21st Aug 2008 07:00
21 August 2008
HYDROGEN GROUP PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
The Board of Hydrogen Group Plc ("Hydrogen" or "the Group"), the specialist professional recruitment business, is pleased to announce its unaudited interim results for the six months ended 30 June 2008.
Highlights
Despite challenging conditions in key markets, Net Fee Income (NFI) is down only 1.4% on second half of 2007
Profit before tax and exceptional item (PBT) of £3.3m (2007: £3.9m) in line with revised expectations
Conversion of NFI to PBT remained strong at 22% (2007: 23%)
NFI from contractors increased by 16% to £6.1m (2007: £5.3m)
Macro economic issues impacted permanent placement markets, particularly in Finance in the UK. NFI from permanent placements of £8.2m was 25% down on first half 2007 (£10.9m), but only 2% down on second half 2007 (£8.3m)
Permanent versus Contract mix of NFI 55:41 in favour of Permanent (2007: 64:31), (the remaining 4% being recruitment process outsourcing offering through Reflect)
Non-UK NFI for the period grew 146% to £1.6m, now representing 11% of the Group total (2007: 4%)
Strong focus on cost control reduced administration costs by 8.7% (2007: increase of 18%)
Tight working capital control resulted in cash generated from operating activities before exceptional costs of £4.3m (2007 £4.0m) and net financing costs being reduced by £314k to £126k (2007: £ 440k)
Days of sales outstanding (DSO's) reduced by 9 to 38 (30 June 2007: 47; 31 December 2007: 43)
Employee Benefit Trust established and funded to enable purchase of 280,359 shares (1.2% of shares in issue) at a cost of £606k
Increased Interim dividend of 2.1p to be paid in November (2007: 2.0p)
Commenting on the results, Ian Temple, Executive Chairman said:
"Despite a positive start to 2008, the more uncertain macroeconomic environment has resulted in trading conditions for some of our brands becoming more challenging in the UK and this trend has continued into the second half of the year.
Our flexible business model means that we are well placed to respond to these tougher conditions and continue to take action to increase our exposure to growth markets both in the UK and overseas. They currently represent a relatively small proportion of the Group's overall business and their success is not compensating for the shortfall in other areas, particularly those exposed to the Investment Banking market. The Board therefore anticipates that the second half of 2008 will be difficult and that the Group will not return to growth until 2009.
We remain focused on the balance between short term performance and achieving our mid term goals, supported by the strong structural growth drivers for professional recruitment."
Enquiries:
|
Hydrogen Group Plc |
020 7796 4133 on the morning of |
|
Ian Temple, Executive Chairman |
the 21 August 2008 and on 020 7240 2500 thereafter |
|
Tim Smeaton, CEO |
|
|
Hudson Sandler |
020 7796 4133 |
|
Kate Hough |
|
|
Oriel Securities |
020 7710 7600 |
|
Luke Webster David Arch |
An analyst meeting will be held at the offices of Hudson Sandler, 29 Cloth Fair EC1A 7NN, on the morning of the results at 10.00am. Please contact Sarah Hughes on 020 7796 4133 for more details.
Notes to editors:
Hydrogen is a specialist recruitment consultancy, focused on mid to senior professional talent hires to financial services and commerce and industry. The Group has nine niche consultancies being Project Partners, Commerce Partners, Target Partners, Finance Professionals, Audit Professionals, Law Professionals, HR Professionals and Eurisko, specialising in recruitment within their disciplines and Reflect, a human resources outsourcing consultancy. In 2007 the Group opened its first international office in Sydney, Australia.
CHAIRMAN'S STATEMENT
Despite a positive start to 2008, the more uncertain macroeconomic environment has resulted in trading conditions for some of our brands becoming more challenging in the UK. This has been particularly true of the investment banking market, which accounted for approximately 20% of Group Net Fee Income (NFI) in 2007.
In light of this economic uncertainty, the Group has taken action to increase its exposure to growth markets, whilst ensuring we maintain a competitive and compelling proposition in our established markets.
