Recruitment company Harvey Nash is up more than 6% this morning after a reassuring trading update that claims it has managed to withstand the tough economic climate.
The shares are up 2p, or 6.2%, at 34.5p after the company said in a pre-close statement its dividend payment was rising by a tenth and that "underlying trading during the second half was in line with expectations."
It continues:
"Consequently, for the year ended 31 January 2010, the board expects to announce total revenue of circa £375.0m and profit before tax and non-recurring items of not less than £4.0m."
"In what has been a challenging year for many organisations, particularly those in cyclical sectors, the group has remained profitable while increasing dividend payments. It has a sound balance sheet and has no long-term debt."
The company confirmed that "in view of the outcome for the year" it will recommend a final dividend of 1.35p per share (2009: 1.2p), resulting in a total dividend up 10% to 2.2p per share (2009: 2.0p).
Panmure Gordon analysts remain buyers with a target price of 46p after the update. They comment:
"While sentiment towards recruitment markets seems to have taken a wobble recently, we believe Harvey Nash remains better placed than most, given its exposure to IT and its software outsourcing revenues."
Seymour Pierce meanwhile has raised its recommendation on the shares to "buy" from "hold".
