Harvey Nash expects Brexit uncertainty to hit profits

Profit

Harvey Nash says it expects Brexit uncertainty and “challenging” market conditions in Hong Kong to adversely effect full-year profits.

According to a trading update statement ahead of final results for the full year ended 31 January 2017 on 27 April, the global executive recruitment and professional services group says it expects adjusted pre-tax profit for the year ended 31 January 2017 to be in line with market expectations, with a year-on-year increase in gross profit of 8% but down 1% on a constant currency basis. 

Elaborating on the reasons for the decline in GP, the group says while growth was held back in the UK & Ireland by Brexit uncertainty, GP jumped 18% in Mainland Europe (4% on a constant currency basis).

Meanwhile, the group attributes the constant currency declines in its Rest of World operation to challenging market conditions in Hong Kong and in offshore services to increased costs in Vietnam caused by the depreciation in the value of the pound during the past year.

Commenting on the group’s performance, CEO Albert Ellis said: "The group has delivered a resilient trading performance despite the significant uncertainty created by the referendum. Mainland Europe, which accounts for 40% of total gross profit, continued to make satisfactory progress. Cashflow has materially exceeded expectations with the year ending in a positive net cash position, some £5m higher than 31 January 2016.”

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