International demand for high quality specialist candidates in regions such as Australia, the Far and Middle East and Continental Europe continues to be robust and as a result the first half of the year has seen significant growth in our international operations with non-UK NFI growing 146% to £1.6m, representing 11% of NFI (2007: 4%)
Financial Highlights
Revenue for the six months ended 30 June 2008 fell 2.1% down to £49.9m (2007: £51.0m). NFI (gross profit) fell faster by 12% to £14.9m (2007: £16.9m) reflecting the poorer performance of permanent recruitment over the period. NFI was down 1.4% on the second half of 2007.
As a result of the fall in NFI, profit before tax and exceptional items fell by 15% to £3.3m (2007: £3.9m) generating a fall in adjusted basic earnings per share of 14% to 10.4p (2007: 12.0p).
Despite the fall in NFI, the conversion of NFI to underlying profit before tax remained strong, falling only slightly to 22% (2007: 23%), reflecting our consistent focus on productivity and strong cost control in the period.
Good working capital management has been maintained resulting in strong cash conversion, with net debt reducing to £3.8m (30 June 2007:£9.8m). Debtor days were reduced from 47 days at 30 June 2007 to 38 days at 30 June 2008.
Dividend
The Board is pleased to declare an increase in the interim dividend of 5% to 2.1p (2007:2.0p). This will be paid on the 7th November 2008 to shareholders on the register on 10th October 2008. The increase reflects the robustness of the Group's balance sheet and Board's confidence in the prospects of the business.
Brands
Against a backdrop of a tougher macroeconomic environment and strong prior year comparatives, solid performances were still delivered from our Law Professionals, and Project Partners brands with good growth coming from Darwin Park our emerging specialist engineering brand. Finance Professionals permanent business suffered the most severely from the downturn in Investment Banking, with comparatives being exaggerated by the fact that H1 2007 was very strong and H1 2008 was exceptionally quiet. The Finance Professionals permanent Commerce and Industry business performed poorly exacerbating the outturn and action has been taken to improve performance in this area.
As would be expected in the current trading environment, the first six months of the year have seen a particularly strong performance for contract business, which grew by 16% in the period. The permanent recruitment business declined by 25%, having been particularly affected by the decline in investment banking activity in the UK. In the first half of 2008 41% of NFI came from contract recruitment, 55% from permanent and the balance from Reflect, our recruitment process outsourcing division. Reflect has won a number of new clients, from which we should see the benefit in future periods, but was impacted in the first half of 2008 by a slowdown in activity from key clients.
We continue to focus on leveraging opportunities for our brands in the international markets. In 2007 we opened our first office in Australia and have been pleased with its performance. Our focus to date has been on Technology recruitment and we have now expanded this into Engineering and Finance recruitment. During the period we expanded our headcount and moved the office to a larger location to support our growing activity.
We have also seen increasing international activity in Continental Europe and the Middle East and have been very pleased with the progress we are making in developing our client relationships in these regions. Consequently, International NFI for the period grew by 146% to £1.6m representing 11% (2007: 4%) of total NFI.
Clients
Our Group customer base remains very broad, at approximately 900 clients, and we have seen good client retention and wins during the period. Whilst some of our major accounts have reduced current activity, we have maintained strong market share of their placements and are continuing to strengthen relationships. By maintaining a strong presence we continue to secure available business and are well positioned for future hiring.
Staff
We have had a small reduction in headcount over the period from 329 to 308 employees. Our staff have adapted well to changing market conditions and priorities and we would like to thank them for their efforts over the last 6 months. We continue to have a highly motivated and effective workforce capable of developing the business through the economic cycle.
Board
We are pleased to announce that with immediate effect Tim Smeaton has been promoted from COO to CEO. Tim has been instrumental in the building of the Group to date and the change reflects the full range of Tim's responsibilities.
Current Trading
Trading in the second half of the year continues to be challenging. Whilst our flexible business model means that we are well placed to respond to these tougher conditions and continue to take action to increase our exposure to growth markets both in the UK and overseas, they currently represent a relatively small proportion of the Group's overall business and their success is not compensating for the shortfall in other areas of the Group's business, particularly those exposed to the Investment Banking market. The Board therefore anticipates that the second half of 2008 will be difficult and that the Group will not return to growth until 2009.
In the first half of the year the cash generated from operating activities before exceptional costs was strong at £4.3m (2007 £4.0m) and the Board expects the business to continue to be cash generative in the second half of 2008.
We remain focused on the balance between short term performance and achieving our mid term goals supported by the strong structural growth drivers for professional recruitment.
