REG - FDM Group plc - Preliminary Announcement of Results FY2024
19/03/2025 07:15
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RNS Number : 2036B FDM Group (Holdings) plc 19 March 2025
FDM Group (Holdings) plc
Preliminary Results
FDM Group (Holdings) plc ("the Company") and its subsidiaries (together "the
Group" or "FDM"), today announces its results for the year ended 31 December
2024.
31 December 2024 31 December 2023 % change
Revenue £257.7m £334.0m -23%
Adjusted operating profit(1) £33.4m £49.6m -33%
Profit before tax £28.1m £55.6m -49%
Adjusted profit before tax(1) £34.0m £50.2m -32%
Basic earnings per share 18.8p 37.3p -50%
Adjusted basic earnings per share(1) 23.0p 32.9p -30%
Cash flow generated from operations £33.1m £61.5m -46%
Cash position at year end £40.6m £47.2m -14%
Cash conversion(2) 120.7% 111.8% +8%
Adjusted cash conversion(2) 116.2% 124.1% -6%
Share-based payment expense/ (credit) £1.1m (£5.4m) n/a
Exceptional administrative expenses £4.9m - n/a
Effective income tax rate 26.9% 26.7% +1%
Dividend per share 22.5p 36.0p -38%
· A resilient performance in 2024, in line with the Board's
expectations, against a backdrop of very challenging market conditions.
· Revenue decreased by 23% to £257.7 million (2023: £334.0
million) and profit before tax decreased by 49% to £28.1 million (2023:
£55.6 million).
· Consultants assigned to clients at week 52(3) were 34% lower at
2,578 (2023: 3,892). The split by region was: UK 1,056 (2023: 1,411); North
America 742 (2023: 1,322); EMEA 256 (2023: 327); and APAC 524 (2023: 832).
· Consultant utilisation rate(4) was broadly in line at 92.9%
(2023: 92.8%). Benefiting from the Group's agile business model, throughout
the year steps were taken to align, as far as practicable, available resource
to market demand. Consultant recruitment and the number of Consultants in our
Skills Lab reduced and coaching completions (previously called training
completions) were 877 (2023: 1,338).
· We remain focused on managing our cost base. We incurred
exceptional costs of £4.9 million (2023: £nil) as we better aligned our
internal staff and undeployed Consultants with current market dynamics.
· During the year we successfully launched our new FDM Practices
methodology, comprising five areas of specialism, to enable us to respond
better to clients' needs.
· We secured 52 new clients globally (2023: 47), 35 of which were
outside the financial services sector.
· We maintain a robust balance sheet, with £40.6 million cash at
year end (2023: £47.2 million) and no debt.
· Cash conversion(2) was 120.7% (2023: 111.8%). Adjusted cash
conversion(2) was 116.2% (2023: 124.1%).
· The Board recommends a final dividend of 12.5 pence per share,
following an interim dividend of 10.0 pence per share, a total dividend for
the year of 22.5 pence per share (2023: 36.0 pence per share).
( )
(1 ) Adjusted operating profit and adjusted profit before tax are
calculated before; i) Share Plan expenses of £1.1 million (2023: credit of
£5.4 million); and ii) exceptional costs of £4.9 million (2023: £nil) as we
better aligned our internal staff and undeployed Consultants with market
demand. The adjusted basic earnings per share is calculated before the impact,
net of tax of; i) Share Plan expenses; and ii) exceptional costs.
(2 ) Cash conversion is calculated by dividing cash flow generated from
operations by operating profit. The adjusted cash conversion is calculated by
dividing cash flows generated from operations by operating profit adjusted for
Share Plan expenses of £1.1 million as this is a non-cash item (2023: credit
of £5.4 million).
(3) Week 52 in 2024 commenced on 30 December 2024 (2023: week 52 commenced
on 25 December 2023).
(4) The business uses the metric 'Consultant utilisation' to monitor all
deployed Consultants. Utilisation rate is calculated as the ratio of the cost
of deployed Consultants to the total Consultant payroll cost.
Rod Flavell, Chief Executive Officer, said:
"FDM delivered a resilient performance for 2024 against a backdrop of very
challenging market conditions.
Trading in the early months of 2025 has been encouraging with a modest uptick
in client demand across the majority of the regions in which we operate.
However, the Board believes that it remains too early, given continuing
uncertain macroeconomic conditions, to materially increase investment in
recruitment and throughput to our Skills Lab.
FDM is a robust and agile business, with a strong balance sheet and an
experienced management team and Board, operating in fundamentally strong
end-markets. It remains difficult to predict the timing of a sustained
recovery in our major end-markets, but the Board remains confident that our
business is well positioned to return to growth as and when conditions
improve."
Enquiries
For further information:
FDM Rod Flavell - CEO 0203 056 8240
Mike McLaren - CFO 0203 056 8240
Nick Oborne 07850 127526
(financial public relations)
Forward-looking statements
This announcement contains statements which constitute "forward-looking
statements". Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no assurance that
these expectations will prove to be correct. Because these statements involve
risks and uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
Inside information
This announcement contains inside information for the purposes of Article 7 of
the UK Market Abuse Regulation.
We are FDM
FDM Group (Holdings) plc ("the Company" or "FDM") and its subsidiaries
(together "the Group" or "FDM") form a global professional services provider
with a focus on IT.
We are a global consultancy powering the people behind tech and innovation.
For over 30 years we have helped our clients stay ahead of the latest tech
trends and thrive in a rapidly changing world.
