software amortisation
Operating lease expenses
Other administrative expenses
Disclosed as:
Cost of sales
Administrative expenses – excluding non-underlying expenses
Auditor’s remuneration
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
Fees payable to the Company’s auditor and its associates for other services:
– Audit of the accounts of subsidiaries
– Audit of the pension scheme
– Audit-related assurance services
– Audit fee expenses
Total
Non-underlying expenses – continuing operations
Amortisation of intangible assets arising on business combinations (licences, customer contracts)
Tax credit on above non-underlying expenses
Post taxation effect on above non-underlying expenses
2022
£m
836.2
21.1
47.3
5.6
1.2
17.1
928.5
857.3
71.2
928.5
2022
£’000
17
682
18
15
13
745
2022
£m
7.4
(1.8)
5.6
Total
Group
2021
£m
914.8
27.8
0.1
942.7
2021
£m
834.1
25.7
46.1
6.3
1.5
18.7
932.4
859.9
72.5
932.4
2021
£’000
15
620
16
15
20
686
2021
£m
8.0
(0.9)
7.1
The charge for amortisation of intangible assets arising on business combinations relates principally to the acquisitions of the Endeavour Group,
Passionate About People, Grafton Recruitment and Brightwork.
112
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
6 Finance income and charges
Finance income
Receipts from derivative
Derivative ineffectiveness
Finance charges
Interest payable on bank and other funding
Interest on lease liabilities
Amortisation of refinancing costs
Amortisation of derivative cost
Net finance charges
7 Directors’ and employees’ remuneration
Employee benefits expense – consolidated
Expense recognised for employee (excluding temporary workers) benefits is analysed below:
Wages and salaries
Social security costs
Other pension costs – defined contribution plans
Other pension costs – defined benefit plan service cost
Share-based payment charge – equity-settled
Included in administrative expenses (Note 5)
Included in cost of sales
Share-based payment charge – equity-settled
2022
£m
0.3
0.4
0.7
2022
£m
2.9
0.1
0.3
0.1
3.4
2.7
2022
£m
79.2
7.7
2.4
0.1
89.4
0.3
89.7
47.1
42.3
0.3
89.7
2021
£m
–
–
–
2021
£m
1.8
0.1
0.5
–
2.4
2.4
2021
£m
72.3
6.7
3.1
–
82.1
0.1
82.2
40.8
41.3
0.1
82.2
The average monthly number of persons (including Directors) employed by the Group during the year was:
– Sales and administrative
2022
Number
2021
Number
2,318
2,336
Strategic Report
Governance
Financial Statements
113
Included in cost of sales are temporary workers’ remuneration paid through the temporary payroll of subsidiary companies as follows:
Wages and salaries payable to employees
Social security costs
Other pension costs – defined contribution plans
Gross cost
Coronavirus Job Retention Scheme receipts
The average monthly number of temporary workers contracted by the Group during the year was:
2022
£m
729.8
55.2
8.9
793.9
–
793.9
2021
£m
737.6
49.4
7.4
794.4
(1.6)
792.8
Number
34,989
Number
37,844
The average number of persons (including Directors) employed by the Company during the year was six (2021: six). All Directors of the Group are
remunerated through a subsidiary of the Company for their services to the Group as a whole and no direct recharge was made to the Company
during the year (2021: £nil).
Directors’ remuneration is detailed on pages 70 to 73 of the Report on Remuneration and disclosed further in Note 26.
Share-based employee remuneration
SAYE share option plan 2019
In November 2019, Staffline granted options to employees as part of its SAYE share scheme for 2019. Eligible employees were invited to subscribe
for options over Staffline’s Ordinary Shares of 10 pence each (“Ordinary Shares”) with an exercise price of 76p, a 20% discount to the closing
middle market price on the trading day before the invitation to participate was made. The options have a contract start date of 1 December 2019
and are exercisable between 1 December 2022 and 1 June 2023. A total of 170 employees elected to participate and, pursuant to these elections,
a total of 1,336,094 options over Ordinary Shares were granted on 6 November 2019, equating to 1.94% of the then current issued share capital
of 68,930,486 shares. As at 31 December 2022, options over 42,725 shares remain (9 employees), options over 1,293,369 shares having lapsed
(161 employees).
SAYE share option plan 2021
In October 2021, Staffline Group plc granted options to employees as part of its SAYE share scheme for 2021. Eligible employees across the
Group were invited to subscribe for options over Staffline’s Ordinary Shares of 10 pence each (“Ordinary Shares”) with an exercise price of
50.56p, a 20% discount to the closing middle market price of 63.20p on the trading day before the invitation to participate was made on 8
October 2021. The options have a contract start date of 1 December 2021 and are exercisable between 1 December 2024 and 31 May 2025. A
total of 272 employees elected to participate and, pursuant to these elections, a total of 2,430,723 options over Ordinary Shares were granted
on 29 October 2021, equating to 1.466% of the current issued share capital of 165,767,728 shares. As at 31 December 2022, options over 925,392
shares remain (133 employees), options over 1,505,331 shares having lapsed (139 employees).
SAYE share option plan 2022
In October 2022, Staffline Group plc granted options to employees as part of its SAYE share scheme for 2022. Eligible employees across the
Group were invited to subscribe for options over Staffline’s Ordinary Shares of 10 pence each (“Ordinary Shares”) with an exercise price of 29.96p,
a 20% discount to the closing middle market price of 37.45p on the trading day before the invitation to participate was made on 12 October
2021. The options have a contract start date of 1 December 2022 and are exercisable between 1 December 2025 and 31 May 2026. A total of 196
employees elected to participate and, pursuant to these elections, a total of 3,277,333 options over Ordinary Shares were granted on 8 November
2022, equating to 1.977% of the current issued share capital of 165,767,728 shares. As at 31 December 2022, options over 3,230,472 shares
remain (193 employees), options over 46,861 shares having lapsed (3 employees).
Options awarded to Directors under the 2022 scheme are set out in the table below:
Albert Ellis – Chief Executive Officer
Daniel Quint – Chief Financial Officer
Options granted
60,080
60,080
114
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
7 Directors’ and employees’ remuneration continued
Long-Term Incentive Plan
2021 Award
On 6 July 2021, the Board approved the award of and granted nil cost options (the “Options”) over 1,678,279 Ordinary Shares of 10 pence each
in the Company (“Ordinary Shares”) to certain employees, including persons discharging managerial responsibilities (“PDMRs”).
The vesting of the Options is subject to the satisfaction of the Company achieving certain financial performance criteria for the financial year
ending 31 December 2023. 50% of the Options awarded are subject to achieving earnings per share hurdles and 50% are subject to achieving
EBITDA hurdles. In addition, no Options will vest unless the average closing price of the Ordinary Shares for the last 30 business days of 2023 is
above a minimum target. The Options will vest from 30 June 2024 and will be exercisable until 30 June 2031. Subsequent to the award, one of
the executives resigned as an employee of the Group and accordingly options over 180,328 lapsed.
2022 Award
On 17 May 2022, the Board approved the award of and granted nil cost options (the “Options”) over 2,899,725 Ordinary Shares of ten pence
each in the Company (“Ordinary Shares”) to certain employees, including persons discharging managerial responsibilities (“PDMRs”), as set
out below.
The vesting of the Options is subject to the satisfaction of the Company achieving certain financial performance criteria for the financial year
ending 31 December 2024. 50% of the Options awarded are subject to achieving earnings per share hurdles and 50% are subject to achieving
underlying operating profit hurdles. In addition, no Options will vest unless the average closing price of the Ordinary Shares for the last 30
business days of 2024 is above a minimum target. The Options will vest from 13 May 2025 (the “Vesting Period”) and will be exercisable until
13 May 2032.
The Options awarded each year to PDMRs which remain outstanding are set out in the table below:
Albert Ellis – Chief Executive Officer
Daniel Quint – Chief Financial Officer
Other senior executives – PDMRs
Other senior staff
2022
2021
Total
711,806
559,276
630,952
997,691
573,770
450,820
473,361
–
1,285,576
1,010,096
1,104,313
997,691
2,899,725
1,497,951
4,397,676
Share-based employee remuneration
A charge of £0.3m of employee remuneration expense has been included in the consolidated statement of comprehensive income for the
year ended 31 December 2022 (2021: £0.1m) which increased the share-based payment reserve by £0.3m (2021: £0.1m) in respect of
equity-settled schemes.