Hydrogen Group plcUNAUDITED CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
For the six months ended 30 June 2008
|
Six months ended |
Year ended |
|||
|
Note |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Revenue |
2 |
49,943 |
51,011 |
103,359 |
|
Cost of sales |
(35,062) |
(34,070) |
(71,324) |
|
|
Gross profit |
2 |
14,881 |
16,941 |
32,035 |
|
Administration expenses |
(11,502) |
(12,595) |
(23,329) |
|
|
Operating profit before exceptional costs |
3,379 |
4,346 |
8,706 |
|
|
Exceptional costs |
3 |
(221) |
- |
(1,347) |
|
Operating profit after exceptional costs |
3,158 |
4,346 |
7,359 |
|
|
Finance costs |
(167) |
(447) |
(745) |
|
|
Finance income |
41 |
7 |
36 |
|
|
Profit before taxation |
3,032 |
3,906 |
6,650 |
|
|
Income tax expense |
4 |
(905) |
(1,196) |
(2,452) |
|
Profit for the period |
2,127 |
2,710 |
4,198 |
|
|
Attributable to: |
||||
|
Equity shareholders of the parent |
2,127 |
2,710 |
4,198 |
|
|
Earnings per share |
||||
|
Basic earnings per share (pence) |
6 |
9.41p |
12.01p |
18.59p |
|
Diluted earnings per share (pence) |
6 |
8.85p |
11.64p |
17.63p |
|
The above results relate to continuing operations. |
||||
The notes on pages 5 to 11 form an integral part of this unaudited condensed consolidated interim report.
Hydrogen Group plc
UNAUDITED CONDENSED CONSOLIDATED INTERIM BALANCE SHEET As at 30 June 2008
|
Note |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Non-current assets |
||||
|
Goodwill |
19,010 |
19,010 |
19,010 |
|
|
Other intangible assets |
404 |
205 |
320 |
|
|
Property, plant and equipment |
955 |
657 |
963 |
|
|
Deferred tax assets |
305 |
664 |
628 |
|
|
Other financial assets |
198 |
83 |
84 |
|
|
20,872 |
20,619 |
21,005 |
||
|
Current assets |
||||
|
Trade and other receivables |
23,931 |
30,855 |
24,081 |
|
|
Cash and cash equivalents |
10 |
287 |
274 |
330 |
|
24,218 |
31,129 |
24,411 |
||
|
Total assets |
45,090 |
51,748 |
45,416 |
|
|
Current liabilities |
||||
|
Trade and other payables |
10,548 |
12,806 |
10,749 |
|
|
Borrowings |
10 |
2,614 |
7,514 |
2,514 |
|
Current tax liabilities |
956 |
1,160 |
1,307 |
|
|
14,118 |
21,480 |
14,570 |
||
|
Non-current liabilities |
||||
|
Borrowings |
10 |
1,449 |
2,516 |
1,982 |
|
Total liabilities |
15,667 |
23,996 |
16,552 |
|
|
Net assets |
29,523 |
27,752 |
28,864 |
|
|
Equity |
||||
|
Capital and reserves attributable to the Company's equity holders: |
||||
|
Called-up share capital |
230 |
227 |
227 |
|
|
Share premium account |
3,456 |
3,211 |
3,220 |
|
|
Merger reserve |
16,100 |
16,100 |
16,100 |
|
|
Own shares held |
7 |
(606) |
- |
- |
|
Share option reserve |
100 |
100 |
100 |
|
|
Other reserve |
714 |
324 |
494 |
|
|
Translation reserve |
22 |
- |
3 |
|
|
Retained earnings |
9,507 |
7,790 |
8,720 |
|
|
Total equity |
29,523 |
27,752 |
28,864 |
|
The notes on pages 5 to 11 form an integral part of this unaudited condensed consolidated interim report.
