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Final Results

4th Sep 2007 07:00

4 September

2007

Preliminary results for the year ended 30 June 2007

OUTSTANDING PERFORMANCE INTERNATIONALLY AND EPS UP 17%***

Year ended 30 June 2007 2006 Actual LFL*‚£'s million growth growth Net fees 633.6 538.2 + 18% + 17% Profit from continuing activities 216.1 193.0 + 12% + 13% Cash from operations 232.1 183.1 + 27% Profit before tax*** 211.7 192.5 + 10% Basic earnings per share*** 10.19p 8.69p + 17% Dividend per share 5.00p 4.35p +15%

- Strong like-for-like net fee and operating profit growth of 17% and 13% respectively*

- Outstanding International performance with net fees up 37%* and operating profit up 38%*

- Improved United Kingdom & Ireland performance in the second half

- 30% increase in net fees from permanent business with excellent performance across the Group*

- 17% increase in earnings per share*** and 15% increase in full year dividend

- 25% increase in recruitment consultants in the year**

- Excellent operating cash from operations of ‚£232.1 million (107% of operating profit)

* LFL is like-for-like growth which represents organic growth of continuing activities at constant currency. No adjustment is made for the one less trading day in 2007

** increase in consultants is shown on a closing basis, comparing 30 June 2007 versus 30 June 2006 on a like-for-like basis, which excludes the impact of acquisitions and disposals

*** continuing activities only

Commenting on these results, Denis Waxman, Chief Executive of Hays, said:

"These results show strong growth in net fees, operating profit and earningsper share. The highlight is our outstanding performance internationally wherewe grew net fees by 37% to ‚£216.5 million and operating profits by 38% to ‚£75.3million*. The International business has increased its share of Group net feesfrom 16% four years ago to 34% this year. Worldwide we now have a network of7,753 staff operating from 376 offices in 25 countries across 17 specialisms.

Following the actions taken in the first half of the year, performance improved in the United Kingdom & Ireland in the second half, despite continuing challenging conditions in the temporary market, primarily in the public sector.

Across all the regions in which we operate, we continue to see strong demandfor our specialist recruitment services. Since the start of July, net fees havebeen ahead of the comparable period last year by 19% on a like-for-like basis*.By region, net fee growth on a like-for-like basis* was 11% in the UnitedKingdom & Ireland, 35% in Asia Pacific and 38% in Continental Europe & RoW.Although there remains some pressure on our United Kingdom temporary margin,overall, the Board is confident in its outlook for the year.On a personal note, this is my final results announcement after leading Hays'specialist recruitment business for 38 years. I am very proud of what Hays andour people have achieved and I leave with absolute confidence that Hays is wellpositioned to take advantage of the tremendous opportunities availableworldwide in the specialist recruitment markets. I will miss the people and thebusiness enormously and wish them every success in the future."

Date of Interim Management Statement:

For the first time, as required by the UK Listing Authority's new Disclosureand Transparency rules, we expect to issue an Interim Management Statement forthe quarter ending 30 September 2007 on 11 October 2007.Enquiries:Denis Waxman Chief Executive Hays plc + 44 (0)20 7628 9999 Paul Venables Finance Director Martin Abell Investor Relations Giles Croot / Gill Ackers Brunswick + 44 (0)20 7404 5959 Chairman's statementHighlightsI am pleased to report another year of strong progress for Hays. At thebeginning of the year, there were two principal objectives. Firstly, tocontinue the excellent momentum in the International business which nowrepresents 34% of the Group's net fees, and secondly to accelerate theinvestment in our United Kingdom & Ireland business. On the first objective, weachieved excellent growth in the International business extending our network,particularly in Continental Europe and Asia. On the second objective, weincreased the number of consultants in the United Kingdom & Ireland by 555,which represents an 18% increase compared to last year**. In addition, weacquired James Harvard, which gives the Group a significant position in thegrowing Pharmaceutical recruitment market, together with an excellent entryvehicle into the exciting Japanese market.Over the last decade, Hays has quadrupled the size of its specialistrecruitment business, both in terms of net fees and profits, principallythrough organic growth. Looking ahead, your Board sees substantialopportunities in the specialist recruitment markets across the world and viewsthe long-term prospects for Hays with great optimism. Our strategic prioritiesare to:

strengthen our market leading positions in our core specialisms in the United Kingdom and Australia whilst aggressively growing our newer specialisms; and

develop our businesses in the major markets of Continental Europe and theemerging markets of Asia. We have proven that our business model works in theselarge and developing markets. Our emphasis now is to invest to build scale andmarket leadership.Basic earnings per share from continuing operations for the year increased by17% compared to last year***. In line with our policy of supporting aprogressive and sustainable dividend, the Board is recommending a finaldividend of 3.40 pence per share which would bring the full year dividend to5.00 pence per share, representing an increase of 15% over 2006.

