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UK - RTC reduces losses

27 April 2011

Revenues were up from 16.5 million Pounds in 2009 to 20 million Pounds in 2010 at RTC Group Plc (RTC:LSE), the recruitment, training and conference services provider.

Preliminary results for the year ended 31 December 2010 reveal that gross profit was up from 2.2 million Pounds in 2009 to 3 million Pounds in 2010.

Operating loss was reduced from -1.15 million Pounds in 2009 to -490,000 Pounds in 2010. Operating loss after exceptional administrative expenses was down from -1.82 million Pounds in 2009 to -432,000 Pounds in 2010.

Loss for the year was reduced from -2.34 million Pounds in 2009 to -958,000 Pounds in 2010.

The Recruitment division performed well in 2010. Recruitment made an operating profit of 212,000 Pounds (2009: loss -460,000 Pounds).

In particular, contract recruitment has continued to expand across all areas of the business and this has been significantly accelerated by a second large contract to supply long-term support staff to NATO bases in Afghanistan, now expected to reach over 700 personnel during the current year. Although the business environment is still tough and impacting on the branch network, vertical markets, operating from Derby and led by Rail and Energy have grown strongly. In addition to the permanent recruitment activities RTC provides to a broad range of European clients the group now also has recruitment activity in Germany and to support this RTC has established a formal European presence.

Growth has also continued in the labour supply company, Ganymede Solutions Limited, again led by Rail, with opportunities in other industry sectors broadening the portfolio.

The Catalis training business was placed into administration in June and is treated as discontinued in the accounts.

Whilst The Derby Conference Centre made major advances in cost control and gross margin enhancements during 2010 the business continued to experience difficult trading as customers continued to conduct conferencing activities in-house. Conferencing made an operating loss of -277,000 Pounds (2009: loss -372,000 Pounds).
 
Bill Douie, Chairman, commented "we believe that given the prolonged nature of the recessionary impact across the recruitment industry per se, we acquitted ourselves very well in 2010 especially given the scale of some of the challenges we faced. Although we could no longer justify continuing to trade in Railway Training, an area of declining opportunity and increasing costs, the termination of our exposure to training removed the main threat to the future health of RTC Group and this has enabled an increasing focus on recruitment where we believe an upward trend will continue to provide opportunities for the group."

"Although there will undoubtedly be continuing worldwide global economic challenges, trading in the first quarter of 2011 has been satisfactorily ahead of expectations and the general outlook remains encouraging."

Since the year end, having succeeded in securing the second contract with our client in Afghanistan, which will serve to accelerate revenue growth rates, we have also concluded arrangements to establish an office in India to service that business and to pursue opportunities in that fast growing part of the world.

"We have also negotiated new five year arrangements with the owners of our premises at London Road, Derby, which, coupled with a five year sublet to a substantial support services company, has markedly improved the outlook for the Derby Conference Centre."

At end of play in London yesterday RTC's shares were unchanged at 8.50 Pence.

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