Harvey Nash Group Plc (LON:HNV) today issued an update on trading for the six months ended 31 July 2018. In the period, revenue was £527 million (2017: £422 million) and gross profit was £51.7 million (2017: £46.5 million). Overall, trading remains in line with the Board’s expectations for the full year.
The increase in revenue in the first six months compared with the six months ending 31 July 2017 is largely due to increases in contract recruitment, managed services and IT outsourcing as a result of both organic growth and acquisitions, whilst permanent recruitment has been broadly flat. This change in mix is reflected in the relatively smaller increase in gross profit in the period.
These higher activity levels resulted in a net working capital outflow, with net borrowings of £21.5 million as at 31 July 2018 (2017: £10.0 million). This year-on-year increase in net borrowings reflects the expansion in working capital required to finance the increased contract book and additional headcount recruited in Vietnam to support current demand, as well as the continuing costs of both the transformation programme and of the acquisitions made in the second half of the year to 31 January 2018 and first six months of the current year. Tight control of working capital was maintained with debtor days of 41.3 days as at 31 July 2018 (2017: 41.4 days).
The Harvey Nash Group is a global technology recruitment and IT outsourcing business, with a focus on technology and digital recruitment. Our unique portfolio of services, executive search, technology recruitment and IT outsourcing, enables us to engage with clients at every stage of the business cycle. Our relationship-based model underpins the delivery of resilient financial returns and supports sustainable returns to shareholders.
