Recruiter Harvey Nash's (HVN) shares slid 5 per cent on the back of these apparently weak half-year figures. But the underlying performance was brighter than it seems - add back £2.2m of restructuring costs, and adjusted operating profit fell by a not so grim 3 per cent to £4.4m.
In Europe, net fee income (NFI) rose 6 per cent to £19.7m, but operating profit slipped 11 per cent to £2.3m - that's because the German outsourcing pipeline was hit by a slowdown in the mobile telecoms market. Once again, the Benelux region delivered the strongest performance, with NFI rising 37 per cent, reflecting a favourable change in the permanent and temporary placement mix. Meanwhile, UK operating profit rose 16 per cent to £1.7m and NFI grew 4 per cent - helped by cost savings from the relocation of the group's London office, and a positive contribution from new offices. The group's weakest sector - executive recruitment - has finally stabilised, too, with revenue there flat compared with last year. US revenue was steady at £21.9m, although NFI edged ahead 2 per cent as improving market conditions resulted in a swing away from temporary recruitment and towards permanent placements.
Broker Numis Securities expects full-year pre-tax profit of £8.9m, giving EPS of 8.2p (from £8.7m and 8.3p in 2013).
| HARVEY NASH (HVN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90p | MARKET VALUE: | £66m | |
| TOUCH: | 89-92p | 12-MONTH HIGH: | 95p | LOW: 54p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 94p* | NET CASH: | £1.2m | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 293 | 3.40 | 3.22 | 1.13 |
| 2013 | 329 | 1.76 | 1.66 | 1.24 |
| % change | +12 | -48 | -48 | +10 |
Ex-div: 23 Oct Payment: 22 Nov *Includes intangible assets of £53m, or 73p a share | ||||
