TIDMHYDG
RNS Number : 4326Q
Hydrogen Group PLC
12 September 2017
Hydrogen Group Plc
UNAUDITED RESULTS FOR THE HALF YEARED 30 JUNE 2017
The Board of Hydrogen Group plc ("Hydrogen" or the "Group")
(AIM: HYDG) announces its unaudited results for the half year ended
30 June 2017.
Financial and Operating Highlights
Operational Highlights
During the period under review, on 2 June 2017, Hydrogen
completed the acquisition of Argyll Scott Holdings Limited ("Argyll
Scott") (the "Acquisition"). While the Acquisition has therefore
made a limited financial contribution for the period, the Board
expect it to materially enhance the business and its prospects
moving forward with respect to:
-- Accelerating the Group's growth through the immediate scaling of its position in APAC.
-- Increased economies of scale which dilute central costs and
the opportunity to realise synergies through the consolidation of
facilities and the alignment of IT, finance, procedures and
processes.
-- Diversification of customer revenue concentration within the
Group and increase the proportion of NFI from outside the UK to
greater than 50%.
Financial Highlights
-- Group revenue for the period totalled GBP56.8m (H1 2016: GBP59.3m as restated).
-- Net Fee Income ("NFI")* increased by 5% to GBP9.4m (H1 2016: GBP8.9m as restated).
o Permanent NFI grew 22% to GBP4.3m (H1 2016: GBP3.5m as restated); and
o Contract NFI declined 5% to GBP5.1m (H1 2016: GBP5.4m).
-- Adjusted** PBT of GBP0.2m (H1 2016: GBP0.5m as restated)
-- Net cash position of GBP1.7m at 30 June 2017 (31 December
2016: GBP2.0m and 30 June 2016: GBP1.0m)
-- Basic EPS in the period of (loss 2.6p) (H1 2016: 4.0p as
restated). Adjusted basic EPS in the loss of (0.1p) (H1 2016: 4.0p
as restated).
* Net Fee Income - which is the equivalent of gross profit
** Adjusted for foreign exchange gains/losses, share based
payments, loss from associate and exceptional items.
H1 2016 results have been restated to reflect the change in
accounting policy set out in Note 13.
Commenting, Ian Temple, CEO of Hydrogen Group plc said:
"In common with our peer group, trading conditions in a number
of our UK markets have been challenging during the period. However,
the organic growth since the start of the year in our UK contract
book together with the opportunities for both revenue growth and
cost synergies created by the acquisition of Argyll Scott places
the group in a position to return to sustainable long term profit
growth.
I should like to thank everyone in the Group for their continued
hard work and commitment to the business"
Enquiries:
Hydrogen Group plc 020 7090 7702
-------------------------- --------------
Ian Temple, CEO
-------------------------- --------------
Shore Capital (NOMAD and
Broker) 020 7408 4080
-------------------------- --------------
Bidhi Bhoma
Edward Mansfield
-------------------------- --------------
Notes to the editor
Hydrogen is a specialist recruitment business with a proven
global platform with clients' in over 50 countries. Our mission is
to empower the careers of our candidates whilst powering businesses
by providing their key people. We deliver by building market
leading specialist teams that develop a deep understanding of
candidate and clients' needs and developing solutions.
Overview
Although trading conditions in a number of the Group's
traditional UK markets have been challenging throughout the period,
the operational and structural changes carried out since 2015 have
enabled it to accommodate a material acquisition. As such, Hydrogen
announced the conditional acquisition of Argyll Scott on 9 May and
the transaction duly completed on 2 June 2017 (the "Acquisition").
Therefore the Acquisition has had a limited impact on reported
results, (although exceptional costs associated with the
acquisition total GBP0.6m) it has materially enhanced the business
and its prospects moving forward through a combination of:
-- Increasing group headcount by 133 to 350
-- Creating critical mass in the Asia Pacific market where the
enlarged group now has a combined headcount of 130 and thereby
diversifying the business into generally higher growth markets. On
a pro-forma basis, 53% of the enlarged group's net fee income in H1
was derived from outside the UK (H1 2016: 42%);
-- Client cross fertilisation opportunities, particularly in the contract market in Asia;
-- Enabling greater utilisation of the investment the Group has
made into its global platform and digital marketing; and
-- Exploiting significant overhead cost synergies throughout the enlarged group.
To date, the integration of Argyll Scott is progressing well and
cost savings have been identified in excess of those anticipated on
completion. We are making good progress in realising these
gains.
