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UK recruitment firm Hydrogen Group PLC (HYDG: LSE) today released an update on trading and its expectations for the full year results to 31 December 2013. The group expects to report an increase in net fee income for the year, reflecting a year-on-year improvement in productivity.
The group reported that it has also continued to enjoy strong growth in its Technical and Scientific practices, and there are some recent signs of an upturn in traditional UK financial services markets, which augur well for 2014. Actual net fee income for November and the latest forecasts for December, however, are both marginally lower than projected.
The group continued to invest in headcount during the second half of the year, with a +10% increase in sales headcount between June and December. The costs associated with this investment, together with some foreign exchange losses arising from the recent strength of Sterling, have also contributed to the reduction in profitability in the period.
As a consequence, the Board expects that profit before tax for the second half of the year will be lower than the first half by an estimated £300,000, and therefore that profit before tax for the year to 31 December 2013 will be below market expectations.
Activity levels across the group in the lead-up to the year-end remain strong. The Board remains confident in its strategy to grow the business, and believes that the investments made in 2013 leave it well placed to benefit from market opportunities in 2014.
In trading today, the company’s share price fell by -5.5% to £1.12, an increase of +42.2% compared with a year ago. Based on its current share price, the company has a market value of £28.1 million.