People

As we announced in June, Denis Waxman has decided to retire at our AGM inNovember. Being the last occasion that I shall report to you with Denis as CEO,I would like to take this opportunity to formally recognise Denis' achievement.Denis was one of the founders of the recruitment business that began in 1969.Since then, he has developed the business into a leading Internationalspecialist recruitment group which now employs 7,753 staff in 25 countries. Itis a unique accomplishment to not only have co-founded the business, but thento have developed it to the size and international reach that is Hays today. During his leadership, Denis has provided inspiration to each and every one ofour staff. From the Board and all our staff, we wish him and his wife, Carole,many, many years of happy and well-deserved retirement. We are delighted that Alistair Cox, formerly CEO of Xansa plc, joined the Groupas CEO Designate on 1 September. Alistair brings proven leadership skills, abroad international background and significant experience of leading a dynamichigh service business. I am confident that he will build on the success ofDenis' legacy and deliver the next phase of Hays' development.Brian Wallace, who has served the Board as both Chairman of the Audit Committeeand Senior Independent Director, will be retiring at the AGM. Brian has been avital member of our Board throughout his six years, and has enlivened andenriched Board discussion with wise counsel and observation, particularlythrough Hays' transformational process. On behalf of the Board, I thank him forhis outstanding contribution and he has our very good wishes for the future.

We have been very pleased to welcome Paul Harrison to our Board as a Non-Executive Director. Paul is Group Finance Director of The Sage Group plc and brings depth of financial and international expertise to the Board's debates. He will also chair the Audit Committee on Brian's retirement.

I have spent considerable time this year visiting our offices. On each visit Ihave been struck by the enthusiasm, professionalism and commitment of everyoneI have met. These qualities permeate our culture and are the foundations ofour success. Our people work hard supporting our clients and candidates to anexceptional standard and I thank them for a job very well done.Bob LawsonChairman4 September 2007Executive reviewMarkets

During the financial year, the specialist recruitment markets were strong.Favourable economic conditions in our major markets, high levels of businessconfidence and a shortage of highly skilled staff led to significant demand forspecialist recruitment services.Whilst the economic cycle is the most important short term influence on theperformance of our business, there are also significant long term structuralchanges driving the specialist recruitment markets. These long term driversinclude deregulation in the labour markets, increasing awareness andwillingness to use specialist recruitment services, people moving jobs morefrequently and demographic changes. In addition, the temporary placement marketbenefits from increasing demand from both candidates and clients for flexibleemployment.Investment

We have invested heavily in the business during the year. We increased thenumber of consultants by 27% (25% on a like-for-like basis), we added 24offices to the network, of which 13 were in the International businesses, weexpanded into 4 new countries, we acquired James Harvard giving us entry intoJapan and the Pharmaceutical market, and we continued to roll out specialismsacross our network.

Recruitment consultant headcount

Closing headcount Average headcount As at 30 June 2007 2006 growth 2007 2006 growth Headline LFL** Headline LFL** United Kingdom & Ireland 3,134 2,579 22% 18% 2,966 2,599 14% 11% Asia Pacific 915 707 29% 23% 815 601 36% 29% Continental Europe & RoW* 973 657 48% 51% 826 570 45% 56% Total 5,022 3,943 27% 25% 4,607 3,770 22% 21% * RoW is Rest of World

** LFL (like-for-like) growth excludes acquisitions and disposals

In the United Kingdom & Ireland, our second half performance benefited from theincreased investment in consultants and our focus on growing our newerspecialisms. In Australia & New Zealand, we have continued to develop our newerspecialisms and strengthened our market leading position with a market beatingperformance. In Asia, we strengthened the business in China and Hong Kong,opened in Singapore and entered Japan. The challenge now is to build upon ourentry into Asia by developing critical mass in the major cities within thisrapidly growing region. In Continental Europe, we have significantly increasedthe number of consultants, substantially increased our presence in major citiesand rolled out our network into new cities, with the objective of securingmarket leading positions in the countries in which we operate. In the Americas,we increased the size of our Canadian business by almost 50% and we opened anoffice in Brazil representing our first entry into South America.In February, we launched our new specialist recruitment internet site whichincludes innovations designed to provide better service to candidates andclients. The site attracts circa 1.3 million visitors a month, 11 million pageviews a month, 140,000 applications a month, and has more than 57,000 jobsadvertised. It is a tool of great importance for attracting candidates andclients, and we will continue to innovate and invest to strengthen our onlinecapability.The Hays networkNumber of offices 30 June 2006 Opened* Acquired 30 June 2007 United Kingdom & Ireland 246 10 1 257 Asia Pacific 43 3 1 47 Continental Europe & RoW 63 9 0 72 Total 352 22 2 376

