RECRUITMENT
Shares in Harvey Nash Group jumped almost six per cent on Thursday as brokers cheered the recruitment firm’s first-quarter trading update.
The company said its first-quarter to end-April revenue was up four per cent, net fee income was up 32 per cent and pre-tax profit increased in line with revenue over the comparable period last year.
The company expects full-year results to be in line with its expectations.
In response, Seymour Pierce said this statement revealed a ‘very strong’ first-quarter performance.
The broker said that after exceeding expectations for full-year 2008, the first three months of 2009 have also started well for Harvey Nash.
It added that these numbers are substantially ahead of its current expectations, but said it is not forecasting this level of improvement to continue for the full year.
The broker said it has pencilled in revenue growth of 10 per cent and net fee income growth of 15 per cent for the year.
It added that it could therefore be too cautious, but will retain its current estimates for the time being.
However, Seymour Pierce said that on this basis the shares still offer good value, being one of the cheapest IT staffing companies.
It conceded that the US is a small worry but said it has been over-emphasised in the rating.
The broker retained its ‘buy’ stance with a target price of 65 pence.
Panmure Gordon was similarly upbeat, saying this statement suggests trading is ahead of expectations by some way, adding that while the recruitment sector in general remains one where current economic pressure should be squeezing profits the opposite appears to be the case.
The broker said it believes its current forecasts to January 2009 may be rather light, though at this stage it will leave them unchanged.
It reiterated its ‘buy’ advice with a price target of 48 pence.