Save As You Earn Scheme
Long-term incentive plan
Total
2022
£m
0.2
0.1
0.3
2021
£m
0.1
–
0.1
Key management personnel
The key management personnel are considered to be the Board of Directors of Staffline Group plc, whose remuneration can be seen in the
Report on Remuneration on page 73, and the divisional Directors. The aggregate remuneration, excluding share-based payment charges, for the
divisional Directors for the year is £1.9m (2021: £2.1m). Further detail is provided in Note 26.
Strategic Report
Governance
Financial Statements
115
8 Tax expense
The tax credit on the loss for the year consists of:
Continuing activities
Corporation tax
UK corporation tax at 19.00% (2021: 19.00%)
Adjustments in respect of prior years
UK current tax credit
Deferred tax
Timing differences arising in the year
Adjustments in respect of prior years
UK deferred tax credit
Total UK tax credit for the year
The tax credit can be further analysed by division and by underlying/non-underlying trading as follows:
Recruitment GB
Recruitment Ireland
PeoplePlus
Staffline Group
Total UK tax credit for the year
Underlying trading
Non-underlying trading
Total UK tax credit for the year
2022
£m
0.1
–
0.1
(0.6)
(1.4)
(1.9)
(1.9)
2022
£m
(1.8)
–
0.2
(0.3)
(1.9)
(0.1)
(1.8)
(1.9)
2021
£m
–
(0.5)
(0.5)
(0.6)
(0.6)
(1.2)
(1.7)
2021
£m
(0.1)
(0.1)
–
(1.5)
(1.7)
(0.8)
(0.9)
(1.7)
The tax credit for the year, as recognised in the statement of comprehensive income, is lower than the standard rate of corporation tax in the UK
of 19.00% (2021: lower than the 19.00% standard rate). The differences are explained below:
Profit/(loss) for the year before taxation
Tax rate
Tax on profit/(loss) for the year at the standard rate
Effect of:
Remeasurement of deferred tax for changes in tax rates
Expenses not allowable
Income not taxable
Adjustments in respect of prior years
Tax losses available
Deferred tax not recognised
Actual tax credit
On underlying profit
On non-underlying loss
Actual tax credit
2022
£m
Total
1.9
19%
0.4
(0.4)
–
–
(1.0)
(0.7)
0.2
(1.9)
(0.1)
(1.8)
(1.9)
2021
£m
Total
(0.1)
19%
–
(0.7)
–
(0.1)
(1.1)
(0.8)
1.0
(1.7)
(0.8)
(0.9)
(1.7)
The total tax credit for the year of £1.9m (2021: £1.7m) arises principally from the movement of deferred tax balances. The Group has an
estimated current corporation tax liability of £0.1m (2021: £nil) for the current year and is anticipating a refund relating to Research &
Development tax relief claims. Corporation tax losses of £17.8m carried forward in all divisions and the Company have been recognised as a
deferred tax asset. This includes tax losses, amounting to £4.3m (2021: £6.6m) whose short-term recoverability was previously less certain, which
have now been recognised as a deferred tax asset.
116
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
8 Tax expense continued
A deferred tax liability is recognised in respect of intangible assets arising on acquired businesses. This liability is reduced each year in line
with the amortisation charge, giving rise to a deferred tax credit each year.
The deferred tax assets and liabilities at 31 December 2022 and at 31 December 2021 have been calculated based on 25%, reflecting the
expected timing of reversal of the related timing differences.
No material tax charges arise on overseas profits or losses and accordingly no disclosures relating to overseas tax are included within the
financial statements.
The current tax asset at the end of 2022 of £0.3m (2021: £0.6m) can be analysed as follows:
Asset at the beginning of the year
Charge for the current year
Loss carried back to prior years
R&D tax credit
Received in the year
Asset at the end of the year
Balance for 2022 tax year (liability)
Balance of 2021 tax year (assets)
Balance of 2020 tax year (assets)
Asset at the end of the year
2022
£m
(0.6)
0.1
–
(0.2)
0.4
(0.3)
0.1
(0.2)
(0.2)
(0.3)
2021
£m
(1.7)
–
(0.4)
(0.2)
1.7
(0.6)
–
–
(0.6)
(0.6)
9 Earnings per share and dividends
The calculation of basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average
number of shares in issue during the year, after deducting the “own shares” held in the Group’s Employee Benefit Trust of 2,014,511 shares
(2021: 1,140,400 shares). The calculation of the diluted earnings per share is based on the basic earnings per share as adjusted to further take
into account the potential issue of Ordinary Shares resulting from share options granted to certain Directors and senior staff under long-term
incentive schemes and share options granted to employees under the SAYE scheme.
Details of the earnings and weighted average number of shares used in the calculations are set out below:
Basic
2022
Basic
2021
Diluted
2022
Diluted
2021
Profit from continuing operations (£m)
Weighted average number of shares
Earnings per share from continuing operations (p)
3.8
163,753,217
2.3p
1.6
3.8
122,178,126 165,163,334
2.3p
1.3p
1.6
122,682,511
1.3p
Underlying earnings (post tax) from continuing operations (£m)
Underlying earnings per share (p)*
9.4
5.7p
8.7
7.1p
9.4
5.7p
8.7
7.1p
Loss from discontinued operations (£m)
Weighted average number of shares
Loss per share from discontinued operations (p)
Underlying loss from discontinued operations (£m)
Underlying loss per share from discontinued operations (p)*
–
–
–
–
–
(0.4)
122,178,126
(0.3)p
–
–
–
–
–
–
–
(0.4)
122,682,511
(0.3)p
–
–
Profit/(loss) for the year (£m)
Weighted average number of shares
Total earnings/(loss)per share (p)
3.8
163,753,217
2.3p
1.2
3.8
122,178,126 165,163,334
2.3p
1.0p
1.2
122,682,511
1.0p
* Underlying earnings before goodwill impairment, amortisation of intangible assets arising on business combinations, reorganisation costs and other non-underlying costs.
For the year ended 31 December 2021, the weighted average number of shares was increased by 54,388,040 shares to take account of the effect
of the Placing, Subscription and Open Offer in June 2021 whereby 96,837,242 new Ordinary Shares were issued.
The total number of dilutive share options held in LTIP and SAYE schemes is 1,410,117 (2021: 504,384).
Dividends
The Board is not proposing a dividend payment for 2022 (2021: £nil).
Strategic Report
Governance
Financial Statements
117
10 Discontinued activities
On 1 December 2020, the Group sold its loss-making Apprenticeships training business for a nominal sum. The sale agreement required
PeoplePlus to provide working capital support to the purchaser in the form of reimbursement of relevant salary costs incurred between December
2021 and March 2021, which were repaid over 12 months commencing May 2021. In 2020, the Apprenticeships business recorded an underlying
operating loss of £(2.2)m for the year, before reorganisation and exit costs of £(2.5)m. During 2021, further exit costs of £0.3m were incurred.
The Group completed the disposal of its subsidiaries in Poland to the incumbent management team in December 2021. The results of the Polish
activities were deemed to be discontinued during 2021 and the loss for that year was £(0.3)m. Costs incurred during 2021, principally for legal
fees, amounted to £0.1m.
11 Goodwill
Gross carrying amount by operating segment:
Gross carrying amount
At 1 January 2022 and 31 December 2022
Impairment adjustment
At 1 January 2022 and 31 December 2022
Net book amount at 31 December 2022
Net book amount at 31 December 2021
Recruitment
GB
£m
Recruitment
Ireland
£m
PeoplePlus
£m
54.5
5.7
57.0
33.1
21.4
21.4
–
5.7
5.7
24.5
32.5
32.5
Total
£m
117.2
57.6
59.6
59.6
Impairment – Goodwill
Management considers there to be three cash-generating units (“CGUs”), being Recruitment GB, Recruitment Ireland and PeoplePlus, in line with
the operating segments defined in Note 4. These three CGUs have been tested for impairment.
An impairment review was conducted as at 31 December 2022. The recoverable amount of goodwill was determined based on a value-in-use
calculation, using forecasts for 2023–25, followed by an extrapolation of expected cash flows over the next two years with a long-term growth
rate of 2% for each cash-generating unit. The forecasts are prepared by the individual operating segments of the Group, which are considered
to be the same as the determined CGUs. The cash flow forecasts are based on current levels of trading for each CGU, with income and cost
increases generally in line with inflation at 2% and no significant contract wins or losses.
Pre-tax discount rates of 17.3% for Recruitment GB, 16.5% for Recruitment Ireland and 14.2% for PeoplePlus (2021: 14.4% for Recruitment GB,
12.0% for Recruitment Ireland and 11.7% for PeoplePlus) were used based on the weighted average costs of capital for each operating segment.
