HYDG.L Regulatory News (HYDG)

RNS Number : 4578G

Hydrogen Group PLC

04 March 2015

 

 

 

 

 

4 March 2015

 

HYDROGEN GROUP PLC

("Hydrogen" or the "Company" or the "Group")

(AIM: HYDG)

 

Final results for the year ended 31 December 2014 and Board changes

 

Hydrogen, the global specialist recruitment group, announces final results for the year ended 31 December 2014 and confirms Board changes effective from today, 4 March 2015.

 

Highlights

 

· Increased profitability in second half, following management action

· Strategy refocused on building profit - new goals set for 2015

· Tim Smeaton has today resigned as CEO, handing over to Ian Temple

· Ian Temple, co-founder of Hydrogen, moves from Chairman to full time Chief Executive

· Stephen Puckett, previously Senior Independent Director, appointed as Chairman (Non-Executive)

· John Glover is also today stepping down from the Board; a search is underway for a new Finance Director

 

Financial Highlights

· Revenue down by 6.7% to £169.4m (2013: £181.6m)

· Net Fee Income (gross profit) of £28.2m (2013: £31.9m)

· Reported profit before tax for the year of £0.4m (2013: £2.4m)

· Profit before tax and exceptional items of £2.4m (2013: £2.4m)

· Payback period of 6 months for exceptional costs of £2.0m (2013: nil)

· Operating profit before exceptional items stable at £2.6m (2013: £2.5m)

· Dividend for the year maintained at 4.6p (2013: 4.6p); proposed final dividend of 3.1p (2013: 3.1p) (ex-dividend date 30 April 2015)

 

Stephen Puckett, Chairman, commented:

"Hydrogen has been through a difficult period of restructuring and cost reductions and is now firmly focused on its core opportunities. The benefit of the cost reductions is apparent in the improved underlying profitability in the second half of 2014. Hydrogen's plan for 2015 is to concentrate on sustainable, profitable business.

"Despite general economic uncertainties and sector-specific disruption resulting from the fall in oil prices, the Board sees opportunities for development and will continue to invest in areas where growth can be delivered at acceptable levels of profitability.

"The Board is announcing today that Tim Smeaton, CEO and a co-founder of Hydrogen, and John Glover, Finance Director, have decided to step down from their respective Board positions with immediate effect. The Board would like to thank Tim and John for their contributions to the Group over the years. The changes to the Board which result from these resignations are intended to ensure that the Board delivers on its key objectives of improving profitability, increasing cash generation and growing the Group's revenue."

 

Enquiries:

Hydrogen Group plc 020 7002 0000

Ian Temple

 

Shore Capital (NOMAD and Broker) 020 7468 7904

Bidhi Bhoma

Edward Mansfield

 

Citigate Dewe Rogerson 0207 282 1028/

Michael Berkeley 0207 638 9571

Caroline Merrell

 

Notes to Editors:

 

Hydrogen is a global specialist recruitment business. We build relationships by finding specialist candidates our clients have difficulty sourcing, placing exceptional, hard to find professionals in countries across the world, on both a contract and permanent basis. Our joined-up practice teams combine international reach with local expertise and specialist knowledge, to provide visibility of world class candidates.

 

http://www.hydrogengroup.com

 

 

CHAIRMAN'S STATEMENT

 

In 2014, following a four year period of diversification and investment, the Board took decisive action to streamline the business and reduce operating costs. A comprehensive review of the business was undertaken with the aim of reducing risk and increasing performance at all levels, leading to an improvement in profitability in the second half of the year.

The process of restructuring started with senior management changes. A detailed review of sales and operational performance in all offices then followed, with the executive team prioritising areas for further investment and scaling back, or closing, underperforming businesses.

2014 Performance

Net Fee Income ("NFI") for the full year was 11.8% lower at £28.2m (2013: £31.9m) but, as a consequence of the actions taken in the first half, profit in the second half was delivered in line with the Board's expectations. Despite difficult trading conditions in some regions and a high degree of change within the business, operating profit before exceptional items for the year to 31 December 2014 was maintained at £2.6m (2013: £2.5m). Reported profit before tax for the year, taking account of exceptional items, was £0.4m (2013: £2.4m).

The Board stated at the half year stage that the payback period for the actions taken should be around 6 months and that intention was delivered. Savings of £3.8m in administration costs have been delivered for 2014 compared with 2013, offsetting the exceptional costs of £2.0m relating to the non-recurring costs of restructuring.

Hard decisions had to be made and everyone in the Group has been impacted in some way. The Board appreciates the efforts of all those who continued to deliver the standards of service expected by our clients and candidates, despite the changes going on within the business. The profit before tax delivered this year could not have been achieved without their hard work and support.

In the second half of the year, there were some positive and encouraging indicators for the future. The Group experienced growth in its Legal practice globally, more than doubled NFI from its operations in the US, and continued to develop its presence in Malaysia by entering into an agreement with an experienced local investor.

Strategy

Strategic objectives agreed in 2012 were aimed at diversifying the business to reduce risk. Growing out of the UK to become a single brand global recruiter, developing newer practices to address project-focused Technical and Scientific sectors and balancing the permanent and contract businesses were valid goals.

In 2014 the strategy was adjusted to refocus the business on delivering and sustaining profit. The Board now believes that the Group has sufficient opportunities to drive sustainable profit growth. Consequently, the Board does not believe it needs to diversify the Group further at this point, either by sector or by geography.

The aims for 2015 will be to deliver a consistent level of NFI and to increase EBITDA and cash generation.

 

Dividend

The Board has recommended a final dividend of 3.1p per share (2013: 3.1p per share), maintaining the total dividend for the year at 4.6p per share (2013: 4.6p). Subject to approval at the Annual General Meeting ("AGM"), the dividend will be paid on [29] May 2015 to shareholders on the register on 1 May 2015.

 

The Board

Tim Smeaton has expressed his wish to step down as CEO and his resignation from the Board will take immediate effect, though he will remain available to the Group as needed to complete a smooth handover of responsibilities. A co-founder of Hydrogen, Tim led the international expansion of the business and the establishment of Hydrogen as a global recruitment brand was his vision. I would like to thank Tim for his contribution in building Hydrogen into the business it is today.

 

Ian Temple, who had stepped back from executive responsibilities in 2012 to become Chairman, has been appointed as full time Chief Executive. Ian, a co-founder of Hydrogen, will provide decisive leadership and continuity to the business.

