Hays PLC (LSE:HAS) shares fell 6% in early trading but losses were pared back after the recruiter reported results in line with expectations, with trading remaining soft but new cost savings eyed.
Adjusted EBIT was down 57% to £45.6 million, which analysts at UBS said was in line with the City consensus.
Trading in what are "extremely weak" markets with the hiring downturn now the longest on record at over three years, UBS noted that Hays' focus remains on productivity and strategic reshaping.
In the past year, Hays has delivered around £35 million in savings, higher than its initial target of £30 million, and announced a new £45 million 'structural' savings plan up to 2029.
"The limited July/August trading suggests recent (weak) trends have continued however, and so despite these savings plans we expect little change to consensus forecasts at this stage," UBS said.
The Swiss bank forecasts EBITA of circa £51 million for the coming year, with the consensus at nearer £53 million.
Hays also announced a rebasing of its dividend given the long-lasting profit pressures, with a total payout of 1.24p this year down 59%, implying a forward cover of 3x.
UBS forecasts a further decline in the dividend to 0.48p for next year.
Analysts at Panmure Liberum said the further cost savings now targeted by 2029 are likely to be front-end loaded, with further exceptional costs – "we think circa £40 million".
With current trading remaining difficult September is seen as "the main month".
Panmure Liberum 2026 EBIT forecast is for £50.4 million, assuming a difficult H1, before a "modest recovery" in H2, with flat net fee income over the year and further benefits from cost reductions.
Consensus EBIT range is wide, the analysts noted, from £46 million up to £80 million and they "see scope for the top end to narrow downwards".