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Date:                    26 November 2008

On behalf of:         Hexagon Human Capital plc ('Hexagon' or the 'Group')

Embargoed until:   0700hrs

HEXAGON HUMAN CAPITAL PLC

Interim Results 2008

The Board of Hexagon Human Capital plc (AIM: HHC), the UK's leading provider of  senior interim managers and one of the UK's major executive search businesses, is pleased to announce its unaudited interim results for the six months ended 30 September 2008 which are in line with management expectations.  

FINANCIAL HIGHLIGHTS

Reported results	Six months to Sept 2008	Six months  to Sept 2007	Growth
Net fee income ('NFI')	£12.6m	£8.7m	45%
Earnings before interest, taxation,  amortisation and exceptional costs ('EBITA')	£3.5m	£2.4m	43%
NFI to EBITA conversion	28%	28%
Adjusted* EPS * before the effect of amortisation of other intangible assets (net of deferred tax), finance charges on deferred consideration and other operating expenses	11.92p	8.22p

OPERATING HIGHLIGHTS

• Strong performance in both interim management and executive search divisions and in line with management expectations

• Group maintains position of UK's No.1 senior interim management company

• Euromedica, a subsidiary of Hexagon, confirmed as the UK's No.1 Healthcare and Life Sciences executive search firm for 2nd year*

• Interim management NFI up 42% and EBITA up 46%

• Executive search NFI up 46% and EBITA up 40%

• Earnings from interim management increased to 61% of Group EBITA

• Acquisition of Correlate Search UK and Dubai (formerly known as Akamai Financial Markets) in April 2008 and business turned from loss to profit

• Operating cash generated of £2.5 million in the period before funding net liabilities of £0.5 million in Correlate Search

• Gross liability to deferred consideration reduced by over £7 million in the period  

• Current trading levels remain positive, although medium term trading conditions uncertain given the global economic downturn

*according to Executive Grapevine reports on Executive Search

Post Balance Sheet Event

• Acquisition of Winchester Group, Atlanta-based executive search company, for maximum consideration of $5.95 million

Commenting on the results, Chairman Robert Walker, said:

'I am pleased to report that the results for the first half of the year are in line with management expectations. Further growth in revenues and trading profits has been achieved in both our market leading senior interim management business and our portfolio of specialist executive search businesses. 

In these challenging market conditions, we expect to see stable demand for senior interim managers to drive change and transition programmes and we are pleased to note that customer enquiry levels have remained robust in the period. 

Our executive search division enjoyed a record trading period in the first quarter of this financial year although the second quarter has seen demand fall back to budgeted levels.

The Group focuses exclusively on supplying senior management talent. This is fundamental in driving our high margins (28% EBITA/NFI conversion) and strong levels of consultant productivity with over £400,000 NFI per consultant. Additionally, the Group has no over dependence on any single sector which coupled with the recent expansion into new geographies (the Middle East and North America) and into growth sectors such as pharmaceutical and life sciences in Europe, reinforces Hexagon's defensive characteristics.

The volatile economic climate makes it difficult to predict with certainty the trading environment in which the Group will be operating in the coming months. However, the defensive characteristics of Hexagon's operations, its weighting towards interim management and the continued implementation of sound financial controls provide the Board with confidence in respect of the outturn for the full year.'

-Ends- 

Enquires to:

Hexagon Human Capital plc                             Tel: 020 7337 1133

Jonathan Wright, Chief Executive Officer              www.hexagonhc.com 

Carl Thompson, Chief Financial Officer            

Brewin Dolphin Ltd (Nomad)                            Tel: 0845 270 8600

Matt Davis/ Alison Barrow

Redleaf Communications                                  Tel: 020 7566 6700

Emma Kane/ Sanna Sumner/ Anna Dunkin            hexagon@redleafpr.com

• Publication quality photographs are available via Redleaf.

