Connecting to LinkedIn...

W1siziisijiwmtgvmtavmtevmdgvndkvmjevmjexl0fsaxn0ywlyienvecbiyxlzlmpwzyjdlfsiccisinrodw1iiiwimtawmhg0mdbcdtawm2uixv0

UK&I net fees up 3% in Q1 2019 for Hays

Hays has released its results for the first quarter of 2019, ended 30th September 2018.


In the first quarter, ended 30th September 2018, Group net fees increased 7% on a headline basis and 9% on a like-for-like basis versus the prior year. This represented the company’s 22nd consecutive quarter of year-on-year growth. The relative strength of sterling against the Australian dollar and the Euro reduced its reported net fee growth.


The temp business, which represented 57% of Group net fees, grew 8% in the quarter. Net fees in its perm business, which accounted for 43% of Group net fees, grew strongly, up 11%. There were no working day impacts year-on-year in the quarter.


The Group net fee growth exit rate was below that of the quarter as a whole at 7%. The reduction, which was driven by Europe including its largest market of Germany, was in part due to increasingly tough growth comparatives versus the prior year, and a growth rate in Europe in September of 7%.


Exchange rate movements remain a material sensitivity to the Group's reported profitability. If the company re-translates FY18 profits of £243.4m at 9th October 2018 exchange rates (AUD1.8510 and €1.1442), it currently estimates a negative c.£5m operating profit currency headwind for FY19. This represents a negative c.£8m reversal from the position at its preliminary results on 30th August 2018. Hays says it has a good net cash position of c.£80m, in line with its expectations (30th September 2017: c.£60m; 30th June 2018: £122.9m).


 Net cash was c.£80m as at 30th September 2018 (30th September 2017: c.£60m; 30th June 2018: £122.9m). The decrease in the quarter was in-line with our expectations and is due to the normal timing and phasing of cash flows.


Alistair Cox (pictured), chief executive, said, "We have made a good start to our financial year, delivering another record quarterly net fee performance. Against increasingly tough comparatives, net fees in our International businesses grew by 11%, including 10 all-time records. Germany and RoW continued to perform strongly, Australia delivered its 17th consecutive quarter of growth and, despite ongoing economic uncertainties, our UK business continued to grow modestly.


“Looking ahead, while we are mindful of macroeconomic conditions, the outlook remains positive across our International markets. We are continuing to invest in our key structural growth markets, notably Germany, France, the USA and Asia to capitalise on the many opportunities we currently see. We remain focused on driving profitable, cash-generative growth and leveraging our platform, which is the largest and most balanced in our industry. This means we can look to the future with confidence."


Growth in the United Kingdom & Ireland (UK&I) was 3%, led by its public sector business up 8%. This was in part due to easier comparatives following the negative impact of IR35 changes in the public sector, implemented in April 2017 and which had a negative impact on Q1 FY18. Conditions remained broadly stable in private sector markets, which represented 74% of UK&I net fees and grew by 1%.


The company’s temp business delivered good growth, up 7%. Growth in public sector temp was strong, up 15%, with the private sector up 4%. Net fees in perm were down 2% in the quarter.


All regions traded broadly in line with the overall UK business, with the exception of Northern Ireland and the South West & Wales, up 15% and 12% respectively, and the South East and the Midlands, down 7% and 5% respectively. Hays’ largest UK region of London grew by 5%. In Ireland, the business delivered another strong performance, with net fees up 12%.


At the specialism level, IT delivered strong growth in net fees, up 14%. Construction & property grew by 7%, with office support up 5% and accountancy & finance up 1%. Education continues to be impacted by tough market conditions, falling 12%.


Australia & New Zealand (ANZ) delivered another good quarter with net fees up 7%, despite tough comparatives. This represented its 17th consecutive quarter of growth, and Q1 FY19 was also its strongest net fee quarter since 2008. Growth in the temp business, which represents 67% of its ANZ net fees, was strong at 10%, while growth in the perm business was 1%. Private sector net fees, which represent 67% of ANZ, grew by 7%, with public sector net fees up 5%.


Australia delivered another good quarter of net fee growth, up 9%. Market conditions remained favourable, and growth was broad-based across most States and specialisms. Hays’ largest regions of New South Wales and Victoria, representing 58% of Australia net fees, were up by 9% and 11% respectively. Queensland grew by 11%, with South Australia strong at 18%. ACT grew by 5%.


At the Australia specialism level, net fee growth in IT was up 26%. Office support grew by 12%, and sales & marketing delivered an excellent 20% growth. Net fees in construction & property, its largest business in Australia, declined by 1%, and accountancy & finance declined by 3%.


New Zealand trading (which represents c.4% of ANZ net fees) remained tough, and net fees fell 29%.


Hays’ largest market of Germany delivered another record net fee quarter, with strong growth of 13%, against increasingly tough comparatives. The temp & contracting business, which together represented 83% of Germany net fees, grew by 10%. Contracting, which represented 56% of Germany net fees, grew 8% and temp, 27% of net fees, delivered strong growth of 14%. Growth in perm was 29%.


The company’s largest specialisms of IT and engineering grew by 8% and 9% respectively. Growth in accountancy & finance was again excellent at 27%, with sales & marketing up 18%. Construction & property grew by 9%, and legal by 69%.


Hays’ Rest of World division, encompassing 28 countries, delivered strong net fee growth of 14%. 15 countries grew more than 10%, including nine all-time quarterly records.


Europe-ex Germany produced good growth of 9%, despite increasingly tough year-on-year comparatives. France, its largest RoW market, grew by 8% while Spain delivered another strong quarter, up 16%. Belgium, its fourth largest RoW country by net fees, grew 3%.


Asia delivered an excellent performance overall, with net fees up 20%. China, Hays’ third largest RoW country, grew by 29%, including Hong Kong net fees up 41%. Japan's growth of 19% was also strong.


Net fee growth in the Americas was excellent, up 22%. The USA, its second largest RoW country by net fees, delivered another excellent quarter, growing by 27%. Growth in Canada was also an excellent 27%, while Brazil net fees fell 3%. Mexico remains a tough market, with net fees down 7%.



Tags: Hays Q1 2019

Articles similar to Hays

Articles similar to Q1 2019