Hydrogen Group issues trading update
As reported in the AGM Statement on 22 May 2014, while underlying levels of activity in terms of vacancies and interviews have been strong, the Group has experienced delay in the conversion of activity into placements and Net Fee Income ("NFI"). In addition, the strength of Sterling has had an adverse impact on reported NFI compared with the first half of 2013. As a result, the Group now expects NFI for the period to 30 June to be lower than in the same period last year by around 7% (4% on a constant currency basis).
Management has undertaken a comprehensive restructuring of the business with the aim of increasing profitability. Implementation of the changes was substantially complete by the end of June. The Group will report an exceptional item for non-recurring costs associated with the changes. Exceptional costs for the full year are currently expected to be in the region of £1.8m.
The business has remained cash generative in the period and control of working capital remains strong.
Throughout the restructuring we have continued to invest in our business development activity, fostering deeper and wider relationships with our clients. As a consequence, our pipeline of business remains as healthy as it has ever been. The strong client pipeline and reduced cost footprint give the Board confidence that future business profitability will improve, and the Board therefore believes that profit for the full year before exceptional items will be in line with expectations.
The results for the six months to 30 June 2014 are expected to be announced on Tuesday 16 September 2014.