*Offices opened is shown net of closed and merged offices

The Group now employs 7,753 staff (2006: 6,101), operating from 376 offices (2006: 352) in 25 countries (2006: 21) across 17 specialisms (2006: 15). We believe this global network, supported by the talent in the business, represents an excellent platform for continuing the Group's development.

Group performance

Specialist Recruitment summary profit and loss statement

Year ended 30 June ‚£m 2007 2006 growth actual LFL* Turnover 2,110.2 1,826.6 16% 15% Net fees Temporary 324.1 301.6 7% 7% Permanent 309.5 236.6 31% 30% Total 633.6 538.2 18% 17% Operating profit 216.1 193.0 12% 13% Conversion rate 34.1% 35.9% Temporary margin 18.0% 19.0% Permanent fees as % of total 49% 44%

* LFL (like-for-like) growth represents organic growth for continuing activities at constant currency

Group turnover grew by 16% (15% on a like-for-like basis), net fees by 18% (17%on a like-for-like basis), and operating profit by 12% (13% on a like-for-likebasis). The increase in net fees was greater than the increase in turnoverbecause of the higher growth in fees generated by the permanent placementbusiness, compared to the temporary placement business. The results weremodestly impacted by acquisitions which increased net fees by ‚£9.5 million andoperating profit by ‚£0.7 million. Exchange rate movements had an adverse impactreducing net fees by ‚£3.6 million and operating profit by ‚£1.5 million.We achieved strong performances in our permanent placement businesses acrossall regions, benefiting from continued investment in new consultants andfavourable market conditions. Net fees in the permanent business grew by 30%,increasing its share of Group net fees during the year from 44% to 49%*.Permanent placement volumes increased 19% and average fees per placementincreased by 9% compared to last year.The temporary placement business, representing 51% of Group net fees, had astrong performance internationally but was impacted by challenging conditionsin the United Kingdom & Ireland, primarily in the public sector, as previouslydisclosed. Overall the temporary placement business had modest net fee growthof 7%, with volume and mix growth of 12% compared to last year, and a 100 basispoint reduction in margin from 19.0% last year to 18.0%*. This decline inmargin reduced operating profit by ‚£14 million.The same factors led to a reduction in the Group's conversion rate, which isthe proportion of net fees converted into operating profit, from 35.9% lastyear to 34.1%.United Kingdom & IrelandYear ended 30 June 2007 2006 ‚£m growth actual LFL* Net fees Accountancy & Finance 164.4 157.1 5% 5% Construction & Property 111.8 100.8 11% 11% Information Technology 31.5 30.7 3% 3% Other Specialist Activities 109.4 89.8 22% 16% Total 417.1 378.4 10% 9% Operating profit Accountancy & Finance 67.6 67.6 - - Construction & Property 44.2 41.5 7% 7% Information Technology 11.2 11.0 2% 2% Other Specialist Activities 17.8 17.4 2% 3% Total 140.8 137.5 2% 3% Conversion rate 33.8% 36.3% Year end consultant headcount 3,134 2,579 22% 18% Average consultant headcount 2,966 2,599 14% 11%

As stated in the interim results, the United Kingdom & Ireland business had amixed start to the year with net fee growth of 6% and flat profits in the firsthalf on a like-for-like basis versus last year*. However, following the actionswe have taken, including our investment in consultants, the performanceimproved in the second half with net fee growth increasing to 11%, andoperating profit growth increasing to 4% on a like-for-like basis versus lastyear. The improvement in the second half was stronger for net fees thanoperating profit due to the full six month impact of the reduction in thetemporary business margin which occurred part way through the first half.Overall for the year, net fees grew by 10% (9% on a like-for-like basis) to ‚£417.1 million, and operating profits grew by 2% (3% on a like-for-like basis)to ‚£140.8 million. We opened a net 10 new offices and increased the number ofconsultants by 18%**.

