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Annual Report and Accounts

2018Impellam Group plc

Impellam

Group plc A

nnual Report and A

ccounts 2018

Impellam Group plc_Annual Report and Accounts _2018

Strategic report

The Company

Impellam is the second largest1 staffing company in the UK and the sixth largest2 Managed Services provider worldwide

Strategic report

01_ Progress and performance02_ Impellam at a glance04_ Chairman’s statement05_ Investment case06_ Performance review14_ Our business model16_ Our strategic priorities18_ Key performance indicators20_ Principal risks24_ Performance review for

operating segments

Corporate governance

33_ Corporate governance34_ Board of Directors36_ Corporate governance statement38_ Directors’ report41_ Statement of Directors’ responsibilities

Financial statements

43_ Independent auditor’s report49_ Consolidated income statement49_ Consolidated statement of other

comprehensive income50_ Consolidated balance sheet51_ Consolidated statement of

changes in equity52_ Consolidated cash flow statement53_ Notes to the consolidated

financial statements94_ Company balance sheet95_ Statement of changes in equity96_ Notes to the Company balance sheet101_ Alternative Performance Measures103_ Glossary105_ Company information

Clients across the world look to us for Managed Services and Specialist Staffing in the UK, North America, Australasia, the Middle East and Europe. Working with them are 3,200 Impellam people, bringing a wealth of expertise through our 17 market-leading brands across 165 locations.

Every year, we connect carefully chosen candidates with fulfilling jobs at all levels. They include doctors, lawyers, accountants, nurses, teachers, cleaners, scientists, receptionists, security guards, drivers, chefs, administrators, engineers, warehouse operatives and technology specialists.

Underpinning everything we do is our ‘high-retention strategy’. It is centred on making and keeping promises to deliver better results and experiences to our customers, candidates, employees and investors.

Our visionTo be the world’s most trusted staffing company – trusted by our people, our customers and our investors in equal measure.

Our missionTo provide fulfilment and a sense of purpose for our people and help our customers build better businesses in a changing world.

Notes1 By revenue (2017 published numbers)2 By Spend Under Management∆ (‘SUM’) (confirmed by Staffing Industry Analysts based on

2017 published numbers)

Alternative Performance Measures

Words with this symbol are defined in the Alternative Performance Measures section of the Annual Report on page 101.

Group revenue_£m

2018

2017

2016

2,276.7

2,171.3

2,140.2

roup operating profit £m

2018

2017

2016

22.9

44.7

47.1

Net debt_£m

2018

2017

2016

(71.7)

(75.9)

(95.3)

roup gross profit £m

2018

2017

2016

282.3

285.5

288.6

Group adjusted EBITDA∆_£m

2018

2017

2016

50.2

59.5

70.1

Net cash generated from operations_£m

2018

2017

2016

38.2

55.0

46.8

Page_01

Strategic report | Corporate governance | Financial statements

Progress and performance

HeadlinesRevenue growth and a more focused portfolio

• Our strategy is working with revenues increasing by 4.9% (5.7% at constant exchange rates), driven by Managed Services growth.

• Increased collaboration through cross-sell delivered 2.5m incremental gross profit in the UK and Group fill

increased by 1.8pps to 27.0% (2017: 25.2%), delivering an additional .2m gross profit.

• Challenging market conditions in the UK Healthcare, Education and Retail markets meant that overall gross profit was flat at constant exchange rates and decreased by 1.1% using actual exchange rates.

• he launch of Guidant Global in October 201 (from the merger of Guidant Group in the UK with Bartech Managed Services in the US) has accelerated the transformation of our portfolio and has already enabled the expansion of one client from the US to the UK as well as a further new client win. he continuing drive to grow the proportion of Managed Services within the Group’s portfolio saw its share of Gross Profit rise to 41% (2017: 3 %) and its share of segment ad usted EBI DA∆ grow to 57% (2017: 52%).

• Focus on key markets across our Specialist Staffing businesses delivered gross profit growth in echnology, Office, Engineering, Legal and Blue Collar in the UK as well as echnology in the US and Engineering in both the Australian and US markets.

• In February 201 , the Group announced the de-merger of Carlisle Support Services Group. he Group believes that the Carlisle business is a non-core division and the de-merger will allow Impellam to further focus on its portfolio of Specialist Staffing and Managed Services businesses.

• Ongoing strategic IT investments, the increased cost of doing business compliantly and the downturns in the markets noted above resulted in ad usted EBI DA∆ of £50.2m (2017: £59.5m).

• Operating profit was 22. m (2017: 44.7m). In addition to the ad usted EBI DA∆ shortfall this was impacted by a goodwill impairment of £8.6m in respect of the Education businesses following this particularly difficult year. This is a non-cash adjustment but does impact basic earnings per share. Operating profit was also reduced by an increase in separately disclosed items from 3.4m to 5.7m.

• he Group’s cash conversion was strong for the year with net debt closing at £71.7m, £4.2m (or 5.5%) better than prior year (2017: £75.9m).

For more informationGlossary: Page_103

Revenue_£m

2018

2017

2016

1,154.6

1,019.4

990.0

Revenue_£m

2018

2017

2016

183.7

187.2

188.4

ross profit £m

2018

2017

2016

71.6

62.7

61.4

ross profit £m

2018

2017

2016

43.7

49.5

48.8

Impellam Group plc Annual Report and Accounts _2018

Page_02

Strategic report

Managed Services

Operating segments performance

UK, Europe, Middle East and Australasia

US

Our Managed Services businesses optimise the productivity and engagement of people by designing, implementing, coordinating and reporting on the whole contingent permanent and contract staffi ng process. This frees our customers to focus on their core business. We provide multi-disciplinary workforce solutions, including all forms of partial and complete outsourcing.

Impellam at a glance

For more informationPage_24


Revenue_£m

2018

2017

2016

800.0

811.9

817.8

Revenue_£m

2018

2017

2016

198.3

213.8

204.4

ross profit £m

2018

2017

2016

135.2

140.4

146.5

ross profit £m

2018

2017

2016

31.8

32.9

31.9

Page 03


Operating segments performance

UK, Europe, Middle East and Australasia

US

Specialist Staffi ng

ur Specialist Staffi ng businesses leverage our deep heritage, sector expertise and extensive network of specialist candidates to provide expert recruitment services and fulfi lled, engaged workers for our customers.

Our dedicated teams build better businesses through the provision of specialist workers for permanent, temporary contract and fi xed-price work directly with our customers, or in partnership with one of our Managed Services businesses in the portfolio. This integrated, collaborative culture enables an agile, exible approach to customer needs.




Page_04

Strategic report

Chairman’s statement

In 201 , Impellam Group made good strategic progress amidst the backdrop of challenging conditions in the UK Healthcare, Education and Retail markets.

We have continued to invest selectively in line with our strategy, whilst maintaining control on costs and cash. Our focus on international expansion to reduce reliance on the UK and to increase scale continues, whilst we continue to strengthen our Managed Services proposition globally.

Our Managed Services businesses delivered strong growth, particularly in Australia. he merger of our UK and US Managed Services businesses has further broadened our capabilities and service o ering. We have also seen expansion of our Specialist Staffing businesses in Europe, with new locations opened in Germany and Swit erland.

We have also continued to invest in our people and technology to ensure that Impellam Group is equipped to adapt to the changing world of work.

During 201 , there were some changes to the Impellam Board. Derek O’Neill, Non-Executive Director, stepped down from the Board in May to pursue other opportunities and Alison Wilford, Group CFO, stepped down in October. Brian Porritt was appointed as Interim Group CFO, a non-Board role, until a permanent replacement is recruited. he Board wishes to thank Alison and Derek for their contribution to the Company.

Finally, I would like to thank our shareholders for their continued support and our people for their hard work and contribution throughout the year. We enter 2019 with a clear plan and look forward to reporting our progress in the coming year.

Lord Ashcroft KCMG PCChairman

We have continued to invest selectively in line with our strategy.

Page_05


Investment case

The changing world of work provides significant opportunity

The world of work is changing rapidly: the demographics of the workforce are shifting, and new generations are demanding work with more purpose and meaning;

clients and candidates are seeking to work ever more flexibly, and the increasingly rapid adoption of technology is challenging our view of the workplace.

Our vision, mission and culture of Virtuosity aligned with our unique business model mean Impellam is ideally placed to deliver

We operate a di erentiated and sustainable high-road business model that builds customer loyalty, trust and advocacy.

Our deep heritage in contingent staffing provides a clear competitive advantage as clients increasingly seek more flexible ways to work. Our Managed Services businesses deliver long-term contracted revenues which provide earnings visibility and sustainable value. This is complemented by our portfolio of higher margin, expert-to-expert Specialist Staffing brands.

We create incremental value for our stakeholders through our integrated, collaborative, cross-selling culture across the portfolio.

We provide our Virtuoso leaders with the autonomy to deliver these solutions to our clients and entrepreneurially identify new opportunities. We continue to empower and enable our Virtuosos with technology to free them up to build more meaningful relationships with our clients and candidates.

Leverage our core markets and remain agile to new opportunities

We have market-leading positions and capabilities in many of our markets which provide a significant competitive advantage. We leverage these capabilities to expand into new markets and develop new revenue streams.

We focus on identifying and executing strategic partnerships and investment opportunities to support the innovation ambitions of our high-road clients, and expanding the geographic footprint of the business organically to provide further resilience across the portfolio.

ong-term sustainable financial performance and shareholder returns

Our balanced portfolio of businesses, organised according to the role they play, Enhancers, Optimisers and Innovators and our high-retention business model delivers sustainable financial performance throughout the economic cycle.

Our strong focus on cash generation enables us to reinvest in the portfolio and continue to deliver dependable returns to shareholders.


Page_06

Strategic report

Performance review

esilient gross profi t performance and a more focused portfolio

Operational reviewDespite signifi cant challenges in the UK Healthcare, Education and Retail markets and the impact of 2017 customer losses in the US, overall Group gross profi t was fl at at constant exchange rates (1.1% decrease at actual exchange rates), with gross profi t growth recorded in UK Managed Services,

echnology, Offi ce, Engineering, Legal and Blue Collar markets, in US echnology and Engineering markets and Australia Managed Services, Healthcare and Engineering markets.

We achieved this gross profi t performance by continuing to invest in the development of our Virtuoso culture, by growing our global Managed Services business and by increasing the scale and competitiveness of our international businesses. We also continued our strategic IT investments: Ignite, our recruiters’ operating system, ShiftWise, a market fi rst technology solution for the NHS and Workplace, our internal collaboration and communication platform.

he in-year fi nancial impact of these investments, combined with the contraction of the UK Healthcare, Education and Retail markets in the UK, the gross profi t wind-down of two Managed Services programmes (‘MSPs’) in North America in 2017 and the increased cost of doing business compliantly (GDPR, Cyber and increase in employment related on-costs), meant that the Group delivered ad usted EBI DA∆ of £50.2m (2017: 5 .5m) and profi t before tax of 16.1m (2017: 37. m).

Julia Robertsonroup hief Executive ffi cer

Throughout a challenging year, we remained true to our vision, mission and strategy.

Page_07


Strategic review and update on strategic prioritiesThroughout a challenging year, we remained true to our vision, mission and strategy and important progress has been made.

Enabling our VirtuososWe have now developed 400 Virtuosos; graduates of a leadership and cultural change programme which enables our people to make the di erence in building trust, stronger relationships and improved experiences for our clients and candidates across the world. We continue to invest in our culture of Virtuosity, empowering our Virtuosos to deliver an increased quality of client service and innovation which drives high retention and satisfaction among clients and candidates alike.

Our Virtuosos are responsible for both front-line service delivery and the implementation of strategic change.

Transforming the portfolioDuring 201 , we accelerated the process of focusing our portfolio of brands to give increased strategic clarity and financial performance.

Since 2014, it has been the Group’s strategy to increase our overall percentage of Managed Services business and this now stands at 57% of our segment ad usted EBI DA∆ (2017: 52%). A new portfolio structure has been implemented to drive Managed Services and international growth further to deliver premium (+10% per annum) returns.

Regional businesses have distinct leadership and are focused on investing to stay relevant, productive and efficient so that they perform ahead of their market peer group.

A key strategic move in 201 was the merger of our two talent acquisition and managed solutions businesses in the UK and US to form Guidant Global. his bold move means that we have strengthened our position in the growing £117bn Spend Under Management∆ (‘SUM’) Managed Services market and enabled us to meet the needs of a broader range of international clients, securing increased market share and creating better workplaces across the world.

Collectively, our Managed Services businesses (Guidant Global, Comensura, Medacs Global Group (‘MGG’) and Lorien) have recorded 57 new wins in 2018 and have a strong sales pipeline across all geographies.

In February 201 , the Group announced the de-merger of Carlisle Support Services Group. he Group believes that the Carlisle business is a non-core division and the de-merger will allow Impellam to focus on its portfolio of Specialist Staffing and Managed Services businesses.

We have continued to invest in international expansion and we have seen particularly strong growth in Australia (Comensura and MGG). We have strengthened our position in Ireland (MGG, Guidant Global and SRG) and have invested in the organic start-up of a technology business in Germany (Lorien).

57%of segment adjusted EBI DA∆ delivered by Managed Services

96%Client retention (based on Top 50)



Page_08

Strategic report

Performance review continued

Finally, during 2018 we launched Origin, our innovation hub, to partner with, acquire and invest in staffing start-ups to drive both sustaining and disruptive innovation across the portfolio. In addition, Origin encourages entrepreneurship in our irtuosos to support them to find new ways to operate and attract, retain and delight our customers and candidates.

Improved resilienceOur Virtuoso culture and our focus on collaboration and cross-selling creates an operating model where customers stay with us for longer, as we adapt and innovate our services for them. Sometimes this means they move from being a Specialist Staffing customer to a ertical Specialist Managed Services customer and sometimes from either a Specialist Staffing or a ertical Specialist Managed Services customer to a full service MSP. In 201 , 13 customers migrated from one service o ering to another with three of these moving to be a full service MSP.

In addition, our collaborative culture means that our percentage Group fill continues to rise as we leverage our Specialist Staffing brands as a key source of talent for our Managed Services customers. This collaboration works to the service of all our stakeholders.

Our customers have access to the best talent, our candidates have access to good work, our people benefit from long-term relationships with customers and candidates and our investors benefit from increased share of our customers’ spend.

All our markets are increasingly competitive. We compete for scarce candidates at the same time as our customers expect more value from us for less, as their individual market dynamics create increasing pressure.

o stay competitive, whilst o ering a premium service to customers where engaged, fulfilled and productive workers are at the heart of our proposition, we have invested in a CRM system for our Specialist Staffing businesses and are mid-way through a roll out programme to Blue Arrow.

Likewise, in the UK Healthcare market, where the NHS has been driving down use of agencies and agency margins over the last three years, we have boldly invested in ShiftWise technology to support the NHS in their strategic goal to shift spend to internal sta banks. Our performance in NHS backed pilots has been such that we confidently expect to increase our market share as this market place continues to transform over the next 24 months.

Despite all this progress, we are acutely aware of, and attuned to, the impact of the combination of events described in my opening statement of this report on our ad usted EBI DA∆ performance in 2018. In anticipation of continued market and technological disruption and downward pricing pressure, we will continue to focus on the price point for our premium positioning, our integrated operating model and our cost base to improve our conversion of gross profit to ad usted EBI DA∆ performance in 2018.

57New Managed Services wins

Page_09


Continued commitment to our strategic priorities and sales momentum is key, but we will also ensure that our rigour on project investment and implementation is second to none and that we have explored every angle to focus the portfolio on achieving optimum results. I believe that with this focus, we will see a return to higher levels of conversion in the months ahead as we continue to work in partnership with our customers as they navigate the changing world of work as well as ongoing political and economic uncertainty.

Operating reviewWe continue to balance the risk in our portfolio. Our global Managed Services businesses are winning new customers and expanding their remit with existing customers. Our combined Managed Services operation, with its long-term customer base and high level of recurring revenues, now accounts for 5 % of our revenue, 41% of our gross profit and 57% of our segment ad usted EBI DA∆. Our non-UK businesses now represent 51% of our total ad usted EBI DA∆.

We achieved a 1. pps increase in Group fill to 27% (2017: 25.2%) which created .2m of additional gross profit in 2018. In addition, our focus on collaboration between our brands has continued to deliver results with an additional

2.5m gross profit reported in the UK.

Managed Services gross profit at 115.3m was 2. % up on prior year with growth across the UK brands. Segment ad usted EBI DA∆ from Managed Services is 30. m (2017:

32.7m). here was growth in the UK (Lorien), Australia (Comensura) and healthcare (Australia) while US Managed Services (Bartech, rebranded to Guidant Global) was down due to the timing of wins and losses.

Specialist Staffing gross profit at 167.0m was 3.6% down on the prior year, impacted by challenges in the UK retail market, the NHS and UK education sector. However, there were good performances from technology in the UK and US (Lorien and s.com), engineering in the UK (Carbon60), legal in the UK (Chadwick Nott) and office and blue collar in the UK (Blue Arrow and ate).

£4.0bnSpend Under Management∆



Page_10

Strategic report


Financial reportRevenue for the 53-week period ended 4 anuary 2019 grew by 4.9% (5.7% at constant exchange rates). Gross profit decreased by 1.1% (0.1% increase at constant exchange rates). Gross profit declined in our Specialist Staffing business and was further impacted by the increased mix of our Managed Services business revenues.

Ad usted EBI DA∆ was 15.6% lower year-on-year (14.4% at constant exchange rates). This was the combination of lower gross profit and an increase in operating costs, particularly I investment. Operating profit was 4 . % lower year-on-year.

he di erence between these measures is reconciled on page 101 and is principally due to a goodwill impairment charge of £8.6m in respect of the education business and £5.7m of separately disclosed items primarily in respect of legal provisions and restructure and integration costs.

Foreign exchangeCurrency movements versus Sterling negatively impacted our reported performance. Over the course of the period to December 201 , the negative impact of exchange movements on gross profit and operating profit was 3.2m and 0.7m respectively. Fluctuations in the rates of the Group’s key operating currencies versus Sterling continue to represent a sensitivity for the reported performance of our business.

By way of illustration, each one cent movement in annual exchange rates of the US Dollar impacts gross profit by

0.6m per annum and operating profits by 0.13m per annum. he rate of exchange between the US Dollar and Sterling over the period ended 4 anuary 201 averaged US 1.334 and closed at US 1.274. As the Group expands further in Australasia and Europe the impact of changes in exchange rates will be greater.

Capital investmentCapital expenditure on fixed assets in the period was 10.0m (2017: 11.3m), with continued investment in our two strategic I pro ects (ShiftWise and Ignite). he net finance expense in the period was £6.8m (2017: £6.8m).

Interest and debtNet cash generated from operations during the period was

3 .2m (2017: 55.0m). Strong underlying cash performance was the result of the continued focus on cash collections, overdue debt reduction and working capital management activities. Cash conversion (net cash generated from operations to operating profit) of 166. % in 201 (2017: 123.0%) was positively impacted by the additional week at the end of the year; however, using the cash conversion of net cash generated from operations to ad usted EBI DA∆ gives 76.1% (2017: 2.4%) which is more reflective of the underlying business performance. At the end of 201 , Days Sales Outstanding (‘DSO’) stood at 3 .5 days (2017: 3 .7 days).

5.5%Reduction in net debt

£10.0mCapital expenditure

perating profit to net cash generated £m

perating cash o (2017: £63.3m)

Operatingprofit

Non-cash Working capital

Tax paid Net cash generated

22.9

21.6 0.2 (6.5)

38.2

£75.9m

£71.7m

Reduction in net debt_£m

Net debt reduction £4.2m (5.5%)

2017 201870

72

74

76

78

80

Page_11


he Group’s operations are financed by retained earnings and bank borrowings.

he Group has in place a 240m global Revolving Credit Facility (‘RCF’) with an accordion element of an additional 50m. his provides the Group with the flexibility to fund its working capital as well as future acquisitions.

Rates of interest for the RCF are based on LIBOR plus a margin calculated on the net debt to ad usted EBI DA∆ leverage.

Incorporated into the RCF is a letter of credit facility which at the end of the period amounted to 5.1m (2017: 3. m).

he Group takes advantage of a number of non-recourse financing agreements organised by clients of the Group to allow for the acceleration of payment of their receivables. At the end of 201 , these amounted to 1 .5m (2017: 17.3m). These agreements accrue interest at between 0.7% and 1. 5% over LIBOR.

A significant priority for the Group continues to be to focus on the conversion of operating profit into sustained positive cash flow by controlling working capital. he Group measures three covenants as required by the facility – interest cover, ad usted leverage ratio (defined as net debt less loan notes and restricted cash to ad usted EBI DA∆) and debtor cover. All covenants were met during the year.

Borrowing levels are controlled by the Group Finance department, which manages treasury risk in accordance with policies set by the Board.



Page_12

Strategic report


he Group’s financial liabilities are denominated primarily in Sterling. At December 201 , US 40.0m of the RCF was drawn in US to provide a hedge against the US operations’ profit streams and net assets which, when reported at a Group level, are a ected by movements in exchange rates. Exposure to currency risk at a transactional level is generally minimal, with most transactions being carried out in local currency.

TaxationThe tax charge in the period of £2.8m (2017: £6.8m) represents an e ective tax rate of 17.4% (2017: 17. %). he tax charge is comprised of corporate tax charges arising from the Group’s activities in the UK and overseas. At the end of the period, the Group has maintained the level of losses against which a deferred tax asset has been recognised on the basis that the Group remains confident that the US business will continue to be profitable in the foreseeable future.

he Group had a UK Corporation ax charge of 1.4m (2017: £4.8m) and an overseas corporate income tax charge of

2.5m (2017: 2.3m). he e ective current tax rate on the UK business is 17.5% (2017: 26.3%). his is lower than the UK statutory rate of Corporation Tax which is 19.0% (2017: 1 .3%). he di erence is principally due to tax credits arising from the true-up of prior years’ provisions o -set partially by charges to the profit and loss account which are not deductible for corporation tax purposes. The overseas current tax charge arises mainly in Australia where the highest corporate income tax rate is 30%.

he Group made a ma or contribution to the UK reasury. In the period, 312.4m (2017: 303.3m) was remitted in the form of A , income tax, national insurance, and Corporation ax.

Of this amount, employer’s national insurance and Corporation Tax of £52.0m (2017: £57.0m) was a cost to the business.

Capital managementhe Group’s capital base (note 30) is primarily used to finance its

working capital requirement, the key component of which is trade receivables. rade receivables in the staffing and support services sectors are managed according to a range of DSO targets. Terms of trade are monitored and the approval of extended payment terms requires senior finance involvement. In some of the Group’s Managed Services businesses, the amounts payable to third party suppliers are not due until after the receipt of the client receivable. As noted above, the Group has committed facilities that ensure there is sufficient liquidity to meet ongoing business requirements.

he primary ob ectives of the Group’s capital management function are to ensure that it maintains a good credit rating in order to support its business, to maximise shareholder value and to safeguard the Group’s ability to continue as a going concern.

Going concernAfter making appropriate enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. In coming to their conclusion the Directors have considered the Group’s profit and cash flow plans for the coming period, together with outline projections for 2019 and 2020. The amount of borrowing required to fund the Group’s activities is determined based on these projections, together with expected returns to shareholders and planned capital expenditure. This is then compared to the bank lending facilities currently committed and expected to be available to the Group.


Also considered is the pro ection of compliance with the financial covenants implied by these plans. In addition, these figures are tested for sensitivity to possible changes to the economic environments in which the Group operates.

he impact on Group liquidity and covenants of each of these sensitivities is then evaluated together with the likelihood of each of these occurring either individually or in combination.

On a regular basis, and at least quarterly, the Board reviews updated pro ections of future borrowing requirements, facility usage and resulting headroom, together with projected covenant compliance; these are based upon the latest actual results and borrowing position supplemented by regularly updated profit forecasts. Based on the above, the Directors consider it appropriate to continue to adopt the going concern basis in preparing the financial statements.

Dividends and share buybackIn uly 201 the Board announced that it would be undertaking a share buyback programme whereby it is returning cash to its shareholders through the purchase of Ordinary shares in the Company up to an aggregate market value of £12m over a period of 12 months. The proposed quantum of the buyback ( 12m) reflects the value that the Board would otherwise have intended to return to shareholders through dividends over the same period.

herefore no final dividend has been declared.

Insurancehe Group maintains a comprehensive insurance programme

with a number of reputable third party underwriters. Insurance is brokered at a Group level. he Group’s insurance policies are reviewed and updated annually to ensure that there is adequate cover for insurable risks and that the terms of those policies are optimised.

BrexitOne of the biggest risks we see over the coming year is in the UK, where uncertainties regarding the macroeconomic and political outlook are likely to remain throughout the period in which the UK negotiates its exit from the EU. his could have a detrimental impact on candidate confidence to switch obs, or business confidence to invest and take on new sta . he impact on this could be reduced volumes of placements in our UK business and therefore reduced fees. Forward visibility remains limited and outlook uncertain, but as ever, we will monitor activity levels closely.

OutlookLooking forward, we anticipate continued market and technological disruption and downward pricing pressure, as well as ongoing uncertainty from Brexit. Notwithstanding this, we anticipate an increasing return from our strategic investments in 2019, and this, coupled with a rigorous portfolio, operating model and cost base review means that we expect to see a return to higher levels of conversion of gross profit to EBI DA∆ and profit before tax.



Page_14

Strategic report

By collaborating closely, our Managed Services and Specialist Staffi ng businesses provide market-leading services across our core markets.

This means that, within the Group, we are always equipped to deliver the right service at the right time to the customers we choose to work with.

• Long-term contracts• High visibility of future earnings• Manage the end-to-end staffi ng process for

a wide range of high-road customers• Meeting high-volume need• E ective process management and innovation• Public, private and not-for-profi t sectors.

• Higher gross profi t, more cyclical business• Provides specialist workers for permanent, temporary,

contract and fi xed-price work• Specialist recruiters delivering bespoke recruitment

services to high-road customers• Specialisms: healthcare, social care, legal, engineering,

catering, driving, offi ce, industrial, science, clinical, education, fi nance and accountancy, sales, I , aviation and cleaning.

All our businesses work in ‘ he Impellam Way’, which embeds a consistent Group-wide culture, based on trusted behaviours delivered by entrepreneurial Virtuoso leaders who can drive our competitive advantage and deliver on our bold promises.

Our businesses

Managed Services

Specialist Staffi ng

Our shared culture

Tuning in to customersuning in is much more than listening.

Impellam people see the world as our customers see it, and work with them to make their businesses better.

Make, keep and deliver promisesAll Impellam people make, keep and deliver their promises, every day.

Producing starsWe perfect the art of delivering fulfi lment to candidates by putting them at the heart of everything we do and taking the time to truly understand them.

