Hays profits up but tough times ahead
UK recruitment firm Hays posted a 25 per cent increase in annual profits yesterday on the back of international growth, but warned that the market would get tougher this year.
The company reported pre-tax profits for the year ending 30 June of £264.4m, up from £211.7m, as it enjoyed a 19 per cent rise in fees, to £786.8m. The company will pay a dividend of 5.8p, up from 5p last year.
An expansion in international business accounted for much of the company’s success, as it added 19 international offices to its network and rolled out new services in 17 countries. International operations now make up 42 per cent of the group’s net fees, with Germany and France the biggest growth countries.
But CEO Alistair Cox, who replaced Denis Waxman this year, said the UK market would be “challenging in the short-term”, as headcounts in industries such as construction dwindle.
Like-for-like net fees in the UK and Ireland rose seven per cent to £452.9m, but Cox warned that the UK recruitment industry was still on course for tougher times.
“Currently, in the United Kingdom demand for temporary placements has flattened out and we are experiencing falling demand for permanent placements,” he said.
His warning follows signs that recruitment firms are looking to consolidate after Swiss firm Adecco had a £1.3bn bid for Michael Page turned down in August. Michael Page rejected the 400p-a-share offer from Adecco, saying it “materially undervalued” the company. The Takeover Panel has given Adecco until 30 September to declare a firm intention of an offer.
