FINANCIALS: Heidrick & Struggles sees revenue up 7.6%

Heidrick & Struggles has seen revenue climb 7.6% year-on-year amid “solid” growth for its executive search business.

This is according to results for Q1 2017, released yesterday, that reveal net revenue from the group’s executive search business rose 7.6% year-on-year, or $8.8m (£6.8m), to $124.5m from $115.7m in Q1 2016.

Excluding the effect of exchange rate fluctuations, group revenue increased $10.6m or 9.1%. All three of the group’s regions of operations contributed to Q1 year-on-year revenue growth in executive search, with Americas up 5.1%, Europe up 12% (21% on a constant currency basis) and Asia Pacific up 11.9% (11% on a constant currency basis), while the group’s industrial, healthcare & life sciences and consumer industry practice groups were the main drivers of the year-on-year growth.

Across the group’s other businesses, leadership consulting saw a 59.6% increase in net revenue or $3.7m, to $9.8m from $6.1m in the 2016 first quarter, while culture shaping saw a 31% decrease year-on-year or $2.5m, to $5.8m from $8.3m in Q1 2016.

Commenting on the results statement, Heidrick & Struggles’ acting president and CEO Krishnan Rajagopalan said he was pleased with the group’s first quarter growth in revenue and profitability.

“Our executive search business showed solid results and has an improved backlog going into the second quarter. We continue to invest in consultant talent to drive future growth. Leadership consulting continues to grow in size and significance, though it will show quarter-to-quarter variability in results as it continues to scale.

“Culture Shaping started off the year slower than we had expected, but our team remains confident in the growth potential for culture-related offerings.

"Heidrick's brand, influence and position in the global marketplace have never been stronger. Leveraging our current platform, we intend to expand our impact in executive search and to strengthen and grow our leadership consulting and culture shaping service offerings."

Additionally, the group revealed that on 31 March 2017 it reached a settlement with HM Revenue & Customs on HMRC's challenge of the tax treatment of certain contributions made to employee benefits trusts between 2002 and 2008. The net impact of this in Q1 2017 was $3.7m, less than HMRC's proposed adjustment of $4.8m as valued on 31 December 2016.

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