Hays Q1 net fee income rises but UK hit by Brexit vote

FTSE 250 recruiter Hays reported growth in net fee income for the first quarter as a strong performance in Asia Pacific and Continental Europe & Rest of world offset declines in the UK and Ireland market.

In the quarter to the end of September, total net fee income was up 17% on the year on a headline basis and 3% on a like-for-like basis. The company said the difference between actual and LFL growth was the result of the weakening of the pound versus the euro and the Australian dollar.

RBC Capital Markets said net fee growth of 3% was slightly ahead of its forecast of 2.3% and consensus of 2%.

Net fee income in Asia Pacific was up 5% on a LFL basis thanks to strong public sector activity and an acceleration in private sector growth.

In Continental Europe & Rest of world, net fee income was up 13%, but the UK and Ireland saw a 10% decline as the company saw a step-down in permanent recruitment activity in the aftermath of the Brexit vote.

Chief executive Alistair Cox said: “We have started our new financial year well, with continued strength in our International businesses, including all-time records in Germany and France and an acceleration of growth in Australia. Our performance was again consistent and broad-based, as 28 of our 33 countries delivered year-on-year growth, 19 of which grew by over 10%).

“In the UK, following a step-down in Perm recruitment activity immediately after the referendum, the business stabilised, and followed the normal seasonal pattern through the remainder of the quarter. Looking ahead, Europe continues to deliver strong, broad-based growth and market conditions remain supportive in Australia and the Americas, where we continue to invest.”

At 0910 BST Hays shares were up 2.4% at 138.70p.