Hays Climbs Most in 3 Months on Signs Fee Outlook Is ImprovingAlex Pashley
Hays Plc, the U.K’s largest professional-recruitment agency, rose the most in three months amid signs that the outlook for fee income is improving.
The shares gained as much as 5.8 percent, the most on an intraday basis since April 11, before trading 4.6 percent higher at 99.40 pence at 11:40 a.m. in London.
In the three months ended June 30 net fees increased 1 percent on a like-for-like basis from a year earlier, the London-based company said today in a statement. In Asia Pacific net fees fell by 13 percent on a decline in Australia, while in Asia they increased by 20 percent. In Continental Europe and the rest of the world, net fees rose 9 percent and in the U.K. and Ireland they grew 7 percent.
“The statement looks positive as net fees rose by 1 percent compared to company provided consensus of a 2 percent decline,” wrote Robert Plant, an equity analyst at JPMorgan Cazenove, in a note to clients. The performance in the U.K. and Ireland was the “main positive swing factor.”
The company said it now expects full-year operating profit to be at the top end of analysts current estimates, which range from 112.3 million pounds ($170 million) to 125.5 million pounds. The stock has 11 buys, 11 holds and 1 sell, according to data compiled by Bloomberg.
U.K. jobless claims fell more than economists forecast in May and a wider measure of unemployment also declined, providing further evidence that an economic recovery is under way. Jobless claims declined 8,600 from April to 1.51 million, leaving the rate at a 2 1/2-year low of 4.5 percent, the Office for National Statistics said last month.
Still, a slump in the euro area, Britain’s biggest export market, and government austerity at home continue to weigh on the U.K. economy. Continental Europe and the rest of the world is the largest division for Hays, representing 40 percent of total net fees.
“Looking ahead, we expect continued fragile and mixed conditions,” Chief Executive Officer Alistair Cox said in the statement. “Several markets are likely to remain challenging and these will sit alongside clear opportunities for growth.”