Hays hails growth as international business makes up for weak UK performance
Results were driven by a 16% rise in its Asia-Pacific operations and a 17% increase for continental Europe and the rest of the world.
Recruitment firm Hays has reported double-digit growth in the second quarter as its international business made up for weak performance from its British operations where public sector hiring took a hit.
The group reported a 13% rise in like-for-like net fees in the three months to December 31, with results driven by a 16% rise in its Asia-Pacific operations and a 17% increase for continental Europe and the rest of the world.
It helped offset the mere 1% increase in like-for-like net fees from the UK and Ireland.
While Hays said the region’s private sector business grew “modestly” at 4%, public sector net fees fell 8% as “markets remained tough”.
The UK’s public sector decline hit net fees from the IT and education sector, which suffered a 5% and 6% decline, respectively.
Hayes said its largest UK sector, accountancy and finance, saw net fees rise 1%, while construction and property grew 4%, and office support increased 8%.
Most UK regions traded “broadly in line” with the UK business as a whole, though the South West and Wales each grew 8%, while the Midlands dropped 7%.
London, meanwhile, saw net fee growth of just 1% year-on-year.
The results dragged on what might have been an otherwise strong performance by Ireland, which saw net fees rise 11% in the quarter.
International performance was Hays’ saving grace, with France, Germany, Asia and Australia all reporting double-digit growth.
Overall, chief executive Alistair Cox said the group had “delivered another strong quarter.”
“Whilst activity levels at the start of the New Year will be an important driver of the Group’s second half performance, we continue to see strong trading conditions in the vast majority of our international markets.
“Our diverse and balanced global business, together with our highly-experienced management teams and our strong balance sheet means we are well positioned to capitalise on the many clear growth opportunities we currently see in most of our markets, while maximising earnings and cash along the way.”
Investors were optimistic on the back of the trading update, sending Hays shares up 3.6% or 6.8p at 195.1p in morning trading.
In a note led by analyst Rahim Karim, Liberum said further growth was likely ahead for Hays.
“With a positive outlook for a number of the group’s key regions, including Europe and Australia, we believe that the risks to underlying expectations lie to the upside.
“As a result we see the group as well positioned to deliver double-digit earnings growth in FY18.”