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Harvey Nash Exceeds Expectations

Harvey Nash Exceeds Expectations

Harvey Nash, the global professional services group, announces increased revenues and profits exceeding expectations for the year ended 31 January 2013

Financial Results

2013

2012

Change

Revenue

&pound594.7m

&pound533.0m

&eacute 12%

Gross profit

&pound83.0m

&pound78.5m

&eacute 6%

Adjusted operating profit*

&pound9.4m

&pound9.0m

&eacute 5%

Non-recurring items**

    (&pound0.8m)

-

Operating profit

&pound8.6m

&pound9.0m

&ecirc 4%

Adjusted profit before tax*

&pound8.7m

&pound8.5m

&eacute 2%

Profit before tax

&pound7.9m

&pound8.5m

&ecirc 7%

Adjusted earnings per share*

8.33p

7.97p

&eacute 5%

Earnings per share

7.49p

7.97p

&ecirc 6%

Final dividend

1.795p

1.635p

&eacute 10%

Cash generated from operating activities

&pound6.7m

&pound1.8m

&eacute 269%

Positive net cash

     &pound5.0m

&pound5.2m

&ecirc &pound0.2m

*             Before non-recurring costs

**           Costs related to the relocation of the Group’s London headquarters and acquisition costs

Financial highlights

Revenue up 12% to &pound594.7m

Profits increased for third successive year despite challenging market conditions

Continuing geographical diversification: 62% of total Group gross profit from outside UK & Ireland

Cash generation from operating activities up 269% to &pound6.7m

Positive net cash position of &pound5.0m

Relocation of Group’s headquarters completed resulting in circa &pound0.9m annualised savings

Recommended 10% increase in final dividend with a total for the year of 2.92 pence per share, the sixth successive annual increase

Operational Highlights

Continued to gain market share particularly in the UK, Nordic and Benelux regions

Market leadership in Benelux secured with the successful integration of Talent-IT

Acquired remaining equity of Bjerke & Luther AS in Norway

New offices in Asia and Europe on track

New managed services contract wins in the USA & Ireland

New strategic partnership in Vietnam with quoted Japanese group, Mitsui & Co

Commenting on the results, Albert Ellis, Chief Executive Officer, said: "I am delighted to report another excellent set of financial results for the year, which have exceeded expectations. As one of Europe’s leading technology recruitment companies, we have focused on supporting our clients’ investment in new digital and mobile growth strategies by helping them find talent in these areas, in which there is an acute skills shortage.

We have also continued to benefit from making market share gains, particularly in the UK and Europe, whilst capitalising on our unique capability to help our clients reduce costs through our market leading outsourcing facility in Vietnam.”

 Strategic Partnership with Mitsui in Vietnam

Harvey Nash, the global recruitment and outsourcing group, is delighted to announce that it has acquired a 15% shareholding in MOCAP Vietnam, a joint venture with Nikkei-listed Mitsui & Co, WPP Plc associate Smart Media and other partners, to create the largest offshore call-centre business in Vietnam, opening up access to the Japanese markets for software development and business process outsourcing (“BPO”).

Under the terms of the venture, Harvey Nash settled the consideration for the shares by way of fixed assets, including staff and client contracts, transferred into the new entity, with a book value of $0.5m.

MOCAP Vietnam will build an in-bound and out-bound call centre business in Vietnam, and promote software development, maintenance and business process outsourcing services to the Japanese market. The joint venture will also enable a consortium approach to bidding for new contracts, not only in Japan but in Asia more widely and drive growth in the Harvey Nash Vietnam based offshore software development and BPO business as well.

Albert Ellis, CEO Harvey Nash commented:

“This agreement will create the largest specialist call centre in one of the fastest emerging markets in South East Asia, offering clients attractive productivity and efficiency benefits and access to one of the largest offshore software development and BPO businesses in Vietnam, at a time when global economic growth is weak and companies are looking to innovate and reduce costs.”

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