 

Notes to Editors:

• Hexagon Human Capital is the market-leader in providing senior interim management;

• The Group floated on AIM in February 2007; 

• It was established in 2004 by Jonathan Wright and Dr Swee Lip Quek with a strategy to buy and build in the interim management and executive search sectors; 

• Hexagon has already built up a portfolio of profitable companies operating in a variety of sectors: 

  • Archer Mathieson: A leading UK provider of interim management and executive recruitment in the specialist fields of finance, IT and human resources;  

  • BIE Interim Executive: The UK's leading senior interim management company;

  • Correlate Search: Provider of specialist executive search in the international financial services industry, with operations in the UK and Dubai;

  • Euromedica: The UK's leading life sciences and healthcare executive search provider with operations in the UK, Benelux, France, Switzerland, Scandinavia and India; 

  • Oxygen Executive Search: Providing leadership talent to UK and international clients in the retail financial services, industrial, consumer, professional services and real estate sectors. Enhanced US presence due to acquisition of the Winchester Group based in Atlanta (November 2008);

  • Roberts & Corr: Providing board level search and HR consultancy to a number of major companies in their specialist sectors including media, financial services, retail and management consultancy.

  CHAIRMAN'S STATEMENT

Introduction 

The Group has made further progress in this period and both of our divisions have seen strong performance. We have consolidated our leadership position in the senior interim management market and successfully and profitably grown our executive search division into new markets and geographies.

Business Overview

Senior Interim Management Division

We are the UK's leading provider of senior interim managers with significantly more market share than our nearest competitor. Our interim managers are used by clients to drive change in their organisations. They are typically on assignment for nine months and we carry a financial interest in the interim manager for the full duration of the assignment. This recurring revenue, coupled with the nature of the work carried out by our interim managers, enhances Hexagon's strong defensive characteristics relative to our peers. During the six months ended 30 September 2008, the division grew NFI to £4.8 million (2007: £3.3 million) and EBITA to £2.1 million (2007: £1.5 million), growth rates of 42% and 46% respectively. The growth in NFI was a combination of £0.4 million (9%) like-for-like organic growth with the remainder of the growth (£1.0 million) arising from a full period of trading from Archer Mathieson, acquired in August 2007. Our senior interim management operations delivered 38% (2007: 38%) of our NFI and 61% (2007: 56%) of our EBITA.  

Executive Search Division

In aggregate, our executive search business is on the verge of becoming one of UK's top 10 firms by NFI. We place senior executives into full time roles within a broad range of clients, including over 25 FTSE 100 companies and operate both domestically and overseas in Dubai, Europe, India and North America. We operate a multi-branded, multi-sector strategy removing any over dependence on any one sector.

During the six months ended 30 September 2008, the division grew NFI to £7.8 million (2007:£5.4 million) and EBITA to £1.4 million (2007: £1.0 million), growth rates of 46% and 40% respectively. A prime driver of growth in NFI was the acquisition of Correlate Search UK and Dubai (formerly known as Akamai Financial Markets) in April 2008 together with exceptional performance from our leading search business, Oxygen Executive Search.

Financial Performance

Our reported results for the Group during the period are NFI of £12.6 million (2007: £8.7 million) and producing EBITA of £3.5 million (2007: £2.4 million), growth of 45% and 43% respectively. Both divisions achieved strong growth in NFI and EBITA, as detailed above, through a combination of acquisition and organic development.

On a proforma basis, assuming ownership of all our businesses for a full period this year and last year, the underlying performance of the Group reveals a 3% growth in NFI and a 20% growth in EBITA. We have grown the interim NFI by 9% whilst successfully transitioning the running of our senior interim management business, BIE Interim Executive, to a new management team following the planned retirement of the founders of the business. Growth in EBITA has been 12% and the new management structure, together with the recruitment of additional senior client directors, has given the business increased scope for growth going forward.

Our search NFI was maintained on a like for like basis but we achieved substantial improvement in EBITA as we turned Correlate Search from a £200,000 loss to a £200,000 profit on a like for like basis.

Like for like divisional performance was as follows: 

£m	6 months to Sept 2008	6 months to Sept 2007	Growth
NFI
Interim Management	4.8	4.4	9%
Executive Search	7.8	7.8	0%
Total	12.6	12.2	3%
EBITA
Interim Management	2.1	1.9	12%
Executive Search	1.4	1.0	35%
Total	3.5	2.9	20%

The reported earnings before interest and tax ('EBIT') was £2.36 million (2007: £1.58 million) after amortisation costs of £0.56 million (2007: £0.83 million) and the write off of advisors fees in respect of aborted acquisitions of £0.52 million. 

