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HAYS PLC HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

HAYS PLC HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2011

A GOOD PERFORMANCE IN MARKETS WHICH BECAME INCREASINGLY UNCERTAIN THROUGH THE HALF

 

6 months ended 31 December                                             Actual     LFL*

(In &pound's million)                                     2011     2010   growth   growth

                                                                                   

Net fees                                             373.8     326.1       15%       11%

Operating profit                                     63.1     52.1       21%      14%

Cash generated by operations**                       60.1     27.8     116%        

Profit before tax                                     60.3     48.6       24%        

Basic earnings per share                             2.76p     2.34p      18%        

Dividend per share                                   0.83p     1.85p     (55)%        

All numbers are from continuing operations only.

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

** Number excludes cash impact of exceptional items paid in the period.

 

Highlights

&middot International businesses drove good Group net fee growth of 11%* and operating profit

 growth of 14%*

&middot Temporary net fees, which represent 56% of the Group, grew 14%*, permanent net fees

 grew 8%*

&middot Continued diversification of the business with 69% of Group net fees generated

 outside the UK (2010: 62%)

&middot Good performance in Asia Pacific with 16%* net fee growth

  - Australia & New Zealand net fees up 15%* driven by Resources and Mining

&middot Strong overall growth in Continental Europe & Rest of World with 27%* net fee growth

  - The Group's largest division delivered record net fees driven by 31%* growth in Germany

&middot The UK market remained challenging with net fees down 6%

  - Private sector net fees down 1%, public sector down 18% but sequentially stable since April 2011

&middot Trading conditions in several markets became more difficult as the half progressed

&middot Strong cash performance with 95% conversion of operating profit** into operating cash flow

&middot Interim dividend down 55% to 0.83p, rebased to a more appropriate level within the revised cover range of 2.0x-3.0x EPS*****

 

Commenting on these results Alistair Cox, Chief Executive, said:

"With profit before tax growing 24%, these are a good set of results. Our diversification has again delivered great benefits with the International business growing net fees by 27%, and 14 countries growing by more than 20%.

Furthermore, with the broadest set of specialisms in our industry, we benefited from our exposure to a number of high-growth industries and skill-sets, including IT, Engineering and the Resource-based industries.

The global economic backdrop became increasingly uncertain as the half progressed, and this continues to adversely impact confidence in some of our markets, especially global banking. However, we continue to see good levels of demand in other markets, many of which are key competitive strengths for Hays, including the mining-based regions of Australia, and the IT and engineering sectors in Germany. With such diverse markets, our focus is on maximizing profitability and market share gains in tougher areas, together with continued selective investment to capitalise on growth opportunities.

The Board remains committed to paying a meaningful dividend. However, given the slowing of our profit growth in the half and our current view on the likely growth rate of Group profitability in the current uncertain economic environment, we have decided to rebase the dividend to a level that is more appropriately covered by current earnings and cash flow. We intend to grow the dividend on a sustainable and progressive basis in line with future profits."

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