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Staffing firm Harvey Nash (HVN:LSE) experienced a slower start to the first quarter of the year as a result of the general caution in the market, weakness in Europe and the impact of seasonality on its Vietnamese and Hong Kong businesses.
In a trading update this morning, the recruiter said it is still on track to achieve its expectations for the full year. Between February and May, revenues were 12% ahead from a year ago while gross profit increased +7%.
But due to the Chinese New Year and client delays in the firm’s German outsourcing business, operating profit was -14% below the previous year. The recruiter is now implementing cost alignments with revenues in the German business.
Elsewhere in the UK and Europe, temporary recruitment remains robust, and a slight pick-up in executive recruitment has been reported. The US market has also picked up.
“We remain encouraged by the exit run rates of the first quarter confirming an improving trend into the second quarter and, despite continued challenging trading conditions in Europe, the Board is confident that the Group is on track to achieve its expectations for the full year,” the firm said in a trading statement.
In early trading, the company’s share price dropped by nearly -5% to 67.75 pence, up +41% from a year ago. Based on this stock price, the firm has a market value of 52.15 million.