Morning, welcome to the Staffline Group PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press Send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO Albert Ellis. Good morning, sir.
Good morning, good morning to all of you who've so kindly devoted some of your time. You're with Albert Ellis here, the CEO, and Daniel Quint, my CFO. Many of you will know us well by now, we'll go straight into it. This morning is just a really a pre-close trading update to update the market on last numbers. Really, really important to take that to take the opportunity to keep the market informed. Hopefully you appreciate the data. We won't have a very long presentation this morning. Just to remind you that, you know, it's our scale, the Staffline and PeoplePlus scale, that gives it its advantage in the market. As you can see, we're the market leader in blue-collar recruitment.
We have offices and sites and presence almost anywhere in the UK and Ireland. We've got an increasing presence now in the Republic of Ireland, in line with our strategy we announced two years ago. Opened a new office last year, growing the business in double digits. You know, that's a little bit of exposure to the Eurozone and to that hard currency, very welcome and also low tax rates. In the island of Ireland as a whole, if you take the North and the Republic, our market share is growing, quite tremendously, so very pleased about that.
Looking at Scotland, actually, Scotland's had a very good time in the last periods, even despite COVID, because their largest client's in the drinks industry, whiskey distillers and others, which have obviously not had the impact from COVID that other companies have had. For the rest of the South of England and the North, you can see we're tracking the spine of the country, you know, warehouse, distribution, logistics, those sorts of, those sorts of sites. That's our, that's our group in a nutshell. Now onto the highlights of the statement. You know, the last year's numbers, we really feel proud of what we've achieved. It's actually a game of two halves.
The first half was tough and challenging because of the end of the pandemic, the Omicron disruption that we had, we suffered from statutory sick pay, people, staff not coming into work and customers locking down again and closing sites. That was the first half. We were a little bit behind the previous year. In the second half, we made up all of that territory. We'll talk about it in the slides to come. Just, you can see the numbers there. You know, we've grown the business, gross profit up, operating profit up in double digits. We, like others, have had a good permanent fee year, you know, up 66%.
We said a couple of years ago that the permanent fees, we'd like to see them in double digits as a proportion of recruitment GB, recruitment gross profit, we're heading for that now. Finally, Daniel's gonna talk to you about the cash. Really, really, you know, good to go into a challenging year with a strong balance sheet and with a strong cash position. Daniel will talk about that. For the rest, you know, some good news on the trading front, all in the statement. Just one I'll pick up there, and that is the PeoplePlus awarded a contract towards the end of the year with the Ministry of Justice. It's a 7-year contract with youth offending institutes, that's a GBP 15 million total contract.
Nice little end to the year.
Good morning, everyone. Very nice to be here today to present the FY 22 trading update. Just gonna cover the core financials. You'll see that revenue was up by 0.4%. There's been 2 real trends driving that. There's been some softening from the customers who benefited from COVID, especially around some of the supermarkets there, and but specifically online supermarkets and the online environment, as has been well trailed. That has been very much offset by new wins, BMW being one of them, which we spoke about earlier, and Albert will speak a bit more about later on. Gross profit up by 2.3%.
I would emphasize actually it's up by more in the recruitment businesses across Great Britain and Ireland, with PeoplePlus moving a bit backwards in the very tight labor market that we have, where some of our skills training not needed as much as one would have liked. That's a natural consequence of that, but the recruitment business is really coming to the fore with strong gross profit increase. Albert's spoken about those perm fees, that commitment we gave 2 years ago to increasing Staffline's presence in the permanent recruitment market. A real success over the last 2 years, both in our traditional customers who we service in the temporary worker sector, but also in other sectors such as defense, for example.
Obviously, in a relatively strong environment with what's been going on in Europe in last year, in that sector. Over two years, you can see the perm fees have actually gone up 177%. A new angle on Staffline there, but clearly we are predominantly a blue-collar temporary worker recruiter, but able to benefit off that platform. One thing that's been really pleasing in 2022 is that we've really kept a tight control of costs that's enabled the profit to drop through. You'll see there the 12.6% growth in underlying operating profit from 21 to 22, and the conversion from gross profit to operating profit up from 12.4% to 13.9%.
