Hays scraps dividend as Covid hits FY profits
By Frank Prenesti
Date: Thursday 27 Aug 2020
(Sharecast News) - Recruitment firm Hays scrapped its final dividend as the coronavirus pandemic hit full-year profits, although it reported a slight pickup as lockdown restrictions were eased.
Annual pre-tax profit fell 63% to £86.3m as net fees came in 12% lower to £996.2m.
Growth slowed through the first half, with fees down 2%, while the second half was heavily impacted by Covid-19, with the fourth quarter down 34%.
Hays said the macroeconomic backdrop deteriorated through the first half of the year, impacted by weaker conditions in many of its main markets and a slowdown in activity in Germany, especially in the automotive sector.
It added that the UK General Election, bushfires in Australia and general strikes in France further negatively impacted fees in the second quarter.
"In the second half, our markets were severely impacted by the unprecedented effects of the Covid-19 pandemic. The severity of each country's lockdown arrangements directly influenced our fee performance, with Australia and the USA less impacted than most European markets," it said.
Hays biggest market, Germany, reported a 13% fall in fees and 41% slump in operating profit.
"Given macroeconomic uncertainty caused by the pandemic, and the fact we traded only at a broadly breakeven level of profitability in Q4, the Board is not proposing a final dividend for full year 2020," the company said.
Chief executive Alistair Cox said: "Although many uncertainties remain, group fees have been stable since May and we see modest signs of improvement in Perm."
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