The Group has also taken a minority interest in CBFG Limited, a
start-up investment business that provides funding and advisory
services to early stage recruitment businesses to help them scale
and create value. Its founders have strong track records in this
field and their model complements both Hydrogen and Argyll Scott's
entrepreneurial roots. We look forward to working with the team as
the business grows.
Financial Highlights
Group revenue for the period declined by 4% (7% in constant
currency terms) to GBP56.8m (H1 2016: GBP59.3m as restated).
Overall, Group NFI increased by 5% (remained flat in constant
currency terms) or GBP0.5m, to GBP9.4m (H1 2016: GBP8.9m as
restated). The principal driver of this was the contribution by
Argyll Scott which offset a small decline in organic UK
revenue.
44% of the Group's NFI for this period was denominated in
currencies other than Sterling (H1 2016: 42% as restated), with the
Euro, Singapore Dollar, United States Dollar, Australian Dollar and
Malaysian Ringgit being the most significant. Foreign currency
income, where applicable, is naturally hedged against foreign
currency expenditure. The Euro is the most significant currency and
any excess over expenditure is partially hedged.
The split between contract and permanent NFI for H1 2017 was 54%
Contract (H1 2016: 60% as restated); 46% Permanent (H1 2016: 40% as
restated). The swing towards permanent was driven by an increase in
permanent revenue of 22% to GBP4.3m (2016: GBP3.5m as restated)
that principally reflects the impact of Argyll Scott, which is
largely a permanent business. Contract margin continued its
incremental improvement. The Group achieved a contract margin of
9.7% in H1 2017 (H1 2016: 9.6%).
In EMEA (including the USA) NFI was flat at GBP7.4m (H1 2016:
GBP7.4m as restated). Argyll Scott contributed GBP0.2m NFI, and
therefore the organic business declined by GBP0.2m principally due
to a reduction in contractor numbers at the start of the year
(which has now been reversed), and a disappointing performance from
the UK Life Sciences business where net fee income fell by GBP0.5m
to GBP1.2m (2016: GBP1.7m as restated), which together offset the
growth in other business units.
In APAC NFI increased by 32% to GBP1.9m (H1 2016: GBP1.5m as
restated), representing a 17% growth in constant currency terms.
Although this has been largely driven by the acquisition of Argyll
Scott, our organic business has performed well over the period
building on the positive actions taken in 2016 to improve financial
performance.
Operating profit before exceptional items fell to GBP0.1m (H1
2016 - GBP0.4m as restated) as non-exceptional administration costs
increased by GBP0.8m to GBP9.6m (H1 2016 - GBP8.8m as restated).
The increase in administration costs was almost wholly driven by
Argyll Scott with organic costs remaining flat. Exceptional
administration costs totalled GBP0.6m (H1 2016 - GBPnil) and
principally relate to acquisition expenses and the provision for an
onerous lease arising from the acquisition. The operating loss for
the period was GBP0.6m (H1 2016 - GBP0.4m profit as restated).
Adjusted** PBT decreased by GBP0.3m to GBP0.2m (H1 2016: GBP0.5m
as restated) in line with the fall in operating profit before
exceptional items.
Loss before tax was GBP0.6m (H1 2016: Profit before tax
GBP1.0m). The result for H1 2016 was inflated by finance income
arising from a foreign exchange gain of GBP0.6m which was
recognised on the translation of the long term intercompany loan
balances with the Group's foreign operations. In 2017, new
intercompany loan agreements have been drawn up to eliminate the
yearly fluctuations and therefore these movements are now shown
through Other Comprehensive Income.
The Board has taken the decision not to declare an interim
dividend. The Board will take a view on any dividend for the full
year based on how the Group performs in the second half of this
year.
Cash flow and cash position
At 30 June 2017, the Group had net cash of GBP1.7m (31 December
2016: GBP2.0m and 30 June 2016: GBP1.0m). The GBP0.3m reduction in
net cash since 31 December 2016 is mainly attributable to net debt
acquired from the purchase of Argyll Scott and exceptional
expenditure incurred as a result of the acquisition. Apart from
these factors underlying cashflow remained broadly flat despite the
adverse seasonality of the business' cash flow between December and
June. The Group generated GBP0.7m of cash between 30 June 2016 and
30 June 2017.
Bank facilities
The Group has two Invoice Discounting Facilities in place with a
combined value of GBP19.5m. Hydrogen had an existing facility of
GBP18.0m, which was renewed in May 2017 with a commitment to 1
April 2019. The Group also acquired an additional facility on the
acquisition of Argyll Scott of GBP1.5m which has a commitment until
December 2018. After these dates, the facilities shall continue
until ended by either party giving to the other not less than three
months' written notice.
