11th Oct 2024 08:47
(Alliance News) - Hays PLC on Friday said it expects near-term market conditions to remain challenging as activity levels were stable but remain at subdued levels, driven by low levels of candidate confidence and longer time to hire.
The London-based recruitment company reported a decline in net fees in its first-quarter, as the recruiter continues to be hurt by "tough market conditions".
Net fees declined 15% on-year in the quarter ended September 30.
There was a 21% decline in permanent recruitment net fees, and an 11% fall in temporary.
Chief Executive Dirk Hahn said: "Net fees in the quarter were down as expected reflecting the tough market conditions, particularly in Perm where we see longer time to hire and low levels of confidence which we expect to continue. Given this backdrop, we remain resolutely focused on operational rigour through business line prioritisation, resource allocation, and efficiency initiatives."
Hays noted that consultant headcount decreased by 2% in the quarter and by 18% year-on-year.
It said: "We believe our consultant headcount capacity is appropriate for current market conditions and expect this will remain broadly stable in Q2 25. Our focus on business line prioritisation and optimal resource allocation will position Hays strongly for when end markets recover."
Its current financial year that ends on June 30 will benefit from some cost savings, it added. It will see an annualisation of GBP60 million worth of savings secured in the prior year, and the initial boost from GBP30 million worth of savings it is aiming for by the end of financial 2027.
"This programme is progressing well and, as a result of our actions, our current periodic cost base is slightly below GBP80 million, lower than our previous guidance of GBP82 million," Hays explained.
Looking ahead, Hays expects pre-exceptional operating profit for the first-half to be weaker than the second half of the prior financial year.
"Overall, we expect near-term market conditions will remain challenging. Activity levels in both temp and perm are sequentially stable overall in Australia & New Zealand, Europe, Middle East & Africa, Asia and the Americas, but remain at subdued levels driven by low levels of client and candidate confidence and longer time to hire," the company said.
Hays shares rose 2.5% to 87.85 pence each on Friday morning in London.
By Tom Budszus, Alliance News slot editor
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