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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.

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