INTRODUCTION
Against a background of continued and exceptional uncertainty across all our
major markets, the Group delivered an adjusted profit before tax of £34.0
million (2023: £50.2 million). FDM's balance sheet remains strong with
closing cash balances of £40.6 million (2023: £47.2 million) and no debt.
The Group made dividend payments during the year of £31.7 million (2023:
£39.3 million).
Overview
The challenging market conditions that began during the first half of 2023
continued for the whole of 2024, impacting client confidence and causing
clients to defer decisions relating to project commencements and Consultant
placements.
Our highly scalable business model enabled us to respond decisively to the
continuing challenging market conditions through managing our internal cost
base, scaling back our recruitment and coaching completions, while retaining
appropriate levels of experienced Consultant resource to satisfy client demand
and to be able to react quickly to any emerging new client opportunities. We
also reduced our internal headcount to align better our business operations to
market conditions.
We ended the year with 2,578 Consultants placed with clients (2023: 3,892) and
877 Consultants were coached during the year (2023: 1,338). The Group recorded
revenue of £257.7 million (2023: £334.0 million) and delivered an adjusted
operating profit(1) of £33.4 million (2023: £49.6 million). We incurred
exceptional costs of £4.9 million relating to the measures taken to realign
our cost base.
The Group's balance sheet remains robust with cash balances of £40.6 million
(2023: £47.2 million). The Group has no debt.
The strength of our financial position, together with the actions taken during
2024 to reduce our operating costs, mean we remain well positioned to benefit
from market recovery when it comes.
Our strategy
FDM's strategy remains to deliver customer-led, sustainable and profitable
operations on a consistent basis through our established and proven business
model, helping clients to stay ahead of the latest tech trends and unlocking
opportunities to help them thrive in a rapidly changing world.
Our four key strategic objectives are: attract and develop talented
Consultants; invest in our state-of-the-art Skills Lab to provide expert
training; grow and diversify our client base; and expand and consolidate our
geographic presence through sustainable and efficient means.
Our strategy requires that all activities and investments that are undertaken
have the potential to produce the appropriate level of return on investment,
that they deliver sustained and measurable improvements for all our
stakeholders including clients, staff and shareholders, and that they further
our objective of launching the careers of talented people worldwide.
To reinforce our strategy and leadership position and our commitment to
diversity, equity and inclusion, in early 2024 we launched a new company logo
and brand identity. We believe FDM's new branding better reflects who we are,
and what we want to achieve in the future, enabling us to give a clear message
to our investors, clients and candidates reflecting what we stand for and how
this benefits them.
Strategic objectives
Attract and develop talented Consultants
As the challenging market conditions, experienced in 2023, continued into
2024, we proactively scaled back on recruitment across all our operating
regions, resulting in 877 coaching completions in the year (2023: 1,338). A
key focus of the Board in 2024 was actively managing recruitment and the
numbers of Consultants on the bench, to minimise operating costs, while
continuing to invest in available resource to position us well to capitalise
on current and future opportunities. We are highly experienced at balancing
the supply of available resource with client demand and have well-established
processes in place to ensure we deliver decisive action.
In periods of reduced recruitment, we recognise the need to ensure we remain
attractive to candidates. The strength of our University Partner relationships
and our Ex-Forces and Returners Programmes, which we continued to develop in
the year, will enable us to increase recruitment and coaching when market
conditions and client demand improve. We maintain an excellent pipeline of
assessed candidates in all our territories, ready to join our Skills Lab as
and when we see an increase in market demand. Our ongoing investment in our
Ex-Forces, Returners and Apprenticeships Programmes diversifies our talent
pipeline further.
I am pleased to report we continue to attract a high number of applicants
across all our operating locations evidencing the global appeal that FDM's
market-leading, flexible training has in tech skills and innovation. I have no
doubt that we are well placed to accelerate recruitment and coaching as and
when market conditions and client demand improve.
Invest in our state-of-the-art Skills Lab to provide expert training
With the launch of the new FDM Practices during 2024, more of which is
presented under 'FDM Practices' below, we have redefined how FDM delivers its
learning and skills development. To ensure that our coaching and upskilling
are fully aligned with the Practices methodology, we have moved away from the
more traditional method of a linear classroom, lecture-based form of training,
previously delivered from our Academies, to a dynamic, skills-based,
experiential model which is central to our new Skills Lab.
Following deployment, our Consultants continue to be connected to the Skills
Lab. During their placements, we engage with both Consultants and clients to
identify and deliver any upskilling required by the Consultant. Likewise,
upskilling and mentoring are provided to our benched Consultants while they
are not assigned to a client.
Our Technology Partnerships with some of the world's most innovative
organisations, including Microsoft and Salesforce, ensure that we are at the
forefront of technological advancements. The presence of certified coaches
authorised to deliver official training from these organisations enhances the
coaching that is delivered through our Skills Lab.
The Skills Lab enhances our operations with flexibility and adaptability. This
innovative approach allows us to be more agile in meeting evolving client
demands, while enabling our Consultants to progress swiftly through the
Sprint-based programmes.
We are confident that the coaching and upskilling delivered by our Skills Lab
enables our Consultants to develop into experienced professionals with skills
across multiple capabilities, delivering maximum value to our clients. Our
coaching continues to be accredited via our partnership with TechSkills, an
important external validation of the quality of FDM's coaching.
Grow and diversify our client base
We continue to deliver the highest level of service to our clients and work
closely with them to meet their requirements. Client diversification remains a
key part of our strategy, with an element of the performance bonus for the
Executive Board and senior management being linked to client diversification
targets. We secured 52 new clients in the year (2023: 47), of which 28 were in
the UK, eight in North America, five in EMEA and eleven in APAC. Of these new
clients, 67% were secured from outside the financial services sector. The
number of new clients does not include those clients which re-engaged with us
during 2024.
