13 Jun 2008 07:00
13 June 2008
Hydrogen Group plc
('the Group')
Trading Update
Hydrogen Group plc, ('the Group'), the specialist professional recruitment business, is today issuing an update on trading for the year to date.
Whilst the year started well with the Group experiencing good trading in most divisions, as has been widely reported, trading conditions in the investment banking market, which accounts for approximately 20% of Group Net Fee Income (NFI), have become increasingly challenging. This market is traditionally strong from Easter to late autumn, but the Group has not seen the seasonal pick up in 2008. Despite diverting resources from this market to international recruitment, the shortfall against budget has not been fully mitigated.
As a result of this, the Board expects that NFI for the first half of 2008 will show a small decline from the record levels of the corresponding period of 2007.
Further, if current trading conditions persist, the Board anticipates that first half and full year profit before tax (and before exceptional items relating to the proposed acquisition of Imprint plc) will be lower than the comparable periods in 2007.
Mindful of the on-going economic uncertainty, the Board has maintained a strong control of costs, whilst still investing selectively in the business, for example in international operations and new disciplines, to ensure that the Group is well placed to take advantage when the market improves. The Board is encouraged by the strong performance from the Sydney office, which opened last year, and from the growth in European revenues. International NFI has grown from 5% of Group NFI in 2007 to approximately 12% in the year to date. The UK contract recruitment business continues to perform well, with growth in contractor numbers and average cash margins. As a result the Group's business is now more balanced between contract and permanent recruitment, with contract recruitment now representing approximately 40% of NFI (2007: 31%). Working capital has remained under tight control with a continued reduction in debtor days.
Ian Temple, Executive Chairman, commented:
'The business has performed well in most areas, but the slow down in the investment banking market has frustrated our ability to achieve our expectations this year. Overall the business remains in very good health, with a strong balance sheet and is now better positioned than ever before to take advantage of the opportunities to develop over the medium term.'
Enquiries:
| Hydrogen Group plc | 020 7240 2500 |
| Ian Temple, Executive Chairman | |
| Hudson Sandler | 020 7796 4133 |
| Andrew Hayes | 07720 893 500 |
| Oriel Securities (Nomad) | 020 7710 7600 |
| Emma Ormond / Natalie Fortescue |