QUARTER ENDED 30 JUNE 2012
11 July 2012
Growth in net fees for the quarter ended 30 June 2012 (Q4) Growth
(versus the same period last year) Actual LFL*
Asia Pacific 0% 1%
Continental Europe & Rest of World 5% 14%
United Kingdom & Ireland (10)% (9)%
Total (1)% 2%
Temporary 5% 8%
Permanent (8)% (5)%
Total (1)% 2%
* LFL (like-for-like) growth represents organic growth at constant currency.
• Solid Group net fee growth of 2%* versus prior year
• International business delivered good growth of 8%*; representing 71% of net fees
in the quarter
• Strong growth of 14%* in Continental Europe & Rest of World, driven by continued
excellent performance in Germany which grew by 25%*
• Growth of 1%* in Asia Pacific, with 2%* growth in Australia & New Zealand. Net
fees decreased by 8%* in the rest of Asia
• Net fees decreased 9% in the UK & Ireland. Private sector net fees declined 14%,
public sector net fees increased by 6%
• Resilient profit performance in the second half as a result of continued focus
on cost control
• Net debt decreased to c.£135m, due to strong working capital management
• Consultant headcount was flat in the quarter, and ended June up 2% year-on-year
Commenting on the Group's performance in the fourth quarter, Alistair Cox, Chief
"Trading conditions in many markets became increasingly challenging through the
quarter as concern about the global economy reduced confidence amongst our clients
and candidates, particularly in the permanent recruitment markets. In that context,
I am pleased that we delivered solid growth in Group net fees, driven by growth of 8%*
in our International business, where 13 countries grew by more than 10%*, including
our market-leading German business. The UK remained very difficult, particularly
in the Banking and City-related specialisms.
Looking ahead, I expect overall conditions to remain challenging but growth
opportunities do still exist. We've deliberately built a business which is well
diversified by country and specialism and has a healthy balance of temp, interim
and permanent revenues. Each of these markets is different, and we will continue
to react quickly to changing conditions in each, investing selectively where we
see growth and defending profitability and cashflow where markets are more difficult."
In the quarter ended 30 June 2012, Hays, the leading global professional recruitment
group, increased net fees by 2% on a like-for-like basis* against prior year
(net fees declined by 1% on a headline basis). Net fees in the temporary placement
business, which accounts for 57% of Group net fees, grew by 8%*. Net fees in the
permanent placement business declined by 5%*, as heightened macro-economic concern
further impacted confidence amongst the Group's candidates and clients, most notably
in our Banking related specialisms around the world.
The exit rate for the quarter was flat* on the same period last year, as market
conditions became increasingly challenging as the quarter progressed.
The Group's underlying temporary placement margin** remained broadly stable and in
line with the previous quarter.
The Group's consultant headcount was flat during the quarter, and ended June up
2% year-on-year. We remain selective regarding areas of investment around the Group,
responding to opportunities which exist whilst at the same time defending Group
As a result of this selective investment approach, and continued focus on tight
cost control, the profitability of the Group in the second half of the financial
year has been resilient.
In Asia Pacific, which represents c.30% of Group net fees, we recorded net fee
growth of 1%*. In our market-leading Australia & New Zealand business, we recorded
net fee growth of 2%*, within which our temporary placement business performed well,
increasing by 13%*, but our permanent placement business declined by 12%*. We saw
further strong growth in Western Australia driven by Resources & Mining and associated
support specialisms, but this was largely offset by increasingly tough market conditions
in New South Wales and Victoria, particularly in our permanent placement businesses
where net fees declined.
In Asia, which accounted for 14% of the division, net fees declined by 8%*. In Japan,
we saw solid growth of 12%*. Elsewhere in the division, market conditions remained
difficult throughout the quarter, particularly in Hong Kong and Singapore which have
a significant weighting towards Banking and Financial Services.
Consultant headcount in the Asia Pacific division was down 1% in the quarter, and
ended June up 5% year-on-year. We opened Malaysia, our 7th Asia Pacific country
of operation, in June.
Continental Europe & Rest of World ('RoW')
In Continental Europe & RoW, our largest division, which represents circa 40% of
Group net fees, we recorded strong net fee growth of 14%*. The performance of our
German business was again excellent, growing net fees by 25%*, and growth was
broadly based across all sectors and each of our permanent, contracting and temporary
Net fee growth in the rest of the division, which is primarily a permanent placement
business, slowed to 2%* as activity was significantly impacted by the Eurozone crisis
and more general macro-economic uncertainty. Market conditions across the division
were mixed however, and whilst 10 countries saw net fees decline in the quarter,
a further 10 countries increased net fees by 10%* or more, including Belgium, Brazil,
Canada and Russia.
