Eurozone fears prove hitch for Harvey Nash

The company said the strength of the recovery remained uncertain –"particularly in the Eurozone" – amid fears over deficits and defaults which have shaken markets so far this year.

But the firm – which specialises in IT staff – added that demand had improved since the end of January, driven mainly by a 19 per cent year-on-year rise in permanent recruitment in the UK and Nordic countries.

This helped push gross profits for the three months to April 30 6 per cent ahead of the previous quarter, although they remained 6 per cent down a year earlier.

At the pre-tax level, Harvey Nash said profits were flat year-on-year on revenues 4 per cent lower because of its cost-cutting efforts during 2009.

Numis analyst Steve Woolf said: "The outlook is encouraging, particularly given the quarter-on-quarter momentum, but it would be remiss not to mention the risk posed by macro uncertainty, and the limited visibility inherent in staffing businesses."

Mr Woolf expects a "modest pick-up in demand over the next 12 months, rather than any steeper path to recovery".

Harvey Nash has UK offices in Birmingham, Leeds, Edinburgh and London, but also expanded its international footprint this year with a new office in Helsinki, Finland and an acquisition in Norway.