FDM pleased with 'resilient' performance in 2020

FDM Group reported a “resilient performance” in its preliminary results for 2020 on Wednesday, in the face of the challenges of the Covid-19 pandemic, as its revenue slipped 1% to £267.7m.

The FTSE 250 professional services provider said its adjusted operating profit fell 23% for the year ended 31 December to £42.7m, as its profit before tax slid 22% to £41m.

Its said basic earnings per share came in 24% lower than the prior year at £42m, while adjusted basic earnings per share were 26% weaker at 28.8p.

Cash flow from operations grew 15% over the year to £66.1m, while the company’s cash conversion was 46 percentage points higher than 2019 at 158.4%.

Operationally, FDM said it performed “strongly” in the first quarter, before trading levels fell in the second quarter as lockdown restrictions were imposed.

As the second half progressed, it said conditions in the majority of sectors and geographies in which it operated trended towards normality, and deal volumes improved.

Its board said its “agile and robust” business model enabled it to respond “rapidly and effectively” to changing conditions in the year, including the move to remote recruitment and training, and ‘Mounties’ - which it dubs its consultants - working for clients remotely.

Mounties assigned to clients at week 52 were down 9% from a year prior at 3,580, as the Mountie utilisation rate slipped to 94.8% from 96.1%.

FDM said performance in the Europe, Middle East and Africa (EMEA) and Asia-Pacific geographies was good, with revenues up 30% and 33% respectively.

The group noted that it had not accessed the UK Coronavirus Job Retention Scheme, or ‘furlough’, or taken any funding from the UK government through the pandemic.

It said its training courses had been revised to include a greater emphasis on technical disciplines to meet changing market demand, with a ‘pod’ solution launched, allowing clients to select teams of Mounties who had collaborated during training.

A total of 52 new clients were secured globally, down from 97 in 2019, of which 24 were secured in the second half and 75% were outside the financial services sector.

FDM said it had a “strong” balance sheet, with £64.7m cash at period end, up from £37m.

The board declared a final dividend of 15p per share, following a first interim dividend of 18.5p in July and a second interim dividend of 13p in January, giving a total dividend for the year of 46.5p, up 191% over 2019.

It said 2021 had started “well”, with “good levels” of demand and “strong” deal volumes across most of its geographies, while recruitment and training levels had been significantly ramped-up to meet that demand.

“2020 saw FDM deliver a solid operational and financial performance in the light of the exceptional challenges presented by the Covid-19 pandemic, benefiting from the group's agile, robust and highly cash-generative business model.

“This included the rapid and successful transition of our business model to the remote delivery of Mountie services to clients and to remote training.”

Flavell said that overall, 2021 had started “encouragingly well”, in line with the board's expectations and with good levels of client activity and strong deal volumes.

“Beached and signed-off resources have returned to normal levels and we have already commenced significantly ramping up recruitment and training activities to meet increasing demand for our Mounties.

“Our balance sheet is strong and, while mindful that the uncertainties presented by the pandemic across the different geographies and sectors in which we operate are not yet behind us, I am confident that the group is well-positioned to deliver good progress in the current year.”

At 0834 GMT, shares in FDM Group Holdings were up 2.25% at 1,092p.