Hydrogen Group plcUNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITYFor the six months ended 30 June 2008
|
Called-up sharecapital£'000 |
Share premium account £'000 |
Merger reserve £'000 |
Own shares held £'000 |
Share option reserve £'000 |
Other reserve £'000 |
Trans-lation reserve £'000 |
Retained earnings £'000 |
Total equity £'000 |
|
|
At 1 January 2007 |
225 |
3,190 |
16,100 |
- |
100 |
273 |
- |
5,103 |
24,991 |
|
Tax on share-based charges |
- |
- |
- |
- |
- |
- |
- |
(21) |
(21) |
|
Net income recognised in equity |
- |
- |
- |
- |
- |
- |
- |
(21) |
(21) |
|
Profit for the 6m to 30.6.2007 |
- |
- |
- |
- |
- |
- |
- |
2,710 |
2,710 |
|
Total recognised income & expense for the period |
- |
- |
- |
- |
- |
- |
- |
2,689 |
2,689 |
|
Increase in share capital |
2 |
21 |
- |
- |
- |
- |
- |
(2) |
21 |
|
Share option charge |
- |
- |
- |
- |
- |
51 |
- |
- |
51 |
|
Total movements in equity |
2 |
21 |
- |
- |
- |
51 |
- |
2,687 |
2,761 |
|
At 30 June 2007 |
227 |
3,211 |
16,100 |
- |
100 |
324 |
- |
7,790 |
27,752 |
|
Foreign currency translation |
- |
- |
- |
- |
- |
- |
3 |
- |
3 |
|
Tax on share-based charges |
- |
- |
- |
- |
- |
- |
- |
(107) |
(107) |
|
Net income recognised in equity |
- |
- |
- |
- |
- |
- |
- |
(107) |
(107) |
|
Profit for the 6m to 31.12.2007 |
- |
- |
- |
- |
- |
- |
- |
1,488 |
1,488 |
|
Total recognised income & expense for the period |
- |
- |
- |
- |
- |
- |
- |
1,381 |
1,381 |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(452) |
(452) |
|
Share option charge |
- |
- |
- |
- |
- |
170 |
- |
- |
170 |
|
Increase in share capital |
- |
9 |
- |
- |
- |
- |
- |
1 |
10 |
|
Total movements in equity |
- |
9 |
- |
- |
- |
170 |
- |
930 |
1,109 |
|
At 31 December 2007 |
227 |
3,220 |
16,100 |
- |
100 |
494 |
3 |
8,720 |
28,864 |
|
Foreign currency translation |
- |
- |
- |
- |
- |
- |
19 |
- |
19 |
|
Tax on share-based charges |
- |
- |
- |
- |
- |
- |
- |
(435) |
(435) |
|
Net income recognised in equity |
- |
- |
- |
- |
- |
- |
19 |
(435) |
(416) |
|
Profit for the 6m to 30.6.2008 |
- |
- |
- |
- |
- |
- |
- |
2,127 |
2,127 |
|
Total recognised income & expense for the period |
- |
- |
- |
- |
- |
- |
19 |
1,692 |
1,711 |
|
Increase in share capital |
3 |
236 |
- |
- |
- |
- |
- |
- |
239 |
|
Share option charge |
- |
- |
- |
- |
- |
220 |
- |
- |
220 |
|
Purchase of shares by EBT |
- |
- |
- |
(606) |
- |
- |
- |
- |
(606) |
|
Dividends |
- |
- |
- |
- |
- |
- |
- |
(905) |
(905) |
|
Total movements in equity |
3 |
236 |
- |
(606) |
- |
220 |
19 |
787 |
659 |
|
At 30 June 2008 |
230 |
3,456 |
16,100 |
(606) |
100 |
714 |
22 |
9,507 |
29,523 |
The notes on pages 5 to 11 form an integral part of this unaudited condensed consolidated interim report.