Stephen Puckett has been appointed as Chairman of Hydrogen Group plc on a non-executive basis, with effect from today. Stephen was previously the Group Finance Director of Michael Page International plc (now Page Group plc) for over 11 years and has been an independent non-executive director of the Company since September 2012.

Anne Baldock, who also joined the Board in September 2012, has succeeded Stephen Puckett as Senior Independent Director.

These appointments preserve the separation of roles on the Board. They are in line with the Group's existing governance arrangements which take account of the guidelines contained in the QCA 2013 Corporate Governance Code for Small and Mid-Size Quoted Companies.

 

John Glover has also signified his intention to step down after 8 years as Finance Director and the search for his successor is now under way.

 

Outlook

 

Hydrogen's plan for 2015 is to remain focused on sustainable, profitable business. Other than continuing to develop our business in Malaysia, no new office openings are planned and no investment in new practices is expected this year.

 

The well-publicised fall in the market price of oil has already had an adverse impact on hiring activity in the Oil and Gas sector. It is not yet clear whether skill sets developed in the Oil and Gas sector will be transferable to other technical projects and the full impact in 2015 is therefore unknown.

 

However, the Board sees opportunities for development and will continue to invest in areas where growth can be delivered at acceptable levels of profitability.

 

Hydrogen has been through a difficult period of restructuring and cost reductions. The Group is now firmly focused on its core opportunities. The changes implemented are intended to ensure that the Board delivers on its key objectives of improving profitability, increasing cash generation and growing the Group's revenue.

 

 

Stephen Puckett

Chairman

 

3 March 2015

 

 

BUSINESS REVIEW

 

Hydrogen has grown from a UK business, focused on legal, financial and technology recruitment, to a global specialist recruitment business. We build relationships by finding specialist candidates our clients have difficulty sourcing, placing exceptional, hard to find professionals in countries across the world, on both a contract and permanent basis.

 

We concentrate on specialist skill sets in niche markets where there is high demand and where we can provide services at a profitable pricing point.

 

A challenging year in 2014

 

The first half of 2014 proved to be very difficult, with a number of unforeseen client project freezes and new wins taking longer than expected to flow through to NFI. The Group had also previously invested in a number of incubator businesses, some of which reached the end of their start-up phase in the early part of 2014 without producing the results the Board would have liked.

 

The Board took swift action on leadership change, cost control and individual performance. The business needed to reduce costs to kick start the drive to deliver return on investments. That took the form of stripping the business back to basics and concentrating on core areas where the business can deliver and increase sustainable profit.

 

One major consequence of the closure of incubators which did not perform and concentration on profitable business was a significant reduction in headcount, from 383 at the end of 2013 to 285 at 31 December 2014. Through 2014 and into 2015 the Group has also seen leadership changes up to and including Board level.

 

Adjusting the strategy

 

In 2012, strategic goals were adopted aimed at delivering growth over a four year period to December 2016. Key elements included establishing stronger client relationships, investing in newer practices and locations and joining up practice areas under a single IT structure and global brand.

 

The three main pillars of the 2016 strategy - to develop the Technical and Scientific operating segment, to diversify internationally and to balance contract and permanent placements - allowed Hydrogen to pinpoint the best areas for investment going forward. Having reviewed the progress made, the strategy has now been adapted to focus on sustainable profitability.

 

At the end of 2014, the Board agreed that the Group was not on track to deliver the 2016 strategic goals and set the following new strategic goals for 2015:

 

● Profit growth

● Company to be dividend bearing and cash neutral (in growth mode)

● Growth in existing clients

● Recruitment, development and retention of exceptional people

● Professionalism and efficiency

● Contract NFI growth; permanent business adding profit

 

Operating segments

 

The business is structured into two principal operating segments (Professional Support Services and Technical and Scientific), which address different market sectors. Balancing the two segments in terms of their share of NFI is part of the strategy to mitigate against the risk of overexposure to one particular section of the global economy.

 

The Professional Support Services operating segment contains the Business Transformation, Finance, Legal and Technology practices. The Technical and Scientific operating segment includes the Oil and Gas and Life Sciences practices as well as the newer areas of business development, including contract placements for power and engineering projects.

Professional Support Services

In 2014, the Professional Support Services operating segment delivered 58% of total Group NFI (2013: 55%). There was strong growth in the Legal and Technology practices which grew their NFI by 10% and 33% respectively, year on year. Business Transformation declined during the year by 19%, almost entirely due to a reduction in the size of our largest project, but there were some notable client wins and the pipeline remains strong.

A recent study carried out by Hydrogen's Business Transformation team, looking at the banking sector in particular, noted that the amount and complexity of regulatory change continues to increase. The demand for candidates with those sorts of skills and experience across Europe, in particular, is still high and seems likely to continue.

In the UK, the outcome of the general election and economic factors will inevitably have a bearing on future recruitment plans for client companies in the UK. The financial services industry, for example, is likely to see heavier demand for transformation professionals as more competition comes into the market.

At the end of the year, we set up a dedicated "Major Accounts" function in the UK to align our consultants' and leaders' skills with the needs of our larger, strategic clients who have complex structures and higher regulatory and compliance demands.

Technical and Scientific

 

The fall in oil prices in the second half of 2014 and continuing into 2015 has had an impact on our global Oil and Gas practice with some project delays and cancellations. Furthermore, contractors have seen a significant reduction in day rates over a short period, both in the US and EMEA. NFI from Oil and Gas reduced by 17% during 2014.

 

International business

The UK business remained flat whilst the restructuring and the strength of Sterling reduced the size of our international business. 63% of total NFI was generated from the UK (2013: 56%).

However, we know there are significant international opportunities as our strategic clients transform and grow their own businesses. An example is Malaysia where we won a major project and the growth of financial services outsourcing means there is a higher demand for contract workers in finance, technology and business transformation. We developed our Kuala Lumpur presence in 2014 in response to client demand and, towards the end of the year, we entered into an agreement with an experienced local partner to help us develop client relationships and pursue potential business opportunities in that region.

 

Our Houston office, which opened in 2013, performed well in 2014 and increased its NFI by 300%, albeit from a low base. Reductions in oil prices have clearly impacted activity in that sector more recently.

 

In 2014, we placed candidates in around 70 different countries.