Expand and consolidate our geographic presence through sustainable and
efficient means
The expansion and consolidation of our geographic presence remains a key
growth driver for the Group. While the move to remote delivery of our Skills
Lab coaching allows us to reduce the size and cost of our physical footprint
worldwide (at the same time enabling us to reduce our greenhouse gas emissions
from the use of physical premises), we retain a strong management and sales
presence across all our main operating regions, as we focus on delivering
sustainable growth across the Group.
FDM Practices
An important element of our refinement of our operating model has been the
transition to FDM Practices ('Practices'), comprising five areas of
specialism: Software Engineering; Data & Analytics; IT Operations; Change
& Transformation; and Risk, Regulation & Compliance. Our core model
has remained the same - to coach and deploy passionate, energetic and
self-motivated Consultants; the Practices ensure skills are clearly linked to
roles and ultimately the five core areas of specialism. We believe this makes
our Consultants more versatile and enhances our ability to respond better to
clients' needs as they look for more specific, detailed and nuanced skillsets
within each job role.
During the year we continued to develop our Consultancy Services team, set up
to provide added expertise and capability to the offering provided by our core
model, by delivering collaborative solutions for a wide range of technology
problems.
GROUP RESULTS
Summary income statement
Year ending Year ending % change
31 December 2024 31 December 2023
Revenue £257.7m £334.0m -23%
Exceptional administrative expenses £4.9m - n/a
Adjusted operating profit(1) £33.4m £49.6m -33%
Operating profit £27.4m £55.0m -50%
Adjusted profit before tax(1) £34.0m £50.2m -32%
Profit before tax £28.1m £55.6m -49%
Adjusted basic EPS(1) 23.0p 32.9p -30%
Basic EPS 18.8p 37.3p -50%
Overview
The Group delivered a resilient performance in 2024 as market conditions
remain challenging.
Revenue decreased by 23% to £257.7 million (2023: £334.0 million) (21% lower
on a constant-currency basis(2)), adjusted operating profit(1) decreased by
33% to £33.4 million (2023: £49.6 million), and adjusted basic earnings per
share(1) was down 30%, to 23.0 pence (2023: 32.9 pence). We ended the year
with cash balances of £40.6 million (2023: £47.2 million), having converted
120.7% of our operating profit into operating cash flow. Our balance sheet
remains strong with no debt. We are well positioned for growth when market
conditions improve, with a proven and agile business model that is able to
respond rapidly and effectively to market fluctuations.
Consultants assigned to clients at week 52 2024 totalled 2,578, a decrease of
34% from 3,892 at week 52 2023. At week 52 2024 our Ex-Forces Programme
accounted for 105 Consultants deployed worldwide (week 52 2023: 163). Our
Returners Programme had 164 Consultants deployed at week 52 2024 (week 52
2023: 219).
The Consultant utilisation rate was consistent with prior year at 92.9% (2023:
92.8%).
An analysis of revenue and headcount by region is set out in the table below:
Year ending Year ending 2024 2023
31 December 2024 31 December 2023 Consultants Consultants
Revenue Revenue assigned to clients assigned to clients
£m £m at week 52(3) at week 52(3)
UK 104.0 127.8 1,056 1,411
North America 92.2 130.2 742 1,322
EMEA 21.9 24.1 256 327
APAC 39.6 51.9 524 832
257.7 334.0 2,578 3,892
Administrative expenses decreased to £87.5 million (2023: £101.5 million).
Included within administrative expenses are £4.9 million of exceptional
costs, representing the costs of terminating the employment of internal staff
and undeployed Consultants. Adjusted Group operating margin(1) decreased to
13.0% (2023: 14.8%).
(1) The adjusted operating profit and adjusted profit before tax are
calculated before; i) Share Plan expenses of £1.1 million (2023: credit of
£5.4 million) and ii) exceptional costs of £4.9 million (2023: £nil) as we
better aligned our internal staff and undeployed Consultants with market
demand. The adjusted basic earnings per share is calculated before the impact,
net of tax of; i) Share Plan expenses; and ii) exceptional costs.
(2) The constant-currency basis is calculated by translating current-year and
prior-year reported amounts into comparable amounts using the 2024 average
exchange rate for each currency. The presentation of the constant-currency
basis provides a better understanding of the Group's trading performance by
removing the impact on revenue of movements in foreign exchange.
(3) Week 52 in 2024 commenced on 30 December 2024 (2023: week 52 commenced on
25 December 2023).
Adjusting items
The Group presents adjusted results, in addition to the statutory results, as
the Directors consider that they provide a useful indication of underlying
trading performance and cash generation. The adjusted results are stated
before; i) share-based payment credit/ expense including associated taxes and
social security costs; and ii) exceptional administrative expenses relating to
terminating the employment of internal staff and undeployed Consultants.
Share-based payment
The share-based payment charge is based on estimates relating to a vesting
which may occur up to three years after the date of grant and the assumptions
underpinning those estimates can change from year to year. An expense of £1.1
million was recognised in the year relating to the share-based payments
including social security costs, £0.2 million of which was in respect of the
Buy As You Earn ("BAYE") Plan (2023: credit of £5.4 million, including
expenses of £0.3 million in respect of the BAYE Plan).
The credit recognised in 2023 arose as a result of a change in the adjusted
earnings per share performance vesting assumptions with the outstanding awards
anticipated to vest at a lower quantum.