High-integrity leadershipWe have passionate irtuoso leaders who thrive in a fast-moving, performance-based culture and who can transform deep-rooted outdated practices.

Our business model

2

3

4

1

Attract

Rew

ard

Develop Retain

ListenTrust

Collaboration

High-retentionbusiness

HighHigh--etentioetentio

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High-retentionbusiness

Employees Clients

Investors Candidates

Page_15


At the heart of our high-retention model is a virtuous circle of making and keeping promises, engendering trust and loyalty.

High-retention businesses will retain clients, candidates, employees and investors for longer, and reap the benefi ts of that longevity.

All Impellam businesses, as well as any business we acquire, believe in high-retention already and, with our help, are on course to become so.

ClientsWe tune in to our customers and work closely with them to fi nd engaged people to help them build better businesses. We retain them, continuing to listen and partner with them to extend the scope and tenure of our services, and in doing so, open up more opportunities for organic growth.

CandidatesFrom the outset, we listen to our candidates and fi nd them work that fulfi ls them and matches their aptitudes, skills and aspirations. We reward our candidates fairly, retain them by treating them well, and fi nd them work that interests and develops them. In turn, this encourages them to refer us to friends and, indeed, employers.

EmployeesWe employ people who care about what we do. We develop them, so they have the right skills and experience to do their ob by being experts in their fi eld. Ultimately, we trust them to make the right decisions, collaborate and deliver on their promises.

InvestorsWe take great care to create strong relationships with investors who understand our strategy and business model. We build on the trust we have created by delivering on both our fi nancial and non-fi nancial promises.

Our high-retention model Our value creation

For more information visitwww.impellam.com


Page_16

Strategic report

Our strategic priorities

A bold promise Our priorities and what they mean

Our strategic objectiveirtuosity makes the di erence and will

drive market-beating value creation.

Our strategic advantageWe retain our customers, people and investors longer than our competitors because they trust us to do what we say we are going to do. We collaborate across our multi-branded portfolio with a common language and a set of signature practices (‘ he Impellam Way’) to deliver di erentiated, integrated solutions to our customers and fulfi lment to our people.

Our strategic scopeCustomers We strive to work with customers who value engaged, fulfi lled and purposeful people, and who will allow us to take our share of the economic value we create as we help them build a better business.

ering We are a staffi ng solutions company with the sole focus of o ering high-value, di erentiated Managed Services and Specialist Staffi ng solutions. We always draw on our core competency and never take on work we do not understand.

eograp We have multi-branded, multi-service o erings in the US, UK, Europe, Middle East and Australasia. In support of our mission, we may choose, very selectively, to invest in and operate with specifi c clients in other countries, and to fi nd exciting opportunities for our people globally.

Integration We have a unique, di erentiated model which integrates Managed Services and Specialist Staffi ng into a full workforce solutions management platform for our customers’ permanent, contingent and Statement of Work (‘SOW’) spend. We do important work and we get work done.

Virtuosos doing what people do best enabled by reliable technology.

We will get out of the way of our irtuosos and make sure they are

leading more of the Group, future-proofi ng the portfolio and delivering new, incremental revenue streams.

We’ll accelerate our Managed Services growth by selectively integrating our Managed Services brands across our ma or geographies to make it easier for our high-road customers to access our talented and engaged people.

We’ll refi ne our Specialist Staffi ng portfolio and will build scale in growing global verticals whilst responding to macro trends and developing new business lines in new verticals opened by the gig economy.

We’ll improve our resilience by investing in technology to drive effi ciencies and productivity.

We’ll enter new growth markets and economies organically to defend our key high-road client relationships.

1

2

3

Enable our Virtuosos

Transform our portfolio

Improve resilience

Page_17


What we’ve achieved in 2018

• We have now developed over 400 irtuosos, leading our people across the Group. In 201 , we continued to invest in developing our people with 170 experiencing the irtuoso programme and a further 112 will oin them in 1 201 . We believe that managers make the di erence. herefore, the more people that we have focused on embedding a culture of irtuosity, founded on making and keeping promises to our customers, candidates and each other, the more robust our portfolio of businesses will be to face changing markets and ongoing uncertainty.

• In the year, we also created a digital platform to support our people to make and keep their promises and to further underpin our culture.

• In 201 , we merged two Managed Services businesses, Bartech and Guidant Group, to form Guidant Global to drive growth in this market. Guidant Global is now well placed for

10% annual growth and increased global market share.

• In the year, we secured 57 new Managed Services customer wins and retained 6% of our customers, demonstrating the impact of high-retention strategy. Our healthcare business, MGG, continued to develop its ShiftWise technology and as a result won 13 new customers.

• Our investment in overseas expansion in Australia, Germany and Ireland generated 25.7m gross profit (2017: 21. m) across both Managed Services and Specialist Staffing.

• We continued to invest in technology to increase efficiency and productivity, to drive collaboration and communication and to provide innovative, di erentiated services to our customers. Ignite, our CRM, has been rolled out to 20 Blue Arrow branches. his pro ect will be completed in 201 . We launched an internal social network, Workplace, to enable our 3,200 people across the world to communicate and collaborate more e ectively.

• A new portfolio structure has been implemented to drive Managed Services and international growth and local businesses have distinct leadership to increase productivity and efficiency.

• In 201 we established the Impellam Group International Equality, Diversity and Inclusion (‘EDI’) council. he council will provide visible leadership, representation and guidance.

• More than 1,500 individual customers attended our seminars and as a consequence spent 1.0m more with our brands and cross-sell delivered 1.5m across both the UK and US.

• Our focus on driving collaboration continued in 201 , which positively impacted Group fill and cross-sell. Group fill increased by 1. pps and we continue to make good progress in filling our addressable Managed Services spend through our Specialist staffing brands.

• In 201 , 13 customers migrated from one service o ering to another with three of these moving to be a full service MSP.

• We diversified our service o ering by supporting and delivering Apprenticeships for customers and our people thereby creating a new revenue stream for the Group. At the end of 201 there were 2 apprentices from 33 customers enrolled on Apprenticeships and we will continue to invest for scale in 201 .

• During 201 we also launched Origin, our innovation hub, to partner with, acquire and invest in staffing start-ups to generate new revenue streams and deliver cost-savings or efficiencies through technology, driving both sustaining and disruptive innovation across the portfolio to improve our resilience.

For more informationlossar : Page

2018

2017

2016

£2,276.7m

£2,171.3m

£2,140.2m

2018

2017

2016

£50.2m

£59.5m

£70.1m

2018

2017

2016

17.8%

20.8%

24.3%

2018

2017

2016

£(71.7)m

£(75.9)m

£(95.3)m

2018

2017

2016

£282.3m

£285.5m

£288.6m

2018

2017

2016

£22.9m

£44.7m

£47.1m

2018

2017

2016

8.1%

15.7%

16.3%

2018

2017

2016

57%

52%

49%


Page 1

Strategic report

Key performance indicators

Financial KPIs

Group revenue

Group adjusted EBITDA∆

EBI DA before separately disclosed items and share-based payment

Conversion ratio – adjusted EBITDA∆

Adjusted EBITDA∆ divided by NFI gross profit

Net debtTotal cash and cash equivalents, less borrowings (both current and non-current)

gross profitNet fee income (‘NFI’) is the total placement fee of permanent candidates, the gross profit earned on the placement of contract candidates

roup operating profit

on ersion ratio operating profitOperating profit divided by NFI

% of Managed Services adjusted EBITDA∆

We monitor our performance against our strategic priorities by using key performance indicators (‘KPIs’). Our KPIs include a set of financial and non-financial measures.


2018

2017

2016

26.5p

61.9p

87.4p

2018

2017

2016

60.8p

75.2p

117.7p

2018

2017

2016

£38.2m

£55.0m

£46.8m

2018

2017

2016

37.1%

38.1%

35.1%

2018

2017

2016

96%

96%

94%

2018

2017

76%

87%

2018

2017

52%

25%

2018

2017

2016

27.0%

25.2%

24.5%

Page 1


on financial P s

Client retention

Retention of managers2

Development of Virtuoso managers

roup fill

Basic earnings per share (‘EPS’)

Adjusted earnings per share∆ (‘EPS’)

Net cash generated from operations

of gross profit outside the

Notes 1 Based on our top 50 clients2 In the UK only



Page 20

Strategic report

Principal risks

We recognise that e ective risk management is fundamental in helping the Group to deliver its strategic objectives. The Group is exposed to a number of threats which could have a material impact on its long-term performance.

Each business segment considers strategic, operational and financial risks on a regular basis and identifies actions to mitigate those risks.

Threat Impact 5 Mitigation

Strategic risks

Economic conditions

A downturn in general economic conditions, particularly in the UK, could result in declining business volumes, difficulties in producing accurate forecasts and/or failure to meet the Group’s ob ectives.

Improving economic conditions, particularly wage increases, could also create pressure on margins where these cannot be fully passed on to clients.

Geographical diversity and the Group’s mixed portfolio of Managed Services and Specialist Staffing businesses provide a competitive advantage and mitigate the potential impacts of economic changes in specific regions.

Political environment

he Brexit decision in 2016 and subsequent uncertainty have adversely a ected both permanent and temporary hiring decisions by clients.

There is also continued uncertainty about the availability of EU candidates in the short term, which may a ect the Group’s ability to meet UK clients’ labour needs.

In the public sector, ongoing financial constraints may limit growth and/or create pressure on margins on existing business.

Management maintain open dialogue with key clients in relation to both short and long-term plans generally, as well as with specific regard to Brexit.

he Group has a clear view of key Brexit-related exposures and continues to monitor developments and communicate with both employed sta and candidates.

Attracting and retaining talent

Any constraints on the Group’s ability to attract and retain key talent in an increasingly competitive market could result in loss or weakening of client relationships, lack of appropriate leadership and/or erosion of the Group’s talent base, impacting achievement of both financial and other ob ectives.

he Group’s high-retention business model ensures that brands and central functions are focused on talent management and development, performance review and succession planning.

Leadership development programmes are in place and Promise-Based Management has been rolled out across the senior leadership community.



Strategic risks continued

Customer concentration

General decline in a particular industry sector, loss of a key customer or a significant reduction in business volume on a key account could result in reduced revenue and/or increased pressure on gross profit.

Management hold regular meetings with key customers to discuss opportunities, sales pipelines and current service performance.

Management also discuss and review market conditions and sales and account management pipelines on an ongoing basis.

Delivery of strategic projects

The Group is committed to investing in strategic projects that will drive revenue growth or improve operational efficiency. Failure to operate rigorous control and oversight of such projects may result in returns on such investment being lower than expected.

An exercise to rationalise the Group’s pro ect portfolio was completed during 201 .

Major projects are considered by an Investment Committee of executive management and regular progress updates are required.

Acquisitions and disposals

As the Group pursues strategic acquisitions and disposals as part of its overall growth strategy, poor due diligence or post-transaction integration could result in expected benefits not being realised and/or diversion of management resource.

Large-scale acquisitions are managed at the Group and executive level while operations teams are responsible for integration.

The Group performs due diligence with the assistance of external third parties, but always conducts detailed people and cultural due diligence using internal resources.

Alignment of Group and brands’ vision, strategy and culture

Failure to establish and maintain consistent understanding of the Group’s strategic objectives and values across the brands could result in a failure to meet ob ectives.

Each brand prepares a three-year strategic plan aligned to the overall Group strategy.


Page 22

Strategic report

Principal risks continued


Operational risks

Technology systems

he Group is reliant on many di erent technology systems that may have limited useful life in a changing business environment.

They may also be vulnerable to factors beyond the Group’s control e.g. power failures or internet connectivity outages.

The Group has a stable systems infrastructure and an ongoing I investment programme.

Core systems are replicated across two data centres and regular monitoring of systems performance is undertaken.

Cyber and information security

he risk of external cyber-attacks continues to increase. A successful attack could result in loss of sensitive data, business disruption and/or damage to the Group’s reputation.

A programme to enhance security of the Group’s systems against attack has been implemented.

Ongoing monitoring is in place and regular exercises are undertaken.

A project to implement GDPR across the relevant parts of the Group was completed during 201 and regular reminders are published to sta .

Business continuity

A ma or disruptive event, such as a fire, severe weather etc., a ecting one of the Group’s operating locations, could lead to loss of business and or adverse impacts on sta and assets.

Comprehensive systems and operational business continuity plans are in place and tested on a regular basis.

Contingency plans such as remote working and redeployment of sta to other Group sites are in place to ensure minimal disruption.

Service and contractual complexity

In certain markets, the Group’s clients are becoming increasingly sophisticated in their procurement and buying activity. Competitive tendering activity and commercial contracts are becoming increasingly complex, with longer lead times in decision-making. his necessitates constant development of the Group’s service o er, the sophistication of our selling activities and the management of tendering processes.

The Group has a standardised contract review process in place involving operational, commercial and legal oversight.

The Group also continues to invest in specialist resource to support these activities and delivery of clients’ service expectations.



egulator co pliance and financial ris s

Regulatory environment

Regulatory changes can lead to increased costs and workload, particularly where they relate to candidates’ rights, eligibility to work or corporate reporting e.g. payment practices, diversity.

Legal, Finance and Compliance functions monitor risks and compliance, taking appropriate action where necessary.

Appropriate policies and codes of conduct are in place across the Group.

Cash and liquidity management

Poor cash and liquidity management may result in a strain on the Group’s credit facilities and operational cash flow issues.

The Group has a Treasury function in place with regular forecasting, reporting and review procedures.

The Group also maintains a revolving credit facility with a syndicate of banks to provide additional flexibility in its funding arrangements.

A Group Credit Policy sets out the policies and procedures that must be implemented across the Group.

Financial control A failure of financial control could lead to a material loss to the business.

The Group operates a number of shared services arrangements where transaction processing and management accounting are independent of operations.

Appropriate segregation of duties is maintained in all finance processes.

A clearly defined schedule of delegated authority limits for various decisions and transactions is also in place.

Key business processes are sub ect to internal audit review.


Page 24

Strategic report

Performance review for operating segments

Overview of Managed Services in the UK, Europe, Middle East and Australasia

Our Managed Services businesses optimise the productivity of people by designing, implementing, coordinating and reporting on the whole staffing process. This frees our customers to focus on their core business. We provide multi-disciplinary workforce management solutions, including all forms of partial and complete outsourcing.

Comensura and Guidant Global are the Group businesses engaged in providing full-scale, multi-disciplinary Managed Services.

orien and Medacs lobal roup deliver specialist single-discipline, master vendor solutions to their customers.

he specialis s of our urope iddle ast and Australasia anaged Ser ices rands are

Brand Specialism

Guidant Global Full programme management

Comensura echnology-led neutral vendor

Lorien Information technology master vendor

Medacs Global Group (‘MGG’) Healthcare master vendor

Carlisle Support Services Cleaning, security, events and retail facilities management

Managed Services Programmes (‘MSPs’)MSPs refer to the outsourcing of contingent labour (temporary and contract workers). Across the Group, we operate various service models within our MSPs, including:

Neutral vendor Assignments are filled by suppliers that we manage for the client, where the Managed Services provider does not form part of the supply chain.

ComensuraGuidant Global

Master vendor he ma ority of assignments are filled directly by the Managed Services provider (including Group supply) and second-tier agencies are used when the Managed Services provider is unable to supply. his model allows for a single point of contact and accountability for all temporary recruitment activities.

Guidant Global LorienMedacs Global Group

Hybrid vendor Assignments are filled by a combination of suppliers that we manage for the client and filled directly by the Managed Services provider (including Group supply) depending on the skillset and or location.

Guidant GlobalLorien

Statement of Work (‘SOW’) MSP

SOW solutions are for spend in complex categories of service. Similar to the sta augmentation process, these solutions include supplier management, requisition facilitation, contract writing, negotiations and invoicing and settlement support services.

Guidant Global

Facilities management

Providing cleaning, security, events and retail facilities support services. Carlisle Support Services

Payroll services Provide access to a fully compliant framework for managing and paying contingent sta .

Guidant Global

Recruitment Process Outsourcing (‘RPO’)hrough our RPO programmes, we maximise candidate

attraction through leveraging a client’s brand, improving the candidate experience and increasing selection efficiency.

We also: minimise agency spend drive referral schemes and internal mobility minimise demands on hiring managers’ time while maximising their overall experience manage all aspects of the pre-employment screening process generate employment contracts and support the on-boarding process.


Managed Services – UK, Europe and Australasia

2018£m

2017£m % change

Revenue 1,154.6 1,01 .4 13.3%

Gross profit 71.6 62.7 14.2%

Admin expenses (50.1) (42.3) 1 .4%

Adjusted EBITDA∆ 21.5 20.4 5.4%

Gross profit % 6.2% 6.2%

Adjusted EBITDA∆ return on sales % 1.9% 2.0%

Adjusted EBITDA∆ conversion ratio 30.0% 32.5%

Permanent fees % of gross profit 8.2% 5. %

Across all of our outsourced programmes, we provide and manage proprietary and/or third party technologies to enhance the user experience. We also provide dedicated account management resources, tried-and-tested processes and sophisticated supply chain management strategies. The emphasis of these elements varies from client to client, depending on the challenges they face and the objectives of their programme.

Financial and operational performance for 2018Our Managed Services businesses in the UK, Europe, Middle East and Australasia delivered a solid performance in 201 despite continuing challenges in the Healthcare market. We continued to invest in Managed Services to build scale and capability globally.

In 201 , to drive growth in Managed Services and transform our portfolio, we merged two market-leading brands to form a united Guidant Global. By bringing together Guidant Group (UK) and Bartech Managed Services (US) we’ll make and keep investment promises designed to serve high-road customers, and build scale and geographic scope rapidly. his merger has already led to a client expansion from the US to the UK, and a new client win.

Revenue of our Managed Services business in the UK, Europe, Middle East and Australasia grew year-on-year by 13.3%. Our Comensura business in the UK and Australasia together with Lorien and Carlisle Support Services (‘CSS’) in the UK achieved double-digit revenue growth year-on-year. Gross profit increased by 14.2% to 71.6m, driven by growth in Australasia and by Guidant Global and Lorien in the UK. Ad usted EBI DA also increased by 5.4% to 21.5m, with double-digit growth in Comensura and Carlisle Support Services.

We continued to drive collaboration in 201 across our business. Our Group fill in the UK was 53%, with a 0. pps increase in Lorien, as a result of leveraging the supply of

candidates from our Specialist Staffing brands. A significant number of customers now buy more than one service from the Group’s portfolio, with 1 % of Guidant Global clients buying more than three services.

In 201 , we secured 46 new client wins seven of those new client wins were within the Guidant Global business, 13 of them in Medacs Global Group, 15 of them in Comensura PTY, and 11 of them in Comensura UK.

Guidant Global in the UK has expanded its RPO o ering. he business won best RPO at the In-House Recruiter awards

for its work with their client, he AA.

Guidant Global were finalists in this year’s Business Disability Forum Disability-smart Awards for Positive Cultural Change. We also received awards for RIDI Awards – number one for Supply Chain Management, Mumandworking Award winner (Flexible Employee Member of the ear), Recruiter Award for Best Campaign with Shop Direct and an IRP Award for the Innovation category with Heathrow Airport.

he launch of ShiftWise, a technology solution by MGG in 2017 to diversify its o ering to the NHS, has led to MGG being one of four partners participating in the 15 Department of Health and Social Care (‘DOHSC’) Bank flexible Working Pilot schemes with favourable results so far.

We continued to invest in ounifi, a start-up irtuoso idea that we backed to deliver a new, innovative platform solution to the social care market. In 201 , ounifi won its first customer.

Corporate social responsibility (‘CSR’) initiatives included fundraising for Headway and Whi -Kid and supporting the Inner City Helping Homeless charity in Ireland. Comensura in Australia supported the social sustainability initiative We Run, hey Learn.


Page 26

Strategic report

Performance review for operating segments continued

Overview of Managed Services in the US

Our Managed Services businesses optimise the productivity of people by designing, implementing, coordinating and reporting on the whole staffing process. This frees our customers to focus on their core business.

We provide multi-disciplinary recruitment services, including all forms of partial and complete outsourcing.

uidant lobal is the roup business engaged in providing full-scale, multi-disciplinary Managed Services.

Managed Services Programmes (‘MSPs’)MSPs focus on the outsourcing of all or part of a company’s contingent workforce. In North America, our MSP solution framework addresses various strategies including sta augmentation, independent contractor compliance management, payrolling, talent pools and Statement of Work (‘SOW’) management. All of our MSP solutions are enabled by a vendor management system (‘ MS’). MS technology enables the full procure-to-pay process, while also providing robust reporting and analytics. In North America, we design and deliver our MSP services using various service models, including:

Neutral vendor Assignments are filled by suppliers that we manage for the client, where the Managed Services provider does not form part of the supply chain.

Guidant Global

Master vendor he ma ority of assignments are filled directly by the Managed Services provider with second-tier agencies used when the Managed Services provider is unable to supply. his model allows for a single point of contact and accountability for all temporary recruitment activities.

Guidant Global

Hybrid vendor Assignments are filled by a combination of suppliers that we manage for the client and filled directly by the Managed Services provider depending on the skill set and or location.

Guidant Global

Statement of Work (‘SOW’) MSP

SOW solutions are for spend in complex categories of service. Similar to the sta augmentation process, these solutions include supplier management, requisition facilitation, contract writing, negotiations and invoicing and settlement support services.

Guidant Global

Independent contractor solutions

Helping to reduce the risk and cost of worker misclassification. Guidant Global

Business Process Outsourcing (‘BPO’)

hrough world-class BPO solutions, we help businesses address back office needs strategically and increase their operational efficiency.

Guidant Global

Recruitment Process Outsourcing (‘RPO’)hrough our RPO programmes, we maximise candidate

attraction by skilfully leveraging our clients’ brands, improving the candidate experience and increasing selection efficiency.

We also minimise agency spend drive referral schemes and internal mobility minimise demands on hiring managers’ time while maximising their overall experience manage all aspects of the pre-employment screening process generate employment contracts and support the on-boarding process.

Across all of our RPO programmes, we provide proprietary and third party technology, dedicated resources (not always based in a client’s premises), tried-and-tested processes and sophisticated supply chain management.

The relative emphasis of each of these elements varies from client to client, depending on the challenges they face and the ob ectives of their programme.


Managed Services – North America

2018£m

2017£m % change1

Revenue 183.7 1 7.2 (0. %)

Gross profit 43.7 4 .5 (10.0%)

Admin expenses (34.4) (37.2) (7.5%)

Adjusted EBITDA∆ 9.3 12.3 (25. %)



Adjusted EBITDA∆ conversion ratio 21.3% 24. %

Permanent fees % 0.1% 0.2%

Financial and operational performance for 2018A key move in 201 in support of our strategic priority to transform our portfolio was the merger of our two Managed Services businesses in the UK and US to form Guidant Global. We have significantly strengthened our position in this high-growth market, improving our resilience by reducing reliance on the UK and enabling us to meet the needs of a broader range of international clients. his merger has already led to a client expansion from the US to the UK and a new client win.

We continue to enable our people with the right technology providing strategic insight through data and analytics to support client insight and decision-making. We introduced PowerBI as a customer-facing analytics platform, and also extended our alent Data Exchange (‘ D ’) relationship.

We also hosted an annual supplier summit, with a preview of ISION, our new supplier performance analytics portal and

interactive decision support system which aggregates supplier data across multiple quarters, for all of Guidant Global MSP programmes and brands.

We continue to focus on diversity, with more than 600 certified diverse supplier partners, currently providing 25% of spend across all Guidant Global programmes.

On a like-for-like currency basis revenue was down 0. %. Gross profit was down 10% on a like-for-like currency basis, impacted by the timing of wins and losses and adjusted EBITDA was 3.0m lower as the gross profit reduction was o set with cost savings.

We secured seven new client wins in 201 which combined with planned expansion programmes with existing clients will drive performance in 201 .

Guidant Global received awards for the Everest PEAK Matrix leader star performer and was number one in the HRO Baker’s Do en for customer service.

Notes1 Using underlying US results and eliminating translation gains and losses


Page 2

Strategic report


Overview of Specialist Staffing in the UK, Europe, Middle East and Australasia

ur Specialist Staffing businesses leverage our deep heritage, sector expertise and extensive network of specialist candidates to provide expert recruitment services and fulfilled, engaged workers for our customers.

Our dedicated teams build better businesses through the provision of specialist workers for permanent, temporary contract and fixed-price work directly with our customers, or in partnership with one of our Managed Service businesses in the portfolio. This integrated, collaborative culture enables an agile, exible approach to customer needs.

ur Specialist Staffing brands in the UK are lue Arrow, arbon60, areer Teachers, Celsian Education, Chadwick Nott, Medacs Global Group, Onezeero, SRG and Tate.

he specialis s of our urope iddle ast and Australasia Specialist Staffing rands are

Brand Specialism

Blue Arrow Catering, driving, industrial and office

Medacs Global Group Healthcare

One eero Information technology

Career Teachers Education (regional)

Celsian Education Education (national)

Chadwick Nott Legal

SRG Science, clinical and process engineering

Carbon60 Engineering, technical and construction

Tate Office professionals


Specialist Staffing – UK, Europe and Australasia

2018£m

2017£m % change

Revenue 800.0 11. (1.5%)

Gross profit 135.2 140.4 (3.7%)

Admin expenses (118.7) (116. ) 1.6%

Adjusted EBITDA∆ 16.5 23.6 (30.1%)


Adjusted EBITDA∆ return on sales % 2.1% 2. %

Adjusted EBITDA∆ conversion ratio 12.2% 16. %

Permanent fees % of gross profit 17.8% 17. %

Financial and operational performance for 2018Across our Specialist Staffing businesses in the UK, Europe, Middle East and Australasia we experienced strong performances in the echnology, Office, Engineering and Blue Collar markets. he Education, Retail and Healthcare markets were challenging due to declining candidate availability, falling high street spending and austerity measures. In the UK, Brexit continued to create uncertainty and a slowdown in 4 201 .

Revenue was down 1.5% on 2017 due to external challenges in our UK doctors and nursing healthcare businesses and our education and retail businesses. Good performances in One eero (technology), Blue Arrow (blue collar, office) and

ate (office) saw increased revenue and gross profit year-on-year in these brands.

Gross profit fell by 5.2m (3.7%) and ad usted EBI DA fell by 7.1m (30.1%) due to the challenging conditions, as well as

continued investment in IT and a new CRM programme (Ignite). Our CRM programme, Ignite, was successfully rolled out to 20 Blue Arrow branches with plans to complete the roll out to all Blue Arrow branches in 201 .

Blue Arrow retained their imes 100 two-star accreditation, the brand’s highest ever score. hey also attained the Disability Confident Employer status in 201 , which certifies the brand’s commitment to supporting people with disabilities.

