Strong first half from Harvey Nash

Recruitment firm Harvey Nash said trading in the first half of its financial year has been in line with management expectations.The group expects to report a year on year increase in underlying operating profit for the six months to end-July of at least 10%, while revenue and gross profits are expected to be in line with last year's levels.Profit before tax after non-recurring items is expected to be at least 40% higher than in the corresponding period of last year.An increased proportion of higher margin permanent revenue, combined with actions taken to reduce the cost base last year, has ensured a strong first half performance, the company said.Demand for contract information technology professionals has been robust in the US and UK, and a recovery in permanent recruitment has also started. "Excellent results were reported from the Nordic region, mitigating the delayed recovery in the Eurozone," the company added.The board said it expects to increase the interim dividend by 10% this year.Broker Panmure Gordon said it would not be adjusting its full year earnings forecasts as a result of the trading update but reiterated its "buy" recommendation" and 55p price target."Over the medium term we expect the strong brand name may attract admirers as the industry consolidates (as it always does on the upturn....)," the broker said.