Hexagon Human Share Discussion Threads

[glasshalfull] 30/5/2007 08:27

Cheers Tole.

Difficult to get some at the 183p offer this morning.Only offered 1500 at this price - which I took.
Suggests that it won't take much to send this higher.

Think I've my full quota now.

Regards,
GHF

[tole] 29/5/2007 17:14

A few significantly sized trades going through here today - and now being reported after the close -

50k and 100k both @ 181p mid-price, a 32710 roll-over by the looks of it in what appears 2x 16991 trades and finally 2x 25k conditional trades @ 180.5p

Price edging further up which is nice to see with results pencilled in for next week.

[glasshalfull] 28/5/2007 18:39

Also forgot to flag up the last RNS announcement on 11th May 2007 which on reading between the lines indicates that ALL of the businesses are in robust shape per the CEO's comments at the end of the announcement.



"The board is pleased to announce that as a result of the strong performance of
Roberts & Corr Limited in the year to 31 March 2007 which has exceeded expectations at the time of acquisition , the vendors will be issued with
£900,000 in loan notes and 172,215 new ordinary 1p shares, equating to the
maximum the deferred consideration payable for the year, as defined in the
acquisition agreement.
Subject to the earnings before interest and tax performance for the years to 31 March 2008 and 31 March 2009, further deferred consideration is likely to be payable to the vendors of Roberts & Corr in May 2009.


Commenting, Jonathan Wright, Chief Executive Officer said:


"By exceeding the performance criteria set at the time of the acquisition,
Roberts & Corr have validated Hexagon's acquisition model, which is designed to
motivate management to perform post acquisition. It also illustrates the
strength of the businesses Hexagon has acquired thus far."


Regards,
GHF

[glasshalfull] 25/5/2007 16:24

Thanks for that Tole.

I scanned back through Shares Magazine and on 15/2/07 see that they awarded the rating below, FWIW:-

Hexagon Human
1(low)-5(high)

Management: 4
Market: 4
Product: 3
Financial strength: 4

TOTAL SCORE 15/20

Regards,
GHF

[tole] 24/5/2007 15:36

New Floats commentary from Shares - Feb 2007.

Hexagon Human Capital eyes Europe and Asia

Temporary job placements are a vital lifeline for recruitment companies. Although they tend to be lowermargin than permanent jobs, it is still possible to make good money. Candidates with specialist skills such as IT programming have proved that contract work can be very lucrative, both to them and the placing agency. Hexagon Human Capital has taken this concept to the next level by tapping into companies with a desperate need for senior management for short-term situations.

Hexagon recently purchased BIE Interim Executive, the UK market leader in placing toplevel staff with 'change management' skills. For example, if a company is undergoing a change in corporate ownership or has lost a key member of staff, Hexagon is able to fill the position at short notice. Its candidates can command salaries of up to £1,250 a day for an average nine-month service.
This market is estimated to be growing at 30% to 40% a year.

Alongside interim management jobs is an executive search division that specialises in permanent placements, with candidates typically commanding salaries of between £100,000 and £400,000.

Founded by former Alexander Mann managing director Jonathan Wright in 2004, Hexagon has spent the past few years acquiring staffing-related businesses.
It will join Aim this week, having raised £10 million through an institutional placing 40% oversubscribed. Hexagon, which is valued at £30 million at listing, will use the proceeds to repay debt and make more acquisitions. The long-term
goal is to expand mainland Europe coverage and also move into Asia.

The management will hold 55% of shares with the remainder free-float. Brewin Dolphin is acting as broker and nominated adviser.

[tole] 22/5/2007 09:30

Thought i'd post this one here too

Wednesday's star t1p on UK-AnAIyst.com comes from the impartial hot IPO spotters at AllNewIssues
UK-Analyst
21st February 2007

Buy Hexagon Human Capital
A tip from Allnewissues.com

EDIT - Ahh....same commenatry as the post 11 above by GHF.

[glasshalfull] 18/5/2007 09:39

Good to see you in these as well PP.
I think it offers excellent value given the recent trading statement.

The calibre of the Management Team is the reason I'm in these, and the following article which has recently been posted on the company web site goes some way to explaining why these appear to be such an attractive investment at this juncture (link below).

----------------------------

M&A Magazine Highlights Hexagon's Jonathan Wright

The May issue of Mergers & Acquisitions Magazine carries an interview with Hexagon Human Capital CEO Jonathan Wright which reviews the Company's distinctive approach, growth since its launch two years ago and plans for the future following the successful AIM flotation.





Kind regards,
GHF

[papalpower] 18/5/2007 05:05

I have a few of these, and its cheap at present imo.

[glasshalfull] 17/5/2007 14:41

Here is a further article that should assist discussion/research.

--------------------------------------------------------------


Hexagon Human Capital, a holding company which buys and builds businesses in the interim management and recruitment sectors, has listed on AIM, raising £8.9 million.