The recoverable amounts of the CGUs, having considered the higher of value-in-use and fair value less costs to sell, were £58.8m for Recruitment
GB, £24.1m for Recruitment Ireland and £42.2m for PeoplePlus, all being value-in-use. The discount rates used are based on appropriate, current
long-term market rate indicators to give a long-term forward view, whilst also acknowledging historical information.
The results of the impairment review showed headroom in all cash-generating units and accordingly no impairment was noted. The same
calculations indicated that an impairment adjustment of £8.2m is required to the Company’s carrying value of its investment in PeoplePlus,
but that no other impairment adjustments were indicated.
In making the assessment of the recoverability of assets within each CGU a number of judgements and assumptions were required.
The critical judgement relates to the determination of the CGUs. Whilst there are individual legal entities within the three operating segments,
they are operated and reviewed as single units by the Board of Directors. Each operating segment has its own management team and head
office. The Group’s strategy, historically and going forward, has been to integrate new acquisitions into the main trading entities within each
operating segment.
118
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
11 Goodwill continued
Impairment – Goodwill continued
The key estimates in determining the value of each CGU are:
1.
The discount rate. In the calculations we have utilised a pre-tax discount rate of 17.3% for Recruitment GB, 16.5% for Recruitment Ireland
and 14.2% for PeoplePlus and a terminal growth value of 2%. These rates are based on the latest weighted average costs of capital for each
operating segment. These rates have increased this year primarily due to a movement in the risk-free rate. The calculations highlighted
headroom of £29.5m for Recruitment GB, headroom of £13.0m for Recruitment Ireland and headroom of £6.3m for PeoplePlus. A 1% increase
in the discount rates reduces the headroom to £25.8m for Recruitment GB, reduces headroom to £11.3m for Recruitment Ireland and reduces
headroom to £3.0m for PeoplePlus.
2.
The achievability of the forecasted future cash flows. There is an inherent uncertainty regarding the achievability of forecasts, as there
are macroeconomic factors outside of the Group’s control. A sustained underperformance of 10% reduces the headroom to £23.7m
for Recruitment GB, reduces headroom to £10.6m for Recruitment Ireland and reduces headroom to £2.1m for PeoplePlus. A sustained
underperformance of 17% would be required before any impairment was necessary to the goodwill.
As at 31 December 2022, the Company had no goodwill (2021: £nil).
12 Other intangible assets
The Group’s other intangible assets include the customer contracts, brands and lists obtained through the acquisition of businesses plus acquired
software. There are no intangible assets with restricted title.
Gross carrying amount
At 1 January 2021
Additions
Disposals
At 31 December 2021
Additions
Disposals
At 31 December 2022
Amortisation
At 1 January 2021
Charged in the year
Disposals
At 31 December 2021
Charged in the year
Disposals
At 31 December 2022
Net book amount at 31 December 2022
Net book amount at 31 December 2021
The Company has no other intangible assets (2021: £nil).
Software
£m
Licences
£m
Customer
contracts and
brands
£m
Customer lists
£m
12.2
2.1
(0.8)
13.5
2.3
–
15.8
6.5
1.8
(0.7)
7.6
2.0
–
9.6
6.2
5.9
2.0
–
–
2.0
–
–
2.0
2.0
–
–
2.0
–
–
2.0
–
–
85.1
–
–
85.1
–
–
85.1
66.5
8.0
–
74.5
7.4
–
81.9
3.2
10.6
5.5
–
–
5.5
–
–
5.5
5.5
–
–
5.5
–
–
5.5
–
–
Total
£m
104.8
2.1
(0.8)
106.1
2.3
–
108.4
80.5
9.8
(0.7)
89.6
9.4
–
99.0
9.4
16.5
Strategic Report
Governance
Financial Statements
119
As at 31 December 2022, there are four individually material other intangible assets:
Customer contracts in Endeavour Group
Customer contracts/brands in Passionate About
People Group
Customer contracts in Grafton Recruitment
Payroll and Credit Control software developed for
Recruitment division
Customer contracts in One Call Recruitment
Customer contracts in Brightwork
Others
Net book amount at 31 December 2022
2022 £m
Customer
contracts and
brands
Software
–
–
–
4.8
–
–
1.4
6.2
0.4
1.7
0.8
–
0.3
–
–
3.2
2021 £m
Customer
contracts and
brands
Software
–
–
–
5.1
–
–
0.8
5.9
3.4
4.0
2.1
–
0.9
0.2
–
10.6
Total
0.4
1.7
0.8
4.8
0.3
–
1.4
9.4
Total
3.4
4.0
2.1
5.1
0.9
0.2
0.8
16.5
Software, customer contracts and brands each have a useful economic life (“UEL”) of 5.0 years. At 31 December 2022, the remaining UELs of the
principal customer contracts are as follows:
Endeavour Group
Passionate About People Group
Grafton Recruitment
One Call Recruitment
13 Fixed asset investments – Company
Cost at 1 January 2021
Impairment adjustment
Net book amount at 31 December 2021
Impairment adjustment
Net book amount at 31 December 2022
UEL
(years)
0.2
0.8
0.6
0.4
Investment
in Group
undertakings
£m
67.8
–
67.8
(8.2)
59.6
An impairment review was carried out with respect to the Company’s carrying value of its investments in subsidiaries and considering recoverable
amount as the higher of value-in-use and fair value less costs to sell for each investment.
The impairment review indicated that an impairment adjustment was required to the carrying value of the Company’s investment in the
PeoplePlus division. The impairment arose due to the combination of the increase in the discount rate and a reduction of forecast earnings
by the division. The recoverable amount of the investment at 31 December 2022 is £42.2m. The recoverable amount of the investment was
based on value-in-use calculations with the same assumptions as described in Note 11. A 1% increase in the discount rate applied would have
resulted in an impairment of £11.5m. A sustained underperformance in the achievement of forecast profitability of 10% would have resulted in
an impairment of £12.4m.
The recoverable amounts of the investments in the Recruitment GB and Recruitment Ireland divisions were based on the value-in-use of the
subsidiaries. No impairment adjustment is required.
120
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
13 Fixed asset investments – Company continued
As at 31 December 2022, the Company holds interests in the following companies:
Subsidiaries
Registered office: 19–20 The Triangle, NG2 Business Park,
Nottingham, England, NG2 1AE
Staffline Recruitment Limited
PeoplePlus Group Limited
A4e Limited
Agency Plus Limited*
A La Carte Recruitment Limited*
Datum RPO Limited*
Driving Plus Limited*
Endeavour Group Limited*
Eos Works Limited*
Eos Works Group Limited
Staffline Recruitment (NI) Limited*
Omega Resource Group Limited*
One Call Recruitment Limited*
Passionate About People Limited*
IEG Limited
Vital Recruitment Limited*
Warwickshire and West Mercia Community Rehabilitation Company Limited*
Registered office: Cooldriona Court, Main Street, Swords,
Co. Dublin, Ireland, K67 WN92
Staffline Limited
Staffline Recruitment (ROI) Limited*
Registered office: The Boat, 49 Queens Square, Belfast, BT1 3FG
Proportion of
Ordinary Share
capital held
Country of
incorporation
Nature of business
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100%
Northern Ireland
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
100% England and Wales
Recruitment
Skills and training
Dormant
Dormant
Dormant
Recruitment
Transport
Dormant
Dormant
Dormant
Recruitment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
100%
100%
Republic of Ireland
Republic of Ireland
Dormant
Recruitment
PeoplePlus (Works) NI Limited*
100%
Northern Ireland
Dormant
Registered office: 193/199 Bath Street, Glasgow, Scotland, G2 4HU
Brightwork Limited*
100%
Scotland
Recruitment
Registered office: Rua S. Joao de Brito 605 E-4, Porto,
Ramalde, 4100 455 Porto, Portugal
Omega Recruitment, Unipessoal LDA*
100%
Portugal
Recruitment
* These companies are owned indirectly through other Group companies.
