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UK – Norman Broadbent reports growth, Chairman announces retirement

22 May 2015

UK-based executive search and recruitment firm Norman Broadbent (NBB: LSE) reported revenue from continuing operations for the year ending 31 December 2014 of £7.6 million, an increase of 11.4% compared with £6.8 million in 2013. 

  2014 2013 Change
Revenue £7.6 million £6.8 million +11.4%
Gross Profit £7.1 million £6.7 million +6.3%
Operating Loss £932,000 £1.2 million N/A

According to the company’s financial results, full-year results reflect start-up losses in emerging businesses and the exceptional costs associated with regaining control of the Norman Broadbent brand worldwide.

The group operates through independently managed and separately managed business, which trade independently. As part of the Board's decision to regain complete control of the Norman Broadbent brand worldwide, in 2014 the Group disposed of Norman Broadbent SPRL (which had a minority 49% shareholder) and its 20% stake in NBS Norman Broadbent SA for £120,000 and £92,000 respectively.

In November 2014, the group also raised £500,000 through a subscription of new shares primarily to fund the remodelling of certain aspects of the contingent offering within its subsidiary AGP (Arcus Global Partners) and for working capital purposes generally.

Three subsidiaries; AGP, SMS (Social Media Search), and NBIM (Norman Broadbent Interim Management), were established in early 2013, late 2012, and mid-2014, respectively. Despite promising revenue growth of 300% to £1.8 million, the start-up losses in AGP and SMS were greater than anticipated and resulted in the remodelling of certain aspects of the contingent offering within the two businesses. 

In addition to the three subsidiaries listed above, Norman Broadbent derives revenue from three additional sources; Executive Search, Overseas Royalties, and Norman Broadbent Leadership Consulting (NBLC).

Revenue during 2014 was broken down as follows:

  2014 2013 Change
Executive Search £5.2 million £5.6 million -6.1%
Overseas Royalties £76,000 £212,000 -64.2%
NBLC £473,000 £467,000 +1.3%
AGP £1.1 million £252,000 +327.4%
SMS £526,000 £304,000 +73.0%
NBIM £203,000 N/A N/A

Revenue from Overseas Royalties decreased as a result of the company electing to terminating licenses with Italy, the Middle East, and Spain as part of the board strategy to regain complete control of the company’s brand. The board also decided to cease its operations in Singapore and the US due to low contributions to group revenue.

A geographic breakdown of revenue from continuing operations during 2014 was as follows:

  2014 2013 Change
UK £7.2 million £6.4 million +12.3%
Europe £143,000 £208,000 -31.2%
Other £259,000 £201,000 +28.9%

Outgoing Chairman Pierce Casey commented: “In light of the successful remodelling which has taken place since [November], I have taken the view that after five years as Chairman the time is now opportune to retire from the business as it is now refinanced, refocused, and returned to profitability in the first quarter of 2015.”

Mr Casey will step down on 30 June 2015.