Net finance costs totalled £0.76 million (2007: £0.53 million) including net interest payable of £0.38 million (2007: £0.27 million) and the finance charges on deferred consideration of £0.38 million (2007: £0.26 million).

Profit before tax was £1.60 million (2007: £1.05 million) which we estimate will be subject to a corporation tax charge of £0.73 million (an effective rate of 46%) due to the non-deductible nature of other operating costs. 

Operating cash flow before interest and tax of £2.5 million (2007: £2.5 million) was before funding net liabilities of £0.5 million in Correlate Search. Fundamentally, the net operating cash flow of £1.9 million coupled with cash from March 2008 of £4.2m has enabled the Group to fund deferred consideration payments of £4.2 million and debt service of £1.8 million whilst also comfortably staying within our banking covenants. Net debt at the half year end was £8.9 million representing an EBITA multiple of 1.3x on an annualised basis.

Deferred consideration outstanding has reduced to £7.5 million (2007: £14.7 million) of which the present value £6.9 million (2007: £12.8 million) is accrued in the balance sheet. The deferred consideration liability is potentially payable in the following periods:  

Gross Payable  to 31 March	2009	2010	2011	Total
£m
Cash	1.7	1.3	0.9	3.9
Hexagon Shares	1.6	1.2	0.8	3.6
Total	3.3	2.5	1.7	7.5

It should be noted that deferred consideration is wholly dependent on EBIT performance of the individual businesses. It is the Group's policy to ensure that where EBIT performance triggers a deferred consideration payment the significant majority of such payments are self funding, e.g. are funded by the EBIT generated. Under the terms of the relevant share purchase agreements, the deferred consideration can be satisfied in a mixture of Hexagon shares and cash, the latter being satisfied from operating cash flow and existing bank facilities.

Business Development Strategy

The Group's strategy remains focused on developing a market leading business providing leadership talent both through its senior interim management and executive search divisions. 

The Group's organic growth initiatives have been adapted to the current market conditions to focus on driving margin growth and limiting the expansion of consultant numbers. This strategy has resulted in consultant numbers being below our original plan whilst at the same time NFI per consultant, at over £400,000 per annum, is ahead of expectations by 17%. 

The success of this strategy has assisted the Company in maintaining its cash generation and in reducing operational risk should recessionary pressures impact future revenues.

In our interim management division, we are now looking to extend our market leading position further by developing a broader UK regional presence as well as targeting those overseas interim markets which have attractive growth rates. 

In our executive search division, we continue to selectively bring in new talent as we look to take our multi-branded specialist approach into selected overseas markets both in support of our current client base and to help support our senior interim management expansion in new markets. During the period, we have opened operations in the Middle East and North America. We are promoting integrated selling between our divisions and this is proving a successful route to new business development. 

We still have an appetite for strategic growth enhancing acquisitions but the Group will only continue to seek acquisitions with a very strong cash generation and immediate operational fit.  During the period, the Company worked on the following transactions: 

• The acquisition of Correlate Search (formerly Akamai) with offices in London and Dubai 

In April 2008, the Group acquired Akamai, an executive search business focused in financial services, from Hat Pin Plc for the consideration of £2 plus deal costs. The acquisition was a significant step for the Group, giving it a foothold in the Middle East and has traded profitability in the period. 

  

• The exchange of contracts to acquire The Winchester Group Inc.

 

In September 2008, the initial contracts were exchanged and in November 2008, the Group completed the acquisition of The Winchester Group Inc. Winchester is an Atlanta based executive search firm with a strong reputation in identifying US based senior level professionals for a wide range of UK companies. The acquisition is a strategic step for the Group, expanding the business internationally and delivering the highest quality of long term senior and board level assignments. Winchester complements the Group's senior and board level Executive Search subsidiary, Oxygen Executive Search Ltd and the American business will trade as Oxygen Executive Search Inc, led by its principals, Charlie Chalk and Dave Gallagher.

