HAYS Delivered Resilient Financial Results for its Fiscal 2023 Fourth Quarter

July 13, 2023 — HAYS, a leading global recruitment firm, announced financial results for the fourth quarter ended June 30, 2023.

Commenting on the Group’s performance, Alistair Cox, Chief Executive, said: “We delivered a resilient Q4 performance against a tougher market backdrop, and we expect FY23 operating profit will be in line with market expectations. Growth was again driven by Temp & Contracting, our largest business and key strategic focus, where volumes were stable overall, however Perm hiring processes continued to lengthen. Germany performed strongly, EMEA produced good fee growth and we also grew fees with our Enterprise clients globally, as we leveraged our network and capabilities to deepen customer relationships.”

Q4 Trading Overview

Group fees declined by 2% year-on-year on a like-for-like basis, versus a strong prior year growth comparative, and reflecting tougher market conditions, particularly in Perm. On an actual basis, net fees also decreased by 2%, with minimal net impact of currency year-on-year. The company’s fee growth exit rate was in line with the rate of growth in the quarter, and six RoW countries delivered record fee performances.

Temp and Contracting (58% of Group fees) delivered solid growth of 4%, driven by the company’s actions to increase fee margins and its focus on higher value markets, together with the positive effects of wage inflation. Temp volumes were sequentially stable through the quarter, although decreased by 4% year-on-year, with growth in Germany and EMEA offset by continued decreases in ANZ and UK&I. Fees in Perm (42% of Group fees) decreased by 9%, driven by volumes down 19% as job flows decreased and hiring processes extended. This was partially offset by growth in the company’s average Perm fee, up 10%. Fees in the Private sector (84% of Group fees) decreased by 4%, with the Public sector up 6%.

Hays continued to deliver on its long-term strategy to position its businesses in the most attractive structural growth sectors. Fees in its largest global specialism of Technology (25% of Group) declined by 3% versus a record prior year performance, with Temp outperforming Perm. Hays’s second largest, Accountancy & Finance, increased by 2% with a stronger performance in its Senior Finance practice. Engineering, Hays’s third largest specialism, produced a fee record and grew by an excellent 15%, although Construction & Property was tougher, down 10%. Direct outsourcing fees in Enterprise clients also produced a fee record, up 2%, and Hays continues to have a good pipeline of opportunities.

During the quarter, Hays purchased a majority stake in Vercida Consulting, a UK-based Diversity, Equity and Inclusion consulting business which provides organizations with advisory services to improve their ability to attract, retain and progress talent from diverse backgrounds. Its initial investment was c.£1 million, with further amounts payable based on achieving our ambitious growth plans.

Highlights

Resilient performance, with Group fees down 2%. Solid growth in Temp, up 4% with volumes sequentially stable through the quarter. Perm down 9%, with reduced client and candidate confidence. Fees continued to be supported by positive margins, mix and wage inflation.

Despite tougher market conditions, FY23 operating profit is expected to be in line with market consensus expectations of c.£196 million.

Germany: strong performance with fees up 11%, or 13% on a working day-adjusted basis. Temp & Contracting up 12%, driven by volume growth and positive pricing. Record performance in Perm, up 10%.

UK & Ireland (UK&I): fees down 7%. Temp fees were flat, however conditions were tougher in Perm, down 15% as activity levels slowed.

Australia & New Zealand (ANZ): fees down 15%. Temp down 9% with reduced activity in the Public sector. Continued tough conditions in Perm, down 22%

Rest of World: fees down 4%, despite a good performance in EMEA ex-Germany, up 5%. Asia decreased by 8%, with China again challenging. The Americas was also tough, down 21%.

Consultant headcount decreased by 3% in the quarter and by 5% YoY, as Hays focused on driving productivity which remained at good levels overall, despite more difficult markets.

Strong cash generation drove year-end net cash of c.£135 million (31 March 2023: c.£80 million), in line with its expectations and after purchasing £6 million in shares in Q4, completing our £93 million buyback programme.

Cash Flow, Balance Sheet and Dividends

Strong cash generation drove year-end net cash of c.£135 million (31 March 2023: c.£80 million), in line with the company’s expectations and after purchasing c.£6 million under its share buyback programme in Q4, which completed our initial £93 million share buyback programme.

About HAYS

Hays is a leading global recruitment firm with a 21-year track record operating in recruitment business. Today it is recognized as one of the leaders in technology and construction recruitment. Its purpose is to benefit society by investing in lifelong partnerships that empower people and organizations to succeed, creating opportunities and improving lives.

SOURCE HAYS