Hays (HAS: LSE) today reported flat net fees in constant currency for the first quarter ended 30 September 2019, compared with the same period last year. The company cited difficult economic conditions and tough growth comparatives.

The group reported flat fees in both its permanent and temporary segments, but eight countries still delivered all-time records. Growth in the Rest of World region offset weakness in the UK where net fee growth was hit by political uncertainty.

On a headline basis, group net fees increased by 1%. Hays pointed to the modest weakening of sterling, primarily versus the euro, which increased its reported net fee growth. On a Working Days Adjusted basis, net fees decreased by 1%.

According to Reuters, analysts said Hays’ net fee result was “better than feared”, especially given the profit warnings from rival UK recruitment firms PageGroup and Robert Walters last week.

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 delivered a solid quarter of stable net fees, despite tougher global macroeconomic conditions and reduced business confidence. Even with these challenges, ten countries grew fees by more than 10%, and we produced eight quarterly country fee records, including the USA and China. Asia and the Americas performed well, both growing by 7%. Fees were down slightly in Australia, but remained at near-record levels, while EMEA ex-Germany remained stable. Germany saw increased signs of client cost control, and the UK Private sector remained tough.”

All growth noted below is on a like-for-like basis unless otherwise noted.

Net fees in Australia & New Zealand faced a tough year-on-year growth comparative. Hays added that the overall market is broadly sequentially stable at near-record levels, although conditions in construction and property remain tough. The temp business, which represented 68% of ANZ net fees, declined by 1% and permanent net fees fell by 3%. Public sector net fees, which represented 34% of ANZ, decreased by 1% while private sector net fees fell by 2%. Australia net fees decreased by 3%, however New Zealand returned to growth with a 19% increase.

The company’s largest market of Germany delivered flat net fees versus tough growth comparatives and broad signs of reduced business confidence and increased client cost control. This was especially evident in the manufacturing and automotive sectors. The Temp & Contractor business, which represents 83% of Germany net fees, was flat on a like-for-like basis. Contracting, the larger of the two businesses, declined by 2%, while Temp delivered growth of 5%. Perm continued to slow and decreased by 2%.

Net fees in the United Kingdom & Ireland decreased by 4%. Growth in the Public sector business, which represented 28% of UK & Ireland net fees, stood at 6%. In the Private sector, net fees fell by 7%, as business confidence continued to be impacted by ongoing uncertainties. Additionally, candidate confidence also weakened across the quarter. Net fees in Temp, which makes up 57% of UK&I net fees, were flat, although Perm markets were tougher and net fees decreased by 8%.

The Rest of World division, encompassing 28 countries, delivered net fee growth of 4%, versus a tough growth comparative. Growth in Perm, which represented 69% of RoW net fees, was 6% while Temp was flat.

Nine countries delivered growth of more than 10%, including eight all-time quarterly records.

EMEA ex-Germany (57% of RoW net fees) delivered 2% net fee growth and was broadly sequentially stable. France, grew by 3%, Switzerland grew by 7% and Italy increased by 11%. However, the Netherlands and Belgium were tougher, decreasing by 12% and 7% respectively, and Spain declined by 6%.

The Americas (23% of RoW) increased net fees by 7%. This was driven by a record quarter in the US, the second-largest RoW country, with 12% growth. Mexico grew by 36%, although Canada was weaker and fell by 5%.

Asia (20% of RoW) grew by 7% overall, led by a quarterly record in China, Hays’ largest Asian country, also up 7%. Japan grew by 3%, while growth in Malaysia stood at 32%.

"Over many years we have built a highly diversified business which gives us access to the world's most exciting markets and sectors,” Cox said. “Looking ahead, our strong market positions, combined with our highly experienced management teams and financial strength, means I am confident we will continue to appropriately balance investing for the long-term while managing the more challenging markets we currently face."

As of last trade Hays traded at £149.70, up 4.18% on the day and 9.63% below its 52-week high of £165.65, set on 1 November 2018. Based on its current share price the company has a market value of £2.11 billion.