Hydrogen Group plcUNAUDITED CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENTFor the six months ended 30 June 2008
|
Six months ended |
Year ended |
|||
|
Note |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Net cash generated from operating activities |
9 |
1,994 |
2,747 |
9,440 |
|
Investing activities |
||||
|
Interest received |
41 |
7 |
38 |
|
|
Proceeds from disposal of property, plant and equipment |
11 |
53 |
87 |
|
|
Purchase of property, plant and equipment |
(284) |
(193) |
(729) |
|
|
Purchase of software assets |
(106) |
(44) |
(237) |
|
|
Net cash used in investing activities |
(338) |
(177) |
(841) |
|
|
Financing activities |
||||
|
Proceeds on issue of shares |
239 |
21 |
32 |
|
|
Contribution to EBT for share purchase |
(606) |
- |
- |
|
|
Repayment of bank loans and loan notes |
(500) |
(500) |
(1,000) |
|
|
Increase in other borrowings |
96 |
- |
- |
|
|
Repayment of other borrowings |
- |
(1,986) |
(6,987) |
|
|
Increase in obligations under finance leases |
- |
72 |
72 |
|
|
Repayment of obligations under finance leases |
(42) |
(64) |
(98) |
|
|
Equity dividends paid |
5 |
(905) |
- |
(452) |
|
Net cash used in financing activities |
(1,718) |
(2,457) |
(8,433) |
|
|
Net (decrease)/increase in cash and cash equivalents |
(62) |
113 |
166 |
|
|
Cash and cash equivalents at beginning of period |
330 |
161 |
161 |
|
|
Effect of foreign exchange rate movements |
19 |
- |
3 |
|
|
Cash and cash equivalents at end of period |
10 |
287 |
274 |
330 |
UNAUDITED RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBTFor the six months ended 30 June 2008
|
Six months ended |
Year ended |
|||
|
Note |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Increase in cash and cash equivalents in the period/year |
(43) |
113 |
169 |
|
|
Change in net debt resulting from cash flows |
446 |
2,478 |
8,013 |
|
|
Other non-cash changes |
(13) |
1 |
- |
|
|
Movement in net debt in the period/year |
390 |
2,592 |
8,182 |
|
|
Net debt at the start of the period/year |
(4,166) |
(12,348) |
(12,348) |
|
|
Net debt at the end of the period/year |
10 |
(3,776) |
(9,756) |
(4,166) |
The notes on pages 5 to 11 form an integral part of this unaudited condensed consolidated interim report.
Hydrogen Group plcNOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM REPORTS For the six months ended 30 June 2008
1 Accounting policies General information
Hydrogen Group plc ("the company") and its subsidiaries (together "The Group") operate predominantly in the United Kingdom. The Group consists of 10 niche brands offering both permanent and contract specialist recruitment consultancy for large and medium sized organisations. The Group operates primarily in the ICT, banking and finance, accountancy and legal sectors.
The unaudited condensed consolidated interim report was approved by the Board of Directors on 20th August 2008.
Copies of interim results are available at the Company's registered office - Pountney Hill House, 6 Laurence Pountney Hill, London EC4R 0BL, and on the Company's website - www.hydrogengroup.com.
This unaudited condensed consolidated interim report does not constitute statutory accounts of the Group within the meaning of section 240 of the Companies Act 1985. The financial information for the year ended 31 December 2007 has been extracted from the statutory accounts for that year, which have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain a statement under section 237 of the Companies Act 1985.
Basis of preparation
The unaudited condensed consolidated interim report for the six months ended 30 June 2008 has been prepared using accounting policies consistent with International Financial Reporting Standards ("IFRSs") and in accordance with IAS 34, 'Interim financial reporting' as adopted by the European Union. The condensed consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31 December 2007, which were prepared in accordance with IFRSs as adopted by the European Union.
Accounting policies
The unaudited condensed consolidated interim report has been prepared under the historical cost convention.
The accounting policies, presentation and methods of computation adopted by the Group in this condensed consolidated interim report are the same as those applied and described by the Group in its consolidated annual financial statements for the year ended 31 December 2007, except for the following:
Employee Benefit Trust
Administration costs and assets and liabilities of the Employee Benefit Trust (EBT) have been included in the Group accounts. Any assets held by the EBT cease to be recognised on the Group balance sheet when the assets vest unconditionally to identified beneficiaries. The costs of purchasing own shares held by the EBT are shown as a deduction against equity. The proceeds from the sale of own shares held increase equity. Neither the purchase nor sale of own shares leads to a gain or loss being recognised in the Group income statement.
