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Hays (HAS:LSE), one of the largest staffing firms in the world, today reported that gross profit (net fess) dropped by -3% in the three months to March, following a slowdown in Asia Pacific, the UK and Ireland.
But gross profit generated from the firm’s temporary staffing business was up +1%. The permanent recruitment market remained fragile as gross profit fell -8% in the quarter. Permanent recruitment fees represent 41% of Group net fees.
Chief executive Alistair Cox said the firm had delivered a resilient performance. “The start to the second half in our key temp and contractor markets has been encouraging and although many perm markets remain challenging, they are broadly stable.”
He expects conditions to remain volatile, but mixed. “Although several markets are likely to remain challenging, these sit alongside clear opportunities for growth,” said Mr Cox.
In the United Kingdom & Ireland, gross profit was flat year-on-year despite the temporary staffing unit posting +4% growth. Gross profit from permanent recruitment fell -7% and the firm continued to struggle from falling demand in its banking segment. Overall, gross profit from the private sector was down -6% while the public sector recorded growth of +17%, driven by the healthcare and education sectors.
In Europe & Rest of the World, the firm’s largest division, gross profit rose by +4% in the quarter, helped by a strong performance in Germany and its accountancy/finance, construction, IT, and engineering sectors. Gross profit was flat in the rest of the division, primarily a permanent recruitment business, as trading remained tough. But key markets such as Canada and Russia posted growth during the quarter.
In Asia Pacific, gross profit was down by a sharp -14% as demand for temporary and permanent staff slowed across Australia & New Zealand. Gross profit in both countries fell -18%. “Overall market conditions in Australia remained challenging but sequentially stable through the quarter,” the recruiter said.
In Asia, gross profit also declined by -14% with the firm seeing flat results in Japan and growth in Hong Kong and China.
Despite the declining performance, the results were towards the top end of analysts’ expectations and, in early trading this morning, the company’s share price rose +4% to 97.10 pence, up +20% from a year ago. Based on its stock price, the firm has a market value of £1.31 billion.