Encouraging third quarter for Harvey Nash

RECRUITMENT specialist Harvey Nash today delivered a cheering third-quarter trading update with both revenues and gross profits up 24 per cent in the period.

Growth in the three months to 25 November built on a strong first-half performance, leading the company to predict that full-year results will be at the top end of current market estimates.

Harvey Nash said the US market was showing positive signs as client demand for executive search and permanent recruitment services grew for the first time this year.

The UK market was performing well while Europe’s recovery was “gaining pace,” the statement said.

“We are encouraged by the growth in revenue and gross profit seen in the year-to-date,” it said.

Harvey Nash increased its interim dividend by ten per cent to 0.935p per share, up from 0.850p in 2009.

New offices in Finland and the US were performing well while the firm’s acquisition of Norwegian search agency Bjerke and Luther AS in April is “on track.”

But it warned of the “continued uncertainty of the global economic outlook”.

Analysts said the results were encouraging and raised 2011 full year profit before tax forecasts.

Numis analyst Steve Woolf said: “staffing companies’ visibility is notoriously low, so it is good to see the momentum from the first half of the year continue,” he said.

The growth “represents a significant acceleration” on the first half and has raised the full-year profit before tax forecast by about ten per cent to £5.4m, he said.

Ian Jermin, senior analyst at Merchant Securities, lifted the 2011 profit before tax forecast from £5m to £5.5m, but raised 2012 forecasts only slightly.

“The group still warns of uncertainties in the year to January 2012, particularly in the UK given the fiscal tightening; we agree,” he said.