Trading Statement
January 21 2008 - 2:02AM
UK Regulatory
Trading Statement
Hat Pin plc
Trading Update
Hat Pin plc, the international human resources group, today announces
the following trading update ahead of the announcement of its
preliminary results for the year ended 31 December 2007 in March
2008.
Key facts
* Strong performances from acquired businesses: Akamai Financial
Markets, Saxton Bampfylde and Executive Access India*
* Poor performance from legacy firm: The Talent Business was
loss-making in second half
* Overall group profitability materially impacted by The Talent
Business resulting in profits for the year falling below market
expectations
o Former CEO of The Talent Business has left the company
and new leadership installed
* Group well positioned for 2008
o Approximate profits split - 70% Asia & the Far East, 30%
UK
o Increased healthy exposure to less cyclical public
sector markets
* Executive Access figures for last five months of 2007
Trading Update
Trading has been above management expectations in Akamai Financial
Markets, Saxton Bampfylde and Executive Access India, all of which
have been acquired by Hat Pin over the past two years.
Performance in The Talent Business, the original Hat Pin operating
company, has deteriorated since the interim announcement and, despite
a rally between September and November, suffered a decline in
December 2007. As a consequence The Talent Business has performed
significantly below management expectations for the period as a
whole.
Group profitability for the year has been materially impacted by the
performance of The Talent Business and is now expected to be around
25% below market expectations.
The Board has considered all available options to redress the trading
position of Hat Pin and concluded that the optimum route to create
shareholder value is to continue with its strategy of diversifying
group revenue streams, grow its profitable businesses and change the
leadership team of The Talent Business to refocus and restructure
operations.
In the UK, performance in late December and early January
demonstrated some weakening. The Directors believe that this is
likely the result of deteriorating economic conditions. This was
apparent through the high level of income deferred into quarter 1
2008 and modest pricing pressure. However, following the refocusing
and restructuring of The Talent Business, the Board believes that Hat
Pin will be well positioned with approximately 70% of profits coming
from Asia and the Far East, and the majority of its 240 staff located
in this geographic region. The Group also has a healthy exposure to
the public sector marketplace through Saxton Bampfylde (augmented by
last year's acquisition and integration of KPMG's executive search
team).
The Talent Business
Following 2007's significant investment in the rebranding,
reorganisation, geographic expansion and US relaunch of The Talent
Business, trading in the second half of the year has been very
disappointing.
Despite considerable efforts by the senior management team, supported
by the Hat Pin Board, actions taken in the second half failed to
deliver a more favourable performance outcome for 2007. This in
turn led to a deterioration of working relations between the Hat Pin
Board and the former CEO of the business, Gary Stolkin, who has now
left The Talent Business.
With immediate effect, Mike Brennan, executive director of Hat Pin
and formerly CEO of Akamai Financial Markets, has been appointed
Chairman of The Talent Business with a brief to refocus the business
and install an appropriate management structure.
Commenting on developments, Angela Campbell-No�, Chief Executive of
Hat Pin plc, said:
"The Board has taken decisive action to resolve the unacceptable
trading performance of The Talent Business.
"While disappointed with the overall group result, we are delighted
with the strong performances of Akamai Financial Markets, Executive
Access India and Saxton Bampfylde. All of these businesses
out-performed expectations and start 2008 with a healthy pipeline.
"The Board therefore believes that Hat Pin is now well positioned in
2008."
ENDS
For further information please contact:
Hat Pin plc
+44 (0)20 7438 8600
Terry Hitchcock, Non-Executive Chairman
Angela Campbell-No�, Chief Executive
Paul Billett, Finance Director
Arden Partners plc
+44 (0)121 423 8943
Steve Douglas
The Hogarth Partnership
+44 (0)20 7357 9477
Julian Walker
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