Hays reports 45% drop in operating profit amid mixed results for international recruiters
By Dawn Gibson
Leading recruiter Hays has announced a £135 million operating profit in its preliminary results for the year ended June 30, down 45% from 2019, as a result of the severe impact of Covid-19 across its international markets.
The UK company, which has more than 10,000 employees in 33 countries, reported an 11% decline in group fees for the year. In the UK and Ireland, fees were down 14% and operating profit was down 66%.
However, there are signs of improving conditions in the latest figures. Fees remained stable from May to July, and Hays saw modest signs of improvement along with the re-opening of 80% of its offices.
Commenting on the results, chief executive Alistair Cox said: "The pandemic severely impacted all our markets globally. Our priority was protecting our colleagues and supporting our clients and candidates as they adjusted overnight to new realities.
“Overall, we have protected our business, while taking actions to appropriately reduce costs. Conditions in all regions were very tough, yet the business we have purposefully built showed its strength, with Temp outperforming Perm, relative resilience in technical sectors like IT & Life Sciences, and also growth in large Corporate Accounts.
"Although many uncertainties remain, group fees have been stable since May and we see modest signs of improvement in Perm.”
Chinese recruiters Renrui and Career International post positive results
Meanwhile, rising demand for flexible staffing solutions and tech innovations are helping big Chinese recruiters to weather the Covid-19 storm.
Renrui Human Resources Technology Holdings Limited reported revenue of approximately RMB1.2 billion, (£132 million) in its interim results for the six months ended June 30, a year-on-year increase of 11%. The company announced a net profit of approximately RMB53.02 million, in contrast to its loss of approximately RMB229 million for the first half of 2019.
Zhang Jianguo, co-founder, chairman and CEO to the board of Renrui, said, while the Chinese economy had been heavily hit by the epidemic outbreak, which had lead to a delay in recruitment, there was increased recognition of the value of flexible staffing services by the government, companies, job seekers and employees.
Career International also pointed to the increased role of flexible staffing in the Chinese market, coupled with its investment in tech research and data analytics platforms, as key factors behind revenue of RMB1,762 million (£191 million), up 5.2% year-on-year in the first half of 2020.
During the reporting period, Career International’s flexible staffing sector registered steady year-on-year growth of 9.1% to reach RMB1,394 million (£152 million), with 15,150 temps under management.
Revenue down at Japan’s Recruit Holdings
In its unaudited results for the three months ended June 30, Japanese company Recruit Holdings reported a 20% drop in consolidated revenue to 475.4 billion yen, adjusted EBITDA of 53.4 billion yen (-38.8%), and adjusted EPS of 17.49 yen (-47.5%).
The company attributed its 63% slump in operating income to decreased revenue and operating expenses, including non-recurring expenses associated with Covid-19 and a loss on the sale of a subsidiary.
In July, monthly revenue in HR Technology decreased approximately 7%, Media & Solutions by 26%, and staffing 10% on a year-on-year basis.
Revenue up at Australia’s Ashley Services Group
Meanwhile, Australian labour hire, recruitment and training company Ashley Services Group announced revenue of AUD $336.8 million (£185.7 million), up by $49.3 million (£27.2 million), for the Australian financial year ending July 5.
The company’s statutory after-tax profit from continuing operations was $5.1 million (£2.8 million), a decline of 6.5% on the previous financial year. The company reported a 6.8% increase in EBITDA to $9.7 million (£5.3 million) and record operating cash inflow of $14.1 million (£7.8 millon), up from $4.8 million (£2.6 million), a result which, with stable operating results, persuaded the board to move to twice yearly dividend payments.