15th Jul 2021 09:22
(Alliance News) - Recruiters Hays PLC on Thursday said it expects profit to be ahead of market expectations, as its net fees rebounded across all segments in the fourth quarter of its financial year.
The London-based recruitment company said net fees grew by 39% on a like-for-like annual basis and 34% on an actual basis in the three months ended June 30.
The surge was led by the UK and Ireland, with net fees up 48% from a year before on both a like-for-like and actual basis, with smaller increases in its Australia & New Zealand, Germany, and Rest of World divisions.
The fourth quarter fees up-tick follows an 11% drop in net fees on a like-for-like basis in the previous financial year. The company earned GBP996.2 million in net fees in financial 2020, down 12% on an actual basis from GBP1.13 billion in financial 2019.
Hays said it expects operating profit of GBP95 million in the current financial year, down 30% from GBP135.0 million the year before and 62% lower than GBP248.8 million in financial 2019.
However, the FTSE 250-listed firm said its prediction sat ahead of market expectations, with Bloomberg reporting a market consensus operating profit of GBP90.9 million for the year that ended June 30.
Cash collection remained strong in the final quarter, Hays said, with year-end net cash of GBP410 million.
As announced in February, the company plans to resume core dividends and issue a special dividend.
Hays said it would offer a single full-year dividend payment to shareholders, based on three times earnings cover, to be declared in August.
Also, the company has identified GBP150 million in surplus capital, which it intends to return to shareholders via a special dividend in two phases. This will begin with a GBP100 million payment via a dividend.
For the coming financial year, Hays warned that the strengthening of sterling against the company's major trading currencies - the euro and Australian dollar - may act as a headwind to profit.
Shares in Hays were trading down 3.3% at 162.10 pence each in London on Thursday morning.
By Scarlett Butler; [email protected]
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