This has also been supported with the first year of profit recognition in the Restart contracts that we have, and that should continue into next year. All in all, very pleased with 22. Very importantly, just coming onto the next slide, is the balance sheet. In times like we're currently experiencing, more challenging times, potentially recessionary times, very important to come to be, to exist with and certainly come into 2023 with a strong balance sheet. Just to point out a couple of points here. You're seeing net cash, although down GBP 1.9 million, that comes after, and you'll see in the top right a really important point, that comes after the repayment of approximately GBP 12 million of COVID government support.
There are two elements to that support. The last installment of repaying the deferred VAT, the COVID deferred VAT, GBP 5.8 million, and then GBP 6.2 million of some advanced payments we received as the Ministry of Justice was supporting its supply chain in 2020 and 2021, repaid in 2022. That's that GBP 1.9 million in net cash movement is notwithstanding paying that GBP 12 million. It's a really strong underlying trading cashflow performance. Really pleased with that. Net cash at the end of the year, a really good position to be entering 2023 on. Further to that balance sheet strength and as, I suppose, further evidence of that is the facilities headroom we have of circa GBP 75 million.
Again, a vast improvement on where we were 2 or 3 years ago, really actually gives us potential firepower to take advantage of any opportunities that arise in what is going to be a challenging 2023, whether we can pick up, you know, contracts, et cetera. We're ready as a business, really focused on watching that space. Leverage at approximately 0.6x EBITDA, good position to be in as well. Finally, just to mention, as a reminder, the group purchased an interest rate cap in Q4 2021, hedging two-thirds of our exposure to interest rates or SONIA specifically, at 1%.
We, we really feel that puts the group in a good position all the way through towards the end of 2024, towards the end of the end of that 3-year interest rate cap product. Especially this year, leaving us in a summary there with strength of facilities, covenant strength, and then interest rate protection in the, in the current environment. Hopefully that's a good platform from which to look into 2023 and deal with the challenges that will arise, but no doubt the opportunities as well. Albert.
Thank you, Daniel. I must say, and this is, I'm not, this is not a scripted comment, but every CEO needs a CFO who takes out an interest rate cap a year before we have a change in Prime Minister, a change in Chancellor, we have an interest rate spike by, in the markets as a result. I'm absolutely delighted with Daniel's foresight there and what a pleasure. It protects us from interest rate rises over the next two years, which is a source of great comfort. Anyway, having said that, what we said in, at the interims, which was probably the last time you saw us, was that there were four points, four stepping stones to achieving our FY 2022 targets.
We're very target-oriented, and we have a culture of high performance in Staffline now. Actually, the management team was super motivated to hit the target. I know there were some skeptics out in the city that said, "Look, numbers look a bit weak in first half." We understand that in the first half you've had Omicron, you've had costs and unexpected pandemic-related setbacks, you know, this is a tall order in the second half. We knew that we had the firepower and the stepping stones to get there. We've just set out how we achieved it. The obvious one was the winning of the contract with BMW Group. That's MINI in Oxford and Rolls-Royce in Goodwood. We onboarded those workers in the second half.
Quite a significant amount of costs expended to implement that contract. It's a big contract, largest contract awarded in our sector, to be honest, in recent years. We didn't want anything to go wrong. The client is foremost in our minds in terms of making sure everything goes smoothly. You, Daniel just set out for reminding anybody that hasn't read that particular statement what it looks like. We had Restart, which was a contract that we flagged in 2021 that we had secured. We were the largest subcontractor in that particular funding framework, with three separate contracts. Of course, the government at the time felt that, you know, there was a risk of rising unemployment.
I mean, some of the forecasts for job losses as a result of the pandemic were apocalyptic, to say the least. Restart was the Welfare to Work successor, the largest amount of funding, I believe, for employment, certainly in recent times. We secured a healthy slug of that funding. The ramping up and mobilization period lasted 12 months. We successfully did that. We promised, as you can see, that we would recognize some profit in that contract if everything went well in the second half. Of course, you can see that that's come in for us. So important and very difficult to predict, Staffline traditionally has a year of, you know, 2 halves, as I said.
