FINANCIALS: Norman Broadbent refocuses and refreshes its business

This Monday will see senior and board executive recruiter Norman Broadbent formally rebrand its midmarket business AGP as NB:Solutions.

Fri, 30 Sep 2016

This Monday will see senior and board executive recruiter Norman Broadbent formally rebrand its midmarket business AGP as NB:Solutions.

The move, announced in unaudited results for the six months ended 30 June 2016, will also see a new managing director take the helm at NB:Solutions, while the group’s Norman Broadbent Interim Management division has also appointed a new MD.

The statement added that the group expects a refocusing and repositioning of its business, combined with a refreshment of its brand, will result in improved financial performance in the second half of 2017.

The results also reveal the group’s continued focus on restructuring had resulted in a reduction of net fee income to £3.2m from £3.79m in the same period in 2015.

However, operating expenses also fell from £3.28m to £3.73m, along with a group net loss from £134k to £106k.

Across the group’s divisions, Norman Broadbent Executive Search revenue declined by 15% to £2.4m (H1 2015: £2.8m) reflecting the impact of a planned reduction in fee generating headcount. Net profit margin increased to 14%, reflecting the restructuring of the group’s business in Q3 of 2015. 

Moving into the second half of 2016 and 2017, the group added its key focus will be on the hiring of senior consultants within existing practices, as well improving consultant productivity. Group wide productivity will be driven by a new head of business development, the appointment of a group head of research & insight and a more holistic approach to account management.

Meanwhile, the group reported Norman Broadbent Leadership Consulting as having a “slow” first six months of 2016 with revenues excluding associate costs of £200k, down from £400k in the same period of 2015. The group attributed the decline in part due to a large assessment project with a FTSE 100 business being put on hold. 

Over at AGP, set to rebrand as NB:Solutions, this business increased gross profit by 26% to £0.4m (H1 2015: £0.3m), but was still loss making. As a result, the business was restructured, with a number of staff leaving in Q2 2016. Since the restructure the group says it has appointed a new divisional MD, re-defined NBS’ proposition and are in the process of re-building the team to enable NBS to leverage the NBES business more effectively.

Elsewhere, the group’s Social Media Search business, which has been restructured significantly in recent years, increased revenues by 46% to £300k from £200k in H1 2015, it too is marginally loss making. But the group adds this loss includes the cost of two underperforming consultants who exited the business in June 2016.

Additionally, the group says it has been missing a high value interim executive offering of significant scale since the business was restructured in 2015 and in light of this a new divisional MD has been appointed, who will join the group at the beginning of October.

The results statement also revealed the retirement of non-executive director Richard Robinson.

Commenting on the group’s performance, chief executive Mike Brennan said: “Given the rightsizing of the cost base in recent years, we are now entering a new phase of growth underpinned by the £2.3m of new capital raised in September 2016 from both existing and new shareholders. 

“This capital will stabilise the business from an operational perspective, has allowed us to repay expensive debt, but more importantly enable the business to scale up through the hiring of new and experienced fee earners across all of our three core offerings of Executive Search, Solutions and Interim Management. We expect to start to see the benefit of these new hires in 2017.”

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