 

Permanent and Contract

 

We place candidates in both permanent and contract roles. Permanent placements play to our experience in finding rare skills and satisfying the demand for niche, specialist skills. Contract provides more predictable revenue. Contract represented 54% of total NFI in 2014 (2013: 53%) and the contract book is expected to continue to exceed 50% of total NFI going forward.

 

Hydrogen has built up real expertise in winning and executing value added solutions for significant clients and has won a number of significant projects during the year that will provide predictable NFI, allowing the Group to align its operational support more closely to sales and manage the timing of increases in administrative costs.

 

There was a decline in contractor renewals by our largest client following completion of one major project. However, overall the number of contractors working on-site with clients increased slightly during the year. The contract business has remained steady notwithstanding a reduction in the number of consultants working in these markets.

 

Clients and Candidates

 

The development of different recruitment practices and entry into new regions from 2010 to 2014 helped the Group to reduce risk by diversifying away from a reliance on UK based financial businesses. We have a strong, global client list with plenty of opportunities for growth.

 

In the last few months, we have been successful in winning new strategic clients where demand is high and we are able to find talented professionals with the specialist skills needed by our clients - for example, highly skilled contractors for technology and business transformation projects in the UK and qualified professionals who are ready to "return home" to Asia.

 

We would like to thank all our clients for their support over the last year. We would also wish to pay tribute to the candidates and contractors who work with us, many of whom establish a connection with us that lasts through several years and stages of career development.

 

Current Trading

Hydrogen is coming through a difficult period and there are certainly continuing challenges, both from external factors such as the dramatic and sudden change in the Oil and Gas market and internal factors such as the Board changes announced today.

 

With Oil and Gas making up around two thirds of the Technical and Scientific operating segment, it is not surprising that the pressure on NFI seen at the end of 2014 has continued into 2015. The Group remains vigilant and has the flexibility and agility to respond to potential impacts in other sectors, including skills shortages which may develop.

 

The business is well financed and cash generating, with a strong platform, hard working people and a solid client base capable of delivering profit.

 

 

FINANCIAL REVIEW

Revenue

Group revenue to 31 December 2014 totalled £169.4m (2013: £181.6m).

Net Fee Income (NFI)

NFI (shown as gross profit in the income statement) comprises the total placement fees of permanent candidates and the margin earned on placement of contract candidates.

Overall, the Group saw a reduction in NFI of 11.8% (7.5% on a like for like basis) to £28.2m (2013: £31.9m) - the fall being almost entirely attributable to international placements, which declined by 26.2% to £10.3m (2013: £13.9m), representing 37% of total Group NFI (2013: 44%)

The main factors behind this decline were falling activity levels and margins in the Oil and Gas markets, most acutely in Europe, following the fall in the price of oil; the weakness of economic activity in Australia, where stabilisation from mid-year enabled the business to return to growth and profitability; and the overall strength of Sterling throughout the period.

In spite of these headwinds we continued to see NFI growth of 5% in Singapore (11% on a like for like basis) and an increase of over 300% in the recently opened Houston office in the USA. NFI in the UK was broadly unchanged at £17.9m (2013: £18.0m).

Operating Segments

On a market sector basis, NFI from the Technical and Scientific operating segment totalled £11.7m (2013: £14.3m), and contributed 42% (2013: 45%) of total NFI. As discussed above, NFI growth was held back by declining activity in the Oil and Gas sector caused by project delays and cancellations a result of the fall in oil prices. In addition, as part of the business restructuring program undertaken in the first half of 2014, the business closed incubators in power and mining that failed to meet milestone KPIs.

NFI in the Professional Support Services operating segment declined by 6.3% to £16.5m (2013: £17.6m). A strong performance by the Legal practice globally was not sufficient to offset the decline in contract NFI in the Business Transformation practice, where delays in project sign-off by a major client had an adverse impact on the number of contractors placed in the period. Despite these delays, this client continued to be the Group's largest customer, representing approximately 12% of total NFI for 2014 (2013: 13%). Other than fluctuations in client demand arising in the normal course of business, and the Group's ability to win new clients, there is no expectation of significant change in this position in the foreseeable future. No other customer represents more than 5% of NFI.

The project delays in Business Transformation discussed above had the effect of reducing NFI from contract recruitment by 9.7% to £15.3m (2013: £16.9m). The weakness in Oil and Gas, partially offset by the strong performance in the Legal practice, had the effect of reducing fees from permanent recruitment by 14.1% to £12.9m (2013: £15.0m). Overall the balance between permanent and contract business continued to move in favour of contract, with fees from contract placements representing 54% of NFI, and permanent fees 46% of NFI (2013: 53% : 47%).

Restructuring

The Group undertook a comprehensive review of the business in the first half of 2014, with the aim of streamlining business operations, reducing complexity and increasing future profitability. The Group has taken an exceptional charge of £2.0m associated with the one-off costs of these changes. Cost savings resulted in administration costs for the year falling by £3.8m to £25.6m (2013: £29.4m), and the conversion ratio (based on operating profit before exceptional items) increased to 9.1% (2013: 7.9%).

Headcount

Total headcount at 31 December 2014 was 26% lower than 2013, at 285 (2013: 383). Average total headcount for the year was 343, 13 down on the previous year (2013: 356). Productivity inevitably suffered during the course of the review, averaging £77,100 per head for the first half of the year, based on average total employees, but rebounded to the prior year level of £89,000 for the second period, giving an average for the year of £82,073 (2013: £89,612).

Finance costs

Finance costs were broadly unchanged from the previous year at £0.2m (2013: £0.2m).

Profit before taxation

Profit before taxation for the year (before exceptional items) was £2.4m (2013: £2.4m).

Taxation

The tax charge for the year was £0.5m (2013: £0.9m), giving an effective tax rate of over 100% (2013: 36%). This is above the UK statutory rate of 21.5%, due to:

· overseas tax suffered, for which relief is not available against UK tax payable;

· unutilised tax losses arising in 2014 in the Group; and

· non-deductible expenses

 

In total, at the reporting date, the Group had unutilised tax losses of £2.4m (2013 £1.8m) available for offset against future profits, for which no deferred tax assets had been recognised.