2 Segment reportingThe Group operates in one business segment, being that of recruitment services, and this is the Group's primary segment. As a result, no additional business segment information is required to be provided. Revenue and assets derived from outside of the UK market (the Group's secondary segment) are less than 10% of the total revenue and assets of the Group and are not required to be disclosed.The following segmental analyses by recruitment classification has been included as additional disclosure over and above the requirements of IAS 14 'Segment reporting':
|
Revenue |
Gross Profit (Net fee income) |
||||||
|
Six months ended |
Year ended |
Six months ended |
Year ended |
||||
|
Recruitment classification |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Permanent |
8,222 |
11,029 |
19,434 |
8,152 |
10,907 |
19,217 |
|
|
Contract |
40,519 |
38,079 |
79,826 |
6,139 |
5,292 |
11,379 |
|
|
Other |
1,202 |
1,903 |
4,099 |
590 |
742 |
1,439 |
|
|
49,943 |
51,011 |
103,359 |
14,881 |
16,941 |
32,035 |
||
3 Exceptional costsExceptional items are those items which, because of their size, incidence or nature, are disclosed to give a proper understanding of the underlying results for the period. Exceptional costs in the period are accountants', advisors', and other charges, net of break fees and other receipts, relating to the unsuccessful offer to acquire Imprint plc.
|
Six months ended |
Year ended |
||||||
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|||||
|
Advisors' fee |
221 |
- |
1,347 |
||||
4 TaxationIncome tax for the interim period is based on the average annual effective rate of 27.8% (30 June 2007: 30.6%; 31December 2007: 30.7%) on pre-tax profit before exceptional costs.
In the six months to 30 June 2008 a deferred tax charge of £435,000 (30 June 2007: £37,000; 31 December 2007: £129,000) has been taken directly to equity in accordance with IFRS 2 'Share-based payments' and IAS 12 'Income Taxes'.5 Dividends
|
Six months ended |
Year ended |
|||
|
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Interim dividend for the year ended 31 December 2007 of 2p per share |
- |
- |
452 |
|
|
Final dividend for the year ended 31 December 2007 of 4p per share |
905 |
- |
- |
|
|
905 |
- |
452 |
||
The proposed interim dividend for 2008 had not been approved by the board at 30 June 2008 and is therefore not included as a liability. The comparative interim dividend at 30 June 2007 was also not recognised as a liability in the prior period. The final dividend for 2007 was approved by members on 29 April 2008, and is included as a liability in the current period.
6 Earnings per share
Earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue.
Adjusted earnings per share is as per basic earnings per share, with profit adjusted to add back exceptional costs.
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.
|
Six months ended |
Year ended |
|||
|
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Earnings |
||||
|
Profit attributable to equity holders of the parent |
2,127 |
2,710 |
4,198 |
|
|
Adjusted earnings |
||||
|
Profit for the year |
2,127 |
2,710 |
4,198 |
|
|
Exceptional costs |
221 |
- |
1,347 |
|
|
2,348 |
2,710 |
5,545 |
||
|
Number of shares |
Number |
Number |
Number |
|
|
Weighted average number of shares used for earnings per share |
22,612,138 |
22,569,088 |
22,575,573 |
|
|
Dilutive effect of share plans |
1,419,986 |
711,656 |
1,234,174 |
|
|
Diluted weighted average number of shares used to calculate fully diluted earnings per share |
24,032,124 |
23,280,744 |
22,809,747 |
|
|
pence |
pence |
pence |
||
|
Basic earnings per share |
9.41 |
12.01 |
18.59 |
|
|
Fully diluted earnings per share |
8.85 |
11.64 |
17.63 |
|
|
Adjusted basic earnings per share |
10.38 |
12.01 |
24.56 |
|
|
Adjusted fully diluted earnings per share |
9.77 |
11.64 |
23.29 |
|
7 Own sharesDuring the period the Group established the Hydrogen Group plc Employee Benefit Trust (EBT trust) for the purpose of acquiring shares to be held in trust for the benefit of employees.
In April 2008 the Group donated the funds to enable the EBT trust to purchase 280,359 ordinary shares of Hydrogen Group plc for a total consideration of £606,000.
On 16 May 2008, the trustees of the EBT, under the Hydrogen Group Enterprise Management Incentive (EMI) scheme and the Unapproved Share Option scheme, awarded options to employees of the Group for 280,359 ordinary shares held in the EBT.