Strategic Report
Governance
Financial Statements
121
14 Property, plant and equipment
Gross carrying amount
At 1 January 2021
Additions
Disposals
At 31 December 2021
Additions
Disposals
Transfer
At 31 December 2022
Depreciation
At 1 January 2021
Charged in the year – operating
Charged in the year – impairment
Disposals
At 31 December 2021
Charged in the year – operating
Charged in the year – impairment
Disposals
Transfer
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
Land and
buildings
£m
Computer
equipment
£m
Fixtures and
fittings
£m
Motor
vehicles
£m
14.7
1.4
(1.4)
14.7
2.3
(1.7)
0.4
15.7
7.9
1.7
0.7
(0.7)
9.6
1.7
(0.6)
(1.3)
0.2
9.6
6.1
5.1
11.3
1.8
(0.8)
12.3
0.6
(1.5)
(0.4)
11.0
8.6
1.8
–
(0.7)
9.7
1.5
–
(1.4)
(0.2)
9.6
1.4
2.6
1.3
0.3
(0.4)
1.2
0.3
(0.1)
–
1.4
1.2
0.2
–
(0.3)
1.1
0.2
–
–
–
1.3
0.1
0.1
0.2
0.3
–
0.5
–
(0.1)
–
0.4
0.2
0.1
–
–
0.3
0.2
–
(0.1)
–
0.4
–
0.2
Total
£m
27.5
3.8
(2.6)
28.7
3.2
(3.4)
–
28.5
17.9
3.8
0.7
(1.7)
20.7
3.6
(0.6)
(2.8)
–
20.9
7.6
8.0
Land and buildings and computer equipment includes the following right-of-use assets:
At 31 December 2022
Office buildings
Computer equipment
At 31 December 2021
Office buildings
Computer equipment
As at 31 December 2022, the Company had no property, plant and equipment assets (2021: £nil).
Carrying
amount
Depreciation
expense
Impairment
4.7
–
4.7
(1.5)
–
(1.5)
0.6
–
0.6
Carrying
amount
Depreciation
expense
Impairment
3.6
0.2
3.8
(1.6)
–
(1.6)
(0.7)
–
(0.7)
122
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
15 Leases
Lease liabilities are presented in the statement of financial position as follows:
Current
Non-current
2022
£m
1.5
3.4
4.9
2021
£m
1.3
3.3
4.6
The Group has leases for its operational and administrative offices. With the exception of short-term leases and leases of low-value underlying
assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group classifies its right-of-use assets in a
consistent manner to its property, plant and equipment (see Note 14).
Unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can typically only be used by the
Group. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. The Group is prohibited from
selling or pledging the underlying leased assets as security. For leases over office buildings the Group must keep those properties in a good state
of repair and return the properties in their original condition at the end of the lease. Further, the Group must insure items of property, plant and
equipment and incur maintenance costs on such items in accordance with the lease contracts.
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset recognised on the balance sheet:
Right-of-use asset
Office building
No of right-
of-use assets
leased
Range of
remaining term
(years)
Average
remaining lease
term
No of leases
with extension
options
51
0.1–12.2
2.8
–
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2022 were as follows:
31 December 2022
Lease payments
Finance charges
Net present value
31 December 2021
Lease payments
Finance charges
Net present value
Within one
year
1.6
(0.1)
1.5
1.4
(0.1)
1.3
Minimum lease payments due
1–2 years
2–3 years
3–4 years
After 5 years
Total
1.2
(0.1)
1.1
1.2
(0.1)
1.1
0.8
(0.1)
0.7
0.8
–
0.8
0.6
–
0.6
0.5
–
0.5
1.0
–
1.0
0.9
–
0.9
5.2
(0.3)
4.9
4.8
(0.2)
4.6
Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of
low-value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not
permitted to be recognised as lease liabilities and are expensed as incurred.
Strategic Report
Governance
Financial Statements
123
The expense relating to payments not included in the measurement of the lease liability is as follows:
Short-term leases
Leases of low-value assets
2022
£m
0.5
0.6
1.1
2021
£m
0.8
0.7
1.5
The Group has not committed to any leases that have not yet commenced.
Total cash outflow for leases for the year ended 31 December 2022 was £2.8m (2021: £3.2m).
16 Retirement benefit net asset/(liability)
One of the Group’s subsidiaries, PeoplePlus Group Limited, operates a defined benefit pension scheme for some staff. The scheme is closed to
new entrants. The last actuarial valuation of the scheme was at 30 May 2019. Given that the fair value of plan assets is only £7.1m (2021: £10.1m),
only significant disclosures are reported below.
The amounts recognised in the balance sheet are determined as follows:
Fair value of plan assets
Present value of funded obligations
Net asset/(liability) in the balance sheet at 31 December
Actuarial gain during the year, before tax
Deferred tax on gain
Actuarial gain during the year, post deferred tax impact
2022
£m
7.1
(6.9)
0.2
0.5
(0.1)
0.4
2021
£m
10.1
(10.4)
(0.3)
0.8
(0.1)
0.7
The Directors have agreed with the pension trustees to make additional contributions to the pension scheme with a view to substantially reducing
the liability by 31 July 2029.
The movement in the fair value of the plan assets over the year is as follows:
Balance at 1 January
Interest on assets
Expenses
Contributions – employer and member
Benefits paid
Actuarial gain/(loss) on asset return
Fair value of plan assets in the balance sheet at 31 December
At 31 December 2022, the scheme’s assets, valued at market value, were distributed as follows:
Bonds (44% of assets as at 31 December 2022)
Equities (11% of assets as at 31 December 2022)
Specialist (34% of assets as at 31 December 2022)
LDI (14% of assets as at 31 December 2022)
Cash (-3% of assets as at 31 December 2022)
Fair value of plan assets in the balance sheet at 31 December
2022
£m
10.1
0.2
(0.1)
0.2
(0.2)
(3.1)
7.1
2022
£m
3.1
0.8
2.4
1.0
(0.2)
7.1
2021
£m
9.8
0.1
(0.1)
0.2
(0.2)
0.3
10.1
2021
£m
5.7
3.3
–
–
1.1
10.1
124
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
16 Retirement benefit net asset/(liability) continued
All investments are managed by the investment advisers and Standard Life within the Standard Life “wrap investment” portfolio where the
investments are held within Dimensional Funds at the year-end. All funds are passively managed. The funds held by the scheme are all pooled
investment vehicles and therefore the investment manager is responsible for appointing an independent custodian. The objective of each
of these funds is to match the investment return in a particular investment market subject to an acceptable degree of tracking-error that
is monitored by the Trustees.
The movement in the present value of defined benefit funding obligations over the year is as follows:
Balance at 1 January 2021
Interest cost on liabilities
Service cost – current accrual cost
Benefits paid – net of member contributions
Actuarial gain on change in assumptions
Present value of funded obligations in the balance sheet at 31 December
Membership numbers (active 2022: 12, 2021: 12)
The liabilities have been calculated using the following principal actuarial assumptions:
Future increase in inflation rate (RPI)
Future increase in inflation rate (CPI)
Salary increase
Discount rate
Future pension increases for leavers (RPI)
2022
£m
10.4
0.2
0.1
(0.2)
(3.6)
6.9
263
2021
£m
10.9
0.1
0.1
(0.2)
(0.5)
10.4
263
2022
3.15%
2.55%
3.15%
4.9%
3.15%
2021
3.30%
2.70%
3.30%
1.90%
3.30%
Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience.
Mortality assumptions are based on the following mortality tables:
• Pre-retirement mortality: 100% of SAPS “S2” Normal tables
• Post-retirement mortality: 100% of SAPS “S2” Normal tables
Future improvements in longevity are based on the following:
• Pre-retirement mortality: CMI 2021 projections with a long-term trend of 0.0% per annum
• Post-retirement mortality: CMI 2021 projections with a long-term trend of 1.25% per annum
The mortality assumptions used were as follows:
Average expected future life at age 65 for a:
– male currently aged 65
– female currently aged 65
– male currently aged 45
– female currently aged 45
31 Dec 2022
Years
31 Dec 2021
Years
27.2
29.5
28.7
31.0
27.2
29.4
28.7
30.9
Members are assumed to retire at the earliest age when there would be no reduction. It is also assumed that members commute 75% of the
maximum HMRC allowance based on current commutation factors. There are £nil (2021: £nil) contributions unpaid at the year-end.
A charge of £0.1m (2021: £0.1m) is included within the statement of comprehensive income within administrative expenses for the service cost.
A net actuarial gain, after deferred taxation, of £0.5m (2021: gain of £0.7m) is included within the consolidated statement of changes in equity.
At 31 December 2022, the Company had no pension balances (2021: £nil).
Strategic Report
Governance
Financial Statements
125
17 Trade and other receivables
Trade and other receivables
Amounts due from Group undertakings
Accrued income
Debtors: Amounts falling due after more than one year
Amounts due from Group undertakings
2022
Group
£m
109.2
–
10.6
–
119.8
2022
Company
£m
0.5
2.7
–
32.2
35.4
2021
Group
Restated
£m
100.9
–
12.7
–
113.6
2021
Company
£m
–
3.0
–
30.8
33.8
Trade and other receivables are usually due within 30 days and do not bear any effective interest rate. All trade receivables are subject to credit
risk exposure and the Group maintains a comprehensive credit insurance policy, which mitigates a significant proportion of any potential credit
risk. The Group does not identify specific concentrations of credit risk with regard to trade and other receivables as the amounts recognised
represent a large number of receivables from various customers.