Dividend

The Board's intention is to maintain a consistent dividend payment policy. In September 2014, the Board declared an interim dividend of 1.5p per share (2013: 1.5p) which was paid to shareholders in November 2014. A final dividend of 3.1p per share (2013: 3.1p) is proposed, maintaining the total dividend for the year unchanged at 4.6p per share (2013: 4.6p). The proposed dividend will be paid on 29 May 2015 to shareholders on the register on 1 May 2015, subject to approval at the AGM.

Earnings per share

Basic loss per share was (0.42)p (2013: earnings 6.8p). Adjusted basic earnings per share, taking into account exceptional items, was 8.47p (2013: 6.79p).

Balance Sheet

Net assets at 31 December 2014 decreased by £1.4m (5.0%) to £25.2m (2013: £26.6m).

Tight control of working capital was maintained throughout the year; however a change in payment practice by one client in December resulted in a £5.0m remittance not being received until 6 January 2015. This resulted in a temporary increase in trade receivables at the end of the period to £16.2m (2013: £13.3m) or, expressed in days of sales outstanding (DSO's) an increase of 8 days to 31 days (2013: 23 days). The delay also had a knock-on impact on year end net debt, leading to a temporary increase of £2.7m to £6.7m (2013: £4.0m). Time worked by contractors for the month of December is accrued on a gross basis in the financial statements, with revenue to be billed included in accrued income within current assets, and payments due to contractors included in accruals within current liabilities. Fees recognised for permanent placements not yet invoiced or with start dates after 31 December 2014 (forward fees) are also included in accrued income.

The Group saw a reduction of 9.5% in accrued income to £14.5m (2013: £16.1m), mainly as a result of work undertaken in the year to eliminate delays in invoicing and hence reduce levels of permanent accrued income.

 

Principal risks and uncertainties

Hydrogen does not have any contractual arrangements with any single significant individual or company which are essential to the continuation of the business.

The Board has continued to review the risks and uncertainties affecting the business during 2014. A summary of principal business risks, which include changes in the macro economic climate which could influence recruitment decisions and risks to short term performance, and commentary on any changes to those risks since the year end, will be included in the Annual Report.

The profile of business risks fluctuates from time to time and the actions being taken to manage and control risks are intended to mitigate the effects on the business, but cannot eliminate risks absolutely.

There is a clear framework of authorities within the business, up to and including a schedule of matters which can be agreed only by the Board. The Board has not delegated its responsibility for financial risk management, including the management of treasury activities.

Treasury management and currency risk

Approximately 83% of the Group's revenue in 2014 (2013: 84%) was denominated in Sterling. For contract revenue, the Group aims to pay and bill in the same currency to provide a natural hedge for the majority of its revenues. The Group has not utilised foreign currency options during the year to manage the foreign exchange risk on its non-Sterling fees.

 

Cash flow and cash position

At the start of the year the Group had net debt of £4.0m. Before investment in working capital and payment of taxes and interest costs, the Group generated cash from trading activities of £2.6m (2013: £3.4m). The delay in receipt of one remittance of £5.0m at the year-end resulted in an investment in working capital of £1.9m (2013: £0.4m). After payment of taxes of £0.3m (2013: £0.8m) and interest payments of £0.2m (2013: £0.1m), cash generated from operations before exceptional items was £0.2m (2013: £2.0m). The cash impact of exceptional items was an outflow of £1.5m (2013: nil).

£0.3m was spent on the development of CRM and management information systems (2013: £0.2m).

A final dividend for 2013 of £0.7m was paid in May 2014 and an interim dividend for 2014 of £0.3m was paid in November 2014.

At 31 December 2014 the Group had net debt of £6.7m (2013: £4.0m) as a result of a client remittance being received later than expected, as explained above. The increase at the year end was reversed in January 2015.

Bank facilities

The Group has an invoice discounting facility of £18m which was renewed in February 2015 with a commitment to April 2018. The maximum utilisation in 2014 was 71% (2013: 80%). During 2014 the Group also had a Revolving Credit Facility ("RCF") of £3m, for a three year term to July 2015. In February 2015 the Group repaid and cancelled the RCF as it was surplus to funding requirements.

 

KEY PERFORMANCE INDICATORS

		2014	2013
NFI (gross profit)	£M	28.2	31.9
Conversion ratio (Operating profit before exceptional items divided by gross profit)	%	9.1	7.9
Productivity (gross profit divided by total average headcount)	£k	82	90
Days of sales outstanding (DSO)	Days	31	23
Average headcount during the year		343	356
Ratio of billing headcount to support headcount (average for year)		3.1	3.0
Net debt at year end	£M	6.7	4.0

 

The Board has agreed strategic goals for 2015 with measurable targets, aimed at securing an improvement in profitability in the short to mid term.

 

 

Ian Temple

Chief Executive

 

3 March 2015

 

 

The Board of Directors announces the following audited results for the year ended 31 December 2014, which were approved by the Board on 3 March 2015.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2014

	Note		2014 £'000	2013 £'000
Revenue	2		169,430	181,603
Cost of sales			(141,279)	(149,701)
Gross profit	2		28,151	31,902
Administration expenses			(25,599)	(29,372)
Operating profit before exceptional items	2		2,552	2,530
Exceptional items	5		(1,988)	-
Operating profit			564	2,530
Finance costs	3		(196)	(189)
Finance income	4		17	13
Profit before taxation			385	2,354
Income tax expense	7		(479)	(850)
(Loss)/profit for the year			(94)	1,504
Other comprehensive losses:
Items that will be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations			(69)	(423)
Other comprehensive losses for the year, net of tax			(69)	(423)
Total comprehensive (loss)/income for the year			(163)	1,081
Attributable to:
Equity holders of the parent			(163)	1,081
Earnings per share
Basic (loss)/earnings per share (pence)	8		(0.42)p	6.79p
Diluted (loss)/earnings per share (pence)	8		(0.41)p	6.46p
The above results relate to continuing operations.

