RTC : Interim Results

5 August 2019

RTC Group Plc

("RTC", "the Company" or "the Group")

Interim Results for the Six Months Ended 30 June 2019

RTC Group Plc (AIM: RTC.L), the engineering and technical recruitment Group, is pleased to announce its unaudited results for the six months ended 30 June 2019.

Summary:

• • Group revenue from continuing operations increased to £46m (2018: £41m)

• • Profit before tax reduced marginally to £0.71m (2018: £0.77m)

• • Basic earnings per share fell to 3.86p (2018: 4.38p)

The final dividend in respect of the year ended 31 December 2018 of 2.55p per share (2018: 2.3p) was approved at the AGM on 24 April 2019 and paid to shareholders on 7 June 2019.

In line with the Group's progressive dividend policy, the Directors propose an interim dividend of 1.4p per share (2018: 1.3p). The interim dividend will be paid on 29 November 2019 to shareholders on the register on 8 November 2019.

Commenting on the results, Bill Douie, Chairman, said:

"Ganymede continues to perform well with enhanced volumes on its Network Rail contract and GSS has increased its presence internationally. ATA has encountered headwinds due to uncertainties over our future relationship with the European Union. However, although the fog has not lifted in the political arena and, therefore, by extension in industry and commerce, we remain confident of continuing our satisfactory performance in the second half of 2019 and as such are maintaining our progressive dividend policy."

The interim report is available on the Company's websitewww.rtcgroupplc.co.uk.

ENDS

1

Enquiries:

RTC Group Plc

Bill Douie, Chairman

Andy Pendlebury, Chief Executive

SPARK Advisory Partners Limited (Nominated Adviser) Matt Davis / Mark Bradywww.Sparkadvisorypartners.com

Tel: 0133 286 1835

Tel: 0203 368 3550

Whitman Howard Limited (Broker) Nick Lovering / Christopher Furnesswww.Whitman-howard.com

About RTC

RTC has three principal trading subsidiaries engaged in recruitment services:

Tel: 020 7659 1234

• • ATA supplies white and blue-collar engineering and technical staff to a broad range of clients;

• • Ganymede supplies blue collar contingent labour into safety critical markets; and

• • GSS provides recruitment services for international deployment.

www.rtcgroupplc.co.uk

Chairman's statement

Six months ended 30 June 2019

The general economic environment has, during the first six months of 2019, become less stable globally and, in particular, in the United Kingdom (UK) as political events have created a rising level of confusion and uncertainty. This has not been helpful in our manufacturing and engineering UK recruitment business but despite that factor the Group has continued to grow overall revenues and we have enjoyed strong performances in our Rail and International activities.

Ganymede continues to perform well with enhanced volumes on its Network Rail contract although continuing delays in take-up of smart meters in the domestic market has constrained volumes of installations.

ATA started the year well but has encountered headwinds as uncertainties over our future relationship with the European Union accelerated in the first quarter and have remained for the rest of the period.

GSS continues to increase its presence in Afghanistan and pursuing exciting opportunities both there and in the Middle East.

The Derby Conference Centre continues to trade satisfactorily under it's new, energetic Managing Director.

In line with the Group's progressive dividend policy, the Directors propose an interim dividend of 1.4p per share (2018: 1.3p). The interim dividend will be paid on 29 November 2019 to shareholders on the register on 8 November 2019.

Although the fog has not lifted in the political arena and, therefore, by extension in industry and commerce, we remain confident of continuing our satisfactory performance in the second half of 2019.

W J C Douie Chairman

5 August 2019

Finance Director's statement Six months ended 30 June 2019

Highlights

In the period ended 30 June 2019, Group revenue increased by 12% to £46.0m (2018: £41.1m).

Profit from operations was maintained at similar levels to 2018 at £0.8m.

Trading

Ganymede increased revenues by 34% to £21.1m (2018: £15.7m) on the same period last year largely as a result of higher levels of demand from Network Rail and this was converted to profit from operations of £1.1m (2018: 0.7m), an increase of 57%.

GSS grew revenues by 17% to £8.1m (2018: £6.9m) reflecting a steady increase in the number of workers supplied to KBR, its longstanding international partner. Profit from operations was maintained at £0.5m (2018: £0.5m).

Market conditions, reflecting uncertainties around Brexit negotiations, resulted in a slow-down in both permanent and contract recruitment for ATA. As a result, revenues were 11% lower than the same period last year at £15.9m (2018: £17.7m) and there was a corresponding reduction in profit from operations of £0.4m to £0.5m (2018: £0.9m).

Within Central Services revenue from the Derby site continued to grow steadily in line with expectations.

Taxation

The total tax charge for the period is estimated at £158,000 (2018: £148,000). This is higher than would be expected if the standard tax rate was applied to the profits for the period, as explained in note 3.

Earnings per share

The basic earnings per share figure is 3.86p (2018: 4.38p). The diluted earnings per share 3.48p (2018: 4.10p).

Adoption of new accounting standards

During the period IFRS 16 Leases (effective 1 January 2019) was adopted which has resulted in the Group recognising right of use assets and lease liabilities for all qualifying contracts that are, or contain, a lease on the statement of financial position. The Group has applied the modified retrospective transition method and as such comparatives have not been restated. The impact on profit before tax for the Group for the six months ended 30 June 2019 was not material and there was no impact on opening equity at 1 January 2019 (refer note 7 for details).

Statement of financial position

The Group statement of financial position has strengthened compared to the same point last year with net working capital increasing to £3.3m (2018: £2.4m). The ratio of current assets to current liabilities has increased to 1.3 (2018: 1.2) and the gearing ratio (excluding liabilities under IFRS16) decreased to 0.7 times (2018: 1.4 times). Interest cover was 17.4 times (2018: 13.6 times) on a like for like basis excluding interest relating to lease liabilities under IFRS16.

Cash flow

The positive cash flow from operations of £1.1m (2018: outflow £1.3m) for the six-month period reflects solid credit control with the temporary payment delays experienced at 30 June 2018 resolved.

Following consideration of the further guidance published in 2018, cash and cash equivalents have been represented to show the invoice discounting liabilities as financing. The movement on invoice discounting is a negative £0.6m (2018: positive £1.3m) which represents a reduction in the amount of invoice finance in use. In 2018 more finance was required due to customer payment delays.

Financing

The Group's current bank facilities comprise an overdraft of £50,000 and a confidential invoice discounting facility of up to £9.0m with HSBC at a discount margin of 1.5% above base. An increase in facility up to £11m has also been approved by HSBC but not yet invoked as the Group is operating within its current facility cap. The Board closely monitors the level of facility utilisation and availability to ensure there is enough headroom to manage current operations and support the growth of the business. The Group continues to be focussed on cash generation and building a robust statement of financial position to support the growth of the business.

Own shares held

The cost of the Group's own shares purchased through the Employee Benefit Trust is shown as a deduction from equity. 40,000 options were exercised during the period and shares held in the EBT were used to satisfy this demand. The balance of £263,919 on the own shares held reserve within equity reflects 377,027 (2018: 417,027) shares remaining in the EBT that will be used to satisfy future exercises.

S L Dye

5 August 2019

Group Finance Director