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UK — Hays sees broad stability across most countries except Spain

08 April 2010

Hays Plc (HAS:LSE), the largest recruitment group in the United Kingdom, has today released an interim management statement for the quarter ended 31 March 2010 (Q3).

The Group saw a decrease in net fees of -5% (-10% on a like-for-like basis) versus the same period last year. Net fees from the temporary placement business decreased by -12% on a like-for-like basis and net fees from the permanent placement business decreased by -6% on a like-for-like basis.

Net fees in the private sector business were down by -8% on a like-for-like basis, with net fees in the public sector business down by -17% on a like-for-like basis. The public sector accounts for 23% of total Group net fees in the quarter.

On a sequential basis, total Group net fees increased by +2% versus the previous quarter, there was a modest quarter-on-quarter decline in the underlying temporary placement margin and headcount increased by +2% across the business, with investment in parts of the international business partially offset by selective reductions in the United Kingdom.

In the United Kingdom and Ireland, quarter-on-quarter net fees remained broadly flat, with modest sequential growth in demand in the private sector business offset by continuing weakness in the public sector, particularly in administrative and other non-front line placements.
Overall, the public sector declined by -19% versus the same period last year. In addition, the unprecedented adverse weather conditions at the start of the period resulted in a number of lost temporary placement days.
Consultant headcount was down by -1% in the quarter, principally in Hays's public sector Construction & Property business.

The German business, which is primarily focused on the IT contracting market, saw good levels of contractor re-engagement post-Christmas and modest sequential growth through the quarter. The businesses in Spain continued to weaken due to the uncertain economic outlook in the market. Consultant headcount increased slightly during the quarter, predominantly in Germany.

Alistair Cox, Chief Executive of Hays, commented "we have continued to see progress in most of our markets, although the dynamics vary by region. In Asia Pacific, we have seen a third consecutive quarter of improving trends in Australia and we are seeing a broad-based recovery across the other Asian countries. In Continental Europe & Rest of World, we are seeing strong growth in Brazil, the early signs of recovery in Germany and broad stability across most other countries except Spain and the UAE, which continued to weaken. In the UK, we are seeing sequential growth in the private sector offset by reductions in the public sector."

"Where markets are recovering, we are now increasing our capacity and selectively recruiting to meet growing demand. Over the course of the recession we have invested in our technology platforms, marketing and training programs and these investments are well advanced and are now delivering results, just as a number of our markets are showing encouraging trends."

"Equally, we have maintained our strong cash flow performance and dividend throughout the downturn and are positioned better than ever to capitalise on cyclical and structural growth in each of our markets as they recover over time."

In early trading Hays's shares were up by +0.98% to 113.4 Pence.



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