27th Sep 2013 08:23
LONDON (Alliance News) - Recruitment company Harvey Nash Group PLC Friday reported lower interim profits as its German outsourcing unit was hit by a slowdown in the mobile telecoms market in that country, but it raised its dividend as revenues rose 13% and it remained confident its full-year results will meet its own expectations.
The company had already warned it would be hit by the problems in its German unit and had shrunk the business, booking GBP2.2 million in redundancy costs.
That pushed its pretax profit for the six months to end-July down to GBP1.8 million compared with GBP3.4 million a year earlier.
However, revenues rose to GBP329.2 million, from GBP292.5 million, as it placed more temporary and contract staff, a higher volume business.
Revenues in the UK and Ireland rose 9%, were flat in the US and up 16% in Europe.
"Clients continued to favour temporary and contract recruitment, while the demand for permanent recruitment remained relatively weak," the company said of its European experience.
The company has also recently expanded into Asia-Pacific and revenues rose 27%, although the operations haven't yet become profitable.
"Whilst not yet achieving breakeven, Hong Kong nevertheless achieved a number of new client wins. The slowdown in Australia's domestic economy has naturally affected the growth trajectory of the Sydney office which has performed exceptionally well in a market which is contracting and in sharp decline," it said.
Harvey Nash said it is confident it will meet its expectations for the full year, with the outlook for the UK market improving and demand for permanent staff in the US on the increase as the economy picks up.
It will pay an interim dividend of 1.238 pence a share, up from 1.125 pence last year.
Panmure cut its rating on the stock to Hold, from Buy, in the wake of the results with a 99 pence price target, and the shares were down 7.5% at 88.22 pence Friday morning.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2013 Alliance News Limited. All Rights Reserved.
Related Shares:
Harvey Nash Group