The company was established in 2004 and owns a profitable portfolio of recruitment firms. Hexagon listed 18.2 million shares at 165p each, giving it a market capitalisation of £30 million. The funds raised will be used to repay acquisition debt (£3.9 million), to settle deferred considerations (£2.8 million), and the remaining will be used for working capital (£2.2 million).
Hexagon recently completed the acquisition of BIE Interim Executive and, upon completion of the merger, will be the UK 's leading provider of senior executive management.

In the past two years, Hexagon has completed four acquisitions and has made an investment in a 70% majority-owned joint venture. It was founded by its current chief executive, Jonathan Wright, and Dr Swee Lip Quek, and employs a similar business model to the one that Mr Wright used as group managing director at Alexander Mann Group (AMG), although it is more of a recruitment-process outsourcer than a conventional recruitment agency.

During his time at AMG, Mr Wright oversaw an increase in revenues from £0.9 million to £128 million. Since its inception, Hexagon it has made a number of deals similar to its current agreement with Acusearch, a joint venture with the
management team to provide partner and director-level staff to the management consultancy market. Hexagon has also acquired Oxygen, which offers recruitment services to senior personnel in the retail, financial services and industrials
market; Euromedica, an executive search company for the life-sciences and healthcare industries; and Roberts & Corr, which is focused on the international market for human capital in the media, communications and technology sectors. The takeover of BIE Interim Executive has enabled Hexagon to offer interim management executives to UK and overseas public and private-sector companies.

Hexagon now has in excess of 200 clients, and among its blue-chip customer base there are 25 FTSE-100 companies and three out of four of the world's largest accountancy and professional services groups.

In the year to 31st March 2006, Hexagon reported operating profits of £3.6
million on turnover of £14.67 million. For the six months to 30th September last year, it recorded operating profits of £2.28 million on turnover of £7.9 million.

And, for the six months since September 2006, Hexagon has encountered surging demand, especially from the financial services and consulting sectors. So, following the acquisition of BIE Interim Executive, it claims that it will announce a strong set of results for the final year to 31st March 2007.

Hexagon looks to acquire profitable businesses that have a market share in geographical areas likely to exhibit strong growth. By doing so, the company expects to enter new sectors and take advantage of post-acquisition growth
to help the value of its investments appreciate further.
What's more, the targets must demonstrate strong profit margins and cash flows. And this strategy of diversification should help Hexagon create more sustainable revenues streams and avoid the impact of an economic downturn in
a particular region. Hexagon also plans to consolidate its market-leading position in the provision of interim management not only by developing its business, but by creating quality consulting teams. As a result, its acquisitions are considered for the cross-synergies they can offer its different subsidiaries - the companies in its portfolio have specific clients that they can promote to the other subsidiaries.

In addition, Hexagon intends to generate additional revenue and establish longer-term relationships with clients by offering additional services such as organisational design, board effectiveness and assessment, and human
capital research. An additional advantage comes from the fact the specialist staff and senior executive sector has always been short of supply, while the company's executive assignments bring in revenues for nine-month periods,
creating earnings visibility.

Hexagon is a growth story. Both through acquisitions and organic development, it has established a premier position in the UK market, reflecting the talent of its management team in selecting suitable targets for acquisition and the
ability to expand successfully. However, in the past two years it has merged with four companies while adding BIE Interim Executive last December, so there are complications in trying to value the business and assess whether a
market price of £30 million discounts future growth or not.

Hexagon's consolidated profit-and-loss statement is not detailed and offers no additional information other than the company's operating profitability. However it looks pretty obvious that this is a company which could easily achieve operating profits of £5-6 million this year and more next time. With no debt left on the balance sheet a £30 million valuation looks far from demanding.



Regards,
GHF

[tole] 17/5/2007 14:37

Well looking at 2008 estimates (Dont have forecasts at hand - though Armshare does summarise) but basing it on the predicted forecast PE of 10x against the peer group average of 13x this one does look to have some upside from these levels.

Peer group average taken from the recent Empressaria EMR note from Dan Stewart. (16th May 2007)

Edit - Hi GHF nice to see you over here :)

[glasshalfull] 17/5/2007 14:33

Thanks for the updates Tole.

I've also been accumulating and now finding it tougher to get hold of stock within the spread.

Reminds me of Northbridge (NBI) a few months ago ....130p before results which were flagged to be good per a trading update, then a gentle rise to the £2 mark in the 8 weeks or so following them.
50% return on an extremely good risk/reward basis IMHO.

Hope this has similar results :-)


Regards,
GHF

[tole] 17/5/2007 14:12

Hexagon Human Capital - SPECULATIVE BUY
Companies: HHC
02/04/2007

Acquisitive executive search counter Hexagon has pleased followers with an upbeat pre-close trading update, nudging its share price higher.

Steered by co-founder and chief executive Jonathan Wright, the recent AIM entrant expects results for the year to March to come in slightly ahead of market expectations following a trading flourish in the final quarter of its financial year.

Analysts were looking for a rise in pre-tax profits from £3.7m to £4m from improved sales of £14.3m (£12.7m), with the numbers prepared on a pro-forma basis, assuming ownership of all group businesses for the entire year. Hexagon was apparently successful in hiring more experienced fee earning consultants towards the end of the year and continues to scout for further acquisitions.