Current Trading and Outlook

Performance across the Group since the end of the period has been in line with management expectations; however, the continued economic uncertainty makes accurate trading predictions conditions very difficult for the coming months. Whilst continuing to focus on delivering growth in NFI and EBITA, the Group as indicated in this report, has taken a conscious decision to focus on margin improvement whilst limiting the hiring of new consultants.

  

This decision will protect our average production levels - probably the best in class - as well as to limit increases in fixed costs and protect our high NFI to EBITA conversion and consequently our strong cash flows.

The Board is confident of delivering a strong full year performance and points to the following key characteristics of the Group:

• We only deliver leadership talent and senior management talent - businesses demand strong leaders in all climates

• Our profits are derived from a sound product mix led by senior interim management which is demonstrating robust levels of demand

• We have no over dependence on any single market sector, insulating us from specific stresses in the market

• In the period we have expanded our international footprint to protect us against over dependency on the UK market

Robert Walker

Chairman 

25 November 2008

  

Consolidated Income Statement - unaudited
for the six months ended 30 September 2008
		Unaudited		Unaudited		Audited
		Six months ended		Six months ended		Year ended
Continuing operations	Notes	30 September 2008		30 September 2007		31 March 2008
		£'000		£'000		£'000
Revenue	2	19,923		11,113		28,664
Cost of sales		(7,341)		(2,417)		(9,176)
Net Fee Income		12,582		8,696		19,488
Administrative expenses		(9,690)		(7,118)		(15,361)
Other operating expenses		(528)		-		-
Earnings before interest and tax		2,364		1,578		4,127
Analysed as:
Earnings before interest, tax and amortisation		3,454		2,409		5,672
Amortisation		(562)		(831)		(1,545)
Other operating expenses		(528)		-		-
		2,364		1,578		4,127
Finance costs		(764)		(709)		(1,462)
Finance income		3		177		207
Profit before tax	2	1,603		1,046		2,872
Income tax expense	4	(731)		(393)		(998)
Profit after taxation		872		653		1,874
Attributable to:
Equity holders of the parent		872		640		1,794
Minority interests		0		13		80
		872		653		1,874
Earnings per share
Basic (pence)	5	4.75		3.49		9.78
Diluted (pence)	5	4.55		3.34		9.35
All amounts relate to continuing activities

Consolidated Balance Sheet - unaudited
as at 30 September 2008
	Unaudited 30 September	Unaudited  30 September	Audited 31 March
	2008	2007	2008
	£'000	£'000	£'000
ASSETS
Non-current assets
Goodwill	29,862	30,196	32,206
Other intangible assets	8,685	9,776	9,072
Property, plant and equipment	427	405	380
Held-to-maturity investments	3	3	3
Deferred tax asset	547	1,071	658
	39,524	41,451	42,319
Current assets
Trade and other receivables	4,706	5,496	5,639
Prepayments and accrued income	2,375	2,106	2,763
Cash and cash equivalents	37	3,285	4,223
	7,118	10,887	12,625
Total assets	46,642	52,338	54,944
LIABILITIES
Non-current liabilities
Borrowings	(6,717)	(6,067)	(7,811)
Deferred consideration on acquisitions	(3,064)	(9,260)	(8,372)
Other payables	(901)	(1,808)	(1,246)
Derivative financial instruments	(35)	(11)	(62)
Deferred tax liabilities	(2,427)	(2,734)	(2,535)
	(13,144)	(19,880)	(20,026)
Current liabilities
Trade and other payables	(6,773)	(9,680)	(8,857)
Deferred consideration on acquisitions	(3,825)	(3,534)	(5,030)
Borrowings	(2,189)	(1,689)	(2,189)
Current tax payable	(2,602)	(2,070)	(1,988)
	(15,389)	(16,973)	(18,064)
Total liabilities	(28,533)	(36,853)	(38,090)
Net Assets	18,109	15,485	16,854
EQUITY
Issued capital	252	248	248
Share premium	10,167	9,690	9,690
Merger reserve	5,171	5,171	5,171
Equity reserve	79	-	102
Foreign exchange reserve	6	(1)	5
Retained earnings	2,434	316	1,510
Capital and reserves attributable to equity holders of the parent	18,109	15,424	16,726
Minority interests	-	61	128
Total equity	18,109	15,485	16,854

