In a trading statement released today, staffing firm Harvey Nash (HVN: LSE ) announced constant currency revenue growth of +1.5% for the third quarter ending 31 October 2014, compared with the same period last year.

Gross profit for the period increased by +7.8%, year-on-year, driven by strong demand in Asia and the United States.

Gross profit from Permanent recruitment services increased by +4.3%, in constant currency. Gross profit from Contract recruitment grew by +10.6%, while Outsourcing increased by +8.1%, year-on-year, both in constant currency.

The UK & Ireland delivered growth in all service lines with constant currency revenue growth of +6.8%. Gross profit increased by +13.4%, in constant currency. Investment in new offices and fee-earners, combined with higher numbers of contractors working, were the key drivers of growth.

Across Europe, economic weakness continued to impact results with weaker demand in permanent recruitment and outsourcing. Contracting and temporary recruitment, however, remained resilient. The region reported a decrease in revenue of -3.4%, while gross profit decreased by -4%, both in constant currency.  

While Sweden showed improved results, challenging local market conditions in Norway continued. A restructuring of the Nordic business has been implemented, with costs to be incurred in the final quarter estimated at circa £500,000, to ensure its cost base is better aligned with current levels of demand. Across the Nordics, revenue increased strongly by +20.5%, in constant currency, while gross profit rose by +6.7%, also in constant currency.

Good market conditions in the United States resulted in higher levels of permanent recruitment and offshore projects at the expense of contract and temporary recruitment. The region reported revenue growth of +15.6% and gross profit growth of +9.6%, in constant currency, compared with the third quarter last year.  

Strong growth in Asia was achieved through organic investment in headcount in Hong Kong and Vietnam, the acquisition of the Japanese executive recruitment business in Tokyo and a stabilisation of market conditions in Australia. Revenue rose by +25.9%, while gross profit grew by +28.1%, in constant currency.

Following an ongoing review process, the Board has concluded that the European telecom outsourcing business is non-core. Specialist advisers have been appointed to make recommendations to the Board on strategic options. Non-recurring costs of circa £500,000 associated with further restructuring and this process are expected to be incurred in the final quarter.

According to the trading update: “Since the start of the current financial year, the Group has invested in an +8% increase in headcount to drive business growth. This, coupled with challenging conditions in permanent recruitment in mainland Europe and ongoing currency headwinds, has held back the uplift in the Group’s adjusted operating profit for the first nine months to +7% on a year-on-year, constant currency basis; and +1% on an actual basis.”

“While like-for-like growth and strong trading has been achieved in many of the Group’s businesses in the period under review, the Board now believes that overall operating profit for the current financial year is likely to be broadly similar to the year ended 31 January 2014.”

“Our business model provides resilience across geographies and markets, so that the effect of challenging trading conditions in parts of Europe is mitigated by more buoyant markets in the USA, UK and Asia. The Board believes the broad portfolio of services, including permanent and temporary recruitment and offshore services, provides the Group with a solid platform for future growth.”

In trading today, the company’s share price decreased by -12.8% to £0.77, a decrease of -13.4% compared with a year ago. Based on its current share price, the company has a market value of £64.8 million.