The Company has a loan agreement with a subsidiary undertaking, Staffline Recruitment Ltd, for a capital amount of £32.2m as at 31 December
2022 (2021: £30.8m). The loan is unsecured, is repayable after four years from 30 December 2021 and bears interest at a rate of 4.50% per
annum. All other amounts due from Group undertakings are non-interest bearing, unsecured and repayable on demand.
The amounts held at 31 December 2022 by the Company pose no material liquidity or credit risk as they are owed by other Group undertakings
and are expected to be settled by Group transactions.
Included in the trade and other receivables balance above is a bad debt provision of £0.3m (2021: £0.7m). The bad debt provision is split
as follows:
Expected Credit Loss
Specific bad debt provision
Bad debt provision
2022
£m
0.1
0.2
0.3
2021
£m
0.1
0.6
0.7
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade
receivables. See Note 29 for details.
18 Derivative financial instruments
Cash flow hedge – interest rate cap
2022
Group
£m
3.0
2022
Company
£m
3.0
2021
Group
£m
0.5
2021
Company
£m
0.5
During 2021, the Group entered into an amortising interest rate cap instrument, which reduces exposure to interest rate increases above 1% of
SONIA on an aggregated two-thirds of the RFA and the customer finance arrangements. The instrument, which has a term of three years from 13
October 2021, is based on quarterly notional amounts varying between £39.5m and £62.5m, with an average of £51.9m. See Note 29 for details of
the Group’s risk management objectives and policies.
The Group has designated the interest rate cap contract as a hedged instrument in a cash flow hedge relationship. All derivative financial
instruments used for hedge accounting are recognised initially at fair value and reported subsequently at fair value in the statement of financial
position. To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges
are recognised in other comprehensive income and included within the cash flow hedge reserve in equity. Any ineffectiveness in the hedge
relationship is recognised immediately in profit or loss.
The fair value of the derivative is based on market data to calculate the present value of all estimated flows associated with it at the balance
sheet date. The interest rate cap is classed as a level 2 financial instrument in accordance with IFRS 13 classification hierarchy. Level 2 financial
instruments are not traded in an active market, but the fair value is based on quoted market prices, broker/dealer quotations, or alternative
pricing sources with reasonable levels of price transparency.
126
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
18 Derivative financial instruments continued
The movements on the fair value of the derivative financial asset and on the cash flow hedge reserve are as follows:
Initial cost
Movement through comprehensive income
Movement through cash flow hedge reserve
At 31 December 2021
Movement through comprehensive income – hedge ineffectiveness
Movement through cash flow hedge reserve
Deferred taxation
At 31 December 2022
19 Cash
Cash and cash equivalents
Cash flow
hedge
reserve
£m
Derivative
financial
asset
£m
–
–
0.2
0.2
–
2.1
(0.6)
1.7
0.4
(0.1)
0.2
0.5
0.4
2.1
–
3.0
2022
Group
£m
31.0
2022
Company
£m
0.1
2021
Group
£m
29.8
2021
Company
£m
–
Cash and cash equivalents consist of cash on hand and balances with banks only. The majority of cash on hand and balances with banks are
held by subsidiary undertakings; however, the balances are available for use by the Group.
Long-term credit ratings for the Group’s main banks are currently as follows:
Royal Bank of Scotland plc
National Westminster Bank plc
The Group’s headroom versus available committed bank facilities is as follows:
Cash at bank (as above)
Undrawn Receivables Finance Agreement
Banking facility headroom
20 Trade and other payables
Trade and other payables
Accruals
Deferred income
Amounts due to Group undertakings
Other taxation and social security
Fitch
A+
A+
Standard
& Poor’s
A
A
Moody’s
A1*/A1
A1*/A1
2022
£m
31.0
44.9
75.9
2021
Group
£m
20.4
45.8
14.3
–
53.8
134.3
2021
£m
29.8
48.6
78.4
2021
Company
£m
–
–
–
3.4
–
3.4
2022
Group
£m
30.5
44.1
8.5
–
47.2
130.3
2022
Company
£m
–
–
–
1.0
–
1.0
The fair value of trade and other payables has not been separately disclosed as, due to their short duration, the Directors consider the carrying
amounts recognised in the statement of financial position to be a reasonable approximation of their fair value.
Strategic Report
Governance
Financial Statements
127
The Group took advantage of the UK Government scheme for the deferral of VAT payments between March and June 2021. The total deferral
under the scheme amounted to £42.4m after offset of a corporation tax refund due from 2018. The balance was repaid in equal instalments
between June 2021 and January 2022. The final instalment of £5.8m was repaid in January 2022.
Under certain contracts, the Group’s PeoplePlus division typically receives income in advance of full satisfaction of its performance obligations.
Such amounts are recorded as deferred income and released as the relevant obligations are fulfilled.
For 2022, revenue includes £2.7m (2021: £6.9m) included in the contract liability balance at the beginning of the period.
Amounts due to Group undertakings are non-interest bearing, unsecured and repayable on demand.
21 Borrowings
Borrowings are repayable as follows:
In one year or less or on demand*
In more than one year but not more than two years*
In more than two years but not more than five years*
In more than five years
Total borrowings
* Ageing of balances above is shown excluding unamortised refinancing costs.
Split:
Current liabilities:
Receivables Finance Agreement
Lease liabilities
Non-current liabilities:
Lease liabilities
Total borrowings
Less: Cash (Note 19)
Net cash
2022
Group
£m
27.5
1.1
1.3
1.0
30.9
2022
Company
£m
–
–
–
–
–
2021
Group
£m
24.2
1.1
1.3
0.9
27.5
2021
Company
£m
–
–
–
–
–
2022
Group
£m
2022
Company
£m
2021
Group
£m
2021
Company
£m
26.0
1.5
27.5
3.4
30.9
(31.0)
(0.1)
–
–
–
–
–
(0.1)
(0.1)
22.9
1.3
24.2
3.3
27.5
(29.8)
(2.3)
–
–
–
–
–
–
–
On 10 June 2021, the Group entered into a Receivables Finance Agreement (“RFA”) to replace the existing Group funding arrangements. The RFA
contained certain requirements to be met before completion, the most significant of which was that the Company raise new equity capital of at
least £40.0m. This condition was satisfied and the RFA became effective on 10 June 2021.
The key terms of the facility, which is provided jointly by RBS Invoice Finance Limited, ABN AMRO Asset Based Finance N.V., UK Branch and Leumi
ABL Limited, are set out below:
i)
ii)
iii)
iv)
v)
vi) Maximum net debt (averaged over a rolling three months) to EBITDA leverage covenant commencing at 5.95x followed by a gradual reduction
Maximum receivables financing facility of £90.0m over a four-and-a-half-year term, with a one-year extension option;
An Accordion option of up to an additional £15.0m, subject to lender approval;
Security on all of the assets and undertakings of the Company and certain subsidiary undertakings;
Interest accruing at 2.75% over SONIA, with a margin ratchet downward to 2.0%, dependent upon the Group’s leverage reducing to 3.00x;
A non-utilisation fee of 35% of the margin;
to 4.0x by October 2023;
vii) Minimum interest cover covenant of 2.25x the last 12 months EBITDA to finance charges; and
EBITDA is defined as earnings before interest, taxation, depreciation and amortisation.
128
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
21 Borrowings continued
On entering into the RFA, the Group’s existing facilities, which comprised a Revolving Credit Facility of £20.0m, a Receivables Finance Facility of
£68.2m and a non-recourse Receivables Purchase Facility of £25.0m, were cancelled. The Group retained its Customer Financing arrangements
whereby specific customer invoices are settled in advance of their normal settlement date. The value of invoices funded under the Customer
Financing arrangements was £51.7m at 31 December 2022 (2021: £42.3m). Costs incurred in relation to these arrangements are charged to profit
and loss as finance charges when incurred.
For the period to 31 December 2024, the Group’s cash flow forecasts indicate ongoing headroom in the RFA and also full compliance with the
financial covenants described above.
22 Other liabilities
Due after more than one year (non-current)
Retirement benefit net liability
2022
Group
£m
2022
Company
£m
2021
Group
£m
2021
Company
£m
–
–
–
–
0.3
0.3
–
–
The Group has agreed with the trustees of the Group’s defined benefit pension scheme to make additional contributions to the scheme in order
to eliminate the actuarial deficit by July 2029.