At 30 June 2008, the total number of ordinary shares held in the EBT and their values were as follows:
|
Shares held for share option schemes |
Six months ended |
Year ended |
||
|
30 June 2008 |
30 June 2007 |
31 December 2007 |
||
|
Number of shares |
280,359 |
- |
- |
|
|
£'000 |
£'000 |
£'000 |
||
|
Nominal value |
3 |
- |
- |
|
|
Carrying value |
606 |
- |
- |
|
|
Market value |
308 |
- |
- |
|
8 Share-based paymentsOn 16 May 2008 the following options were granted to a number of employees of the Group to subscribe for ordinary shares in the Group:
(i) options for 270,538 ordinary shares under the Hydrogen Group Enterprise Management Incentive (EMI) scheme (ii) options for 38,596 ordinary shares under the Unapproved Share Option scheme.
For both grants, options vest on various dates from September 2010 to September 2012 subject to successful achievement of a number of market-based performance criteria, based on growth in the Group's fee income and profitability. Options may be exercised without the payment of an exercise price and may be exercised up to 10 years from date of grant, after which they expire. Options are forfeit if the employee leaves the Group before options vest, except where the employee leaves for qualifying reasons.
The Group recognised total expense of £220,000 (30 June 2007: £51,000; 31 December 2007: £221,000) relating to equity-settled share based payment transactions in the period.
9 Cash flow from operating activities
|
Six months ended |
Year ended |
|||
|
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Profit before taxation |
3,032 |
3,906 |
6,650 |
|
|
Adjusted for: |
||||
|
Exceptional costs |
221 |
- |
1,347 |
|
|
Depreciation and amortisation |
319 |
236 |
511 |
|
|
Loss on sale of property, plant and equipment |
(4) |
(9) |
(8) |
|
|
Share based payments |
220 |
51 |
221 |
|
|
Net finance costs |
126 |
440 |
709 |
|
|
Operating cash flows before movements in working capital |
3,914 |
4,624 |
9,430 |
|
|
Decrease/(increase) in receivables |
106 |
(3,944) |
1,501 |
|
|
Increase in payables |
242 |
3,330 |
1,457 |
|
|
Cash generated from operating activities before exceptional costs |
4,262 |
4,010 |
12,388 |
|
|
Income taxes paid |
(1,278) |
(816) |
(1,993) |
|
|
Interest paid |
(167) |
(447) |
(748) |
|
|
Net cash inflow from operating activities before exceptional costs |
2,817 |
2,747 |
9,647 |
|
|
Cash flows arising from exceptional costs |
(823) |
- |
(207) |
|
|
Net cash inflow from operating activities after exceptional costs |
1,994 |
2,747 |
9,440 |
|
10 Analysis of net debt
|
Six months ended |
Year ended |
|||
|
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|
|
Cash and cash equivalents |
287 |
274 |
330 |
|
|
Debt due within one year |
(2,552) |
(7,457) |
(2,456) |
|
|
Hire purchase contracts due within one year |
(62) |
(57) |
(58) |
|
|
Debt due after one year |
(1,449) |
(2,436) |
(1,936) |
|
|
Hire purchase contracts due after one year |
- |
(80) |
(46) |
|
|
(4,063) |
(10,030) |
(4,496) |
||
|
Total |
(3,776) |
(9,756) |
(4,166) |
|
The Group repaid £500,000 of senior bank debt in accordance with previously disclosed repayment schedule.
11 Contingent liabilitiesThe Group has entered into a cross guarantee in respect of the banking facilities of its subsidiary undertakings which amounted to £1,572,000 (30 June 2007: £6,477,000; 31 December 2007: £1,476,000) at the balance sheet date.
12 Related party transactionsTransactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The Directors, Ian Temple and Chris Cole are also shareholders of IQ Education Recruitment Limited (IQ) and Resourcing Associates Limited (RA). During the year, the Group charged or received fees for recruitment services as follows:
|
Transactions during the period to 30 June2008 £'000 |
Trade Receivable at 30 June 2008 £'000 |
Transactions during the period to30 June 2007 £'000 |
Trade Receivable at 30 June 2007 £'000 |
Transactions during the year 2007 £'000 |
Trade Receivable at year end 2007 £'000 |
|
|
Fees charged to IQ |
- |
7 |
- |
15 |
- |
9 |
|
Fees charged to RA |
6 |
6 |
11 |
3 |
11 |
- |
|
Fees received from RA |
- |
1 |
13 |
8 |
30 |
9 |
All of the transactions were carried out on an arm's length basis at open market value.
- ENDS -
Related Shares:
HYDG.L