Hays surges on foreign growth despite UK slide

Rapid growth in its overseas business helped recruitment firm Hays post a 50 per cent rise in profits despite seeing its UK operation shrink as public sector contracts dried up.

The group’s operating profits for UK and Ireland fell 68 per cent to £3.6 million in the year to 30 June, but that was offset by “exceptional” net fees growth of 51 per cent in Asia and record growth in other overseas offices.

Overall, pre-tax profits before exceptional items rose 50 per cent in the period, to £106.6m.

UK and Ireland net fees were down 1 per cent, driven by a 35 per cent decrease in public sector work as austerity measures kicked in.

UK private sector business grew by 19 per cent, driven by hirings in accountancy, finance, construction and property, although Hays said the second half of the period saw tougher market conditions in banking and City-related businesses. However, the firm said it had won a number of key contracts, including with American Express and Siemens.

Chief executive Alistair Cox said: “The UK market has been tougher, particularly as recruitment activity in the public sector has dropped significantly over the year. The UK private sector grew strongly in the first half but growth slowed as the year progressed.”

Hays said it had taken action to reduce costs in the UK, including staffing levels, and it was focusing its resources on those areas offering the best growth opportunities.