The recession in the UK has been bit of a non-event for unemployment figures as companies have hoarded labour or switched to temporary labour, rather than resorting to mass lay-offs. This trend has proved positive for recruitment consultant Harvey Nash (HVN), with an increase in revenues boosting operating profits by 11 per cent to £4.5m. Overall, these results could prove to be a valuable lead indicator that the downturn is starting to bottom out.
The weak finance and banking market in the UK and Ireland was offset by brisk contract recruitment in oil & gas, education, healthcare and IT. Regional sales were 26 per cent higher at £106m, with a 15 per cent rise in operating profits to £2.5m. The eurozone troubles weighed on permanent placements, but surprisingly strong temp demand in Benelux countries and Germany increased revenues by 8 per cent overall. In the US, meanwhile, demand in midwest and west-coast cities for contract placements drove sales 25 per cent higher to £21.9m. The rise in net debt was due to working capital increasing to support the contract recruitment, an office relocation in London and new openings in Australia and Hong Kong.
Broker Numis forecasts pre-tax profits for 2013 of £7.6m, giving EPS of 7p, with the possibility of upgrades later this year.
HARVEY NASH GROUP (HVN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 60p | MARKET VALUE: | £44.1m | |
| TOUCH: | 58-61p | 12-MONTH HIGH: | 71p | LOW: 47p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 87p* | NET DEBT: | 22% | |
| Half-year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 253 | 3.82 | 3.45 | 1.03 |
| 2012 | 293 | 3.40 | 3.22 | 1.13 |
| % change | +15 | -11 | -7 | +10 |
Ex-div: 24 Oct Payment: 23 Nov *Includes intangible assets of £50.9m, or 69p a share | ||||
