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Results in line with expectations, strong cash flow reported

 

Harvey Nash, the global executive recruitment and professional services group, issues this trading update in advance of results for the full year ended 31 January 2015, which will be announced on 30 April 2015.

 

Trading

 

The Board confirms that adjusted profit before tax for the full year is expected to be in line with management's revised expectations, despite further adverse currency movements since the trading statement issued on 25 November 2014. In addition strong trading cash flow has exceeded expectations, resulting in a net positive cash position of circa £2 million at 31 January 2015.

 

As can be seen from the table below, growth in gross profit in the year was achieved across all service lines on a constant currency basis. The Group continued to invest for future growth during the year, with fee-earner headcount up 10% at the year-end.

 

 

Year to 31 Jan 2015

Gross profit

% increase/decrease

 

Service lines

 

Actual %

Constant

Currency * %

Gross Profit

Permanent

-2.2

+2.6

Contracting

+2.7

+6.4

Outsourcing

+2.8

+7.4

Total

+0.8

+5.1

 

* 2015 figures re-translated at 2014 rates

 

Financial position

 

Improved debtor days and strong trading cash flow have resulted in a significant positive swing in working capital.

 

This has been achieved notwithstanding the Group's investment in wireless technology for the automotive and rail sectors referred to in the interim statement, the purchase of its own shares for the EBT and the acquisition of Beaumont KK in Japan in August 2014, amounting in aggregate to circa £3.4 million.

 

The Group continues to maintain substantial headroom in its banking facilities, which total £52 million, and has no term debt.

 

Albert Ellis, Chief Executive Officer commented:

 

"These results reflect the significant progress made by the Group over the past year despite strong currency headwinds and challenging markets in many parts of the world.

 

Strong trading cash flow has enabled us to continue to invest in the future growth of the Group with fee-earning capacity increased by 10% and additional locations established in the UK and Asia."