LONDON (ShareCast) - Trading in the second half continues to be challenging at Hydrogen Group and the recruitment firm expects the six months to be difficult and that it will not return to growth until 2009.

Profit before tax for the six months ended 30 June dropped to £3m from £3.9m and to £3.3m before exceptional items, in line with revised expectations. Revenue fell 2.1% to £49.9m.

NFI (gross profit) slipped12% to £14.9m, reflecting a poor performance from the permanent recruitment side, although that was down just 1.4% on the second half of last year.

“Despite a positive start to 2008, the more uncertain macroeconomic environment has resulted in trading conditions for some of our brands becoming more challenging in the UK,” said the company.

“This has been particularly true of the investment banking market, which accounted for approximately 20% of group Net Fee Income in 2007.”

Hydrogen has promoted COO Tim Smeaton to chief executive with immediate effect.

The dividend rises to 2.1p from 2p last time.

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