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UK - Norman Broadbent’s profits down due to restructuring

29 September 2011

Revenues were up by +5.8% from 3.26 million Pounds in H1 2010 to 3.49 million Pounds in H1 2011 at Norman Broadbent (NBB:LSE), the executive search and leadership consultancy firm.

Interim results for the six months ended 30 June 2011 reveal that operating profit fell from 201,000 Pounds in H1 2010 to 42,000 Pounds in H1 2011 after incurring restructuring costs of -410,000 Pounds.

Revenue in the core executive search business declined from 3.06 million Pounds to 2.85 million Pounds while its profit before tax was 180,000 Pounds compared with 101,000 Pounds in the previous period. Income from overseas operations and interim business increased satisfactorily in the six months. The maiden revenue from the board assessment and evaluation business, HADIL, was also encouraging.

The decline in search revenue reflected the restructuring of the search team with sixteen consultants active at the period end compared with twenty in the corresponding period in 2010. Since the end of the reporting period, the hiring of eight senior search consultants has brought fee-earning headcount to 23.

The company expects to incur a further 350,000 Pounds of restructuring costs in the second half of the year.

Profit for the period fell from 968,000 Pounds (mainly due to the gain on the disposal of a group subsidiary of +822,000 Pounds) in H1 2010 to 30,000 Pounds in H1 2011.

Norman Broadbent is currently considering the opening of offices in Asia, France and Germany, although market uncertainty makes the company cautious in the short-term.

Pierce Casey, Executive Chairman, commented "with our eight UK search appointments (all from top tier competitors) we believe that 2012 should see a substantial increase in UK search revenue. Moreover, our board level interim and assessment offerings in the UK are developing well, albeit from modest bases."

"Internationally, we remain focused on developing a presence in Asia and mainland Europe."

"The outlook for the company in 2012 and beyond looks bright."
As of last trade, Norman Broadbent's shares traded at 58.00 Pence, +16% above the 52 week low of 50 Pence set on 15 September 2011.


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