Connecting to LinkedIn...

W1siziisijiwmtyvmtavmtgvmdgvmjivmzevmtuyl0fsaxn0ywlyienvecbiyxlzlmpwzyjdlfsiccisinrodw1iiiwimtawmhg0mdbcdtawm2uixv0

Net fees in UK and Ireland down 10% for Hays

Hays has released its quarterly update for the three months ended 30th September 2016.


In the first quarter ended 30th September 2016 net fees increased 17% on a headline basis and 3% on a like-for-like basis against the prior year, the company’s fourteenth consecutive quarter of year-on-year growth. The difference between actual and like-for-like growth was primarily the result of the significant appreciation of the Euro and the Australian Dollar against Sterling.


The impact of these material movements in foreign exchange rates means that if Hays retranslate the Group's FY16 operating profit of £181.0m at current exchange rates (AUD1.6015 and €1.1112 as at 14 October 2016), the actual reported result would increase by c.£35m to c.£216m.


The exit rate of Group net fee growth was in line with the quarter as a whole, with no significant differences by region.


In the second quarter, there are three less working days in Germany versus the prior year due primarily to the timing of public holidays. Hays expect this to have a c.4% negative impact on net fees in Germany, most notably in its temp and contractor business.


The temp business, which accounted for 58% of Group net fees in the quarter, increased by 5% and the underlying temp margin was broadly stable. Net fees in the perm business increased by 2%.


In the United Kingdom & Ireland, which represented 27% of the Group, net fees decreased 10%. Following a step-down in perm activity levels immediately after the EU Referendum, the UK perm business stabilised and then followed the normal seasonal pattern through the remainder of the quarter. Year-on-year, perm net fees were down 10%, as continued concerns about the economic outlook impacted client and candidate confidence. Its UK temp business was down 11% year-on-year primarily as a result of continued challenging conditions in public sector markets and construction & property.


Net fees in its sector business declined 12% and it remained tough through the quarter, particularly in the local government, healthcare and construction & property-focused markets.


All regions traded broadly in line with the overall UK business, with the exception of London, which was down 17%, and Scotland & Northern Ireland and the East of England, where net fees declined 2%. In Ireland Hays’ business delivered good net fee growth of 9%.


At a specialism level, our accountancy & finance and office support businesses were both down 4% and construction & property and IT were down 12% and 13% respectively. Our education business decreased 9%.


In Asia Pacific, which represented 24% of Group net fees, Hays delivered solid growth of 5%.


In Australia & New Zealand net fees were up 7%. Its perm business was up 5% and temp, which represented 65% of net fees in the quarter, was up 8%.


In Australia net fee growth accelerated to 8%, as Hays saw further improvement in private sector activity through the quarter, with net fees up 5%. Its largest regions of New South Wales and Victoria, which account for 58% of Australia net fees, were up 14% and 11% respectively and ACT (Canberra) delivered good growth of 8% driven by continued strength in its public sector business, which grew 14%. Conditions in Western Australia remained subdued, with net fees down 16%, but this business has now been stable for six months. Elsewhere, the group saw positive performances in Queensland and South Australia, which grew by 1% and 7% respectively. At the specialism level, all major specialisms grew, including construction & property, its largest business in Australia, which delivered strong growth of 13% and IT which grew 18%. Net fees in accountancy & finance increased 1% and sales & marketing was up 16%. In New Zealand net fees were flat.


In Asia, which accounted for 22% of the division, net fees decreased 4%. China delivered further strong growth of 12% and net fees in Malaysia grew 68%. Net fees in Japan were down 4% and Singapore declined by 33% largely due to continuing challenging conditions in the banking market.


Consultant headcount in the division was up 3% in the quarter and 2% year-on-year. Consultant headcount in Australia & New Zealand was up 3% in the quarter and 6% year-on-year, and in Asia was up 5% in the quarter but down 4% year-on-year.


In Continental Europe & RoW, its largest division, which represented 49% of Group net fees, Hays delivered strong, broad-based growth of 13% and, to date, we have seen no evidence of contagion into Europe following the outcome of the EU Referendum. Germany delivered strong 12% growth and an all-time record net fee performance, with its temp & contractor business up 11% and perm up 20%. Growth in its core IT & engineering business was 12% and within its newer specialisms accountancy & finance also delivered strong growth of 12%. 


The rest of EMEA delivered 15% growth, with 11 countries growing by over 10%, including Belgium and Poland. France, its second largest business in the division, delivered another excellent performance, with net fees up 22%. This was the eighth consecutive quarter of double digit growth and an all-time net fee record, driven by the continued strength of its IT and life sciences contractor businesses, as well as by an excellent performance in accountancy & finance, its largest specialism, up 24%. In southern Europe, whilst growth remained good overall, rates slowed versus challenging comparators, with Italy up 7% and Spain up 3%.


In the Americas net fees grew by 13%, with an excellent performance in Brazil, up 36% despite continued tough market conditions and it delivered excellent growth across the rest of our Latin America businesses. In North America the group delivered good growth, with the US up 8% and Canada up 7%.


Alistair Cox (pictured), chief executive, said, "We have started our new financial year well, with continued strength in our International businesses, including all-time records in Germany and France and an acceleration of growth in Australia. Our performance was again consistent and broad-based, as 28 of our 33 countries delivered year-on-year growth, 19 of which grew by over 10%. In the UK, following a step-down in Perm recruitment activity immediately after the Referendum, the business stabilised, and followed the normal seasonal pattern through the remainder of the quarter.


Looking ahead, Europe continues to deliver strong, broad-based growth and market conditions remain supportive in Australia and the Americas, where we continue to invest. In the UK we have a strong, market-leading and diverse business, led by a world-class management team who are highly experienced in managing through fast-changing and uncertain times. As ever, our focus remains on driving profitable growth in our business, capitalising on long-term opportunities, while maximising earnings and cash along the way."



Articles similar to Hays

Articles similar to results