International staffing provider Hays plc (HAS:LSE) reported net fees, or gross profit, fell 7% year over year in its fiscal second quarter ended 31 December 2019.

On a “like-for-like” basis, which represents organic growth of continuing operations at constant currency, Hays’ gross profit was down 4%.

The strengthening of sterling, primarily versus the euro and Australian dollar, reduced the group’s reported net fee growth.

Gross profit in the UK and Ireland fell by 4% on a like-for-like basis.

“Growth slowed markedly in December, driven by specific events in key markets: general strikes in France, tragic Australian bushfires and the UK election,” Chief Executive Alistair Cox said in a statement.

Change in gross profit Q2 2020

Australia and New Zealand (comprising 17% of net fees): The perm placement market slowed in December with sentiment impacted by bushfires with gross profit down 15%; temp placement net fees fell by 2%.

Germany (comprising 26% of net fees): The company noted broad signs of reduced business confidence and more cost control by clients, particularly in the manufacturing and automotive sectors. Signs indicate weakness has begun to spread to the financial and services sectors.

UK and Ireland (comprising 23% of net fees): Both candidate and client confidence weakened. Temp placement gross profit fell by 1% while perm placement gross profit fell by 7%.

Rest of world (comprising 34% of net fees): EMEA ex-Germany net fees decreased by 1%. The Netherlands was down 12%, and Spain fell by 2%. Growth in Italy and Belgium was up 9% and 6% respectively.

The Americas increased net fees by 6%. This was driven by a strong quarter in the US with 13% growth. Mexico grew by 57% and Brazil by 1%, although Canada was weaker and fell by 5%. Continental Europe excluding Germany net fees fell by 1%.

Asia was flat overall, led by 12% growth in Japan. China, the largest Asian country, declined by 9%, with conditions in Hong Kong becoming increasingly difficult and net fees declining by 10%. Malaysia net fees grew by 25%.

Share price and market cap

Shares in Hays closed down 3.42% Thursday at £166.70; the company had a market cap of £2.53 billion, according to FT.com.