Harvey Nash annual profit up but UK market slowing

In the year to the end of January, pre-tax profit rose 7% to £9.1m on broadly flat revenue of £676.5m.

Earnings per share increased to 9.42p from 8.51p and the company announced a final dividend of 2.360p per share, up 8.7% from 2015. This brought the total dividend for the year to 3.850p from 3.531p the year before.

Chief executive Albert Ellis said: "The group has delivered another year of robust underlying growth in gross profit and operating profit while cashflow was ahead of expectations.

“The group continues to win market share and invest in headcount in key locations, focusing on driving profitable growth, whilst remaining flexible and agile."

Harvey Nash attributed the solid performance to growth from its US business and strong trading results in Asia Pacific following its investment in both regions last year. Gross profit in the US was up 25% while operating profit grew 56%.

In Europe, however, currency headwinds held back results and in the UK, the final quarter was hit by weaker business confidence, a slowing economy and fears over Brexit.

Still, the company experienced strong growth from Scotland and offices outside London.

“Despite this and the strong contracting results, the UK experienced a slowdown in permanent recruitment in the final two months as uncertainty affected clients' decision making processes. This caution in the UK is likely to continue until the referendum on Europe concludes,” it said.

Harvey Nash said its performance at this stage of the financial year was in line with expectations.

At 1245 BST, shares were down 6.5% to 72.70p.