RTC : Interim Report 2022

This announcement contains inside information as stipulated under The Market Abuse Regulation (EU No. 596/2014).

26 July 2023

RTC Group Plc

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

Interim Results for the Six Months Ended 30 June 2023

RTC Group Plc (AIM: RTC.L), the engineering and technical recruitment Group, is pleased to announce its unaudited results for the six months ended 30 June 2023.

Summary:

• Group revenue from continuing operations increased 33% to £45.6m (2022: £34.4m);
• Contract revenues increased to £43.0m (2022: £32.1m) and a strong order book in excess of £200m;
• EBITDA increased by £1.5m to £1.6m (2022: £0.1m);
• Profit before tax increased by £1.4m to £1.0m (2022: loss of £0.4m);
• Net assets grew by £0.7m to £6.9m (2022: £6.2m);
• Net cash inflow from operating activities £2.1m (2022 outflow: £0.6m);
• No term debt; and
• Basic earnings per share 5.20p (2022: loss per share 2.43p).

No dividends were paid in the period (2022: Nil). The Directors propose an interim dividend of 1.0p per share

(2022: Nil). The interim dividend will be paid on 1 September 2023 to shareholders on the register on 4 August 2023.

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

"In our Annual Report and Accounts 2022 our general message was that our Rail business, which had successfully secured a further long term strategic supply contract with Network Rail, was impacted by the combination of: the tail end of enhanced costs to comply with covid restrictions; escalating fuel prices; upfront costs; and other investment activities to establish appropriate management and operational structure for our new operating routes. In addition, there was significant disruption due to industrial action across the whole rail network. I am pleased to report that, whilst industrial action remains disappointingly prevalent, albeit with less impact, our Rail business is back trading strongly and in line with our expectations. Our other businesses are also showing strong recovery and have progressed well as anticipated.

I am therefore pleased to be able to report that the Group has enjoyed a buoyant first half and that we have posted a pre-tax profit of £1.0m for the period.

Whilst I have been reluctant in recent years, especially given such turbulent times for the global economy, to propose the payment of dividends, given these excellent results, which represent our best-ever first half, I am proposing to make a cautious return to payment of dividends with an interim dividend of 1p per share.

Outlook

We remain cautiously confident that our progress will continue in the second half of 2023. We continue to invest in our businesses and to further strengthen our balance sheet through retained profits."

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

ENDS

Enquiries:

About RTC

RTC Group Plc is an AIM listed business that focuses on white and blue-collar recruitment, providing

temporary and permanent labour to a broad range of industries and customers in both domestic and

international markets through its geographically defined operating divisions.

UK division

Through its Ganymede and ATA Recruitment brands the Group provides a wide range of recruitment services in the UK.

Ganymede specialise in recruiting technical and engineering talent and providing complete workforce solutions to help build and maintain infrastructure and transportation for a wide range of clients. Ganymede is a market leader in providing a diverse range of people solutions to the rail, energy, construction, highways, and transportation sectors. With offices strategically located across the country, Ganymede provides its clients with the benefit of a national network of skilled personnel combined with local expertise.

ATA Recruitment provide technical recruitment solutions to the manufacturing, engineering, and technology

sectors. Working as an engineering recruitment partner supporting businesses across the UK. ATA Recruitment has a strong track record of attracting and recruiting engineering talent for our clients. ATA's

regional offices which are strategically located in Leicester and Leeds each have dedicated market-experts to ensure ATA delivers excellence to both our clients and candidates.

International division

Through its GSS brand the Group works with customers across the globe that are focused on delivering projects in a variety of engineering sectors. GSS has a track record of delivery in some of the world's most

hostile locations. Working closely with its customers GSS provides contract and permanent staffing solutions on an international basis, providing key personnel into new projects and supporting ongoing large-scale project staffing needs. GSS typically recruit across a range of disciplines and skills from operators and supervisors, through to senior management level.

UK Central Services

The Group headquarters are located at the Derby Conference Centre which also provides office accommodation for its operating divisions in addition to generating rental and conferencing income from space not utilised by the Group.

Chairman's statement

Six months ended 30 June 2023

In our Annual Report and Accounts 2022 our general message was that our Rail business, which had successfully secured a further long term strategic supply contract with Network Rail, was impacted by the combination of: the tail end of enhanced costs to comply with covid restrictions; escalating fuel prices; upfront costs; and other investment activities to establish appropriate management and operational structure for our new operating routes. In addition, there was significant disruption due to industrial action across the whole rail network. I am pleased to report that, whilst industrial action remains disappointingly prevalent, albeit with less impact, our Rail business is back trading in line with our expectations. Our other businesses are also showing strong recovery and have progressed well as anticipated.

