FINANCIALS: Harvey Nash posts overall increase but UK down

Harvey Nash has posted a double-digit increase in overall group revenue but has seen a marginal decrease in gross profit in the UK, according to unaudited interim results for the six months to 31 July 2017.

The technology, finance, HR, interim and digital staffing specialist’s results, published this morning, reveal overall group revenue rose 12.6% from £377.6m to £425.2m, while GP increased to £48.2m from £47.2m.

Within the UK, the group saw GP fall to £18.2m, down 1.2% on the previous year.

The group reported a regional divide in terms of performance here with NFI up 14% in the North of England and up 6% in Scotland, offsetting a 4% NFI decline in the Midlands, South-West and London.

Speaking to Recruiter this morning, Harvey Nash CEO Albert Ellis said Brexit had adversely affected London, with global companies in the capital more hesitant to hire.

The group also reported the introduction of new IR35 rules in April had caused some contractors to leave the public sector.

Here, too, a divide has opened up between London and the rest of the country, Ellis said, with highly skilled contractors in the capital likely to leave the public sector than other parts of the country more. Although he added highly skilled contractors are also leaving the NHS as a result of the rule changes.

Further afield, within mainland Europe the group saw GP increase 15.9%, with Benelux a star performer, while GP also rose in Asia-Pacific fuelled by NFI growth in Vietnam and Singapore.

However in the US, GP fell 10.8% year-on-year to £7.6m.

The second half of this year saw the July acquisition of Swedish HR consultancy PAT Management and UK-based technology solutions and recruitment consultancy Crimson in September. Ellis added while the group is prepared to make further acquisitions, it is currently occupied with integrating these new businesses.

Commenting on the group’s performance overall, Ellis said he was pleased that in a challenging UK market the business had managed to increase revenue and deliver a robust financial performance. 

“The group's businesses in the Benelux reported record revenues and profits, and improved results in the Nordics and Asia Pacific reflected the actions taken to increase margins and overall results during the period.

“Our strategy is focused on the demand for executive and technology recruitment from clients undergoing digital transformation, and we have added to the group's capacity with two excellent acquisitions. The combined benefits of these and the efficiencies from the transformation programme are expected to flow through into the current and next year’s results.

“Accordingly, we enter the second half of the year on track, well positioned to capitalise further on market opportunities as they arise and confident about the outlook for the remainder of the year.”

In a separate announcement the group announced it has appointed recruitment veteran Adrian Gunn, a council member of the Recruitment & Employment Confederation and former director at Matchtech, as a non-executive director.

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