Hays sees decent growth in spite of tough comparatives
By Josh White
Date: Tuesday 16 Apr 2019
(Sharecast News) - Recruitment firm Hays reported like-for-like net fee growth of 6% in its third quarter on Tuesday, driven by 7% growth in its international businesses, while actual growth was 5% due to the timing of Easter.
The FTSE 250 company said it saw "solid" like-for-like growth of 3% in Australia and New Zealand, despite increasingly difficult comparatives and a tough construction and property market.
Temp net fee growth in that geography was 6%, with permanent positions down 4%, while total actual growth in the region was nil.
In Germany, Hays reported like-for-like net fee growth of 6%, also in the face of tough comparatives and a more challenging macroeconomic backdrop.
Temp and contracting net fees grew by 6%, with permanent up 7%, while total actual growth was 5%.
UK and Ireland saw decent like-for-like growth of 3%, with temp up 4% and permanent up 2%.
The company said public sector net fees were ahead 14%, with private sector net fees slipping 1%, while total actual growth was 3%.
For the rest of the world, like-for-like net fee growth was 9% against "tough" comparatives, including eight all-time quarterly records.
Greater China and Canada delivered excellent growth, up 21% and 18% respectively, the board said.
Hays' largest rest of world business of France delivered decent growth, up 8%, with Spain up a strong 18%, while total actual growth in the rest of world geography was 10%.
Group consultant headcount was down 1% in the quarter, although it was up 5% year-on-year, led by 7% growth in the international business.
The company reported "good" cash generation, with net cash standing at £30m as at 31 March, up from £5m year-on-year.
"Against increasingly tough comparatives, we have delivered another good quarter of broad-based growth, with net fees up 6% and 17 of our 33 countries growing above 10%," said Hays chief executive Alistair Cox.
"Asia performed strongly, up 12%, and our Americas business continued to do well, growing by 7%.
"Despite a mixed economic backdrop across Europe, our largest business of Germany grew by 6% and Europe, Middle East and Africa ex-Germany grew 10%."
Cox noted that Australia and New Zealand recorded its 19th consecutive quarter of growth, and despite political uncertainties the UK and Ireland business produced "another highly creditable performance", with net fees up 3%.
He also said underlying cash generation continued to be good.
"While we remain mindful of macroeconomic conditions, the outlook remains positive across most of our markets.
"Our consistent focus is to drive consultant productivity, while selectively investing in our key markets to reinforce our market leadership and capture the many opportunities the changing world of work is presenting us with.
"Our financial strength and highly experienced management teams give us an excellent platform to balance our short-term performance with our long term strategic goals."
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