Consolidated Statement of Changes in Equity - unaudited
as at 30 September 2008
		Called up share capital	Share premium	Merger Reserve	Equity Reserve	Foreign exchange reserve	Retained earnings	Attributable to equity holders of the parent	Minority interests	Total equity
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 April 2007		246	9,392	5,171	147	(1)	(357)	14,598	48	14,646
Income tax on items taken directly to equity		-	-	-	(147)	-	-	(147)	-	(147)
Net income recognised directly in equity		-	-	-	(147)	-	-	(147)	-	(147)
Profit for the six-month period ended 30 September 2007		-	-	-	-	-	640	640	13	653
Total recognised income/(expense) for the period		-	-	-	(147)	-	640	493	13	506
Shares issued in the period		2	298	-	-	-	-	300	-	300
Equity-settled share-based payments credit		-	-	-	-	-	33	33	-	33
Balance at 30 September 2007		248	9,690	5,171	-	(1)	315	15,423	61	15,485
Balance at 1 April 2007		246	9,392	5,171	147	(1)	(357)	14,598	48	14,646
Exchange differences on translation of foreign operations		-	-	-	-	6	-	6	-	6
Income tax on items taken directly to equity		-	-	-	(45)	-	-	(45)	-	(45)
Net income recognised directly in equity		-	-	-	(45)	6	-	(39)	-	(39)
Profit for the year ended 31 March 2008		-	-	-	-	-	1,794	1,794	80	1,874
Total recognised income/(expense) for the period		-	-	-	(45)	6	1,794	1,755	80	1,835
Shares issued in the period		2	298	-	-	-	-	300	-	300
Equity-settled share-based payments credit		-	-	-	-	-	73	73	-	73
Balance at 31 March 2008		248	9,690	5,171	102	5	1,510	16,726	128	16,854
Balance at 1 April 2008		248	9,690	5,171	102	5	1,510	16,726	128	16,854
Exchange differences on translation of foreign operations		-	-	-	-	1	-	1	-	1
Tax on items taken directly to equity		-	-	-	(23)	-	-	(23)	-	(23)
Net income recognised directly in equity		-	-	-	(23)	1	-	(22)	-	(22)
Profit for the six-month period ended 30 September 2008		-	-	-	-	-	872	872	-	872
Total recognised income/(expense) for the period		-	-	-	(23)	1	872	850	-	850
Shares issued in the period		4	477	-	-	-	-	481	-	481
Purchase of minority interest		-	-	-	-	-	-	-	(128)	(128)
Equity-settled share-based payments credit		-	-	-	-	-	52	52	-	52
Balance at 30 September 2008		252	10,167	5,171	79	6	2,434	18,109	-	18,109
Nature and purpose of reserves:
Merger reserve
The merger reserve arose as a consequence of a Group reconstruction that resulted in Hexagon Human Capital plc acquiring Hexagon Human Capital (Services) Ltd and Hexagon Management Services Ltd by way of a share for share exchange, together with the difference between the value of shares and the nominal value where shares have been issued as part of the consideration for acquisitions in accordance with the requirements of Merger Relief under the Companies Act 1985.
Equity reserve
Equity reserve represents the reserve for deferred tax on share options not charged to the income statement.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

