The board of directors of Fairplace Consulting plc today reports the Groups unaudited results for the six months to 31 December 2004
- Sales of 2.1 million (2003 : 2.35 million) reflecting difficult conditions in UK outplacement market
- Costs reduced to 2.43 million (2003 : 2.65 million) with greater resourcing flexibility for 2005
- Operating loss before goodwill of 0.33 million (2003 loss : 0.3 million) in line with management expectations
- Outplacement sales starting to strengthen and increasing contributions from talent management services
- Second half has started positively and two major contracts won in past month
- Expansion into search and interim management specialising in HR appointments
Mark Allsup, Chairman, said :
2004 proved a difficult year for providers of outplacement services, as witnessed by consolidations and trading results within the sector. Despite prevailing market conditions, Fairplace has entered 2005 with increased confidence.
Over the past year we have repositioned the business : bringing in a Chief Executive and a City Managing Director from a larger competitor ; placing the marketing focus on specific sectors and geographies ; changing the resourcing model and reducing fixed delivery costs ; creating a consulting team with expertise in coaching and other talent management services ; and extending the international network through partnerships and alliances.
Our growth strategy is based on capturing a greater share of the outplacement market and building broader relationships with clients through the provision of talent management services.
The Board anticipates that the positive effects of this strategy will become increasingly evident during 2005.
Michael Moran, Chief Executive, said :
I am delighted with the significant progress we have made in positioning Fairplace for a return to profitability. Outplacement sales have started to strengthen and our talent management services are gathering real momentum.
The volume of business in the pipeline indicates that our strategy is beginning to deliver results. We are particularly pleased to have won two competitive bids in the past month which are expected to benefit the Companyís second half performance.
Chairmanís Statement
While conditions in the outplacement market continued to be difficult, significant progress has been made in positioning Fairplace for a return to profitability.
With the arrivals of Michael Moran as Chief Executive and Linda Jackson as co-Managing Director of the City practice last summer, we have strengthened our position in the outplacement sector, while opening up new avenues for growth in talent management services. These include executive coaching, where the UK market is believed to be considerably larger than outplacement and highly fragmented.
The effects of this strategy are already being seen : Fairplace has been successful in winning competitive bids for two major accounts in the past month ; and we are deriving an increasing proportion of our revenues from non-outplacement services. These have recently been expanded to include search and interim management, specialising in HR appointments.
Trading Results
Sales for the six months to 31 December 2004 declined by 10.6% to 2.1 million (2003 : 2.35 million), but costs were also lower at 2.43 million (2003 : 2.65 million) as a number of measures to reduce fixed costs took effect. The operating loss before goodwill of (0.33 million) was therefore similar to the comparable period in 2003. This was in line with management expectations.
While there is no interim dividend payment, it remains the Boardís intention to resume dividend payments as soon as the Companyís performance allows.
City
Despite the general market conditions, the City divisionís outplacement sales were higher than in 2003 as monthly activity levels picked up in the autumn period. Sales of HR consulting services also increased.
The second half has started positively with a number of clients embarking on restructuring projects. This appears to mirror the latest quarterly financial services survey by the CBI and PwC which suggests an accelerating rate of job cuts in the banking, insurance and fund management sectors.
We also believe that Fairplace is gaining market share and are pleased to have recently won a substantial new banking client for which we will provide both outplacement and coaching services.
UK
Sales were below target, but the division ended the half-year on a more favourable trading note. In the last month we have secured a nationwide outplacement contract with a financial services client which is expected to have a positive impact on second half performance.
We have sharpened our marketing focus on specific client sectors and geographic regions in order to maximise use of resources and give us competitive advantage.
In October we were pleased to receive the Association of Career Firms Internationalís Quality of Excellence award for effectiveness in delivering on-site, distance and other services to one of the UKís largest insurance companies.
Distance-Based
Sales were below the 2003 level, due to the lower level of UK project activity in the first half and reduced creditor business, but profitability was satisfactory.
We continue to offer a very high quality distance service from our centre in Northampton which is unmatched by our competitors.
International
Italy
Fairplace Consulting Italy
(100% subsidiary)
Sales showed some improvement on the same period in 2003 and new business prospects for the second half are encouraging.
Portugal
Fairplace Recursos Humanos
(40% shareholding)
Losses for the second full year of operation were substantially reduced and further progress is looked for in 2005.
Switzerland
In December we were delighted to announce an alliance with Choice, an executive coaching, career transition and change management consultancy based in Zurich.
Through alliances and membership of Career Partners International, our coverage now encompasses many of the worldís leading financial centres. We are working closely with CPIís other member firms on a number of marketing, product development and technology initiatives which should yield benefits in 2005.
Current Trading and Prospects
The second half has started on an improved trading note and the Directors are encouraged by the volume of business in the pipeline. Excellent progress is also being made in the development of talent management and other services which are expected to contribute an increasing proportion of revenues.
While implementation of the new strategy is at an early stage, the Board believes that the positive effects will become increasingly evident during 2005.
Fairplace Consulting plc reports the groups unaudited results for the six months to 31 December 2004
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