Exceptional administrative expenses
During the year, the Group incurred exceptional administrative expenses of
£4.9 million (2023: £nil), as a result of the Group taking measures to align
better the number of undeployed Consultants and internal staff with current
market demand.
Net finance income
Net finance income includes bank interest income of £1.9 million (2023: £1.4
million) and lease liability interest of £1.2 million (2023: £0.7 million).
The Group has no debt.
Taxation
The Group's total tax charge for the year was £7.6 million, equivalent to an
effective tax rate of 26.9%, on profit before tax of £28.1 million (2023:
effective tax rate of 26.7% based on a tax charge of £14.9 million and a
profit before tax of £55.6 million). The effective tax is higher than the
underlying UK tax rate of 25% due to the Group's geographical mix of profits
and the impact of items considered to be non-taxable or non-deductible for tax
purposes.
Earnings per share
Basic earnings per share decreased in the year to 18.8 pence (2023: 37.3
pence), while adjusted basic earnings per share was 23.0 pence (2023: 32.9
pence). Diluted earnings per share was 18.7 pence (2023: 37.2 pence).
Dividend
During the year, the Group paid two dividends with a total payment to
shareholders of £31.7 million (2023: £39.3 million).
At the AGM held on 14 May 2024, a final dividend of 19.0 pence per share for
2023 was approved by shareholders and was paid on 28 June 2024. On 30 July
2024, an interim dividend of 10.0 pence per share for 2024 was declared and
was paid on 1 November 2024.
The Board has recommended a final dividend of 12.5 pence per share, subject to
shareholder approval at the 2025 AGM, taking the total dividend arising from
the 2024 financial year to 22.5 pence per share (2023 total dividend: 36.0
pence per share).
The Group maintains its dividend policy, to retain sufficient capital to fund
ongoing operating requirements, while maintaining an appropriate level of
dividend cover and sufficient funds to invest in the Group's longer-term
growth. As at 31 December 2024, the Company had distributable reserves of
£33.7 million. This statement does not form part of the audited financial
statements and the distributable reserves figure of £33.7 million is
therefore not audited by PricewaterhouseCoopers LLP ("PwC").
Cash flow and Statement of Financial Position
At the year end the Group's cash balance was £40.6 million (2023: £47.2
million). Dividends paid in the year totalled £31.7 million (2023: £39.3
million). Capital expenditure was £0.3 million (2023: £0.7 million) and tax
paid was £5.8 million (2023: £12.7 million).
The Group delivered a robust working capital performance. Our business model
remains highly cash generative and cash conversion was 120.7% (2023: 111.8%).
Debtor days at the year end were in line with Group targets, as they were in
the prior year.
SEGMENTAL PERFORMANCE
UK
Year-end Consultant headcount was 1,056, a decrease of 25% on the prior year
(2023: 1,411). Revenue decreased by 19% to £104.0 million (2023: £127.8
million) and adjusted operating profit(1) decreased by 25% to £18.8 million
(2023: £25.1 million).
The market remained challenging in 2024, which was reflected in Consultant
headcount. The mix of our Consultant population shifted towards more
experienced resource as clients managed reduced budgets which restricted them
from both taking on new Consultants and internalising our Consultants as
permanent hires. Our experienced Consultants have a higher sell rate and as a
result the percentage reduction in revenue was less than the percentage
reduction in headcount.
During the year we incurred £3.6 million of exceptional costs associated with
measures taken to align better the number of benched Consultants and internal
staff with demand.
We carried a higher than typical number of undeployed Consultants into the
year and adjusted our coaching schedules to reflect this resulting in reduced
coaching completions (2024: 200; 2023: 339).
Despite macroeconomic uncertainty, business development was promising as we
gained 28 new clients in the year (2023: 23).
North America
Year-end Consultant headcount was 742, a decrease of 44% on the prior year
(2023: 1,322). Revenue decreased by 29% to £92.2 million (2023: £130.2
million) and adjusted operating profit(1) decreased by 43% to £11.7 million
(2023: £20.4 million).
As in the UK, challenging market conditions continued into 2024 and resulted
in reduced demand for new Consultants and our Consultant mix becoming more
experienced. The shift in tenure mix contributed towards the percentage
reduction in revenue being less than the percentage reduction in headcount.
During the year we incurred £0.8 million of exceptional costs associated with
the measures taken to align better the number of benched Consultants and
internal staff with current demand. With challenging market conditions
continuing for a second year, we coached a similar number of Consultants
year-on-year (2024: 330; 2023: 340).
During the year we gained eight new clients (2023: seven).
EMEA
Year-end Consultant headcount was 256, a decrease of 22% on the prior year
(2023: 327). Revenue decreased by 9% to £21.9 million (2023: £24.1 million)
and adjusted operating profit(1) decreased by 38% to £1.3 million (2023:
£2.1 million).
During the year we carried a higher than typical number of undeployed
Consultants which contributed towards adjusted operating profit decreasing by
more than headcount. Exceptional costs associated with measures taken to align
better the number of benched Consultants and internal staff with current
demand were £0.1 million.
In the year, we coached 138 Consultants (2023: 256) and gained five new
clients (2023: eight).
APAC
Year-end Consultant headcount was 524, a decrease of 37% on the prior year
(2023: 832). Revenue decreased by 24% to £39.6 million (2023: £51.9 million)
and adjusted operating profit(1) decreased by 20% to £1.6 million (2023:
£2.0 million).
We experienced similar market conditions to the rest of the Group, and we
adjusted our coaching schedules accordingly such that we coached 209
Consultants in the year (2023: 403).