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2014

 

	Note	2014 £'000	2013 £'000
Non-current assets
Goodwill	9	13,658	13,658
Other intangible assets	10	1,212	1,098
Property, plant and equipment	11	1,536	1,936
Deferred tax assets	12	52	182
Other financial assets	13	278	261
		16,736	17,135
Current assets
Trade and other receivables	13	31,114	29,704
Cash and cash equivalents	14	5,975	3,559
		37,089	33,263
Total assets		53,825	50,398
Current liabilities
Trade and other payables	15	15,416	15,836
Borrowings	16	12,704	7,574
Current tax liabilities		80	117
Provisions	17	308	247
		28,508	23,774
Non-current liabilities
Deferred tax liabilities	12	34	34
Provisions	17	60	29
		94	63
Total liabilities		28,602	23,837
Net assets		25,223	26,561
Equity
Called-up share capital	18	239	237
Share premium account		3,520	3,519
Merger reserve		16,100	16,100
Own shares held		(1,338)	(1,338)
Share option reserve		2,041	2,184
Translation reserve		(196)	(127)
Retained earnings		4,857	5,986
Total equity		25,223	26,561

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

As at 31 December 2014

 

	Called-up  sharecapital£'000		Share premiumaccount £'000	Merger reserve £'000	Ownsharesheld£'000	Shareoption reserve£'000	Trans-lation reserve£'000	Retained earnings£'000	Totalequity£'000
At 1 January 2013	235		3,512	16,100	(1,338)	2,060	296	5,436	26,301
Dividends	-		-	-	-	-	-	(1,003)	(1,003)
Share option charge	-		-	-	-	124	-	-	124
Tax on share option charge	-		-	-	-	-	-	49	49
Shares issued from EBT	2		7	-	-	-	-	-	9
Transactions with owners	2		7	-	-	124	-	(954)	(821)
Profit for the year		-	-	-	-	-	-	1,504	1,504
Other comprehensive losses:
Foreign currency translation	-		-	-	-	-	(423)	-	(423)
Total comprehensive income for the year	-		-	-	-	-	(423)	1,504	1,081
At 31 December 2013	237		3,519	16,100	(1,338)	2,184	(127)	5,986	26,561
Dividends	-		-	-	-	-	-	(1,032)	(1,032)
Share option charge reversal	-		-	-	-	(143)	-	-	(143)
Tax on share option charge	-		-	-	-	-	-	(3)	(3)
New shares issued	2		1	-	-	-	-	-	3
Transactions with owners	2		1	-	-	(143)	-	(1,035)	(1,175)
Loss for the year	-		-	-	-	-	-	(94)	(94)
Other comprehensive loss:
Foreign currency translation	-		-	-	-	-	(69)	-	(69)
Total comprehensive loss for the year	-		-	-	-	-	(69)	(94)	(163)
At 31 December 2014	239		3,520	16,100	(1,338)	2,041	(196)	4,857	25,223

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2014

 

	Note		2014 £'000	2013 £'000
Net cash (used in)/generated from operating activities	19		(1,296)	2,043
Investing activities
Finance income			17	13
Proceeds from disposal of property, plant and equipment			23	26
Purchase of property, plant and equipment	11		(18)	(1,778)
Purchase of software assets	10		(348)	(178)
Net cash used in investing activities			(326)	(1,917)
Financing activities
Proceeds on issuance of ordinary shares			3	9
Increase in borrowings	16		5,130	2,112
Equity dividends paid	6		(1,032)	(1,003)
Net cash generated from financing activities			4,101	1,118
Net increase in cash and cash equivalents			2,479	1,244
Cash and cash equivalents at beginning of year	14		3,559	2,704
Effect of foreign exchange rate changes			(63)	(389)
Cash and cash equivalents at end of year	14		5,975	3,559

 

 

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2014

 

1 Basis of preparation

Hydrogen Group plc is the Group's ultimate parent company. The Company is a limited liability company incorporated and domiciled in the United Kingdom. The registered office address and principal place of business is 30 Eastcheap, London, EC3M 1HD, England. Hydrogen Group plc's shares are listed on the AIM Market.

The consolidated financial statements of Hydrogen Group plc have been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union and also comply with IFRIC interpretations and Company Law applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention. The Group's accounting policies, as set out below, have been consistently applied to all the periods presented.

The factors considered by the Directors in exercising their judgment of the Group's ability to continue to operate in the foreseeable future are set out in the Annual Report and summarised in the Financial Review. The Group has prepared financial forecasts for the period to 31 March 2016 and the directors have a reasonable expectation that the Group will have sufficient cashflow and available resources to continue operating in the foreseeable future. On these grounds the Board considers it reasonable to continue to adopt the going concern basis for the preparation of the financial statements.

The consolidated financial statements for the year ended 31 December 2014 (including comparatives) are presented in GBP '000, and were approved and authorised for issue by the Board of Directors on 3 March 2015. The full Annual Report and Accounts will be presented at the Company's next Annual General Meeting and will be filed with the Registrar of Companies.

2 Segment reporting

Segment operating profit is the profit earned by each operating segment excluding the allocation of central administration costs, and is the measure reported to the Group's Board for performance management and resource allocation purposes.

(a) Revenue, gross profit and operating profit by discipline

For management purposes, the Group's recruitment business is organised into the following two operating segments:

- Professional Support Services (business transformation, legal, finance and technology); and

- Technical and Scientific (oil and gas, power and life sciences)

 

The operating segments noted reflect the information that is regularly reviewed by the Group's Chief Operating Decision Maker (CODM) which is the Board of Hydrogen Group plc. Both of these operating segments have similar economic characteristics. 

 

2(a) Revenue, gross profit and operating profit by discipline (continued)

2014										2013
		Professional support services£'000	Technical and scientific£'000	Non-allocated£'000	Total£'000			Professional support services£'000			Technical and scientific£'000	Non-allocated£'000	Total£'000
Revenue		116,586	52,844	-	169,430				127,507		54,096	-	181,603
Gross profit (Net Fee Income)		16,456	11,695	-	28,151				17,588		14,315	(1)	31,902
Depreciation and
amortisation		325	250	-	575				351		307	-	658
Operating profit/(loss) before exceptional items		3,685	302	(1,435)	2,552				2,625		1,192	(1,287)	2,530
Finance costs					(196)								(189)
Finance income					17								13
Profit before tax and exceptional items					2,373								2,354

Non-allocated costs represent central management costs that are not allocated to operating segments.

Revenue reported above represents revenue generated from external customers. There were no sales between segments in the year (2013: Nil).

The accounting policies of the operating segments are the same as the Group's accounting policies described above. Segment profit represents the profit earned by each segment without allocation of central administration costs, finance costs and finance income.

There is one external customer that represented 32% of the entity's revenues, with revenue of £53,800,000, and approximately 12% of the Group's NFI, included in the Professional Support Services segment (2013: one customer, revenue £65,449,000, Professional Support Services segment).

