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Good results from RWA today, following on from MPI, particularly in the UK. HVN remains on a P/E of only around 10, with a 3.7% divi yield and a sound Balance Sheet - a huge discount to its comparators.
SThree - a staffer with a strong bias towards ICT, like HVN - announced good results on Monday, emphasising "strong growth" in ICT. The difference is that SThree are valued at 21 times earnings - almost double HVN's multiple of barely 11.
Brief comment from Panmure: Http://www.digitallook.com/news/news-and-announcements/harvey-nash-group-expects-strong-pound-to-hurt-growth-rates--784761.html "Panmure analysts maintained their 'buy' recommendation and said: "We believe investors will look beyond the impact of FX or the recently reported conversion ratio and focus on how spare capacity within the business should drive earnings higher"
The trading update is indeed pretty good: Http://www.investegate.co.uk/harvey-nash-group--hvn-/rns/agm---trading-statement/201507020700119207R/ Trading in line on a P/E of barely 10, with operating profits storming ahead 9% on a constant currency basis (plus an almost 4% dividend yield).
AGM and trading update is this Thursday. It should be good imho. And this CIO survey by HVN bodes well in terms of their niche IT sector specialism: Http://www.irishexaminer.com/breakingnews/business/64-of-it-companies-plan-to-hire-staff-in-coming-months--survey-683826.html
This extract is from Hardman's monthly review - given that HVN are on a P/E of around 10.8 the other small cap staffers must be on P/E's of around 16 on average. If HVN were on a similar P/E - and HVN probably have a better Balance Sheet - then they'd be trading at around 160p-170p. Which would nicely match Numis' 160p target price: "The three large, mid-cap UK quoted staffers (Hays, Page and SThree) are trading on forward PERs of 23.0x (CY14E, unweighted average). The small cap staffers (Harvey Nash, Hydrogen, Matchtech, Robert Walters and Staffline) are trading on 14.3x (FY14E, unweighted average)."
RNS late yesterday - good to see Giles Hargreave's Hargreave Hale rapidly building a large stake here. They now have 10.3m shares, or 14%, increased by 570,000 shares from their last disclosure on April 13th: Http://www.investegate.co.uk/harvey-nash-group--hvn-/rns/holding-s--in-company/201506091618326879P/
Good bought for my small cap income portfolio.
Note that the AGM and trading update is coming up soon on 2nd July. With the "encouraging start to the current financial year" it should be a good one. Panmure's latest current year forecast is 9.58p EPS, with a 3.6p dividend. Next year they go for 10.3p EPS. with a 3.67p dividend. Numis go for 3.85p and 4.2p dividends respectively, so Panmure's dividend forecasts are on the low side. So still extremely cheap on barely a double-digit P/E and against sector comparators - especially given the better Balance Sheet than most of those comparators.
Nice close tonight at new recent highs. Panmure's latest current year forecast is 9.58p EPS, with a 3.6p dividend. So still extremely cheap on barely a double-digit P/E and against sector comparators - especially given the better Balance Sheet than most of those comparators.
possibly next week, 5th June last year. Outlook in the endo f year was in line with management expectations.
Hopefully heading back up to 120p. Meanwhile, HVN in Australia say demand has risen by 18% in the last couple of months: Http://www.theaustralian.com.au/business/technology/agile-pros-cashing-in-on-skills-vacuum/story-e6frgakx-1227368810554 "IT contract recruitment has increased almost 20 per cent in the past few months, with an overarching demand for “Agile” professionals, hiring experts say. High-volume demand for contracting in April and May was believed to be due to a number of new projects. Harvey Nash Australia managing director, Bridget Gray, said there had been an 18 per cent surge in demand from March to April for contract resources. “They just want people that are immediately or quickly available with the right skills that they know don’t need any ramp up so they can hit their milestones with their programs and transformations,’’ Ms Gray said. The rise in demand was happening across cloud technologies, business analysis, project/program management, UX and architecture with an overall demand for Agile practitioners across all IT functions. “Particularly on the contract side, we have had people going from about $820 a day to $1100 with the banks if they have got a bit of Agile,’’ she said. As a result of so many financial institutions dramatically scaling up their change initiatives simultaneously in 2015, rates and salary expectations are moving rapidly due to the skills shortage and peak in demand. “We have experienced IT business analysts and program management candidates with Agile experience achieving up to 20 per cent pay increases to move over the past two months,’’ she said."
HVN just tipped today in the IC - and the P/E is even less after stripping out the cash pile: Http://www.investorschronicle.co.uk/2015/05/05/shares/news-and-analysis/harvey-nash-eyes-a-re-rating-KqekhOEqOzbgVoZrrELU0H/article.html Conclusion: "IC VIEW: Hitting the £10m pre-tax figure - which is forecast for the 2016-17 financial year - would put Harvey Nash's shares on an earnings multiple of eight. That's a big discount to the sector average, so the re-rating story looks credible. The generous dividend yield is another sign of value. Buy."
Numis reiterate their 160p target price and Buy for HVN: Http://www.directorstalkinterviews.com/harvey-nash-group-plc-85-potential-upside-indicated-by-numis/412662308
That's the target price :-) Fingers crossed that after the election is out of the way that this ticks up quick above 100p
Adjusted EPS of 9.02p beat expectations, and the 3.5p dividend is bang in line: Http://www.investegate.co.uk/harvey-nash-group--hvn-/rns/final-results/201504300700217753L/ HVN have £2.1m net cash, and the core performance is much better than the figures suggest given the adverse urrency movements. And the outlook statement is extremely positive, with an "encouraging start" to this year, and "the Board believes the outturn for the year will be in line with its expectations". The share price should be 100p at minimum, and really should be much higher than that imo for such a respected, high profile and consistent brand.
