Hays Earnings Rise 12% as U.S. Business StrengthensJessica Morris
Hays Plc’s earnings jumped 12 percent as the U.K’s largest professional-recruitment agency took more fees in countries from the U.K. and Germany to North America.
Full-year pretax profit rose to 132.3 million pounds ($219 million), the London-based company said in a statement today. That was in line with analysts’ average estimate, according to data compiled by Bloomberg.
“Our U.S. business was up by almost 100 percent last year,” Finance Director Paul Venables said in a telephone interview. In the U.S. “we’ve increased our own headcount by 25 percent and we expect strong growth.”
Growth in net fees was strong in the U.K. and Ireland, climbing 11 percent to 246 million pounds, helped by business in the construction, finance and information technology sectors, Hays said. The company also continues to see good year-on-year growth in Germany.
The stock climbed 0.9 percent to 130.5 pence at 3.38 p.m. in London, taking the advance to 0.5 percent this year and giving the company a market value of about 1.8 billion pounds.
Sales were little changed at 3.68 billion pounds, increasing by 3 percent on a like-for-like basis at constant currency. Total net fees rose about 1 percent to 724.9 million pounds, held back by a 13 percent drop in Australia on a like-for-like basis.
In Australia “the worst of it is behind us,” Venables said. “We’ve got by far the biggest recruitment business in Australia, we’re a dominant player there, and we expect to return to growth this year.”
In Germany and France, net fees increased by 8 percent and 5 percent respectively on a like-for-like basis.
With “economic conditions as they are in Germany at the moment, we will still continue to grow,” Venables said. “Even in places like France, which is clearly a tough economy and it’s still on the verge of a recession, our business grew by 5 percent last year.”
Last quarter, Germany’s economy shrank for the first time since 2013, the Federal Statistics Office in Wiesbaden said this month. While the country’s weakness was largely due to a warm winter that shifted production to earlier months, the outlook is now clouded by Russia’s territorial dispute with Ukraine. In France, gross domestic product stagnated during this period, according to national statistics office Insee.
Overall Europe is “still positive,” Venables said. “I think the backdrop for that is a sign of how bad things were three or four years ago.”
The euro-zone economy failed to grow in the second quarter, compared with a 0.2 percent increase in the first three months of the year, the EU statistics office Eurostat said this month.