You have the beginning of the year where it's rather subdued after the previous year's Christmas period. People have got mortgages and higher mortgages and credit cards, and everybody's, you know, spent their savings a little bit over Christmas. The first quarter is always a bit subdued in retail and in the supermarket chains, as you know, if you follow them. The year begins to move forward and in February, we have Valentine's Day, we have Mother's Day, we have these celebrations during the first half, which actually lift trading. We have a summer peak, a mini peak, and then of course, we have the peak towards the autumn and into the winter.
We knew that the World Cup would helpfully fuel a little bit of that Christmas peak. We were delighted to see indeed that you all went out and bought ready meals and maybe a few beers and a couple of bottles of wine and watched the World Cup. That really helped us. Of course, it doesn't matter if there's a peak, it really doesn't affect you if you can't deliver. One of the things that has struck me since I've been at Staffline is how strong the delivery is and how committed our teams are. I've been in the office just before Christmas in the Midlands, one of our busiest offices, and the teams are up, you know, 5, 6 o'clock in the morning to fulfill shifts.
It's just quite admirable and amazing to watch. It's that commitment to the delivery that has ensured that we were able to capitalize on the peak. Finally, we've seen organic growth, and Daniel has mentioned that logistics and distribution, those sorts of businesses that prospered, you know, the sort of, you know, the Amazons of this world, et cetera, that have really prospered during COVID, those businesses that actually uniquely, could service us while we were all in lockdown globally. They've actually come off those peaks a little bit, and so therefore, demand is slightly lower. We've seen other organic growth in particular, and I'll talk about that in the next slide. Give you a little bit of color.
The two names I've chosen are two of the most fantastic customers in the supermarket and food production chains you could imagine. Sainsbury's Argos, you know, they released some good trading updates in the last two weeks. We've been asked to help them. They've given us more market share, and we're hugely appreciative of their confidence in us to deliver. We're helping them with their supply chain. They are, you know, as all companies are now concerned about supply chains, this is one of the great benefits of being listed. Of course, you know, we're transparent, our numbers, whether they're good or not so good, are always valuable to the market. Private companies believe that they have an advantage because they don't have that transparency.
Whereas my view is our customers like the transparency. They love to know that we have a strong balance sheet. We will pay the thousands, the tens of thousands of temps that are on their sites on time, and they can rely on us. I think that's the Sainsbury's story, is the confidence in Staffline to stand shoulder to shoulder with them in their supply chain delivery and help them. Now, we've done this through a managed service arrangement. Something that we're very, very keen on this year, we believe that more companies will consolidate their supply chains, particularly in labor, as some of our weaker competitors will struggle with higher interest rates. Private companies that have got debt and they've got funding, but for those, the cost of their funding is rising, particularly if you're not listed. There's a difference there.
Then on to Samworth Brothers, which is a great friend of ours. We love Samworth Brothers. They produce, you know, pork pies and their sort of related food to go. You know, I would call it more value meals and food to go. Of course, they're large customers of the supermarkets, of course. They're a huge business that actually does a lot of good as well as produce and bakery products. Actually, we're one of their largest labor suppliers and they've actually seen a move to value in the supermarket chains. We've picked up some organic growth from them. Then just Daniel mentioned Restart. You know, it's old news now, so I don't want to go through how it works.
Essentially, we've recognized very cautiously our first profit despite having started that contract 18 months ago. VINCI, to just quickly touch on that, it was a contract extension and a new element to that contract that we were awarded last year. It's to do with the London to Southampton fuel pipe. Of course, it's construction. It's in the construction sector. You know, these projects, these infrastructure projects, and of course, you won't, you'll be forgiven for me if I could just mention that energy is becoming much more important.
Projects like this and more down the pipeline, which we're engaged on, all to do with energy security and getting fuel into the economy, I think has been very good for us and is good for the country. We had an outstanding year with VINCI Construction. Then, as I said, we've implemented BMW in the second half. Finally, always looking forward, of course, investors want to know what we think of the future. Let me just step back by saying, you know, Daniel and I have got 30 years of. More than that, I think 40 years of recruitment experience between us. We've certainly been through a number of recessions. My grown-up children have. This is their first recession, so I'm helping them navigate it.