Current Trading
The Group has traded in line with the board's expectations since
30 June. Looking ahead, we believe that the growth in our UK
contract book since the start of the year, together with a full
half year impact of Argyll Scott's trading, and the client cross
fertilisation and cost synergies that the enlarged group is already
benefitting from will drive a return to sustainable long-term
profit growth.
Unaudited Condensed Six months Year
Consolidated Interim ended ended
Statement of Comprehensive
Income for the six
months ended 30 June
2017
30 June 30 June 31 December
--------------------------------
2017 2016 2016
As restated
--------------------------------
Note GBP'000 GBP'000 GBP'000
-------------------------------- ----- --------- ------------- ------------
Revenue 3 56,800 59,347 116,246
Cost of sales (47,438) (50,463) (98,508)
-------------------------------- ----- --------- ------------- ------------
Gross profit 9,362 8,884 17,738
Other administrative
expenses (9,585) (8,803) (17,541)
Exceptional administrative
expenses 4 (610) - -
--------- ------------- ------------
Administration expenses (10,195) (8,803) (17,541)
Other income 267 280 553
-------------------------------- ----- --------- ------------- ------------
Operating (loss)/profit (566) 361 750
Share of loss from (17) - -
associate
Finance costs (37) (21) (63)
Finance income 9 627 980
-------------------------------- ----- --------- ------------- ------------
(Loss)/Profit before
taxation (611) 967 1,667
Income tax 5 (23) (71) (135)
-------------------------------- ----- --------- ------------- ------------
(Loss)/Profit for the
period/year (634) 896 1,532
-------------------------------- ----- --------- ------------- ------------
Other comprehensive
profit/(loss):
Exchange differences on
translating foreign operations (247) 222 (539)
Exchange differences on
intercompany loans 108 434 347
--------------------------------------- ------------- ------------
Other comprehensive
(loss)/profit (139) 656 (192)
-------------------------------- ----- --------- ------------- ------------
Total comprehensive (loss)/profit
for the period/year (773) 1,552 1,340
--------------------------------------- --------- ------------- ------------
Attributable to:
Equity holders of the
parent (764) 1,552 1,340
Non-controlling interest (9) - -
-------------------------------- ----- --------- ------------- ------------
Earnings per share
Basic (loss)/profit
per share (pence) 6 (2.61p) 3.97p 6.8p
Diluted (loss)/profit
per share (pence) 6 (2.61p) 3.65p 6.5p
Adjusted basic (loss)/profit
per share (pence) 6 (0.06p) 3.97p 6.8p
Adjusted diluted (loss)/profit
per share (pence) 6 (0.06p) 3.65p 6.5p
-------------------------------- ----- --------- ------------- ------------
The notes to the accounts set out below form an integral part of
this unaudited condensed consolidated interim report.
Unaudited Condensed 30 June 30 June 31 December
Consolidated Interim
Statement of Financial
Position for the
six months ended
30 June 2017
-----------------------------
2017 2016 2016
As restated
-----------------------------
Note GBP'000 GBP'000 GBP'000
----------------------------- ----- --------- ------------- ------------
Non-current assets
Goodwill 12,112 10,141 10,141
Investment in associate 11 133 - -
Other intangible
assets 1,417 736 792
Property, plant and
equipment 902 623 858
Deferred tax assets 141 138 104
Other financial assets 8 339 107 99
----------------------------- ----- --------- ------------- ------------
15,044 11,745 11,994
----------------------------- ----- --------- ------------- ------------
Current assets
Trade and other receivables 8 22,250 20,358 17,852
Current tax receivable 336 - 232
Cash and cash equivalents 4,149 1,873 3,106
----------------------------- ----- --------- ------------- ------------
26,735 22,231 21,190
----------------------------- ----- --------- ------------- ------------
Total assets 41,779 33,976 33,184
----------------------------- ----- --------- ------------- ------------
Current liabilities
Trade and other payables 9 (16,182) (13,876) (12,493)
Borrowings (2,422) (840) (1,087)
Current tax liabilities - (2) -
Provisions 10 (271) - -
----------------------------- ----- --------- ------------- ------------
(18,875) (14,718) (13,580)
----------------------------- ----- --------- ------------- ------------
Non-current liabilities
Deferred tax (429) (101) (280)
Loans (56) - -
Provisions 10 (444) (84) (309)
----------------------------- ----- --------- ------------- ------------
(929) (185) (589)
----------------------------- ----- --------- ------------- ------------
Total liabilities (19,804) (14,903) (14,169)
----------------------------- ----- --------- ------------- ------------
Net assets 21,975 19,073 19,015
----------------------------- ----- --------- ------------- ------------
Equity
Capital and reserves attributable
to the equity holders:
Called-up share capital 329 239 239
Share premium account 6,660 3,520 3,520
Merger reserve 16,100 16,100 16,100
Own shares held (1,338) (1,338) (1,338)
Share option reserve 2,694 2,390 2,544
Translation reserve (927) 60 (788)
Retained earnings (1,887) (1,898) (1,262)
Non-controlling interest 344 - -
----------------------------- ----- --------- ------------- ------------
Total equity 21,975 19,073 19,015
----------------------------- ----- --------- ------------- ------------
The notes to the accounts set out below form an integral part of
this unaudited condensed consolidated interim report.