During the year we incurred £0.4 million of exceptional costs associated with
the measures taken to align better the number of benched Consultants and
internal staff with current demand.
We opened eleven new clients in the year (2023: nine).
The Board and its Committees
Peter Whiting, FDM's Senior Independent Director and Chair of the Remuneration
Committee, stepped down from the Board in May 2024 after having served almost
ten years on the FDM Board since the Company's IPO in June 2014. The Board
would like to thank Peter for his invaluable contribution to the Group over
that period, and the significant role he played in the management of the
business through the successes and challenges of the last decade.
Following Peter's departure, Jacqueline de Rojas, who has been a Non-Executive
Director on the Board since October 2019, has taken on the role of Senior
Independent Director. Rowena Murray became Chair of the Remuneration
Committee.
Looking ahead, as announced separately today, the Board has appointed Bruce
Lee as an Independent Non-Executive Director with effect from 19 March 2025.
Based in the US, Bruce has wide experience in CIO roles with global banks,
financial institutions and other organisations (including some which
historically have been FDM clients). He has an in-depth understanding of FDM's
model, the sectors we operate in, and the technologies which are key to those
organisations. The Board looks forward to welcoming him and to benefitting
from his expertise.
Michelle Senecal de Fonseca will retire from the Board on 19 March 2025 after
having served just over nine years as a Non-Executive Director since her
appointment. The Board would like to thank Michelle for her contribution,
including her particular focus on promoting FDM's support for Women in Tech.
David Lister has now served just over nine years on FDM's Board since his
appointment and, accordingly, has notified his fellow directors of his
intention to retire from the Board this year, when a suitable replacement
Chair can be identified. The Nomination Committee is conducting a search for a
candidate to replace David as Chair when he steps down, and a further
announcement will be made on this subject in due course.
Progressing our ESG initiatives
We remain committed to promoting diversity, social mobility and inclusion
within our workplace. We are highly supportive of our Employee Networks, our
charity partners and our various career development and leadership training
programmes.
Delivering our science-based GHG emission reduction targets remains an area of
focus, and a factor in recent decision making relating to the selection of new
offices in Brighton, Glasgow and Leeds. Our total annual GHG emissions are low
at below 1 tCO(2)e per employee, however, we are not complacent and remain
focused on achieving our targets.
Our People
FDM is a people business, and the Board is proud of the passion and commitment
which our people across our operating regions ceaselessly offer the Group.
The wellbeing of all our people remains a key priority for the Board. The
People Team continues to engage with employees to ensure that their wellbeing
is monitored and safeguarded.
The Board thanks every FDM employee for the quality of their work during 2024,
which has enabled us to deliver a resilient performance, in challenging market
conditions.
CURRENT TRADING AND OUTLOOK
While there are some encouraging signs in the markets that FDM serves, it
remains too early in the cycle to commit discretionary spend at present. The
Board keeps the relevant trading metrics under continuous review and,
benefiting from its flexible business model and strong market position and
balance sheet, the Group will move rapidly to capitalise on opportunities that
it sees.
FDM is a strong, well managed and well financed business. We shall continue to
manage our cost base and levels of Consultant resource to ensure we are well
positioned to meet our clients' needs and to support them as and when market
conditions improve.
Consolidated Income Statement
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Revenue 3 257,704 333,975
Cost of sales (142,754) (177,449)
Gross profit 114,950 156,526
Administrative expenses (87,511) (101,500)
which includes:
Exceptional items 4 (4,894) -
Operating profit 27,439 55,026
Finance income 1,927 1,396
Finance expense (1,304) (796)
Net finance income 623 600
Profit before income tax 28,062 55,626
Taxation 6 (7,555) (14,861)
Profit for the year 20,507 40,765
Earnings per ordinary share
2024 2023
pence pence
Basic 7 18.8 37.3
Diluted 7 18.7 37.2
The results for the year shown above arise from continuing operations.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£000 £000
Profit for the year 20,507 40,765
Other comprehensive income/ (expense)
Items that may be subsequently reclassified to profit or loss
Exchange differences on retranslation of foreign operations (net of tax) 494 (1,329)
Total other comprehensive income/ (expense) 494 (1,329)
Total comprehensive income for the year 21,001 39,436
Consolidated Statement of Financial Position
as at 31 December 2024 2024 2023
Note £000 £000
Non-current assets
Right-of-use assets 19,614 18,215
Property, plant and equipment 1,974 2,616
Intangible assets 19,464 19,571
Deferred income tax assets 481 552
41,533 40,954
Current assets
Trade and other receivables 8 28,532 32,613
Income tax receivables 797 3,384
Cash and cash equivalents 9 40,588 47,226
69,917 83,223
Total assets 111,450 124,177
Current liabilities
Trade and other payables 10 20,734 25,638
Lease liabilities 4,586 4,512
Current income tax liabilities 1,010 1,428
26,330 31,578
Non-current liabilities
Lease liabilities 17,122 15,669
Provisions 658 228
Deferred income tax liability - 31
17,780 15,928
Total liabilities 44,110 47,506
Net assets 67,340 76,671
Equity attributable to owners of the parent
Share capital 11 1,097 1,096
Share premium 9,705 9,705
All Other reserves 2,525 1,567
Retained earnings 54,013 64,303
Total equity 67,340 76,671
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
Note 2024 2023
£000 £000
Cash flows from operating activities
Group profit before tax for the year 28,062 55,626
Adjustments for:
Depreciation and amortisation 5 5,405 5,742
