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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hydrogen Group Plc | LSE:HYDG | London | Ordinary Share | GB00B1DJTV45 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 42.50 | 35.00 | 50.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
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
Hot Features
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-- 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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