Unaudited Condensed Consolidated Interim
Statement of Changes in Equity for the six months ended 30 June
2017
Share Own Share Trans-
Share premium Merger shares option lation Retained Attributable Total
to owners
capital account reserve held reserve reserve earnings Owners NCI equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
At 1 January
2016 (as
previously
reported) 239 3,520 16,100 (1,338) 2,213 (332) (2,037) 18,365 - 18,365
Prior year
adjustment
(note 13) - - - - - (264) (757) (1,021) - (1,021)
At 1 January
2016 (as
restated) 239 3,520 16,100 (1,338) 2,213 (596) (2,794) 17,344 - 17,344
Share option
charge - - - - 177 - - 177 - 177
----------- -------- -------- --------
Transactions
with owners - - - - 177 - 177 - 177
Profit for
the 6m to
30.6.16 - - - - - - 896 896 - 896
Other
comprehensive
income:
Exchange
differences
on
intercompany
loans - - - - - 222 - 222 - 222
Foreign
currency
translation - - - - - 434 - 434 - 434
-------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
Total
comprehensive
profit for
the period - - - - - 656 896 1,552 - 1,552
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
At 30 June
2016 (as
restated) 239 3,520 16,100 (1,338) 2,390 60 (1,898) 19,073 - 19,073
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
Share option
charge - - - - 154 - - 154 - 154
----------- -------- -------- --------
Transactions
with owners - - - - 154 - - 154 - 154
Profit for
the 6m to
31.12.16 - - - - - - 636 636 - 636
Other
comprehensive
income:
Exchange
differences
on
intercompany
loans - - - - - 124 - 124 - 124
Foreign
currency
translation - - - - - (972) - (972) - (972)
-------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
Total
comprehensive
loss for the
period - - - - - (848) 636 (213) - (213)
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
At 31 December
2016 239 3,520 16,100 (1,338) 2,544 (788) (1,262) 19,015 - 19,015
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
Acquisition
of Argyll
Scott 90 3,140 - - - - - 3,230 353 3,583
Share option
charge - - - - 150 - - 150 - 150
Transactions
with owners 90 3,140 - 150 - - 3,380 353 3,733
Profit for
the 6m to
30.6.17 - - - - - - (625) (625) (9) (634)
Other
comprehensive
income: - - - - - - - - - -
Exchange
differences
on
intercompany
loans - - - - - (247) - (247) - (247)
Foreign
currency
translation - - - - - 108 - 108 - 108
-------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
Total
comprehensive
loss for the
period - - - - - (139) (625) (764) (9) (773)
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
At 30 June
2017 329 6,660 16,100 (1,338) 2,694 (927) (1,887) 21,631 344 21,975
---------------- -------- --------- -------- -------- --------- -------- ----------- -------- -------- --------
The notes to the accounts set out below form an integral part of
this unaudited condensed consolidated interim report.
