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Hays plc Resilient Performance Delivered Through Selective Investment

Hays plc Resilient Performance Delivered Through Selective Investment

Hays has published its half year report for the six months ended 31st December 2012.

Six months ended 31 December                                          Actual    LFL(1)

(In &pound's million)                                    2012      2011    growth    growth                                                                                     

Net fees                                           360.3     373.8      (4)%      (1)%

Operating profit from continuing operations         60.3      63.1      (4)%      (2)%

Cash generated by operations(3)                     49.2      60.1     (18)%         

Profit before tax                                   56.7      60.3      (6)%         

Basic earnings per share(4)                        2.43p     2.76p     (12)%         

Dividend per share                                 0.83p     0.83p        0%         

All numbers are from continuing operations only.


&middot Solid Group results in the context of more fragile and fast-changing conditions in several key markets

&middot Resilient profit performance due to our selective investment approach and strong  cost control

&middot UK returned to profit through successful delivery of significant cost reduction programme

&middot Strong performance in Continental Europe & Rest of World, net fees increased 14%(1)

  markets mixed

 - Germany up 19%(1), Canada up 36%(1) Russia up 37%(1) but 7 countries saw net fees decrease

&middot Asia Pacific net fees decreased 11%(1) markets overall more challenging

- Australia down 13%(1)  including a step-down in Resources & Mining activity in Q2

- Asia down 6%(1) with markets tough but broadly stable

&middot UK & Ireland net fees decreased 6%(1) markets remained challenging but sequentially  stable overall in H1

- Private sector net fees down 12%(1) Public sector up 15%(1)  due to increased  perm job churn

&middot Consultant headcount down 3% year-on-year, up 1% in the last six months

&middot Solid cash performance, with 82% conversion of operating profit into operating cash flow(3)

&middot 12% decrease in EPS(4) reflecting the Group's higher net finance charge and effective tax rate

Commenting on these results Alistair Cox, Chief Executive, said: "I am pleased we have delivered such a resilient profit performance considering the fragile and rapidly changing environment we faced in the half. We have returned the UK business to profit, continued to invest for growth where markets are good such as in Germany or Canada, and taken rapid action to reduce costs in markets which deteriorated in the half such as Australia or France.

What sets us apart in today's more volatile market is the scale and strength of the business model we have built. Our business is well balanced across temp and perm recruiting, has market leadership positions in both structural-growth and more mature markets, and has a sectoral diversity which is unrivalled in our industry. All of this is underpinned by our unique technology systems which not only help us improve our own productivity and efficiency but also allow us to capitalise on new evolutions in the market such as social media platforms.

Looking ahead we expect overall conditions to remain fragile, but we have seen an encouraging return to work in our key temp and contractor businesses. Several markets are likely to remain challenging, but these will sit side by side with clear opportunities for growth. To be successful in this environment, we will continue to react quickly to the world as it changes, investing in stronger markets while reducing costs in tougher areas. Our focus is on long-term growth while driving profits along the way."

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

(2) 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.

 (3) Before exceptional items and excludes exceptional cash cost.

(4) Earnings per share from continuing operations only before exceptional items.


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