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Harvey Nash breaks the mould

RESULTS: Technology recruiter Harvey Nash is benefitting from a pick-up in job markets and an innovative approach to outsourcing
April 29, 2014

Harvey Nash (HVN) is not like other recruiters. Yes, a large chunk of its business involves the typical activity of finding candidates for its clients' hiring needs. But it is also the largest British software developer in Vietnam. Harvey Nash employs over 2,500 software professionals in Vietnam to provide offshore software development and outsourced IT services for the likes of Honda and Prudential. Vietnam was chosen as it has a large number of science graduates that can do from Ho Chi Minh City just what an IT worker in London can do, but at a much lower cost.

IC TIP: Buy at 120p

Harvey Nash is also taking a leaf out of its clients' books. The recruiter has found that it too can save money by moving some of its workload out to Vietnam. The recruiter now has a team of people in Vietnam doing desktop research such as scouring the company's databases and social-media sites to compile candidate lists for roles back in the US. Chief executive Albert Ellis describes this as a "game-changing" development for the recruiter.

Reported profits went backwards last year due to the costs of restructuring the business in Europe. Adjusting for this, however, pre-tax profit rose 4 per cent to £9m. Broker Numis is expecting £9.8m this year, giving earnings per share of 9.4p (from 8.8p).

HARVEY NASH (HVN)

ORD PRICE:120pMARKET VALUE:£88m
TOUCH:115-120p12-MONTH HIGH:121pLOW: 67p
DIVIDEND YIELD:2.7%PE RATIO:23
NET ASSET VALUE:89p*NET CASH:£3.8m

Year to 31 JanTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20103761.31.12.2
20114226.35.92.42
20125338.58.02.66
20135957.97.52.92
20146976.45.23.21
% change+17-18-30+10

Ex-div: 18 Jun

Payment: 11 Jul

* Includes intangible assets of £50.4m or a 69p share