| Hat Pin duo leaves after accounting errors |
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| Monday, 11 February 2008 | |
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The CEO and Finance Director of recruitment firm Hat Pin have left the company after accounting errors came to light.
Hat Pin plc (LSE:HTP) operates through its trading subsidiaries, Akamai Financial Markets, Executive Access India, and Saxton Bampfylde Hever in the provision of human resource by executive search and other recruitment services. Hat Pin’s trading companies have 11 offices across markets in the UK, Europe and Asia that undertake executive search for senior management roles for sectors including corporates, financial services, government and academia. The firm was floated on the AIM market in 1996. Materially worse The board of Hat Pin announced on 21 January 2008 that group profits for the financial year ended 31 December 2007 were anticipated to be around 25 per cent below market expectations. Hat Pin said it had since discovered various accounting errors in one subsidiary, which the board said were likely to cause the 2007 results to be ‘materially worse’ than previously indicated. It hastened to add that there was no suggestion or evidence of fraud, or wilful deceit. The exact outcome for 2007 will not be known until completion of the ongoing audit. In the circumstances, the company obtained an immediate suspension in the trading of the ordinary shares of the company on AIM. The board said it expects that trading on AIM in the ordinary shares will restart as soon as the preliminary results are announced. It added that it believed that the underlying trading position of its three operating businesses was still fundamentally sound. Satisfactory answers Hat Pin said that it was in talks with the firm’s bank about the group’s ongoing facilities. The group added that the bank had indicated that it wished to continue to provide facilities, subject to the audit providing satisfactory answers to certain questions that had been raised by the bank. Hat Pin said after the second profits warning this year that its chief executive Angela Campbell-Noë and finance director Paul Billett had indicated their intention to resign on the date of the announcement of the preliminary results. Campbell-Noë joined Hat Pin at the beginning of 2004 and has a background in investment banking. She joined Goldman Sachs out of Oxford University where she studied Law. She then headed the food and drink practice at Baring Brothers and led the luxury goods and personal care franchise for Deutsche Bank. Billett was appointed to the board on 22 September 2005. After qualifying as a chartered accountant, he spent eight years with PricewaterhouseCoopers providing audit and transaction support services to some of the firm’s largest clients. Before joining Hat Pin he was finance director of AIM-listed Dynamic Commercial Finance Plc which he joined from PwC in December 2003. Loss on disposal Terry Hitchcock, currently non-executive chairman, has assumed the role of executive chairman with immediate effect. He was a co-founder and executive director of Collins Stewart and retired in March 2005. The board reached agreement to sell its original operating company The Talent Business to its former chief executive, Gary Stolkin, for an initial cash consideration of £1.5m. An additional amount of £1m is payable over the next two years subject to certain performance criteria. The Talent Business was formerly known as Kendall Tarrant Worldwide and has six offices around the world. In its unaudited accounts for the year ended 31 December 2007, The Talent Business reported an operating profit of £30,000 on a turnover of £5.4m. As at 31 December 2007, The Talent Business had net assets of £1.01m. Hat Pin said it would recognise a loss on disposal of around £1.9m in its 2007 statutory accounts. The board added that this would have no impact on the group's cash position. The net proceeds received from the disposal will be used to reduce Hat Pin's current debts and to grow its profitable businesses. Michael Brennan, currently chairman of The Talent Business, has resigned with immediate effect. Campbell-Noë said that the disposal gave Hat Pin a more focused platform from which to continue its growth strategy. She added that the group was also now strongly positioned to enhance further its existing operations. Related links |
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