Harvey Nash

Executive recruitment group Harvey Nash (HVN) says interim profits will emerge at least 40% up on last year's, implying £3.6m pre-tax. In an upbeat trading statement which contrasts with fellow recruiter Michael Page International's warning about the banking sector, the fully-listed company's board indicates it expects to recommend a 10% dividend increase for the six months to July, when the figures come out at the end of September, 'subject to prevailing market conditions'.

With no long-term debt and 20% first-half revenue growth seen as on the cards, Harvey Nash is benefiting from having a high proportion of freelance and temporary project and contract staff on its books, including 60% in the UK, where it is market leader, says chief executive officer Albert Ellis. He argues this market is brisker, even with the banks, than permanent recruitment in uncertain  economic times and stresses the company's presence in the technology field, while also arguing the the recent Google-Motorola deal 'will have a big impact'.

Retail recruitment is 'still hurting badly', comments Ellis, though he sees the gaming sector as buoyant. Harvey Nash enjoys wider margins in the UK, but derives more than half its profits from continental Europe, where it is strongest in the Nordic markets, with a little more than 10% coming from the USA, one market where the company is faring well in permanent recruitment.

Ellis comments that Harvey Nash is 'always on the look-out' for suitable acquisitions. But he suggests any deals are more likely next year than this.

Recommended by Growth Company Investor at 43.25p last year, Harvey Nash shares now trades at 73.5p, yielding a prospective 3.7%. Hold on.