Unaudited Condensed Consolidated Six months Year ended
Interim ended
Statement of Cash Flows
for the six months ended
30 June 2017
30 June 30 June 31 December
2017 2016 2016
As restated
Note GBP'000 GBP'000 GBP'000
---------------------------------- ----- -------- ------------- ------------
Net cash (outflow)/inflow
from operating activities 7 (719) (2,999) (1,244)
Investing activities
Finance income - - -
Acquisition of subsidiary, 476 - -
net of cash acquired
Purchase of property, plant
and equipment (7) - (285)
Purchase of software assets (167) (60) (216)
-------- -------------
Net cash used in investing
activities 302 (60) (501)
---------------------------------- ----- -------- ------------- ------------
Financing activities
Increase/(decrease) in
borrowings 1,335 386 633
Equity dividends paid - - -
---------------------------------- ----- -------- ------------- ------------
Net cash generated/(utilised)
from financing activities 1,335 386 633
---------------------------------- ----- -------- ------------- ------------
Net increase/(decrease)
in cash and cash equivalents 918 (2,673) (1,112)
Cash and cash equivalents
at beginning of period/year 3,106 3,034 3,034
Effect of foreign exchange
rate movements 125 1,512 1,184
---------------------------------- ----- -------- ------------- ------------
Cash and cash equivalents
at end of period/year 4,149 1,873 3,106
---------------------------------- ----- -------- ------------- ------------
Unaudited Reconciliation of Net Cash Flow
to movement in Net Debt
For the six months ended
30 June 2017
Six months Year ended
ended
30 June 30 June 31 December
----------------------------------
2017 2016 2016
As restated
----------------------------------
GBP'000 GBP'000 GBP'000
---------------------------------- ----- -------- ------------- ------------
Increase/(decrease) in cash
and cash equivalents in the
period/year 1,043 (1,161) 72
(Increase)/decrease in
net debt resulting from
cash flows (1,335) (386) (633)
------------
Movement in net cash in
the period/year (292) (1,547) (561)
Net cash at the start of
the period/year 2,019 2,580 2,580
---------------------------------- ----- -------- ------------- ------------
Net cash at the end of
the period/year 1,727 1,033 2,019
---------------------------------- ----- -------- ------------- ------------
The notes to the accounts set out below form an integral part of
this unaudited condensed consolidated interim report.
Notes to the Unaudited Condensed Consolidated Interim Report for
the six months ended 30 June 2017
1 General information
The principal activity of Hydrogen Group plc ("the Company") and
its subsidiaries' (together known as "the Group") is the provision
of recruitment services for mid to senior level professional staff.
The Group consists of two operating segments, EMEA (including USA)
and APAC, offering both permanent and contract specialist
recruitment consultancy for large and medium sized organisations.
The Group recruits for roles in Professional Support Services
(including legal, finance, technology and business transformation
placements) and in Technical and Scientific market sectors (Energy
and Life Sciences). The Group has operated predominantly in the
United Kingdom, but has international operations in Australia,
Singapore, Malaysia, Dubai, Hong Kong, Thailand, Norway,
Netherlands, Switzerland, Germany, and the USA, plus a number of
internationally focused teams based in the UK.
Hydrogen Group plc is the Group's ultimate parent company. The
Company is a limited liability company incorporated and domiciled
in the United Kingdom. The registered office address and principal
place of business is 30 Eastcheap, London, EC3M 1HD, England.
Hydrogen Group plc's shares are listed on the AIM Market.
Registered company number is 05563206.
The unaudited condensed consolidated interim report for the six
months ended 30 June 2017 (including comparatives) is presented in
GBP '000, and were approved and authorised for issue by the board
of directors on 11 September 2017.
Copies of these interim results are available at the Company's
registered office, 30 Eastcheap, London, EC3M 1HD, England, 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 434 of the Companies Act 2006. The financial information
for the year ended 31 December 2016 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 498 of
the Companies Act 2006.
2 Basis of preparation
The unaudited condensed consolidated interim report for the six
months ended 30 June 2017 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
unaudited condensed consolidated interim report should be read in
conjunction with the annual financial statements for the year ended
31 December 2016, which were prepared in accordance with IFRSs as
adopted by the European Union.
These financial statements have been prepared under the
historical cost convention.
The Group has two Invoice Discounting Facilities in place with a
combined value of GBP19.5m. Hydrogen had an existing facility of
GBP18.0m, which was renewed in May 2017 with a commitment to 1
April 2019. The Group also acquired an additional facility on the
acquisition of Argyll Scott of GBP1.5m which has a commitment until
December 2018. After these dates, the facilities shall continue
until ended by either party giving to the other not less than three
months' written notice. Accordingly, the directors have adopted the
going concern basis in preparing the interim report.
This unaudited condensed consolidated interim report has been
prepared in accordance with the accounting policies adopted in the
last annual financial statements for the year ended 31 December
2016.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of the
condensed consolidated interim report.