Founded by Wright, previously managing director of Alexander Mann Group (AMG) which flourished during his tenure, and Dr Swee Lip Quek, the group's stated mission is to buy and build businesses within the interim management and 'human capital services' sectors. Four acquisitions have been completed over the past two years (and Hexagon has a 70% stake in a joint venture), with the most recent deal being BIE in December, an acquisition turning Hexagon into the number one provider of senior level interim executives in the UK. This part of the recruitment sector, insists Wright, offers 'significant' revenue visibility, high margins and is growing 'substantially' faster than the permanent recruitment sector.

Hexagon floated on AIM in February, having raised £10m of new money from institutions at 165p. Its still early days, but given Wright's track record, supposed bumper demand for the shares pre-float and the group's diverse portfolio of profitable companies providing a degree of insulation against cyclicality, this looks a story worth following. Watch out for the figures, which should be issued in early June.

James Crux
Market cap: £31.98m
Share price: 176p

[tole] 17/5/2007 13:43

Snippet from the Independant - citing their market report
April 5 2007

"Brewin Dolphin inititated coverage of Hexagon Human Capital, the executive search group that listed at 165p in February. Having risen to 190.5p on the first day of dealings, the shares have fallen back on steady selling pressure. Brewin points out the stock trades at an undeserved discount to its peer group and set a target of 200p"

Looks more like it suffered a bout of profit taking after its initial surge - now looks more likely that they have been cleared this should move back towards a more decent rating.

Also noted this extract covered elsewhere -

"Brewin Dolphin started coverage of Hexagon Human Capital, an executive recruitment specialist, with an "add" recommendation. It noted that shares were on around 12 times earnings, compared with immediate peers such as Hatpin, Hydrogen and Empresaria which were at between 11 and 15 times. "Given the strong current trading and above sector average growth prospects, margins and visibility we believe that Hexagon should trade at least at the midpoint of its nearest peer group range," Brewin said. It set a 200p share-price target, compared with a 176p closing price yesterday."

[tole] 17/5/2007 13:33

Okay - lets bring this thread up to date witha few of the recent articles here on HHC.

Hexagon recruited to Aim
15 February 2007

Aim's gaggle of recruitment companies got a new member this week with the floatation of Hexagon Human Capital. The company, which has only been trading since 2005 and has been built up through acquisition, targets the top end of the market - executives and senior management.

Most of the acquisitions have been in permanent recruitment, where Hexagon works in the health, media, consumer and management consultancy sectors. But the most recent addition, BIE, finds senior personnel to manage companies over a period of change.

Interim recruitment is high margin work and, according to Hexagon, the market is growing at 30 to 40 per cent per year. Hexagon is looking for more acquisitions in this area, and raised £10m of new money at the float. The money will be used to pay down debt that was taken on for acquisitions, and also to fund new deals.

None of the existing shareholders sold any shares in the float which,according to chief executive Jonathan Wright, was 40 per cent oversubscribed. At the float price, Hexagon has a market capitalisation of £30m.

At the placing price of 165p, Hexagon trades at 11 times earnings. Given the growth opportunities, that's good value.

[tole] 17/5/2007 13:23

Heres the Pre-close from last month -


Hexagon Human Capital PLC (the "Group"), the UK's leading provider of senior
interim executive management and a leading executive search business, is pleased
to provide a trading update prior to entering into its close period ahead of its
preliminary results for the year ended 31 March 2007. The Group plans to
announce its preliminary results during the week commencing 4 June 2007.

The Group has enjoyed strong trading in the final quarter of its financial year
and the board expects results, on a pro-forma basis, for the financial year to
31 March 2007 to be slightly ahead of market expectations. The Board is also
confident that this positive performance will continue into the start of its new
financial year. The Group's operating companies have been successful in hiring
further experienced fee earning consultants in the quarter and the Group
continues to pursue a number of potential acquisition opportunities.

[tole] 17/5/2007 13:08

Looks to be breaking up.
Results due 4/6 which as they have already stated are going to be marginally ahead.

[wanglong1981] 03/4/2007 00:56

Research Standing
ArmShare is not usually attracted to recruitment businesses. However, ArmShare has come across BIE (the interim/change management business acquired in December 2006) previously and was very impressed by the quality of candidates on the database and the ability of BIE to match candidates to assignments. Top level interim/change managers are usually required at very short notice, and the supply thereof involves both recurring revenues and contacts at the highest levels within major organisations (both UK and overseas) - the latter provides an excellent platform for cross selling - ownership of BIE differentiates Hexagon from other recruitment businesses, as also does the focus on providing human capital consultancy services rather than just recruitment services.

The company broker's note dated January 2007 projects post-tax profits of £2.8 million for 2006/7, £3.2 million for 2007/8 and £3.8 million for 2008/9 representing P/Es of 11.5, 10.0 and 8.4 respectively based on the market cap of £32.1 million at 23rd February.


Seems good!

[hard work] 02/4/2007 07:48

Good pre-close statement

[hard work] 23/2/2007 11:57

...lets hope so