Proactive Investors - Run By Investors For Investors

Hays enjoys strong quarter on the strength of its German business

No prizes for guessing which region was letting the side down
Hays recruitment
In the UK, public sector markets remained tough and net fees were down 8%

Global recruitment giant Hays plc (LON:HAS) boasted of strong growth in the final quarter of 2017, with net fees up 13% year-on-year.

As with sector peer PageGroup yesterday, the United Kingdom and Ireland was a drag on growth, but at least it saw some – net fees were up 1% on a like-for-like (LFL) basis in from a year earlier.

READ: Pagegroup overcomes subdued UK market to put in a strong finish to the year

Asia Pacific clocked in with LFL growth of 16%, which was slightly surpassed by the 17% growth achieved by Continental Europe and the Rest of the World.

Also mirroring PageGroup’s experience, Hays saw strong growth in Germany, which was up 19% (or 23% when adjusted for working days), and France, up 14%.

By segment, the Permanent business outdid the Temporary side, with the former achieving LFL growth of 15% and the latter 11%.

The group ended the year with around £35mln in cash, down from around £60mln three months earlier, after the company paid out £94.3mln in dividends in the final quarter.

"We have delivered another strong quarter of broad-based growth with net fees up 13% and 24 of our 33 countries delivering double-digit growth. Performance in Continental Europe was excellent, led by Germany, our largest business, which grew by 19% and where we continued to materially invest in consultant headcount,” said Alistair Cox, the chief executive officer of Hays.

“Australia delivered another strong, market-leading performance and in Asia we delivered excellent growth. In the UK our business remained stable overall,” he added.

READ: Hays and Pagegroup looking a bit toppy to Deutsche Bank

Liberum Capital Markets, which has Hays as its preferred large-cap recruiter, said it would keep its forecasts unchanged following Thursday’s update.

“In part due to the continued strength of the group’s German business net fee income in 2Q18 was stronger than expected,” the broker said.

“With a positive outlook for a number of the group’s key regions, including Europe and Australia, we believe that the risks to underlying expectations lie to the upside. As a result we see the group as well positioned to deliver double-digit earnings growth in FY18. This combined with strong cash conversion should support the case for the announcement of a special dividend in FY18,” it added.

Shares in Hays were up 2.9% at 193.8p.

View full HAS profile View Profile

Hays plc Timeline

February 23 2017

Related Articles

picture of drugs
July 03 2017
Frontier trades its commercial expertise for stakes in the university spin outs and has a core portfolio is six firms.
drilling rigs
February 08 2018
As mining exploration continues to recover from its lulls of a few years ago, Capital Drilling is starting to find its services more and more in demand
Talent meter
March 07 2018
Underlying profits are up 20% year-on-year and net fee income should be around 17% higher

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use