You know, I've been through the 93, the 2001, the 2009, and then the pandemic. I can tell you that there's only one thing that matters in a recession, and that is your financial strength. It's binary. You know, if you're strong financially, you've got headroom, you've got the confidence of lenders that are helping you finance your working capital, and your customers trust you, and there's transparency, then recessions are opportunities for recruitment businesses. You know, it's about keeping that infrastructure in place, keeping your fee earners in place, delivering and navigating your way through. Ultimately, the objective of every recession for every recruitment business I've been in, is to gain more market share.
It's the time where you can gain market share and not at the expense so much of price because you have a weaker competitive landscape. Macros this year, you know, pick whatever number and whatever view and whatever opinion from the various commentators out there, whether it's Ernst & Young, the EY forecast, which should be the recession, you know, they're on the more pessimistic side. The IMF have got a bit more positive. There's a range, but let's be honest, it's not gonna be as good as last year. In particular, if you look at the sector, you'll have seen that both Page and Walters have had profit warnings for last year, and Hays had an in-line just a week ago.
The sector is now either in line or warning on the outlook. I think, you know, the first point to note is we're a big recruitment company, and we can't be immune to the sector-wide weaknesses. It's particularly in permanent recruitment. There's a cycle. Customers have now, you know, hired many perms, and now the demand falls, and the first thing they do is they start thinning out the workforce. As you've seen with all of the big tech companies, they're all laying off IT software developers. Who would have thought? That's the first element. Of course, everything's a cycle.
Within 6-12 months, or, you know, these companies would have laid off too many people, or they'd have thinned the workforce, and suddenly demand will start picking up, and actually the economy will improve, and they'll need people. In particular, in the blue-collar sector, it'll be supermarkets that will need to hire temps. They will turn to us for temps in the retail, aviation, and automotive sectors as well. Whilst we're not immune, we really believe we've got a key strength of resilience. We all need to eat. People are traveling. Cars need to be replaced. Vehicles need to be replaced. And these are just the basics of life, and they don't stop during a recession.
Demand might fall, of course, people might change their choices, overall, the economy continues to move forward. That's recruitment. Onto PeoplePlus. Well, it's a, it's a yin and yang because PeoplePlus's great strength is that they are, you know, a trusted partner for the DWP, the Department for Work and Pensions, the Department for Education, and the Ministry of Justice, well-known to the commissioners. Their job is to support unemployed, those people unfortunately enough to be unemployed at this time. PeoplePlus is there for them. Because the jobs market has actually surprised everybody on the strength of vacancies, we, you know, we just hit record low unemployment in the last few months now. There's a lot in those numbers.
There's a lot of inactivity, there are people that have left the workforce, retired earlier during the pandemic. Of course, we've got a long-term sickness problem in the economy from the pandemic, as a result of the pandemic. Actually of those people choosing to work, wanting to work, and in the workforce, we're at a record low unemployment. That, of course, is not helpful for PeoplePlus because, you know, PeoplePlus generates revenue from helping volumes of unemployed individuals. Because of the Restart and the training programs having less volume than we expected, and we don't think that unemployment is gonna get materially worse in the next six months, we've held our expectations back on PeoplePlus.
We've simply as a board been very, very cautious, mature, responsible, and said, "We're not going to make a highly optimistic and possibly unrealistic forecast and statements about the future. We'll rather look at the near term, be mature, be take a cautious approach and address the near term factors as we see them." That's the macroeconomic backdrop. Of course, you know, the global backdrop in terms of automotive, supply chains, travel, you know, this will be affected, but I think less so than what we've seen with PeoplePlus. PeoplePlus is where our outlook is most cautious. We have a healthy pipeline of opportunity.
We can't talk about it right now, because obviously, you know, pens need to be taken and signatures appended to contracts, and we need certainty. We've got a good, healthy pipeline of new opportunities. I think we'll be in a much, much better position as well as we secure those opportunities with our balance sheet and with our results last from FY 2022. Of course, it goes without saying that Daniel and I are not the only members of the management team, but we've got a fantastic management team out there.
you know, all of the hidden unsung heroes that are delivering on the front line, our management, our MDs, our FDs, they're all working to make sure that we collect our cash, that we actually invoice our debtors, that we actually make good decisions, and that we do what it says on the tin that we do, and we are successful. A credit to the management team, but also to the staff. look, the group remains well, well-placed. There's no doubt about it. We've got a strong balance sheet. We're conserving cash. That was the right decision.