We continued to look for growth outside of the UK. In Australia and New ealand Medacs Global Group (‘MGG’) and Carbon60 delivered over 14m of gross profit, up 15. % year-on-year.

ate launched an external apprenticeship programme to customers, which at the end of 201 had 2 individuals from 33 customers enrolled. he scheme is being rolled out to Blue Arrow and Carbon60 clients in 201 .

he Group initiative to cross-sell across the brands saw 4 permanent placements, generating over 200k in gross profit as a result of one brand passing a lead to a sister brand within the Group. In addition, over 1,500 individual clients attended our seminars, and as a consequence spent £1m more with our brands.

One eero successfully launched their diversity and inclusion programme, Cohesion, in 201 . Corporate social responsibility (‘CSR’) initiatives continue to be important to the Group with fundraising activities for mental health charity, Mind, and Action for Children, Headway and Whi -Kid charities, amongst others.


Page 30

Strategic report


Overview of Specialist Staffing in the US

ur Specialist Staffing businesses in the US leverage our deep heritage, sector expertise and extensive network of specialist candidates to provide expert recruitment services and fulfilled, engaged workers for our customers. Our dedicated teams build better businesses through the provision of specialist workers for permanent, temporary contract and fixed-price work directly with our customers, or in partnership with one of our Managed Service businesses in the portfolio. This integrated, collaborative culture enables an agile, exible approach to customer needs.

artech Staffing, oresta , SR Woolf and s.com are Specialist Staffing businesses in the US.

he rand specialis s of our S Specialist Staffing rands are

Brand Specialism

Bartech Professional and technical specialist

Coresta Office professionals

SRG Woolf Life Science specialist

s.com Information technology

Page_31


Specialist Staffing – North America

2018£m

2017£m % change1

Revenue 198.3 213. (1. %)

Gross profit 31.8 32. (0.6%)

Admin expenses (25.1) (25. ) (3.1%)

Adjusted EBITDA∆ 6.7 7.0 (13.5%)



Adjusted EBITDA∆ conversion ratio 21.1% 21.3%

Permanent fees % of gross profit 4.7% 4.6%

Financial and operational performance for 2018Our Specialist Staffing brands in North America delivered mixed performances due to shifting market conditions, particularly in automotive.

Revenue was down 1. % on a like-for-like currency basis due to volume reductions in Coresta . However s.com and Bartech both increased year-on-year.

Gross profit was 1.1m down (0.6% on a like-for-like currency basis) with the drop in Coresta o set by an increase in s.com and ad usted EBI DA fell by 13.5% on a like-for-like currency basis with all brands down on 2017.

SRG Woolf have changed their business mix as they continue to diversify their portfolio of activity which now covers clinical (43%), scientific (3 %), biometrics (12%) and other (7%).

S.com had four customers who generated over 1m gross profit during 201 , compared to two customers in 2017. The specialist brand grew the average number of customers per week to 65.

Bartech Staffing continued to experience difficult operating climates in the automotive sector but with successful diversification outside of the sector and by focusing on the strategic priorities maintained gross profit year-on-year. In Canada they grew gross profit by 5% year-on-year. Bartech ranked 15 th in Forbes 201 list of America’s Best Recruiting Firms.

Although Coresta saw volume reductions in 201 from existing clients, the branch network had 0 new clients in the year and the retail sales model continues to grow.

Notes1 Using underlying US results and eliminating translation gains and losses

his Strategic report from pages 1 to 31 was approved by the Board on 21 March 201 and signed on their behalf by:

Rebecca WatsonCompany Secretary

00 he BoulevardCapability GreenLutonBedfordshireLU1 3BA


Page_32

The Impellam Board is committed to a high standard of corporate governance

For more information visitwww.investors.impellam.com/corporate-governance/


33_ Corporate governance34_ Board of Directors36_ Corporate governance statement38_ Directors’ report41_ Statement of Directors’ responsibilities

Page_33


Our governance framework


The Board has overall responsibility for corporate governance within the Group and this is underpinned by a framework aligned to the requirements of the business. The full Board retains certain matters for its own review and decision-making while other responsibilities are delegated to sub-committees of the Board, namely the Audit Committee and the Remuneration Committee.

As a Company whose shares are traded on the AIM market of the London Stock Exchange, the Company complies with the Quoted Companies Alliance (‘QCA’) Corporate Governance Code (‘the Code’) and its Statement of Compliance with the same can be found on the Company website www.investors.impellam.com/corporate-governance/.

Board of Directors

Audit Committee

• Oversees the Group’s internal risk and controls strategy, including whistleblowing arrangements

• Reviews the Annual Report and interim financial statements prior to submission to the full Board

• Reviews reports from the external auditor• Reviews the Group’s risk register• Approves financial policies.

Responsible for the overall management of Impellam Group

• Monitors and reviews the strategy and its development, the financial and operational performance of the Company and risk management

• Monitors and reviews internal and external factors that a ect the Company

• Sets standards, values and policies• Ensures the Company is meeting its objectives

and has the correct resources in place• Approves financial policies• Reports to shareholders• Oversees internal controls• Responsible for corporate governance.

Remuneration Committee

• Sets, reviews and recommends to the Board remuneration for Directors and other senior executives, and sets overall remuneration strategy and policy for the Group.

Impellam Executive Team

Senior Leadership Team

• Devises the Group strategy and financial plan for approval by the Board, and then implements the same.

• Approves the strategic and financial plans of the sub-brands and divisions, and monitors the implementation and delivery of those plans.

• Responsible for the day-to-day management of the Group and its operations.

Audit CommitteePage_36

Remuneration CommitteePage_37


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Board of Directors

Lord Ashcroft KCMG PCNon-Executive Chairman

Appointed: December 2014

Lord Ashcroft is an international businessman, author, philanthropist and pollster. His many, varied business interests include significant investments and participation in both public and private companies in the UK, US and the Caribbean. He was appointed Non-Executive Chairman of the Company in December 2014. In September 2012, he was appointed a member of the Privy Council and was made the Government’s Special Representative for Veterans’ Transition, working with all departments to ensure military personnel receive the support they need when making the transition to civilian life. He stepped down from his veterans’ transition role in 2018.

Lord Ashcroft supports a wide range of charities, including those dealing with crime prevention and education. He is

the founder and Chairman of Trustees of both Crimestoppers and the Ashcroft Technology Academy, Chancellor of Anglia Ruskin University which awarded him an Honorary Doctorate in 1999, Patron of the Forces in Mind Trust Research Centre, Vice Patron of the Intelligence Corps Museum, Ambassador to SkillForce, a Trustee and President of the West India Committee, a former Trustee of Imperial War Museums and a Trustee of the Cleveland Clinic in the US. He resigned from the House of Lords in 2015 to concentrate on other areas of his work. In 2016, Lord Ashcroft was made Knight Grand Cross of The Imperial Order of The Holy Trinity (Ethiopia) and a Fellow of the Royal Canadian Geographical Society and, in 2017, he was made a Senior Fellow of the International Strategic Studies Association.

Julia Robertsonroup hief ecuti e fficer

Appointed: April 2013

Julia Robertson joined the Group in 2000 following the acquisition of Tate and increased her remit over time such that she became divisional CEO of Impellam’s UK Staffing and Managed Services businesses after the 2008 merger. In April 2013 she was appointed Group Chief Executive Officer.

Prior to working for the Group, Julia was Chief Executive of the Institute of Employment Consultants (now known as the Recruitment Employment Confederation), the professional body for the UK recruitment industry. She also founded her own recruitment business in 1986, which was sold to the Group alongside Tate.

Mike EttlingIndependent Non-Executive DirectorChair of Audit Committee

Appointed: September 2013

Mike Ettling was appointed a Non-Executive Director of the Company in September 2013. Mike is a Chartered Accountant with over 20 years’ experience of executive management, particularly in the technology and HR outsourcing sector. Most recently he was the President of SAP Success Factors, the HR Cloud software business for SAP SE.

Prior to this, Mike was Chief Executive of NorthgateArinso, a global HR services company. He has served as Vice President, Global BP Strategy and Operations with Unisys. Mike is also a Director of NCC PLC in Manchester, Move Guides Inc in San Francisco and Business Connexion Limited in Johannesburg.

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Angela EntwistleNon-Executive DirectorChair of Remuneration Committee

Appointed: September 2012

Angela Entwistle was appointed a Non-Executive Director of the Company in September 2012. Angela is a Corporate Communications Specialist working with companies in the private sector including Deacon Street Partners Limited and Conservative Home Limited. She is a Non-Executive Director of Dods Group, a leading business intelligence, data, events, media and training company.

Angela was Corporate Communications Director of ADT Limited, an international

business services company and the world’s leader in electronic security solutions, from 1986 to 1997. She is significantly involved in a number of charities including acting as Trustee of Crimestoppers, the only UK charity dedicated to solving crimes, and Trustee and Vice-Chairman of Prospect Education (Technology) Trust Limited, the umbrella trust responsible for the operation of Ashcroft Technology Academy. Angela is not considered to be independent due to her links with the major shareholder.

Michael LaurieIndependent Non-Executive DirectorMember of Audit Committee and Remuneration Committee

Appointed: July 2014

Michael Laurie was appointed a Non-Executive Director of the Company in July 2014. He is also a Non-Executive Chairman of SUSD Limited, a property development company that promotes sustainable architecture. Michael was an army officer for 34 years.

He held the role of Major General at the Ministry of Defence until 2003, when he became the CEO of the Crimestoppers Trust, retiring from that position in 2013.

Baroness Tina Stowell of Beeston MBE PCIndependent Non-Executive Director

Appointed: October 2017

Tina Stowell has held a number of senior positions in media and government throughout her career. Since 2011, she has been a member of the House of Lords and was Leader of the House from 2014 to 2016. Before entering the House of Lords she worked at the BBC between 2001 and 2010 and was Head of Corporate A airs.

She currently is a director of ABTA Limited and is Chairman of the Charity Commission for England and Wales.

Rebecca WatsonPortfolio CEO, Group General Counsel and Company Secretary

Appointed: May 2008

Rebecca Watson was appointed as Group Company Secretary and General Counsel of the Company in May 2008. She spent the previous five years as Company Secretary and General Counsel for The Corporate Services Group Plc, having joined the Group in 1998 as Company Solicitor. In addition, in July 2018 she was appointed Portfolio CEO.

Prior to this, she was in a private practice, acting for a range of corporate clients. She has been a qualified solicitor since 1 3.


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Corporate governance statement

The Board of Directors comprises the Non-Executive Chairman, one Executive Director and four other Non-Executive Directors. The Board is responsible for overseeing the management of the Group’s strategy and its businesses, reviewing trading performance, ensuring adequate funding, maintaining a system of internal controls and risk assessment, ensuring good corporate governance and reporting to shareholders. The Board meets when required and at least eight times per annum. During the period ended 4 January 2019, the Board met on eight occasions. Relevant high-quality information, consisting of detailed reports and presentations, is circulated to the Directors in advance of meetings by the Company Secretary.

The number of scheduled Board meetings and Committee meetings attended as a member by each Director during the period are set out below:

Board Audit CommitteeRemuneration

Committee

Lord Ashcroft 7 (8) n/a n/aJulia Robertson 8 (8) n/a n/aAlison Wilford 7 (7) n/a n/aAngela Entwistle 7 (8) n/a 2 (2)Mike Ettling 8 (8) 3 (3) n/aMichael Laurie 8 (8) 3 (3) 2 (2)Baroness Stowell 7 (8) n/a n/a

Figures in brackets indicate the maximum number of meetings the individual could attend in the period.

During the period, Alison Wilford resigned and Brian Porritt was appointed as interim Chief Financial Officer, a non-board role, until a permanent replacement is recruited.

The Non-Executive Chairman and Angela Entwistle are not considered to be independent due to their links with the Company’s major shareholder. All the other Non-Executive Directors are considered to be independent.

On appointment, the Directors receive relevant information about the Group; the role of the Board and the matters reserved for its decision-making; membership of the principal Board Committees and the powers delegated to those Committees; the Group’s corporate governance policies and procedures and the latest financial information.

hroughout their period in office, the Directors are regularly updated on the Group’s business and the environment in which it operates. All Directors receive regular and timely information on the Group’s operational and financial performance and any legal or governance requirements of the Group and those which a ect them as Directors. he Directors have direct access to the advice and services of the Company Secretary and Chief Financial Officer, and are able to take professional advice in the furtherance of their duties at the Company’s expense, where required.

he Board is satisfied that, between the Directors, it has an e ective and appropriate balance of skills and experience, including in the areas of HR, technology, finance, communications, media, and government. The Board seeks advice from external sources on matters as they arise in the business, including legal and accounting advice. There is an appropriate gender balance with the Board consisting of three male and three female members. The biographies of all Directors appear on the Company investor website: www.investors.impellam.com.

The Chairman assesses the individual contribution of each of the members of the Board to ensure a well-balanced and committed team. Over the next 12 months, the Board will assess its performance as a unit to ensure the members collectively function in an efficient and productive manner. In addition, a review of succession planning will be undertaken.

Board tenure as at March 2019

Lord Ashcroft KCMG PC 4 years, 3 monthsJulia Robertson 5 years, 11 monthsAngela Entwistle 6 years, 6 monthsMike Ettling 5 years, 6 monthsMichael Laurie 4 years, 8 monthsBaroness Tina Stowell 1 year, 5 monthsRebecca Watson 10 years, 10 months

Re-election of Directors at the 2019 AGMIn accordance with the Company’s Articles of Association and the principles of the Code, all Directors of the Company will o er themselves for re-election by shareholders at the 201 AGM. he Board is satisfied that each Director is qualified for re-election by the quality of their skills, experience and commitment to the Board.

The Board and its CommitteesAudit CommitteeThe Board has an Audit Committee whose responsibilities include oversight of the Group’s internal risk and controls strategy, including establishing whistleblowing arrangements; reviewing interim and Annual Reports and financial statements prior to their submission to the full Board and reviewing reports from the external auditor. On behalf of the Board, they also examine and review internal financial controls financial and accounting policies and practices and the form and content of financial reports and statements, plus the financial udgements therein. The Committee ensures that arrangements are in place for employees of the Group to raise concerns about any possible improprieties, either confidentially or publicly, and that procedures are in place for the proportionate and independent investigation of any such matters, and appropriate follow-up action.

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The Committee also reviews the independence, objectivity, performance, behaviour and e ectiveness of the external auditor with whom it meets at least twice a year, and the nature of any non-audit services provided by them. The Audit Committee is required to report its findings to the Board. This means identifying any matters on which it considers action or improvement is needed. The Committee operates under written Terms of Reference and meets at least twice each year. During the period ended 4 January 2019, it met on three occasions. The Audit Committee comprises two Non-Executive Directors: Mike Ettling (Chair) and Michael Laurie.

Remuneration CommitteeThe Board has a Remuneration Committee that is responsible for making recommendations to the Board on Directors’ remuneration. It also reviews recommendations from the Group Chief Executive Officer on other senior executives’ remuneration, including performance-related remuneration. The Committee operates under written Terms of Reference, and during the period ended 4 January 2019 it met on two occasions. The Remuneration Committee comprises two Non-Executive Directors: Angela Entwistle (Chair) and Michael Laurie.

Internal controlThe Board has responsibility for the Group’s overall system of internal controls and for reviewing their e ectiveness. They recognise that the system is designed to manage and mitigate, rather than eliminate, the risk of failure to achieve business objectives. It can provide only reasonable and not absolute assurance against material financial misstatement or loss. The Board has established an organisational structure with clear Terms of Reference that must be adhered to by all subsidiaries.

There is a programme of regular review by the Board and executive management, which provides assurance that the control environment is operating as intended. A key element of this review is strategic business planning and subsequent performance monitoring. Each business has defined financial performance plans that are agreed by the Board at the beginning of each financial period to meet Company objectives. These plans contain measurable performance targets, which are continuously monitored to identify shortfalls, so that corrective actions can be taken.

In addition, the Company and its subsidiaries maintain risk registers that are updated and reviewed by the Audit Committee on a regular basis, whilst reviewing generally the e ectiveness of the Company’s internal control system. he Group Head of Internal Audit and Risk is also responsible for reporting to the Audit Committee on internal audit, utilising internal and external expertise.

The Group operates in ‘The Impellam Way’, which embeds a consistent company-wide culture, based on trusted behaviours, delivered by entrepreneurial Virtuoso leaders, who can drive competitive advantage and deliver on the Group’s commitments. The Board is committed to maintaining appropriate standards for all the Company’s business activities and ensuring that these standards are set out in written policies. Key examples of such standards and policies include the ‘Code of Business Conduct’. The Company ‘Code of Business Conduct’ demonstrates its commitment to maintaining the highest level of ethical standards and behaviours, wherever it operates in the world.

Dialogue with shareholdersThe Company remains committed to listening to and communicating openly with its shareholders to ensure that its vision, mission, strategy, business model and performance are clearly understood.

The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, the Annual General Meeting (‘AGM’) and one-to-one meetings with large existing or potential new shareholders. The Non-Executive Directors will attend the AGM and are available to answer any questions relevant to the Committees they chair. The Board receives regular updates on the views of shareholders through briefings and reports from the Group Chief Executive Officer, Chief Financial Officer and Company Secretary. Corporate information, including all Company announcements, is available to shareholders, investors and the public on the Company’s website (www.investors.impellam.com).


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Directors’ report

he Directors present their Annual Report on the a airs of the Group and the Company, together with the audited consolidated financial statements and auditor’s reports, for the period ended 4 anuary 201 .

Principal activitieshe principal activities of the Group comprise the provision of staffing solutions, human capital management and outsourced

people-related services in the UK, Ireland, North America, mainland Europe, Australasia, New Zealand, Singapore and the Middle East. The principal activity of the Company is that of a holding company that provides strategic planning and management services to its portfolio of subsidiaries.

Results and dividendshe audited consolidated financial statements for the period ended 4 anuary 201 are set out on pages 4 to 100. he Group

profit for the period was 13.3m (year ended 2 December 2017: 31.1m). During the year, a final dividend of 13.5p per Ordinary share in respect of 2017 was on 9 August 2018.

Capital structureThe Company ‘Impellam Group plc’ has no limit to its authorised share capital. At 4 January 2019, there were 49,744,515 (2017: 50,32 , 71) allotted, fully paid shares of 1p in issue.

Post balance sheet eventsBetween the end of the year and 21 March 2019, a further 541,819 Ordinary shares of 1p each have been repurchased in the market for total consideration of 3.0m, and have been cancelled.

On 20 February 2019 the Group announced the de-merger of its wholly owned subsidiary Carlisle Support Services Group Limited (‘Carlisle’). his de-merger was e ected through a dividend in specie by the issue of new Ordinary shares of 0.034p each (to 3 decimal places) in the share capital of Carlisle (each, a ‘Carlisle Share’) on the basis of one new Carlisle Share for each Impellam Share owned by an Eligible Shareholder on the Record Date of 1 March 2019 and was paid on 8 March 2019. As a precursor of this transaction, a payment of 0.4m was made to the defined benefit pension scheme (note 24) to both clear the current deficit and to give the scheme a small surplus.

Political donationsThe Group has made no political donations during the current or prior years.

Major shareholdingsAs at 22 February 201 , the Company had been notified of the following disclosable interests representing 3% or more of the issued Ordinary share capital of the Company:

Lombard Trust 52.12%Schroder Investment Management Limited 5.22%Hendrik M. Van Heijst 5.1%Lord Ashcroft 4.5%

Directorshe Directors who held office during the period and up to the date of signing these financial statements were:

Executive DirectorsJulia Robertson Group Chief Executive Officer Appointed April 2013Alison Wilford Chief Financial Officer Appointed July 2016

Resigned October 2018

Non-Executive DirectorsLord Ashcroft KCMG PC Non-Executive Chairman Appointed December 2014Angela Entwistle Non-Executive Director Appointed September 2012Mike Ettling Independent Non-Executive Director Appointed September 2013Michael Laurie Independent Non-Executive Director Appointed July 2014Baroness Tina Stowell Independent Non-Executive Director Appointed October 2017

To read all of our Directors’ biographies, see pages 34 and 35.

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Directors’ shareholdingsAs at 22 February 2019, the following Directors held shares in the Company:

Lord Ashcroft (Non-Executive Chairman) 2,223,755ulia Robertson (Group Chief Executive Officer) 153,910

Mike Ettling (Non-Executive Director) 10,860

Financial risk managementhe Group’s ob ectives and policies relating to financial risk management are fully explained in note 30 on pages to 0.

Principal risksThe Board’s assessment of the principal risks and uncertainties, the Group’s policy and its mitigations are detailed on pages 20 to 23.

Inclusion and diversityWe actively encourage diversity in the workplace and have a wide and varied employee base with a variety of social and ethnic groups represented at all levels of the business. We believe that breaking down the barriers that have traditionally restricted access to the labour market will encourage job opportunities for all.

We see it as our responsibility both to understand and to address the root causes of gender pay gaps. We are pleased that Impellam is leading by example by appointing and promoting women into senior roles. We are one of only 3.5% of AIM listed companies to be led by a woman, and in addition, 50% of our Board members and 35% of our Senior Leadership eam are women.

With this in mind, we work hard to help our clients and suppliers achieve their diversity objectives. The Group is committed to providing all our employees with a work environment free of discrimination related to sex, race, colour, orientation, religion, age, ethnicity, national origin, disability or any other inappropriate basis. Applications for employment by people with disabilities are considered, like all others, bearing in mind the aptitudes of the candidate concerned. In the event of members of sta becoming disabled, every e ort is made to ensure that their employment within the Group continues and that appropriate adjustments are made. It is our policy that the training, career development, and promotion of people with disabilities should, as far as possible, be the same as for all other employees.

In 2018 we established the Impellam Group International Equality, Diversity and Inclusion (‘EDI’) council. The council will provide visible leadership, representation and guidance on equality, diversity and inclusion issues. To bring our people, candidates and clients together; to realise a vision for a personal, fair and diverse collective of organisations where everyone’s voice is heard, where everyone is represented, and where everyone – whether they’re our people candidates or our clients – can ultimately contribute towards building better businesses.

Employee involvement and communicationsAll 3,200 Impellam people across the world are connected by Workplace: an internal social network that provides relevant information to all employees in the UK, Europe, and Asia Pacific. Workplace combines the structure of a traditional intranet with the capabilities of Enterprise Social Networking software: a place to organise and disseminate information securely, and also a place for our people to connect, communicate, and collaborate.

he Group Chief Executive Officer holds half-yearly strategy cascades with leaders across the Group and connects with all 3,200 people on a regular basis through Workplace; using written updates, videos, and other multimedia to provide strategic information and financial updates.

The Impellam management community holds regular 1:1 meetings with their people; team meetings, and wider business-area conferences to facilitate sharing of information, consultation and two-way communication, supported by tools like OpenBlend.

The Impellam communications model and associated technology means we can connect with our employees quickly, wherever they are. The platform and communication strategy facilitates faster information sharing, communication and collaboration. This dynamic, knowledge-sharing, and democratised approach to communications is key to supporting our strategy and culture of enabling our irtuosos to ultimately help us to achieve our vision of becoming the world’s most trusted staffing company.


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Directors’ report continued

Health and safetyWe are committed to meeting all the requirements of relevant health and safety legislation. Formal policies are in place throughout the Group and they are regularly reviewed and updated to reflect changes in legislation and best practice. The Group requires all employees to comply with these.

Environmental and sustainable operationsEnvironmentalAs a service-based organisation with no manufacturing facilities and limited transportation requirements, our direct environmental impact is minimal. That said, we are still committed to following environmental best practices in the day-to-day conduct of our business. This includes the use of sustainable and/or recyclable materials when available. A regular review of the potential impacts on the various businesses is undertaken and parts of the Group have achieved accreditation to ISO 14001 in relation to their environment management systems.

Modern slaveryAs part of the Group mission to find people fulfilling work, we strongly oppose modern slavery in all its forms and will try to prevent it by any means that we can. We expect anyone who has any suspicions of modern slavery in our business or our supply chain to raise their concerns without delay. In light of the Modern Slavery Act 2015 we annually review internal and external measures to ensure we are doing what we can to prevent slavery and human trafficking in our businesses and in our supply chains. Our policy is available on our website at www.impellam.com.

Annual General Meetinghe Notice of AGM, to be held at .00am on Wednesday 26 une 201 at the offices of Cenkos Securities plc, 6.7. okenhouse

Yard, London EC2R 7AS, is contained in a separate circular to shareholders. It is being mailed or otherwise provided to shareholders, after the publication of the Annual Report. The Notice of Meeting sets out the resolutions to be proposed at the AGM and gives details of the voting record date and proxy appointment deadline for that meeting.

Separately disclosed itemshese costs are not considered to be part of the normal course of business and are of sufficient si e to be identified separately

on the face of the income statement and explained in more detail in note 6 on page 67.

Anti-briberyWe have a commitment to carrying out business fairly, honestly and openly. We also have ero tolerance towards bribery. Our Bribery Policy is in place to provide relevant guidance and information to all our people in compliance with the law relating to bribery and corruption, in particular the Bribery Act 2010 (‘the Act’). We are determined to maintain our reputation as a business that will not tolerate fraudulent or corrupt dealings – whether they are attempted against us from outside, from within our own workforce, or towards our clients or suppliers.

Directors’ indemnity provisionsDuring the year and to the date of these accounts, the Company had in force an indemnity provision in favour of one or more Directors of the Company against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006.

Disclosure of information to auditorsIn the case of each Director in office at the date the Directors’ report is approved and in accordance with Section 41 of the Companies Act 2006:(a) So far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and(b) He/she has taken all the steps that he/she ought to have taken as a Director in order to make himself/herself aware of

any relevant audit information and to establish that the Company’s auditor is aware of that information.

Reappointment of auditorsIn accordance with Section 485 of the Companies Act 2006, a resolution for the re-appointment of KPMG LLP as auditors of the Company is expected to be proposed at the Annual General Meeting being held on 26 June 2019.

Directors’ reportThis report was approved by the Board on 21 March 2019 and is signed on their behalf by:

RJ WatsonCompany Secretary800 The Boulevard, Capability Green, Luton, Bedfordshire LU1 3BA

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Statement of Directors’ responsibilities

he Directors are responsible for preparing the Annual Report and the Group and Parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under the AIM Rules of the London Stock Exchange they are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the EU (IFRSs as adopted by the EU) and applicable law and they have elected to prepare the Parent Company financial statements on the same basis.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of a airs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;• make judgements and estimates that are reasonable, relevant, reliable and prudent;• state whether they have been prepared in accordance with IFRSs as adopted by the EU;• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern; and• use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to

cease operations, or have no realistic alternative but to do so.

he Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. hey are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report and a Directors’ Report that complies with that law and those regulations.

he Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may di er from legislation in other jurisdictions.


