Source: Sharecast
In an update for the three months to the end of June, the company said group net fees declined 15%. Fees were down 17% in the UK and Ireland, 22% in Australia and New Zealand and 17% in Germany. Meanwhile, rest of world fees were 11% lower.
Hays also said that the June exit rate was down 18%, hit by "challenging" conditions in Germany and Australia, and the negative effects of elections in the UK and France.
Chief executive Dirk Hahn said: "Market conditions remained challenging in the quarter. Overall, we continued to see longer-than-normal 'time-to-hire', impacted by low levels of confidence. Given this backdrop, we have remained focused on driving consultant productivity and tight cost control, and we have delivered annualised savings of circa £60n during our FY24. Our proactive actions meant that average group consultant productivity increased by 3% in Q4.
"Given ongoing global uncertainties, in the near-term we expect our key markets will remain challenging. Looking ahead, we are focused on building a more resilient business, targeting the many long-term growth opportunities we see, and underpinned by our clear strategy and enhanced operational rigour. I know we can deliver substantial profit growth once our end markets recover, driven by our financial strength and strong teams of talented colleagues worldwide."
The company now expects FY24 pre-exceptional operating profit of around £105m.
Russ Mould, investment director at AJ Bell, said: "Like its counterpart PageGroup, which took a pummelling on a major profit warning earlier this week, Hays is also seeing signs of stress in the jobs market.
"Given recruiters are a leading indicator for wider economic conditions, as firms hire when they’re feeling confident and trim when they’re not, this reinforces the view that pressures on global growth are increasing and central banks have more scope to consider rate cuts.
"In Hays’ favour, the company appears to have made a better fist of getting ahead of these challenges than some peers and despite the material pressures on the top line, it expects annual profit to be within the consensus range, albeit right at the bottom of said range. The company also has a net cash position which will provide some reassurance to shareholders that it can ride out a volatile backdrop.
"The discipline implied by Hays’ ‘golden rule’ - profit growth should exceed fee growth, which in turn should exceed headcount growth - could be worth its weight in gold during a sticky period."