International Accounting Standards (IAS/IFRS) and
interpretations in issue but not yet adopted
The board continues to review future applicable IFRS to the
Group. In particular, the board is reviewing the impact of IFRS 9,
15 and 16 in more detail as these standards have been identified as
ones that will impact future results. In particular, the Group is
currently assessing the impact of IFRS 16 as, given the number of
operating leases the Group has entered into, this is likely to be
material. In summary, IFRS 16 will require the Group to recognise a
liability and right of use asset for the majority of its leases
which are currently treated as operating. This will affect fixed
assets, current and non-current liabilities and the measurement and
disclosure of associated lease expenses (ie depreciation and
interest expense compared to operating lease rentals
currently).
2 Basis of preparation (continued)
International Accounting Standards (IAS/IFRS) and
interpretations in issue but not yet adopted (continued)
It is not practicable to provide a reasonable estimate of the
effects of the adoption of IFRS 9, 15 or 16 until a detailed review
has been completed, given the complexity of these standards.
Standards become effective as follows:
IFRS 15: 1 January 2018 (for annual periods beginning on or
after)
IFRS 9: 1 January 2018
IFRS 16: 1 January 2019
The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.
3 Segment reporting
(a) Revenue, gross profit and operating profit/(loss) by
discipline
For management purposes, the Group is organised into two
operating segments, EMEA including USA (EMEA) and Asia Pacific
(APAC), based on the discipline of the candidate being placed. Both
of the operating segments have similar economic characteristics and
share a majority of the aggregation criteria set out in IFRS
8.12.
30 June 2017 30 June 2016 31 December 2016
Group Group Group
EMEA APAC cost Total EMEA APAC cost Total EMEA APAC cost Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Revenue 49,302 7,498 - 56,800 54,734 4,613 - 59,347 104,428 11,818 - 116,246
Gross
profit 7,426 1,936 - 9,362 7,415 1,469 - 8,884 14,403 3,335 - 17,738
Depreciation
and
amortisation (215) (6) - (221) (162) (4) - (166) (310) (8) - (318)
Other
income 267 - - 267 280 - - 280 553 - - 553
Operating
profit
/(loss) 256 11 (833) (566) 1,166 (129) (676) 361 1,547 323 (1,120) 750
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Finance
costs (37) (21) (63)
Finance
income 9 627 980
Loss (17) - -
from
associate
-------- -------- --------
(Loss)/profit before
tax (611) 967 1,667
-------- -------- --------
Profit before tax,
loss from associate,
Non-Controlling
interests and exceptional
items 25 967 1,667
======== ======== ========
3. Segment reporting (continued)
(a) Revenue, gross profit and operating profit/(loss) by
discipline (continued)
Revenue reported above represents revenue generated from
external customers. There were no sales between segments in the six
months to 30 June 2017 (30 June 2016: Nil, 31 December 2016:
Nil).
The accounting policies of the reportable segments are the same
as the Group's accounting policies described above. Segment profit
represents the profit earned by each segment without allocation of
central administration costs, finance costs and finance income.
The information reviewed by the chief operating decision maker,
or otherwise regularly provided to the chief operating decision
maker, does not include information on net assets. The cost to
develop this information would be excessive in comparison to the
value that would be derived.
There is one external customer that represented more than 28% of
the entity's revenues with revenue of GBP16.0m, and approximately
14% of the Group's net fee income, included in the EMEA segment (30
June 2016: one customer, revenue GBP18.5m, EMEA segment; 31
December 2016: one customer, revenue GBP36.3m, EMEA segment).
(b) Revenue and gross profit by geography
Revenue Gross profit
----------- ---------------------------- ----------------------------
Six months Year Six months Year
ended ended ended ended
----------- ------------------ -------- ------------------ --------
30 June 30 June 31 Dec 30 June 30 June 31 Dec
-----------
2017 2016 2016 2017 2016 2016
-----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------- -------- -------- -------- -------- -------- --------
UK 42,863 46,604 90,007 5,286 5,113 10,190
Rest
of World 13,937 12,743 26,239 4,076 3,771 7,548
----------- -------- -------- -------- -------- -------- --------
56,800 59,347 116,246 9,362 8,884 17,738
----------- -------- -------- -------- -------- -------- --------
(c) Revenue and gross profit by recruitment classification
Revenue Gross profit
------------ ---------------------------- ----------------------------
Six months Year Six months Year
ended ended ended ended
------------ ------------------ -------- ------------------ --------
30 June 30 June 31 Dec 30 June 30 June 31 Dec
------------
2017 2016 2016 2017 2016 2016
------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ -------- -------- -------- -------- -------- --------
Permanent* 4,280 3,503 6,761 4,260 3,500 6,743
Contract 52,520 55,844 109,485 5,102 5,384 10,995
------------ -------- -------- -------- -------- -------- --------
56,800 59,347 116,246 9,362 8,884 17,738
------------ -------- -------- -------- -------- -------- --------
* includes Fixed Term Contracts (FTC's)
4 Exceptional items
Exceptional items are costs that are separately disclosed due to
their material and non-recurring nature. They arose as a result of
the strategic decision to acquire the entire share capital of
Argyll Scott Holdings and also a restructure of the Group
board.
