REG - Partway Group PLC - Final Results
10/06/2024 12:30
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RNS Number : 8262R Partway Group PLC 10 June 2024
Partway Group plc
("Partway" or the "Group")
Final results for the year ended 31 December 2023
10 June 2024
Partway announces its full year results for the year ended 31 December 2023.
A copy of its audited financial statements and annual report for the year
ended 31 December 2023 ("Annual Report") will shortly be available for
download on the Company's website, www.partway.net.
Key extracts from the Annual Report are set out below.
Contacts
Partway Group plc
Mark Braund, Executive Chairman m.braund@partway.net
Mike Johns, Chief Financial Officer m.johns@partway.net
Allenby Capital Limited (Nominated Adviser and Broker) Tel: +44 (0) 20 3328 5656
David Hart / Dan Dearden-Williams (Corporate Finance)
Tony Quirke (Sales and Corporate Broking)
Chairman's statement
For more than a decade, Partway Group plc, formerly known as Parity Group plc
(the "Company" or the "Group") has, under several different management teams,
attempted without success to diversify away from its core competency in IT
contract recruitment.
In the three years leading up to my appointment as Chair, in April 2021, the
core recruitment division had been starved of investment in order to fund a
failed attempt to build a new consulting capability.
During the second half of 2021, we restructured the business, shutting down
the consulting division to refocus on IT recruitment, a business that was
generating greater than 95% of the revenue at the time. After years of
underinvestment, and the loss of key personnel, we successfully rebuilt the
core recruitment business into a position of strength in the public sector
market, re-establishing Parity's heritage as a well-recognised recruitment
brand, and did so against a backdrop of tough economic conditions.
Despite a much slimmer management structure and materially lower overheads,
the costs associated with maintaining an AIM listing along with the continuing
obligation to fund a legacy defined benefit pension scheme, did not leave
capacity to fund further investment.
With significant challenges to source new investment for growth, continuing
economic uncertainty, and no expectation of a short-term return to a growth in
the recruitment market, we took the decision in November 2023 that the best
opportunity to deliver value for all our stakeholders, (shareholders,
employees, customers and suppliers) was to find a new home for the recruitment
business, giving it the opportunity to flourish within a larger group. This
was completed on 8 December 2023, realising £1.6m of cash after costs of the
disposal, and the settlement reached with the trustees of the pension scheme
that removed future obligations to fund the defined benefit pension scheme.
As outlined in the circular to shareholders dated 21 November 2023, the sale
of the trading activities of the Company reclassified the Company as a cash
shell under rule 15 of the AIM Rules for Companies (AIM Rule 15). The Board's
strategy has been to use the proceeds from the sale to secure a new trading
activity via a reverse takeover (RTO), and if this was not possible to return
funds back to shareholders, many of whom are long term holders.
In parallel with our proactive search for RTO targets, we have since 8
December 2023, decoupled the operational and IT resources from the recruitment
business and been unwinding 40 + years of corporate activity to facilitate a
clean cash shell.
Over the last six months, we have actively explored more than a dozen RTO
opportunities, considering the following key factors:
· suitability and readiness for a public listing;
· growth potential and outlook for future cash generation;
· likely resulting liquidity in the Company's shares following
acquisition(s);
· short, medium and longer-term exit strategies for Shareholders;
· possible synergies with knowledge and contacts of the Directors; and
· ease with which capital can be raised to meet the working capital
requirements both initially and in the future.
To date we have not sourced a suitable target that has:
· the opportunity to generate future value for Shareholders;
· could be delivered within the timeframes set out in AIM Rule 15
before the Company would be delisted; and
· would justify incurring the significant costs to undertake an RTO.
The Board has considered the merits of continuing to pursue the RTO strategy
based on conversations with prospective RTO candidates, and has concluded that
the likelihood of successfully securing an RTO on or before 9 December 2024
(being the first business day following the anniversary of the sale of the
recruitment business and the deadline for completing an RTO before the
Company's shares are cancelled from trading in accordance with Rule 41 of the
AIM Rules for Companies) is low and, as such, is not in the best interests
of shareholders given the ongoing costs that would be incurred.
The Board has therefore consulted with specialist advisors on the most
appropriate way to return funds to Shareholders and will in due course set out
in a circular to Shareholders its plan to cancel the admission of the
Company's Ordinary Shares to trading on AIM and place the Company in a solvent
members' voluntary liquidation (the "Liquidation") pursuant to the UK
Companies Act 2006, enabling surplus funds, after paying creditors to be
distributed.
As a result, we expect that this to be our final annual report on the
Company. We have included for your review our statutory accounts which, as a
result of the proposed solvent members voluntary liquidation, have been
prepared on a basis other than going concern. We thank you for your support.
