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Recruiter Hays (LON:HAS) has warned of current macro-economic risks in its fiscal first quarter update.
The firm boasted of good growth in net fees across all three regions in both the permanent and temporary workplace sectors, but cautioned that year-on-year comparatives start to get tougher from this point.
Asia Pacific saw net fees fall 7% year-on-year (YOY) in the three months to the end of September, but on a like-for-like (LFL) basis, which strips out currency effects, the number was 6% higher YOY.
The UK & Ireland saw net fees rise 6% YOY on a LFL basis, but the star performer was Continental Europe & Rest of World, where net fees rose 11% on a LFL basis.
Both the temporary and permanent segments enjoyed 8% net fee growth on a LFL basis.
Net debt stood at around £70mln but the group remains confident of clearing this by the end of the year.
"In Germany, growth accelerated as we capitalised on our recent head count investments there. The recovery in our Australia business continued, though conditions remained mixed, with strong growth in New South Wales and Victoria contrasted by tough conditions in the mining-focused regions,” said Alistair Cox, Hays's chief executive.
“Despite tougher comparators, UK growth was solid and broad-based, especially in the private sector. Elsewhere around the world we delivered another quarter of strong, consistent growth, as 17 countries grew by 10% or more and eight delivered all-time record quarterly performances,” he added.
Hays's shares fell 4.1% to 139.6p, however, as investors seized on cautious comments about the economy and the dent being put in revenues by exchange rate movements.
Applying year-to-date average exchange rates and spot rates as at 6 October 2015 would reduce full-year operating profit by around.£10 million versus the previous financial year, the company warned.
“Hays is often seen as a bellwether for the overall health of the economy and the latest figures come against strong comparatives,” said AJ Bell's investment director, Russ Mould.
“Hays has seen good growth in the UK in the IT, construction, property and education sectors, but it has also sounded a note of caution by pointing out that it is aware of potential macro-economic risks on the horizon,” he added.
Investec, meanwhile, reiterated its 'buy' recommendation, though the price target is under review.
Net fee income growth of 8% was a little below the market consensus, and the performance in the UK was a bit disappointing, in the broker's view, though this was offset by a strong showing in mainland Europe.
The broker predicts there will be a modest cut of around 2.5% to consensus operating profits as a result of Thursday's trading update.
“Overall, whilst some likely temporary softness in the UK market is disappointing, with Hays remaining on track to double operating profit on a five-year view and offering the prospect of additional capital returns later this year, we reiterate our BUY,” said analyst John Mullane.