16th Jan 2020 08:39
(Alliance News) - FTSE 250 recruiter Hays PLC on Thursday warned on interim profit as difficult market conditions persist around the world.
Hays's net fees for its second quarter ended December 31 fell 7% on the year before, and declined 4% on a like-for-like basis.
In the UK & Ireland, net fees fell 4% both reported and like-for-like, while Australia & New Zealand dipped 11% and 7% like-for-like. In Germany, net fees were 12% lower and 9% down like-for-like, while Rest of World net fees fell 1%, but did rise 1% like-for-like.
Australia's private sector has been sluggish, Hays said, while bushfires have also hurt trading. The company is experiencing "tough" conditions in Germany, while economic and political uncertainty has hampered operations in the UK & Ireland.
In Rest of World, there was strong growth in Japan and the Americas, but China declined and performance in France was hurt by ongoing strike action.
Following this second-quarter performance, Hays now expects operating profit for the first half of around GBP100 million, which would be an approximate drop of 19% from the year before.
Alastair Cox, the chief executive of London-based Hays, said: "Growth slowed markedly in December, driven by specific events in key markets: general strikes in France, tragic Australian bushfires and the UK election. Each event impacted markets already facing challenging economic conditions and low business confidence.
"Germany weakened further, with economic uncertainties driving increased client cost controls. The Americas performed well, with the USA a standout, while Asia was flat. Conditions in the UK remained uncertain, particularly before the election, although the result may provide impetus over time."
"The rebound from these events and our New Year 'return to work' are thus particularly important, and we are closely monitoring activity levels. Overall, we expect near-term macro conditions to remain difficult, but see continued opportunities for growth in key specialisms like IT," Cox continued.
"Our task is to balance such investment opportunities with managing our cost base while protecting our infrastructure and market leadership. Our highly experienced management teams, combined with our financial strength, gives us confidence in achieving this balance."
Shares in Hays were 3.5% lower on Thursday morning in London at a price of 166.60 pence each.
By George Collard; [email protected]
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