(Profit)/ loss on disposal of non-current assets (167) 155
Finance income (1,927) (1,396)
Finance expense 1,304 796
Share-based payment charge/ (credit) (including associated social security 1,202 (5,340)
costs)
Decrease in trade and other receivables 3,864 11,386
Decrease in trade and other payables (4,635) (5,470)
Cash flows generated from operations 33,108 61,499
Interest received 1,927 1,396
Income tax paid (5,796) (12,741)
Net cash inflow from operating activities 29,239 50,154
Cash flows from investing activities
Acquisition of property, plant and equipment (335) (651)
Net cash used in investing activities (335) (651)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 1 4
Proceeds from sale of shares from EBT 299 468
Principal elements of lease payments (3,676) (4,807)
Interest elements of lease payments (1,225) (718)
Proceeds from sale of own shares - 16
Payment for shares bought back - (2,525)
Finance costs paid (57) (72)
Dividends paid 12 (31,677) (39,320)
Net cash used in financing activities (36,335) (46,954)
Exchange gains/ (losses) on cash and cash equivalents 793 (846)
Net (decrease)/ increase in cash and cash equivalents (6,638) 1,703
Cash and cash equivalents at beginning of year 47,226 45,523
Cash and cash equivalents at end of year 9 40,588 47,226
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Share capital Share All Other reserves Retained Total
premium earnings equity
£000 £000 £000 £000 £000
Balance at 1 January 2024 1,096 9,705 1,567 64,303 76,671
Profit for the year - - - 20,507 20,507
Other comprehensive income for the year - - 494 - 494
Total comprehensive income for the year - - 494 20,507 21,001
Share-based payments - - 1,108 - 1,108
Transfer to retained earnings - - (1,260) 1,260 -
Own shares sold - - 616 (317) 299
Recharge of net settled share options - - - (63) (63)
Dividends (note 12) - - - (31,677) (31,677)
Issue of new shares 1 - - - 1
Total transactions with owners, recognised directly in equity 1 - 464 (30,797) (30,332)
Balance at 31 December 2024 1,097 9,705 2,525 54,013 67,340
Share capital Share All Other reserves Retained Total
premium earnings equity
£000 £000 £000 £000 £000
Balance at 1 January 2023 1,092 9,705 13,525 58,881 83,203
Profit for the year - - - 40,765 40,765
Other comprehensive expense for the year - - (1,329) - (1,329)
Total comprehensive income for the year - - (1,329) 40,765 39,436
Share-based payments - - (4,434) - (4,434)
Transfer to retained earnings - - (4,673) 4,673 -
Own shares sold - - 1,003 (496) 507
Own shares purchased - - (2,525) - (2,525)
Recharge of net settled share options - - - (200) (200)
Dividends (note 12) - - - (39,320) (39,320)
Issue of new shares 4 - - - 4
Total transactions with owners, recognised directly in equity 4 - (10,629) (35,343) (45,968)
Balance at 31 December 2023 1,096 9,705 1,567 64,303 76,671
Notes to the Consolidated Financial Statements
General information
1 General information
The Group is an international professional services provider focusing principally on IT, specialising in the recruitment, development and deployment of its own permanent Consultants.
The Company is limited by shares, incorporated and domiciled in the UK and
registered as a public limited company in England and Wales with a Listing on
the London Stock Exchange. The Company's registered office is 3rd Floor,
Cottons Centre, Cottons Lane, London, SE1 2QG and its registered number is
07078823.
The financial statements of the Group have been prepared in accordance with
UK-adopted International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to companies reporting under those standards.
The Consolidated Financial Statements have been prepared on a historical cost
basis. The Consolidated Financial Statements are presented in Pounds Sterling
and all values are rounded to the nearest thousand (£000), except where
otherwise indicated.
2 Basis of preparation
The financial information set out in this preliminary announcement does not
constitute statutory accounts for the years ended 31 December 2024 and 31
December 2023, for the purpose of the Companies Act 2006, but is derived from
those accounts. The audited statutory accounts for 2023 have been delivered to
the Registrar of Companies and those for 2024 were approved for issue on 18
March 2025. The Group's auditor reported on the Annual Report and Accounts for
the year ended 31 December 2024 on 18 March 2025. Their report was
unqualified, did not draw attention to any matters by way of emphasis without
qualifying their report and did not contain statements under Section 498(2) or
(3) of the Companies Act 2006.
While the financial information included in this preliminary announcement has
been prepared in accordance with UK-adopted International Financial Reporting
Standards, this announcement does not itself contain sufficient information to
comply with UK-adopted International Financial Reporting Standards. The
accounting policies applied in preparing this financial information are
consistent with the Group's financial statements for the year ended 31
December 2023 with the exception of the following standards and amendments
which were effective from 1 January 2024 and were adopted by the Group in
preparing the financial statements. The adoption of these standards and
amendments has not had a material impact on the Group's financial statements
in the year:
- Classification of Liabilities as Current or Non-current (Amendments
to IAS 1)
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Supplier finance arrangements (Amendments to IAS 7 and IFRS 7)
3 Segmental reporting
Management has determined the operating segments based on the operating
reports reviewed by the Board of Directors that are used to assess both
performance and strategic decisions. Management has identified that the
Executive Directors are the chief operating decision-maker in accordance with
the requirements of IFRS 8 'Operating segments'.
As of 31 December 2024, the Board of Directors consider that the Group is
organised on a worldwide basis into four core geographical operating segments:
(1) UK;
(2) North America;
(3) Europe, Middle East and Africa, excluding UK ("EMEA"); and
(4) Asia Pacific ("APAC").
