Q&A with Mike Allen Head of Research at Zeus Capital: Harvey Nash Group plc (LON:HVN)

Harvey Nash Group plc (LON:HVN) is the topic of conversation when Zeus Capital’s Head of Research Mike Allen caught up with DirectorsTalk for an exclusive interview

 

Q1: Harvey Nash Group, they released their preliminary results for year-end 31st January, can you talk us through the highlights?

A1: The company delivered a very good set of results. They were slightly ahead of our expectations at the PBT level, so they came in at 10.8 million against our 10.6 million. Earnings were about 7% ahead of our forecast due to a lower tax rate and we’ve seen lower tax guidance going forward as well. They continued their impressive dividend growth track record as well, growing that 5% which is in line with our expectations. Headline growth was very good so PBT growth was well in excess of 20% and that’s despite some mixed market conditions in some of their markets but shows that their strategy is working well.

 

Q2: What can you tell us about the market that Harvey Nash is in?

A2: I think regionally the UK business saw a good uplift in gross profits and that was against a challenging backdrop of Brexit-related uncertainty, but they certainly appear to be in the right areas there, very focussed.

Europe continues to go well for them as well, we saw very strong performance in the Benelux and the Rest of the World was fairly mixed which has already been well flagged and they’ve undertaken some restructuring in Asia-Pacific and in the US as well, so we think those measures will benefit future years.

 

Q3: With this in mind then, have the results affected your forecasts in any way?

A3: The second half from run rate was very strong and I think that gave rise for a confident outlook for the coming year, there are still some uncertainties there, but they’ve certainly started the new year well. We trigged up our forecast really just due to the lower improved effective tax rate that we’ve seen so there was a small upgrade to forecast but really tax driven.

 

Q4: In terms of Harvey Nash Group’s valuation, what are the key things we should be looking at?

A4: I think the first thing I’d probably say is that this company has delivered on its strategy, the strategy of delivering growth in its markets. Also, the transformation programme of making it a more efficient business is working well and the acquisitions that they’ve done have also embedded well into the business.

So, we think the share price, the PE of just 8 times I think doesn’t reflect all of the progress they’ve made on those fronts and also, I think the dividend yield of 5% also of note as well so I think on those valuation metrics, given the progress delivered, there’s still a lot of value in the shares in our view.

Click to view all articles for the EPIC:
Or click to view the full company profile:
    Facebook
    Twitter
    LinkedIn
    Harvey Nash Group

    More articles like this

    Harvey Nash Group

    Demand For Architects Driving Contractor Growth

    The recently released 2018 Harvey Nash CIO Survey revealed 78% of IT leaders claim their digital strategy is ineffective, while 55% state alignment between the business and technology is not up to scratch. Clearly something is

    Harvey Nash Group

    IR35 And Failure Of CEST Impacting UK Business

    In recent weeks, IR35 has caused yet more uproar amongst the UK’s self-employed. HMRC have been accused of cutting corners with the legislation, with its CEST tool making headlines for all the wrong reasons. With the

    Harvey Nash Group

    Google’s Goals for Civility in the Workplace

    Civility in the workplace should be a no-brainer. But if work environments are a microcosm of the wider society, it is no wonder some organisations are laying down the law when it comes to how workers

    Harvey Nash Group

    Harvey Nash Group plc to be acquired by The Power of Talent Ltd

    Commenting on the Acquisition, Julie Baddeley, Chairman of Harvey Nash said:“Harvey Nash’s acquisition strategy and successful transformation programme has resulted in significant shareholder value being created over the past two years. The Independent Harvey Nash Directors

    Harvey Nash Group

    Harvey Nash HR Survey 2018

    About the Survey 820 respondents. A comprehensive study of the HR community 38 countries. From Saudi Arabia to Sweden 127 different job titles. From HR Consultant to Head of HR What you need to know Recruitment is the

    Harvey Nash Group

    What Is The Future Of The Chief Digital Officer?

    Once seen as disruptors for hire, and often met with entrenched organisational resistance, Chief Digital Officers have emerged as key strategic operators.  Increasingly they also have a direct reporting relationship to the CEO, according to studies conducted

    Harvey Nash Group

    What Is The Future Of The Chief Digital Officer?

    Once seen as disruptors for hire, and often met with entrenched organisational resistance, Chief Digital Officers have emerged as key strategic operators. Increasingly they also have a direct reporting relationship to the CEO, according to the

    Harvey Nash Group

    Running An MSP With Harvey Nash Recruitment Solutions

    What happens when Harvey Nash Recruitment Solutions runs an MSP with you? What can you expect? What’s included and how exactly will it work? This article guides you through every element of the service, covering: The service in brief Your

    Harvey Nash Group

    Reskilling facilitates agile IT in the digital era

    CIOs are quickly learning that cultivating an agile IT organisation requires out-of-the-box thinking in the age of digital transformation. That, along with the glaring talent shortage, is why many IT leaders are cross-training employees in other

    Harvey Nash Group

    How An MSP Can Support Diversity And Inclusion

    78% of businesses consider diversity and inclusion to be very or extremely important. Predicted to be a 2018 trend according to LinkedIn’s global recruitment trends report, hiring managers are increasingly focused on delivering D&I through strategic hiring

    Harvey Nash Group

    CEO Priorities Highlight Focus on Growth and Innovation

    We live in a disrupted age. For those already struggling, the situation is unlikely to improve. Indeed, listen to management consultants like McKinsey and Company, and they will tell you all value chains will be disrupted.