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Hays delivers growth in three regions

“Looking ahead, we continue to see good levels of net fee growth, many clear opportunities remain and we currently expect to deliver strong operating profit growth for the full year, with second half operating profits slightly ahead of first half. Our focus remains on selectively increasing consultant capacity in the many areas where we see opportunities for growth. Simultaneously we will drive continual improvement in business productivity, allowing us to maximise this year's financial result, as well as deliver on our long-term profit and cash objectives."

“In the third quarter ended 31 March 2015 net fees increased 5% on a headline basis and 8% on a like-for-like basis against the prior year. The difference between actual and like-for-like net fee growth rates was primarily the result of a material depreciation of both the Euro and the Australian Dollar against Sterling.

“Taking into account year-to-date foreign exchange movements in the Group's key operating currencies, and applying spot rates as at 8 April 2015 through the remainder of our year, would reduce our FY14 operating profit result by c.&pound11 million.

“The exit rate of Group net fee growth was c.7%, with the Asia Pacific and Continental Europe & RoW rates broadly in line with the quarter as a whole, and the UK & Ireland at c.6%.

“Despite the material negative impact of currency moves described above and based on current activity levels around the business, we expect the Group's second half operating profit to be slightly ahead of the first half level of &pound81.5 million.

“The Temp business, which accounted for 59% of Group net fees in the quarter, increased by 6% and the underlying temp margin was broadly stable. The Perm business increased by 11%.

“Consultant headcount was up 3% in the quarter and up 11% year-on-year as we invested selectively across the Group where market conditions and outlook were supportive. These numbers exclude the impact of the Veredus acquisition in December 2014 which has added a further 147 consultants, or 3%, to the Group. Having invested in these increases, we expect consultant headcount to be broadly flat for the fourth quarter as we focus on integrating the newer consultants into the business.

“In Asia Pacific, which represented 22% of Group net fees, we delivered good growth of 9%.

“In Australia & New Zealand we delivered good growth of 7%, driven by excellent Perm growth of 17%. Temp, which represented 64% of net fees in the quarter, increased by 2%.

“In Australia we delivered good net fee growth of 8%, though performances were mixed across different states. Growth in New South Wales was excellent at 28%. Queensland and Victoria grew by 2% and 4% respectively, while Western Australia was down 22% as reduced activity in the resources & mining sector impacted trading across the state. The remaining smaller states delivered excellent growth.

“At the specialism level, construction & property, our largest business in Australia, delivered strong growth of 12%. Accountancy & finance increased by 5% and IT grew 4%, although resources & mining declined 34%. In New Zealand net fees declined by 4%.

“In Asia, which accounted for 23% of the division, net fees increased by 14%. In Japan, our largest business in Asia, we delivered a record monthly net fee performance in March and over the quarter net fees grew by an excellent 26%. Net fees in China grew by 17% and in Singapore fees declined 9%.

“Consultant headcount in the division was up 5% in the quarter and 15% year-on-year. Consultant headcount in Australia & New Zealand was up 3% in the quarter and 11% year-on-year, and in Asia was up 7% in the quarter and 23% year-on-year.

“In Continental Europe & RoW, our largest division which represented 42% of Group net fees, we delivered good growth of 8%. Net fee growth of 4% in Germany was solid, with growth in our core IT & engineering business also 4%. Germany Temp net fees increased by 3% as decision making in certain client segments continued to be impacted to an extent by uncertainty regarding the future regulations governing Temp and Contractor markets. Perm grew by 6% and within our newer specialisms Accountancy & finance delivered strong growth of 10%.

“In the rest of the division net fees grew by 12%. Within this, 12 countries delivered growth of 10% or more, including businesses such as Belgium, the Netherlands, Poland and Spain. France, our second largest business in the division, delivered another strong performance with net fees up 13% and broad-based growth across all regions and specialisms. In North America, Canada delivered growth of 1% and our business in the US, excluding the Veredus acquisition, increased net fees by an excellent 27%. The integration of the Veredus business into the Group continues to proceed well. Elsewhere, Brazil remained challenging, with net fees down 14%, whilst the rest of Latin America, particularly Mexico, continued to perform well.

“Consultant headcount in the division was up 2% in the quarter and 12% year-on-year, excluding the impact of the Veredus acquisition.

“In the United Kingdom & Ireland, which represented 36% of Group net fees, we delivered good 8% growth. After a strong start, growth slowed through the quarter as we overlapped tougher comparatives and the exit rate for the quarter was c.6%.

“Our Temp business delivered good growth of 6% and Perm delivered strong growth of 11%. Activity levels remained broad-based and we delivered strong performances in the North, Midlands, the East and London (ex-City), all of which grew by more than 10%, the City of London grew by 8%. Net fees in Ireland were down 11%.

“Growth continued to be strong in our technical specialisms as IT delivered excellent growth of 26% and construction & property grew by 10%. Accountancy & finance, our largest specialism, delivered good growth of 6% and Education, a predominantly public sector business, delivered strong growth of 11%.

“Our private sector business, which represented 69% of the division's net fees, delivered good growth of 8% and overall whilst market conditions remain good, we have seen more cautious decision making amongst certain client and candidate segments as we get closer to the upcoming General Election. To date, this has been most notable in the public sector, which grew by 8%.

“Consultant headcount in the division was up 4% in the quarter and 9% year-on-year.”

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