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For more information visitwww.investors.impellam.com


43_ Independent auditor’s report49_ Consolidated income statement49_ Consolidated statement of other

comprehensive income50_ Consolidated balance sheet51_ Consolidated statement of

changes in equity52 Consolidated cash flow statement53_ Notes to the consolidated

financial statements4 Company balance sheet5 Statement of changes in equity6 Notes to the Company balance sheet

101_ Alternative Performance Measures103 Glossary 105 Company information

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Independent auditor’s reportto the members of Impellam Group plc

ur opinion is un odified We have audited the financial statements of Impellam Group plc ( the Company ) for the 53 week period ended 4 anuary 201 which comprise the Group consolidated income statement, the Group consolidated and Parent Company balance sheets, the Group consolidated statement of comprehensive income, the Group consolidated and Parent Company statement of changes in equity, the Group consolidated cash flow statement and the related notes, including the accounting policies in note 1 of the Group and Parent Company financial statements.

In our opinion: • the financial statements give a true and fair view of the

state of the Group’s and of the Parent Company’s a airs as at 4 anuary 201 and of the Group’s profit for the period then ended;

• the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union

• the Parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework and

• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ( ISAs (UK) ) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed entities. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

Materiality: Group financial statements as a whole

£1.4m (2017: 2.1m)5% (2017: 5%) of Normalised Group

profit before tax

Coverage 96% (2017: %) of Group profit before tax

Refer to Section 3 for a full definition of normalised profit before tax

Key audit matters for the Group vs 2017

Event Driven New: The impact of uncertainties due to Britain exiting the European Union on our audit

Recurring risks Fraud in revenue recognition for temporary workers

Recurring risks Goodwill and brand intangibles impairment

Event Driven New: Going concern

Event Driven New: Legal provisions

Key audit matters for the Parent Company vs 2017

Recurring risks Recoverability of parent company’s investment in subsidiaries


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2. Key audit matters: our assessment of risks of material misstatementKey audit matters are those matters that, in our professional udgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest e ect on: the overall audit strategy the allocation of resources in the audit and directing the e orts of the engagement team. hese matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The risk Our response

The impact of uncertainties due to Britain exiting the European Union on our audit

Refer to page 20 (principal risks).

Unprecedented levels of uncertaintyAll audits assess and challenge the reasonableness of estimates, in particular as described in goodwill impairment and brand intangibles impairment below, and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements (see below). All of these depend on assessments of the future economic environment and the Group and Parent Company’s future prospects and performance.

Brexit is one of the most significant economic events for the UK and at the date of this report its e ects are sub ect to unprecedented levels of uncertainty of outcomes, with the full range of possible e ects unknown.

We developed a standardised firm-wide approach to the consideration of the uncertainties arising from Brexit in planning and performing our audits. Our procedures included:• Our Brexit knowledge: We considered the Directors’

assessment of Brexit-related sources of risk for the Group and Parent Company’s business and financial resources compared with our own understanding of the risks. We considered the Directors’ plans to take action to mitigate the risks

• Sensitivity analysis: When addressing goodwill impairment and brand intangibles impairment, and other areas that depend on forecasts, we compared the Directors’ analysis to our assessment of the full range of reasonably possible scenarios resulting from Brexit uncertainty, and where forecast cash flows are required to be discounted, considered ad ustments to discount rates for the remaining level of uncertainty

• Assessing transparency: As well as assessing individual disclosures as part of our procedures on goodwill impairment and brand intangibles impairment we considered all of the Brexit related disclosures together, including those in the strategic report, comparing the overall picture against our understanding of the risks.

Fraud in revenue recognition for temporary workers

(Temporary revenue within total revenue of £2,276.7 million; 2017: £2,143.0 million)

Refer to page 36 (Audit Committee Report), page 53 (accounting policy) and page 63 (financial disclosures).

2018/2019 saleshe risk is that emporary Worker revenue is

overstated, as there may be an incentive to record revenue from work performed by temporary workers in the wrong period, and to accrue in 201 for income related to work performed in 2019, in order to receive commissions or to meet bonus targets.

he volume and frequency of timesheets processed each week increases this risk.

Our procedures included: • Control design: Across some entities, testing the design

and implementation of key controls in the systems used in the financial reporting process related to temporary revenue

• Tests of details: Inspecting timesheets for a sample of sales selected close to year-end in order to assess whether the policy had been correctly applied to recognise revenue in the appropriate period. his sample is selected on the basis of statistical sample methodology combined with items meeting a specified risk criteria

• Test of details: Assessing the accrued income and revenue recognised in respect of temporary workers in the final week of the period by agreeing the week-ending date, hours worked and rates of a sample of accrued items to timesheets processed after the year-end and invoice

• Tests of details: Inspecting sales invoices and timesheets agreed by the Group for a sample of credit notes raised subsequent to the year end in order to assess whether

emporary Worker revenue related to a valid sale and was recognised in the correct period, and whether there were any systemic issues around revenue cut-o

• Analytic Testing: Across the UK companies, reconciling total cash received in the year to total revenue, allowing for movements in other revenue balances including trade debtors.

Independent auditor’s reportto the members of Impellam Group plc continued

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Goodwill and brand intangibles impairment

(Goodwill of £156.2 million; 2017: £160.4 million, brand intangibles of £87.9 million; 2017: £87.5 million)

Refer to page 36 (Audit Committee Report) and page 63 (financial disclosures).

Forecast-based valuationThe Group’s consolidated balance sheet includes goodwill and brand intangibles, principally arising from historical acquisitions in the UK and US.

he risk is that the goodwill and brands allocated to cash generating units is not recoverable and should be impaired. his risk predominantly relates to the UK healthcare and UK education sectors, where factors that could give rise to an impairment include adverse market conditions which impact the performance of separate cash generating units.

Due to the inherent uncertainty involved in forecasting and discounting future cash flows, which are the basis of the assessment of recoverability, this is one of the key udgemental areas for our audit.

he e ect of these matters is that, as part of our risk assessment, we determined that the value in use of goodwill and brand intangibles has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole.

he financial statements (note 12) disclose the sensitivity estimated by the Group.

Our procedures included: • Benchmarking assumptions: Assessing the discount

rates used in the Group’s cash flow forecasts, including with reference to rates used by comparable companies, using our own valuation and restructuring specialist. We also compared the pro ected growth rates to externally derived data

• Historical comparisons: Considering the historical accuracy of the Group’s cash flow forecasts and growth rates by assessing the accuracy of previous forecasts made by the Group against actual performance

• Sensitivity analysis: Performing breakeven analysis on the assumptions noted above

• Assessing transparency: Assessing the adequacy of the Group’s disclosures in respect of goodwill, including disclosures regarding the sensitivity of the outcome of the impairment assessment to changes in key assumptions, and the disclosure of key estimates and udgements related to the carrying amount.

Going Concern

Refer to page 12 of the Directors’ report and page 53 of the financial disclosures.

Disclosure qualityhe financial statements explain how the Board

has formed a udgement that it is appropriate to adopt the going concern basis of preparation for the Group and Parent Company.

hat udgement is based on an evaluation of the inherent risks to the Group’s and Company’s business model and how those risks might a ect the Group’s and Company’s financial resources or ability to continue operations over a period of at least a year from the date of approval of the financial statements.

he risks most likely to adversely a ect the Group’s and Company’s available financial resources over this period were: • Recoverability of key debtors• he impact of changing laws and regulations

and• he impact of Brexit on the Group’s ability to

source workers from Europe.

he risk for our audit was whether or not those risks were such that they amounted to a material uncertainty that may have cast significant doubt about the ability to continue as a going concern. Had they been such, then that fact would have been required to have been disclosed.

Our procedures included:• Test of details: Evaluated the process and models

management used in its assessment, including use of the work of our valuation specialists

• Test of details: Evaluated whether the assumptions are realistic and achievable and consistent with the external and or internal environment and other matters identified in the audit

• Test of details: Evaluated management’s assessment of the entity’s compliance with debt covenants

• Historical comparisons: Considering the historical accuracy of the Group’s cash flow forecasts and growth rates by assessing the accuracy of previous forecasts made by the Group against actual performance

• Our expertise: Consultation with our debt advisory specialists to assess the cash flow forecasts

• Benchmarking assumptions: Assessing the discount rates used in the Group’s cash flow forecasts, including with reference to rates used by comparable companies, using our own valuation specialist. We also compared the pro ected growth rates to externally derived data

• Our sector expertise: Challenged management’s plans for future actions, and verified the reliability and relevance of data used including plans to refinance external debt against our own knowledge of the industry

• Assessing transparency: Assessing the adequacy of the Group’s disclosures in respect of going concern.


Page_46



Legal Provisions

(£2.8 million)

Refer to page 77 of the financial disclosures.

Dispute outcomeThe Group’s consolidated balance sheet includes a legal provision related to an on-going legal case.

he e ect of this matter is that, as part of our risk assessment, we determined that the litigation liability has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole.

Our procedures included:• Enquiry of lawyers: For the significant litigation we

enquired of the Group’s internal legal counsel and inspected internal notes and reports. We also received formal confirmations from external counsel

• Assessing transparency: Assessed whether the disclosures detailing the significant litigation adequately disclose the potential liabilities and the significant uncertainties that exist.

Recoverability of Parent Company’s investments in subsidiaries

(£151.7 million; 2017: £151.7m)

Refer to page 96 (accounting policy) and page 97 (financial disclosures).

Low risk, high valuehe carrying amount of the Parent Company’s

investments in subsidiaries represents 32.0% (2017: 26. %) of the company’s total assets. heir recoverability is not at a high risk of significant misstatement or sub ect to significant udgement. However, due to their materiality in

the context of the parent company financial statements, and them being unior to the Group receivables balance, this is considered to be the area that had the greatest e ect on our overall parent company audit.

Our procedures included:• Tests of detail: Comparing the carrying amount of 100%

of investments with the relevant subsidiaries draft balance sheet to identify whether their net assets, being an approximation of their minimum recoverable amount, were in excess of their carrying amount and assessing whether those subsidiaries have historically been profit-making

• Assessing subsidiary audits: Assessing the work performed by the subsidiary audit teams on all of those subsidiaries which have been scoped in for audit purposes, and considering the results of that work, on those subsidiaries’ profits and net assets.

We continue to perform procedures over calculation of rebates in the US division. However, due to a reduction in complexity following a fall in si e, and change in terms, we have not assessed this as one of the most significant risks in our current year audit and, therefore, it is not separately identified in our report this year.


3. Our application of materiality and an overview of the scope of our auditMateriality for the Group financial statements as a whole was set at 1.4m (2017: 2.1m), determined with reference to a benchmark of Group profit before tax, normalised to exclude this year’s one-o , non-recurring costs being goodwill impairment, legal provisions and contingent consideration as disclosed in note 6, of which it represents approximately 5% (2017: 5%).

Materiality for the Parent Company financial statements as a whole was set at 1.1m (2017: 1. m), based on component materiality. his is lower than the materiality we would otherwise have determined with reference to a benchmark of Parent Company net assets, and represents 0. % (2017: 1%) of this benchmark.

We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding 0.2m (2017: 0.1m) in respect of misstatements which relate solely to reclassifications within the balance sheet, 0.07m (2017:

0.1m), in addition to other identified misstatements that warranted reporting on qualitative grounds.

Of the Group’s 45 (2017: 45) reporting components, we sub ected 20 (2017: 11) to full scope audits for Group purposes and one (2017: none) to specified risk-focused audit procedures. he components within the scope of our work accounted for the percentages illustrated opposite.

he remaining 5% (2017: %) of total Group revenue, 4% (2017: 2%) of Group profit before tax and % (2017: 1%) of total Group assets is represented by 25 (2017: 34) of reporting components. For these residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant risks of material misstatement within these.

The Group team approved the component materialities, which ranged from 0.1m to 1.3m (2017: 1.3m to 1. m), having regard to the mix of si e and risk profile of the Group across the components. he work on of the 23 components (2017: 3 of the 11 components) was performed by component auditors and the rest, including the audit of the Parent Company, was performed by the Group team. Component auditors were instructed as to the significant areas to be covered, including the relevant risks detailed above, and the information to be reported back. he Group team performed procedures on the items excluded from normalised Group profit before tax.

■ Normalised Group PBT■ Group materiality

or alised roup Profitefore ta P

£28.0m (2017: £41.3m)

roup aterialit£1.4m (2017: £2.1m)

£1.4mWhole financial statements materiality(2017: £2.1m)

£0.91mRange of materiality: £0.1m-£1.2m (2017: £1.3m to £1.9m)

£0.07mMisstatements reported to the Audit Committee (2017: £0.1m)

95 96

91 96

92 98

99 98

■ Full scope for Group audit purposes 2018■ Full scope for Group audit purposes 2017■ Residual components

Group revenue roup profit efore ta

roup total assets or alised roup profit efore ta

(2017: 92%)

(2017: 99%)

(2017: 98%)

(2017: 98%)

95%

91%

96%

96%

Page_47


The Group team visited the overseas component location in North America, and visited the component audit team based in Leeds (2017: North America and Leeds) to assess the audit risk and strategy. elephone conference meetings were also held with these component auditors and Australia, which was not physically visited. At these visits and meetings, the fi ndings reported to the Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditor.

4. We have nothing to report on going concernhe Directors have prepared the fi nancial statements on the

going concern basis as they do not intend to liquidate the Company or the Group or to cease their operations, and as they have concluded that the Company’s and the Group’s fi nancial position means that this is realistic. hey have also concluded that there are no material uncertainties that could have cast signifi cant doubt over their ability to continue as a going concern for at least a year from the date of approval of the fi nancial statements ( the going concern period ).

Our responsibility is to conclude on the appropriateness of the Directors’ conclusions and, had there been a material uncertainty related to going concern, to make reference to that in this audit report. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with udgements that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor’s report is not a guarantee that the Group and the Company will continue in operation.

We identifi ed going concern as a key audit matter (see Section 2 of this report). Based on the work described in our response to that key audit matter, we are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast signifi cant doubt over the use of that basis for a period of at least a year from the date of approval of the fi nancial statements.

We have nothing to report in these respects.

5. We have nothing to report on the other information in the Annual Report

he Directors are responsible for the other information presented in the Annual Report together with the fi nancial statements. Our opinion on the fi nancial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our fi nancial statements audit work, the information therein is materially misstated or inconsistent with the fi nancial statements or our audit knowledge. Based solely on that work we have not identifi ed material misstatements in the other information.


Page_48


Strategic report and Directors’ reportBased solely on our work on the other information:• we have not identified material misstatements in the

strategic report and the Directors’ report• in our opinion the information given in those reports for

the financial year is consistent with the financial statements; and

• in our opinion those reports have been prepared in accordance with the Companies Act 2006.

6. We have nothing to report on the other matters on which we are required to report by exception Under the Companies Act 2006, we are required to report to you if, in our opinion:• adequate accounting records have not been kept by the

Parent Company, or returns adequate for our audit have not been received from branches not visited by us or

• the parent Company financial statements are not in agreement with the accounting records and returns or

• certain disclosures of Directors’ remuneration specified by law are not made or

• we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

7. Respective responsibilities Directors’ responsibilities As explained more fully in their statement set out on page 41, the Directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

8. The purpose of our audit work and to whom we owe our responsibilities

his report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. o the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Aimie Keki (Senior Statutory Auditor)for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants15 Canada Square, London, E14 5GL

21 March 2019


Page_49


Consolidated income statementFor the 53 weeks ended 4 January 2019

Notes

53 weeks4 January

2019£m

52 weeks 2 December

2017£m

Revenue 3 2,276.7 2,171.3Cost of sales (1,994.4) (1, 5. )

ross profit 282.3 2 5.5Administrative expenses (259.4) (240. )

perating profit 3 & 4 22.9 44.7

Operating profit before separately disclosed items, impairments of goodwill and share-based payments 37.6 4 .

Separately disclosed items 6 (5.7) (3.4)Impairment of goodwill 12 (8.6) –Share-based payment 23 (0.4) (0.7)

perating profit 22.9 44.7Finance expense 7 (6.8) (6. )

Profit efore ta 16.1 37.ax charge 8 (2.8) (6. )

Profit for the period 13.3 31.1

Profit for the period attri uta le to Equity holders of the Parent Company 13.2 30.Non-controlling interest 26 0.1 0.2

13.3 31.1

Earnings per share 9Attributable to equity holders of the Parent Company:– basic 26.5p 61. p– diluted 26.5p 61.1p

Consolidated statement of other comprehensive incomeFor the 53 weeks ended 4 January 2019

Notes

53 weeks4 January

2019£m

52 weeks 2 December

2017£m

Profit for the period 13.3 31.1Other comprehensive income:Items that may be subsequently reclassified into income:Remeasurement of defined benefit liability 24 0.1 –Foreign currency translation di erences – foreign operations 25 5.6 (7. )

Total comprehensive income for the period, net of tax 19.0 23.2

Total comprehensive income for the period attributable to: Equity holders of the Parent Company 19.1 23.1Non-controlling interest (0.1) 0.1

19.0 23.2


Page_50


Consolidated balance sheetAs at 4 January 2019

Notes

4 January 2019

£m

2 December 2017

£m

Non-current assetsProperty, plant and equipment 11 6.7 7.3Goodwill 12 156.2 160.4Other intangible assets 13 131.1 131.7Financial assets 14 1.4 1.4Deferred tax assets 21 15.3 13.2

310.7 314.0

Current assetsTrade and other receivables 15 569.1 6 7.2Cash and cash equivalents 16 77.2 100.3

646.3 7 7.5

Total assets 957.0 1,101.5

Current liabilitiesShort-term borrowings 18 25.1 73.2

rade and other payables 17 508.3 635.5ax payable 1.7 4.2

Provisions 20 0.9 1.1

536.0 714.0

Net current assets 110.3 73.5

Non-current liabilitiesLong-term borrowings 19 123.8 103.0Other payables 17 1.6 0.Provisions 20 3.4 1.1Deferred tax liabilities 21 22.8 22.2

151.6 127.2

Total liabilities 687.6 41.2

Net assets 269.4 260.3

EquityIssued share capital 22 0.5 0.5Share premium account 22 30.1 30.1

30.6 30.6Other reserves 25 124.6 120.Retained earnings 114.2 10 .7

Total equity attributable to equity holders of the Parent Company 269.4 260.2

Non-controlling interest 26 – 0.1

Total equity 269.4 260.3

he consolidated financial statements of Impellam Group plc (registered number: 06511 61) on pages 4 to 3 were approved by the Board on 21 March 201 .

Julia Robertsonhief Executive fficer

Page_51


Total share capital and

share premium (note 22)

£m

Other reserves(note 25)

£m

Retainedearnings

£m

otal equity attributable to equity owners

of the parent£m

Non-controllinginterest

(note 26)£m

otal equity£m

31 December 2016 30.6 12 .0 .2 246. – 246.

Profit for the period – – 30. 30. 0.2 31.1Other comprehensive income (note 25) – (7. ) – (7. ) (0.1) (7. )

Total comprehensive income in period – (7. ) 30. 23.1 0.1 23.2Transactions with owners, recorded directly

in equity:Purchase of reasury shares (note 22) – – (0.1) (0.1) – (0.1)Share-based payment charge (note 23) – 0.7 – 0.7 – 0.7Dividends paid – – (10.3) (10.3) – (10.3)

29 December 2017 30.6 120. 10 .7 260.2 0.1 260.3

30 December 2017 30.6 120.9 108.7 260.2 0.1 260.3

Profit for the period – – 13.2 13.2 0.1 13.3Other comprehensive income (note 25) – 5.8 0.1 5.9 (0.2) 5.7

Total comprehensive income in period – 5.8 13.3 19.1 (0.1) 19.0Transactions with owners, recorded directly

in equityPurchase of reasury shares (note 22) – – (3.5) (3.5) – (3.5)Share-based payment charge (note 23) – 0.4 – 0.4 – 0.4Dividends paid – – (6.8) (6.8) – (6.8)

ransfer between reserves – (2.5) 2.5 – – –

4 January 2019 30.6 124.6 114.2 269.4 – 269.4

Consolidated statement of changes in equityFor the 53 weeks ended 4 January 2019


Page_52


Notes

53 weeks 4 January

2019£m

52 weeks 2 December

2017£m

ash o s fro operating acti itiesProfit before tax 16.1 37.Adjustments for:

Depreciation of property, plant and equipment 11 3.3 3.3Amortisation of other intangible assets 13 9.1 7.3Impairment of goodwill 12 8.6 –Loss on disposal of property, plant and equipment 4 0.2 0.1Finance expense 7 6.8 6.Share-based payment 23 0.4 0.7

44.5 56.1Decrease (increase) in trade and other receivables 89.9 ( 4. )(Decrease) increase in trade and other payables (91.8) 105.7Increase (decrease) in provisions 20 2.1 (3.7)

Cash from operations 44.7 63.3ax paid (6.5) ( .3)

Net cash from operating activities 38.2 55.0

ash o s fro in esting acti itiesAcquisition of subsidiary 10 (4.8) (1. )Purchase of property, plant and equipment 11 (3.1) (3.2)Purchase of intangible assets 13 (6.9) ( .1)Decrease (increase) in other financial assets 14 – (0.2)

Net cash from investing activities (14.8) (13.3)

ash o s fro financing acti ities(Decrease) increase in short-term borrowings 29 (27.6) 26.Purchase of reasury shares 22 (3.5) (0.1)Finance expense paid 7 (6.8) (6. )Capital element of finance leases 29 0.4 (0.2)Dividends paid 32 (6.8) (10.3)

et cash fro financing acti ities (44.3) .4

Net (decrease)/increase in cash and cash equivalents (20.9) 51.1Opening cash and cash equivalents 100.3 54.E ect of foreign exchange rate movements 29 (2.2) (5.6)

Closing cash and cash equivalents1 16 77.2 100.3

1 Unrestricted cash, available to the Group

onsolidated cash o state entFor the 53 weeks ended 4 January 2019

Page_53


1. Corporate informationhe financial statements of Impellam Group plc and all of its subsidiaries (‘the Group’) for the 53 weeks ended 4 anuary 201

were authorised for issue by the Board of Directors on 21 March 201 and the balance sheet was signed on behalf of the Board by ulia Robertson.

he Group provides staffing solutions, human capital management and outsourced people-related services from offices located in the UK, Ireland, North America, mainland Europe, Australia, New ealand, Singapore and the Middle East.

Impellam Group plc (‘the Company’) is a public limited company incorporated and registered in England Wales and domiciled in the UK under the Companies Act 2006 with a listing on the London Stock Exchange, trading on AIM.

Its registered office is located at:00 he Boulevard

Capability GreenLutonBedfordshireLU1 3BAUnited Kingdom

Su ar of significant accounting policies Basis of preparation

he consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards ( IFRS ) as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. In coming to their conclusion the Directors have considered the Group’s profit and cash flow plans for the coming period, together with outline pro ections for 201 and 2020. he amount of borrowing required to fund the Group’s activities is determined based on these pro ections, together with expected returns to shareholders and planned capital expenditure. Also considered is the pro ection of compliance with the financial covenants implied by these plans. In addition, these figures are tested for sensitivity to possible changes to the economic environments in which the Group operates. he impact on Group liquidity and covenants of each of these sensitivities is then considered together with the likelihood of each of these occurring either individually or in combination.

he financial statements have been prepared on the historical cost basis except where otherwise identified and as modified for the revaluation of certain financial assets at fair value through the income statement. he principal accounting policies adopted are set out below. he financial statements are presented in Pound Sterling and all values are rounded to the nearest

0.1 million ( 0.1m) except where otherwise indicated. Foreign operations are included in accordance with note 2(C) below.

Basis of consolidationhe consolidated financial statements comprise the financial statements of the Group as at 4 anuary 201 . he financial

statements of subsidiaries are prepared for the same reporting period as the Parent Company. Each company, including the parent, uses locally applicable generally accepted accounting practice ( GAAP ) for the preparation of their individual financial statements. Ad ustments are made to bring these into line with the IFRS policies adopted by the Group, as required.

Subsidiaries are consolidated from the date on which the Group obtains control using the acquisition method and cease to be consolidated from the date on which the Group ceases its control. Accounting policies have been applied consistently.

A) Changes in accounting policies and disclosuresStandards, amendments and interpretations effective in financial year 2018• None

New standards and interpretations to existing standards that are not yet effective and have not been early adopted by the Grouphe following new standards and interpretations to existing standards have been published that are mandatory for the

Group’s future accounting and e ective for the Group as follows:• IFRS 2 Share-based Payment (e ective year starting on or after 1 anuary 201 ) • IFRS Financial Instruments (e ective year starting on or after 1 anuary 201 ) • IFRS 15 Revenue from Contracts with Customers (e ective year starting on or after 1 anuary 201 ) • IFRS 16 Leases (e ective year starting on or after 1 anuary 201 )• Annual Improvements to IFRSs – 2014-2016 Cycle (e ective year starting on or after 1 anuary 201 )

otes to the consolidated financial state entsFor the 53 weeks ended 4 January 2019


Page 54


otes to the consolidated financial state ents continuedFor the 53 weeks ended 4 January 2019

Su ar of significant accounting policies continuedIFRS 9 – Financial InstrumentsIFRS introduces a new classification approach for financial assets and liabilities. he classification of financial assets will be reduced from four to three classes and financial liabilities will be measured at amortised cost or fair value through profit and loss. he standard also prescribes an ‘expected credit loss’ model for determining the basis of providing for bad debts.

he Group holds credit insurance that covers all clients except public sector, local government and pay when paid contracts (see note 30 for more details). his policy covers around 40% of the value of all invoices raised (excluding sales taxes). he Group holds a provision for the excess payable and, as such, considers that there will be no ad ustment required for the clients covered.

For those clients who are not covered by the credit insurance, the expected credit loss is very low as the public sector and local government contracts have a very low history of credit loss. It is also noted that in the case of pay when paid clients, any losses would be o set by a similar credit against cost of sales. he Directors expect any ad ustment made as a result of bringing this policy in to be less than 0.5m.

IFRS 15 – Revenue from Contracts with CustomersIFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

he new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full retrospective application or a modified retrospective application is required for annual periods beginning on or after 1 anuary 201 (for the Group this will apply for our December 201 year-end). It is the Group’s current plan to adopt the new standard on the required e ective date using the full retrospective method.

he Group is in the business of providing recruitment and staffing services. IFRS 15 requires revenue to be recognised once value has been received by the customer and when the performance obligations have been satisfied. IFRS 15 also prohibits the recognition of up-front fees. he Group has continued the assessment of IFRS 15 started in 2017 and discovered that there will be a change to the level of revenue recognised following a clarification on the agency principal basis. his will purely lead to amendments to revenue and cost of sales with no change in gross profit. he Group does not expect any significant ad ustments to be material. In preparing to transition to IFRS 15, the Group is considering the following:

emporary revenue (c. 1% of revenue) – this represents amounts billed for the services of temporary sta , including the salary costs of these sta , and is recognised when the service has been provided over the duration of the placement. he Group does not anticipate any change as a result of the transition to IFRS 15.

