Global staffing firm Hays today reported net fees, or gross profit, fell by 7% year over year on a like-for-like (LFL) basis for the first quarter ended Sept. 30. “Like-for-like” measures organic growth of continuing operations in constant currency.

The 7% decrease in gross profit was in line with the company’s expectations and compared to a record quarter in the prior year, Hays noted.

The group also noted a resilient performance in its temp segment, with gross profit flat (LFL). Permanent was down 15% (LFL), with tough conditions and increased time to hire.

On an actual basis, group gross profit decreased by 9%, with a weakening of the Australian dollar versus the British pound in particular decreasing group fees. The group’s year-over-year fee decline was consistent through the quarter, and the company’s September fee exit rate was in line with Q1 overall at 7%.

In August, Hays announced the appointment of Dirk Hahn as CEO, effective Sept. 1.

Gross profit percentage changes noted below are on an LFL basis unless otherwise noted.

In Germany, technology is the largest specialty at 33% of Germany gross profit, and the segment increased by 1%; the second largest, engineering, was up 17%. Accountancy and finance grew by 4%, with HR up 7%. Private-sector gross profit increased by 4%, with the public sector up 21%. Contracting delivered solid growth, with fees up 6% and 8% working days adjusted. This was driven by 1% growth in contractor volumes and 7% from higher margins, partially offset by a 2% reduction from one fewer working day year on year.

Fees in temp increased by 12%. This was driven by 5% growth in temp volumes, 9% from higher margins and average temp hours worked, partially offset by a 2% reduction from one fewer working day year on year. Perm, which represented 17% of Germany gross profit, increased by 2%.

Gross profit in the UK and Ireland decreased by 11%. Temp gross profit decreased by 8%, with perm down 14%. The private sector declined by 16%, with the public sector up 4%.

Most regions traded broadly in line with the overall UK and Ireland business, including the largest region of London, which decreased by 14%. In Ireland, the business decreased by 10%. At the specialism level, the two largest UK&I businesses, accountancy and finance and technology, decreased by 6% and 20% respectively. Education increased by 7%, although construction and property decreased by 10%.

Gross profit in Australia and New Zealand fell by 17%. Temp, 62% of Australia and New Zealand, decreased by 13%, with perm down 24%. Private sector fees, 64% of Australia and New Zealand, decreased by 20%, with the public sector down 11%, impacted by tough market conditions, particularly in temp.

Australia gross profit decreased by 17%. The largest regions of New South Wales and Victoria, which together represented 51% of Australia fees, decreased by 22% and 20% respectively. Queensland and Western Australia fell 10% and 8%, with ACT (Australian Capital Territory) down 20%.

At the Australia and New Zealand specialism level, construction and property (19% of gross profit) decreased by 24%. Technology, the second largest specialism, fell by 21%, while accountancy and finance and HR decreased by 12% and 9% respectively.

New Zealand, 9% of Australia and New Zealand gross profit, decreased by 17%.

Gross profit in the Rest of World (RoW) division, comprising 28 countries, decreased by 11%. Perm, which represented 63% of RoW net fees, decreased by 17%, with temp gross profit up 4%.

EMEA excluding Germany gross profit was flat. France, the largest RoW country, grew by 6%, with the UAE and Italy up 25% and 10% respectively. Belgium and Switzerland increased by 2% and 3% respectively, although gross profit in Poland declined by 21%.

The Americas gross profit decreased by 28%, with conditions difficult through the quarter, particularly in perm. Canada and US were down 31% and 27% respectively, as was Latin America, down 29%.

Asia gross profit decreased by 17%. Japan decreased by 4%, with Malaysia down 15%. China decreased by 25%.

Overall group consultant headcount decreased by 2% in the quarter and decreased by 9% year on year as the group managed its overall capacity in line with market conditions.

Looking ahead, Hays said overall fiscal year 2024 has begun in line with expectations, and the group continued to benefit from the positive effects of mix and margins. Volumes remain broadly stable overall in temp and contracting, with lower numbers of new assignments offset by greater contract extensions. In perm, Hays continued to see lower client and candidate confidence, with increased time to hire.

Given that group gross profit will decline year over year in the first half of fiscal 2024, in part due to the currency effects and working day impacts noted above, Hays said it will continue to expect conversion rate and operating profit will also decline as it protects key strategic investments to benefit from future recovery and structural growth opportunities.

Share price

Shares in Hays were down 0.78% to £102.10 (US$125.55) as of 12:07 p.m. Eastern time; they were 5.37% above their 52-week low, according to FT.com.