Tips of the week
"Companies are taking a longer term view and they are not responding to news which is driven by sentiment; they have adapted well to increased volatility, which is the new normal." said Albert Ellis, chief executive of recruitment firm
That long-term view meant that UK net fee income (NFI) rose 10 per cent despite the anaemic economic recovery. Mr Ellis put it down to a bouyant market for technology specialists in smart phone application and social media sectors, and increased demand from the big four accountancy firms' consulting businesses. He added that both these sectors show no signs of slowing.
Elsewhere the Nordic regions powered a 35 per cent increase in NFI in Europe. Here the story was very much about manufacturing, as Swedish exporters responded to strong Chinese demand. Germany, too, benefited from a favourable market for exports. European progress means that over 60 per cent of NFI now comes from overseas, and an increase in permanent hires there lifted permanent recruitment to 42 per cent of total NFI, from 39 per cent.
Broker Panmure Gordon kept its underlying pre-tax profit forecast unchanged at £7.2m, giving EPS of 6.9p (from 5.8p last year).
|HARVEY NASH GROUP (HVN)|
|ORD PRICE:||58p||MARKET VALUE:||£42.6m|
|TOUCH:||58-60p||12-MONTH HIGH:||97p||LOW: 45p|
|DIVIDEND YIELD:||4.3%||PE RATIO:||8|
|NET ASSET VALUE:||83p*||NET CASH:||£1.8m|
|Half-year to 31 July||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
*Inlcudes intangible assets of £48.8m, or 66p per share.
Shares in Harvey Nash have slipped on poor sentiment, but trading momentum is strong, especially in Europe, and the increased dividend is more than twice covered. The shares trade on a conservative forecast PE ratio of nine and remain a buy.
Last IC View: Buy, 75.5p, 3 May 2011