A strong performance by the permanent placement business was largely offset by a weak performance in the temporary business. The public sector activities, representing circa 35% of our temporary business net fees, experienced challenging market conditions, which affected margins. As a result, the conversion rate declined from 36.3% last year to 33.8%.

Whilst our temporary business margin was broadly stable in the second half ofthe year, there are two legislative changes in the United Kingdom & Irelandthat may put modest pressure on the temporary business margin this year.Firstly, legislation was introduced in April 2007 impacting the tax status oftemporary workers in sectors in which managed service companies operate. Thisparticularly affects the Construction & Property and IT sectors. Secondly,legislation has been introduced requiring that temporary workers are paidadditional holiday entitlement.This legislation is being phased in, with fouradditional days being payable per annum from October 2007, and a further fourfrom April 2009. The Accountancy & Finance business achieved a good performance in the permanentmarket benefiting from high levels of demand for accountants. However, due to alarge weighting to the public sector, this performance was offset by theconditions in the public sector described above. Overall, net fees increased by5% to ‚£164.4 million and operating profit was flat at ‚£67.6 million. Theincreased focus and consultant investment in the permanent placement businesspositions us for improvement in the current financial year.Construction & Property, which serves both the construction and "built"environment sectors, had a good performance, benefiting from earlier investmentin consultants. Net fee growth of 11% to ‚£111.8 million translated intooperating profit growth of 7% to ‚£44.2 million. We believe this business iswell positioned to benefit from the continuing strong demand in theconstruction market.Information Technology under-performed during the year due to subdued demandfrom our larger contracts in the temporary placement market and ourunder-exposure to the buoyant permanent placement market. Net fee growth was 3%to ‚£31.5 million and operating profit growth was 2% to ‚£11.2 million. In orderto increase our focus on the permanent market and SMEs, we have rolled out thebusiness into a further 8 offices during the year, bringing our InformationTechnology presence into a total of 25 offices.The Other Specialist Recruitment Activities in the United Kingdom & Irelandcontinued their strong track record of growth. Net fees increased by 22% (16%on a like-for-like basis) to ‚£109.4 million and operating profit increased by2% (3% on a like-for-like basis) to ‚£17.8 million. This result includedexcellent contributions from Resource Management Services, Financial Services &Insurance, Banking, Purchasing and Sales & Marketing which had combined net feegrowth of 30%. As expected, the Contact Centres business was impacted by thecompletion of a large contract and the Healthcare business was affected by thechallenging NHS market for healthcare professionals. Excluding the ContactCentres and Healthcare businesses, net fees and operating profit in OtherSpecialist Recruitment Activities was up by 22% and 17% respectively on alike-for-like basis. We see exciting long term growth opportunities for Hays inthese markets and expect these specialisms to develop into large businesses

inthe future.Asia Pacific Year ended 30 June 2007 2006 growth ‚£m actual LFL* Net fees 114.0 85.7 33% 33% Operating profit 54.2 41.7 30% 32% Conversion rate 47.5% 48.7%

Year end consultant headcount 915 707 29% 23%

Average consultant headcount 815 601 36% 29% The Asia Pacific business delivered an excellent performance in both thetemporary and permanent placement businesses. Net fees increased 33% (33% on alike-for-like basis) to ‚£114.0 million and operating profit increased 30% (32%on a like-for-like basis) to ‚£54.2 million. The difference between headlinegrowth and like-for-like growth was principally due to the depreciation in theAustralian dollar partially offset by the acquisition of James Harvard inJapan. We increased the number of consultants in the year by 23%**. As a resultof the investment in Asia, the conversion rate declined slightly from 48.7% to47.5%.In Australia & New Zealand, the business achieved exceptional performanceacross all its specialist activities further enhancing its market leadingposition. Accountancy & Finance, our largest specialism (representing 41% ofnet fees), grew net fees by 29%; Construction & Property, our second largestspecialism (representing 23% of net fees), grew net fees by 28%; Resources &Mining, created four years ago and now our third largest specialism(representing 9% of net fees), continued its excellent progress growing netfees by 13%; and Information Technology, our fourth largest specialism(representing 7% of net fees), grew net fees by 30%*.We rapidly expanded in the newer specialist activities with HR, Sales &Marketing, and Purchasing performing particularly well. We also rolled out twonew specialist activities, Oil & Gas and Healthcare, and we expanded ouractivities in Sydney, Canberra, Melbourne, Perth, Wollongong and Auckland. Thisinvestment contributed to an increase in net fees in Australia & New Zealand of32% compared to last year*. Our continued success in Australia & New Zealandstems from our excellent customer service, strong consultant trainingprogrammes, a very efficient automated technology platform, a high qualitymanagement team, and a strong market presence across all states.In Asia, net fees were ‚£4.7 million in the period (2006: ‚£0.4 million). Thenewly established businesses in China and Hong Kong expanded into Beijing, andreported a profit in their first full year. The start up in Singapore isprogressing well and the newly acquired Japanese business traded strongly.Overall, we are very encouraged by the growing demand for our services in theAsian markets.

