Hays (HAS: LSE), the sixth largest staffing firm in the world, today reported net fee income growth of 9% on a like-for-like basis for the second quarter ended 31 December 2018, compared with the same period last year. This represented the 23rd consecutive quarter of year-on-year growth for Hays.

Growth was led by Germany and Rest of World. Both the Temp and Perm businesses grew by 9% on a like-for-like, which represented 58% and 42% of net fees respectively.

Hays added that the relative strength of sterling against the Australian dollar reduced its reported net fee growth. Germany benefitted from two additional trading days versus prior year, due to one fewer public holiday and the timing of another. Hays estimated that this had a 3% positive impact in Germany and a 1% positive impact on group net fees.

Exchange rate movements remain a material sensitivity to the group's reported profitability. The company said that it expects foreign-exchange movements to negatively affect its operating profit for the full year.

“If we re-translate FY18 profits of £243.4 million at 11 January 2019 exchange rates we currently estimate a negative £1 million operating profit currency headwind for FY19. This represents a negative £4 million reversal from the position at our preliminary results on 30 August 2018.

Net Fee growth by region was as follows for the second quarter.

Net Fee growth by segment was as follows for the second quarter.

Alistair Cox, Chief Executive, commented, “We have delivered another good quarter of broad-based growth, with net fees up 9% and 17 of our 33 countries growing above 10%. Against increasingly tough comparatives, our International businesses grew net fees by 11%. Encouragingly, Germany, our largest market, delivered a strong 15%, and ANZ (Australia and New Zealand) recorded its 18^th consecutive quarter of growth. Rest of World continued to perform strongly, with excellent growth in China and Canada, and strong growth in the USA. Our UK & Ireland business produced another solid performance with 3% net fee growth, despite continued economic uncertainties.”

In Australia and New Zealand, growth was led by temp growth of 11% while perm was up 1%, despite  increasingly tough comparatives. Growth in Q2 for this region was the 18th consecutive quarter of growth. Australia delivered a strong quarter of net fee growth of 10%. However, New Zealand trading (which represented 5% of ANZ net fees) continued to be tough, and net fees fell 21%. Hays said it continues to work to improve its performance.

In Germany, the group’s largest market, Hays reported growth of 15%, against increasingly tough comparatives. The Temp & Contracting business, which together represented 84% of Germany net fees, grew by 13%.

Growth in the United Kingdom & Ireland stood at 3% and was led by its public sector business which represented 28% of the UK and Ireland business and was up 11%. Hays said this was in part due to easier comparatives following the negative impact of IR35 changes in the public sector, implemented in April 2017. Net fees in the private sector markets remained flat. Growth in public sector Temp was 9%, with private sector Temp up 1%. In Perm, public sector net fees grew strongly, up 18%, while the private sector was flat.

Hays’ Rest of World division encompasses 28 countries and delivered net fee growth of 10% during the quarter. Meanwhile, 15 countries grew more than 10%.

Europe-excluding Germany produced growth of 6%, despite increasingly tough year-on-year comparatives. France, the largest Rest of World market, and Spain both delivered record net fee quarters, growing 3% and 19% respectively. Poland also grew strongly at 16%, however Belgium was tough and net fees fell 14%.

Asia delivered a strong performance overall, with net fees up 18%. China, the third largest Rest of World country, produced a record quarter and grew by 33%, which includes Hong Kong, up 41%. Japan had a tougher quarter and was down 6%, although Singapore returned to growth with an increase of 25%.

Net fee growth in the Americas was up 15%. The USA, the second largest Rest of World country by net fees, grew by 10% while Canada delivered growth of 28%. Brazil declined 2%, and Mexico remains a tough market, with net fees down 20%.

Hays stated that the group net fee growth exit rate was broadly in line with the Q2 growth rate. “Looking ahead, Easter falls entirely in Q4 2019, while last year it was evenly split between our Q3 and Q4,” Hays stated. “We expect this will have a 1% benefit to our net fees in Q3 2019, with a corresponding 1% negative impact in Q4 2019.”

Cox commented, “While activity levels at the start of the New Year will be an important driver of the Group’s second half performance, and we remain mindful of macroeconomic conditions, the outlook is good across most International markets.”

“We continue to invest in key structural growth markets like Germany, the USA and Asia, capitalising on the clear opportunities we are seeing. Our diverse and balanced global business, together with our highly experienced management teams, mean we look to the future with confidence,” Cox said.

As of last trade Hays traded at £145.90, up 3.04% on the day and 8.40% above its 52-week low of £134.60, set on 27 December 2018. Based on its current share price the company has a market value of £2.06 billion.