Consolidated Income Statement for the year ended 31 December 2023
2023 2022
Continuing activities Continuing activities
Notes £'000 £'000
Revenue 3 - -
Contractor costs - -
Net Fee Income - -
Other operating income 4 111 950
Operating costs 5 (2,785) (2,810)
Operating (loss)/profit (2,674) (1,860)
Analysed as:
Operating loss before non-underlying items (685) (858)
Non-underlying costs 6 (2,100) (1,952)
Non underlying income 4 111 950
Operating loss (2,674) (1,860)
Finance costs 10 (249) (302)
(Loss)/profit before tax (2,923) (2,162)
Analysed as:
Adjusted loss before tax(1) (934) (1,160)
Non-underlying costs 6 (2,100) (1,952)
Non underlying income 4,6 111 950
Loss before tax (2,923) (2,162)
Tax (charge)/ credit 12 (236) (301)
Loss for the year (3,159) (2,463)
Loss on disposal of trading activities 7 (262) -
Profit for the year from discontinued operations 8 198 748
Loss for the year attributable to owners of the parent (3,223) (1,715)
Loss per share - Continuing activities
Basic 13 (3.07p) (2.39p)
Loss per share - Continuing and discontinued activities 13 (3.13p)
Basic (1.66p)
( )
(1) Adjusted profit/(loss) before tax is a non-IFRS alternative performance
measure, defined as profit/(loss) before tax and non-underlying items.
Statements of Changes in Equity for the year ended 31 December 2023
Consolidated Share Capital Other Retained Total
capital redemption reserves earnings £'000
£'000 Share Share- based payment reserve reserve £'000 £'000
premium £'000 £'000
reserve
£'000
At 1 January 2022 2,062 33,270 31 14,319 34,560 (77,215) 7,027
Share options and warrants - charge - - 50 - - - 50
Transactions with owners - - 50 - - - 50
Loss for the year - - - - - (1,715) (1,715)
Remeasurement of defined benefit pension scheme - - - - - (841) (841)
Deferred taxation on remeasurement of defined pension scheme - - - - - 290 290
At 31 December 2022 2,062 33,270 81 14,319 34,560 (79,481) 4,811
Share options and warrants - charge - - 45 - - - 45
Share options - lapsed - - (28) - - 28 -
Transactions with owners - - 17 - - 28 45
Loss for the year - - - - - (3,223) (3,223)
Remeasurement of defined benefit pension scheme - - - - - 13 13
Deferred taxation on remeasurement of defined pension scheme - - - - - (5) (5)
At 31 December 2023 2,062 33,270 98 14,319 34,560 (82,668) 1,641
Statements of Financial Position as at 31 December 2023
Company number 3539413 Consolidated
2023 2022
Notes £'000 £'000
Assets
Non-current assets
Goodwill 14 - 2,642
Other intangible assets 15 - 188
Property, plant and equipment 16 - 10
Right-of-use assets 17 - 174
Trade and other receivables 19 - -
Deferred tax assets 18 - 521
Retirement benefit asset 25 - 1,269
Total non-current assets - 4,804
Current assets
Trade and other receivables 19 426 5,909
Cash and cash equivalents 1,495 2,053
Total current assets 1,921 7,962
Total assets 1,921 12,766
Liabilities
Current liabilities
Loans and borrowings 20 - (4,356)
Lease liabilities 17 - (203)
Trade and other payables 21 (280) (3,340)
Total current liabilities (280) (7,899)
Non-current liabilities
Lease liabilities 17 - (14)
Provisions 22 - (42)
Total non-current liabilities - (56)
Total liabilities (280) (7,955)
Net assets 1,641 4,811
Shareholders' equity
Called up share capital 26 2,062 2,062
Share premium reserve 24 33,270 33,270
Share based payment reserve 11 98 81
Capital redemption reserve 24 14,319 14,319
Other reserves 24 34,560 34,560
Retained earnings 24 (82,668) (79,481)
Total shareholders' equity 1,641 4,811
Statements of Cash Flows for the year ended 31 December 2023
Consolidated
Notes 2023 2022
£'000
£'000
Cash flows from/ (used in) operating activities
(Loss)/profit for the year (3,223) (1,715)
Adjustments for:
Net finance expense/(income) 10 282 310
Share-based payment expense/(credit) 11 45 50
Income tax charge/ (credit) 12 235 376
Amortisation of intangible assets 15 59 3
Depreciation of property, plant and equipment 16 4 10
Depreciation and impairment of right-of-use assets 17 149 346
Write down of pension asset 25 2,100 -
Loss on disposal of subsidiary 7 262 -
Provision for impairment of investment in subsidiaries 20 - -
Impairment of goodwill 14 - 1,952
(87) 1,332
Working capital movements
(Increase)/decrease in trade and other receivables 19 1,837 (1,112)
(Decrease)/increase in trade and other payables 21 (1,100) (343)
(Decrease) in provisions 22 (42) -
Payments to retirement benefit plan 25 (928) (331)
Net cash flows used in operating activities (320) (454)
Investing activities
Purchase of property, plant and equipment 16 - (5)
Development of intangible assets 15 - (109)
Net proceeds from disposal 7 1,792 -
Cash disposed of (127) -
Net cash flows used in investing activities 1,665 (114)
Financing activities
Drawdown/(repayment) of finance facility 20 (1,542) 2,077
Principal repayment of lease liabilities 17 (191) (433)
Movements on intercompany funding - -
Interest paid 10 (170) (144)
Net cash flows from/ (used in) financing activities (1,903) 1,500
Net increase/(decrease) in cash and cash equivalents (558) 932
Cash and cash equivalents at the beginning of the year 2,053 1,121
Cash and cash equivalents at the end of the year 1,495 2,053
All references to Notes in the financial statements above refer to the Annual
Report which will be available to download from www.partway.net
(http://www.partway.net)
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