Continental Europe & Rest of World ('RoW')

Year ended 30 June ‚£m 2007 2006 growth actual LFL* Net fees 102.5 74.1 38% 42% Operating profit 21.1 13.8 53% 55% Conversion rate 20.6% 18.6% Year end consultant headcount 973 657 48% 51% Average consultant headcount 826 570 45% 56% The Continental Europe & RoW division continued its outstanding progressincreasing net fees by 38% (42% on a like-for-like basis) to ‚£102.5 million andoperating profit by 53% (55% on a like-for-like basis) to ‚£21.1 millioncompared to last year. The difference between headline growth and like-for-likegrowth was due to the depreciation in the Euro and the disposal of the FrenchIT Services business, partially offset by the James Harvard acquisition. Weinvested significantly in consultants, increasing the number of consultantsduring the year by 51%**. The conversion rate improved to 20.6% from 18.6% dueto the increased scale of the business despite substantial investment in theyear.All countries contributed to the outstanding performance across both temporaryand permanent sectors with eleven countries delivering net fee growth of morethan 40% in the year*.Germany, our largest business in the region (representing 40% of the region'snet fees), took advantage of growth in the market and further improved itsmarket share, growing net fees by 22%*. This business predominantly focuses onthe IT and Engineering contracting markets and is now in 6 offices employing441 staff including 160 consultants. We are also expanding our Accountancy &Finance and Legal specialisms in Germany and we see excellent growth prospectsin these areas in the coming years.France, our second largest business in the region (representing 20% of theregion's net fees), grew net fees by an impressive 50%, significantlyincreasing its presence in Paris and continuing its expansion into theprovinces, opening in Tours, Rennes and Bordeaux*. This business, predominantlyfocused on the permanent placement market, is now in 13 offices employing 240consultants.

Canada, our third largest business in the region (representing 7% of the region's net fees), benefited from the ongoing investment in consultants and a new office in Calgary, growing net fees by 46%*. This business is now in 7 offices employing 103 consultants.

Among the other countries in this region, Spain doubled its net fees supportedby a new office in Bilbao, whilst the Netherlands increased net fees by 43%*.The start up in Italy continues to develop well with a new office opening inBologna. In addition, we started operations in Brazil (Sao Paulo), representingour first entry into South America, we opened an office in Slovakia(Bratislava), and we expanded our operations in Sweden, opening a new office inMalmo.

We see great opportunities for Hays in these markets, and we will continue to invest in staff and offices to secure market-leading positions.

Acquisitions and disposals

Whilst the strategy of the Group is to grow and create value primarily fromorganic development, geographical and sector in-fill acquisitions form part ofour development strategy. On 23 February 2007 we acquired James Harvard, arecruitment business specialising in the Pharmaceutical sector and the ITFinancial Services sector. On acquisition, two thirds of the James Harvardbusiness was based in the United Kingdom with the remainder primarily in Japan.The consideration was an initial ‚£24 million, on a cash free, debt free basis,with further payments estimated at ‚£20 million depending on achievement ofgrowth and profitability targets over the next three years. In the year ended31 December 2006, James Harvard generated net fees of ‚£10.7 million andoperating profits of ‚£3.0 million.The acquisition provided Hays with entry into Japan, and expertise in thePharmaceutical sector. In Japan, we have re-branded the business under the Haysbrand, moved to a larger office in Tokyo, opened an office in Osaka in July2007 and we are rolling out Hays' core specialisms. In Europe, we have rolledout James Harvard's Pharmaceutical business into Belgium, Germany, France,Spain and the Czech Republic under the new brand 'Hays Pharma'. Earlyindications suggest there is very strong demand for Hays Pharma and we willcontinue the roll out in the current year. Overall, the financial performanceof the James Harvard business has been in line with plan contributing ‚£4.7million net fees and ‚£1.3 million operating profit in the four months ended 30June 2007.

In February, Hays sold the non-core IT Services business in France for net proceeds of ‚£2.0 million. In the seven month period prior to disposal, this business generated net fees of ‚£1.9 million and operating profit of ‚£0.4 million.

