Recruitment giant makes hay despite election woes

Hays' activities span more than 30 countries

The group, whose activities span more than 30 countries, said UK like-for-like revenues rose 8 per cent in the quarter to end–March despite being up against strong comparatives a year ago.

However, the company said that although recruitment conditions remained generally good “we have seen more cautious decision–making amongst certain client and candidate segments as we get closer to the upcoming general election”.

Hays, which employs about 8,750 staff of its own, said this caution, ahead of what is seen as one of the most uncertain general elections in terms of outcome since 1974, was “most notable in the public sector”. Despite this, it added that revenues in the public sector also grew 8 per cent.

The overall group revenue growth came in 1 per cent below a consensus City expectation of 9 per cent.

In the UK the main growth areas were the north of England, the English Midlands, the east of the country and London, all of which grew fees by more than 10 per cent.

However, Hays said that after a strong start in the UK and Ireland growth slowed through the quarter as the tougher comparatives kicked in. The UK and Ireland contributes more than a third of group fees.

The company said that IT jobs jumped 26 per cent in the period, construction and property were up 10 per cent, while  its largest specialism – accounting and finance – climbed 6 per cent.

The international arm also did well, with more than 15 countries growing 10 per cent or more, including the crucial French, Chinese, Japanese and American markets, as well as Belgium, Holland, Poland and Spain.

German net fee growth was “solid” at 4 per cent, while a standout performer was the US, where underlying net fees leapt an “excellent” 27 per cent.

Alistair Cox, group chief executive, said: “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.”

The firm added that temporary positions, accounting for just under 60 per cent of net fees, lifted 6 per cent, while permanent staff positions rose 11 per cent.

Brokers at Jefferies said that the cautious tone of the update in terms of electoral factors ahead of the general election meant it was downgrading the firm’s 2015 full-year targets.

Jefferies now expects annual pre-tax profit at Hays will be 1 per cent lower at £155.6 million.