(b) Revenue and gross profit by geography 

		Revenue				Gross profit
		2014£'000	2013£'000		2014£'000		2013£'000
UK		136,393	142,630		17,888		17,991
Rest of world		33,037	38,973		10,263		13,911
		169,430	181,603		28,151		31,902

 

(c) Revenue and gross profit by recruitment classification 

		Revenue			Gross profit
		2014£'000	2013£'000		2014£'000	2013£'000
Permanent		12,897	15,016		12,897	15,012
Contract		156,533	166,587		15,254	16,890
		169,430	181,603		28,151	31,902

The information reviewed by the Chief Operating Decision Maker, or otherwise regularly provided to the Chief Operating Decision Maker, does not include information on total assets and liabilities. The cost to develop this information would be excessive in comparison to the value that would be derived.

 

 

3 Finance costs

 

			2014 £'000	2013£'000
Interest on invoice discounting			122	81
Interest on bank overdrafts and loans			74	108
			196	189

 

4 Finance income 

			2014 £'000	2013 £'000
Bank interest receivable			10	13
Other income			7	-
			17	13

 

5 Exceptional items

Exceptional items are costs that are separately disclosed due to their material and non-recurring nature. They have arisen as a result of the comprehensive review of the Group's operations and actions implemented to reduce the Group's administration costs: 

		2014£'000	2013£'000
Redundancy costs		1,186	-
Property costs		634	-
Tangible asset write down and disposal		69	-
Advisors costs		66	-
Other		33	-
Total		1,988	-

 

 

6 Dividends

	2014 £'000		2013 £'000
Amounts recognised and distributed to shareholders in the year
Interim dividend for the year ended 31 December 2014 of 1.5p per share (2013: 1.5p per share)		337	335
Final dividend for the year ended 31 December 2013 of 3.1p per share (2012: 3.0p per share)	695		668
	1,032		1,003

An interim dividend of 1.5p (2013: 1.5p) per share was paid on 7 November 2014 to shareholders on the register at the close of business on 10 October 2014. The interim dividend was approved by the Board on 15 September 2014.

The final dividend in relation to 2013 was recommended on 28 March 2014, and was not recognised as a liability in the year ended 31 December 2013.

The Board proposes a final dividend of 3.1p per ordinary share for the year ended 31 December 2014 (2013: 3.1p), to be paid on 29 May 2015 to shareholders on the register as at 1 May 2015, subject to approval at the AGM. The proposed final dividend had not been approved by shareholders at 31 December 2014. No income tax consequences are expected to arise at the Hydrogen Group plc level as a result of this transaction.

 

7 Tax

 

(a) Analysis of tax charge for the year:  The charge based on the profit for the year comprises:			2014 £'000	2013 £'000
Corporation tax:
UK corporation tax on profits for the year			171	790
Adjustment to tax charge in respect of previous periods			(20)	(174)
			151	616
Foreign tax:
Current tax			201	-
Total current tax			352	616
Deferred tax:
Origination and reversal of temporary differences			108	(103)
Adjustments in respect of previous periods			19	337
Total deferred tax			127	234
Tax charge on profit for the year			479	850
UK corporation tax is calculated at 21.5% (2013: 23.25%) of the estimated assessable profits for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
(b) The charge for the year can be reconciled to the profit per the Consolidated Statement of Comprehensive Income as follows:
			2014 £'000	2013 £'000
Profit before tax			385	2,354
Tax at the UK corporation tax rate of 21.5% (2013: 23.25%)			83	547
Effects of:
Expenses not deductible for tax purposes			97	91
Tax losses arising in the year not relieved			131	191
Profits charged at (lower) rates of tax			(46)	(56)
Adjustment to tax charge in respect of prior periods			1	163
Share-based payments			5	(125)
Other			7	39
Foreign tax suffered			201	-
Tax charge for the year			479	850

 

There has been a deferred tax charge of £3,000 relating to share options charged directly to equity (2013: credit of £49,000) (see note 12).

In total, at the reporting date, the Group had tax losses of £2,426,000 (2013: £1,752,000) available for offset against future profits, for which no deferred tax assets have been recognised.

 

8 (Loss)/earnings per share

 

(Loss)/earnings per share is calculated by dividing the (loss)/profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue.

 

Fully diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares by existing share options and share incentive plans, assuming dilution through conversion of all existing options and shares held in share plans.

 

 

From continuing operations			2014 £'000	2013 £'000
Earnings
(Loss)/profit attributable to equity holders of the parent			(94)	1,504
Adjusted (loss)/earnings
(Loss)/profit for the year			(94)	1,504
Add back: exceptional costs			1,988	-
			1,894	1,504
Number of shares
Weighted average number of shares used for basic and adjusted earnings per share			22,361,997	22,141,885
Dilutive effect of share plans			588,529	1,129,433
Diluted weighted average number of shares used to calculate diluted and adjusted diluted earnings per share			22,950,526	23,271,318
Basic (loss)/earnings per share (pence)			(0.42p)	6.79p
Diluted (loss)/earnings per share (pence)			(0.41p)	6.46p
Adjusted basic (loss)/earnings per share (pence)			8.47p	6.79p
Adjusted diluted (loss)/earnings per share (pence)			8.25p	6.46p

9 Goodwill 

		2014 £'000	2013 £'000
Cost
At 1 January and 31 December		19,228	19,228
Accumulated impairment losses
At 1 January and 31 December		(5,570)	(5,570)
Carrying amount at 31 December		13,658	13,658
Allocation of goodwill to cash generating units (CGU):
Professional Support Services		13,658	13,658

 

Goodwill arising on business combinations is tested annually for impairment or more frequently if there are indications that the value of goodwill may have been impaired. Goodwill has been tested for impairment by comparing the carrying value with the recoverable amount.

The recoverable amount is determined on a value-in-use basis utilising the value of cash flow projections over eight years, which is estimated by management to be the duration of the recruitment cycle. The first year of the projections is based on detailed budgets prepared as part of the Group's performance and control procedures. Subsequent years are based on extrapolations using the key assumptions listed below. Cash flows are discounted by the cash generating unit's weighted average cost of capital. Management believes that no reasonably possible change to the key assumptions given below would cause the carrying value to materially exceed the recoverable amount.

Management determines that there has been no further impairment in the carrying value of goodwill.