Taxation and discontinued activities

Tax on continuing operations for the year was ‚£63.6 million, representing aneffective tax rate of 30.0% (2006: 31.2%). The reduction in the effective taxrate is due to the recognition and utilisation of brought forward tax losses inour French business. Profit from discontinued activities in the year was ‚£18.4million of which ‚£17.6 million relates to the write-back of tax relatedaccruals that are no longer required, following the resolution of tax issues inrespect of previously disposed businesses.

Earnings per share

Basic earnings per share from continuing activities of 10.19 pence was 17%ahead of last year (2006: 8.69 pence). The improvement in earnings per sharearises from the strong growth in operating profit, 12% ahead of last year, thereduction in the effective tax rate, and the favourable impact of the accretionfrom the share buy-back programme, partially offset by the higher net interestcharge this year.Cash flow

Cash flow in the year was excellent, with 107% conversion of operating profit into operating cash flow. Overall, net cash from continuing operations was

‚£232.1 million (2006: ‚£183.1 million) including ‚£5.9 million inflow from workingcapital following initiatives to improve working capital management. Tax paidwas ‚£70.7 million and net capital expenditure was modest at ‚£13.3 million,reflecting the low capital intensity of the business. ‚£23.1 million was spenton acquisitions and ‚£65.5 million was paid out in dividends, ‚£4.4 million waspaid out in net interest, and ‚£58.2 million was used to buy-back our ownshares. At the year end, net debt was broadly at the same level as last yearend at ‚£76.2 million (2006: ‚£77.0 million).

Capital structure and dividend

The priorities for our free cash flow are to fund Group development,particularly overseas, support a sustainable dividend policy and to buy backshares when appropriate. During the year, we purchased 34.3 million shares at atotal cost of ‚£52.6 million. As at the year end, this brings the total numberof shares bought back since the start of the share buy-back programme to 302.2million shares at a cost of ‚£395.9 million.The Board is proposing to pay a final dividend of 3.40 pence per share, whichif approved at the Annual General Meeting, will make a total of 5.00 pence pershare for the full year. This represents a 15% increase on last year. Therecommended dividend will be paid on 20 November 2007 to shareholders on theregister at 19 October 2007.

Retirement benefits

The Group's pension liability under IAS 19 at 30 June 2007 of ‚£43.5 million(‚£31.3 million net of deferred tax) decreased by ‚£12.4 million compared to30 June 2006 mainly due to the improvement in the return on investment. During theyear, the company contributed ‚£4.7 million of cash into the defined benefitscheme and that is expected to increase to circa ‚£6 million in 2008.

Current trading and outlook

Across all the regions in which we operate, we continue to see strong demandfor our specialist recruitment services. Since the start of July, net fees havebeen ahead of the comparable period last year by 19% on a like-for-like basis*.By region, net fee growth on a like-for-like basis* was 11% in the UnitedKingdom & Ireland, 35% in Asia Pacific and 38% in Continental Europe & RoW.Although there remains some pressure on our United Kingdom temporary margin,overall, the Board is confident in its outlook for the year.The Board has identified substantial opportunities for Hays in existing,emerging and new specialist recruitment markets across the world. Our growingInternational network, the ambition of our people, and our proven ability toreplicate our business across both borders and sectors positions Hays extremelywell to capitalise on these opportunities.

Notes

* growth is shown on a LFL (like-for-like) basis which represents organic growth for continuing activities at constant currency

** increase in consultants is shown on a closing basis, comparing 30 June 2007 versus 30 June 2006 on a like-for-like basis, which excludes the impact of acquisitions and disposals

Important notice

Certain statements in this preliminary announcement are forward lookingstatements. By their nature, forward looking statements involve a number ofrisks, uncertainties or assumptions that could cause actual results or eventsto differ materially from those expressed or implied by those statements.Forward looking statements regarding past trends or activities should not betaken as representation that such trends or activities will continue in thefuture. Accordingly, undue reliance should not be placed on forward looking

statements. CONSOLIDATED INCOME STATEMENTfor the year ended 30 June(In ‚£'s million) Note 2007 2006 TURNOVER Continuing operations 3 2,110.2 1,826.6 NET FEES Continuing operations 3 633.6 538.2 PROFIT FROM OPERATIONS Continuing operations 3 216.1 193.0 Finance income 4 1.5 4.7 Finance cost 4 (5.9) (5.2) (4.4) (0.5) PROFIT BEFORE TAX 211.7 192.5 Tax 5 (63.6) (60.1)

