19th Jun 2025 08:32
(Alliance News) - Hays PLC on Thursday said it expects annual profit to be below market consensus, as the staffing firm grapples with challenging market conditions.
Hays shares dropped 14% to 60.38 pence in London early Thursday morning, the worst performer in the FTSE 250 index.
Hays said permanent recruitment markets have been particularly hurt, amid "low levels of client and candidate confidence".
The company, which rounds off its financial year at the end of June, expects like-for-like net fees to be down 9% on-year in the fourth quarter.
Permanent recruitment fees will be down 14%, while in Temporary & Contracting, only a 5% decline is expected.
"Temp & Contracting activity continues to be more resilient," Hays said.
The firm expects annual pre-exceptional operating profit of GBP45 million, below company-compiled consensus of GBP56.4 million. Operating profit before exceptional items amounted to GBP105.1 million in financial 2024.
"At a regional level, we expect like-for-like net fees in our largest country Germany to decrease by 5% with continued stability in Contracting but weaker conditions in Perm and Temp, primarily due to a subdued automotive sector. Perm has also weakened in the UK&I, and we expect a 13% divisional net fee decline, and similarly in ANZ where net fees are expected to be down 9% year-on-year," Hays said.
"Net fees are expected to decline by 9% year-on-year in RoW. [Europe, Middle East & Africa] ex-Germany (net fees down 13%) has experienced challenging Perm markets, particularly in France. Asia (net fees down 3%) is stable overall. Americas (net fees down 1%) with 5% year-on-year growth in North America where markets remain stable."
Hays expects challenging market conditions to persist in the new financial year.
"Our initiatives to improve net fee productivity in real terms and back-office efficiency will be important drivers of medium-term profit recovery when the market recovers," it added.
By Eric Cunha, Alliance News news editor
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