Fleshing out the detail of its upbeat trading statement last month (see Harvey Nash bucks UK trend), UK-based international recruitment, outsourcing and offshoring firm, Harvey Nash, has turned in a fine set of half-time numbers. Headline revenues rise by 28% to £253m though gross margins eased almost a point to 13.6%. However, careful husbandry in the back office saw operating margins inch up from 1.4% to 1.6%, and that was enough to push EPS up by 46% to 3.41p.
CEO Albert Ellis reported growth in all of Harvey Nash’s operating divisions, but it must be said they still do not break out performance of their Vietnam-based offshore outsourcing division, which is a bit of a pity as it’s been running a few years now.
The UK business did very well – revenues up 40% to £84m – despite the public sector slowdown. Ellis reported ‘buoyant’ demand in the smartphone apps and social media technology sectors, though Retail, Consumer, Manufacturing and Professional Services all slowed. Harvey Nash now makes 60% of its gross profit from outside of the UK, up from 57%.
Ellis remains ‘confident’ they will make the FY numbers despite a ‘challenging’ economic climate, expecting that increased contactor and offshoring activity will offset what he thinks will be a ‘mild slowdown’ in executive recruitment.
As a side note, the new European regulations on temporary staffing come into force tomorrow, which basically give temporary workers pretty much the same terms and conditions as permanent workers for contracts 12 weeks and over. I fail to see how this measure will boost employment in the UK – or indeed actually improve the welfare of temporary workers. Surely employers will either switch to 11 week contracts or simply reduce contractor fee rates? Am I missing the point?