I mean, I remember facing the investors 1 year ago and talking about dividends and other things. You know, we said we need to conserve our cash and build our balance sheets. That's what our key larger investors also wanted us to do, and we've done that, and they've been proven right in that. You know, conserving our cash, using it to capitalize on considerable market opportunities, and we'll update you as and when those opportunities appear. Of course, ultimately the game is to further entrench our market position and grow our market leading share of that market. With that, Daniel, I don't know if you've got any other comments.
Yeah, no, I just would support everything that Albert said, obviously. Challenging year ahead. You know, off the back of a really good 2022, FY 2022, challenging year ahead, cautious forecast. Opportunities are there, and we're ready for when they present themselves and we're able to realize them. With that, we'll finish the presentations, and we're ready to take some questions.
Perfect. Albert and Daniel, thank you very much indeed for your presentation. Ladies and gentlemen, please continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Albert, Daniel, as you can see, we have received a number of questions throughout today's presentation, and thank you to all investors for submitting their questions. Albert, could I ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Thank you.
I think I'll take the first question, which was how much debt is left to be paid? Why is such a big firm share price going so low? In terms of the first part A of that question, really two questions, there's no debt in terms of COVID debts, which that question might be referring to be repaid. That's all completed. If it's a more general question, if you look at our year-end position, we ended up with net cash. I think that really leaves the business in a really good place. Why such a big firm share price going so low?
I think, as you would have seen, driven by the recruitment sector, our share price is not dissimilar to the share prices of, you know, three, four, five other in our category. Along with as we've gone through the end of 2022 into early 2023, the macroeconomics obviously have spoken, people have taken their direction from that reality. That's the reading I have into the reason why the share price has gone lower. Just the next question, because I will take obviously the finance related ones, I think this one looks like a finance one. What is the repayment of GBP 6.2 million of COVID related advanced payments to the Ministry of Justice?
It sounds like MoJ paid up front for services that weren't delivered required, so these didn't convert to sale. As I mentioned, just to echo what I said earlier, in the depths of COVID, we're talking throughout 2020 and then in 2021, the Ministry of Justice wanted to make sure that their supply chain was robust. There were no risks to delivery of service. That was absolutely key, as was the case in other parts of the economy, and that was the reason why those advanced payments, as I call them, were made. Absolutely appropriate, all paid back on time.
It was to be, to summarize, very important to ensure that the strength of the supply chain, to society, to whom those services are supplied, whether it's prisons, et cetera, were robust and strong and wouldn't fall over. That was a general approach they took to the supply chain. There might be some other smaller suppliers who might have been at risk of challenges in terms of financial challenges, with cash flows, but that was the general strategic reason for that.
They did convert into sales?
Yes.
Broker forecast for FY 2023 of turnover increasing marginally and EPS growing 22%. Is your cautious approach to FY 2023 in line with these forecasts or are management expectations different? Daniel? Yeah.
Well, I think what we'll say about FY 23 is that the results for 23 as we see them at the moment, you know, in January, at the beginning of the year, we see them being slightly behind FY 22. I think, as we've said, we're approaching things in a cautious manner. Our expectations are that we will be slightly behind 22. We will obviously, as Albert said, we will update. Our next opportunity for update is on Tuesday the 21st of March, as you would have seen announced this morning, which will be the full publication of our FY 22 results, and then at other points during the year. We'll update at those points.
Change in revenue mix from permanent to temporary recruitment suggests to us that margins will come under pressure. Is this correct, Daniel?
Yeah, I think that's an interesting point. As we stated in our presentation, we've increased perm fees 65% over the last year, and over a 2-year period, 177%. The general comment about perm recruitment softening would lead one to believe that is possible. Number 2, I would say that it depends where our mix lies in temporary recruitment. For example, we've spoken about, as the image on the front of our presentation suggests, that we have made inroads into the aviation sector, which has slightly higher margins than you would expect, for example, in the supermarket sector. That would be able to support our margins.
