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03 December 2009
Hexagon Human Capital Plc (HHC:LSE) the Executive Search and Interim Management firm has recently undertaken a re-forecast of its financial performance.
Trading in recent months has stabilised across both the Group's operating divisions. However, the Board now anticipates that EBITA for the full year will be below market expectations.
The re-forecast exercise has revealed previous cash flow forecasts to have been over-optimistic. As scheduled payments to Her Majesty's Revenue and Customs (HMRC) had been agreed based on these forecasts, the Group has not fulfilled its obligation under this arrangement. Discussions with HMRC about a revised payment plan are now ongoing, and the Company will make further announcements as appropriate.
The Company also announces that it will not be in a position to satisfy termination payments to Mr Jonathan Wright, former CEO, and Mr Carl Thompson, former CFO. The termination payments were agreed based on the previous financial forecasts. In negotiation with Mr Wright and Mr Thompson, the Company has proposed a re-scheduling of the payments set out in the termination agreements. The proposals made to date have not been accepted.
The Company remains in active discussions with its bankers and following the re-forecast exercise now believes that it has a realistic basis on which to agree facilities appropriate for Hexagon's ongoing requirements.
Commenting on the update, Rob Walker, Executive Chairman, said "it is pleasing to note that trading performance has stabilised, demonstrating the strength and value of the Hexagon businesses. The complete re-forecast exercise has revealed over-optimism in the past regarding the Group's cash position. As a result, whilst we are confident of our ability to trade out of the current situation, the Group is in default on previously agreed payments with HMRC. Discussions with HMRC are now ongoing."
Hexagon subsidiaries include Acusearch Limited t/as Acumen, BIE Interim Executive Limited, Archer Mathieson Limited, Correlate UK Search Limited, Euromedica Limited and Oxygen Executive Search Inc. In October 2008, the Company acquired The Winchester Group Limited.
After an initial fall following the announcement, Hexagon's shares are up in early trading by 25.93% to 17 Pence.