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Scott Rochfort
April 14, 2009

HIGH-END recruitment firm Hamilton James & Bruce has offered another illustration of the dire state of the white-collar employment market, after reporting a $5.9 million half-year loss.

The Sydney firm, which has been suspended from trading since early last month for failing to file its half-year accounts on time, released its results to the ASX late on Thursday showing it had been hit badly by the economic slowdown.

“HJB has been affected by the well-publicised decline in trading within the recruitment sector and in particular this has impacted permanent revenues which were down 54.5 per cent on the corresponding period in 2007,” the company said in a statement.

HJB’s auditor, PricewaterhouseCoopers, said there “is a significant uncertainty whether the company will continue as a going concern”.

HJB, considered one of the conservative recruitment firms in Sydney, is primarily exposed to the banking, accounting and finance sectors. So white collar is the recruiter that it has a policy of forbidding its staff from wearing non-white shirts.

The company failed to explain why its accounts were released six weeks late. Nor did it say when it expected to resume trading.

However, HJB said it had secured “alternative financing” after losing the support of ANZ, with whom it had breached its debt covenants. The company has $3.4 million of borrowings.

HJB management were unavailable for comment. It failed to indicate who the unnamed “potential strategic” partner could be, which it said “would provide a platform for growth and benefits for all stakeholders”.

One likely partner could be the recruitment industry veteran Victor Plummer, who has now built a 56 per cent stake in HJB. Mr Plummer, who funded the bulk of a HJB $2 million capital raising in December, also owns a 17 per cent stake in the white and blue collar recruiter Chandler Macleod.

Mr Plummer also has a 14.5 per cent stake in the struggling recruiter Ambition Group, which reported a $24 million full-year loss in February. It is not clear if he is interested in broking a possible merger between HJB and Ambition or Chandler Macleod.

HJB shares last traded at 3.1c, well down from their $1 listing price in 2000. The company’s loss included a $2.9 million impairment from an “onerous contract” related to its leasing of two floors of office space in the ASX building on Bridge Street, Sydney. The company said it hoped to sub-let part of the office space. HJB declined to say how many jobs it had cut as a result of its “cost reduction strategies”. Despite the dire state of its finances, the intangible assets on HJB’s balance sheet remain largely intact.

HJB has been hit particularly hard due to its exposure to the financial sector. However, other listed recruiters such as Ross Human Directions, Skilled and Talent2 have all suffered large share price falls.

HJB’s troubles could be a worry for the owner of the ASX building in Sydney, the former Allco-aligned Record Realty. Record has already withdrawn the building for sale due to a lack of buyer interest.

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