Hays preliminary results for Q2 ending 30 June 2012
GOOD FEE AND PROFIT PERFORMANCE DUE TO STRONG COST
CONTROL AND SELECTIVE INVESTMENT FOR GROWTH
Year ended 30 June
(In £’s million) 2012 2011
Net fees 734.0 672.1 9% 8%
Operating profit (before exceptional items) (2) 128.1 114.1 12% 9%
Cash generated by operations (3) 162.2 97.3 67%
Profit before tax (before exceptional items) (2) 122.4 106.6 15%
Profit before tax 122.4 110.7 11%
Basic earnings per share (before exceptional items) (2) 5.47p 5.19p 5%
Basic earnings per share 5.47p 5.69p (4)%
Dividend per share 2.50p 5.80p (57)%
All numbers are from continuing operations only.
· Strong International net fee growth of 16%(1) driving Group net fee growth of 8%(1)
· Good operating profit growth of 9%(1) due to our selective investment approach and focussed cost control
· Record performance in Continental Europe & Rest of World, delivering 23%(1) net fee growth
- Broad-based growth, with Germany up 30%(1), Brazil up 30%(1), Canada up 25%(1) and France up 17%(1)
· Good performance in Asia Pacific, delivering 10%(1) net fee growth with markets increasingly multi-speed
- Australia & New Zealand net fees up 10%(1), Asia net fees up 11%(1) with Japan up 16%(1)
· The UK market became increasingly challenging as the year progressed, with net fees down 7%
- Private sector net fees down 6%. Public sector down 8% but sequentially stable over the year
- Cost reductions delivered in the second half to protect the financial performance of the business
· Consultant headcount up 1% year-on-year, but down 4% in the second half, reflecting our strategy to capitalise on growth markets whilst maximising Group profit
· Excellent cash performance, with 127% conversion of operating profit into operating cash flow(3)
· 5% growth in basic earnings per share(2) to 5.47p full year dividend down 57% to 2.50p, in line with the rebased level announced at the Interim results Commenting on these results Alistair Cox, Chief Executive, said: “Delivering profit growth above our net fee growth in the increasingly difficult markets we faced is a good result. We have focussed on getting the balance right between continued investment to grow our business and rapid action to control costs as many of our markets tightened throughout the year.
The strong performance of our International business is further clear evidence of the structural growth characteristics of markets such as Germany, Brazil, Canada and Japan. In addition, our performance illustrates the expertise of our teams around the world and their ability to respond to challenges whilst fully capitalising on opportunities in their specific markets.
Looking ahead to 2013 we expect the overall economic backdrop to remain difficult and our markets to continue to be multi-speed. Several markets are likely to remain very challenging, but these will sit side-by-side with clear opportunities for growth. Therefore we need to be both adaptable to the world as it changes and selective about areas for investment. Achieving the right balance of building scale for the long term, exploiting stronger market segments and reducing costs and driving productivity to maximise the bottom line in more difficult areas will be key to our success.”
(1) LFL (like-for-like) growth represents organic growth of continuing activities at constant currency.
(2) Continuing operations only, before exceptional items. 2011 profit numbers are presented before an exceptional credit of £4.1 million.
(3) Cash generated by operations excludes cash impact of exceptional items of £7.0 million (2011: £15.4 million) paid in the year.
(4) Based on earnings per share from continuing operations only, before exceptional items.
(5) The underlying temporary placement gross margin is calculated as temporary placement net fees divided by temporary placement gross
revenue and relates solely to temporary placements in which Hays generates net fees and specifically excludes transactions in which Hays
acts as agent on behalf of workers supplied by third party agencies.
(6) Consultants shown on a closing basis at 30 June 2012, and the change in consultants compares 30 June 2012 with 30 June 2011.