Each geographical segment is engaged in providing services within a particular
economic environment and is subject to risks and returns that are different
from those of segments operating in other economic environments.
All segment revenue, profit before taxation, assets and liabilities are
attributable to the principal activity of the Group, being a global
professional services provider with a focus on IT.
For the year ended 31 December 2024
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
Revenue 103,985 92,188 21,923 39,608 257,704
Depreciation and amortisation 2,135 1,356 368 1,546 5,405
Exceptional administrative expenses 3,636 780 86 392 4,894
Segment operating profit 14,512 10,666 1,186 1,075 27,439
Finance income¹ 1,842 280 15 6 2,143
Finance costs¹ (897) (149) (51) (423) (1,520)
Profit before income tax 15,457 10,797 1,150 658 28,062
As at 31 December 2024
Total assets 68,210 18,936 9,599 14,705 111,450
Total liabilities (12,325) (7,461) (7,177) (17,147) (44,110)
(¹) Finance income and finance costs include intercompany interest which is
eliminated upon consolidation
Included in total assets above are non-current assets (excluding deferred tax)
as follows:
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
31 December 2024 34,108 1,896 579 4,469 41,052
The following foreign entities, which are 100% owned subsidiaries, are
material by their size at 31 December 2024:
Entity name FDM Group Inc. FDM Group Canada Inc. FDM Group
Australia Pty Ltd
Country of registration USA Canada Australia
£000 £000 £000
Revenue 48,317 43,871 15,976
Non-current assets (excluding deferred tax) 1,041 855 3,245
For the year ended 31 December 2023
North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
Revenue 127,770 130,167 24,093 51,945 333,975
Depreciation and amortisation 2,420 1,324 362 1,636 5,742
Segment operating profit 28,608 21,641 2,398 2,379 55,026
Finance income(¹) 1,334 260 24 11 1,629
Finance costs(¹) (401) (55) (61) (512) (1,029)
Profit before income tax 29,541 21,846 2,361 1,878 55,626
As at 31 December 2023
Total assets 71,625 21,147 13,766 17,639 124,177
Total liabilities (11,093) (8,629) (5,479) (22,305) (47,506)
(¹) Finance income and finance costs include intercompany interest which is
eliminated upon consolidation
Included in total assets above are non-current assets (excluding deferred tax)
as follows:
( ) North
UK America EMEA APAC Total
£000 £000 £000 £000 £000
31 December 2023 32,358 1,409 911 5,724 40,402
The following foreign entities, which are 100% owned subsidiaries, are
material by their size at 31 December 2023:
Entity name FDM Group Inc. FDM Group Canada Inc. FDM Group
Australia Pty Ltd
Country of registration: USA Canada Australia
£000 £000 £000
Revenue 71,884 58,283 21,665
Non-current assets (excluding deferred tax) 1,185 224 4,377
Information about major clients
Client A represents 10% or more of the Group's 2024 and 2023 revenues. Revenue
from client A is attributed to North America.
2024 2023
£000 £000
Revenue from client A 38,234 48,960
4 Exceptional administrative expenses
During the year, the Group incurred exceptional costs of £4.9 million (2023:
£nil) as we better aligned our internal staff and undeployed Consultants with
market demand.
5 Operating profit
Operating profit for the year has been arrived at after charging/ (crediting):
2024 2023
£000 £000
Net foreign exchange differences 369 174
Loss on disposal of property, plant and equipment 3 148
Profit on disposal of right-of-use assets (170) -
Depreciation of right-of-use assets 4,547 4,279
Depreciation of property, plant and equipment and amortisation of software and 858 1,463
software licences
Expense relating to short-term leases 49 600
6 Taxation
The major components of income tax expense for the years ended 31 December
2024 and 2023 are:
2024 2023
£000 £000
Current income tax:
Current income tax charge 8,254 13,352
Adjustments in respect of prior periods (731) (249)
Total current income tax 7,523 13,103
Deferred tax:
Relating to origination and reversal of temporary differences 32 1,758
Total deferred tax 32 1,758
Total tax expense reported in the income statement 7,555 14,861
The standard rate of corporation tax in the UK increased from 19% to 25%
effective 1 April 2023, accordingly, the profits for 2024 are taxed at 25%
(2023: 23.5%). As in the prior year, the tax charge for the year is higher
than the standard rate of corporation tax in the UK. The differences are set
out below:
2024 2023
£000 £000
Profit before income tax 28,062 55,626
Profit before income tax multiplied by UK standard rate of corporation tax of 7,016 13,072
25% (2023: 23.5%)
Effect of different tax rates on overseas earnings 403 1,562
Effect of expenses not deductible for tax purposes 287 99
Adjustments in respect of prior periods (731) (249)
Effect of unused tax losses not recognised for deferred tax assets 580 377
Total tax charge 7,555 14,861
7 Earnings per ordinary share
Basic earnings per share are calculated by dividing the profit attributable to
ordinary equity holders of the Parent Company by the weighted average number
of ordinary shares in issue during the year.
2024 2023
Profit for the year £000 20,507 40,765
Average number of ordinary shares in issue (thousands) 109,224 109,151
Basic earnings per share Pence 18.8 37.3
Notes to the Consolidated Financial Statements (continued)
Adjusted basic earnings per share are calculated by dividing the profit attributable to ordinary equity holders of the Parent Company, excluding, (i) Performance Share Plan expenses (including social security costs and associated deferred tax) and (ii) exceptional costs relating to terminating the employment of internal staff and undeployed Consultants (including associated tax) by the weighted average number of ordinary shares in issue during the period.
