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Hays beats forecast after strong finish to year
Wed, 08 Feb, 2012
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Hays beats forecast after strong finish to year
Thu, 2 Sep 2010, 06:21:00
Global recruitment firm <b>Hays</b> saw a return to growth in the second half of its financial year, which softened the blow of a 53% slide in pre-tax profits. Profit before tax and exceptional items in the year to 30 June tumbled to £71.1m from £151m the year before, beating market expectations. Broker Charles Stanley's above consensus forecast had been for a figure of £70m. "As reported" pre-tax profit plunged to £29.7m, after the company took a charge of £29m relating to the Office of Fair Trading (OFT) fine that the company is contesting, and also swallowed £12.4m of non-recurring restructuring costs relating principally to the United Kingdom back office automation project. Net fees fell 17%, or 21% on a like for like basis, to £557.7m from £670.8m. Operating profit before exceptional items more or less halved to £80.5m from £158.0m. The company said it had seen a broad based recovery in the second half with sequential net fee growth of 8% and operating profit growth of 23% versus the first half. "After a tough first half to the year, we returned to growth in the second half driven by excellent performances in Asia Pacific and Germany. In the fourth quarter, 20 countries across the group delivered net fee growth of over 10% as we added headcount to capitalise on the upturn," said Alistair Cox, chief executive of Hays. Cox added that the outlook across 90% of its markets, including the UK private sector, continues to improve. The bulk of the group's fees (44%) still come from the UK & Ireland; Asia accounted for 25% of group net fees while continental Europe accounted for 30%. The temporary placement business represented 58% of net fees and the permanent placement business represented the rest. Net fees from temporary placements fell 18% on a like for like (LFL) basis while permanent placements saw a 26% LFL decline. The dividend has been maintained at 5.80p, in line with management's pledge to maintain the cash pay-out through the down cycle.
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