29th Aug 2019 08:32
(Alliance News) - Hays PLC on Thursday reported a slip in annual profit on exceptional charges, but saw a rise in fees on growth from both recruitment divisions, Temporary and Permanent.
In the year ended June 30, the recruiter's pretax profit fell 2.9% to GBP231.2 million from GBP238.5 million.
Excluding pension charges - related to the Lloyds Bank ruling - and restructuring costs from the company's European businesses, the company's operating profit increased 2.3% to GBP248.8 million.
Hays' net fees - which represents turnover minus remuneration of temp workers from other recruitment agencies - grew 5.6% to GBP1.13 billion from GBP1.07 billion.
Hays upped its ordinary dividend by 4.2% to 3.97 pence per share from 3.81p distributed the year before. The company also upped its special payout by 8.6% to 5.43p.
The recruitment agency attributed the dividend growth to ending the financial year with "record" net cash of GBP129.7 million.
"We delivered solid profit growth in 2019, backed up by strong cash generation, despite weakening macroeconomic conditions in many markets. 19 countries delivered all-time records, including Germany, France, Canada, the US and China, and our International business grew net fees by 7%," said Chief Executive Alistair Cox.
Cox continued: "We invested in strengthening our leading positions in key markets like Australia and Germany, while also restructuring some of our European businesses to maximise their profitability. Our UK business delivered a solid result, despite ongoing uncertainties."
Hays net fees from its Temp unit - which includes its Contracting division - increased by 6%. The company saw a volume increase in Temp workers of 6% and an hours gain of 3%.
Hays Permanent unit saw net fees grow 7%, with volumes up 4%.
The company ended the financial year with 7,782 consultants, 4.3% higher than the year before.
"Looking ahead, despite an increasingly tough global economic backdrop, our market positions, combined with our highly experienced global management teams and strong financial position, means I am confident we will continue to appropriately balance our long-term potential with the more challenging markets we currently face," added Cox.
Shares in FTSE 250-listed Hays were down 4.2% in early trade in London on Thursday at 133.60p each.
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