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Staffing firm Hays (HAS: LSE) announced that net fees increased by +1% during the first quarter ending 30 September 2013, compared with a year ago. The Group’s net fees are generated from 59% temporary placement and 41% permanent placement.
Commenting on the Group’s performance, Alistair Cox, Chief Executive, said: “We have made an encouraging start to the new financial year. Conditions were stable overall and we saw improved performance in many parts of the business. We delivered meaningful growth in the UK, invested selectively to capitalise on opportunities and kept a tight control of costs in tougher markets to maximise our financial performance.”
“Looking ahead we see clear growth opportunities as a number of markets continue to improve, including some that have been challenging for some time, such as the UK and Asia. Our well balanced diverse business and focus on controlling costs and driving productivity position us well to deliver long-term, sustainable growth while continuing to drive profits and cash along the way,” he concluded.
In its UK home market, which represents 32% of total net fee income, Hays reported a +8% organic growth in net fee income. Temporary net fee income increased on an organic basis by +8% and permanent income increased by +9%, year-on-year. Eight of the 12 UK regions delivered year-on-year growth; including more than +10% organic growth in Scotland, Northern Ireland, the North West, the Midlands, and London (excluding The City). The Republic of Ireland delivered organic net fee growth of +17%.
In the company’s UK private sector business, net fees increased by +4% on an organic basis. Overall market conditions saw further gradual improvement; with the Construction & Property, IT, Office Support, and Sales & Marketing businesses growing by more than +10%. The company’s Banking and City-related specialisms remain subdued. Hays’ public sector business delivered organic net fee growth of +21%, driven primarily by a strong performance in the Education business and Healthcare.
In Asia-Pacific, which represents 26% of Group net fees, on an organic basis net fees decreased by -12%. In Australia & New Zealand net fees decreased organically by -17%. The temporary business declined organically by -11% and the permanent business fell by -26%, year-on-year. Overall market conditions in Australia remain challenging.
In Asia, which accounted for 20% of the division, net fees increased organically by +17%. Japan delivered strong net fee growth of +11%, with Hong King, Malaysia, and Singapore each delivering organic net fee growth of over +20%.
In Continental European and the ‘Rest of the World’, the company’s largest division representing 42% of Group net fees, delivered organic net fee growth of +6%. Germany delivered two record monthly fee performances in the quarters and net fees increased by +7% on an organic basis. During the quarter,the company reported a slight acceleration in growth and noted good performances in Accountancy & Finance, Construction & Property, and Sales & Marketing, as well as continued growth in the core specialism of IT and Engineering.
Net fees increased by +6% on an organic basis in the rest of the region, which focuses predominately on permanent placements. Organic net fee growth of over +10% was reported in 13 countries in this region. Five countries reporting record monthly fee performances; including Belgium, Switzerland, and Russia, where net fees increased organically +32%, year-on-year. Four countries reported net fee declines. In France,net fees were flat.
In trading today, the company’s share price increased +1.64% to £1.17, an increase of +57.3% compared with a year ago. Based on its share price, the company has a current market value of £1.6 billion. According to the latest research from Staffing Industry Analysts, Hays is the 6th largest staffing firm in the world.