Shares in Hydrogen tumbled after the specialist recruitment group told investors its full-year profits would be lower than expected in the wake of the economic downturn.
The trading update wiped off more than a quarter of the company’s shares as brokerages rushed to downgrade their numbers.
Ian Temple, executive chairman, said: “The business has performed well in most areas, but the slowdown in the investment banking market has frustrated our ability to achieve our expectations this year.”
Recruitment companies have struggled recently to offset lost income from financial services clients. Shares in companies such as Michael Page International and Robert Walters have lost more than half of their value in the past year, in line with previous economic downturns.
Hydrogen said that its attempts to divert resources from the sluggish investment banking sector to its more buoyant international recruitment market had only partly offset the shortfall against its budget.
As well as expanding overseas, the group highlighted its increasing exposure to contractor hiring – now 40 per cent of its income – which tends to fare better as companies seek to cut back on hiring full-time staff.
Shares in Hydrogen closed down 27 per cent, or 52½p, at 142½p.