The final thing I would say, just back on the permanent recruitment point, is that the sectors that we in addition to supplementing our temporary customers, which are quite focused around the food supply chain and food retail, we do have quite an extensive presence in technical engineering permanent sectors, for example, defense, and I think I mentioned that, and obviously, sadly with the war, but for business reasons, those would be supportive of the margin. I think we'll just have to wait to see how the mix of margins turns out with the offsetting of some of the softening in permanent recruitment with where our actual permanent recruitment ends up in the defense sector and oil and gas where we can support those sectors. All to play for, but we'll be watching that closely.
I'll just add to that. I don't think we're going to see any sort of alarming margin degradation if degradation, if that's also part of the sort of thinking behind that question. I think they will be what they'll be, but certainly on conversion ratios, we've seen through the good work of the transformation and everybody that has been involved in turning this company around, our conversion ratios have gone up right across the board. I will, I will just bring out Ireland in that team has done a fantastic job. They've got sector-beating conversion ratios in the mid-20s. Really, so someone who comes from the recruitment business that's really fantastic margin. Yeah, we've got some great margins, conversion ratios mainly, which shows efficiencies.
Daniel will be talking about clients, which is absolutely right. We just don't see any reason that there would be any alarm about the macro on margins. You've asked, I know the company has been focused on organic growth, do you see a return to making acquisitions? As I said, we are actually conserving cash. We see organic growth as a sort of, it's always the best growth, right? It's the most valuable for shareholders. Staffline have made some acquisitions in the past. Some have been good, some have been not so good. We can get more out of what we've got in our view. We will not be closed.
Our minds will not be closed to the possibility of picking things up that are either distressed sellers and are in our market or where there's value to be had. We're not gonna bet the farm whilst Daniel and I are the executive team here. There'll be no borrowings to buy acquisitions. You can take that to the bank. It'll all be out of trading cash flow if there are any bolt-ons, and actually, our organic growth opportunity is our real opportunity.
Excellent. Next question: Is your rate of cash collection from customers now at an acceptable level, or are you still working hard to improve debtor days ? We're always working hard to improve debtor days . I'll choose this opportunity to applaud our teams, especially in the credit control teams and the FDs who've done a fantastic job throughout 2022 and continue to do that, not just at certain moments, but throughout the year. Do a fantastic job. We're always working hard to improve debtor days . It is harder than it was two, three years ago when I started. Naturally, there was some really good opportunities then, but we continue to work hard and we'll drive debtor days to make the cash flow as efficient as possible for the business.
Just adding my congratulations to the finance team. They've done a fantastic job on debtor days . We really have sector best in class debtor days , so well done to the finance team on that. Thomas asked, How do you feel Staffline is performing compared to its peer group? Look, the peer group is not the white collar recruiters. Actually, there's elements of Staffline that reflect, you know, the same markets that Hays, Walters and Page are in, and Gattaca. Those businesses, you know, tremendous businesses like Datum RPO, for example, had a record year last year. Omega, our business that's in the technical and engineering sectors, you know, very much in, you know, in helping the supply chains in automotive and also, you know, the defense sectors.
These businesses have been booming and continuing to be strong. You know, in that respect, I feel that we're standing shoulder to shoulder with the best in the sector. On the blue collar side, you know, we don't have any obvious listed competitors, certainly in the UK, where it's their core business. We know from our own intel and from our interaction in the market, particularly with the other private companies, that we're outperforming. We feel that we're in a very good position there.
Good. Thank you. Next question: Does the managed service contract with Sainsbury's mean that you pay temporary staff and cover the working capital outflow? If so, how quickly does Sainsbury's pay you without obviously prejudicing any commercial relationships? The supply chain cash flow stream that occurs in that contract is protected for Staffline in terms of payments down to our supply chain, the panel of agencies, so there's nothing to worry there. I will just say that Staffline's cash position is protected appropriately. Next question: As an indication of scale, fixed rate debt facilities compatible with your covenants together with cash exceeding the entire market capitalization of Staffline, would you consider modest share buybacks and or a dividend? I think well spotted that we're in a strong balance sheet position.
We will, and obviously we have the challenging macros of 2023, but as we go through this year, we will certainly be considering and their position allows the board to consider those options, not only dividends at a point in time, but certainly buybacks. I think that's a strong consideration that the board will give to that.
