Recruitment agent RTC group saw a drop in revenues from £81.4m to £77.7m in 2021 due to employees on furlough as a consequence of Covid-19 and Nato troops’ withdrawal from Afghanistan.
RTC Group shares plummeted 18.5% to 28.5p after the company reported disappointing revenues and no final dividend.
The UK recruitment division saw revenues increase from £64.5m to £66.8m in 2021 as the rail division entered into a contract with Network Rail to provide frontline labour services from October 2021 to at least 2026.
The group’s UK revenues in 2020 also included a one-off contract performance obligation settlement of £590k which was not repeated in 2021.
The energy division’s revenue was positively impacted by the Government’s smart meter roll-out programme.
The international recruitment division saw a drop in revenues to £9.6m from £16.1m in 2021 due to NATO troops withdrawing from Afghanistan in Q2.
RTC Group recorded operation profits of £0.3m, £0.8m lower than 2020 due to the reduction in Government support from £2.5m to £0.3m in 2021, higher administrative costs caused by the mobilisation of the new Network Rail contract and inflation in wages.
RTG group noted a net cash outflow from operating activities of £2.4m compared to an inflow of £5.1m in 2020 due to an increase in working capital tangled with debtors.
The group also paid off £1.5m VAT deferrals the Government allowed as a form of financial support during the pandemic.
Earnings per share reduced from 4.66p to 0.04p in 2021 and no final dividend has been proposed by the group.
Andy Pendlebury, CEO said, “RTC Group, like many other companies, had an extremely challenging year in 2021.”
“The COVID pandemic continued to significantly impact client demand across many markets and where requirements for contract labour remained strong this was accompanied by higher operational costs to ensure the safety and wellbeing of our workforce; candidate reluctance to change employers or careers given these turbulent times and workers self-isolating increased both direct and indirect costs as programme and project continuity was heavily disrupted.”
“In addition, the sudden and immediate demobilisation from Afghanistan due to the complete withdrawal in August of all American, United Kingdom and NATO troops curtailed a large contribution of revenue from our international business.”
“However, despite the untimely combination and cumulative effect of all these events, the majority of which were outside of the control of the Group, we still managed to trade, albeit marginally, in positive territory.”
“Although for many reasons we are all naturally very disappointed with the way the year played out for us, and also mindful of the fact that there are still many geo-political events and micro-economic challenges threatening the domestic and international landscape, we believe our positioning across a broad range of markets, sectors and industries, give us every reason to be optimistic about our ability to deliver long term sustainable value to all our stakeholders.”