RPS’s annual profit rose as revenue increased and margins improved but the professional services group said rising costs and recruiting staff would be a challenge in 2022.
Adjusted pretax profit rose 40% at constant currency to £28.3m in the year to the end of December as fee revenue increased 5% on the same basis to £476.1m.
RPS swung to a statutory pretax profit of £12.4m from a £31.3m loss as revenue rose 4% at constant currency to £560.4m. The company, which focuses on regeneration and sustainability, declared a final dividend of 0.44p a share, taking the annual payout to 0.7p a share compared with no dividend a year earlier.
Fee revenue rose as markets recovered from the impact of the pandemic. RPS’s adjusted profit margin widened to 5.9% from 4.5% a year earlier with improvement at all parts of the business, it said.
RPS said its contracted order book was 14% higher than a year earlier with growth in UK & Ireland consulting, Norway and Australia Asia Pacific. Headcount is 5% higher than in December 2020.
The company said it was trading in line with expectations so far in 2022 but it said its main challenges would be rising costs and passing these on to customers, as well as recruiting and retaining staff to drive growth. Inflation is already high and is set to rise further because of the war in Ukraine. Employers also face tight labour markets and rising wages.
RPS shares fell 4.6& to 105p at 10:03 GMT, taking their decline so far in 2022 to almost 16%.
John Douglas, RPS’s chief executive, said: “I am pleased with the strong financial and operational progress delivered in 2021 with the much-improved momentum in our business driving these results.
“Our alignment with the key thematics of urbanisation, natural resources and sustainability has driven strong demand for our services and we have continued to benefit from operating in favourable markets which are seeing significant government and private sector investment.”
