In morning trading, shares jumped 4.9% to 200p each.
The recruitment firm reported a 15% like-for-like increase in net fees, a measure of gross profit, for the quarter ended June 30 with growth across all regions. The company said the timing of Easter had a 1% positive impact on group net fees during the period.
The UK and Ireland division, which has been the company’s weak spot, generated like-for-like growth in net fees of 5% -- accounting for 24% of the total.
That marked an improvement on the third quarter’s 2% like-for-like decline as UK employers exercised caution on hiring amid Brexit uncertainty.
Hays said the recovery seen the UK business was in part due to easier comparatives following the negative impact of changes to IR35 off-payroll rules in the public sector, implemented in April 2017. IT was the best performing sector in the UK and Ireland with a 15% rise in net fees.
Germany remains the star performer
Germany, the group’s biggest market representing 25% of total net fees, delivered a record quarter with like-for-like growth of 16%, driven by growth in IT, accountancy, finance, sales and marketing.
In Australia and New Zealand, net fees rose 14% on a like-for-like basis – the best quarter since 2008 – on the back of a strong performance in recruitment for the IT and human resources industries. The division accounts for 19% of total net fees.
The rest of the world arm, which makes up 32% of total net fees, posted like-for-like growth of 10%. Continental Europe, excluding Germany, produced an 18% gain in net fees while net fees in Asia edged up 25% and the Americas jumped 35%.
Temporary recruitment accounts for 58% of total net fees and permanent placements make up the rest. In the quarter, like-for-like net fees in temporary placements rose 11% and permanent gained 20%.
Hays considers increasing dividend as it ‘looks to the future with confidence’
The group ended the period with a net cash of £123mln, compared to £111.6mln the same time a year ago. Hays said its strong cash position and underlying trading will “enable the board to consider increasing shareholder returns significantly, in line with our dividend policy”.
“We have ended our financial year with another record quarterly net fee performance, excellent cash generation, and expect full-year operating profit to be marginally ahead of current market expectations,” said chief executive Alistair Cox.
“Looking ahead, conditions remain positive in virtually all of our markets.”
Hays said it understands the consensus forecast for full-year operating profit to be £240.9mln.
Mike van Dulken, head of research at Accendo Markets, said: "The new guidance is likely to lead analysts to tweak forecasts for this year, with a positive knock-on for future years. This could, in turn, see upgrades to both valuations and ratings."
Cox said the company will continue to invest in key growth markets where it sees structural and market share opportunities, particularly in Germany, France and the US.
He added: “Our focus continues to be on driving profitable, cash-generative growth, leveraging the largest and most balanced global platform in our industry. That allows us to look to the future with confidence."