HYDG9 Jan 2012 07:23
Pre-Close Trading Update
Hydrogen, the specialist recruitment business, is today issuing a trading update in respect of its financial year ended 31 December 2011.
Whilst recruitment markets have continued to be affected by global macroeconomic instability, the Group has been able to deliver a 9% increase in Net Fee Income ("NFI") to approximately £30m (2010: £27.6m) and expects to report PBT at the top end of the range of analyst forecasts. This continued growth in an uncertain environment is testament to the Group's careful investment in recent years to take the business into new markets as well as an ongoing emphasis on controlling costs.
Our Pharmaceuticals practice launched last year has performed exceptionally well, particularly in Europe, growing NFI by more than 140% during the year. Our Oil & Gas business, which was launched in 2008, continues to perform impressively, growing NFI by more than 60% to approximately £6.4m (2010: £3.9m). These two comparatively new ventures now contribute 29% of Group NFI, and demonstrate our capability to identify and deliver in new growth markets.
In the UK, the Group's contract business performed well driven by a strong performance in Technology, and we established an office in Edinburgh to meet client demand in this sector. There has been an ongoing trend towards contract placements in Financial Services, where permanent hiring has slowed. As a result, contract placements accounted for 55% of Group NFI during the year, against 46% in 2010, giving the Group a welcome increase in the visibility of future earnings during a period of economic uncertainty.
In line with our strategy of international expansion we opened an office in Hong Kong during the first half of the year, and are confident that this will be a key location in the growth of our business in the Asian region. International NFI increased to approximately 36% of NFI (2010: 32%) for the year, despite the strong performance of the UK business.
Notwithstanding the increase in the proportion of contract revenue, tight control of working capital has enabled the balance sheet to remain strong, with an expected marginal reduction in net debt from £2.2m at the end of 2010, comfortably within our banking facilities, which were extended to February 2014 during the year.