Hays expects top end annual profit as net fee decline slows
(Alliance News) - Recruiter Hays PLC on Friday said it expects annual profit at the top end of market expectations, despite "challenging" market conditions.
Hays shares surged 12% to 40.34 pence each in London on Friday morning, among the best FTSE 250 performers.
The company said a year-on-year fall in net fees eased in its fourth quarter ended June 30, despite some softness in the permanent recruitment category.
The London-based firm said net fees fell 4% on-year in the final quarter, 5% on a like-for-like basis. In the third quarter, they fell 7%, or 8% like-for-like.
"The year-on-year decline in group net fees eased to 5% in Q4 driven by good Temp & Contracting growth in several of our countries and stable average hours worked in Germany despite slightly softer Perm activity through the quarter. We continue to make strong progress with our structural cost and productivity initiatives," Chief Executive Officer Mark Dearnley said.
Hays expects annual pre-exceptional operating profit at the top of the GBP37.0 million to GBP46.0 million consensus range. In the year prior, it amounted to GBP45.6 million.
Hays said: "Although we have limited forward visibility, we are mindful of heightened global macroeconomic uncertainty and expect near term market conditions to remain challenging, with greater resilience in Temp & Contracting than in Perm. We were pleased once again with our net fee productivity through Q4 and believe our group consultant headcount capacity is appropriate for current market conditions and therefore expect it to remain broadly stable in Q1 27 as we balance focused investment in high performing and potential business lines with improving productivity in more challenging areas.
"In addition, we will continue to structurally reduce our cost base, to support our investments in data and technology and position Hays strongly for when end markets recover. We will share more information regarding these initiatives and any associated restructuring charges at the full-year results in August."
Hays releases annual results on August 20.
By Eric Cunha, Alliance News news editor
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