Consolidated Cash Flow statement - unaudited
for the 6 months ended 30 September 2008
	Unaudited Six months ended	Unaudited Six months ended	Audited Year ended
	30 September	30 September	31 March
	2008	2007	2008
	£'000	£'000	£'000
Cash flows from operating activities
Profit before taxation	1,603	1,046	2,872
Adjustments for:
Depreciation and amortisation	642	877	1,661
Equity-settled share-based payments	52	33	73
Finance income	(3)	(177)	(207)
Finance costs	764	709	1,462
Operating profit before working capital and provision changes	3,058	2,488	5,861
(Increase)/decrease in trade and other receivables	1,939	(519)	(1,254)
Increase/(decrease) in trade and other payables	(2,954)	545	(580)
Cash generated from operating activities	2,043	2,514	4,027
Income taxes (paid)/refund	(175)	237	(132)
Net cash flows from operating activities	1,868	2,751	3,895
Cash flows from investing activities
Purchase of property, plant and equipment	(114)	(97)	(141)
Purchase of intangible assets	-	(3)	(14)
Purchase of subsidiary undertakings (net of cash)	45	(5,106)	(5,362)
Payment of deferred consideration	(4,213)	(2,175)	(3,755)
Interest received	3	177	207
Net cash flows used in investing activities	(4,279)	(7,204)	(9,065)
Cash flows from financing activities
Proceeds from issue of share capital	-	300	-
Interest paid	(681)	(440)	(742)
Repayment of borrowings	(1,094)	(2,908)	(3,753)
Proceeds from borrowings	-	-	3,089
Net cash flows used in financing activities	(1,775)	(3,048)	(1,406)
Net decrease in cash and cash equivalents	(4,186)	(7,501)	(6,576)
Net foreign exchange difference	-	-	13
Cash and cash equivalents at the beginning of the period	4,223	10,786	10,786
Cash and cash equivalents at the end of the period	37	3,285	4,223

  

Notes to the Financial Statements - unaudited
at 30 September 2008
1	Basis of preparation
Hexagon Human Capital plc is a public limited company listed on the AIM market. Its principal activities comprise the provision of senior interim managers and executive search consultancy.
The consolidated interim financial statements are for the six months ended 30 September 2008. These financial statements have been prepared in accordance with the accounting policies expected to be followed for the year ending 31 March 2009.
The interim financial statements were approved for issue by the Board of Directors on 25 November 2008. They are unaudited but have been reviewed by the auditors and their report is set out at the end of the notes to the financial statements.
The interim consolidated financial statements have been prepared on a historical cost basis except for derivative financial instruments that have been measured at fair value.
The consolidated financial statements are presented in pounds sterling and all values are rounded to the nearest thousand except when otherwise indicated. The principal accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2008,  which are based on the recognition and measurement principles of IFRS as adopted by the European Union.
The interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the period ended 31 March 2008 is based upon the audited statutory accounts for that period.
The Group's statutory financial statements for the period ended 31 March 2008 prepared under IFRS have been filed with the Registrar of Companies. The Auditors' report on those financial statements was unqualified and did not contain a statement under section 237(2) of the Companies Act 1985.

2	Segment analysis
The Group is managed according to two operating divisions; senior interim management and executive search.
These divisions are the basis on which the Group reports its primary reporting segment information.
				Senior Interim Management				Executive Search				Group
		Six months ended		Six months ended	Year ended		Six months ended	Six months ended	Year ended		Six months ended	Six months ended	Year ended
		30 September		30 September	31 March		30 September	30 September	31 March		30 September	30 September	31 March
		2008		2007	2008		2008	2007	2008		2008	2007	2008
		£'000		£'000	£'000		£'000	£'000	£'000		£'000	£'000	£'000
Revenue
Ongoing operations		12,087		5,760	16,945		6,466	5,353	11,719		18,553	11,113	28,664
Acquisitions		-		-	-		1,370	-	-		1,370	-	-
Total revenue		12,087		5,760	16,945		7,836	5,353	11,719		19,923	11,113	28,664
Net fee income		4,746		3,343	7,769		7,836	5,353	11,719		12,582	8,696	19,488
Result
Segment result		2,106		1,445	3,886		1,348	964	1,786		3,454	2,409	5,672
Amortisation of intangible assets		(331)		(655)	(1,150)		(231)	(176)	(395)		(562)	(831)	(1,545)
Unallocated expenses		-		-	-		-	-	-		(528)	-	-
Earnings before interest and tax		1,775		790	2,730		1,117	788	1,391		2,364	1,578	4,127
Net finance costs											(761)	(532)	(1,255)
Profit before tax											1,603	1,046	2,872
Assets and liabilities
Segment assets		30,988		32,619	33,045		12,480	13,258	14,255		43,468	45,877	47,300
Unallocated assets		-		-	-		-	-	-		3,174	6,461	7,644
Total assets		30,988		32,619	33,045		12,480	13,258	14,255		46,642	52,338	54,944
Segment liabilities		(2,306)		(4,144)	(3,576)		(3,212)	(2,831)	(3,496)		(5,518)	(6,975)	(7,072)
Unallocated liabilities		-		-	-		-	-	-		(23,015)	(29,878)	(31,018)
Total liabilities		(2,306)		(4,144)	(3,576)		(3,212)	(2,831)	(3,496)		(28,533)	(36,853)	(38,090)
Segment net assets		28,682		28,475	29,469		9,268	10,427	10,759		37,950	38,902	40,228
Unallocated net assets		-		-	-		-	-	-		(19,841)	(23,417)	(23,374)
Total net assets		28,682		28,475	29,469		9,268	10,427	10,759		18,109	15,485	16,854