MSP Fees (c. 16% of revenue) – this represents amounts billed for Managed Services Programmes where the assignments are filled directly by the provider, other Group companies or second-tier agencies. he revenue is recognised in the same way as temporary revenue, i.e. when the service has been provided. Other than the review of the agency principal basis discussed above the Group does not anticipate any change as a result of the transition to IFRS 15.

Contingent basis (c. 2% of revenue) – this is revenue recognised from permanent placements, typically based on a percentage of the candidate’s remuneration package. his income is recognised once the candidate starts the placement. he Group is satisfied that the basis of revenue recognition remains appropriate as our only performance obligation (commencement date of the candidate) reflects our current policy and therefore does not expect any ad ustment as a result of transition to IFRS 15.

Other revenue (c. 1% of revenue) – this includes revenue from payroll fees, provision of healthcare services, statement of work activity and other management and related fees. he ma ority of these are billed to clients at the time the expense occurred.

he Group does have revenue it recognises over a period of time (statement of work – SOW, c. 0.3% of revenue), particularly in the construction business where the client contract is to provide workers to achieve a pro ect deadline. his revenue is recognised over the course of the contract and in line with agreed performance obligations. herefore the Group does not expect any ad ustment as a result of transition to IFRS 15.

In addition to revenue, the Group has reviewed rebates and commissions. All rebates are recognised over the contract period and deducted from revenue, therefore the Group does not expect any ad ustment as a result of transition to IFRS 15.

Page_55


Su ar of significant accounting policies continuedhe Group pays commissions to the ma ority of its consultants, linked to financial performance, fill rates, sales or a combination

of targets. In the context of IFRS 15, sales commissions will be capitalised and the amortisation will be charged to cost of sales. herefore, if sales commissions are currently recognised in administration expenses, gross profit (but not EBI DA) would be

lower under the new standard. he Group has identified that a small amount of commissions which were paid in 201 would be classed as sales commissions under IFRS 15, and therefore would be reclassified from administration expenses to cost of sales, thus reducing gross profit.

IFRS 16 – LeasesIFRS 16 was released in anuary 2017 and replaces IAS 17 Leases. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17.

IFRS 16 requires all leases (excluding short-term and leases of low value items) to be recognised as an asset on the balance sheet, with a corresponding lease liability. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense of the right-of-use asset.

IFRS 16 is expected to result in an increase in EBI DA for the Group, as rentals are reclassified as depreciation and interest expense. Gross profit may also appear higher as a result. IFRS 16 also requires us to make more extensive disclosures than under IAS 17. Note 27 gives the current lease portfolio. IFRS 16 is e ective for annual periods beginning on or after 1 anuary 201 (for the Group this will apply for our December 201 year-end). A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach. he standard’s transition provisions permit certain reliefs.

he Group has reviewed its portfolio of leases as at 4 anuary 201 and decided to account for IFRS 16 on the modified retrospective approach using a single discount rate for portfolio leases with similar characteristics. Advantage has been taken of the exemption provided for low value leases. he main di erences between the IFRS 16 liability shown below and the value of the total operating lease commitment shown in note 27 is that the commitment note has been calculated to the end of the lease, whilst this disclosure has recognised where there is a probability of activating an earlier break clause ( . m). here are also ad ustments for the service charge which has not been included in the for IFRS 16 ( 4.5m), the discount applied for future years which has decreased the value of the liability ( 4.0m) and the removal of low value leases ( 0.2m). he following table gives an indication of the e ect of this approach if we had adopted IFRS 16 at the start of the current financial period:

ee s ended anuar As reported

mIFRS 16

mPro-forma

m

Gross profit 2 2.3 – 2 2.3Administrative expenses before depreciation, amortisation and other reconciling items (232.1) 10.3 (221. )

Ad usted EBI DA (note 3) 50.2 10.3 60.5Depreciation and amortisation (12.4) ( .3) (21.7)Other reconciling items (note 3) (14. ) – (14. )

Operating profit 22. 1.0 23.Finance expenses (6. ) (1.7) ( .5)

Profit efore ta 16.1 (0.7) 15.4

At anuar As reported

mIFRS 16

mPro-forma

m

otal non-current assets 310.7 24. 335.6otal current assets 646.3 – 646.3otal current liabilities (536.0) ( .2) (544.2)otal non-current liabilities (151.6) (17.4) (16 .0)

Net assets 26 .4 (0.7) 26 .7

he Directors are currently evaluating the impact of the adoption of all other standards, amendments and interpretations but do not expect them to have a material impact on the Group operation or results.


Page 56



Su ar of significant accounting policies continued Significant accounting judgements and estimates

In applying the Group’s accounting policies, the following udgements and estimates have been made that may have a significant e ect on the amounts recognised in the financial statements in the current or future years:

i) JudgementsAgent versus principal

he Group assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the Group, whether the Group has the primary responsibility for providing the services and whether the Group contracts directly with either the worker placed or any other recruitment agency. Where the Group provides a managed service, in which it acts as agent for the client (which is mainly Managed Services contracts), the amount of revenue recognised is limited to the management fee receivable for that service after making provision for any losses foreseen, volume rebates and amounts payable under gain-share arrangements rather than the full amount invoiced. rade receivables and payables related to these sales are recorded at full invoice value.

ii) EstimatesBrand value amortisation

he Group carries out an annual review of the useful economic lives of the brands held on the balance sheet. As a result of the review for this period the estimate was revised, resulting in useful economic lives changing from indefinite to between 3 and 20 years, based on the perceived strength of the brands (see part F of this note). his change has been applied during the period after the completion of the review.

Impairment of goodwill and other intangible assetshe Group determines whether goodwill and other intangible assets are permanently impaired on an annual basis or

otherwise when changes in events or situations indicate that the carrying value may not be recoverable. his requires an estimation of the recoverable amount of the cash-generating unit to which the assets are allocated. Estimating the value-in-use requires the Group to make an estimate of the future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. More details of the carrying value and impairment review, including sensitivities, are given in note 12.

Legal provisionhe Group measures and recognises provisions related to pending litigation or other outstanding claims sub ect to negotiated

settlement, mediation and arbitration. A significant level of estimation is required to quantify the possible ranges of financial settlement. Due to the inherent uncertainty in this evaluation process, actual losses may be di erent from the originally estimated provision (see note 20).

Change in critical estimates and critical judgementsDuring the year, the Group reassessed the critical estimates and critical udgements. As a result of this review, estimates over workers compensation, property provisions and doubtful debt provisions have been removed as they are no longer significant enough to the Group to draw attention to here. A change in estimate on the useful economic lives of brand value and the estimates behind legal provisions have been added as above. No other change was needed from last year in critical estimates and critical udgements.

C) Currencies and foreign currency translationhe functional and presentational currency of the Company and its UK subsidiaries is Pound Sterling. Foreign operations are

located mainly in North America, Europe, Australia, New ealand and Singapore, which use their local currencies as their functional currencies.

On consolidation, at the reporting date, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Group at rates ruling on the balance sheet date. Income and expense items are translated at average exchange rates monthly during the reporting period, as this is considered a reasonable approximation to actual translated rates.

he exchange di erences arising from this re-translation are recognised in the Consolidated Statement of Other Comprehensive Income and accumulated to a foreign currency translation reserve in equity.


Su ar of significant accounting policies continued ransactions in foreign currencies are initially recorded in the functional currency using the rate of exchange ruling at the date

of the transaction. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. All di erences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using exchange rates at the date when the fair value was determined.

Exchange di erences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, therefore forming part of the net investment in the foreign operation, and the tax charges and credits attributable to the exchange di erences on these balances are dealt with in the statement of comprehensive income and accumulated to a foreign currency translation reserve in equity.

Property, plant and equipmentProperty, plant and equipment is stated at historic cost less accumulated depreciation and any impairment in value. Historic cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

Freehold property: over 50 yearsShort leasehold property: over the term of the leaseFurniture, fixtures and fittings: between 3 and 10 years or to the end of the lease, whichever is shorter at the start of the asset’s lifeComputer equipment: between 2 and 5 years

he residual value and estimated useful lives of assets are reviewed, and ad usted if appropriate, at each balance sheet date. he carrying value of property, plant and equipment is reviewed for impairment when events or changes in circumstances

indicate that the carrying value may not be recoverable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the di erence between the net disposal proceeds and the carrying value of the item) is included in the income statement in the period the item is derecognised.

E) GoodwillGoodwill acquired in a business combination represents the excess of the consideration paid (at the date of exchange) over the fair value of the identifiable assets, liabilities and contingent liabilities acquired on the date of acquisition. Acquisition-related costs are expensed to the income statement as incurred.

Goodwill is recognised as an asset in the consolidated balance sheet of the Group and is recorded at cost less any accumulated impairment losses. he carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Any impairment charge is recognised immediately in the income statement and is not subsequently reversed.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (business segments) that is expected to benefit from the combination. Each group of cash-generating units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.


Page_58



Su ar of significant accounting policies continuedF) Other intangible assetsOther intangible assets represent the carrying value of brands and client relationships, identified on business combinations, and of computer software and licences.

Carrying value is equal to cost less accumulated amortisation and impairment or, in the case of assets acquired through business combinations, fair value at date of acquisition less accumulated amortisation and impairment.

Brands are defined as having finite useful lives and the costs are amortised on a straight-line basis over the estimated useful lives of each of the assets (ranging between three and twenty years). he expense is taken to the income statement through the ‘depreciation and amortisation’ line within administrative expenses.

Client relationships are defined as having finite useful lives and the costs are amortised on a straight-line basis over the estimated useful lives of each of the assets (ten years). he expense is taken to the income statement through the ‘depreciation and amortisation’ line within administrative expenses.

Externally acquired computer software and licences are capitalised at the costs incurred to acquire and bring into use the specific software. Internally generated computer software programs are capitalised to the extent that costs can be separately identified and attributed to particular software programs, measured reliably, and where the asset developed can be shown to generate future economic benefits and the Group intends to and has the technical ability and sufficient resources to complete development. Computer software and licences are defined as having finite useful lives and the costs are amortised on a straight-line basis over the estimated useful lives of each of the assets, considered to be between three and five years. he expense is taken to the income statement through the ‘depreciation and amortisation’ line within administrative expenses.

All costs relating to the ‘research’ phase of the software development cycle together with costs not separately identifiable and attributable to particular program development are expensed directly to the income statement in the period in which it is incurred.

All intangible assets are also reviewed for impairment whenever there is an indication that the carrying amount may be impaired, or where the asset is not yet available for use. Useful lives are also examined on an annual basis and ad ustments, where applicable, are made on a prospective basis.

Implementation costsCosts directly attributable to the implementation of a contract and which can be separately identified and measured reliably are capitalised when income from that contract is virtually certain and where they meet the criteria for recognition as an asset under the IASB framework. hese costs are included within trade and other receivables on the balance sheet so long as the estimated future cash flows from the contract are no less than the capitalised amount. hese capitalised costs are amortised over the life of the contract on a straight-line basis. If the contract becomes loss-making, any unamortised costs are written o immediately.

H) Financial assetsFinancial assets are classified as ‘financial assets at fair value through the income statement’, ‘loans and receivables’, ‘held to maturity investments’, or as ‘available-for-sale financial assets’, as appropriate. he Group determines the classification of its financial assets at initial recognition and where allowed and appropriate re-evaluates this designation at each financial period-end. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus, in the case of financial assets not at fair value through the income statement, directly attributable transaction costs.


Su ar of significant accounting policies continuedInvestments

he Group’s investments are classified as held at fair value through the income statement. hey are further classified as non-current unless management expects to dispose of the investment within 12 months of the balance sheet date.

hese investments relate to the deferred compensation plan detailed in note 2(P) below, where the employee’s entitlement is limited to the market value of the fund. On this basis the use of fair value through the income statement is permitted, because it eliminates a measurement inconsistency (‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains or losses on them on a di erent basis.

Subsequent to initial recognition these investments are held at fair value the fair values are based upon bid prices ruling at the balance sheet date. Fair value ad ustments are recognised through the income statement.

I ther non-current financial assetsOther non-current financial assets represent security deposits with non-financial institutions that have no fixed date of repayment and that are not expected to be repaid within the next 12 months. On initial recognition these assets are held at cost and subsequently at amortised cost.

Impairmenthe Group assesses at each balance sheet date whether a financial asset is impaired.

J) Trade and other receivables rade receivables, which have various terms, are non-interest-bearing and are recognised and carried at fair value, being the

original invoice amount less an allowance for uncollectible amounts, credit notes and an estimate of rebates due.

ImpairmentA provision for impairment is made when there is ob ective evidence (such as probability of insolvency or significant financial difficulties of the debtor) that the Group will not be able to collect all of the amounts due under the original terms of the invoice. he carrying amount of the receivable is reduced through use of an allowance account. Impaired receivables are derecognised when they are assessed as uncollectible.

K) Cash and cash equivalentsCash and short-term deposits in the consolidated balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts. Bank overdrafts are shown with other short-term borrowings on the consolidated balance sheet.

L) Trade and other payablesrade payables are non-interest-bearing and, as they are short-term, are stated at invoiced value, being the fair value.

M) Taxes Current taxCurrent tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. he tax rates and the tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.


Page 60



Su ar of significant accounting policies continuedDeferred taxDeferred income tax is provided, using the liability method, on temporary di erences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary di erences, except:• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a

transaction that is not a business combination and, at the time of the transaction, a ects neither the accounting profit nor taxable profit or loss and

• in respect of taxable temporary di erences associated with investments in subsidiaries, where the timing of the reversal of the temporary di erences can be controlled and it is probable that the temporary di erences will not reverse in the foreseeable future.

Deferred income tax assets are recognised on an undiscounted basis for all deductible temporary di erences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary di erences and the carry-forward of unused tax credits and unused tax losses can be utilised except:• where the deferred income tax asset relating to the deductible temporary di erence arises from the initial recognition of

an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a ects neither the accounting profit nor taxable profit or loss and

• in respect of deductible temporary di erences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary di erences will reverse in the foreseeable future and taxable profit will be available against which the temporary di erences can be utilised.

he carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.

Deferred tax assets and liabilities are o set if a legally enforceable right exists to set o current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Sales taxesRevenues, expenses and assets are recognised net of the amount of sales tax except:• where the sales tax incurred on a purchase of goods or services or assets is not recoverable from the taxation authority,

in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable and

• receivables and payables that are stated with the amount of sales tax included.

he net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

N) ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as a result of past events it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

If the e ect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money. When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense in the income statement.

As part of the normal course of business the Group is exposed to various claims. Provisions are made for amounts that satisfy the recognition criteria in IAS 37 and accordingly are not recognised when the likelihood of any claim being settled and the associated settlement amount cannot be estimated.


Su ar of significant accounting policies continuedO) Financial liabilitiesFinancial liabilities are classified as either ‘financial liabilities at fair value through income statement’ or ‘other financial liabilities’. All Group borrowings have initially been recognised as ‘other financial liabilities’ and measured at fair value of the consideration received less directly attributable issue costs.

After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost. his cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the e ective interest rate method of any di erence between the initially recognised amount and the maturity amount. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.

Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the amortisation process.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

P Employee benefitsShort-term benefits – bonus arrangements

he Group operates a number of annual bonus arrangements for Directors and employees. he cost of these arrangements is recognised in the income statement when the entity has an obligation to make such payments as a result of the achievement of Board-approved performance targets and when a reliable estimate of this obligation can be made.

Defined contribution pension obligationshe Group provides pension arrangements for its UK-based Directors and employees through defined contribution schemes

administered by third party providers. he Group has no further payment obligations once the contributions have been made. Contribution costs are expensed to the income statement as they become due.

Defined benefit pension obligationsA defined benefit plan is a post-employment benefit plan other than a defined contribution plan. he Group’s net obligation in respect of defined benefit pension plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods that benefit is discounted to determine its present value, and the fair value of any plan assets (at bid price) are deducted. he Group determines the net interest on the net defined benefit liability asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability asset.

he discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA that have maturity dates approximating to the terms of the Group’s obligations and that are denominated in the currency in which the benefits are expected to be paid.

Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the e ect of the asset ceiling (if any, excluding interest). he Group recognises them immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses in profit or loss.

he calculation of the defined benefit obligations is performed by a qualified actuary using the pro ected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the present value of benefits available in the form of any future refunds from the plan or reductions in future contributions and takes into account the adverse e ect of any minimum funding requirements.

Other post-employment obligationsIn the US, the Group operates a deferred compensation plan for certain key employees. he plan allows the employee to defer receipt of a portion of their emoluments together with, in some cases, a contribution from the Group. he deferred amounts plus the Group contribution are paid into an external trust fund. Employees’ entitlement is limited to the market value of the fund therefore, both the investment and the liability to the employee are marked to market on an annual basis, with movements in the liability passing through the administrative expenses line (salaries and wages) in the income statement.


Page 62



Su ar of significant accounting policies continuedShare-based compensation

he Group can award share-based payments for employees (including Directors). he cost of these transactions is measured by fair value at the date at which they are granted and is recognised as an employee expense with a corresponding increase in equity. he fair value of these options is determined using an appropriate pricing model taking into account the terms and conditions upon which the options were granted (note 23).

Awards are expensed over the vesting period such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. Due to the unusual nature and si e of such a charge, this is separated out on the face of the consolidated income statement and in notes 5 and , as appropriate.

here is no dilutive e ect of share awards which will ultimately be satisfied by market purchases through an employee benefit trust (see note ).

Q) Leaseshe determination of whether an arrangement is, or contains, a lease is based upon the substance of the arrangement at

inception date.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. he corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the income statement.

Assets held under finance leases are depreciated over the shorter of the estimated useful life of the asset and the lease term.

All other leases are classified as operating leases. Payments under operating leases are expensed to the income statement on a straight-line basis over the period of the lease.

R) RevenueRevenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for the provision of services, net of value-added tax, rebates and discounts and after eliminating sales made within the Group.

Revenue for temporary staffing services is recognised and accrued by reference to hours worked in accordance with approved and submitted weekly timesheets and agreed charge rates.

he Group recognises the income derived from permanent placements when the employment of the individual commences with provision made for potential refunds which can be payable if the placement is terminated within a short period.

he Group assesses whether it is acting as agent or principal depending on whether the client has a direct relationship with the Group, whether the Group has the primary responsibility for providing the services and whether the Group contracts directly with either the worker placed or any other recruitment agency. Where the Group provides a managed service, in which it acts as agent for the client (which is mainly Managed Services contracts), the amount of revenue recognised is limited to the management fee receivable for that service after making provision for any losses foreseen, volume rebates and amounts payable under gain-share arrangements rather than the full amount invoiced. rade receivables and payables related to these sales are recorded at full invoice value.

Revenue from other services provided by the Group is recognised in accordance with work performed. Interest income receivable on deposits with financial institutions is recognised on an accrued basis. Deferred income is recognised when an invoice has been raised in advance of the service provision.

S Separately disclosed itemsCosts or income that have been recognised in the income statement which the Directors believe, due to their nature or si e, should be disclosed separately to give a more comparable view of the year-on-year underlying financial performance. hese are separately disclosed on the face of the consolidated income statement and in the notes, as appropriate.


Su ar of significant accounting policies continuedT) Borrowing costsBorrowing costs are recognised as an expense when incurred unless they are qualifying assets under IAS 23 when they are capitalised.

U Equity instrumentshe Ordinary shares issued by the Company are classified as equity. hey are recorded as the proceeds received, net of direct

issue costs.

Where any Group company purchases the Company’s equity instrument (treasury shares), the consideration paid, including any directly attributable incremental costs (net of taxes) is deducted from equity attributable to the Company’s equity shareholders, until the shares are cancelled or re-issued. Upon cancellation, a reserve equal to the nominal value of the shares is transferred from Retained Earnings into a Capital Redemption Reserve.

V) Dividend distribution policyDividend distributions to the Company’s shareholders are recognised as a liability in the Group financial statements in the period in which the dividends are paid or approved by the Company’s shareholders.

3. Segment informationhe Group is reporting under IFRS Operating Segments which requires that the Group firstly:

• identify its ‘Chief Operating Decision Maker’ (‘CODM’), which has currently been assessed as the Group Chief Executive Officer who, along with the ‘Leadership team’, reviews the Group’s internal reporting in order to assess performance and allocate resources

and secondly:• by reference to the information supplied to the CODM identify its operating segments and from these to identify its

reportable segments.

he CODM discusses performance with management of the following two reportable segments plus shared costs and corporate costs:• Managed Services • Specialist Staffing

he geographical split of the reportable segments is based on the location of the management teams.

he CODM does not review balance sheet reports in detail by segment, only in total for the Group.

ee s ended anuar Revenue

£mross profit

£m

Adjusted EBITDA

£m

Managed Services – UK, Europe and Australasia 21.5Specialist Staffing – UK, Europe and Australasia 800.0 135.2Managed Services – North America 183.7Specialist Staffing – North America 31.8Inter-segment revenues – –

Operating segments 282.3

ee s ended ece er Revenue

mGross profit

m

Ad usted EBI DA

m

Managed Services – UK, Europe and Australasia 1,01 .4 62.7 20.4Specialist Staffing – UK, Europe and Australasia 11. 140.4 23.6Managed Services – North America 1 7.2 4 .5 12.3Specialist Staffing – North America 213. 32. 7.0Inter-segment revenues (61.0) – –

Operating segments 2,171.3 2 5.5 63.3


Page 64



3. Segment information continuedeconciliation of seg ent adjusted A to profit after ta is as follo s

53 weeks anuar

£m

52 weeks 2 December

2017m

Seg ent adjusted A 63.3Corporate costs (3. )

Adjusted A 50.2 5 .5Amortisation of other intangible assets (note 13) (7.3)Depreciation of property, plant and equipment (note 11) (3.3)Loss on disposal of property, plant and equipment (0.1)Impairment of goodwill (note 12) –Separately disclosed items (note 6) (3.4)Share-based payment (note 23) (0.7)

perating profit 44.7Finance expense (6. )

ax charge (6. )

Profit for the period 13.3 31.1

he above table reconciles the ad usted Earnings Before Interest, ax, Depreciation and Amortisation (‘EBI DA’), which also excludes separately disclosed items and share-based payment to the standard profit measure under International Financial Reporting Standards (Operating Profit). his is the Group s Alternate Profit Measure used when discussing the performance of the Group. he Directors believe that ad usted EBI DA is the most appropriate approach for ascertaining the underlying trading performance and trends as it reflects the measures used internally by senior management for all discussions of performance, including Directors’ remuneration, and also reflects the starting profit measure used when calculating the Group’s banking covenants. All discussions within the Group on segmental and individual brand performance refer to ad usted EBI DA. Corporate costs represent costs associated with being a listed company with a wide portfolio of brands and therefore are not allocated to the segments.

Ad usted EBI DA is not defined by IFRS and therefore may not be directly comparable with other companies’ ad usted profit measures. It is not intended to be a substitute, or superior to, IFRS measurements of profit.

Separately disclosed items are costs or income that have been recognised in the income statement which the Directors believe, due to their nature or si e, should be disclosed separately to give a more comparable view of the year-on-year underlying financial performance (note 6).

Share-based payment – in September 2015, the Company granted share awards to two senior Directors which were due to vest following the publication of the audited financial results for the 52 weeks ended 2 December 2017. One of the Directors left during 2016 and the share award relating to that Director has been cancelled. he remaining shares lapsed in 201 as the vesting conditions were not met.

hese costs are shown separately in order to bring this to the attention of the reader to highlight that this is a scheme which is one-o in nature and not part of the ongoing remuneration structure of senior executives.

eographic information

e enue fro e ternal custo ers

53 weeks anuar

£m

52 weeks 2 December

2017m

UK 1,631.North America 382.0 401.0Europe 81.5 2.1Asia Pacific 56.3

otal 2,171.3

he revenue information above is based on location of Group entity.


3. Segment information continued

on current assets

53 weeks anuar

£m

52 weeks 2 December

2017m

UK 178.8 167.7North America 110.3 123.Europe 14.4Asia Pacific 8.0 .1

otal 310.7 314.0

Non-current assets above consist of Property, Plant and Equipment, Goodwill, Other intangible assets, Deferred tax assets and Financial assets.

perating profita perating profit has been arrived at after charging

53 weeks anuar

£m

52 weeks 2 December

2017m

Separately disclosed items (note 6) 5.7 3.4Depreciation of property, plant and equipment (note 11) 3.3 3.3Amortisation of other intangible assets (note 13) 7.3Impairment of goodwill (note 12) –Loss on disposal of property, plant and equipment 0.2 0.1Minimum lease payments recognised as an operating lease expense (note 27) 10.5 10.4Charge for bad and doubtful trade receivables (note 15) 1.0 0.2

b Auditor’s remuneration53 weeks anuar

£m

52 weeks 2 December

2017m

Fees payable to the Auditor for the audit of the Group’s annual financial statements 0.1 0.1Fees payable to the Group’s Auditor and their associates for other services:

he audit of the Company’s subsidiaries pursuant to legislation 0.5 0.5Other non-audit services in relation to tax advisory 0.1 0.1

otal 0.7 0.7

plo ent costs a Employees including irectors whose costs are included in administrative expenses

osts of e plo ent

53 weeks anuar

£m

52 weeks 2 December

2017m

Wages, salaries and bonuses 158.8 15 .7Share-based payment (note 23) 0.7Social security costs 11.6Expenses related to defined contribution plan 2.1

otal 174.1

onthl a erage nu er of e plo ees

53 weeks anuar

u er

52 weeks 2 December

2017Number

Managed Services – UK, Europe and Australasia 758 677Specialist Staffing – UK, Europe and Australasia 1, 40Managed Services – North America 371 3 5Specialist Staffing – North America 237 240Corporate sta (including Directors) 11 15

otal 3,267


Page 66



plo ent costs continuedb Employees whose costs are included in cost of salesIn addition to the above, the Group employs some of the sta who are supplied to clients and whose costs are part of the Group’s cost of sales.

osts of e plo ent

53 weeks anuar

£m

52 weeks 2 December

2017m

Wages, salaries and bonuses 755.7Social security costs 22.8 2 .7Expenses related to defined contribution plan 2.1 1.5

otal 7 5.

onthl a erage nu er of e plo ees

53 weeks anuar

u er

52 weeks 2 December

2017Number

Managed Services 13,03Specialist Staffing 15,427

otal 2 ,466

c Information on irectors’ remunerationhe total emoluments for all Directors during the period were:

53 weeks anuar

£000

52 weeks 2 December

2017000

Emoluments (including benefits) 1,252 1,160Contribution to defined contribution pension plans 81 6

1,333 1,22

otal e olu ents e cluding pension contri utions

53 weeks anuar

£000

52 weeks 2 December

2017000

Lord M Ashcroft – Robertson 455

A Wilford 353 3AE Entwistle 47ME Ettling 52M Laurie 47Baroness Stowell –D O’Neill 17 47P Stephenson – 47SL Stone – 67

otal 1,252 1,160

Pension contri utions

53 weeks anuar

£000

52 weeks 2 December

2017000

Robertson 81 6

All pension payments relate to defined contribution schemes.


plo ent costs continued

he e olu ents for the highest paid irector during the period ere

53 weeks anuar

£000

52 weeks 2 December

2017000

Emoluments (including benefits) 455Pension contributions 81 6

557 523

he total emoluments for Robertson and A Wilford include benefits, both non-cash and cash, to the value of 107,000 (2017: 2,000) and 1 ,000 (2017: 44,000), respectively. Emoluments for Lord M Ashcroft include an amount accrued in relation to backdated Directors’ fees.

he 40,000 (2017: 47,000) paid for the services of AE Entwistle as a Non-Executive Director is paid to Deacon Street Partners Limited (formerly Anne Street Partners Ltd). Nil (2017: 6,000) of the fee paid for the services of ME Ettling as a Non-Executive Director is paid to Nomad Advisory Services Ltd.

