Hydrogen Group shares climb following interim profit growth

(Sharecast News) - Shares in Hydrogen Group climbed on Tuesday after interim profits before tax and net fee income increased, though lower demand for contractors in the UK led to falling revenues.
The specialist recruitment group recorded a profit before tax of £1.4m for the six months ended 30 June, an increase of 19% over the same period last year, as net fee income increased by 4% to £15.3m thanks to both permanent revenue growth and improved contract margins.

Profits were also assisted by a 9% drop in the company's cost of sales to £48.7m, allowing Hydrogen to hike its proposed interim dividend by 20.0% to 0.6 pence per share.

Meanwhile, revenue decreased by 7.0% to £64.1m as lower demand for contractors in the UK offset increased and higher-margin contract activity in the USA.

Trading in the Asia Pacific segment also struggled, with net fee income falling by 12.0% to £4.9m because of the challenging market conditions in Hong Kong and Singapore.

Ian Temple, chief executive of Hydrogen, said: "I am delighted to be able to report continued strong earnings growth despite the group experiencing more challenging market conditions in a number of Asian markets, and the impact of Brexit-related uncertainty on demand levels for certain skill sets in the UK."

"The performance is a testament to both the operating model that we have developed and our agile business model that has allowed us to pivot investment into higher growth markets, particularly in the USA."

The AIM traded company said that it remained confident in achieving its full-year expectations, having traded well since the start of the second half as trading in Asia recovered to the levels seen during last year's third quarter.

Hydrogen Group shares were up 10.65% at 53.67p at 1153 BST.