Hays gives gloomy outlook as full-year profits drop

by | Aug 24, 2023

(Sharecast News) – Recruitment firm Hays has raised its full-year dividend and announced a special payout to shareholders, but gave a gloomy outlook as it reported a drop in annual profits.
Operating profit was down 6% at £197m in the 12 months to 30 June, as a record performance in Germany was outweighed by tough markets in the UK and Ireland, Australia and New Zealand.

Net fees reached a record £1.29bn, up 6% on a like-for-like basis, but growth slowed markedly as the year went on, from 12% in the first half to just 1% in the second, “as the economic backdrop deteriorated across our markets”, the company explained.

Looking ahead, fees are expected to decline in the first half of the current financial year. While the Temp business is doing well, conditions are tough in Perm around the world, with lower client and candidate confidence meaning it’s taking longer to hire some positions.

Nevertheless, the company saw cash generated by operations rise 9% to £199.3m, allowed it to up its final dividend by 5% to 3p a share and announce a further 2.24p return worth £36m.

“While we cannot control the macroeconomic environment, we do control our reaction to it. We acted swiftly to manage our capacity and costs in the face of toughening markets, delivering increased profits in our second half,” said outgoing chief executive Alistair Cox.

Hays announced in February that it was an “appropriate time” to start looking for a successor to Cox, who has been at the helm of the group for 15 years.

The company said on Thursday that it has now appointed Dirk Hahn, currently managing director of Hays Germany and CEMEA, as his replacement. Hahn will become CEO on 1 September.

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