No Director has been in receipt of a loan from the Group in the current or prior periods.

Directors’ optionsOptions held by the Directors during the period are as follows (see note 23 for more details):

Scheme Date of grantDate from

which exercisable Expiry dateExercise price

in pence

u er as at anuar

Number as at2 December

2017

Robertson 2015 2 September 2015 6 March 201 6 September 201 Nil il 50,000

Separatel disclosed ite s53 weeks anuar

£m

52 weeks 2 December

2017m

Legal costs a 3.2 1.US Businesses restructuring and integration b 2.0 0.7Ad ustments to deferred consideration c 0.5 0.

otal included in perating profit 5.7 3.4

a) In 201 the Group had an ongoing litigation matter for which a provision for settlement and associated legal costs of 3.0m has been made. here was also an additional 0.2m cost for a legal case which 1.6m was previously provided for in 2017. In 2017 the US incurred tax and associated legal costs of 0.3m with regard to the settlement of historic state tax liabilities for the period 2010 to 2016. hese are disclosed separately due to their one-o nature and significance

b) US Business restructuring and integration costs are of such significance that they are excluded in order to bring them to the reader’s attention in understanding the Group’s financial performance. Following the acquisition of Bartech at the end of 2015 the Group has gone through a three-year programme to enable the realisation of cost and revenue synergies and ensure the right structure of Impellam North America is in place. his includes costs related to the integration of the Bartech business to Impellam systems, processes and policies.

his programme has concluded at the end of 201 . All other costs related to restructures within the individual Impellam brands have been included in the trading results as they are not deemed significant

c) Contingent consideration payments linked to individuals’ continuing employment in the business generated a 0.5m charge in relation to the acquisition of Global Group (UK) Ltd (2017: 0. m). hese are of such significance that they are shown separately so as to not distort the reporting of the underlying performance of the respective businesses

otal finance e pense53 weeks anuar

£m

52 weeks 2 December

2017m

Revolving credit facilities 6.0Other interest expense 0.3 0.6

otal interest payable for financial liabilities not at fair value through the income statement 6.6Unwinding of discount on deferred consideration – 0.2

otal finance e pense 6.


Page 6



a ationa Tax charge in the income statement

53 weeks anuar

£m

52 weeks 2 December

2017m

Current income taxUK Corporation ax on results for the period 1.7 4.4Ad ustments in respect of previous periods 0.4

4.Foreign tax in the period 2.5 2.3

otal current income tax 7.1Deferred tax credit (0.3)

otal ta charge in the inco e state ent 2.8 6.

he deferred ta credit co prises the follo ing

53 weeks anuar

£m

52 weeks 2 December

2017m

Utilisation of tax losses brought forward 1.8 3.0Recognition of assets not previously recognised (3.0)Origination and reversal of other temporary di erences (0. )Change in tax rate used for deferred tax carried forward 0.3 1.7Ad ustment in respect of previous periods (1.2)

otal deferred tax credit (note 21) (0.3)

b) Reconciliation of the total tax chargehe standard rate of Corporation ax in the UK reduced to 1 % on 1 April 2017 (previously 20%). Accordingly, the Group’s

profit from this period is taxed at an e ective rate of 1 .0% (2017: 1 .3%). he tax charge for the period is 2. m (2017: 6. m) for the Group. A tax reconciliation explaining di erences from the expected statutory rate of 1 .0% (2017: 1 .3%) is summarised below:

53 weeks anuar

%

52 weeks 2 December

2017%

ax charge at UK standard rate 1 .3Di erences in tax rates in other countries 5.3 10.1Income not taxable in determining taxable profits (5.5)Utilisation of losses brought forward not recognised as assets – (1.7)Losses in period carried forward but not recognised as assets 1.5Recognition of losses not previously recognised – (7. )Change in tax rate used for deferred tax carried forward 2.0 4.1Ad ustments to deferred tax in respect of previous periods (3.0)Ad ustments to current tax in respect of previous periods 1.0

E ective total tax rate 17.

Income not taxable in determining taxable profits is comprised of various small ad ustments in respect of items not treated as taxable under local tax rules, plus expenses previously added back as non-deductible being treated as allowed for tax. Ad ustments in respect of previous periods (current and deferred) arise as result of a reduction in non-tax deductible expenses and estimated timing di erence in the prior year filed UK tax returns.

See note 21 for explanation of deferred tax assets and liabilities.

actors a ecting tax charges in future periodsA reduction in the UK Corporation ax rate from 1 % to 17% (e ective 1 April 2020) was substantively enacted on 6 September 2017. his will reduce the Company’s future current tax charge accordingly. he deferred tax balances at 4 anuary 201 have been calculated based on these rates.


arnings per shareBasic earnings per share amounts are calculated by dividing the profit for the period attributable to the owners of the Company by the weighted average number of Ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated on the same basis but after ad usting the denominator for the e ects of dilutive options. he only potentially dilutive shares arise from the share options issued by the Group under its share-based compensation plans. here were ero options outstanding at 4 anuary 201 (2017: 50,000), see note 23.

Excluding the 1 , 41 shares owned by he Corporate Services Group Ltd Employee Share rust, the weighted average number of shares in 201 is 50,171, 30 (2017: 50,322,1 6) and the fully diluted average number of shares is 50,1 1,671 (2017: 50, 12,3 5).

he calculations of both basic and diluted earnings per share (EPS) are based upon the following consolidated income statement data:

53 weeks anuar

£m

52 weeks 2 December

2017 m

Profit for the period 13.3 31.1 Separately disclosed items (net of tax) 3.3 Impairment of goodwill –Customer relationship and brand amortisation (net of tax) 3.7 3.4

Ad usted profit for the period 30.5 37. EPS – basic calculation

53 weeks anuar

Pence

52 weeks 2 December

2017 Pence

Unad usted basic earnings per share 61.Separately disclosed items (net of tax) 6.7 Impairment of goodwill 17.1 –Customer relationship and brand amortisation (net of tax) 6.6

Ad usted basic earnings per share1 75.2 1 Additional earnings per share calculations have been presented in order to provide information on the underlying performance of the Group before separately disclosed expenditure,

impairment of goodwill and the amortisation of customer relationships and brands

EPS – diluted calculation

53 weeks anuar

Pence

52 weeks 2 December

2017 Pence

Unad usted diluted earnings per share 61.1Separately disclosed items (net of tax) 6.5 Impairment of goodwill 17.1 –Customer relationship and brand amortisation (net of tax) 6.6

Ad usted diluted earnings per share1 74.2 1 Additional earnings per share calculations have been presented in order to provide information on the underlying performance of the Group before separately disclosed expenditure,

impairment of goodwill and the amortisation of customer relationships and brands

usiness co inationsOn 30 uly 2015, the Group acquired 100% of the shares of Global Group (UK) Limited, an unlisted company incorporated in the UK in exchange for cash. Global Group is a specialist doctors’ locum recruitment business operating in Ireland, Australasia and the UK, which is complementary to the Medacs business and propels the healthcare business forward significantly outside the UK.

Contingent consideration payments arising on the acquisition of Global Group (UK) Limited which are linked to the continued employment of certain individuals are being amortised through the profit and loss account over the earnout periods until 201 . A charge of 0.5m (2017: 0. m) was recorded in operating profit and 4. m (2017: 1. m) was paid during the period. At the end of the period, there was 1.2m outstanding (2017: 6.0m).


Page 70



Propert plant and e uip entFreeholdproperty

m

Short leaseholdproperty

m

Furniture, fixturesand fittings

m

Computerequipment

motal

m

et carr ing alue ece er 0.2 1.6 3.1 2.3 7.2

ost ece er 0.2 2.7 5. 4.0 12.7Additions – 0.5 1.2 1.5 3.2Disposals – (1.0) (0.3) (0.6) (1. )Foreign exchange – 0.1 (0.4) – (0.3)

ost ece er 0.2 2.3 6.3 4. 13.7

Accu ulated depreciation ece er – 1.1 2.7 1.7 5.5Charge for the period – 0.5 1.3 1.5 3.3Disposals – (1.0) (0.3) (0.6) (1. )Foreign exchange – (0.1) (0.4) – (0.5)

Accu ulated depreciation ece er – 0.5 3.3 2.6 6.4

et carr ing alue ece er 0.2 1. 3.0 2.3 7.3

ost ece er 0.2 2.3 13.7Additions – 1.3 3.1Disposals –Foreign exchange – – 0.1 – 0.1

ost anuar 0.2 15.7

Accu ulated depreciation ece er – 0.5 3.3Charge for the period – 0.7 1.1 1.5 3.3Disposals –Foreign exchange – – 0.1 – 0.1

Accu ulated depreciation anuar – 1.1

et carr ing alue anuar 0.2 1.5 2.1

Included in computer equipment are assets with net carrying value of 0.4m (2017: nil) held under a finance lease. Depreciation of 0.1m (2017: 0.2m) was charged on these assets.

ood ill

Costm

Impairmentm

Netcarrying value

m

Opening balance at 31 December 2016 1 1.2 (14.0) 167.2Foreign exchange and other movements (6. ) – (6. )

losing alance at ece er 174.4 (14.0) 160.4

Opening balance at 30 December 2017Provision in period –Foreign exchange and other movements –

losing alance at anuar 178.8

Goodwill acquired through business combinations has been allocated for impairment testing purposes to nine principal cash-generating unit groups as follows:• Education • Engineering • Healthcare • Information technology• Science and clinical• Support service• UK general staffing• US Staffing• endor procurement


ood ill continuedForeign exchange and other movements to goodwill arises from the re-translation of goodwill balances held in foreign currencies relating to the acquisition of Bartech Holdings Corporation, in the Impellam North America segment.

Following a challenging trading period an impairment of .6m has been recognised against the Education CGU (2017: nil) which is in the Specialist Staffing – UK, Europe and Australasia reporting segment. he brought forward impairment of 14.0m is allocated against the goodwill of Support services.

he carrying amount of goodwill and other indefinite assets allocated to cash-generating units at the period-end is:

At anuar ood ill

£m

ther indefinite life assets

note £m

otal indefinite life

assets£m

Education –Engineering 2.1 – 2.1Healthcare –Information technology 25.7 – 25.7Science and clinical 8.5 – 8.5Support service –UK General staffing –US Staffing 77.0 – 77.0

endor procurement – – –

otal –

At ece er Goodwill

m

Other indefinite life assets

(note 13)m

otalindefinite life

assetsm

Education 10.2 11.5 21.7Engineering 2.1 – 2.1Healthcare 7. 25.0 32.Information technology 25.7 13.0 3 .7Science and clinical .5 – .5Support service 4. – 4.UK General staffing 2 .6 10.4 3 .0US Staffing 72.6 20. 3.4

endor procurement – 6. 6.

otal 160.4 7.5 247.

he recoverable amount of the Education CGU is 15. m using the value-in-use model. he Group tests this and other assets (note 13) for impairment on an annual basis, and otherwise when changes in events or situations indicate that the carrying value may not be recoverable. If such a test indicates that the carrying amount is too high, a recoverable amount is established for the asset, which is the higher of the fair value less costs to sell and the value in use.

he recoverable amount for each of the above segments has been determined based upon a value-in-use calculation. alue-in-use is established by discounting anticipated future cash flows attributable to each cash-generating unit (‘CGU’) that goodwill has been allocated to. As part of our ongoing review of CGUs, during the period management has redefined the existing three CGUs into nine as shown in this disclosure to reflect how independent cash flows were generated in the last 12 months. Each of these CGUs were reviewed to see whether there were increased levels of detail which could be used for impairment testing so, where such level was found, potential impairments were calculated at the lowest level possible. Pre-tax cash flow pro ections are based on financial budgets approved by management covering the next financial period and pro ections for two future periods. Cash flows beyond the two-year period have been extrapolated using long-term growth rates of 2.0% (2017: 2.0%).


Page 72



ood ill continuedKey assumptions

he key assumptions are based upon a combination of market data tempered by our own historical experience. he calculation of value-in-use is most sensitive to the following assumptions:• Gross profit – this is based on the average gross profit achieved in the two years preceding the start of the plan years. hese

have been amended as appropriate over the plan years for anticipated changes to business mix and market conditions• Discount rate – this reflects the Directors’ estimate of an appropriate market rate of return taking into account the relevant

risk factors this has been ad usted to reflect current and expected future economic conditions as well as to account for geographic influences

• Growth rate used to extrapolate beyond the plan year and terminal values are based upon the long-term average growth rate of the UK and US economies. Management recognises that the staffing and support services market growth rates fluctuate both above and below this rate and

• erminal value growth rate – the cash flow pro ections include growth rates that are not expected to exceed the long-term growth rates of the UK and US economies.

Sensitivity to changes in assumptionshe impairment calculation is sensitive to changes in the above assumptions. Sensitivity analyses were performed over each

subsidiary CGU to model the e ects of adverse changes in the forecasts and growth assumptions. he table below shows how the impairment test in Education would be impacted (with all other variables being equal) by an increase in discount rate of 0.5% or a decrease of 0.5% in the long-term growth rate. he impact of all of the scenarios together has also been considered and is disclosed in the final column.

Pre-tax discount rates

0.5% increase in WACC

( m)

Long-term growth rate

decrease by 0.5% ( m)

Combined sensitivity

( m)

Increase in impairment

using combined sensitivity scenario

( m)

Education 11.07% (1.0) (0.7) (0.5) (0.5)

he pre-tax discount rate used for managements best estimate of the Education CGU in 2017 was 11.31%. Management continue to monitor closely the performance of all CGUs and consider the impact of any changes to the key assumptions.

he Healthcare CGU is not impaired but if the discount rate increased by 0.5% and long-term growth decreased by 0.5% there would be an impairment.

In conclusion, other than disclosed above with regard to the CGU impaired in the year, management believes there is no reasonably possible change in the underlying assumptions that would result in a further significant impairment charge in the consolidated income statement.


ther intangi le assets

Softwarem

Brand valuesm

Clientrelationships

motal

m

et carr ing alue ece er 10.1 . 34.6 133.6

ost ece er 1 .6 . 55.5 163.0Additions .1 – – .1Disposals (3. ) – – (3. )Foreign exchange (0.5) (1.4) (1.4) (3.3)

ost ece er 22.3 7.5 54.1 163.

Accu ulated a ortisation ece er .5 – 20. 2 .4Charge for the period 3.5 – 3. 7.3Disposals (3. ) – – (3. )Foreign exchange (0.4) – (0.2) (0.6)

Accu ulated a ortisation ece er 7.7 – 24.5 32.2

et carr ing alue ece er 14.6 7.5 2 .6 131.7

ost ece er 22.3 87.5Additions – –Disposals – –Foreign exchange 0.2 1.0 2.1

ost anuar 55.1 172.1

Accu ulated a ortisation ece er 7.7 – 32.2Charge for the period 0.5 3.7Disposals – –Foreign exchange 0.2 – 0.3 0.5

Accu ulated a ortisation anuar 12.0 0.5 28.5

et carr ing alue anuar 131.1

Included in software additions for the 53 weeks ended 4 anuary 201 are internally generated software development costs of 2.7m (2017: 2.1m) which have been capitalised at cost. hese costs have been assessed as having a finite life of between three and five years (2017: three and five years) and are amortised, from the date the software is available for use, on a straight-line basis over this period. As at the end of the period, assets with a cost of 2.3m (2017: 1. m) are not being amortised as they are not yet ready for use.

Client relationships have resulted from business combinations and have been assessed as having a finite life of ten years. hey are amortised, from the date of acquisition, on a straight-line basis over this year.

Following a review of the expected useful lives of the brand values which resulted from business combinations, we have amended the assumption such that brand values are now assessed as having a finite life remaining of between 3 and 20 years.

hese assets are all reviewed for impairment when there are changes in events or situations that indicate the carrying value may not be recoverable. Details of the sensitivities over such impairment reviews are included in note 12.


Page 74



inancial assets anuar

£m

2 December 2017

m

inancial assets non currentMarketable investments designated at fair value through the income statement 1.0 0.

ther financial assets loans and recei a les non currentDeposits with non-financial institutions 0.5

otal 1.4

Financial assets include:• he marketable investments at fair value through the income statement represent investments held in trust on behalf of

certain US employees (see note 2(P)). he plan allows certain key employees to defer receipt of a portion of their compensation. hese deferred compensation liabilities are funded by making contributions into a trust. he employees’ entitlements are limited to the market value of the fund. Investments in the trust comprise shares in US mutual funds. At 4 anuary 201 , these investments have been ad usted to the market value of 1.0m (2017: 0. m). his movement is matched by an equivalent movement in other payables as disclosed in note 17 and

• Deposits with non-financial institutions represent amounts held by suppliers, clients and landlords as security for provision of facilities and services.

Information on fair values and credit risks are given in notes 30 and 31.

rade and other recei a les anuar

£m

2 December 2017

m

rade receivables (note 2( )) 554.6Other receivables .7Prepayments 8.0 5.4Accrued income 11 .5

otal 6 7.2

• rade receivables also include gross receivables of 230.7m (2017: 311.4m) under master-vendor agency arrangements in the UK and US where the Group only recognises the management fee element of the receivable as revenue – note 2(R) and

• he above trade and other receivables fall into the ‘loans and receivables’ category of the Group’s financial assets. Information on fair values and credit risks are given in notes 30 and 31.

• As at 4 anuary 201 , trade receivables at a nominal value of 3.2m (2017: 2.2m) were impaired and fully provided for. he principal factor considered in calculating the impairment is the ageing of the receivable balance and

• Included within the impaired receivables is 0.5m (2017: 0.5m) relating to the credit risk policy.

he ageing of these impaired receivables is as follows: anuar

£m

2 December 2017

m

Impaired: 60 days (0.4)

60–120 days (1.0)120 days (0. )

otal (2.2)


rade and other recei a les continuedMovements in the provision for impairment of trade receivables were as follows:

anuar

£m

2 December 2017

m

Balance at beginning of period 2.2 2.0Charged for the period 1.0 0.2

alance at end of period 3.2 2.2

he creation and release of provisions for impaired trade receivables have been included in ‘administrative expenses’ in the income statement. Amounts are generally written o to the provision account where there is no expectation of recovery.

he ageing analysis of trade receivables that were past due but unimpaired is as follows: anuar

£m

2 December 2017

m

Past due but not impaired: 60 days 35.

60–120 days 5.3120 days 10.4

otal 51.6

he other classes within ‘trade and other receivables’ do not contain impaired assets.

Included in the Group’s receivables are the following balances denominated in foreign currency: anuar

£m

2 December 2017

m

rade receivables 347.7Other receivables 3.0 2.Prepayments 2.1 1.0Accrued income 75.

otal 305.5 427.4

ash and cash e ui alentsFor the purpose of the consolidated cash flow statement cash and cash equivalents comprise the following:

anuar

£m

2 December 2017

m

Cash 77.2 100.3

Information on fair values, credit risks and interest rates are given in notes 30 and 31.

rade and other pa a les

Current liability

anuar

£m

2 December 2017

m

rade payables 42 .Other tax and social security costs 56.1Accruals 51.7 4.0Deferred income 0.5 0.2Other payables 65.3

otal 508.3 635.5

rade payables include 312.1m (2017: 400.3m) of amounts payable under master-vendor arrangements in the UK and US, which are related to certain of the trade receivables – note 15. Arrangements are such that the payable amount is not due by the Group until a few days after receipt of the receivable.


Page 76



rade and other pa a les continuedIncluded in other payables and accruals are:• 1.0m (2017: 0. m) in respect of liabilities accruing to certain US employees in respect of a deferred compensation plan.

hese amounts are payable to members of the plan on retirement (note 14) • 1. m (2017: 1.0m) for contributions due to be made to defined contribution pension schemes on behalf of certain

employees of the Group • 0.3m (2017: 0.5m) for contributions due to be made to defined benefit pension schemes on behalf of certain employees

of the Group (see note 24) and• 1.2m (2017: 5.1m) represents contingent consideration payable to the vendors of Global Group (UK) Limited

(2017: Global Group (UK) Limited).

erms and conditions of the above financial liabilities:• rade payables are non-interest-bearing and are normally settled within one month from the end of the month of invoice • Other tax and social security costs are non-interest-bearing and are normally settled within one to three months and • Other payables and accruals are non-interest-bearing and have an average term of three months.

Non-current liability

anuar

£m

2 December 2017

m

Other payables 0.

otal 0.

• Included in other payables is nil (2017: 0. m) representing contingent consideration payable to the vendors of Global Group (UK) Limited (2017: Global Group (UK) Limited) and

• Included in other payables is 1.6m (2017: nil) representing monies held on deposit from a client relating to a sub-let property.

Information on fair values and credit risks are given in notes 30 and 31.

Short ter orro ings anuar

£m

2 December 2017

m

Financial liabilities measured at amortised cost:Revolving credit borrowings – secured 25.0 73.2Hire purchase – secured due in less than one period 0.1 –

otal 25.1 73.2

Information on fair values, credit risks, interest rates and security are given in notes 30 and 31.

ong ter orro ings anuar

£m

2 December 2017

m

Financial liabilities measured at amortised cost:Revolving credit borrowings – secured 123.5 103.0Hire purchase – secured 0.3 –

otal 123.8 103.0

Information on fair values, credit risks, interest rates and security are given in notes 30 and 31.


20. Provisions

Property£m

Workers’co pensation

£megal

£motal

£m

Current – 2 December 2017 0.5 – 1.1Non-current – 2 December 2017 0.7 – 1.1

At ece er 1.3 – 2.2

Charged to income in the period 0.2 – 2.8 3.0Utilised during the period –Foreign exchange – 0.1 – 0.1

At anuar 1.3 0.2 2.8

Current – 4 anuary 201 0.7 0.2 –Non-current – 4 anuary 201 – 2.8

otal 1.3 0.2 2.8

PropertyWhen a property ceases to be used for the purposes of the business, provision is made to the extent that the recoverable amount of the interest in the property is expected to be insufficient to cover the future obligations relating to the lease.

A provision is made in respect of the expected holding costs to the estimated disposal dates on vacant properties under leases with a weighted average period until settlement of three years (2017: three years). Provision is also made for expected dilapidations and provisions are accrued evenly over the last five years of the lease.

Workers’ compensationhe US operations maintain, or maintained, insurance policies with significant excesses, below which claims are borne by the

operations. Provision is made for estimated costs of claims or losses arising from past events.

he level of provision made is based upon independent actuarial estimates. hese estimates take into account the ultimate cost, less amounts paid to date, in respect of accidents occurring between the inception of the policy and the end of the current period, the period covered by these self-insurance arrangements. An allowance is made for claims incurred but not reported in line with standard actuarial practice.

Claims are expected to be settled between one and five years.

Legalhe Group holds a provision for expected legal and contractual costs that are probable to cause an outflow of resources over

an extended period. Management exercises udgement to determine the amount of this provision on a case-by-case basis. Provision is made for known issues based on past experience of similar items and other known factors. Each provision is considered separately and the amount provided reflects the best estimate of the most likely amount, being the single most likely amount in a range of possible outcomes. Owing to the inherent uncertainty within many legal proceedings, the amount and timings of such outflow could di er significantly from the amount and ageing provided.


Page 7



eferred ta ation anuar

£m

2 December 2017

m

on current deferred ta assetsotal deferred tax asset – UK 1.4otal deferred tax asset – overseas 13.7 11.

otal deferred ta asset 15.3 13.2

anuar

£m

2 December 2017

m

eferred ta lia ilitiesNon-current 22.8 22.2

otal deferred ta lia ilities 22.8 22.2

Deferred tax liabilities primarily relate to fair value ad ustments on acquisitions.

Property, plantand equipment

mIntangible assets

mProvisions

m

ax value of losscarry-forwards

m

otal deferredtaxation

m

At ece er 1.4 (27. ) 2.4 15.4 ( .7)Recognised in income (0.6) 4. 0. (4. ) 0.3Foreign exchange 0.1 0. (0.3) (1.3) (0.6)

At ece er 0. (22.2) 3.0 .3 ( .0)

Deferred tax assets – 2 December 2017 0. – 3.0 .3 13.2Deferred tax liabilities – 2 December 2017 – (22.2) – – (22.2)

0. (22.2) 3.0 .3 ( .0)

At ece er 3.0Recognised in income 0.2 1.1Foreign exchange – 0.2 0.5

At anuar 1.1

Deferred tax assets – 4 anuary 201 1.1 0.3 5.0 15.3Deferred tax liabilities – 4 anuary 201 – –

1.1

he Group has gross deductible temporary di erences relating to provisions and deferred capital allowances of 17. m (2017: 12. m). Deferred tax assets of 6.4m (2017: 3. m) have been recognised in respect of these temporary di erences, leaving 0.5m (2017: 1.0m) as unrecognised di erences. hey have no expiry date.

he Group has gross tax losses that arose in the UK of 33.0m (2017: 33.0m) and tax losses that arose outside the UK (mostly in the US) of 60.0m (2017: 64. m) that are available for o set against future taxable profits of the right type arising in the companies in which the losses arose. he reduction in tax losses in the US at the end of the current period compared to the previous period is due to the utilisation of these losses against taxable profits in the current period. here is no expiry date on the UK losses but the US losses expire between 202 and 2033. he Group has performed sensitivity analysis on the utilisation of US losses looking at forecasts of profitability and these show that the tax losses will be fully utilised within three to four years, well in advance of their expiry. All losses are sub ect to legislation restricting the right to o set them. Deferred tax assets of . m (2017: .3m) have been recognised as they relate to companies that are trading profitably or can expect to have taxable profits in the foreseeable future. Deferred tax assets have not been recognised in respect of UK losses of 33.0m (2017: 33.0m) and outside the UK of 20. m (2017: 27. m) as they may not be used to o set taxable profits elsewhere in the Group and they have either arisen in subsidiaries where future use is uncertain, or are capital losses for which there is limited scope for future o set.


ssued share capitalNumber of

issued sharesMillions

Issuedshare capital

m

Share premiumaccount

m

otalshare capital

m

ece er 50.3 0.5 30.1 30.6Shares repurchased – – – –

ece er 50.3 0.5 30.1 30.6

ece er 50.3 0.5 30.1Shares repurchased – – –

anuar 0.5 30.1

In 201 , 5 4,356 Ordinary shares of 1p each (2017: 13,500), representing 1.2% (2017: 0.0%) of the opening number of issued shares, were repurchased in the market for consideration of 3.5m (2017: 0.1m), and cancelled.