I mean, where we have excess cash, we as a board have a responsibility to consider there are options in relation to our owners and shareholders, of which Daniel and I are big investors in the company. You know, be assured that we will always be considering that. It's weighed against the, you know, the near term and the, you know, the requirements and our strategic objective to conserve our balance sheet. These sort of competing considerations will be properly debated on our board and are being properly debated. As Daniel said, we're in a much better position now to consider and debate than we were a year or two years ago.
Okay. Thank you, Albert. Next question. How much debt is left? They're going to go over the first question. We had net cash position at the end of the year. For purposes of transparency, as you would have seen at the half year, we do have movements in debt throughout the year. Of course, at the year-end, comparing it to the prior year-end is a very sensible and legitimate benchmark. You can see the improvements it makes. Even though we had the 1.9 reduction in net cash, that was having also paid out that GBP 12 million of final COVID payments back, paying it back. So, yeah, the net cash, net debt number fluctuates from day to day, depending on what it is.
The reality is, at the end of the year, we had net cash. That's a good position to be in.
I just wanted to add that, very important point here in recruitment, we need working capital. We've got, you know, 35,000 temps that we have to pay every week, and we need working capital. We need to hit those payroll deadlines absolutely in accordance with our commitments to our customers and our very important temps and staff. That's really important. We need, you know, an overdraft, if you like, to help us do that, but it fluctuates up and down. We don't have any core debt any longer, and we don't owe the government or the HMRC Treasury any liabilities over COVID. We have no core debt. In other words, we don't have a mortgage. We have what I call working capital facilities, what Daniel and I call working capital facilities.
We use our debtors, which is our asset, to finance that so we can pay our contractors in the case of Omega and our temporary staff in the case of Staffline. That's just simply to meet payroll obligations. Someone rightly pointed out there's a gap between our payroll and when Sainsbury's or Tesco or someone else would pay us, and that gap needs to be financed. Just to make sure that you understand that, it's an important point.
Dividend question?
A dividend question again. Will you be considering dividends given shareholders loyalty and capital raise of GBP 0.50? Absolutely. Feel that for you on that one. Daniel, as well as I, contributed as, you know, a material part of our net wealth to the capital raise. First of all, our objective is to make sure that we're in an even better position than we expected to be, which I think, you know, in terms of our balance sheet and our market positioning, I sense that we are in a much better position, certainly from a market share and a turnover position we are. In terms of dividends, though, it's, we have to have that conversation as we previously discussed between what form of returns we choose.
There's buybacks, there's dividends and specials and various other things. Look, we'll take that debate, but we're not at liberty to give you any commitments right now. We're at the beginning of a difficult year for the world, indeed for the UK. You know, our focus is really on delivering for you and our share price, and must reflect that. We'd like to see some movement on that. That would be my personal desire. Government contracts have always had the disadvantage of being relatively lumpy and unpredictable. You're absolutely right. Risks seem to have increased further in recent years. Would you consider disposing of PeoplePlus if you received a suitable offer? That's a tricky one as a public company to comment on.
We can't comment on those sorts of those sorts of M&A possibilities until we've made a decision or we've received an offer. What I can say to you is, look, government money is also very, very good quality money. When you're delivering, you're a good partner. It is lumpy. This year, you're absolutely right. We're going through a cycle where commissioning and new contracts are at lower levels than they were in the recent past because the government have actually put a lot of money into the likes of post-COVID programs. Those commissioning levels will improve and increase because there's a cycle. The government has to renew its commitments, whether it's prisons, whether it's education, whether it's employability. I wouldn't get too concerned about it.
In the main, all businesses are really cyclical and government's no different. Government earnings is really good quality. First of all, you know that your debtor is secure. Secondly, if you deliver, you know that the revenues will be there as well. When will share prices recover? A million-dollar question. All I can say is that usually in the darkest before the morning and the day-breaking, in all recessions. I remember the collapse of Lehman Brothers and the fear that created around the world, that banks were collapsing. Global names were actually failing.