2024 2023
Profit for the year (basic earnings) £000 20,507 40,765
Share-based payment expense/ (credit) (including social security costs) £000 1,063 (5,449)
Tax effect of share-based payment expense / (credit) £000 (210) 563
Exceptional costs (see note 4) £000 4,894 -
Tax effect of exceptional costs £000 (1,164) -
Adjusted profit for the year £000 25,090 35,879
Average number of ordinary shares in issue (thousands) 109,224 109,151
Adjusted basic earnings per share Pence 23.0 32.9
Diluted earnings per share
Diluted earnings per share are calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The Company has one type of dilutive potential
ordinary shares in the form of share options; the number of shares in issue
has been adjusted to include the number of shares that would have been issued
assuming the exercise of the share options.
2024 2023
Profit for the year (basic earnings) £000 20,507 40,765
Average number of ordinary shares in issue (thousands) 109,224 109,151
Adjustment for share options (thousands) 401 329
Diluted number of ordinary shares in issue (thousands) 109,625 109,480
Diluted earnings per share Pence 18.7 37.2
8 Trade and other receivables
Due to their short-term nature, the Directors consider that the carrying
amount of trade receivables approximates to their transaction price. The
standard credit terms are 30 days.
2024 2023
£000 £000
Trade receivables 22,297 24,944
Prepayments and accrued income 5,105 6,717
Other receivables 1,130 952
28,532 32,613
Included within prepayments and accrued income is £1,528,000 of accrued
income (2023: £2,340,000).
The expected loss rate and the aged gross trade receivables and aged loss
allowance as at 31 December are as follows:
Expected Gross trade receivable Loss
loss rate allowance
31 December 2024 £000 £000
Not overdue 2% 20,002 (448)
Not more than three months past due 2% 2,780 (62)
More than three months but not more than six months past due 3% 26 (1)
22,808 (511)
Expected Gross trade receivable Loss
loss rate allowance
31 December 2023 £000 £000
Not overdue 2% 21,873 (443)
Not more than three months past due 2% 3,562 (72)
More than three months but not more than six months past due 2% 25 (1)
25,460 (516)
The movement in the allowance for expected credit loss is as below:
2024 2023
£000 £000
At 1 January (516) (498)
Increase in allowance - (18)
Unused amount reversed 5 -
At 31 December (511) (516)
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade
receivables. To measure the expected credit losses, trade receivables have
been grouped based on shared credit risk characteristics. Shared credit risk
characteristics include current and forward-looking information on
macroeconomic factors affecting the sector in which the debtor operates and
those affecting the ability of the client to settle the receivables. The Group
has identified relevant factors including the GDP and the unemployment rate of
the countries in which it trades, and accordingly adjusts the loss rates based
on expected changes in these factors.
9 Cash and cash equivalents
2024 2023
£000 £000
Cash at bank and in hand 40,588 47,226
The Group has issued guarantees in favour of the Swiss Office of Labour and
Economy for CHF150,000.
The credit quality of financial assets can be assessed by reference to
external credit ratings issued by credit ratings agencies registered in the
EU. Cash at bank is held with banks with the following ratings:
Cash at bank by credit rating 2024 2023
£000 £000
A 40,563 47,202
BB - 24
B 25 -
40,588 47,226
10 Trade and other payables
Due to their short-term nature, the Directors consider that the carrying
amount of trade payables approximates to their fair value.
2024 2023
£000 £000
Trade payables 1,782 1,435
Other payables 1,773 2,147
Other taxes and social security 4,798 7,031
Accruals 12,381 15,025
20,734 25,638
11 Share capital
Authorised, called-up, allotted and fully-paid share capital
2024 2024 2023 2023
Number of £000 Number of £000
shares shares
Ordinary shares of £0.01 each
At 1 January 109,611,852 1,096 109,191,669 1,092
Issued in year 94,850 1 420,183 4
At 31 December 109,706,702 1,097 109,611,852 1,096
Ordinary shares
All ordinary shares rank equally for all dividends and distributions that may
be declared on such shares. At general meetings of the Company, each
shareholder who is present (in person, by proxy or by representative) is
entitled to one vote on a show of hands and, on a poll, to one vote per share.
12 Dividends
2024 2023
£000 £000
Dividends paid
Paid to shareholders 31,677 39,320
2024
An interim dividend of 10.0 pence per ordinary share was declared by the
Directors on 30 July 2024 and was paid on 1 November 2024 to holders on the
register on 11 October 2024; the amount paid was £10,928,000.
The Board is proposing a final dividend of 12.5 pence per share in respect of
the year to 31 December 2024, for approval by shareholders at the AGM on 20
May 2025; the amount payable will be £13,667,000. Subject to shareholder
approval the dividend will be paid on 27 June 2025 to shareholders on the
register on 6 June 2025.
This brings the Company's total dividend for the year to 22.5 pence per share
(2023: 36.0 pence per share).
The Board continues to operate its dividend policy; the Group will retain
sufficient capital to fund ongoing operating requirements, maintain an
appropriate level of dividend cover and sufficient funds to invest in the
Group's longer-term growth.
2023
An interim dividend of 17.0 pence per ordinary share was declared by the
Directors on 25 July 2023 and was paid on 13 October 2023 to holders on the
register on 22 September 2023; the amount paid was £18,539,000.
The Board paid a final dividend of 19.0 pence per share on 28 June 2024, to
shareholders on the register on 7 June 2024; the amount paid was £20,749,000.
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