Hays plc revenue rose 12% on an organic and constant currency basis in its fiscal year ended June 30 to £7.58 billion (US$9.57 billion). Net fees, or gross profit, at Hays rose 6% during the year. However, the London-based company, which ranks as the sixth-largest staffing firm in the world, reported growth in gross profit slowed sharply through the year, with the first half up 12% and the second half up only 1%, as the economic backdrop deteriorated across markets.

Looking at present conditions, Hays reported that temp volumes remained stable overall on a sequential basis despite macroeconomic challenges; however, conditions in perm remained “tough.” The company expects a headcount reduction in the first quarter.

Looking back at fiscal year 2023, temp revenue rose 9% on an organic, constant currency basis to £735.8 million (US$929.0 million), while perm revenue rose 3% to £558.8 million (US$705.5 million).

“Despite facing tough economic conditions globally, we delivered record group fees,” Chief Executive Alistair Cox said in a press release discussing 2023. “Twenty-one countries hit individual records, including our largest market of Germany, together with records in key strategic markets of technology, engineering and enterprise clients. We delivered all of this from our decisive actions to increase fee margins in skill-short sectors and our shift towards the most in-demand markets, supported by wage inflation globally.”

Hays also announced a new chief executive.

A closer look

Unless otherwise stated all growth rates discussed below are on an organic and constant currency basis.

In Germany, Hay’s largest market, gross profit increased by 19%. Operating profit increased by 29%, despite three fewer working-days in the first half of the fiscal year.

In the UK and Ireland, gross profit increased by 1%. Technology delivered a record fee performance, up 5%, with accountancy and finance up 2%, according to the company. Temp, which represented 56% of UK&I, increased by 4%. The perm business saw fees decrease by 3%.

In Australia and New Zealand, gross profit decreased by 6%, with operating profit down 39%. Temp decreased by 6%, with volumes down 13%. Perm fees decreased by 5%, with volumes down 16%.

In the Rest of World division, which comprises 28 countries, Hays reported record gross profit, up 5% and included 19 individual country records. The US, Canada and Latin America are included in this segment.

Gross profit in the US fell by 13% on an organic, constant currency basis, while Canadian gross profit rose by 1% and Latin American gross profit rose by 14%.

Current trading

Hays expect group consultant headcount will reduce by approximately 3% to 4% in the first quarter as it continues to focus on consultant productivity and leveraging its infrastructure investments. The company has already reduced its number of consultants by 6% (more than 500) since December though staff cuts have been made through natural attrition with no redundancies planned.

The group’s June 2023 net fee exit rate was down 2% year on year.

Overall, Hays expects gross profit will decline year on year in the first half of the present fiscal year, driving a reduction in first half conversion rate year on year, as it protects key strategic investments in order to benefit from future recovery and structural growth opportunities.

Share price

Shares in Hays closed at £103.00 (US$130.89) in London on Aug. 24; they were 6.6% above their 52-week low, according to FT.com.