Harvey Nash, the global technology recruitment and outsourcing group, announces its preliminary results for the year ended 31 January 2018, delivering a record performance.
Financial Results | Constant Currency | ||||||
2018 | 2017 | Variance | Variance | ||||
Revenue | £889.3m | £784.3m | 13.4% | 9.2% | |||
Gross profit | £100.1m | £97.9m | 2.2% | (0.6%) | |||
Core1 operating profit | £11.4m | £9.3m | 22.6% | 16.8% | |||
Operating profit | £6.0m | £9.2m | (34.4%) | (40.5%) | |||
Core1 PBT | £10.8m | £8.6m | 24.4% | 18.2% | |||
Profit before tax | £5.4m | £8.5m | (37.1%) | (43.7%) | |||
Core1 EPS | 11.46p | 8.86p | 29.3% | ||||
EPS | 4.74p | 8.70p | (45.5%) | ||||
Final dividend | 2.652p | 2.525p | 5.0% | ||||
Net cash from operating activities | £0.6m | £15.1m | (96.3%) | ||||
Net cash at 31 January | (£6.8m) | £5.6m | (221.4%) | ||||
Albert Ellis, Chief Executive Officer of Harvey Nash, commented:
“The Group delivered an excellent performance in the year to January 2018, driven by our transformation programme which saw us sharpen our focus on the buoyant demand for technology skills, streamline our operations and complete two earnings enhancing acquisitions. This combination of organic and acquisitive growth, our renewed strategy and transformed cost base resulted in a 24% uplift in Core profit before tax and an increased core conversion margin from 9.5% to 11.7%.
I am particularly delighted by the outstanding performance of the UK business against a backdrop of Brexit related uncertainty and an overall decline in demand reported by many others in our sector. A successful acquisition in IT solutions, increased demand in the regions and strong growth in Financial Services in London has contributed to this excellent result.
We are encouraged by the strong trading momentum in the second half of the year to January 2018 which has continued into the current year. As a result, the Board is confident the Group will continue to make significant progress in the year ahead.”
Financial Highlights
• Revenue increased by 13.4% to a record level of £889.3m
• Core1 operating profit increased by 22.6% to £11.4m
• Operating profit decreased 34.4% to £6.0m
• Core1 PBT increased by 24.4% to £10.8m
• Core1 EPS increased by 29.3% to 11.46p
• Final dividend increased by 5.0% to 2.652p
Operational Highlights
• Transformation programme on track with expected annualised savings of £2.0m. The cost of this programme impacted statutory results
• Listing successfully moved to AIM to support growth strategy
• Two acquisitions successfully integrated and already delivering synergies:
– PAT (July 2017), a Swedish leadership consulting business
– Crimson (September 2017), a UK IT solutions and recruitment business
• In the UK & Ireland, robust growth and market share gains achieved despite the sector being materially affected by Brexit uncertainty
– Gross profit increased by 7.2% and operating profit by 7.6%
– Robust organic growth across Ireland, Scotland and offices outside London
– In London Financial Services division achieved revenue growth of 28%
– Multiple managed service contracts won by Recruitment Solutions division
– Contractor numbers up 23% year on year at 31 January 2018
• In Europe strong organic growth was reported in Benelux and Nordics with benefits flowing from streamlining actions taken during the year in Central Europe
– Excellent organic growth from the Benelux with 16.9% increase in gross profit and 20.7% increase in operating profit
– Nordics gross profit up 5.3% with 47.2% increase in operating profit
– Strong year on year growth in contractor numbers (up 20% at 31 January 2018) underpinning profit growth and momentum at the start of the current year
– Outstanding organic growth in Finland, with gross profit up 35.4%
– Turnaround in Germany achieved in second half of the year
• In Rest of the World, although gross profit fell 11.9% the benefits from the transformation programme resulted in operating profit of £0.9m (2017: £0.2m)
– Record revenues for Executive Search in the USA
– Operating profit in Vietnam increased by 60.3%
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