Six months Year ended
ended
30 June 30 June 31 December
---------------------------
2017 2016 2016
---------------------------
GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- ------------
57 - -
Restructuring costs
Acquisition related costs
General expenses 32 - -
Onerous lease 291 - -
Professional fees 230
Total 610 - -
---------------------------- -------- -------- ------------
5 Income tax expense
The charge for taxation on profits for the six months amounted
to GBP0.02m (30 June 2016: GBP0.07m, 31 December 2016: GBP0.14m),
being tax on profits and adjustment to prior year amounts.
6 Earnings per share
Earnings per share is calculated by dividing the profit or loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue.
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 Year ended
ended
30 June 30 June 31 December
-----------------------------------------
2017 2016 2016
-----------------------------------------
GBP'000 GBP'000 GBP'000
----------------------------------------- ------------- ------------- -------------
Earnings
(Loss)/profit for the period/year (634) 896 1,532
Add back Non-Controlling 9 - -
Interest
(Loss)/profit for the period/year
attributable to equity holders
of the parent (625) 896 1,532
------------------------------------------
Adjusted earnings
(Loss)/profit for the period (625) 896 1,532
Add back: exceptional costs 610 - -
----------------------------------------- ------------- ------------- -------------
(15) 896 1,532
----------------------------------------- ------------- ------------- -------------
6 Earnings per share (continued)
Number of shares Number Number Number
Weighted average number
of shares used for earnings
per share
23,973,554 22,530,249 22,529,360
Dilutive effect of share
plans 2,653,075 1,987,668 1,212,308
------------------------------------------ ------------- ------------- -------------
Diluted weighted average
number of shares used to
calculate fully diluted
earnings per share 26,626,629 24,517,917 23,741,668
------------------------------------------ ------------- ------------- -------------
Basic (loss)/profit per
share (2.61p) 3.97p 6.80p
Fully diluted (loss)/profit
per share (2.61p) 3.65p 6.45p
Adjusted basic earnings
per share (0.06p) 3.97p 6.80p
Adjusted diluted earnings
per share (0.06p) 3.65p 6.45p
7 Cash flow from operating activities
Six months Year ended
ended
30 June 30 June 31 December
2017 2016 2016
As restated
GBP'000 GBP'000 GBP'000
--------------------------------------- ------------ ------------- ------------
(Loss)/Profit before taxation (611) 967 1,667
Add back associate loss 17 - -
Add back non-controlling 9 - -
interest
Add back exceptional items 610 - -
--------------------------------------- ------------ ------------- ------------
Profit before taxation and
exceptional items 25 967 1,667
Adjusted for:
Depreciation and amortisation 220 166 318
Increase/(decrease)in non-exceptional
provisions 135 - 241
FX unrealised gains 11 (104) (315)
Share based payments 150 180 331
Net finance costs (9) (627) (917)
---------------------------------------- ------------ ------------- ------------
Operating cash flows before
movements in working capital 532 582 1,325
(Increase)/decrease in receivables (4,640) (6,016) (3,502)
Increase/(decrease) in payables 3,690 2,618 1,235
Income tax expense (23) (71) (135)
---------------------------------------- ------------ ------------- ------------
Cash (utilised) from operating
activities (441) (2,887) (1,077)
Income taxes paid (132) (90) (104)
Finance costs (37) (22) (63)
---------------------------------------- ------------ ------------- ------------
Net cash (outflow) from
operating activities before
exceptional items (610) (2,999) (1,244)
Cash flows arising from (109) - -
exceptional items
Net cash (outflow) from operating
activities (719) (2,999) (1,244)
---------------------------------------- ------------ ------------- ------------
8 Trade and other receivables
Six months ended Year ended
30 June 30 June 31 December
------------------------------
2017 2016 2016
As restated
------------------------------
GBP'000 GBP'000 GBP'000
------------------------------ --------- ------------- ------------
Trade receivables 11,011 8,820 9,687
Allowance for doubtful debts (55) (149) (142)
Accrued income 9,936 11,297 7,532
Prepayments 983 326 561
Other receivables
- due within 12 months 375 64 214
- due after more than 12
months 339 107 99
-------------------------------
22,589 20,465 17,951
------------------------------ --------- ------------- ------------
Current 22,250 20,358 17,852
Non-current 339 107 99