23 Provisions
At 1 January 2022
Amounts charged to the income statement
Amounts transferred from accruals
Amounts utilised
Unused amounts reversed to the income statement
At 31 December 2022
Due within one year (current)
Due after more than one year (non-current)
At 31 December 2022
NMW
remediation
and
financial
penalties
£m
Property
costs
£m
Employee
claim
£m
1.8
0.8
–
(0.3)
(1.3)
1.0
0.4
0.6
1.0
0.1
–
–
(0.1)
–
–
–
–
–
–
0.2
–
–
–
0.2
0.2
–
0.2
Staff
costs
£m
0.9
–
–
(0.2)
(0.4)
0.3
0.3
–
0.3
2022
Group
Total
£m
2.8
1.0
–
(0.6)
(1.7)
1.5
0.9
0.6
1.5
2021
Group
Total
£m
5.0
0.5
0.1
(1.4)
(1.4)
2.8
1.4
1.4
2.8
The Group makes provision for staff and property costs relating to reorganisation programmes. The staff costs relate to redundancies and the
property costs relate to lease dilapidations.
Provision is made for “wear and tear” dilapidation costs at the Group’s leased properties. Where possible, dilapidations provisions are determined
based on an independent valuation of the estimated total cost payable on expiry of the respective leases. The timing and value of the costs are
uncertain due to potential changes to exit dates and the final liability which may be subject to negotiation with the landlord.
The NMW remediation and financial penalties provision, which has been fully settled, related to historic HMRC National Minimum Wage
breaches.
The Company has no provisions (2021: £nil).
Strategic Report
Governance
Financial Statements
129
24 Deferred taxation
Deferred taxation assets
Deferred taxation (liabilities)
Net asset/(liability)
2022
Group
£m
5.0
(1.5)
3.5
2022
Company
£m
0.4
(0.6)
(0.2)
2021
Group
Restated
£m
4.9
(2.7)
2.2
2021
Company
£m
0.8
–
0.8
The table below shows the Group movement in net deferred taxation during the year:
2022
Deferred tax assets/(liabilities)
Property, plant, equipment and software temporary timing differences
Acquired intangible assets
Provisions
Recoverable tax losses
Retirement benefit asset
Hedge instrument
Net asset
Recognised as:
Deferred tax asset
Deferred tax liability
Net asset
1 January
2022 Restated
£m
Recognised in
comprehensive
income –
current year
£m
Recognised in
comprehensive
income –
prior year
£m
31 December
2022
£m
0.2
(2.7)
0.7
3.9
0.1
–
2.2
4.9
(2.7)
2.2
–
1.8
(0.3)
(0.5)
(0.1)
(0.6)
0.3
(0.9)
1.2
0.3
(0.3)
–
0.7
0.6
–
–
1.0
1.0
–
1.0
(0.1)
(0.9)
1.1
4.0
–
(0.6)
3.5
5.0
(1.5)
3.5
The table below shows the Group movement in net deferred taxation during the prior year:
2021
Deferred tax assets/(liabilities)
Property, plant, equipment and software temporary timing differences
Acquired intangible assets
Provisions
Recoverable tax losses
Retirement benefit asset
Net asset
Recognised in
comprehensive
income –
current year
£m
Recognised in
comprehensive
income –
prior year
£m
1 January
2021 Restated
£m
31 December
2021 Restated
£m
0.4
(3.0)
0.7
2.9
0.2
1.2
0.1
0.3
(0.5)
0.6
(0.1)
0.4
(0.3)
–
0.5
0.4
–
0.6
0.2
(2.7)
0.7
3.9
0.1
2.2
The Group has utilised taxable losses against current year taxable profits amounting in aggregate to £7.0m (2021: £4.1m), during the year and
has carried forward tax losses of £17.8m. These losses are available for relief against future tax liabilities. The likelihood of recovery of these losses
in the foreseeable future is considered to be probable and consequently a deferred tax asset has been recognised. Tax losses, amounting to
£4.3m (2021: £6.6m) whose short-term recoverability was previously considered to be less certain, and therefore not recognised as a deferred tax
asset, have now been recognised.
Deferred tax assets and liabilities in the UK have been recognised at the rate of 25%, whilst those in the Republic of Ireland have been recognised
at 12.5%. An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantially enacted on 24 May 2021. This will
increase the Group’s future tax charges accordingly.
Deferred tax net liabilities expected to unwind next year total £0.9m, being the estimated amortisation of intangible assets arising on business
combinations of £3.3m at a tax rate of 25%.
No deferred tax has been recognised on taxable temporary differences associated with investments as the parent is able to control the timing of
the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
130
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
25 Share capital
Allotted and issued
165,767,728 Ordinary 10p Shares
Shares issued and fully paid at the beginning of the year
Shares issued during the year
Shares issued and fully paid at the end of the year
2022
£m
2021
£m
16.6
16.6
2022
Number
2021
Number
165,767,728
–
68,930,486
96,837,242
165,767,728
165,767,728
All Ordinary Shares have the same rights and there are no restrictions on the distribution of dividends or repayment of capital with the
exception of the 2,014,511 shares held at 31 December 2022 (2021: 1,140,400 shares) by the Employee Benefit Trust where the right to
dividends has been waived.
On 21 May 2021, the Group announced a proposed Placing, Subscription and Open Offer (the “Fundraise”) following conditional agreement of
a debt refinancing the previous day. The Fundraise comprised the following elements:
• a total of 87,249,500 new Ordinary Shares of 10 pence each placed at a price of 50 pence per share (the “Issue Price”) to certain existing
shareholders and new institutional investors;
• a total of 750,500 new Ordinary Shares of 10 pence each to certain Directors and employees of the Group at the issue price; and
• an open offer to existing shareholders for ten shares for every 78 Ordinary Shares held, for a total of 8,837,242 new Ordinary Shares of 10
pence each at the issue price.
The total proceeds of the Fundraise, which was approved by the shareholders in a General Meeting on 9 June 2021, was £48.4m and the new
Ordinary Shares were admitted by the London Stock Exchange for trading on AIM on the following day.
26 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this Note.
There were no material transactions with Directors of the Company during the period, except for those relating to remuneration and share
purchases as noted below.
Transactions with key management personnel
The Group key management personnel’s (defined as the Company’s Directors and divisional directors) remuneration, which includes the Group
Directors’ remuneration disclosed above, is detailed below:
Short-term employee benefits:
Salaries and fees (inc. car allowance)
Bonus
Pension contributions
Benefits in kind
Pay in lieu of notice
Share-based employee remuneration charge
2022
£’000
1,996
1,275
193
12
20
106
3,602
2021
£’000
2,508
137
159
12
–
20
2,836
The emoluments of the highest paid director were £791,000 (2021: £749,000).
Fees for the services of Daniel Quint in 2021 of £40,000, which were paid prior to his appointment as a Director of the Company on 1 February
2021, are included in both the transactions with Directors and the transactions with key management personnel. The fees were paid to the
company, Q Finance Limited, of which Daniel is a director.
Strategic Report
Governance
Financial Statements
131
27 Contingencies
A cross-guarantee exists between the Company and certain subsidiary undertakings for all amounts owing to National Westminster Bank plc.
The Group aggregate amount owing to National Westminster Bank plc at the year-end was £26.0m (2021: £22.9m).
28 Capital commitments
The Group and Company had no material capital commitments at either 31 December 2022 or 31 December 2021.
29 Risk management objectives and policies
The Group is exposed to a variety of financial risks through its use of financial instruments which result from both its operating and investing
activities. The Group’s risk management is co-ordinated at its headquarters, in close consultation with the Board of Directors.
The Group does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the
Group is exposed are described below.
Credit risk
Generally, the Group’s maximum exposure to credit risk is limited to the carrying amount of the financial assets (being current assets excluding
corporation tax recoverable) recognised at the balance sheet date, as summarised below:
Trade and other receivables (Note 17):
• held to collect
Cash and cash equivalents (Note 19)
Accrued income (Note 17)
2022
Loans and
receivables
and balance
sheet totals
£m
2021
Loans and
receivables
and balance
sheet totals
£m
103.6
31.0
10.6
145.2
97.5
29.8
12.7
140.0
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade
receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics
and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the
trade receivables for the same types of contracts. The Group has therefore concluded that the expected loss rates for trade receivables are
a reasonable approximation of the loss rates for the contract assets.
