Hays issues profit warning as political uncertainty slows hiring
Recruitment firm Hays issued a profit warning today, blaming political uncertainty for a slow three months to the end of December.
The group anticipates first half operating profit to be around £100m, down from the £124.1m reported in the same period last year.
London-listed shares fell by as much as nine per cent in early morning trading but recovered to trade 3.7 per cent lower by mid-morning.
Group net fees fell four per cent on a like-for-like basis in the second quarter. The firm blamed a strong pound, versus the euro and Australian dollar, as the main reason for the fall.
In the UK and Ireland, Hays said that net fees in the private sector fell eight per cent because of the significant uncertainty generated by a prolonged Brexit and the snap election.
Chief executive Alistair Cox said: “Conditions in the UK remained uncertain, particularly before the election, although the result may provide impetus over time.”
It echoes concerns laid out by rival recruitment firm Robert Walters, which posted a 23 per cent drop in UK profits last week.
Chief executive Robert Walters told Morning Wire: “We are rather like stock markets in that we don’t like uncertainty. The fact there was a [decisive] result in the election is a good thing in itself.”
He warned that “client and candidate confidence deteriorated” in the UK due to the political uncertainty surrounding Brexit and the General Election.