The key assumptions for revenue growth rates and discount rates used in the impairment review are stated below: 

	Growth rates
Professional Support Services	2015%	2016-2020%	2021-2022%	Discountrate %
Net fee income growth rate	N/A	5%	2.3%	10.5%

Revenue for 2015 has been taken from the Group's detailed operating budgets, taking into account information on specific client projects and hiring plans for the coming year. Overall growth rate assumptions have not been utilised in generating revenue forecasts.

The revenue growth rates for 2015-2020 are the Group's own internal forecasts, supported by external industry reports predicting improving conditions in the industry, with demand for the industry's services anticipated to pick up.

The revenue growth rates for 2021 and 2022 are based on long term average growth rates for the UK economy.

The discount rate used is an estimate of the Group's weighted average cost of capital, based on the risk adjusted average weighted cost of its debt and equity financing.

 

 

10 Other intangible assets

		Domain names& trademarks£'000	Computersoftware£'000	Total£'000
Cost
At 1 January 2013		30	2,053	2,083
Additions		-	178	178
Disposals		(30)	(595)	(625)
At 31 December 2013		-	1,636	1,636
Additions		-	348	348
Disposals		-	(1)	(1)
At 31 December 2014		-	1,983	1,983
Amortisation
At 1 January 2013		30	933	963
Charge for the year		-	200	200
Disposals		(30)	(595)	(625)
At 31 December 2013		-	538	538
Charge for the year		-	233	233
Disposals		-	-	-
At 31 December 2014		-	771	771
Net book value at 31 December 2014		-	1,212	1,212
Net book value at 31 December 2013		-	1,098	1,098

Amortisation on intangible assets is charged to Administration expenses in the Consolidated Statement of Comprehensive Income.

 

11 Property, plant and equipment

	Computer and office equipment£'000	Motor vehicles £'000	Leasehold improvements£'000	Total £'000
Cost
At 1 January 2013	1,647	182	1,522	3,351
Additions	314	-	1,464	1,778
Disposals	(1,103)	(75)	(942)	(2,120)
Exchange difference	(23)	-	(68)	(91)
At 31 December 2013	835	107	1,976	2,918
Additions	15	-	3	18
Disposals	(27)	(66)	(269)	(362)
Exchange difference	(4)	-	(2)	(6)
At 31 December 2014	819	41	1,708	2,568
Accumulated depreciation and impairment
At 1 January 2013	1,422	102	1,021	2,545
Charge for year	171	31	239	441
Disposals	(1,101)	(66)	(792)	(1,959)
Exchange difference	(13)	-	(32)	(45)
At 31 December 2013	479	67	436	982
Charge for the year	143	16	183	342
Impairment loss	37	-	-	37
Disposals	(28)	(59)	(242)	(329)
At 31 December 2014	631	24	377	1,032
Net book value at 31 December 2014	188	17	1,331	1,536
Net book value at 31 December 2013	356	40	1,540	1,936

 

Depreciation on property, plant and equipment is charged to Administration expenses in the Consolidated Statement of Comprehensive Income.

The impairment loss on computer and office equipment and leasehold improvements relate to surplus facilities at the Group's Eastcheap premises.

The Group has pledged all of its assets to secure banking facilities granted to the Group (see note 16).

 

12  Deferred tax 

Deferred tax asset	Other£'000		Unutilisedlosses£'000		Accelerateddepreciation£'000		Sharebasedpayments£'000		Total£'000
At 1 January 2013	31		277		77		27		412
Exchange differences	-		-		(2)		-		(2)
Credited/(charged) to profit or loss	(10)	(277)		(113)		123		(277)
Credited to reserves	-	-		-		49		49
At 31 December 2013	21		-		(38)		199		182
Charged to profit or loss	(6)	-		(61)		(60)		(127)
Charged to reserves	-	-		-		(3)		(3)
At 31 December 2014	15		-		(99)		136		52

 

 

Deferred tax (liability)							Acceleratedcapitalallowances£'000
At 1 January 2013							(71)
Exchange differences							(10)
Credited/(charged) to profit or loss							47
At 31 December 2013 and 31 December 2014							(34)

No reversal of deferred tax is expected within the next twelve months (2013: Nil). 

In total, at the reporting date, the Group had unutilised tax losses of £2.4m (£1.8m) available for offset against future profits, for which no deferred tax assets had been recognised. 

 

13 Trade and other receivables   Trade and other receivables are as follows:		2014£'000	2013£'000
Trade receivables		16,186	13,267
Allowance for doubtful debts		(109)	(111)
Accrued income		14,537	16,063
Prepayments		445	432
Other receivables:
- due within 12 months		55	53
- due after more than 12 months		278	261
Total		31,392	29,965
Current		31,114	29,704
Non current		278	261

 

As at 31 December 2014, the average credit period taken on sales of recruitment services was 31 days (2013: 23 days) from the date of invoicing, and the receivables are predominantly non-interest bearing.

An allowance of £109,000 (2013: £111,000) has been made for estimated irrecoverable amounts. Due to the short-term nature of trade and other receivables, the Directors consider that the carrying value approximates to their fair value. Bad debt expense recognised in the year was £102,000 (2013: £47,000).

Accrued income principally comprises accruals for amounts to be billed for contract staff for time worked in December, and amounts to be billed for permanent placements with a start date in 2015.

Other receivables due after more than 12 months are predominantly rental deposits on leasehold properties.

The Group does not provide against receivables solely on the basis of the age of the debt, as experience has demonstrated that this is not a reliable indicator of recoverability. The Group provides fully against all receivables where it has positive evidence that the amount is not recoverable.

The Group uses an external credit scoring system to assess the creditworthiness of new customers. The Group supplies mainly FTSE 100 and other major companies and major professional partnerships.

Included in the Group's trade receivable balances are receivables with a carrying amount of £6,536,000 (2013: £5,708,000) which are past due date at the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not hold any collateral over these balances.

 

Ageing of past due but not impaired trade receivables:(Number of days overdue)			2014£'000	2013£'000
0-30 days			3,790	3,340
30-60 days			1,192	1,257
60-90 days			706	611
90+ days			848	500
31 December			6,536	5,708

 

Movement in allowance for doubtful debts:			2014£'000	2013£'000
1 January			(111)	(172)
Impairment losses recognised on receivables			(102)	(47)
Previous impairment losses reversed			84	101
Amounts written off the trade receivables ledger as uncollectable			20	7
31 December			(109)	(111)

 

14 Cash and cash equivalents

Cash and cash equivalents are as follows:		2014£'000	2013£'000
Short-term bank deposits		5,975	3,559
		5,975	3,559

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less, less bank overdrafts repayable on demand. The carrying amount of these assets approximates their fair value.

