Harvey Nash Grp Share Discussion Threads

[edmundshaw] 27/4/2018 09:26

Absolutely, Oxman. I am not selling just because we have finally breached 100p again. If I may be permitted to mix the old metaphors a little, with renewed vigour at the helm, this one could have legs...

[its the oxman] 27/4/2018 09:14

Hoping this can push us through 100p and keep us there. Scope for much more if we get a bit of a rerating.

[slopsjon2] 27/4/2018 08:08

Zeus note incomplete

Harvey Nash has announced full year results for the 12 months ended 31st January 2018. The year has proven transformational for the Group with a successful migration to AIM, completion of two acquisitions and the launch of a savings initiative anticipated to deliver annualised savings of c.£2.0m. The benefit of the restructuring being undertaken is already paying off, with a meaningful pick up in profitability seen in the second half of this year and good trading momentum continuing int...

[edmundshaw] 27/4/2018 08:04

The massive 'transformation program' is the key. Its is quite a piece of work!! If the new FD is the prime cause, then I am thinking he has been very busy, what with two additional acquisitions on top!

[its the oxman] 27/4/2018 08:04

Div up and good positive outlook seem key at first glance.

[edmundshaw] 27/4/2018 08:01

"Board is confident the Group will continue to make significant progress in the year ahead"

For me those are almost the most important words.

Pug, note to the headline results says "core results exclude non-recurring items and the impact of offices closed during the current financial year. The impact of these closed offices is described as 'non-core'. There were no office closures in the year ended 31 January 2017. For further details see notes 8 to the financial information."

So read note 8, it is all there.

[pugugly] 27/4/2018 07:43

Results out - Curates egg -

Need to dig deep to determine massive difference between core and statutory

Is it a smore and mirrors job or is there REAL potential going forward.

[edmundshaw] 26/4/2018 12:24

I think the activist investors are going to help draw more earnings from Harvey Nash. Tomorrow's results could make HVN look very cheap, with a definite possibility of a re-rating.

Looking at last year's finals and the recent trading update gives me confidence to hold on to my overweight position here. But of course it is tomorrow's numbers that will drive the share price...

[chartsworth] 26/4/2018 10:30

Maybe a hint of good news too going by the rise today...

[edmundshaw] 24/4/2018 08:52

Not too long to wait now. Results Friday...

[gleach23] 12/3/2018 17:36

Nice 54k trade @ 92.6 reported after the close. Not currently holding but looks poised to move away from 90p?

[jon123] 09/3/2018 04:15

good keeping thinking like that all year round lol

[chartsworth] 08/3/2018 09:03

This is heading up because I was thinking of selling a couple of days ago

[edmundshaw] 02/3/2018 15:13

If outlook stays good, Zeus are basically looking at a share price of 207p in three years time (adding back the time-cost discounting). Plus of course another perhaps 14p in dividends. Compelling indeed! Total CAGR by my reckoning of around 36% p.a. over the next three years.

[its the oxman] 02/3/2018 11:40

Looks very cheap and likely to be bid for at this price.

[shauney2] 02/3/2018 10:37

Thanks dave.

[davebowler] 02/3/2018 10:20

Zeus;
Harvey Nash has released a trading update ahead of final results for the year ended 31 January 2018 this morning. Overall trading was in line with market expectations, with adjusted profit before taxation up c22% compared to the prior year. We are maintaining our headline forecasts on the back of these results, and continue to believe the valuation remains compelling at this juncture.

§ Trading update: UK & Ireland gross profit (38% of group NFI) is up 6% year on year, which we believe is above average for the sector, with demand improving through H2 in particular for technology recruitment despite widely reported Brexit-related market volatility. Mainland Europe (40% of group NFI) continues to be the key driver of organic growth in the Group, with Gross Profit up 5% overall year on year. The performance in the ROW (22% of group NFI) was weaker, driven by the groups restructuring efforts during the year. The company has reduced contractor numbers, closed loss-making offices and focused on its core markets. We would expect to see the benefits of this restructuring programme coming through in 2019E.

§ Performance drivers: Adjusted PBT growth of c.22% implies a full year number marginally ahead of our forecast of £10.6m. Full year net debt is expected to come in higher than forecast as a result of higher working capital commitments driven by the normalisation of debtor days during the year after a strong performance in 2017A. The business model is highly cash generative, trading cash generation has funded two acquisitions during the period, and financed the international restructuring programme. Acquisitions made during the year are expected to be earnings enhancing.

§ Forecasts: We leave our headline P+L forecasts unchanged following this update, we expect a 3-year EPS CAGR of 17.3% out to 2020E which we believe compares favourably with the sector average, albeit we note that we remain at the upper end of consensus for 2019E onwards. Clearly trading uncertainty remains across the sector, we will review our longer-term assumptions following the full year results announcement, when the company provides some more detail on the outlook.

§ Valuation: At last nights close price, Harvey Nash trades on an FY19 P/E of 6.4x (falling to 6.1x in 2020E) and an EV/EBITDA of 3.8x (falling to 3.3x in 2020E), a compelling valuation alongside an attractive 4.9% dividend yield. We remain comfortable with our blue-sky analysis in our initiation note (12 September 2017) showing the Group delivering an EBIT of £17.5-20.0m in the medium term, which implies a share price range of 154p-172p discounted back by 3 years at 10% applying a modest through the cycle P/E of 12x.

[sophia1982] 02/3/2018 09:53

IMO, this stock is strongly undervalued vs peers and the market.
Just one indicator: it trades at about 4x cash flow from operations (2017 and 2016).
I have been following HVN for the last 10 years and come to the conclusion that, while the business is doing fine, the management may not be doing their best to promote shareholder value.
I hope that DBAY can do that.

[jon123] 02/3/2018 08:04

good ed i'm fully invested here so i'll not be buying anymore unless it goes down to 80p

[edmundshaw] 02/3/2018 07:59

Last year adjusted EPS 8.86p. Add 22% to that gives 10.8p EPS underlying! So on a P/E of just above 8 at the moment, with further efficiency and further dividends from the two acquisitions to come and an active investor with board presence likely kicking things along! The rating is clearly wrong.

[edmundshaw] 02/3/2018 07:53

Wake up fellow investor(s)!! There's a great update sitting in your in-tray!

"adjusted profit before taxation and non-recurring items being up c22% compared to the prior year"

[edmundshaw] 01/3/2018 08:00

Or messages left on our icy pavements... or text left on an old style computer disc...