Norman Broadbent posts solid fourth-quarter growth

Executive search and interim management company Norman Broadbent said in a trading update on Tuesday that it saw significant growth in the fourth quarter of 2023, with group net fee income (NFI) rising 13% year-on-year to £2.6m.

The AIM-traded firm said the positive momentum had carried forward into the first quarter of 2024, where contracted revenue increased 15% to £1.5m, compared to £1.3m in the first three months of 2023.

For the entire 2023 financial year, the company achieved several noteworthy milestones.

NFI surged by 44%, reaching £10.5m, compared to £7.3m in 2022.

Norman Broadbent said its financial health also saw marked improvement, as underlying EBITDA reached £0.9m, up substantially from the £0.1m reported in the year prior.

Additionally, the company achieved a profit before tax of £0.3m - a significant turnaround from the prior year's loss before tax of £0.3m.

Moreover, the company said it experienced positive net cash flow throughout the year.

Norman Broadbent said its fiscal strategy also included early redemption and conversion of outstanding £0.4m convertible loan notes, further strengthening its financial position.

The company's net cash position improved to £0.4m as of 31 December, compared to a net debt of £1.1m at the end of 2022.

“Our strategic plan continues to deliver and I thank the whole team for their outstanding performance,” said group chief executive officer Kevin Davidson.

“In the two years since we started this journey, and amid challenging market conditions, we have almost doubled NFI, increased profit before tax by over £0.9m, returned to meaningful profitability and become net cash flow positive.

“This success is attributed to the strength of our team, the quality hires we have made and our continued focus on productivity improvements across the business.”

Davidson said that, while the executive search and broader recruitment markets were challenging in 2023, the company bucked the trend by growing the size of its team and still delivered a strong set of financial results.

“In 2024, we plan to continue to invest and pursue our aggressive growth strategy, whilst remaining profitable and generating positive net cash flows.

“This will be organically led, leveraging the renewed attractiveness of our brand proposition while exploring synergistic acquisition opportunities as appropriate.

“While being cognisant of the macroeconomic headwinds, the strong momentum established across the business and some easing of inflationary pressures in the economy mean that we are increasingly confident in our ability to overachieve against our previously stated target of £1.25m of EBITDA in 2025.”

At 1003 GMT, shares in Norman Broadbent were down 2.83% at 7.05p.

Reporting by Josh White for Sharecast.com.