PROFIT FROM CONTINUING OPERATIONS AFTER TAX 148.1

132.4

PROFIT FROM DISCONTINUED OPERATIONS 6 18.4

52.5

PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 166.5

184.9

Earnings per share from continuing operations

- Basic 8 10.19p 8.69p - Diluted 8 10.13p 8.65p

Earnings per share from continuing and discontinued operations

- Basic 8 11.46p 12.14p - Diluted 8 11.39p 12.08p CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEfor the year ended 30 June(In ‚£'s million) 2007 2006 Profit for the financial year 166.5 184.9

Currency translation adjustments taken to equity (0.9)

0.3

Actuarial profits on defined benefit pension scheme 12.9

15.8

Tax on items taken directly to equity (4.7)

(4.8)

Net income recognised directly in equity 7.3

11.3

Total recognised income and expense for the year 173.8

196.2

Attributable to equity shareholders of the parent 173.8

196.2 CONSOLIDATED BALANCE SHEETat 30 June(In ‚£'s million) Note 2007 2006 NON-CURRENT ASSETS Goodwill 157.7 126.2 Other intangible assets 4.3 1.6

Property, plant and equipment 25.2

20.1 Deferred tax assets 22.7 22.2 209.9 170.1 CURRENT ASSETS Trade and other receivables 375.7 330.2 Cash and cash equivalents 68.4 52.8 444.1 383.0 TOTAL ASSETS 654.0 553.1 CURRENT LIABILITIES Trade and other payables (252.4) (208.9) Current tax liabilities (31.7) (49.4) (284.1) (258.3) NON-CURRENT LIABILITIES Bank loans and overdrafts (144.6) (129.8) Trade and other payables (19.6) (7.9) Retirement benefit obligations 9 (43.5) (55.9) Deferred tax liabilities - (0.9) Provisions 10 (50.2) (57.0) (257.9) (251.5) TOTAL LIABILITIES (542.0) (509.8) NET ASSETS 112.0 43.3 EQUITY Called up share capital 15.7 15.7 Share premium account 369.6 369.6 Capital redemption reserve 1.7 1.7 Retained earnings (288.7) (354.8) Other reserves 13.7 11.1 TOTAL SHAREHOLDERS' EQUITY 112.0 43.3 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 30 June(In ‚£'s million) Note 2007 2006

OPERATING PROFIT FROM CONTINUING OPERATIONS 216.1

193.0 Adjustments for: Depreciation of property, plant and equipment 7.3

6.5

Amortisation of intangible fixed assets 0.4

0.2

Net movement in provisions (6.1)

(0.2)

Movement in employee benefits and other items 8.5 7.8 10.1 14.3

OPERATING CASH FLOWS BEFORE MOVEMENT IN WORKING CAPITAL 226.2

207.3 Changes in working capital Increase in receivables (38.9) (37.6) Increase in payables 44.8 13.4 5.9 (24.2) CASH GENERATED BY OPERATIONS 232.1 183.1 Income taxes paid (70.7) (46.7)

NET CASH FROM OPERATING ACTIVITIES 161.4

136.4 INVESTING ACTIVITIES Purchases of property, plant and equipment (12.3)

(10.5)

Proceeds from sale of property, plant and equipment 0.2

0.2 Purchase of intangible assets (2.8) (0.4)

Cash paid in respect of acquisitions made in previous (0.3)

(8.2)years Acquisition of subsidiaries (22.8) (20.2)

Sale of businesses and related assets 1.6

20.4 Interest received 1.5 4.7 NET CASH USED IN INVESTING ACTIVITIES (34.9) (14.0) FINANCING ACTIVITIES Interest paid (5.9) (6.3) Equity dividends paid (65.5) (56.7) Cash outflow in respect of share buy-back (58.2)

(209.2)

(Purchase) / disposal of own shares (0.4)

8.7

Proceeds from share option exercises 3.8

- Repayment of borrowings - (0.1) Issue of loan notes 0.2 0.4 Increase in bank overdrafts 14.6 122.6 NET CASH USED IN FINANCING ACTIVITIES (111.4)

(140.6)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 15.1

(18.2)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11 52.8

71.2

Effect of foreign exchange rate changes 0.5

(0.2)

CASH AND CASH EQUIVALENTS AT END OF YEAR 11 68.4

52.8 NOTES TO THE ACCOUNTS

1 STATEMENT UNDER S240 - PUBLICATION OF NON-STATUTORY ACCOUNTS

The financial information contained in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The financial information is based on the statutory accounts for thefinancial years ended 30 June 2007 and 30 June 2006. The financial statementsfor 30 June 2007, upon which the auditors issued an unqualified opinion, thatdid not contain a statement under Section 237 (2) or (3) of the Companies Act1985, have yet to be delivered to the Registrar of Companies. The financialstatements for 30 June 2006 upon which the auditors issued an unqualifiedopinion, have been delivered to the Registrar of Companies.

