IT Staffing Report: Oct. 23, 2014

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Harvey Nash reports half-year revenue up 12%

IT staffing provider Harvey Nash (HVN: LSE) reported revenue rose 12.2 percent in constant currency to £355.9 million (US$602.5 million) in first six months of 2014 compared to the same period last year.

Gross profit for the period rose by 5.9 percent in constant currency to £43.6 million (US$73.8 million), up from £43.1 million in the first half of 2013. Harvey Nash achieved operating profit growth of 116.2 percent to £4.6 million (US$7.8 million), up from £2.1 million a year ago.

“I am very pleased with the performance of this business this year, which has been achieved despite currency headwinds and the continued challenging markets in Europe,” said CEO Albert Ellis. “On a constant currency basis, group revenue, profits and dividends have growth by at least 10 percent.”

On a geographical basis, results were mixed with steady revenue growth in the UK and US, declines in Eastern Europe and Asia Pacific and only marginal operating profit growth in mainland Europe.

The company currently operates in 16 countries, with Harvey Nash’s business outside the UK accounting for 71 percent of revenue and 63 percent of gross profit during the first half of 2014, up from 69 percent and 65 percent, respectively, last year.

Harvey Nash achieved revenue growth of 1.8 percent across the United Kingdom & Ireland, rising to £114.2 million (US$193.3 million), up from £112.2 million a year ago. Operating profit across the region rose 10.4 percent to £1.9 million (US$3.2 million), up from £1.7 million last year.

Revenue derived from mainland Europe rose by 12.8 percent to £217.1 million (US$367.5 million) during the first half of 2014, up from £192.4 million last year. Operating profit across mainland Europe rose 0.7 percent to £2.34 million (US$4.0 million), up from £2.33 million a year ago.

France and the Benelux nations contributed £166.3 million (US$281.5 million) in revenue, an increase of 21.2 percent from £137.2 million last year. Operating profit in France and the Benelux countries rose by 18.5 percent to £2.3 million (US$3.9 million), up from £1.9 million in H1 2013.

Revenue from the Nordics remained relatively static, rising by 0.6 percent to £7.9 million (US$13.4 million), up from £7.8 million last year. The region reported operating profit of £57,000 (US$96,493)for the period, an increase of 103.6 percent from £28,000 a year ago.

Central Europe was one of the two regions to report a decrease in revenue during the period, falling by 9.3 percent to £42.9 million (US$72.6 million), down from £47.3 million a year ago. Operating profit across the region fell strongly to just £1,000 (US$1,692), down from £371,000 last year.

Asia Pacific also reported a decrease in revenue during the first half of 2014, compared with last year, falling by 12 percent to £2.4 million (US$4.1 million), down from £2.7 million in the first half of 2013. The region reported an operating loss of £145,000 (US$245,466), a slight improvement against an operating loss of £151,000 last year.

The US reported revenue growth of 1.5 percent to £22.2 million (US$37.6 million), up from £21.9 million last year. Operating profit derived from the United States in the first half of 2014 was £470,000 (US$795,649), an increase of 1.1 percent from £465,000 last year.

In August 2014, Harvey Nash completed the acquisition of Tokyo-based executive recruitment firm Beaumont KK, described by the company as a small, but strategic bolt on acquisition. The new company will trade as Harvey Nash Japan.