 

15 Trade and other payables

Trade and other payables are as follows:		2014£'000	2013£'000
Trade payables		310	776
Other taxes and social security costs		928	898
Other payables		805	1,198
Accruals		13,373	12,964
		15,416	15,836

Accruals principally comprise accruals for amounts owed to contract staff for time worked in December.

The average credit period taken on trade purchases, excluding contract staff costs, by the Group is 13 days (2013: 18 days), based on the average daily amount invoiced by suppliers. Interest is charged by suppliers at various rates on payables not settled within terms. The Group has procedures to ensure that payables are paid to terms wherever possible. Due to the short-term nature value of trade and other payables, the Directors consider that the carrying value approximates to their fair value.

 

16 Borrowings

		2014£'000	2013£'000
Invoice discounting (repayable on demand)		9,704	4,574
Revolving credit facility		3,000	3,000
		12,704	7,574

 

All borrowing is at floating interest rates. Interest on the invoice discounting facility is charged at 2.35% over UK Base Rate on actual amounts drawn down, and the margin is fixed to April 2018. The weighted average interest rate for the year charged on amounts drawn down on invoice discounting was 2.35% (2013: 2.35%).

In September 2012 the Group agreed a £3.0mRevolving Credit Facility (RCF) with its bankers for a three year period. Interest on the revolving credit facility is charged at 2.45% over the London Inter-Bank Offered Rate (LIBOR) on actual amounts drawn down. There is a non-utilisation charge of 1.23% over LIBOR. The weighted average interest rate for the year charged on the RCF was 3.03% (2013: 3.03%).

The RCF is subject to the following covenants:

- Pre-tax profit will not be less than 400% of interest charges

- Net debt excluding invoice finance drawdown shall not exceed 25% of EBITDA

As a result of restructuring costs the Group's pre-tax profit was below the level required to meet the interest cover covenant. As the Group's forecasts showed the RCF funding to be surplus to Group requirements for the foreseeable future, the RCF was repaid and cancelled in February 2015.

 

17 Provisions

		Leaseholddilapidations £'000	Onerouscontracts £'000	Total£'000
At 1 January 2013		237	-	237
Foreign exchange		(4)	-	(4)
New provision		57	-	57
Utilised		(14)	-	(14)
At 31 December 2013		276	-	276
New provision		40	435	475
Unutilised provision released		(203)	-	(203)
Utilised		(53)	(127)	(180)
At 31 December 2014		60	308	368
Current		-	308	308
Non-current		60	-	60

The unutilised dilapidations provision released relates to the Group previous London HQ, which it had occupied since 2001, and vacated in August 2013. Advisors for the Group consider the likelihood that the Group will be required to pay a dilapidations charge to be low, consequently the provision has been released.

The dilapidations provisions relate to the Group's current leased offices in London and Singapore.

The onerous lease contracts relate to surplus accommodation within the Group's London HQ at 30 Eastcheap. Following discussions with advisors the Group has taken an exceptional charge for 18 months' costs, starting from 1 July 2014, relating to this space to cover the marketing void and rent free incentive that is assumed would be required to sublet this space. No rent shortfall/surplus has been assumed for the duration of any sub-lease eventually granted.

 

18 Share capital

The share capital at 31 December 2014 and 2013 was as follows:

	2014			2013
Ordinary shares of 1p each	Number of shares	£'000		Number of shares	£'000
Authorised
At 1 January and 31 December	40,000,000	400		40,000,000	400
Issued and fully paid:
At 1 January	23,714,238	237		23,550,386	235
Issuance of new shares for employee share schemes	166,856	2		163,852	2
31 December	23,881,094	239		23,714,238	237

During 2014,166,856 options were exercised (2013: 163,852), all of which were satisfied by the issuance of new shares (2013: 163,852).

At 31 December 2014, 1,185,451 (2013: 1,185,451) shares were held in the Hydrogen Group Employee Benefit Trust.

At 31 December 2014, 211,414 (2013: 336,880) ordinary shares were held in the Hydrogen Group plc Share Incentive Plan trust for employees.

 

19 Notes to the cash flow statement

a. Reconciliation of profit before tax to net cash inflow from operating activities

 

 

			2014 £'000	2013 £'000
Profit before taxation and exceptional items			2,373	2,354
Adjusted for:
Depreciation and amortisation			575	641
(Decrease) in provisions			(343)	(14)
(Gain)/loss on sale of property, plant and equipment			(24)	135
Share-based (income)/payments			(143)	126
Net finance costs			179	176
Operating cash flows before movements in working capital			2,617	3,418
Increase in receivables			(1,445)	(1,487)
(Decrease)/increase in payables			(481)	1,060
Cash generated from operating activities			691	2,991
Income taxes paid			(308)	(812)
Finance costs			(196)	(136)
Net cash inflow from operating activities before exceptional items			187	2,043
Cash flows arising from exceptional costs			(1,483)	-
Net cash (outflow)/inflow from operating activities			(1,296)	2,043

 

b. Reconciliation of net cash flow to movement in net debt:

 

			2014 £'000	2013 £'000
Increase in cash and cash equivalents in the year			2,416	855
Increase in net debt resulting from cash flows			(5,130)	(2,112)
Increase in net debt during the year			(2,714)	(1,257)
Net debt at the start of the year			(4,015)	(2,758)
Net debt at the end of the year			(6,729)	(4,015)

 

 

20 Financial information

The financial information in this announcement which comprises the Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Changes In Equity, Condensed Consolidated Statement of Cash Flows and related notes is derived from the full Group financial statements for the year ended 31 December 2014 and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006.

Group statutory accounts for 31 December 2013 have been delivered to the Registrar of Companies and those for 31 December 2014 will be delivered in due course.

The auditors have reported on each set of Group statutory accounts. Their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

Copies of the full audited Annual Report and Accounts for 2014 and the Notice of Annual General Meeting and associated documents will be circulated and will be available to be downloaded from the Company's website in April 2015: http://www.hydrogengroup.com/Company_reports

 

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