Hays net fees slump on 'challenging' permanent recruitment

Hays PLC on Wednesday reported a decline in second quarter net fees, as jobs market pressure continued, with permanent recruitment bearing the brunt.

The London-based staffing provider said net fees shrunk 9% on-year in the second quarter ended December 31. On a like-for-like basis, it fell 10%.

Net fees in the Permanent segment slumped 14% both on a reported and like-for-like basis. In Temp & Contracting, it declined 6%, or 8% like-for-like.

‘Temp & Contracting volumes remain solid but the modest decline in average hours worked in Germany through the summer accelerated further during Q2 due to public sector and Enterprise client cost control. Perm remains challenging with longer time to hire,’ Hays said.

Hays expects pre-exceptional operating profit for the first half of around £20 million, in line with consensus. It would represent a decline from £25.5 million a year prior.

Consultant headcount was 1% lower on-quarter and down 15% on-year.

Hays said: ‘We were pleased once again with our net fee productivity through Q2 and believe our group consultant headcount capacity is appropriate for current market conditions and therefore expect it to remain broadly stable in Q3 as we balance focused investment in high performing and potential business lines with improving productivity in more challenging areas.’

The firm said it is on track to deliver annual cost savings of roughly £80 million by the end of financial 2029. This includes £35 million delivered In the last financial year. It said £15 million of annualised savings were already secured in the first half. It expects to book a £10 million exceptional charge for the half-year.

Chief Executive Officer Dirk Hahn said: ‘With our continued actions to reposition the business, I remain confident that we will benefit materially when markets recover.’

Hays shares were down 1.6% to 50.13 pence each in London on Wednesday morning. Shares have declined around 31% over the past 12 months.

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