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Hays - Progress in Most Regions

HAYS has issued its Interim Management Statement for the Quarter ended 31st march 2010.

Financial summary

Growth in net fees for the quarter ended 31 March 2010 (Q3) growth
(versus the same period last year)
actual LFL*
By region
Asia Pacific 23% 3%
Continental Europe & Rest of World (2)% (7)%
United Kingdom & Ireland (18)% (18)%
Total (5)% (10)%

By segment
Temporary (8)% (12)%
Permanent (1)% (6)%
Total (5)% (10)%

* LFL (like-for-like) growth represents organic growth at constant currency.


2% sequential growth in Group net fees versus the previous quarter,
led by 7% sequential net fee growth in Asia Pacific

Modest sequential net fee growth in Continental Europe & RoW with
trading in Germany improving through the quarter

Continued stability in the UK with growth in the private sector
offset by reduced demand in the public sector

International business now represents 57% of Group net fees

Consultant headcount up 2% with selective investment in Asia,
Australia, Germany and Brazil

Commenting on trading for the quarter ended 31 March 2010, Alistair Cox, Chief Executive of Hays plc, said:

"We have continued to see progress in most of our markets, although the
dynamics vary by region. In Asia Pacific, we have seen a third consecutive
quarter of improving trends in Australia and we are seeing a broad-based
recovery across the other Asian countries. In Continental Europe & Rest of
World, we are seeing strong growth in Brazil, the early signs of recovery in
Germany and broad stability across most other countries except Spain and the UAE, which continued to weaken. In the UK, we are seeing sequential growth in the private sector offset by reductions in the public sector.

Where markets are recovering, we are now increasing our capacity and selectively recruiting to meet growing demand. Over the course of the recession we have invested in our technology platforms, marketing and training programs and these investments are well advanced and are now delivering results, just as a number of our markets are showing encouraging trends. Equally, we have maintained our strong cash flow performance and dividend throughout the downturn and are positioned better than ever to capitalise on cyclical and structural growth in each of our markets as they recover over time."


In the quarter ended 31 March 2010, Hays, the leading global specialist
recruitment group, saw a decrease in net fees of 5% (10% on a like-for-like
basis*) versus the same period last year. Net fees from the temporary placement business decreased by 12%* and net fees from the permanent placement business decreased by 6%*. Net fees in our private sector business were down 8%*, with net fees in our public sector business down 17%*, the public sector accounting for 23% of total Group net fees in the quarter.

On a sequential basis, total Group net fees increased by 2% versus the previous quarter, there was a modest quarter-on-quarter decline in the underlying temporary placement margin** and headcount increased by 2% across the business, with investment in parts of our international business partially offset by selective reductions in the United Kingdom.

Asia Pacific

In Asia Pacific we recorded 7% sequential net fee growth versus the previous
quarter, being the third consecutive quarter of growth. We continue to take
advantage of improving market trends in our market leading Australia & New
Zealand business, as growth in demand in private sector business more than
offset the decrease in our public sector business. Our performance in Asia was again strong with many countries now performing at pre-downturn levels.
Consultant headcount was increased by 10% during the quarter, with headcount up 25% in Asia, as we continue to invest to ensure we capitalise on the improving market conditions we are seeing in all countries across the division.

Continental Europe & Rest of World ('RoW')

In Continental Europe & RoW we recorded 3% sequential net fee growth versus the previous quarter. Our German business, which is primarily focused on the IT contracting market, saw good levels of contractor re-engagement post-Christmas and modest sequential growth through the quarter. In our Brazilian business we continued to achieve strong growth as market conditions improved. Our businesses in Spain and the UAE continued to weaken due to the uncertain economic outlook in these markets, whilst the sequential net fee trends in the remaining businesses, principally in permanent placement markets, remained broadly flat this quarter. Consultant headcount increased by 4% during the quarter, predominantly in Germany and Brazil.

United Kingdom & Ireland

In the United Kingdom & Ireland quarter-on-quarter net fees remained broadly flat, with modest sequential growth in demand in the private sector business offset by continuing weakness in the public sector, particularly in
administrative and other non-front line placements. Overall the public sector
declined 19% versus the same period last year. In addition, the unprecedented adverse weather conditions at the start of the period resulted in a number of lost temporary placement days. Consultant headcount was down 1% in the quarter, principally in our public sector Construction & Property business.

Cash flow and balance sheet

The Group continued to deliver a solid cash flow performance, although net debt increased to c.80m (December 2009: 38.4m) at the end of the period. This was due to the normal phasing of cash outflows together with a modest increase in working capital as trading improved through the quarter.


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