Consultant headcount in the Continental Europe & RoW division grew by 1% during
the quarter and ended June up 15% year-on-year.
United Kingdom & Ireland
In the United Kingdom & Ireland, net fees decreased by 9%. In our private sector
business, net fees were down 14% due to increasingly difficult conditions across
the market, but especially in our Banking and City-related specialisms. Elsewhere
in our private sector business our IT, Life Sciences and Energy businesses demonstrated
relative resilience. In our public sector business net fees were up 6% year-on-year,
and this business continues to perform in line with our expectations.
We continued to make good progress on our cost reduction plans through the quarter,
and therefore expect the financial performance of the UK business in the second half
to broadly reflect that of the first half.
Consultant headcount in the United Kingdom & Ireland division decreased 1% in the
quarter and ended June down 10% year-on-year.
Cash flow and balance sheet
As a result of strong working capital management, net debt decreased to around
£135 million (31 March 2012: £160 million) despite the payment of the £12m interim
dividend in April.
* LFL (like-for-like) growth represents organic growth at constant currency.
** the underlying temporary placement gross margin is calculated as temporary placement
net fees divided by temporary placement gross revenue and relates solely to temporary
placements in which Hays generates net fees and specifically excludes transactions
in which Hays acts as agent on behalf of workers supplied by third party agencies.
Paul Venables Group Finance Director +44 (0)20 7383 2266
David Walker Head of Investor Relations +44 (0)20 7383 2266
Brian Hudspith +44 (0)20 7379 5151
Paul Venables and David Walker of Hays plc will conduct a conference call for analysts
and investors at 9:00am United Kingdom time on 11 July 2012. The dial-in details are
Dial-in number +44 (0)20 3140 0668
The call will be recorded and available for playback for seven days as follows:
Replay dial-in number +44 (0)20 3140 0698
Access code 385529#
Preliminary Results for the year ended 30 June 2012 30 August 2012
Interim Management Statement for the quarter ending 30 September 2012 8 October 2012
Note to editors
Hays plc (the "Group") is a leading global professional recruiting group. The Group
is the expert at recruiting qualified, professional and skilled people worldwide,
being the market leader in the UK and Asia Pacific and one of the market leaders
in Continental Europe and Latin America. The Group operates across the private
and public sectors, dealing in permanent positions, contract roles and temporary
assignments. As at 30 June 2011, the Group employed 7,620 staff operating from
255 offices in 31 countries across 20 specialisms. For the year ended 30 June 2011:
- the Group reported net fees of £672 million and operating profit of £114 million;
- the Group placed around 60,000 candidates into permanent jobs and around 190,000
people into temporary assignments;
- 31% of Group net fees were generated in Asia Pacific, 33% in Continental Europe & RoW
(CERoW) and 36% in the United Kingdom & Ireland;
- the temporary placement business represented 54% of net fees and the permanent
placement business represented 46% of net fees;
Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada,
Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong,
Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands,
New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE,
the United Kingdom and the USA.
This Trading Update (the "Report") has been prepared in accordance with the Disclosure
Rules and Transparency Rules of the UK Financial Services Authority and is not audited.
No representation or warranty, express or implied, is or will be made in relation
to the accuracy, fairness or completeness of the information or opinions made in this
Report. Statements in this Report reflect the knowledge and information available
at the time of its preparation. Certain statements included or incorporated by reference
within this Report may constitute "forward-looking statements" in respect of the Group's
operations, performance, prospects and/or financial condition. By their nature,
forward-looking statements involve a number of risks, uncertainties and assumptions
and actual results or events may differ materially from those expressed or implied
by those statements. Accordingly, no assurance can be given that any particular
expectation will be met and reliance should not be placed on any forward-looking
statement. Additionally, forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or activities will continue
in the future. The information contained in this Report is subject to change without
notice and no responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or otherwise.
Nothing in this Report should be construed as a profit forecast. This Report does not
constitute or form part of any offer or invitation to sell, or any solicitation of any
offer to purchase or subscribe for any shares in the Company, nor shall it or any part
of it or the fact of its distribution form the basis of, or be relied on in connection
with, any contract or commitment or investment decisions relating thereto, nor does
it constitute a recommendation regarding the shares of the Company or any invitation
or inducement to engage in investment activity under section 21 of the Financial Services
and Markets Act 2000. Past performance cannot be relied upon as a guide to future
performance. Liability arising from anything in this Report shall be governed by
English Law, and neither the Company nor any of its affiliates, advisers or
representatives shall have any liability whatsoever (in negligence or otherwise) for any
loss howsoever arising from any use of this Report or its contents or otherwise arising
in connection with this Report. Nothing in this Report shall exclude any liability under
applicable laws that cannot be excluded in accordance with such laws.