Actually, if you look back, if you had invested in the recruitment sector at that time and not had fear but had faith, you would have made, you know, multiple times what you would have invested. As Warren Buffett says, when everybody else is fearful, that's when he's brave. He gets very fearful when everybody's exuberant. You know, think counter cyclically. Share prices are down. That's a buying opportunity. Share prices rise. That's also good because your portfolio shows improvement. "Henry Spain Investment Services is your largest shareholder. Are they actively engaged with your board?" I'm delighted to say that both Henry Spain and HRnet and our other shareholders, Fidelity, we're very engaged with, and others. We're engaged with them all.
Very, you know, Aberdeen Standard Life, I had some good catch ups just before Christmas. We're constantly engaged with our investors, and it's really important to us. Henry Spain being one of a number of investors. Very engaged with our investors. We're all investment-minded. We're all shareholders. Tom Spain, who's the founder of that business, is actually our interim chair. He's taking care of the chair role as we evolve the board composition. We're making some appointments to the board, in particular, audit committee chair this, in the first, second quarter of this year. Our board composition will continue to evolve. Lots of engagement, lots of support from our shareholders, and we really appreciate it.
Next question: Daniel stated the drop in share price reflects other drops seen by other recruitment agencies. Page, Hays and Walters are flat over the last six months. Staffline down 29%. This would suggest it's not sector driven. Why do you think the share price is down 29% when others are flat? My comments were made over a 12-month period as opposed to a six-month period. I think there'll be different factors that will affect different types of recruitment company. Difference between blue collar and white collar. I think picking a particular. I was talking in general terms. I've seen, you know, those share prices drop over 12 months at 50%. Not hugely different to Staffline. I think that's a relatively fair and legitimate benchmark. Point taken over different periods of time. Never one to shy away from those kind of challenges.
One of the drivers of share price. Look, I'm not a broker, I'm the Chief Executive, one of the drivers of share price is the size of the market cap. AIM-listed businesses who are smaller have suffered more than FTSE. You know, you know the FTSE 100 is touching record highs, certainly in sterling terms. You know, that's oil, banks, gas, energy, telecoms companies, insurers. You know, they are large global financial and energy companies, telecoms companies, that is driving that. Smaller companies, and particularly the AIM index, has underperformed there. That's always the same. Small companies suffer from more illiquid stocks.
Of course, you know, when they recover, the growth is higher and the smaller funds outperform the FTSE trackers. It's really just what your personal investment taste is catered to. That, I wouldn't get into too much detail on share prices. That's for the market. Those are my own comments. I've always been a fan of small companies. As you know, one of our close friends, Gervais Williams of Miton Group, talks about the great strengths of U.K. small caps. And so, you know, I've been a fan. Of course, the cycles of share prices are different, depending on the sector, depending on the scale, and depending on the liquidity. All right. Here's an interesting one.
How has Albert Ellis manage his commitments given his role in other boards outside of Staffline? I actually only have 1 board position. That's at HRnetGroup in Singapore. Because of the time zone, actually, any involvement I have is usually at an ungodly hour in the morning, because their board meetings will start around about midday Singapore time, which is sort of 3, 4 o'clock in the morning here. They have a very, very tight schedule that doesn't impact my role whatsoever. In fact, it's a tremendous business, HRnetGroup, and my role there is really to learn how they achieve the most outstanding sort of margins and growth that they have achieved. That's.
I'm there to help them in my, with my experience. It's very limited time commitment. I'm on no committees in that board, and we have about 4 board meetings a year. I've come to the end of my commitment with Asia House. I need to update my LinkedIn on that basis because that was the 31st of December, so I'm a little bit overdue on that. As a consequence, I certainly wouldn't want to do more than one role outside of Staffline. My other commitments are really sort of, there's no time whatsoever. Those are the only positions I have, the two positions I have, Asia House and HRNet. Asia House I've finished, so it's only 1.
I think that is a good question. Thank you. Again, gives me an opportunity to address that. I'm 150% involved in Staffline. It's seven-days-a-week job, but it's the best job I've ever had, and I'm absolutely loving it. Great. Thank you very much to everyone for listening, and look forward to seeing you soon. Thank you for your questions, and thank you for your time.
Albert, Daniel, thank you once again for updating investors today. Could I please ask investors not to close this session, as you will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Staffline Group plc, we would like to thank you for attending today's presentation. Good morning to you all.