Hays posts 7% jump in second quarter net fees

Recruitment group Hays reported a rise in second quarter net fees thanks to solid demand in Continental Europe.

The company, whose shares slumped on Tuesday following a downbeat update from peer Michael Page, said underlying net fees rose 7% in the quarter to the end of December.

This marked the 11th consecutive quarter of year-on-year growth as “excellent” growth of 16% in Continental Europe and Rest of World helped to offset just 1% growth in the UK and Ireland.

In the UK and Ireland, the public sector was down 2% as markets became tougher as the quarter progressed, while the private sector was up 3%.

Hays said the significant headcount investment it made earlier in 2015 drove a further acceleration of growth to 14% in Germany, its second-largest business, and elsewhere in Europe, with seven countries including France delivering record performances.

Chief executive Alistair Cox said: “As ever, activity levels at the start of the new year will be an important driver of the group's second half performance and, while we are mindful of the greater uncertainty our world faces today, we continue to see many opportunities to drive growth.

“Against this backdrop, our focus remains on continual improvement in business productivity and disciplined cost control in order to maximise the conversion of net fee growth into profit and cash.”

Hays said if the rates of exchange of its key operating currencies remained as at 11 January 2016 levels throughout the rest of the financial year, operating profit would reduce by around £9m versus full year 2015.

At 0902 GMT, Hays shares were up 2.2% to 123.90p.