3	Business combination
In April 2008, the Group purchased the business and assets of Akamai Financial Markets (UK) Ltd and the entire share capital of Akamai Financial Markets Executive Search (Dubai) Ltd (collectively referred to as 'Akamai') from Hat Pin Plc for consideration of £1 each. Deal costs were £105,648. Akamai is a specialist provider of executive search services to the international financial services industry and has operations in the UK and in Dubai which provide the Group with an important Middle East base. For the 12 months to December 2007 Akamai had unaudited net fee income of £4.3 million and losses before interest and tax of £0.4 million. At the date of acquisition the fair value of the identifiable assets and liabilities are recorded including identifiable intangible assets comprising order book and customer contracts. Since the acquisition Akamai has contributed towards the Group £1.8 million of net fee income and £0.28 million of earnings before interest and tax for the period ended 30 September 2008.

4	Tax
			Six months ended	Six months ended	Year ended
			30 September	30 September	31 March
			2008	2007	2008
			£'000	£'000	£'000
Current tax			(801)	(634)	(1,385)
Deferred tax			70	241	387
Total tax charge			(731)	(393)	(998)

5	Earnings per share
		Six months ended	Six months ended	Year ended
		30 September	30 September	31 March
		2008	2007	2008
		£'000	£'000	£'000
Profit for the period		872	653	1,794
Add back:
Amortisation of other intangible assets net of deferred tax		405	595	1,105
Finance charges on deferred consideration		381	258	581
Other operating expenses		528	-	-
Minority interest		-	-	80
Adjusted profit for the period		2,186	1,506	3,560
		Number	Number	Number
Weighted average number of shares		18,343,591	18,319,908	18,331,782
Dilutive effect of share plans		796,538	844,482	844,985
Diluted weighted average number of shares		19,140,129	19,164,390	19,176,767
		Pence	Pence	Pence
Basic earnings per share		4.75	3.49	9.78
Diluted earnings per share		4.55	3.34	9.35
Adjusted earnings per share*		11.92	8.22	19.42
Adjusted diluted earnings per share*		11.42	7.86	18.57
*Adjusted earnings per share are before the effect of amortisation of other intangible assets net of deferred tax, finance charges on deferred consideration, other operating expenses and minority interest.
6	Post balance sheet events
On 5 November 2008, the Group completed the acquisition of The Winchester Group ('Winchester') an Atlanta, USA based executive search firm, for an initial consideration of $1.25 million. Additional consideration of up to a maximum of $4.7 million will become payable in a mixture of cash and new Hexagon shares over the period from completion to 31 December 2012, dependent on the achievement of certain EBIT and recruitment performance targets.
For the 12 months ended 31 December 2007, Winchester reported net fee income of $3.4 million and a normalised earnings before interest and tax (EBIT) of $0.7 million and had net assets of $(0.2) million.

  

Independent review report to Hexagon Human Capital PLC 

Introduction

We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30 September 2008 which comprises the Consolidated Income Statement, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Cashflow Statement and the related notes (1 to 6). We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts. As disclosed in Note 1 the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. 

Our responsibility 

Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on our review. 

Scope of review 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

Conclusion 

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 September 2008 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 1. 

GRANT THORNTON UK LLP
Chartered Accountants

Registered Auditor

Cambridge
25 November 2008

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