Harvey Nash Grp Share Discussion Threads

[rivaldo] 30/7/2015 11:51

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.

[rivaldo] 28/7/2015 10:13

Bouncing today.

A quality company with a strong core remains so, whilst currencies fluctuate up or down. Which is presumably why Giles Hargreave has been buying HVN.

[jimmywilson612] 27/7/2015 12:49

Its because the Euro is so weak against the £ at the moment. Any increases in revenue/profit is been swallowed up with a weakening euro.

[starpukka] 24/7/2015 17:32

Hello Gentlemen. Some buys showing as sells today it seems. Anyone know the reason for the price drop ? GLA

[rivaldo] 16/7/2015 11:22

15k shares just bought at 107p causing another tick up today.

[rivaldo] 15/7/2015 09:38

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.

[rivaldo] 14/7/2015 15:29

Nice 33k buy at 106p just caused a positive intra-day turnaround.

Thx for the prompt G2, got mine too.

[gargoyle2] 14/7/2015 09:33

Lovely dividend just hit my account today. Still undervalued imo.

[thorpematt] 13/7/2015 16:36

free stock charts from uk.advfn.com



Thrpogh previous high with resistance levels to the north

[rivaldo] 13/7/2015 15:37

A few buys coming in today, including a 25k at 106p, lifting the price to new recent highs.

[dangersimpson2] 07/7/2015 16:51

Vietnam is where HVN have their outsource centre. Not sure how much permanent business they do in SEA but given their current outsource footprint it would easy for them to expand.

[edmundshaw] 07/7/2015 12:38

Thanks paleje, useful.

[paleje] 07/7/2015 11:31

RWA updated this morning, very robust and FY will be ahead of market expectations. I'm not ramping them I dont hold, but there could be a read across to us in some areas, their UK net fee income is up 19% and they are seeing exceptional growth "In excess of 100% net fee income growth across Vietnam, Korea, Indonesia, and Taiwan"

Robert Walters, Chief Executive, commented:

"The Group's continued strong trading performance, underpinned by our ongoing focus on consultant productivity enables us to continue to deliver operational gearing. The Board is confident that despite FX headwinds, profit for the year will be ahead of current market consensus."

[rivaldo] 03/7/2015 14:18

Terrific summary ds2. You've crystallised my own uncoordinated thoughts much better than I ever could :o))

Good upturn today. It wouldn't surprise me to see Giles Hargreave adding again.

[dangersimpson2] 03/7/2015 13:15

Harvey Nash is effectively 3 businesses in 1 with different revenue streams - Permanent Recruitment where they get a one-off fee for placing IT professionals or executives in permanent roles. Contracting where they get a proportion of the rate that they charge for the contractor and outsourcing where they take on packages of work. The margins for each can be quite different. So anlaysing margins as a whole without taking into account the mix can be misleading. The three business are to some extent counter-cyclical too so you get a steadier results than a pure permanent recruiter or a pure contract house which is good. Also HVN are highly globally diversified so again you get smoother results but no blockbuster years. I do agree though that a focus on margins rather than purely revenue growth at HVN would be advantageous since the top line growth often appear to not feed through to the bottom line. If they can get that right and keep the balanced nature of the business they arguably deserve a premium rating not a discount.

[spooky] 03/7/2015 12:42

Or someone decides to make a takeover bid, which given the current valuation metrics, is a distinct possibility.

[thorpematt] 03/7/2015 11:43

edmundshaw,
I'd agree that 7% YOY for buy and hold is fine. Esp. if you are adding dividends.

However if you had've bought in 9 years ago the price would be barely less than it is today and thus what you have described relates more to the success of your timing rather than the success of the business.

Apologies for the negativity. I am certainly not here to trash the company, anyone's investment or this thread. But I do think that ensuring you buy in at the right price is going to be key if you wish to make money out of this one...unless of course the current management can out-perform the historic ones.

[ken536] 03/7/2015 11:35

Good post Edmund,
been in since 36p and topped up on occasions since,
and as you say, nice dividends along the way.
I'm still a believer, and still think there is more to come. IMHO

[edmundshaw] 03/7/2015 11:13

Well 10 years ago the price was half what it is now. So that is 7% per annum if you just bought and held. Add in a nice dividend and it has been a pretty safe and comfortably profitable investment. If you were more active and adjusted your holding on the spikes to 120p and bought back on significant dips you would of course have done even better...

I know a lot of very confident peeps sneer at anything less than 20% per annum, but such a return, over a long period of say 20 years, is extremely rare.

[thorpematt] 03/7/2015 09:12

Shanklin,
For a minute there you sounded like a passage from Benjamin Graham essay.

Despite his well-documented generosity as a human being he was in many ways very cynical in his analysis of business (rightly so I would suggest). In any event your impression is not wrong IMV.
I always look at 10 year histories for analysis of how companies have produced REAL progress financial and as you suggest EPS growth is poor here. I won't write an essay here but quite often these failures are down to dilution of earnings through either issue of stock or the continuous hammering of the “exceptionals” line in the accounts. In HVN’s case it is in the COGS and in the subsequent gross margin.

Last 10 years of GM as % :-

21.2
19.2
18.4
16.5
16.1
16.2
14.7
13.9
12.7
12.8

…has totally eroded the ability of the company to produce EPS for its owners. I suspect some of its employees and directors have done OK on the apparent top-line growth however.

Incidentally despite the dividend having grown since introduction so ha the pay-out ratio. In 8 years its grown from 23% to 46%. Again not surprising given the above.

In summary then as the revenue has grown the efficiency of the company has shrunk. Which of course is the opposite of what you would hope / expect (economies of scale and all that).

[rivaldo] 03/7/2015 08:58

Yesterday's update stated that operating profits were a whopping 9% up year-on-year - and therefore actually higher than gross profits, which were themselves up 8%.

Currency movements are temporary and will fluctuate up and down, so will hopefully move back in HVN's favour over the next few months.

Going through the RNS's I believe HVN are on the cusp of a upwards lift in performance. It's a shame this has been masked by currency movements, but, as Panmure's noted, perhaps the City will look through this to see the improvements in the core business.

[shanklin] 03/7/2015 08:01

Having held HVN for several years to little benefit, albeit having now moved on to STAF, RTC and PNA, my view is that...

...generally HVN seems to generate excellent revenue growth but IMHO this just doesn't get through to the bottom line. The yoy 10% increase in dividend is a positive but I have the impression that almost all the additional operating profit is just absorbed in extra undefined costs. Hence minimal EPS growth, hence deserved low rating.

[starpukka] 02/7/2015 23:31

Results looked good to me but the market didn't appear too impressed it seems ?

[rivaldo] 02/7/2015 15:01

Good to get an overall thumbs up from PS, even though I often disagree with his verdicts.

BIG L's comment on the article below reflects my own view:

"Interesting chart comparing HVN and STAF - but if you adjust HNV's price upwards to put it on a comparable valuation it wouldn't be far away e.g. on the same EV/EBITDA multiple. Of course different valuations may be justified by faster growth but STAF should be ahead in share price terms due to underlying growth rather than just having been rerated more than HVN. STAF also has further to fall if growth disappoints whereas if HVN can get its act together and growth more it may experience the same rerating, so potentially more optionality on the upside for HVN and mixed/negative optionality on the valuation front for STAF. I'm long HVN :) cheers"

[zoolook] 02/7/2015 13:05

Commentary from Paul Scott

hxxp://www.stockopedia.com/content/small-cap-value-report-2-jul-2015-staf-hvn-jsg-102211/