Annual Report and Accounts 2009/2010

The principal activity of the company during the year was the provision of quality Information Technology, Communications and e-business Human Capital and software solutions to Blue Chip Clients both Nationally and Internationally.

IT Human Resources plc's core business is the provision of contract staff resourcing, permanent recruitment and retained search recruitment to Blue Chip Clients in some 20+ countries worldwide. As a wholly owned subsidiary ITHR Consulting Ltd provides consulting services focussed on IT project governance, project and programme management and software development and integration, predominantly to the Telecommunications and Mobile Internet Services sectors.

IT Human Resources plc is a proudly independent organisation, wholly funded, owned and managed by the Directors and Employees of the Company. All growth since our inception in 1999 has been achieved organically and has been driven by our quality ethos in all of our business dealings with all stakeholders; be they with our customers, candidates or suppliers and by our desire to succeed in a spirit of true partnership.

Our aim is to innovate our chosen marketplaces with total professionalism whilst being flexible enough through our independence not only to meet but exceed our Clients' expectations.

Now in our 12th year of trading I am pleased to present IT Human Resources plc's 11th annual Group Report and Accounts for the year ended 31st March 2010 - another record year for us.

This past year I feel almost every business in every industry sector has been a “cautious” one waiting to see if UK plc emerges from the deepest and longest recession for a generation, anxiously searching for those much heralded “green shoots” of recovery before setting out any expansion programme. Sadly within the fiscal year no such reassurance came, although the new calendar year 2010 did start out promising. So we ended the year with cautious optimism for the IT recruitment sector coming off what I described in my report of last year as an “unprecedented contraction in all recruitment sectors and in particular our core IT market where many competitors at best have reported falling revenues and profits and at worst significant losses and even bankruptcy”.

With this backdrop in mind I am pleased to report yet another record breaking year for IT Human Resources plc. Group revenues increased a modest 4% - but still a growth in the year - for the year to just under £25.2m. Gross Operating Profit (Gross fee income) decreased 1% to just over £5.8m, which came from a mixture of tightening sales margins, the weakness of Sterling and our investment in developing MyPhoneHas as a product. Net revenue was broadly in line with FY2008/09 turnover levels and net profitability given the above.

In this accounting period whilst we have not been able to continue our run of phenomenal growth we have maintained and consolidated our positions in both the mainstream IT resourcing/recruitment market and the Consulting/software development market. We have maintained our healthy net cash position - £5m - and our balance sheet is an extremely healthy £6.4m, giving all our stakeholders the confidence to do business with ITHR in another year where competitors have failed, and in particular the freelancer managed services sector, where some very high profile failures have lost the freelance community large sums of their fees.

During the year our recruitment and resourcing division did suffer from the general malaise of the economic climate however against that backdrop did perform extremely well, especially in the generation of revenue from permanent placements which increased slightly over the previous year. The division was given a boost toward the end of the year by the addition of a new leadership team (alluded to in last year’s report and accounts) and I expect that with significantly increased investment in our core recruitment and resourcing division that it will continue to benefit from the emerging recovery in the sector, especially in the freelance market.

In contrast our consulting arm performed robustly during the year, defending and increasing revenues slightly in its key markets whilst maintaining margins in a fiercely competitive sector – a very credible achievement in uncertain and turbulent times. The division also released its first product to market in the form of MyPhoneHas ( Launched at the Mobile World Congress 2010 in Barcelona we believe that MyPhoneHas is the world’s first (and certainly most advanced) socially aware online retail store which we are now heavily investing in, and marketing to, a targeted client audience which includes 1st and 2nd tier mobile operators as well as blue chip internet retailers from across the globe.

Our fledgling online recruitment portal experienced mixed fortunes and the strategy for this division is currently being revised to reflect the changing nature of this sector. We expect to be in a position to re-launch this offering after the Microsoft World Partner conference in the summer and then as soon as the new web portal comes out of development, most probably sometime around September.

Looking forward to FY2010/11 clearly this will prove to be another challenging year not only for us but the entire IT services industry, and we are gearing up to meet those challenges

The strategy of the board this coming year is a fivefold investment. That investment has already started in our core recruitment division with the strategic hire of a new Divisional Sales Director to be followed by a new leadership management team and a complete restructure of the whole division to facilitate a 100% increase in the sales team by Q3 – enabled by our planned office re-location, quadrupling the floor space of our current severely headcount restricted offices in Leicester Square. As already mentioned; renewed investment in our ITHR online business with a planned re-launch of the www site also in Q3. A further investment in software product development and the marketing sales activity of ITHR’s MyPhoneHas and other new ‘in development’ mobile internet applications. And finally, with the creation of ITHR Group Plc as the vehicle to enable expansion by acquisition continually seek to find a strategic “value add” acquisition to the Group using our strong balance sheet position and cash reserves which will significantly enhance our offering to a wide and diverse blue chip client base.

Sean Gallagher
Managing Director