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Global staffing firm Hays (HAS: LSE) reported +3% organic growth in global net fees for the second quarter ending 31 December 2013, compared with the same period last year. Net fees for the company’s temporary recruitment business, which account for 60% of total net fees, increased organically by +3%. Permanent recruitment increased organically by +4%, the highest rate of growth for almost two years.
Alistair Cox, Chief Executive of Hays, commented: “This is another encouraging quarter. In the UK, growth accelerated as we saw improved client and candidate confidence, and we delivered a strong performance in all regions and specialisms. Around the world, 17 countries grew by more than +10% (on an organic basis) and six countries, including Germany and Japan, achieved record monthly net fee performances in the quarter. We continued to see market conditions improve in several parts of the Group as the quarter progressed, most notably in the UK and Asia.”
“As ever, activity levels at the start of the New Year will be an important driver of the Group’s second half performance. We remain focused on increasing consultant productivity and investing to capitalise on areas of opportunity to deliver further profitable fee growth and a strong cash performance during the second half of our financial year,” he added.
In the UK and Ireland, which represents 34% of Group business, net fees increased organically by +10%. The Group’s temporary business increased organically by +5%, while the permanent business increased by +17%. The company reported continued broad-based improvement in activity levels in all specialisms and regions through the quarter. Ireland reported significant organic growth of +30%, while net fee income growth of more than +10% was reported in the East, London, the Midlands, Northern Ireland, the North West, and Scotland.
Hays’ private sector business, which accounts for 70% of divisional net fees in the UK and Ireland, growth accelerated to +8%, in terms of constant currency. This was driven by strong growth in the company’s largest “specialisms”; such as Construction & Property (+21%) and Accountancy & Finance (+8%).
In Asia-Pacific, which represents 24% of Group net fees, reported an organic drop of -9% in net fee income during the quarter. Across Australia and New Zealand net fees decreased by -15% on an organic basis, with the company’s temporary recruitment business declining by -10% and the permanent business reported a -25% drop in net fee income.
Asia, which accounts for 21% of the division, delivered excellent organic net fee growth of +28%. Japan had a record net fee performance in December and delivered organic net fee growth of +28% in Q2 2014. Singapore, Hong Kong, and Malaysia all delivered organic growth of more than +30%.
Hays’ largest division, Continental Europe and Rest of the World, represents 42% of Group net fees and delivered organic net fee growth of +5%. The company’s German division reported organic net fee growth of +5%, with strong performances in Accountancy & Finance (+29%), and organic growth of more than +10% in Construction & Property, Sales & Marketing, and Legal. Hays’ permanent recruitment business reported organic growth of +22% during the quarter.
Net fees increased by +7% across the rest of the division, which is predominately a permanent recruitment business. Across the division 11 countries delivered organic net fee growth of +10% or more; including a record monthly net fee performances in Mexico, Chile, and Russia, where net fees increased organically by +35%. In France net fees increased organically by +3%, despite difficult market conditions, with improved conditions reported across Southern Europe, notably Spain where net fees increased organically by +18% compared with a year ago.
In trading today, the company’s share price dropped by -0.8% to £1.31, an increase of +56.2% compared with a year ago. Based on its current share price, the company has a market value of £1.83 billion.