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Hays PLC

Hays falls as subdued UK market, weak cash generation offsets rise in first half profit

The FTSE 250-listed recruiter reported half-year pre-tax profit of £113.9mln, up from £96.2mln a year earlier, as revenue rose to £2.83bln from £2.48bln

Hays front desk
Hays first-half net fee income was up 13% to £525.8mln, however, cash generated by operations fell 12% year-on-year to £74.1mln

Hays plc (LON:HAS) saw its shares decline on Thursday despite reporting both profit and revenue increases in its first-half results as cash generation fell and it said the UK was more subdued.

The FTSE 250-listed recruiter reported half-year pre-tax profit of £113.9mln, up from £96.2mln a year earlier, as revenue rose to £2.83bln from £2.48bln.

READ: Hays enjoys strong quarter on the strength of its German business

The group said its first-half net fee income was up 13% to £525.8mln, however, cash generated by operations fell 12% year-on-year to £74.1mln, down from £83.8mln previously.

Internationally, the company said market conditions had stayed strong in the vast majority of regions, especially in mainland Europe, Australia, and Asia, although the UK market was more subdued but stable.

Hays chief executive, Alistair Cox, said: "Looking ahead, the scale, balance and diversity of our businesses, combined with our strong balance sheet and highly experienced management teams, stand us in good stead.

"The outlook in the vast majority of our markets remains positive and we have made an encouraging start to our new five-year plan to broadly double our operating profits by 2022."

The group raised its interim dividend by 10% to 1.06p, up from 0.96p a year earlier.

Few surprises after recent trading update

In a note to clients, analysts at Liberum Capital reiterated a 'buy' rating and 1,810p price target on Hays shares, noting that there were few surprises in the numbers given the recent trading update

They said: "Relative to our forecasts the largest surprise came in the UK & Ireland, where despite net fees being up just 1% y/y at constant currencies, operating profit was up 24% y/y on good cost control and certain IT assets having become fully depreciated."

In late morning trading, Hays shares were down 5.33% at 193.7p.

Quick facts: Hays PLC

Price: £1.44

Market: LSE
Market Cap: £2.1 billion
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