132
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
29 Risk management objectives and policies continued
Credit risk continued
The expected loss rates are based on the payment profiles of sales over a period of 36 months before 31 December 2022 or 31 December 2021,
respectively and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current
and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
31 December 2022
Expected loss rate
Gross carrying amount – trade receivables
Loss allowance
31 December 2021
Expected loss rate
Gross carrying amount – trade receivables
Loss allowance (including specific provisions)
Not more than
30 days
past due
£’000s
0.02 %
95,213
19
Not more than
30 days
past due
£’000s
0.04%
85,878
34
>31 days
past due
£’000s
0.25 %
6,569
16
>31 days
past due
£’000s
0.33%
8,524
28
>61 days
past due
£’000s
0.80 %
1,085
>91 days
past due
£’000s
1.24 %
1,677
Total
£’000s
104,544
9
21
65
>61 days
past due
£’000s
1.06%
1,775
19
>91 days
past due
£’000s
2.01%
1,322
27
The closing loss allowance for trade receivables as at 31 December 2022 reconciles to the opening loss allowances as follows:
As at 31 December – as previously calculated under IAS 39
Increase in loss allowance recognised in profit or loss during the year
As at 31 December
2022
£m
0.1
–
0.1
Credit risk is only disclosed in circumstances where the maximum potential loss differs significantly from the financial asset’s carrying amount.
The Group’s trade and other receivables are actively monitored to avoid significant concentrations of credit risk. Details in respect of trade
receivables at 31 December 2022 are provided in Note 17. Substantially all of the trade within the PeoplePlus division is with local and central
government; therefore, the credit risk with these customers is considered low.
The Group has adopted a policy of carefully monitoring all customers, especially those who lack an appropriate credit history.
Liquidity risk
The Group seeks to manage financial risks to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely
and profitably. Short-term flexibility is achieved by the use of an RFA of up to £90.0m (31 December 2021: £90.0m). As at 31 December 2022,
£26.0m (2021: £22.9m) of the RFA was utilised.
The Group has covenants attached to its banking facilities as described in Note 21. For the period to 31 December 2024, the Group’s cash
flow forecasts indicate ongoing headroom in the RFA and also full compliance with the financial covenants contained therein. The Group has
sufficient day-to-day liquidity to ensure that short-term liabilities can be satisfied as and when they fall due.
Total
£’000s
97,499
108
2021
£m
0.1
–
0.1
Strategic Report
Governance
Financial Statements
133
Maturity of financial liabilities
The analysis of the maturity of financial liabilities due in less than one year is as follows:
2022
Less than one
month
£m
2022
Between 1 and
3 months
£m
2022
Between 3
and 12 months
£m
Receivables Finance Agreement
Lease liabilities
Trade and other payables
Accruals
Total
0.4
0.1
24.9
20.8
46.2
25.6
0.3
5.5
10.9
42.3
–
1.1
0.1
12.4
13.6
2022
Total
£m
26.0
1.5
30.5
44.1
102.1
2021
Less than one
month
£m
2021
Between 1 and
3 months
£m
2021
Between 3 and
12 months
£m
7.6
0.1
18.8
24.8
51.3
15.3
0.3
1.6
8.4
25.6
–
0.9
–
12.6
13.5
The analysis of the maturity of financial liabilities at 31 December 2022 is as follows:
2022
Less than
one year
£m
2022
One to
five years
£m
2022
More than
five years
£m
Receivables Finance Agreement
Lease liabilities
Trade and other payables
Accruals
Total
26.0
1.5
30.5
44.1
102.1
–
2.4
–
–
2.4
–
1.0
–
–
1.0
2022
Total
£m
26.0
4.9
30.5
44.1
105.5
2021
Less than
one year
£m
2021
One to
five years
£m
2021
More than
five years
£m
22.9
1.3
20.4
45.8
90.4
–
2.4
–
–
2.4
–
0.9
–
–
0.9
2021
Total
£m
22.9
1.3
20.4
45.8
90.4
2021
Total
£m
22.9
4.6
20.4
45.8
93.7
The accruals figure includes £10.6m (2021: £13.1m) of employee obligations, which are not within the scope of IFRS 7, but have been included
to provide additional information.
The analysis of the maturity of contractual undiscounted financial liabilities (including estimated future interest) at 31 December 2022 is
as follows:
2022
Less than
one year
£m
2022
One to
five years
£m
2022
More than
five years
£m
Receivables Finance Agreement
Lease liabilities
Trade and other payables
Accruals
Total
26.0
1.6
30.5
44.1
102.2
–
2.6
–
–
2.6
–
1.0
–
–
1.0
2022
Total
£m
26.0
5.2
30.5
44.1
105.8
2021
Less than
one year
£m
2021
One to
five years
£m
2021
More than
five years
£m
23.0
1.4
20.4
45.8
90.6
–
2.5
–
–
2.5
–
1.0
–
–
1.0
2021
Total
£m
23.0
4.9
20.4
45.8
94.1
134
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
29 Risk management objectives and policies continued
Interest rate risk
In October 2021, the Group entered into an amortising interest rate cap instrument, which reduces exposure to interest rate increases above 1%
of SONIA on an aggregated two-thirds of the RFA and the customer finance arrangements. The instrument, which has a term of three years from
13 October 2021, had an initial notional amount of £53.9m. This amount varies quarterly based on forecast borrowings between £39.5m and
£62.5m, with an average of £51.9m. The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible
increase in interest rates of one percentage point with effect from the beginning of the year.
Decrease in net result and equity (£m)
2022
+1%
(0.2)
2021
+1%
(0.6)
Hedge accounting
In order to qualify for hedge accounting, the Group is required to document the economic relationship between the item being hedged and the
hedging instrument in advance. The Group is also required to demonstrate that the hedge will be effective on an ongoing basis. Effectiveness
testing of the interest rate cap instrument was undertaken at inception and at subsequent half-year ends and year-ends. Further effectiveness
testing will be undertaken periodically. As at 31 December 2022 some of the quarterly nominal amounts specified in the instrument exceeded
the Group’s updated borrowings forecasts, resulting in an ineffectiveness value of £0.4m (2021: £nil). This amount has been credited to finance
income in the income statement. Other potential sources of ineffectiveness include the timing of weekly and monthly interest payments versus
the quarterly periods of the interest rate cap and a difference in the interest rate basis specified in a small part of the hedged item. Neither of
these items give rise to material hedge ineffectiveness.
Foreign currency sensitivity
Most of the Group’s transactions are carried out in sterling. Exposure to currency exchange rates arises from the Group’s overseas sales and
purchases which are predominantly denominated in euro (Republic of Ireland and Portugal). The Group has not entered into any foreign
currency risk mitigation strategies to date. This will be kept under review.
Financial liabilities
The Group’s liabilities (being total liabilities excluding deferred tax liabilities) are classified as follows:
Receivables Finance Agreement
Lease liabilities
Trade and other payables
Accruals
Deferred income
Taxation and social security
Provisions
Total
2022
Financial
liabilities at fair
value through
profit or loss
£m
2022
Other financial
liabilities at
amortised cost
£m
2022
Liabilities not
within the scope
of IFRS 9
£m
2022
Balance
sheet total
£m
–
–
–
–
–
–
–
–
26.0
4.9
30.5
44.1
–
–
–
105.5
–
–
–
–
8.5
47.2
1.5
57.2
26.0
4.9
30.5
44.1
8.5
47.2
1.5
162.7
Strategic Report
Governance
Financial Statements
135
It is considered that the fair value of the Group’s financial assets and liabilities equal the book value.
Receivables Finance Agreement
Lease liabilities
Trade and other payables
Accruals
Deferred income
Other liabilities
Taxation and social security
Provisions
Total
2021
Financial
liabilities at fair
value through
profit or loss
£m
2021
Other financial
liabilities at
amortised cost
Restated
£m
2021
Liabilities not
within the scope
of IFRS 9
£m
2021
Balance
sheet total
Restated
£m
–
–
–
–
–
–
–
–
–
22.9
4.6
20.4
45.8
–
–
–
–
93.7
–
–
–
–
14.3
0.3
53.8
2.8
71.2
22.9
4.6
20.4
45.8
14.3
0.3
53.8
2.8
164.9
Fair value represents amounts at which an asset could be exchanged, or a liability settled on an arm’s length basis.
Financial assets and financial liabilities measured at fair value are grouped into three levels of fair value hierarchy. This grouping is determined
based on the lowest level of significant inputs used in the fair value measurement, as follows:
• level 1 – quoted prices in active markets for identical assets and liabilities;
• level 2 – inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly; and
• level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Group has no financial assets or liabilities in any of the above classifications.
