Hays’ shares fall as global operations compensate for contracting UK market
Recruiter Hays' share price fell over three per cent this morning despite posting double-digit percentage growth in its half-year figures.
The figures
Net fees for the first six months of the firm's financial year increased by 17 per cent to £466m with operating profit increasing by 16 per cent to £100m.
Figures were given a considerable shove by currency tailwinds; on a like-for-like basis fees and profit numbers were actually up three per cent and down one per cent respectively.
Read more: Hays eliminates debt as it continues with plans to double profit
Cash generated by operations leapt by 147 per cent to £83.8m and profit before tax was up 17 per cent at £96.2m.
Earnings per share grew from 3.99p to 4.55p and the firm raised its dividend by five per cent to 0.96p per share.
Why it's interesting
Hays is a global firm with only a quarter of its revenue coming from the UK, something it is likely to be quite glad about at the moment.
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So while the group numbers were up – though given a considerable leg up by sterling's slump – UK revenue fell by 10 per cent and operating profit plummeted by 29 per cent. Nevertheless, the firm's chief executive said (see below) the firm reckons Britain is turning a corner.
Read more: Hays understands logic of City firms hiring abroad
Fortunes in the firm's European (with fee growth of 10 per cent) and Asia Pacific (up six per cent) divisions could hardly be more contrasting.
Australia and New Zealand is faring particularly well for Hays, it grew its operating profit in the two countries by 16 per cent compared with the six months before.
What the company said
Chief execuive Alistair Cox said:
“This has been a good first half, with further net fee and profit growth and strong cash generation. Conditions remained supportive in many key markets, especially Germany, our most profitable business, where we delivered another all-time record performance, and Australia where activity accelerated significantly through the half.
In the UK, after a marked step-down immediately after the EU Referendum, markets quickly stabilised and we saw early signs of improvement towards the end of the half in the private sector recruitment market, which have continued into the start of the second half.