Numis reiterate their Buy - with a 160p target: Http://www.wkrb13.com/markets/506284/harvey-nash-group-plcs-buy-rating-reaffirmed-at-numis-securities-ltd-hvn/ The market should now look at this year's forecasts of 9.55p EPS, with a 3.8p dividend, and will hopefully re-rate upwards accordingly. GP margins are up over 5% year-on-year on a constant currency basis. Impressive stuff.
Good news in today's trading update - trading in line with expectations, plus much improved cash flows leaving HVN in surplus with £2m cash, despite acquisitions, technology investments etc. Achieving 8.63p EPS - with a 3.5p dividend - puts HVN almost on a single-figure P/E, and with 9.55p EPS forecast for this current year that's a P/E of just 9.2: Http://www.investegate.co.uk/harvey-nash-group--hvn-/rns/trading-update/201502270700160241G/
Two holding RNS's from HVN yesterday, showing that Hargreave Hale have increased their stake by a mighty 1.6m shares to 8.4m, or over 11%. In particular, it's great to see in the detail of the RNS that Giles Hargreave's Marlborough Fund Managers are the driving force for the buying, heavily increasing their stake. The City will hopefully sit up and take notice that Monsieur Hargreave is so keen on HVN.
Across from micheal pages results here today showing good rises.
Anyone out there know what is happening with HVN? I am beginning to have a bad feeling about this. Help and reassurance needed....
A mixed trading statement, which seems to have been anticipated by the markets given the recent share price performance. HVN now go for similar operating profits to last year, which equates to around 8.8p EPS, so it would seem the current 77p has discounted everything. The 3p-3.5p dividend should help too. Currency movements should benefit H2, to at least mitigate the European downturn. Interesting that HVN has appointed specialist advisers to recommend on its strategic options for the European telecom outsourcing business. How much might they get for this I wonder? The cash should be increasing nicely given the success in reducing debtor days. The 8% increase in headcount since January should also soon result in additional revenues after the initial bedding in. I think perhaps HVN have prepared the markets for the worst - and the short-term bad weather in the USA may have contributed to that sentiment - such that the 31/1//15 results and overall outlook may be rosier, especially with possible European QE and an American economy which continues to prosper.
It seems HVN are doing rather well in Australasia.... Http://www.theaustralian.com.au/technology/cloud-digital-stars-in-demand-as-it-looks-to-contractors/story-e6frgakx-1227111280639?nk=f0d09fad4cda24d5bc4606dbee22da73 "Cloud, digital stars in demand as IT looks to contractors The Australian | November 04, 2014 12:00AM" "Harvey Nash managing director Bridget Gray said there had been a “marked upswing’’ in demand, particularly in the last half of the third quarter. “The contract market has continued to improve month on month, with particular momentum in financial services. “We are still seeing a local preference for permanent hiring or fixed term contracts.’’ Ms Gray said there were many business/technology change and transformation programs going live."
Shore Capital now go for 9.6p EPS this year ending soon on 31/1/15, and 10.9p EPS next year (Numis go for 9.4p EPS this year).. This against the current 89p share price. And that's with 3.5p and 3.9p dividends respectively. It's easy to justify a 150p share price based on those forecasts imo, especially with the strong cash position (working capital should come back nicely in H2). The IC also says Buy and this was when the share price was at 104p: Http://www.investorschronicle.co.uk/2014/10/01/shares/news-and-analysis/tech-revolution-boosts-harvey-nash-m0wQOGHQjrjUESA3VDvn9O/article.html "Tech revolution boosts Harvey Nash East Asia is still the big story at recruitment outfit Harvey Nash (HVN). The group has shifted some of its workforce to Vietnam in recent months, but the latest development is the acquisition of executive recruitment company Beaumont KK in Japan. Chief executive Albert Ellis said the “recovery story” in Japan played into recruiters’ hands, and demand for technology appointments in the region remained strong. Technology recruitment is a booming business elsewhere, too, says Mr Ellis, with growing demand for software and website developers as more companies go digital. London’s reputation for technology innovation helped push revenues in the UK and Ireland up 2 per cent to £114m in the first half, driving a 10 per cent improvement in operating profit to £1.9m. European revenues leapt 13 per cent to £217m in the period, with muted performances in Germany and the Nordic regions offsetting roaring growth from the Benelux countries. But costs also grew, so that gross profits actually fell. Germany was held back by a plunge in permanent recruitment revenues, but Mr Ellis said trading had picked up during the third quarter. Brokerage Numis expects pre-tax profits of £9.8m for the current financial year, giving EPS of 9.4p, up from £9m and 8.8p respectively. ORD PRICE: 104p MARKET VALUE: £ 76m TOUCH: 100-106p 12-MONTH HIGH: 125p LOW: 87p DIVIDEND YIELD: 3.2% PE RATIO: 13 NET ASSET VALUE: 87p* NET DEBT: 7% Ex-div: 23 Oct Payment: 21 Nov *Includes intangible assets of £49.6m or 68p per share IC view: Harvey Nash prides itself on its geographical spread, which means it isn't reliant on one region for growth. This seems to be paying off, as pockets of strong demand continue to offset stagnant markets elsewhere. Trading on 11 times forward earnings, shares in Harvey Nash still look attractive. Buy."
Anyone noticed a couple of things over the last few months? Firstly, the bid/offer spread has widened considerably as it now tends to be around 5-6% wheras it used to be 2-3%. Secondly, there have been quite a few large late trades reported such as the 135000 buy on Monday and reported yesterday - look back over the weeks and you`ll see this has happened before and just after the bid has dropped below what could be regarded as a stop/loss point such as the 100p for the above trade. Strange? Now a cynic might think ...... SH