Impellam roup plche Company has no limit to its authorised share capital. he above number represents the number of allotted, fully paid

shares of 1p in issue.

Share ased co pensation e plo ee share incenti e plans Share option schemeIn September 2015, the Company granted share awards to certain senior executives. hese options will vest on the measurement date which has been defined as the date of publication of the preliminary announcement of the audited financial results for the 52 weeks ended 2 December 2017. esting criteria are based on the growth in share price from either

.00 or .50 with 100% of shares vesting at 11.00 or 12.00 respectively.

he charge recognised for the period is 0.4m (2017: 0.7m).

At the end of the period options under the schemes were outstanding as follows:

Date of grant Exercise periodExercise price

Pence

anuar

u erof shares

2 December 2017

Numberof shares

2015 1 months from measurement date nil – 50,000

otal – 50,000

he following table illustrates the number and weighted average exercise prices of share options outstanding at the end of each period.

anuar 2 December 2017

Averagee ercise price

PenceOptions

housands

Averageexercise price

PenceOptions

housands

utstanding at eginning of period nil 850 nil 50Lapsed nil – –

utstanding at end of period – 50

ercisa le at end of period – –

he weighted average remaining contractual life for outstanding options at 4 anuary 201 was nil years (2017: 0.2 years).


Page 0



Share ased co pensation e plo ee share incenti e plans continuedhe fair value of employee share options is measured using a simulation model. Measurements inputs and assumptions

are as follows:ranche 1


Fair value at grant date 2. 2Weighted average share price 7. 6Exercise price nil nilExpected volatility (expressed as percentage used in the modelling) 21. 7Option life (expressed as weighted average life in years used in the modelling) 2.51 2.51Dividend yield (%) 2.06Risk-free interest rate (based on national government bonds) (%) 0.78 0.7

he expected volatility is wholly based on the historic volatility (calculated based on the weighted average remaining life of the share options), as there is no evidence to suggest that the expected future share performance will di er from that of the past.

plo ee enefitsA limited number of employees are members of the Carlisle Cleaning Services Shared Cost Section of the Railway Pension Scheme ( RPS ). he RPS provides benefits based on the final salary for members of the scheme.

Contributions payable to the pension scheme at the end of the year are nil (2017: nil). he expected contributions to the plan for the next reporting period are 0.4m to both clear the current deficit and to give the scheme a small surplus.

anuar

£m

2 December 2017

m

otal defined benefit asset 2.2 2.1otal defined benefit liability (2.6)

et lia ilit for defined enefit o ligations see follo ing ta le (0.5)

Movements in net defined benefit liability

Defined benefit obligation Fair value of plan assets Net defined benefit liability

anuar

£m

2 December 2017

m

anuar

£m

2 December 2017

m

anuar

£m

2 December 2017

m

alance at start of period included in profit or loss

(2. ) 2.1 2.2 (0.6)

Interest income (cost) – 0.1 – – –

– 0.1 – – –ncluded in

Remeasurements gain:Actuarial gain arising from:

– Experience ad ustment 0.1 – – – 0.1 –

0.1 – – – 0.1 –OtherContributions paid by the employer – – 0.1 0.1 0.1 0.1Benefits paid 0.1 0.2 (0.2) – –

alance at end of period (2.6) 2.2 2.1 (0.5)


plo ee enefits continuedPlan assets

anuar

£m

2 December 2017

m

Government bonds 1.3Equity instruments 0.

otal 2.2 2.1

All equity securities and government bonds have quoted prices in active markets. All government bonds are issued by European governments and are AAA- or AA-rated. All other plan assets are not quoted in an active market.

Actuarial assumptionshe following are the principal actuarial assumptions at the reporting date (expressed as weighted averages):


Period-end discount rate 2.8% 2.5% Future salary increases 2.3%Future pension increases 2.3%

he assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. he assumptions are equivalent to expecting a 65-year-old to live for a number of years as follows: Current pensioner aged 65 (male): 5.2 years (2017: 5.2 years) Future retiree upon reaching 65 (male): 7.2 years (2017: 7.2 years).

Sensitivity analysishe calculation of the defined benefit obligation is sensitive to the assumptions set out above. he following table summarises

how the impact on the defined benefit obligation at the end of the reporting period would have increased (decreased) as a result of a change in the respective assumptions.

anuar

£m

2 December 2017

m

Increase discount rate by 0.5% (0.2)Increase life expectancy by 1 year 0.1 0.1Increase inflation by 0.5% 0.2 0.2

he above sensitivities are based on the average duration of the benefit obligation determined at the date of the last full actuarial valuation at 31 December 2016 and are applied to ad ust the defined benefit obligation at the end of the reporting period for the assumptions concerned. Whilst the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation to the sensitivity of the assumptions shown.

Fundinghe RPS scheme is funded by one of the Group’s subsidiaries. he funding requirements are based on the pension fund’s

actuarial measurement framework set out in the funding policies of the plan. he funding of the plan is based on an actuarial valuation for funding purposes for which the assumptions may di er from the assumptions above.

he Group expects to pay 0.4m in contributions to its defined benefit plans in the next annual reporting period.


Page 2



25. Other reserves

Mergerreserve

m

Otherreserve

m

Foreign currencytranslation

reservem

otal otherreserves

m

ece er 1 .0 3.6 15.4 12 .0Share-based payment (note 23) – 0.7 – 0.7Currency translation di erences – – (7. ) (7. )

ece er 1 .0 4.3 7.6 120.

ece er Share-based payment (note 23) – –Currency translation di erences – – 5.8 5.8

ransfer to retained earnings – –

anuar

Merger reservehe merger reserve arises under Section 612 of the Companies Act 2006 as a result of the acquisition of Bartech Holding

Corporation and Lorien Limited using the issue of shares as part consideration. he excess of fair value over nominal value of shares is transferred to a merger reserve rather than share premium. his reserve is not distributable.

Other reservehe other reserve comprises 2.2m contributed surplus arising on a historical demerger transaction (2017: 2.2m). his reserve is not distributable. It also contains a charge of 0.4m (2017: 0.7m) arising from share-based payment arising

within the period. All share options lapsed during the year, so the balance of 2.5m on the share-based payment element of the reserve was transferred to retained earnings. he balance on the share-based payment element of the reserve at the end of the period is nil (2017: 2.1m).

Foreign currency translation reservehe foreign currency translation reserve is used to record exchange di erences arising from the translation of the financial

statements of foreign subsidiaries.

on controlling interesthe following table summarises the information relating to each of the Group’s subsidiaries that has material non-controlling

interest ( NCI ), before any intra-Group eliminations.

anuar

ndi iduall i aterial

su sidiaries£m

otal£m

et assets attri uta le to – –

Profit allocated to NCI 0.1 0.1Other comprehensive income allocated to NCI

ece er

Individually immaterial

subsidiariesm

otalm

et assets attri uta le to 0.1 0.1

Profit allocated to NCI 0.2 0.2Other comprehensive income allocated to NCI (0.1) (0.1)

he individually immaterial subsidiaries include the share of results for Barpellam Inc, Bartech Belgium N and ounifi Limited which are not wholly owned by the Group (note 2 ).

Page_83


o it ents and contingenciesperating lease commitments – roup as lessee

he Group has entered into commercial leases for short leasehold premises, office machinery, computer equipment and motor vehicles. Due to the nature of the business, where the location of office premises needs to change on a frequent basis, and the short-lived nature of office equipment, computers and motor vehicles, the Group has decided that it is not in its best interest to purchase these assets.

Office premises are held under non-cancellable operating leases with lives ranging from 1 to 13 years (2017: 1 to 13 years). he leases have various terms, escalation clauses and renewal rights.

Non-cancellable operating leases for other assets have an average life of between one and three years (2017: one and three years) with no renewal terms included in the contracts.

he future aggregate minimum lease payments under non-cancellable operating leases are as follows:

anuar

£m

2 December 2017

m

Within one year 10.5After one year but not more than five years 23.5 27.More than five years 10.2 15.6

otal 54.0

perating lease commitments – roup as lessorIf a property becomes vacant and ceases to be used for the purposes of the business, then the Group will seek an exit route from the property or seek to sub-let the property to a new tenant.

he future aggregate minimum sub-lease receipts expected to be received under non-cancellable sub-leases are less than 0.1m.

apital commitmentsAt 4 anuary 201 , the Group had commitments of nil (2017: 0.4m) relating to computer equipment.


Page 4



elated part disclosureshe consolidated financial statements include those of the holding Company, Impellam Group plc, and all of its subsidiaries. All

subsidiaries have the same period end as the Group and are wholly owned at the period-end unless otherwise specified.

00 he Boulevard – Blue Arrow Financial Services LimitedCapability Green – Blue Arrow Holdings LimitedLuton – Blue Arrow LimitedLU1 3BA – BMS LimitedUnited Kingdom – Carbon60 Limited

– Career eachers Limited– Carlisle Cleaning Services Holdings Limited– Carlisle Cleaning Services Limited– Carlisle Events Services Limited– Carlisle Group Limited– Carlisle Interior Services Limited– Carlisle Nominees Limited– Carlisle Retail Services (Luton) plc– Carlisle Security Services Limited– Carlisle Staffing plc– Carlisle Staffing Services Holdings Limited– Carlisle Staffing Services Limited– Carlisle Support Services Group Limited– Celsian Group Limited– Chadwick Nott (Holdings) Limited– Chrysalis Community Care Group Limited a

– Comensura Limited b

– Doctors On Call Limited– Global Group (UK) Limited– Global Medics Limited– Guidant Global-Europe Limited (formerly Bartech-Europe Limited)– Impellam Holdings Limited– Impellam UK Limited– Laybridge Limited– Litmus Managed Solutions Limited– Lorien Limited– Lorien Resourcing Limited– Medacs Global Group Limited– Medacs Healthcare Australasia Group Limited– Medacs Healthcare plc– Ohsea Holdings Limited– One rue Limited– PRN Recruitment Limited– Science Recruitment Group Limited– ounifi Limited ( 0% owned)

Level 2, – Allied Employment Group Pty Limited c

14 Martin Place – Carbon60 Pty Limited c

Sydney – Comensura Pty Limited c

NSW 2000 – Global Medics Pty Limited c

Australia – Litmus Solutions Pty Ltd c

– Medacs Healthcare (Pty) Limited c

– Medacs Healthcare Australia Pty Limited c

Straatsburgdok-Noordkaai 3 – Bartech Belgium N (i) (73% owned)2030 Antwerp, Belgium

PO Box 71, Road own – Sabertooth Services Limitedortola G1110

British irgin Islands

Page_85


250 Howe Street, – Bartech echnical Services of Canada Limited d

20th Floor ancouver – Canada Corporate Employment Resources ULC d

BC 6C 3R – Global Medical Recruitment Consultancy Inc. d

Canada – Guidant Group Canada ULC d

Anna-Schneider-Steig 22, – Guidant Global Germany GmbH (formerly Bartech Germany GmbH) d

5067 Cologne, Germany

Beethovenplat 2 – Impellam GmbH d (formerly Carbon60 GmbH)0336 M nchen, Germany

57 63 Line Wall Road, Gibraltar – Kenard Investments Limited

11 Ely Place, Dublin 2, Ireland – Carlisle Security (Holdings) Limited f

– Carlisle Security Limited f

– Carlisle Staffing Services Ireland Limited f

– Irish Recruitment Consultants Limited f

– Litmus Software Solutions Ireland Limited i

Unit , Adelphi House, – Medacs Global Group Limited i

Upper Georges St,Dun Laoghaire, Dublin, Ireland

ia Filippo urati 2 – Guidant Global Italy SRL (formerly Bartech Italy SRL) i

20121 Milan, Italy

Rio iber 40 102 – Bartech Mexico S, de RL de C d

Col Cuauhtemoc 06500Cuauhtemoc, Distrito Federal, Mexico

Level 6, 3 Ferncroft Street – Global Medics N Limited g

Graft, Auckland 1010 – Healthlink New ealand Group Limited g

New ealand – Medacs Healthcare Limited g

Oriental Center, Suite P1 – Guidant Global Puerto Rico Inc (formerly Bartech Puerto Rico Inc) d

254 Mu o U o Rivera Avenue San uan,PR 00 1 Puerto Rico

133 New Bridge Road, – Guidant Global SG Pte Ltd (formerly Bartech Singapore P E Ltd) h

10-05, Chinatown Point, – Latitudes Group International Management Pte Limited h

Singapore 05 413

Paseo de la Castellana, – Carlisle Cleaning Services Spain SL i

25 C Madrid, Spain

Martin-Disteli-Strasse – Carbon60 AG e

4600 Olten, Swit erland – Science Recruitment Group AG e

2711 Centerville Road Suite 400 – Barpellam Inc (4 % owned) d

Wilmington – CER Canada Holding Inc. d

Delaware 1 0 – Coresta Support Services Inc. d

USA – Corporate Employment Resources Inc. d

– Corporate Services Group Holdings Inc d

– Guidant Global Canada Holding Inc. (formerly Guidant Canada Holding Inc.) d

– Guidant Global Holding Corporation d (formerly Bartech Holding Corporation)– Guidant Global Inc. d (formerly he Bartech Group Inc)– Guidant Group Inc. d

171 N Laural Park Drive – Bartech Mexico Holding LLC d

Suite 224 Livonia – Bartech echnical Services LLC d

Michigan 4 152 USA

Companies marked with a above are exempt from the Companies Act 2006 requirements relating to the audit of their individual accounts by virtue of Section 4 0 of the Act relating to dormant companies.

elated part disclosures continued


Page 6



elated part disclosures continuedAll subsidiaries are indirect holdings of the Company other than Carlisle Support Services Group Ltd, Impellam Holdings Ltd, Impellam UK Ltd and the Medacs Global Group Ltd which has its registered office in the UK.

Shares for all companies are classed as Ordinary and a nominal value of 1 per share except as disclosed below:(a) Deferred shares of 1 and Ordinary shares of US 1 (b) ‘A’ Ordinary shares of 1 (c) Ordinary shares of A 1 (d) Common stock with no par value (e) Ordinary shares of 1000 CHF (f) Ordinary shares of 1.27 (g) Ordinary shares of N 1 (h) Ordinary shares of SG 1 (i) Ordinary shares of 1

he Group owns 4 % of the issued stock of Barpellam Inc but exercises control of the company in accordance with the definitions of power and exposure to variability in returns required under IFRS 10 Consolidated Financial Statements.

he subsidiary undertakings listed below are exempt from the Companies Act 2006 requirements relating to the audit of their individual accounts by virtue of Section 47 A of the Act as this Company has guaranteed the subsidiary company under Section 47 C of the Act:

Ownership

Registered number

Class ofshares held


Guidant Global-Europe Limited 07130 56 Ordinary 100% 100%Medacs Healthcare Australasia Group Limited 03120 1 Ordinary 100% 100%One rue Limited 011 Ordinary 100% 100%

ompensation of key management personnel of the rouphe Directors have considered the levels of responsibility delegated to senior management of the Group and have concluded

that, in addition to the Directors themselves, disclosure should include the Senior Leadership eam which comprises the Company Secretary, the Chief Executives of Medacs Global Group, Lorien, Guidant Group, Impellam North America Specialist businesses, Impellam North America Managed businesses, Blue Arrow and Comensura as well as the Chief Commercial Officer, the Chief Information Officer and the Group Marketing Director.

anuar

£m

2 December 2017

m

Short-term employment benefits 3.7Post-employment benefits 0.2 0.2Share-based payment expense (note 23) 0.7

otal 5.2 4.6

Angela Entwistle is also a Director of a company called Deacon Street Partners Limited (formerly Anne Street Partners Limited). he Group pays Deacon Street Partners Limited for its provision of Angela Entwistle’s services as a Non-Executive Director – 40,000 (2017: 47,000). he Group owed ,000 to Deacon Street Partners Limited at the end of the period (2017:

4,000). Also, a company within the Impellam Group provides a payroll bureau service to Deacon Street Partners Limited for which no charge is made. During the year, the company paid a total of nil in relation to consultancy fees and for his services as a Director (2017: 12,000) to Nomad Advisory Services Ltd, a company controlled by Michael Ettling. At the end of the period,

nil (2017: nil) was outstanding.


he Group also considers Anne Street Partners Holdings Pty Limited as a related party as Lord Ashcroft has a controlling shareholding. During the year, a Group company sub-let a portion of a property leased by Anne Street Partners Holdings Pty Limited and reimbursed for their proportional share of occupancy costs. In 201 , the total amount reimbursed was A 251,000 141,000 (2017: A 255,000 152,000). At the end of the year, there were no amounts outstanding. During the year the Group company took over this lease for no payment and now sub-lets a proportional share of the costs to Anne Street Holdings Pty Limited. In 201 , the total amount charged was A 176,000 ,000 (2017: nil). At the end of the year, there were no amounts outstanding. As part of the agreement, the Group has received a rental deposit of A 43 ,000 245,000 which is still outstanding (2017: provided a rental deposit of A 14 ,000 6,000).

Lord Ashcroft, Impellam’s Chairman, is the founder and Chair of Crimestoppers rust. During the year, the Group made a donation of 20,000 to Crimestoppers (2017: 30,000). At the end of the year, there were no amounts outstanding.

In 2016, a company within the Group advanced a loan of 1,300,000 to David Barfield, a Director of various Group companies. his loan is due for repayment on or before 25 anuary 2021 and 1,370,000 was outstanding at the period-end (2017: 1,347,000). Interest accrues at a rate of 1. 1% per annum and during the period 23,000 (2017: 24,000) interest had been

accrued. David Barfield is also a significant shareholder in Bartech Acquisition Corporation LLC to whom the Group provides accounting and management services at an arm’s length rate. During the period, the Group charged Bartech Acquisition Corporation LLC 200,000 (2017: 1 5,000). At the end of the period, Bartech Acquisition Corporation LLC owed the Group

551,000 (2017: 515,000). Bartech Acquisition Corporation LLC is a shareholder in echCentral LLC and the Group provides accounting and programme management services at an arm’s length rate to echCentral LLC. During the period, the Group charged echCentral 3,000 (2017: 14,000) for these services. At the end of the period, echCentral LLC owed the Group

162,000 (2017: 1,000).

et de t

2 December 2017

mCash flow

mInterest paid

m

Interest expense

m

Decrease in short term

borrowingsm

Foreignexchange

m

anuar

£m

Cash and short-term deposits (note 16) 100.3 6.7 (0.3) 0.3 (27.6) (2.2) 77.2Revolving credit (note 1 and 1 ) (176.2) – (6.5) 6.5 27.6 0.1Hire purchase (note 1 and 1 ) – (0.4) – – – –

et de t (75. ) 6.3 (6. ) 6. – (2.1)

elated part disclosures continued


Page_88



inancial ris anage ent o jecti es and policieshe Group’s principal financial liabilities comprise: bank overdrafts, revolving credit facilities, operating leases and trade

payables. Overdrafts and revolving credit facilities are used to satisfy short-term cash flow requirements. he main purpose of these financial liabilities is to raise finance for the Group’s trading operations. he Group also has various financial assets such as investments, trade receivables, cash and short-term deposits which arise directly from trading operations.

he main risks arising from the Group’s financial instruments are set out below. he Board reviews and agrees policies for managing each of these risks and these are summarised below.

It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments such as derivatives shall be undertaken. he Group’s policy with regard to interest rate and foreign exchange contracts is to only hedge specific risks with a determinable date that arise from operations or financing.

Interest rate riskNone of the Group’s borrowings are at a fixed rate of interest. All borrowings are sub ect to changes in market interest rates, primarily the Revolving Credit Facility, which is sub ect to floating rates. he floating rate borrowings are not exposed to changes in fair value, however, the Group is exposed to interest rate risk as costs increase if market rates rise or cash flow opportunity as costs decrease if market rates fall.

he Group also earns interest on credit bank balances at a floating rate of interest.

he Group’s policy is to manage its interest rate cost by the use of variable rate debts while rates are low.

Interest rate risk tablehe following table demonstrates the sensitivity to a reasonably (based upon market expectations for the next 12 months)

possible change to interest rates, with all other variables held constant, of the Group’s profit before tax (through the impact of floating rate borrowings).

Increase(decrease) inbasis points

E ect on profitbefore tax

m

E ecton equity

m

anuar Pound Sterling +50

-25 0.5

US Dollar +50 – –-25 – –

ece er Pound Sterling 50 (1.0) (0. )

-25 0.5 0.4

US Dollar 50 – –-25 – –

Liquidity riskhe Group’s funding strategy is to maintain funding flexibility through the use of cash, deposits, revolving credit facilities,

overdrafts, and leasing contracts. he Group aims to ensure that it has committed borrowing facilities in place in excess of its peak forecast borrowings for at least the next 12 months. Short-term flexibility is achieved by the use of deposits and revolving credit facilities.

Under the Group’s revolving credit facilities, 250m was available for drawdown (2017: 250m). he amount not utilised at 4 anuary 201 was 101.5m (2017: 73. m). here are no restrictions to the free transfer of funds between fully owned subsidiaries. he facility is committed until at least November 2020 and covers all territories the Group operates in. he revolving credit facility includes financial covenants linked to the Group’s debtor cover, leverage cover and interest cover using ad usted EBI DA (before separately disclosed items and share-based payment) – note 3. At 4 anuary 201 , and throughout the period, the Group was in compliance with its financial covenants and expects to continue to be so. In March 201 the Group amended this facility. he new facility is for 240m with an accordion element for an additional 50m and is for a three-year period with an option to extend by a further two years.

Page


inancial ris anage ent o jecti es and policies continuedhe table below summarises the maturity profile of the Group’s financial liabilities at 4 anuary 201 and 2 December 2017

based on contractual undiscounted payments.

anuar On

de and£m

ess than3 months

£m

3 to 12months

£m

1 to 5years

£motal

£m

Revolving credit facilities (note 1 and 1 ) – 1.5 23.5 123.5rade and other payables (note 17) –

Finance lease liabilities (note 1 and 1 ) – – 0.1 0.3

otal –

ece er On

demandm

Less than3 months

m

3 to 12months

m

1 to 5years

motal

m

Revolving credit facilities (note 1 and 1 ) – 0. 72.4 103.0 176.2rade and other payables (note 17) – 55 . 1 .5 0. 5 0.3

Finance lease liabilities (note 1 and 1 ) – – – – –

otal – 560.7 1. 103. 756.5

Credit riskhe risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in relation to transactions

where the Group provides services on deferred terms (note 15).

Group policies are aimed at minimising such losses. It is the Group’s policy that all clients who wish to trade on credit terms are sub ect to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is kept to a minimum. he maximum exposure is the carrying amount as disclosed in note 15.

In February 2017, the Group purchased a credit risk policy. he policy covers all clients except public sector, local government and pay when paid contracts. here is a 500,000 aggregate first loss and maximum policy liability of 44.5m. his policy has been renewed as of 1 February 201 on the same terms but with minor ad ustments to individual client coverage.

With respect to credit risk from other financial assets of the Group, which comprise cash and cash equivalents and investments, the Group’s exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these assets. hese risks are minimised by restricting deposits and investments to those available from well-established reputable, financial institutions.

At 4 anuary 201 , the maximum exposure to credit risk for trade and other receivables by geographic region was as follows.

anuar

£m

2 December 2017

m

UK 2 0.4North America 367.7Europe 13.2 12.6Asia Pacific 18.3 16.5

otal 6 7.2

Foreign currency riskhe Group has a significant investment in its operations in North America with some smaller interests in Europe and

Australasia. he Group’s consolidated balance sheet can be a ected significantly by the movements in the US Dollar and Euro exchange rates, however, movements in Australian Dollar, Canadian Dollar, Swiss Franc, New ealand Dollar or Singapore Dollar exchange rates have only a marginal impact on the Group’s results and balance sheet.

he Group does not hedge against the impact of exchange rate movements on the translation of foreign currency denominated profits. ransactional currency exposures across the Group are minimal.


Page 0



inancial ris anage ent o jecti es and policies continuedhe following table demonstrates the sensitivity to a reasonably possible change in the exchange rates:

US Dollars

% change in rate

Decrease(increase) in profit

before tax m

E ect on equity m

anuar +10-10 1.3

2 December 2017 25 2.6 3.-10 (1.4) (2.2)

Euros

% change in rate

Decrease(increase) in profit

before tax m

E ect on equity m

anuar +10 0.3 –-10 –

2 December 2017 10 0.3 (0.1)-10 (0.3) (0.1)

Price riskhe Group has investments in marketable securities and as such is exposed to price risk. hese securities are held in trust on

behalf of certain US employees and the underlying risk is borne by those employees. he Group’s liability is limited to the market value of the securities (note 14).

apital managementCapital consists of the total equity attributable to the equity holders of the Parent Company.

he primary ob ective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern, to ensure that it maintains a good credit rating in order to support its business and maximise shareholder value. No changes were made to the ob ectives, policies or processes during either period.

he Group considers capital less any net cash as components of funding. It monitors funding by reference to its ability to borrow and to satisfy debt covenants. he principal measure is the EBI DA ratio, which is calculated by dividing the funding of the Group by the Group’s ad usted earnings before interest, tax, ad usted depreciation and amortisation.

anuar

£m

2 December 2017

m

Net debt (note 2 ) 71.7 75.Equity per balance sheet 260.3

unding total capital less net cash 336.2

he revolving credit facility included a financial covenant linked to the Group’s leverage. At 4 anuary 201 , and throughout the period, the Group was in compliance with this financial covenant whilst this facility was in place.


inancial instru entsSet out below is a comparison by category of the carrying amounts and fair values of all the Group’s financial instruments that are carried in the consolidated balance sheet.

anuar

Carryingamount

£mair alue

£m

2 December 2017

Carryingamount

mFair value

m

inancial assetsInvestments (note 14) 1.0 1.0 0. 0.Other financial assets (non-current) (note 14) 0.5 0.5

inancial lia ilitiesShort-term borrowings (note 1 and 1 ) 25.1 25.1 73.2 73.2Long-term borrowings (note 1 and 1 ) 123.8 123.8 103.0 103.0

he carrying value of trade receivables less impairment and trade payables are assumed to approximate fair value and are excluded from the above table.

