7th Apr 2020 16:14
(Alliance News) - Recruitment firm Hydrogen Group PLC on Tuesday withdrew its final dividend for 2019 in light of the ongoing Covid-19 situation, as profit and revenue dropped for the year.
Shares in Hydrogen were down 11% at 31.00 pence on Tuesday in London.
Hydrogen reported a pretax profit of GBP1.7 million, almost half the GBP3.0 million recorded the year before, as administrative costs rose to GBP28.2 million from GBP27.9 million.
Meanwhile, net fee income dropped by 3.6% to GBP29.4 million from GBP30.5 million, due to drops in Europe, Middle East & Africa and Asia Pacific, despite a notable performance in the US.
Revenue for 2019 also declined, slipping to GBP121.3 million from GBP135.6 million the year before.
Looking ahead, Hydrogen said that the challenging trading environment in the fourth quarter of 2019 have continued into the first quarter of 2020, as the UK has hit by delays in the implementation of the new IR35 legislation in the private sector.
Meanwhile, the disruption of the Chinese New Year arising from the Covid-19 pandemic has hit activity levels in Asia-Pacific.
"In common with many businesses, Hydrogen currently faces unprecedented uncertainty as a result of Covid-19. While our first priority is to do everything that we can to ensure that our staff and other stakeholders are as safe as possible, we are also focussed on ensuring that we preserve cash while maintaining a critical mass in all of our key markets," said Chief Executive Officer Ian Temple.
"Our balance sheet is strong and our stress testing shows that the business could withstand both a prolonged and material decline in revenue. The group faced a more challenging year in 2019, particularly during the fourth quarter when a number of external market factors in both the UK and parts of APAC combined to reduce activity levels and, in turn, the group's net fee income and profit," Temple added.
By Dayo Laniyan; [email protected]
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