Hydrogen Group publish trade update
Further to the Group's announcement made on 17 December 2013, the Board of Hydrogen (AIM: HYDG) today issues the following trading update for the year ended 31 December 2013 (the "period"). Hydrogen confirms that trading during November and December 2013 was in line with projections and that consequently the Group is forecast to report an increase in Net Fee Income ("NFI") for the year of around 2% and pre-tax profits for the year in the region of £2.3m.
During the period, the Group saw further strong growth in the Technical & Scientific sector, which now represents 45% of the Group's NFI. However, conditions in the Professional Support Services recruitment markets remained challenging.
In 2013 the Group continued with its strategy of investing for growth in the medium term. During the first half of the year, offices were opened in Houston, USA and Stavanger, Norway to take advantage of strength in the global oil and gas markets, and a number of experienced hires were recruited across the business. The Group has continued to add heads during the second half of the year and, as a result, year-end headcount was 386, a 10% increase since the half year. A consequence of this investment is that administration costs for 2013 are expected to increase by approximately 5% from 2012.
Net debt at the end of the period is forecast to be approximately £4.0m (2012: £2.8m), primarily as a result of £1.8m invested in the fit-out of the Group's new London headquarters to accommodate growing headcount during the second half of the year. Underlying operations of the Group remain cash positive and borrowing limits are well within current banking facilities. The Group will enjoy a £1.4m cash benefit of a further 21 months' rent free on its new property lease in 2014 and 2015.
The Board believes that the investments made in the period provide a strong basis for the Group to take advantage of future growth opportunities in the recruitment markets.
Pictured: Ian Temple, chairman of Hydrogen group