Fair value estimation hierarchy:• Level 1 – uoted prices (unad usted) in active markets for identical assets or liabilities • Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

(that is, as prices) or indirectly (that is derived from prices) and • Level 3 – Inputs for asset or liability that are not based on observable market data (that is, unobservable inputs).

he following table presents the fair value hierarchy of assets and liabilities measured at fair value:

anuar e el

£me el

£me el

£motal

£m

Investments (note 14) 1.0 – – 1.0

ece er Level 1

mLevel 2

mLevel 3

motal

m

Investments (note 14) 0. – – 0.

Level 1Market values, based on published prices, have been used to determine the fair value of the marketable investments included in other financial assets.

Fair value for short-term borrowings are equal to book value as they are repayable on demand and are sub ect to churn over a period of less than three months. Items previously held as Level 3 assets have been reassessed during the year. his has been corrected in the table above without any change in the value of the underlying asset.


Page 2



inancial instru ents continuedInterest rate riskAt 4 anuary 201 and 2 December 2017, none of the Group’s borrowings are at fixed rates of interest.

he following table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest rate risk.

anuar Within 1 year

£m1-2 years

£motal

£m

loating rateCash and short-term deposits (note 16) 77.2 – 77.2Revolving credit facilities (note 1 and 1 )Hire purchase (note 1 and 1 )

ece er Within 1 year

m1-2 years

motal

m

loating rateCash and short-term deposits (note 16) 100.3 – 100.3Revolving credit facilities (note 1 and 1 ) (73.2) (103.0) (176.2)Hire purchase (note 1 and 1 ) – – –

he e ective interest rate on bank balances and other short-term deposits was less than 0.5% (2017: less than 0.5%). US deposit interest rates were less than 0.5% (2017: less than 0.5%).

Bank loans and revolving credit borrowings are secured by a guarantee and debenture with a fixed charge over certain assets of the Company and the subsidiary undertakings concerned plus a floating charge over all other assets of the Company and those subsidiary undertakings, supported by a cross-guarantee given by the Company and the various subsidiary undertakings. Borrowings under these facilities incurred interest (including margin) between 1.45% and 2.40% over LIBOR rate (2017: between 1.45% and 2.40% over LIBOR rate). All interest is charged monthly in arrears (note 30).

Collateral pledgedhe self-insured workers compensation liability described in note 20 is covered by insurers on the basis that collateral is

provided sufficient to cover all potential claims. his collateral takes two forms:• 5.1m – 6.5m (2017: 4.2m – 5.7m) in the form of letters of credit drawn upon the revolving credit facility in the US and • 0.4m – 0.5m (2017: 0.5m – 0.7m) in the form of cash deposits, shown on the balance sheet as non-current other

financial assets (note 14).

Contingent considerationIncluded in other creditors is contingent consideration payable to the vendors of Global Group (UK) Limited (2017: Global Group (UK) Limited).

he following table sets out the carrying amount, by maturity, of the liabilities.

anuar ess than

3 months£m

3-12 months£m

1-5 years£m

otal£m

Current contingent consideration (note 10) – 1.2 – 1.2Non-current contingent consideration (note 10) – – – –

otal – 1.2 – 1.2

ece er Less than 3 months

m3-12 months

m1-5 years

motal

m

Current contingent consideration (note 10) 4.4 0.7 – 5.1Non-current contingent consideration (note 10) – – 0. 0.

otal 4.4 0.7 0. 6.0


i idends53 weeks anuar

£m

52 weeks2 December

2017m

Prior year final paid: 13.5p (2017: 13.5p) 6.Interim paid: 0p (2017: 7.0p) – 3.5

Paid in period 10.3

On 26 uly 201 the Board announced that the Group will not pay an interim dividend for the financial year 201 , instead it will undertake a share buyback programme commencing in 3 201 up to an aggregate market value of 12m over a period of 12 months. On 20 February 201 the Board announced a dividend in respect of a de-merger transaction amounting to

1.7m to be paid on March 201 to all shareholders on the register at 1 March 201 (see note 33 for details).

Post alance sheet e entsBetween the end of the year and 21 March 201 , a further 541, 1 Ordinary shares of 1p each have been repurchased in the market for total consideration of 3.0m, and have been cancelled.

On 20 February 201 the Group announced the de-merger of its wholly owned subsidiary Carlisle Support Services Group Limited ( Carlisle ). his de-merger was e ected through a dividend in specie by the issue of new Ordinary shares of 0.034 pence each (to 3 decimal places) in the share capital of Carlisle (each, a Carlisle Share ) on the basis of one new Carlisle Share for each Impellam Share owned by an Eligible Shareholder on the Record Date of 1 March 201 and was be paid on March 201 . As a precursor of this transaction, a payment of 0.4m was made to the defined benefit pension scheme (note 24) to both clear the current deficit and to give the scheme a small surplus.


Page_94


Notes

4 January 2019

£m

29 December 2017

£m

Non-current assetsInvestments 3 151.7 151.7

Current assetsOther receivables 4 322.0 415.0Cash at bank and in hand 0.4 0.4

322.4 415.4

Other payables: amounts falling due within one period 5 (208.2) (380.4)

Net current assets 114.2 35.0

Total assets less current liabilities 265.9 186.7

Other payables: amounts falling due in more than one period 6 (123.5) (103.0)

Net assets 142.4 83.7

Capital and reserves

Called-up share capital 8 0.5 0.5Share premium account 8 30.1 30.1Merger reserve 9 19.0 19.0Other reserves 9 – 2.1Retained profit 9 92.8 32.0

Total shareholders’ funds 11 142.4 83.7

The accompanying notes are an integral part of this balance sheet.

The financial statements on pages 94 to 100 were approved by the Board on 21 March 2019 and are signed on their behalf by:

Julia Robertsonhief Executive fficer

Registered number: 06511961

Company balance sheetAs at anuary 201

Page_95


Share capital andpremium

(note 8)£m

Other reserves(note 9)

£mRetained profit

£mTotal reserves

£m

31 December 2016 30.6 20.4 51.0 102.0

Loss for the period – – (8.6) (8.6)Share-based payment charge (note 9) – 0.7 – 0.7Purchase of treasury shares (note 9) – – (0.1) (0.1)Dividends paid (note 10) – – (10.3) (10.3)

29 December 2017 30.6 21.1 32.0 83.7

30 December 2017 30.6 21.1 32.0 83.7Profit for the period – – 68.6 68.6Share-based payment charge (note 9) – 0.4 – 0.4Purchase of treasury shares (note 9) – – (3.5) (3.5)Dividends paid (note 10) – – (6.8) (6.8)Transfer between reserves – (2.5) 2.5 –

4 January 2019 30.6 19.0 92.8 142.4

Statement of changes in equityor the 53 weeks ended anuary 201


Page_96


Su ar of significant accounting policiesA) Basis of accountingImpellam Group plc (‘the Company’) is a company incorporated and registered in England & Wales and domiciled in the UK.

In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of International Financial Reporting Standards as adopted by the EU (‘Adopted IFRSs’), but makes amendments where necessary in order to comply with the Companies Act 2006 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.

Summary of disclosure exemptionsIn these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following disclosures:• Comparative year reconciliations for share capital• A cash flow statement and related notes• Disclosures in respect of transactions with wholly owned subsidiaries • Disclosures in respect of capital management • he e ects of new but not yet e ective IFRSs • Disclosures in respect of the compensation of Key Management Personnel.

As the consolidated financial statements of Impellam Group plc include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:• IFRS 2 ‘Share-based Payment’ in respect of Group-settled share-based payments • Certain disclosures required by IAS 36 ‘Impairment of Assets’ in respect of the impairment of investments • Certain disclosures required by IFRS 3 ‘Business Combinations’ in respect of business combinations undertaken by the

Company in the current and prior years including the comparative year reconciliation for goodwill • Certain disclosures required by IFRS 13 ‘Fair alue Measurement’ and the disclosures required by IFRS 7 ‘Financial

Instruments Disclosures’.

he Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial statements.

he accounting policies set out below have, unless otherwise stated, been applied consistently to all years presented in these financial statements.

A separate profit and loss account or statement of total recognised gains and losses dealing with the results of the Company only has not been presented as permitted under Section 408 of the Companies Act.

hanges in accounting policyNone of the standards, interpretations and amendments e ective for the first time from 1 anuary 201 have had a material e ect on the financial statements.

Accounting policies have been applied consistently.

B) InvestmentsShares in subsidiary companies are held as fixed assets, they are stated at cost less provision for impairment. Impairment reviews are conducted when changes in events or situations indicate that the carrying value may not be recoverable. More details of the impairment methodologies are given in note 12 of the consolidated accounts.

Notes to the Company balance sheetor the 53 weeks ended anuary 201

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Su ar of significant accounting policies continued eferred taxation

Deferred income tax is provided, using the liability method, on temporary di erences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax assets are recognised on an undiscounted basis for all deductible temporary di erences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary di erences and the carry-forward of unused tax credits and unused tax losses can be utilised except:• where the deferred income tax asset relating to the deductible temporary di erence arises from the initial recognition of

an asset or liability in a transaction that is not a business combination and, at the time of the transaction, a ects neither the accounting profit nor taxable profit or loss and

• in respect of deductible temporary di erences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary di erences will reverse in the foreseeable future and taxable profit will be available against which the temporary di erences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognised directly in equity is recognised in equity and not in the income statement.

Deferred tax assets and liabilities are o set if a legally enforceable right exists to set o current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Employee benefitsShort-term benefits – bonus arrangementsThe Company operates a number of annual bonus arrangements for Directors and employees. The cost of these arrangements is recognised in the income statement when the entity has an obligation to make such payments as a result of the achievement of performance targets and when a reliable estimate of this obligation can be made.

Pension obligationshe Company provides pension arrangements for its UK-based Directors and employees through defined contribution

schemes. Contribution costs are expensed to the income statement as they become due.

Share-based compensationThe Group can award share-based payments for employees (including Directors). The cost of these transactions is measured by fair value at the date at which they are granted and is recognised as an employee expense with a corresponding increase in equity. he fair value of these options is determined using an appropriate pricing model taking into account the terms and conditions upon which the options were granted.

2. Operating costs• he amount payable to the Auditor in respect of the audit of the Company is 20,000 (2017: 20,000), all of which is payable

to KPMG LLP. he Company is exempt from providing details of non-audit fees as it prepares consolidated financial statements in which the details are required to be disclosed on a consolidated basis (see note 4 to the consolidated financial statements)

• Details of emoluments for Directors can be found in note 5 of the consolidated financial statements • Monthly average sta numbers (including Directors) for the Company during 201 was 32, eight Directors Company

Secretary, eight managers and 16 administrators (2017: 44, ten Directors Company Secretary, ten managers and 24 administrators)

• The total amount of employee costs charged to the Company’s income statement in the period is £4.6m (2017: £5.9m).


Page_98


3. InvestmentsSubsidiary

undertakings£m

CostAt 2 December 2017 and 4 anuary 201 151.7

Impairment provision –At 2 December 2017 and 4 anuary 201 –

Net carrying valueAt 4 January 2019 151.7

At 29 December 2017 151.7

Details of the principal subsidiary undertakings are given in note 2 of the consolidated financial statements. All of these companies are unlisted.

Subsidiary undertakingshe carrying value of investments were tested against discounted future cash flows during the period using a discount rate of

between 10.55% to 13. 0% (2017: between 10.51% to 10. 6%), which include a country risk premium and a general forecasting risk premium based on latest forecasts of the business growth. he forecasts were based on pre-tax cash flows derived from approved budgets for the 201 financial period. Management believes the forecasts are reasonably achievable. No impairment in carrying value was identified.

4. Other receivables4 January

2019£m

29 December 2017

£m

Amounts owed by subsidiary undertakings 299.5 394.5Other receivables 21.1 18.3Prepayments 1.2 2.1Deferred tax (note 7) 0.2 0.1

Total 322.0 415.0

Amounts owed by subsidiary undertakings are unsecured, repayable on demand and are not interest-bearing.

5. Other payables: amounts falling due within one period4 January

2019£m

29 December 2017

£m

Bank overdraft 39.9 37.6Revolving credit facilities 22.9 71.5Amounts owed to subsidiary undertakings 142.7 269.8Accruals and other payables 2.7 1.5

Total 208.2 380.4

Amounts owed to subsidiary undertakings are unsecured, repayable on demand and are not interest-bearing.

6. Other payables: amounts falling due in more than one period4 January

2019£m

29 December 2017

£m

Revolving credit facilities 123.5 103.0

Details of security given over these liabilities are described in notes 30 and 31 to the consolidated accounts.

Notes to the Company balance sheet continuedor the 53 weeks ended anuary 201

Page_99


7. Deferred taxation4 January

2019£m

29 December 2017

£m

Opening balance 0.1 –Charged to profit and loss account in the period 0.1 0.1

Deferred tax asset 0.2 0.1

The total recognised and unrecognised deferred tax is as follows:

Assets

Recognised4 January

2019£m

Unrecognised4 January

2019£m

Recognised30 December

2017£m

Unrecognised30 December

2017£m

Other short-term timing di erences 0.2 – 0.1 –

Total 0.2 – 0.1 –

8. Called-up share capitalNumber of

issued sharesMillions

Issuedshare capital

£m

Share premiumaccount

£m

Totalshare capital

£m

29 December 2017 50.3 0.5 30.1 30.6Purchase of treasury shares (0.6) – – –

4 January 2019 49.7 0.5 30.1 30.6

In 201 , 5 4,356 Ordinary shares (2017: 13,500) were repurchased in the market for consideration of 3.5m (2017: 0.1m), and cancelled.

Impellam roup plche Company has no limit to its authorised share capital. he above number represents the number of allotted, fully paid

shares of 1p in issue.

9. ReservesMergerreserve

£m

Otherreserves

£m

Retainedprofit

£m

Totalreserves

£m

29 December 2017 19.0 2.1 32.0 53.1Profit for the period – – 68.6 68.6Share-based payment charge – 0.4 – 0.4Purchase of treasury shares – – (3.5) (3.5)Dividends paid – – (6.8) (6.8)Transfer to retained earnings – (2.5) 2.5 –

4 January 2019 19.0 – 92.8 111.8

Merger reservehe merger reserve arises under Section 612 of the Companies Act 2006 as a result of the acquisition of Bartech Holding

Corporation and Lorien Limited using the issue of shares as part consideration. The excess of fair value over the nominal value of shares is transferred to a merger reserve rather than a share premium. This reserve is not distributable.


Page_100


9. Reserves continuedther reserves

Other reserves comprise the following:• A charge of £0.4m (2017: £0.7m) arising from share-based payments arising within the period. All share options lapsed

during the year, so the balance of 2.5m on the share-based payment element of the reserve was transferred to retained earnings. he balance on the share-based payment element of the reserve at the end of the period is nil (2017: 2.1m)

• 41,000 contributed surplus arising on a historical demerger transaction and a special reserve arising from the capital reduction in December 2012 (2017: 41,000) and

• ,000 capital redemption reserve arising from the purchase and cancellation of treasury shares (2017: 2,000).

These reserves are non-distributable.

Profit attributable to the Parent ompanyhe profit dealt with in the financial statements of the Company for the 53 weeks ended 4 anuary 201 was 6 .6m

(2017: loss £8.6m). Dividends totalling £6.8m (2017: £10.3m) were declared and paid during the period. As allowed by Section 40 of the Companies Act 2006, no separate profit and loss account is presented for the Parent Company.

10. Dividends4 January

2019£m

29 December 2017

£m

Prior year final paid: 13.5p (2017: 13.5p) 6.8 6.8Interim paid: 0p (2017: 7.0p) – 3.5

Paid in period 6.8 10.3

On 26 uly 201 the Board announced that the Group will not pay an interim dividend for the financial year 201 , instead it will undertake a share buyback programme commencing in Q3 2018 up to an aggregate market value of £12.0m over a period of 12 months.

11. Reconciliation of movements in shareholders’ funds4 January

2019£m

29 December 2017

£m

Profit (loss) for the financial period 68.6 (8.6)Share-based payment charge 0.4 0.7Shares repurchased (3.5) (0.1)Dividend paid (6.8) (10.3)Opening shareholders’ funds 83.7 102.0

Closing shareholders’ funds 142.4 83.7

12. Related party transactionshe Board is not aware of any related party transactions other than those disclosed in note 2 to the consolidated financial

statements.

13. Post balance sheet eventsBetween the end of the year and 21 March 201 , a further 541, 1 Ordinary shares of 1p each have been repurchased in the market for total consideration of 3.0m, and have been cancelled.

Notes to the Company balance sheet continuedor the 53 weeks ended anuary 201

Page_101


Alternative performance measuresCertain discussions and analyses set out in this Annual Report and Accounts include measures which are not defined by generally accepted accounting principles such as IFRS. We believe this information, along with comparable IFRS measurements, is useful to investors because it provides a basis for measuring our operating performance on a comparable basis. Our management uses these financial measures, along with the most directly comparable IFRS financial measures, in evaluating our operating performance and value creation. Non-IFRS financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. Non-IFRS financial measures as reported by us may not be comparable with similarly titled amounts reported by other companies.

Adjusted EBITDADefinition: The Group calculates adjusted EBITDA as operating profit before interest, tax, depreciation and amortisation and excludes separately disclosed items and share-based payments.

Closest equivalent IFRS measure: Operating profit.

Rationale for adjustment: he Directors believe that ad usted EBI DA is the most appropriate approach for ascertaining the underlying trading performance and trends as it reflects the measures used internally by senior management for all discussions of performance, including Directors’ remuneration, and also reflects the starting profit measure used when calculating the Group’s banking covenants. All discussions within the Group on segmental and individual brand performance refer to ad usted EBI DA.

Reconciliation of adjusted EBITDA to operating profit:2018

£m2017

£m

Segment adjusted EBITDA 54.0 63.3Corporate costs (3.8) (3.8)Adjusted EBITDA 50.2 59.5Amortisation of intangible assets (9.1) (7.3)Depreciation of tangible assets (3.3) (3.3)Loss on disposal (0.2) (0.1)Separately disclosed items (5.7) (3.4)Impairment of goodwill (8.6) –Share-based payments (0.4) (0.7)

Operating profit 22.9 44.7

Separately disclosed items are costs or income that have been recognised in the income statement which the Directors believe, due to their nature or si e, should be disclosed separately to give a more comparable view of the year-on-year underlying financial performance.

he impairment charge due to its si e is disclosed separately to give a more comparable view of the year-on-year underlying financial performance.

Share-based payments – in September 2015 the Company granted share awards to two senior Directors to vest following the publication of the audited financial results for the year ended 31 December 2017. One of the Directors left during 2016 and the share award relating to that Director has been cancelled. he remaining shares lapsed in 201 as the vesting conditions were not met.

hese are shown separately in order to bring this to the attention of the reader to highlight that this is a scheme which is one-o in nature and not part of the ongoing remuneration structure of senior executives.

The separately disclosed items are:2018

£m2017

£m

Legal costs(a) 3.2 1.9US Business restructuring and

integration(b) 2.0 0.7Ad ustments to deferred

consideration(c) 0.5 0.8

Total 5.7 3.4

a) In 201 the Group had an ongoing litigation matter for which a provision for settlement and associated legal costs of 3.0m has been made. here was also an additional 0.2m cost for a legal case of which 1.6m was previously provided for in 2017. In 2017 the US Business incurred tax and associated legal costs of 0.3m with regard to the settlement of historic state tax liabilities for the period 2010 to 2016. hese are disclosed separately due to their one-o nature and significance

b) US Business restructuring and integration costs are of such significance that they are excluded in order to bring them to the reader’s attention in understanding the Group’s financial performance. Following the acquisition of Bartech at the end of 2015 the Group has gone through a three-year programme to enable the realisation of cost and revenue synergies and ensure the right structure of Impellam North America is in place. his includes costs related to the integration of the Bartech business to Impellam systems, processes and policies. his programme has concluded at the end of 201 . All other costs related to restructures within the individual Impellam brands have been included in the trading results as they are not deemed significant

c) Contingent consideration payments linked to individuals’ continuing employment in the business generated a 0.5m charge in relation to the acquisition of Global Group (UK) Ltd (2017: 0. m). hese are of such significance that they are shown separately so as to not distort the reporting of the underlying performance of the respective businesses

Spend Under Management (‘SUM’)Definition: otal amount of client expenditure which our Managed Service brands managed on behalf of their clients.

his equates to revenue earned where Impellam acts as principal plus gross billings to customers where Impellam acts as agent.

Closest equivalent IFRS measure: Group Revenue.

Rationale for adjustment: The Group uses this measure as it reflects the total value of the client spend to the Group, not ust the revenue generated.

Alternative Performance Measures


Page_102


Adjusted earnings per share (‘EPS’)Definition: Ad usted profit divided by the weighted average number of Ordinary shares outstanding during the year.

Closest equivalent IFRS measure: Basic earnings per share.

Rationale for adjustment: The Group uses this measure alongside the basic EPS calculation as it reflects the underlying trading performance of the business.

Reconciliation of Adjusted EPS to Basic EPS:2018

£m2017

£m

Profit for the period 13.3 31.1Separately disclosed items (net

of tax) 4.9 3.3Impairment of goodwill 8.6 –Customer relationship and brand

amortisation (net of tax) 3.7 3.4

Adjusted profit 30.5 37.8

Weighted average number of shares 50,171,830 50,322,1 6

Unadjusted EPS 26.5 61.9

Adjusted EPS 60.8 75.2

Alternative Performance Measures continued

Page_103


Adjusted EBITDA∆ EBI DA before separately disclosed items, impairment of goodwill and share-based payments

Adjusted EBITDA∆ Conversion Ratio

Adjusted EBITDA∆ divided by NFI gross profit

Business Process Outsourcing (‘BPO’)

Solutions which help businesses address back office needs strategically and increase operational efficiency

Cash Conversion Net cash from operating activities divided by operating profit

Constant Exchange Rates Calculated by multiplying the prior year functional currency amount by the current year foreign currency exchange rate

Contingent Labour emporary and contract workers

CRM Customer Relationship Management

Days Sales Outstanding (‘DSO’) otal trade receivables divided by average daily invoiced sales

EBITDA Earnings before interest, tax, depreciation and amortisation

Facilities Management Providing cleaning, security, events and retail facilities support services

GDPR General Data Protection Regulation came into force on May 25 201

Group Fill he percentage of Spend Under Management∆ supplied from our Group brands into our Managed Services programmes

Hybrid Vendor Assignments are filled by a combination of suppliers that we manage for the client and filled directly by the Managed Services provider (including Group supply)

IFRS International Financial Reporting Standards

Ignite CRM (customer relationship management), our recruiter operating system

Independent Contractor Solutions

Helping to reduce the risk and cost of worker misclassification

Managed Services hese businesses optimise the productivity of people by designing, implementing, coordinating and reporting on the whole staffing process. hey provide multi-disciplinary workforce solutions, including all forms of partial and complete outsourcing

Managed Services Programme (‘MSP’)

he outsourcing of contingent labour

Master Vendor he ma ority of assignments are filled by the Managed Services provider (including Group supply) and second-tier agencies are used when the Managed Services provider is unable to supply

Net Debt otal debt of the Group less cash in hand

Net Fee Income (‘NFI’) Equivalent to gross profit

Neutral Vendor Assignments are filled by suppliers that we manage for the client, where the Managed Services provider does not form part of the supply chain

Non-UK Non-UK refers to all countries Impellam operates in outside of the UK. his is the US, Australasia, Europe (excluding the UK) and the Middle East

Origin Our innovation hub that acquires, invests in and partners with disruptive start-ups in our markets as well as backing our irtuosos’ ideas

Payroll Services Provide access to a fully compliant framework for managing and paying contingent sta

Recruitment Process Outsourcing (‘RPO’)

Where a client outsources the management of the recruitment function (in whole or part) to a third party expert

ShiftWise echnology solution for the NHS to build our Managed Services capability

Glossary


Page_104


Specialist Staffing Dedicated brands which provide expert recruitment services and skilled workers for permanent, temporary, contact and fixed-price work

Spend Under Management∆ (‘SUM’)

otal amount of client expenditure which our Managed Service brands managed on behalf of their clients. his equates to revenue earned where Impellam acts as principal plus gross billings to customers where Impellam acts as agent

Statement of Work (‘SOW’) Solutions for spend in complex categories of service which include supplier management, requisition facilitation, contract writing, negotiations and invoicing and settlement support services

Vendor Management System (‘VMS’)

MS technology enables the full procure-to-pay process, while providing robust reporting and analytics

Vertical Specialist Managed Services

Our brands which have Specialist focus and expertise delivering sector or function staffing solutions

Virtuoso People who see possibilities and can tune in to the needs of our customers and candidates

Glossary continued

Company information

Impellam is the second largest1 staffing company in the UK and sixth largest2 Managed Services provider worldwide. Our vision is to be the world’s most trusted staffing company – trusted by our people, our customers and our investors in equal measure.

We provide Managed Services and Specialist Staffing solutions across the UK, Europe, US, the Middle East and Australasia. We have over 3,200 Impellam people throughout our network of 17 market-leading brands across 165 worldwide locations.

Ultimately, Impellam Group’s mission is to provide fulfilment and a sense of purpose to our people and to help customers build better businesses in a changing world.

For more information about Impellam Group, please visit: www.impellam.com.

Nominated advisers and brokersCenkos Securities plc6.7.8 Tokenhouse YardLondon EC2R 7AS

Principal solicitorsAllen & Overy LLPOne Bishops SquareLondon E1 6AD

RegistrarsLink Asset Services34 Beckenham RoadBeckenhamKent BR3 4TU

Principal bankersBarclays Bank plc1 Churchill PlaceLondon E14 5HP

Independent auditorKPMG LLP15 Canada SquareLondon E14 5GL

Registered addressImpellam Group plc800 The BoulevardCapability GreenLutonBedfordshire LU1 3BA

Registered number06511961

LSE symbolIPEL

Notes1 By revenue (2017 published numbers)2 By Spend Under Management∆ (‘SUM’) (confirmed by Staffing Industry Analysts based on 2017 published numbers)

This report is printed on Revive 50 Silk which is produced using 50% recycled post-consumer waste and 50% wood fibre from fully sustainable forests with FSC® certification. All pulps used are Elemental Chlorine Free (ECF). Printed in the UK by Fontain using vegetable based inks throughout. Both the manufacturing mill and the printer are registered to the Environmental Management System ISO14001 and are Forest Stewardship Council® (FSC®) chain-of-custody certified.

Impellam Group plc800 The BoulevardCapability GreenLutonBedfordshire LU1 3BA

www.impellam.com

Registered number: 06511961

Impellam

Group plc A

nnual Report and A

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