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UK recruiter Hydrogen (HYDG:LSE) today reported that profits for the full year will be “significantly” below current market expectations as trading deteriorated in the second half of 2012.
In a trading update on Thursday, the company said that investments had taken longer than anticipated in the two months to November, which is impacting revenue growth and productivity levels. The firm’s investment plans are part of a strategy to expand into new sectors and countries.
The first half of the year saw better performance with continued growth, but Hydrogen warned that the difficult macroeconomic environment has impacted its traditionally stronger period in the second half.
“As a result, the directors believe that, whilst the group will still produce low single digit percentage growth in net fee income for the year ending 31 December 2012 compared to the prior year, profits will be significantly below current market expectations,” the company said.
But the firm will continue investing in markets with potential growth and will stay focused at managing its cost as “visibility remains poor.”
Hydrogen operates internationally across major staffing markets in Europe, Asia, Australia and the Americas. Last year, the firm saw revenue grow by +27% to £156.2 million with turnover from contract placements rising by over +30% to £142.6 million. Hydrogen is ranked among the top 40 largest staffing companies in the UK, according to Staffing Industry Analysts.
In early trading, the company’s share price plummeted by -14.3% to 93 pence setting a new 52-week low, although the stock price is still up +5.1% from a year ago. Hydrogen has a market value of £25.55 million.