Recruitment firm Hays PLC (LON:HAS) posted flat gross profit for the fourth quarter as political uncertainty in Australia and the UK hurt business confidence.
Gross profit in the UK and Ireland fell 2% on a reported and underlying basis, reflecting a weak performance in the private sector as Britain’s future outside the European Union remained unclear. The UK accounts for 23% of total gross profit.
In Australia, employers also held off hiring new staff in the lead up to the general election while trading in New Zealand continued to be tough.
READ: Hays reports slowdown in gross profit growth despite benefit of later Easter
Gross profit in the Australia and New Zealand arm dropped 5% on a reported basis and edged down 3% on a like-for-like basis, representing 18% of the total.
German growth slows
Germany, which makes up 25% of gross profit, delivered growth of 2% or 4% at like-for-like against tough year-ago comparatives and a slowdown in the manufacturing and automotive sectors. That compares to 5% actual growth and 6% underlying growth in the third quarter.
The rest of the world division – Europe (excluding Germany), Middle East, Africa, Asia and the Americas – achieved a 2% increase in gross profit, accounting for 34% of the total.
Despite concerns over a trade dispute between the US and China, Greater China had a record quarter with growth of 9%.
Hays said it expects operating profit for the year to be in line with market forecasts of about £248.2mln, compared to £243.4mln last year.
The group will end the year with a record net cash position of £130mln, up from £122.9mln the previous year.
Hays 'mindful' of political uncertainties
“Looking ahead, we are mindful of economic and political uncertainties and will continue to focus on driving consultant productivity, while making selective investments in our key markets to reinforce our market leadership,” said chief executive Alistair Cox.
“Our strong financial position means we have an excellent platform to balance short-term performance with our long-term strategic goals, allowing us to invest to capitalise on numerous opportunities in the changing world of work."