Harvey Nash Upbeat
Harvey Nash Upbeat
Harvey Nash has issued a trading update ahead of entering the Close Period.
Trading during the second half remained strong underpinned by the Groups broad portfolio of services and geographic diversity. In particular, the outsourcing and offshoring business saw excellent growth. As expected, growth in the UK and Ireland was lower than in mainland Europe, which reported another strong year. The Board was also pleased with the performance in the USA, where profits have almost doubled when compared to the prior year, mainly as a result of its successful IT outsourcing strategy.
Accordingly, the Board expects to announce revenues increased by approximately 30% and profits before tax by some 25%, in line with its expectations.
As has been widely reported, the challenging economic environment has had a significant impact in demand for permanent recruitment services, which accounts for 38% of the Group's revenues during the year.
Whilst it is early in the new financial year to January 2010, looking forward, the Board believes that in the absence of an upturn in demand for permanent hiring, it has been prudent to review its revenue and profit expectations for the current year.
This will not materially affect the Group's expectations in relation to its cash resources. Strong operating cash flow during the year resulted in a higher than expected net cash position of just under 4m at the year end. All of the Group's recent acquisitions have met or exceeded their targets during last year and all relevant deferred payments for last year were settled by the year end.
Therefore, the Board remains confident that going forward, there is ample dividend cover to continue with the current dividend policy.
Continuing the Group's tight control of cost and working capital, the Board's approach is to maintain an appropriate level of headcount to reflect current demand, without sacrificing future opportunities to drive growth and value when the upturn comes.