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 first quarter ended 30 September 2018, compared with the same period last year. This represented the 22nd consecutive quarter of year-on-year growth for Hays.

During the first quarter, 17 countries exceeded 10% net fee growth, with 10 all-time records. Growth was led by Rest of World and Germany while both temporary and permanent segments reported growth during the period.

However, Hays reported that the relative strength of the British pound sterling against the Australian dollar and the Euro reduced its reported net fee growth.

According to analysts, net fee income growth was 2% below the market consensus forecast for the first quarter.

Exchange rate movements remain a material sensitivity to the group's reported profitability. In its full year forecast, the company warned that currency headwinds could hit its fiscal 2019 operating profit. Hays said current exchange rates would translate into a reduction of £5 million pounds ($6.6 million) from operating profit for fiscal 2019 as a whole, representing an £8 million negative reversal from the company's previous estimates.

“If we re-translate FY 2018 profits of £243.4 million at 9 October 2018 exchange rates (AUD 1.8510 and €1.1442), we currently estimate a negative £5 million operating profit currency headwind for FY19. This represents a negative £8 million reversal from the position at our preliminary results on 30 August 2018.”

Net Fee growth by region was as follows for Q1.

Net Fee growth by segment was as follows for Q1.

Alistair Cox, Chief Executive, commented, “We have made a good start to our financial year, delivering another record quarterly net fee performance. Against increasingly tough comparatives, net fees in our International businesses grew by 11%, including 10 all-time records. Germany and RoW continued to perform strongly, Australia delivered its 17th consecutive quarter of growth and, despite ongoing economic uncertainties, our UK business continued to grow modestly.”

In Australia, the group delivered its strongest quarter since 2008, despite strong comparatives. Growth in the group’s Temp business, which represents 67% of ANZ net fees, was strong at 10%, while growth in Perm business was 1%. Private sector net fees, which represent 67% of ANZ, grew by 7%, with public sector net fees up 5%.

In Germany, the group’s largest market, Hays delivered another record net fee quarter, with growth of 13%, against increasingly tough comparatives. The Temp & Contracting business, which together represented 83% of Germany net fees, grew by 10%.

Growth in the United Kingdom & Ireland was led by its public sector business which was up 8%. 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 and which had a negative impact on Q1 2018. Conditions remained broadly stable in private sector markets, which represented 74% of UK&I net fees and grew by 1%. The Temp business delivered good growth, up 7%. Growth in public sector Temp was strong, up 15%, with the Private sector up 4%. Net fees in Perm were down 2% in the quarter.

Hays’ Rest of World division encompasses 28 countries and delivered net fee growth of 14% during the quarter. Meanwhile, 15 countries grew more than 10%, including nine all-time quarterly records.

Europe-excluding Germany produced growth of 9%, despite increasingly tough year-on-year comparatives. France, the largest Rest of World market, grew by 8% while Spain was up 16%. Belgium, the fourth largest Rest of World country by net fees, grew 3%.

Asia reported a net fee increase of 20%. China, the third largest Rest of World country, grew by 29%, while Hong Kong net fees were up 41%. Japan reported growth of 19%.

Net fee growth in the Americas was up 22%. The USA, the group’s second largest Rest of World country by net fees, grew by 27%. Growth in Canada was up by 27%, while Brazil net fees fell 3%. According to Hays, Mexico remains a tough market, with net fees down 7%.

“Looking ahead, while we are mindful of macroeconomic conditions, the outlook remains positive across our International markets,” Cox said. “We are continuing to invest in our key structural growth markets, notably Germany, France, the USA and Asia to capitalise on the many opportunities we currently see. We remain focused on driving profitable, cash-generative growth and leveraging our platform, which is the largest and most balanced in our industry. This means we can look to the future with confidence."

Following its warning on currency headwinds impacting operating profit, Hays set a new 52-week low in its trading session when it reached £152.10. Over this period, the share price is down -19.32% and down 12.67% on the day. Based on its current share price the company has a market value of £2.56 billion.