------------------------------- --------- ------------- ------------
9 Trade and other payables
Six months ended Year ended
30 June 30 June 31 December
------------------------
2017 2016 2016
As restated
------------------------
GBP'000 GBP'000 GBP'000
------------------------ --------- ------------- ------------
Trade payables 1,928 1,075 1,505
Other taxes and social
security costs 1,404 719 701
Other payables 999 916 947
Accruals 11,851 11,166 9,340
-------------------------
16,182 13,876 12,493
------------------------ --------- ------------- ------------
10 Provisions
Leasehold Onerous
dilapidations lease Total
GBP'000 GBP'000 GBP'000
--------------------- -------------- -------- --------
At 1 January 2016 68 - 68
New provision 16 - 16
---------------------- -------------- -------- --------
At 30 June 2016 84 - 84
New provision 225 - 225
---------------------- -------------- -------- --------
At 31 December 2016 309 - 309
New provision 135 271 406
Utilised - - -
---------------------- -------------- -------- --------
At 30 June 2017 444 271 715
---------------------- -------------- -------- --------
Current - 271 271
Non-current 444 - 444
---------------------- -------------- -------- --------
11 Investment in associate
Principle Investment Principal Country of %Equity
associate held by activity incorporation interest
-------------- ------------ ----------- ---------------- ----------
Hydrogen Advisory
CBFG Limited Group Plc services UK 45.0
The following table provides summarised information of the
Group's investment in the associated undertaking:
GBP'000
Investment acquired 150
Share of associate's loss (17)
--------------------------- --------
Total 133
--------------------------- --------
12 Acquisition of Argyll Scott Holdings
On 2 June 2017, Hydrogen Group Plc acquired the entire issued
share capital of Argyll Scott Holdings for GBP3.3m, satisfied by
the issuance of ordinary shares in Hydrogen Group Plc. In the
director's opinion, the consideration paid over are worth in excess
of the net assets of the Argyll Scott Group and hence has given
rise to the following goodwill.
Net Assets acquired were GBP'000
as follows:
-------------------------------- -----------------------------------------------------------
Fixed Assets 85
Trade and other receivables 3,278
Cash and cash equivalents 476
Borrowings (608)
Trade and other payables (2,124)
-------------------------------- -----------------------------------------------------------
Net Assets 1,107
Non-controlling interest (353)
-------------------------------- -----------------------------------------------------------
Tangible Assets Acquired 754
Intangible Assets Acquired 625
Goodwill 1,851
Total consideration (satisfied
by shares) 3,230
On recognition of the intangible assets acquired, a deferred tax
liability of GBP120k has also arisen. As a result, goodwill has
further increased by the corresponding amount. A full valuation of
the intangibles acquired is currently being reviewed and therefore
there could be changes to the intangibles, deferred tax liability
and goodwill balances disclosed within the applicable reporting
period.
13 Prior year adjustment
During the year ended 31 December 2016, the Group changed its
accounting policy with respect to the recognition and measurement
of revenue. Permanent recruitment revenue was previously recognised
on the acceptance of the role by a candidate. This policy has been
changed to recognise revenue on the start date of a candidate.
The impact of this change in accounting policy on the
comparative figures previously reported in the audited financial
statements for the year ended 31 December 2016 illustrated
below:
GBP'000
Reduction to 2014 Retained Earnings (1,577)
Increase to 2015 Retained Earnings 820
------------------------------------- --------
Total (757)
Included within the adjustment to equity as at 1 January 2015,
is an amount of GBP264k in the translation reserve as a result of
the revenue policy change. This arose from translating the foreign
subsidiaries from their functional currencies in to the Group's
presentational currency.
The impact of this change in accounting policy on the
comparative figures previously reported in the unaudited financial
statements for the period ended 30 June 2016 illustrated below:
GBP'000
Increase to 2016 Retained Earnings 53
Included within the adjustment to equity as at 30 June 2016, is
an amount of GBP30k in the translation reserve.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSAAAILLID
(END) Dow Jones Newswires
September 12, 2017 02:00 ET (06:00 GMT)
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