Trading has stabilised but will be below market expectations at Hexagon Human Capital, the senior interim management provider has announced in a re-forecast of its financial performance.

Hexagon says that it anticipates that earnings before interest, tax and amortisation (EBITA) for the full year will be below market expectations, adding previous cash flow forecasts were over optimistic.

Hexagon’s scheduled payments to HMRC had been agreed based on these forecasts, meaning the group has failed its obligation under this arrangement. Discussions are ongoing with HMRC over a revised payment plan and Hexagon says it will make further announcements as appropriate.

The statement adds that Hexagon will not be in a position to satisfy termination payments to Jonathan Wright, former chief  executive, and Carl Thompson, former chief financial officer as these payments were agreed based on the previous financial forecasts. In negotiations with Wright and Thompson, Hexagon has proposed a re-scheduling of the payments set out in the termination agreements. These proposals to date have not been accepted.  

Hexagon remains in active discussions with its bankers and following the re-forecast now says that it has a realistic basis on which to agree facilities appropriate for Hexagon’s ongoing requirements.

Rob Walker, executive chairman, says: “It is pleasing to note that trading performance has stabilised, demonstrating the strength and value of the Hexagon businesses. The complete re-forecast exercise has revealed over-optimism in the past regarding the group’s cash position. As a result, while we are confident of our ability to trade out of the current situation, the group is in default on previously agreed payments with HMRC. Discussions with HMRC are now ongoing.”