Harvey Nash shares fall as firm cites challenges
SHARES in Harvey Nash tumbled yesterday after the British recruitment and outsourcing firm admitted trading remains challenging, while the expectation of a V-shaped recovery in its end-markets has not materialised.
Panmure Gordon said the update was “significantly worse than expected, and should send a reality check to those expecting cyclical recovery from recruitment markets”.
The broker cuts its pre-tax profit forecasts for both 2010 and 2011 to £4m from £6.9m, and reduced its target price to 39p from 49p, while keeping its “hold” rating.
“We expect recruitment share prices elsewhere to wake up and smell the coffee as a result,” it said.
Meanwhile, Numis downgraded its recommendation to “add” from “buy” and slashed its 2010 pre-tax profit forecast by 47 per cent to £4m and by 28 per cent to £4.9m for 2011.
Yesterday shares fell by nearly 18 per cent to 36.50p.