Hays shows strong growth in UK
31 March 2014
10 April 2014
Growth in net fees for the quarter ended 31 March 2014 (Q3 FY14)
(versus the same period last year)
Continental Europe & Rest of World
United Kingdom & Ireland
Other highlights include:
· Asia Pacific net fees decreased by 4%(1). Australia net fees decreased by 12%(1) but we saw broad-based stability in activity levels in the quarter. Asia delivered continued excellent growth of 25%(1)
· Group consultant headcount was up 1% during the quarter and increased by 2% year-on-year
· We expect full year operating profit to be towards the top of the current range of market estimates, which we understand to be £141 million(2), based on a good start to the second half overall and strong performances in key markets such as the UK and Germany
Commenting on the Group's performance, Alistair Cox, Chief Executive, said: "This has been another good quarter of growth for the Group as we continued to capitalise on improving conditions in many of our key markets, leading to an increase in our expectations for full year profits. In the UK & Ireland we delivered the strongest rate of quarterly net fee growth for six years including excellent Perm growth of 25%(1) as candidate confidence improved significantly. Elsewhere around the world we saw continued recovery in many European, Asian and American markets and seven of our businesses delivered record monthly net fees, including key businesses such as Germany, Canada and Japan.
Looking ahead we are confident that the improvements we have seen in our key markets will continue, presenting further growth opportunities for the Group. We also see clear signs that conditions in Australia have stabilised. We will continue to invest to capture these opportunities and maintain our focus on driving productivity to deliver on our long-term profit and cash objectives."
In the third quarter ended 31 March 2014 net fees increased 1% on a headline basis and 8% on a like-for-like basis(1) against the prior year. The difference between the actual growth and like-for-like growth rates was primarily the result of a material depreciation in the rate of exchange between the Australian Dollar and Sterling. The timing of Easter generated a c.1% benefit to the Group's year-on-year net fee growth rate in the quarter, which will reverse in Q4. Net fees in the Temp business, which accounted for 60% of Group net fees in the quarter, increased by 8%(1), and the underlying temp margin(3) was broadly stable. Net fees in the Perm business, which is not affected by the timing of Easter, increased by 9%(1).
The exit rate of overall Group net fee growth was broadly in line with the quarter as a whole.
Consultant headcount was up 1% in the quarter and increased by 2% year-on-year.
We expect full year operating profit to be towards the top of the current range of market estimates, which we understand to be £141 million(2), based on a good start to the second half overall and strong performances in key markets such as the UK and Germany.
In Asia Pacific, which represented 22% of Group net fees, net fees decreased by 4%(1).
In Australia & New Zealand, net fees decreased by 10%(1) but we saw broad-based stability in activity levels through the quarter. Temp net fees, which represented 67% of net fees in the quarter, decreased by 6%(1) but have now been sequentially stable for nine months. Perm net fees decreased by 17%(1) as candidate confidence remained subdued. At a state level, New South Wales and Victoria, which together accounted for 50% of our Australian business, saw net fees decrease by 7%(1), and in Western Australia and Queensland, which together accounted for 32% of our Australian business, net fees decreased by 16%(1). In New Zealand, we saw strong net fee growth of 10%(1).
In Asia, which accounted for 21% of the division, net fees increased by 25%(1) and we saw strong momentum through the quarter. Hong Kong, Malaysia, Singapore and China all delivered excellent net fee growth of over 30%(1). Japan, our largest business in Asia, delivered good net fee growth of 8%(1) and had a record monthly net fee performance during the quarter.
Consultant headcount in the division was up 3% in the quarter but down 1% year-on-year. In Australia & New Zealand, consultant headcount was up 3% in the quarter but down 7% year-on-year. In Asia, consultant headcount was up 4% in the quarter and up 17% year-on-year.
Continental Europe & Rest of World ('RoW')
In Continental Europe & RoW, our largest division which represented 43% of Group net fees, we delivered strong net fee growth of 11%(1). In Germany, growth accelerated to 12%(1), driven by good growth of 9%(1) in our core IT & Engineering business and continued strong growth in our newer specialisms such as Accountancy & Finance, Construction & Property and Life Sciences, which all grew by more than 10%(1). Overall Temp net fees were up 14%(1) and Perm net fees increased by 2%(1).
Net fees increased by 10%(1) in the rest of the division, which is primarily a Perm business. Within this, 14 countries delivered net fee growth of 10%(1) or more including key businesses such as Belgium, which grew by 19%(1) Spain where growth was 18%(1) and Switzerland which grew by 18%(1). In France, which is our second largest business in the division, net fees were up by 7%(1).
Consultant headcount in the division was down 1% in the quarter and year-on-year.
United Kingdom & Ireland
In the United Kingdom & Ireland, we delivered strong net fee growth of 14%(1), the strongest quarterly growth for six years. Our Temp business delivered good growth of 8%(1) and our Perm business delivered excellent growth of 25%(1) as we saw a significant improvement in candidate confidence. Activity levels were strong and broad-based as all regions delivered year-on-year net fee growth. We saw particularly strong performances from the East of England, the North, the North West and the Midlands, all of which grew by more than 20%(1). Our London business, excluding City-related, also saw strong growth. Ireland again performed well and delivered excellent net fee growth of 45%(1).
In our private sector business, net fees increased by 12%(1). Overall market conditions saw further improvement, with Construction & Property, IT and Office Support all delivering excellent growth. Net fees in our largest specialism of Accountancy & Finance grew by 21%(1) within which our Senior Finance business grew by 24%(1). Our public sector business again delivered strong net fee growth of 19%(1), driven primarily by a strong performances in our Education and Healthcare businesses.
Consultant headcount in the division was up 2% in the quarter and up 8% year-on-year.