30 Cash flows from operating activities – consolidated
Reconciliation of loss before taxation to net cash inflow/(outflow) from operating activities
Profit/(loss) before taxation from:
Continuing operations
Discontinued operations
Adjustments for:
Finance income
Finance charges
Depreciation and amortisation – underlying
Amortisation – non-underlying
Loss on disposal of property, plant and equipment
Cash generated before changes in working capital and share options
Change in trade and other receivables
Change in trade, other payables and provisions
Cash generated from/(used by) operations
Employee cash-settled share options
Net cash inflow/(outflow) from operating activities
2022
£m
1.9
–
1.9
(0.7)
3.4
5.5
7.4
0.1
17.6
(3.8)
(8.6)
5.2
0.3
5.5
2021
£m
(0.1)
(0.4)
(0.5)
–
2.4
6.3
8.0
0.3
16.5
(12.2)
(33.1)
(28.8)
0.1
(28.7)
136
Staffline Group plc Annual Report and Accounts 2022
Notes to the Financial Statements continued
The year ended 31 December 2022
30 Cash flows from operating activities – consolidated continued
Movement in net debt
Net cash/(debt) at 1 January
Loan repayments
Net drawdowns from Receivables Finance Agreement
Lease payments, additions, disposals and interest
Change in cash and cash equivalents
Net cash at 31 December
Represented by:
Cash and cash equivalents (Note 19)
Current borrowings (Note 21)
Lease liabilities (Note 15)
Net cash at 31 December
The movements in net debt, excluding refinancing costs, can be further summarised as follows:
Net debt as at 1 January 2021
Cash flows during the year
Non-cash movements in leases
Net cash/(debt) at 31 December 2021
Cash flows during the year
Non-cash movements in leases
Net cash/(debt) at 31 December 2022
Lease liabilities
£m
Revolving credit
facility
£m
Receivables
Finance
Agreement
£m
Movements
from financing
activities
£m
(5.5)
1.7
(0.8)
(4.6)
1.6
(1.9)
(4.9)
(20.0)
20.0
–
–
–
–
–
(13.3)
(9.6)
–
(22.9)
(3.1)
–
(38.8)
12.1
(0.8)
(27.5)
(1.5)
(1.9)
(26.0)
(30.9)
2022
£m
2.3
–
(3.1)
(0.3)
1.2
0.1
31.0
(26.0)
(4.9)
0.1
Cash
£m
24.5
5.3
–
29.8
1.2
–
31.0
2021
£m
(14.3)
20.0
(9.6)
0.9
5.3
2.3
29.8
(22.9)
(4.6)
2.3
Total
£m
(14.3)
17.4
(0.8)
2.3
(0.3)
(1.9)
0.1
31 Capital management policies and procedures
The Board’s current priorities for the Group’s free cash flow are to fund Group development and maintain the strength of the statement of
financial position. The Group’s overall strategy remains unchanged from last year in that it manages its capital to ensure that the Group will
be able to continue as a going concern through the economic cycle.
The capital structure of the Group consists of net debt, which is represented by cash and cash equivalents (Note 19), bank borrowings (Note
21) and equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in the
consolidated statement of changes in equity.
The only restrictions on the Group’s capital relates to the certain undertakings and covenants attached to the debt facilities.
The Group has covenants attached to its banking facilities. Following the June 2021 refinancing, the main financial covenants are minimum net
debt to EBITDA leverage and interest cover as described in Note 21.
32 Changes in accounting policies
There were no new accounting pronouncements requiring adoption in the year.
33 Post balance sheet events
There were no events between the balance sheet date of 31 December 2022 and the approval of these accounts on 20 March 2023 that are
required to be brought to the attention of shareholders.
Strategic Report
Governance
Financial Statements
137
Staffline Group plc
Unaudited Five-Year Summary of Financial Data
Comprehensive income
Turnover
Underlying operating profit
% margin
Operating profit/(loss)
Net profit/(loss) after taxation
Underlying earnings/(loss) per share (diluted)
Declared dividend per share
Dividend cover v underlying diluted EPS
Financial position
Goodwill
Intangible assets
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Restricted cash
Trade and other payables
Borrowings (excluding deal fees)
Lease liabilities (IFRS 16)
Deferred tax net asset/(liability)
Other net assets/(liabilities)
Net assets
Net cash/(debt), pre-IFRS 16, excluding deal fees
Goodwill, intangibles
Other net assets/(liabilities)
Cash flows
Underlying operating profit
Loss on discontinued activities
Non-underlying cash costs
Depreciation, amortisation
Working capital movements
Capital expenditure, including software
Taxation received/(paid) (net)
Adjusted free cash from operations
Dividends and interest paid
Business acquisitions including debt acquired
Payment into restricted fund
Issue of share capital (net)
Others
Reduction/(increase) in net debt
Financial reporting years ended 31 December £m
2021
Restated
2020
Restated
2019
2018
942.7
10.3
1.1%
2.3
1.2
7.1p
n/a
n/a
59.6
16.5
8.0
114.7
29.8
–
(134.3)
(22.9)
(4.6)
2.2
(3.1)
65.9
6.9
76.1
927.6
4.8
0.5%
(44.3)
(52.7)
5.0p
n/a
n/a
59.6
24.3
9.6
103.9
24.5
0.9
(155.6)
(33.0)
(5.5)
1.2
(12.3)
17.6
(8.8)
83.9
(14.8)
(55.2)
10.3
(0.4)
–
6.6
(45.1)
(4.4)
5.8
(27.2)
(1.9)
–
–
46.4
(11.8)
5.5
4.8
(5.0)
(4.5)
8.2
62.2
(2.4)
(0.5)
62.8
(8.5)
(0.3)
–
–
0.1
54.1
1,063.0
0.6
0.1%
(38.5)
(46.3)
(7.4)p
n/a
n/a
94.9
34.0
14.6
137.7
25.0
12.7
(128.7)
(84.5)
(8.4)
(3.3)
(20.5)
73.5
(59.5)
128.9
4.1
0.6
(3.7)
(5.7)
7.3
3.1
(5.1)
(1.1)
(4.6)
(6.0)
(7.2)
(12.7)
38.0
–
7.5
1,120.9
32.8
2.9%
(14.7)
(16.0)
88.3p
11.3p
n/a
117.2
42.9
7.6
159.5
16.2
–
(143.4)
(80.0)
–
(5.8)
(31.4)
82.8
(63.8)
160.1
(13.2)
32.8
–
(30.2)
4.8
12.8
(6.4)
(6.4)
7.4
(9.8)
(49.6)
–
5.0
–
(47.0)
2022
940.5
12.0
1.3
4.6
3.8
5.7p
n/a
n/a
59.6
9.4
7.4
122.1
31.0
–
(132.5)
(26.0)
(4.9)
3.5
2.1
71.7
0.1
69.0
2.6
12.0
–
–
5.7
(12.7)
(3.1)
0.4
2.3
(2.5)
–
–
–
(1.7)
(1.9)
138
Staffline Group plc Annual Report and Accounts 2022
Company Details
Company registration number:
05268636
Registered office:
19–20 The Triangle
NG2 Business Park
Nottingham
NG2 1AE
Directors:
Tom Spain (Interim Chairman)
Albert Ellis (Chief Executive Officer)
Daniel Quint (Chief Financial Officer)
Ian Starkey (Non-Executive Director)
Catherine Lynch (Non-Executive Director)
Company Secretary:
Louise Barber FCG
Company website:
www.stafflinegroupplc.co.uk
Investor relations contact details:
investors@staffline.co.uk
Nominated adviser and joint brokers:
Liberum Capital
Ropemaker Place
25 Ropemaker Street
London
EC2Y 9LY
Joint brokers:
Zeus Capital Limited
125 Old Broad Street
12th Floor
London
EC2N 1AR
Registrars:
Link Market Services Limited
Central Square
29 Wellington St
Leeds
LS1 4DL
Bankers:
National Westminster Bank plc
City of London Office
1 Princes Street
London
EC2R 8BP
ABN AMRO Asset Based Finance N.V. UK Branch
5 Aldermanbury Square
London
EC2V 7HR
RBS Invoice Finance Limited
250 Bishopsgate
London
EC2M 4AA
Leumi ABL Limited
1 Angel Court
London
EC2R 7HJ
Solicitors:
DLA Piper UK LLP
160 Aldersgate Street
London
EC1A 4HT
Statutory auditors:
Grant Thornton UK LLP
Chartered Accountants and Statutory Auditors
30 Finsbury Square
London
EC2A 1AG
Financial and trade public relations:
Vigo Consulting Limited
Sackville House
40 Piccadilly
London
W1J 0DR
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Registered office
19–20 The Triangle
NG2 Business Park
Nottingham, NG2 1AE