Hays helped by international business
Hays reported a 15% jump in full-year operating profit to £243.4 million, which was slightly ahead of the £240.9 million expected by analysts. Net fees for the year ticked up by 12% to £1.07 billion.
The core dividend and the special dividend were hiked by 18% each. The company had a ‘landmark year’ as it achieved its target of exceeding £1 billion revenue in 2018, and that target was set out in 2013.
The UK business remains uncertain, but stable, and the rest of the world is powering ahead as it saw profit growth of 51%. Hays confirmed it is seeing strong growth in its international business.
The group has earmarked £30 million for capital expenditure, and seeing as the firm’s expansion has been successful so far, investors will continue to have high hopes for the business.
Hays had s strong final-quarter as the company posted a 15% rise in annual fees for the last three months of the year. The recruitment agency saw the strongest performance in its German division, and the operation registered a 16% jump in fees, and the Australian business wasn’t far behind with 14% fees growth.
The UK and Ireland division revealed fees growth of just 5%. Uncertainty over Brexit was blamed for the relative under performance in the division, but earlier this month it was reported that the UK unemployment rate fell to its lowest level since 1975. It is possible that some of the jobs being created aren’t the sort of jobs that are promoted by professional recruitment agents, but it seems that Brexit gets bandied around a lot.
Hays is going to ‘invest significantly’ in growth markets like Germany, France and the USA. The company has a rude cash flow position, and therefore it has the ability to keep expanding in growing regions. Germany now account for 25% of the company’s revenue stream, and geographical diversification is sensible from a risk management point of view.
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