Ganymede Rail and Recruitment divisions are benefitting from the increasing demand for high-quality engineering personnel in the UK, driven by the growth in infrastructure expenditure. In 2021, the UK government made a funding commitment of £100 billion to support economic infrastructure, specifically aimed at strengthening the infrastructure sector and fostering its development.

Ganymede Energy benefits from growing demand from major energy providers for dual-fuel meter installers to support the Government's smart-meterroll-out programme. The initial programme has a target

completion date of 2025 which involves the installation of 53m smart gas and electricity meters across the UK, with follow on works to replace first generation meters and to upgrade the second-generation meters to 4G capability expected to continue until 2033.

I am therefore pleased to be able to report that the Group has enjoyed a buoyant first half and that we have posted a pre-tax profit of £1.0m for the period.

Whilst I have been reluctant in recent years, especially given such turbulent times for the global economy, to propose the payment of dividends, given these excellent results, which represent our best-ever first half, I am proposing to make a cautious return to payment of dividends with an interim dividend of 1p per share.

Outlook

We remain cautiously confident that our progress will continue in the second half of 2023. We continue to invest in our businesses and to further strengthen our balance sheet through retained profits.

W J C Douie

Chairman

26 July 2023

Finance Director's statement

Six months ended 30 June 2023

Highlights

For the six months ended 30 June 2023, the Group delivered revenues of £45.6m (2022: £34.4m) an increase

of 33% on the same period in 2022. EBITDA increased by £1.5m to £1.6m (2022: £0.1m) and profit before tax

was £1.0m (2022: loss before tax: £0.4m) an increase of £1.4m versus the same period in 2022.

The key driver of the increase being contract revenue which was £43.0m (2022: £32.1m). The growth predominantly coming from our Rail and Energy divisions. Overall gross profit from contract revenues increased to £6.1m (2022: £3.7m).

UK recruitment

The UK Recruitment segment delivered increased revenues of £41.8m (2022: £31.1m) which were

converted to significantly improved profit from operations of £2.2m (2022: £0.6m).

Ganymede Rail has worked with Network Rail to successfully address issues that severely impacted the division in 2022, such as fuel and general price increases coupled with the significant disruption caused by Network Rail's decision to award all suppliers new contract delivery areas in 2022. This, together with growth with other clients, has resulted in a significantly improved performance both in terms of revenues and profits in the first half of 2023. Revenues increased to £28.4m (2022: £21.1m). Gross profit was £3.7m (2022: £2.2m) and gross margin was improved at 13% (2022: 10%). The division delivered a £1.5m increase in profit compared to the same period in 2022. Within the Rail division, Ganymede's signalling labour supply business continued to grow with a new regional office being opened to support that growth.

Ganymede Energy continued its growth trajectory in the first half of 2023. It increased first half revenues by 47% to £8.4m (2022: £5.7m), delivered gross profits of £1.8m (2022: £1.2m) and its gross profit margin increased to 22% (2022: 20%). The division further delivered a 75% uplift in profit compared to same period in 2022 £0.7m (2022: £0.4m).

The division's white-collar recruitment, serviced by its ATA brand continued to perform well with client demand remaining strong across permanent and temporary UK recruitment. The division delivered revenues of £4.3m (2022: £3.5m) with the increase mainly coming from growth in temporary recruitment. Gross profits overall grew to £1.5m (2022: £1.3m). As a result of the increased proportion of temporary revenues the gross margin reduced to 34% (2022: 38%). Profit for the period was maintained at £0.3m (2022: £0.3m) as the division continued to invest in staff numbers for future growth.

International recruitment

International recruitment delivered revenues of £2.6m (2022: £2.5m), slightly higher than the same period in 2022 as they steadily have increased revenues under new framework agreements. Profit from operations also showed a slight improvement at £238,000 (2022: £169,000).

UK Central Services

Within UK Central Services, our hotel and conference centre business delivered revenues of £1.2m (2022: £0.9m) as the good levels of activity relating to conferences, events and bedroom sales seen throughout 2022 continued in the first half of 2023. Gross profit increased to £0.6m (2022: £0.5m) and gross margin was maintained at 54%. Our hotel and conference centre in Derby benefits from a long lease that was taken out in 2018 and has 10 years left to run. Rents for the entire lease period were fixed at inception and as such are now even more competitive.

Taxation

The total tax charge for the period is estimated at £254,000 (2022: £59,000). This is higher than would be expected if the standard tax rate was applied to the result for the period, as explained in note 3.