2 BASIS OF PREPARATION

Whilst the financial information included in this preliminary announcement hasbeen computed in accordance with International Financial Reporting Standards(IFRSs), this announcement does not itself contain sufficient information tocomply with IFRSs. The Company expect to publish full financial statementsthat comply with IFRSs in November 2007.The financial information included in this preliminary announcement has beenprepared using accounting policies consistent with those in the Group's lastpublished annual financial statements for the year ended 30 June 2006.

3 SEGMENTAL INFORMATION

Continuing operations comprise one class of business, the Specialist Recruitment activities. The Group operates in three identified geographical segments. These results by geography are shown below.

TURNOVER AND PROFIT FROM OPERATIONS(In ‚£'s million) 2007 2006 TURNOVER Continuing operations United Kingdom & Ireland 1,413.7 1,266.9 Continental Europe & Rest of World 353.2 286.5 Asia Pacific 343.3 273.2 2,110.2 1,826.6 NET FEES Continuing operations United Kingdom & Ireland 417.1 378.4 Continental Europe & Rest of World 102.5 74.1 Asia Pacific 114.0 85.7 633.6 538.2 PROFIT FROM OPERATIONS Continuing operations United Kingdom & Ireland 140.8 137.5 Continental Europe & Rest of World 21.1 13.8 Asia Pacific 54.2 41.7 216.1 193.0 4 FINANCE INCOME AND FINANCE COSTSFinance income(in ‚£'s million) 2007 2006 Interest on bank deposits 1.5 4.7 Finance costs(in ‚£'s million) 2007 2006

Interest payable on bank overdrafts and loans (7.4) (6.0)

Pension Protection Fund levy (0.4) (0.3) Net interest on pension obligations 1.9 1.1 (5.9) (5.2) Net finance charge (4.4) (0.5) 5 TAX

The tax charge for the year was based on the following:

(In ‚£'s 2007 2007 2007 2006 2006 2006million) Continuing Discontinued Total Continuing Discontinued Total Current tax 69.7 (17.3) 52.4 61.5 (15.5) 46.0 Deferred tax (6.1) - (6.1) (1.4) - (1.4) 63.6 (17.3) 46.3 60.1 (15.5) 44.6 6 DISCONTINUED OPERATIONS

The results of the discontinued businesses which have been included in the consolidated income statement, were as follows:

(in ‚£'s million) 2007

2006

Profit from disposal of business assets 1.1

6.0

Write back of amounts previously provided against fixed asset -

27.0investments Interest - 4.0 Profit before tax 1.1 37.0 Tax 17.3 15.5

Post tax profit from discontinued operations 18.4

52.5

The tax credit of ‚£17.3 million in the current year is the result of a ‚£17.6million write-back of tax-related accruals that were established when the Groupcompleted the disposal of non-core activities between March 2003 and November2004 and in the light of subsequent events are no longer required, less a ‚£0.3million charge on other items.The profit from disposal of business assets in the current year relates mainlyto the cash receipts from loan notes arising from the disposal of the Hays USHome Delivery business, previously fully provided against.In the prior year, profits from discontinued operations in the year weregenerated from surplus property disposals of ‚£6.0 million and the receipt of‚£31.0 million as final settlement of amounts receivable from the acquirers ofHays Chemicals.

The tax credit of ‚£15.5 million in the prior year is the result of an ‚£18.2 million write-back of tax-related accruals less a ‚£2.7 million tax charge arising from the profit on disposal of Hays Chemicals and surplus properties.

7 DIVIDENDS

The following dividends were paid by the Group and have been recognised as distributions to equity shareholders in the year.

2007 2006 pence per ‚£ pence per ‚£ share million share million Previous year final 2.90 42.3 2.27 35.6dividend Current year interim 1.60 23.2 1.45 21.1dividend 65.5 56.7 The following dividends were proposed by the Group in respect of the accounting year presented: 2007 2006 pence per ‚£ pence per ‚£ share million share million Interim dividend 1.60 23.2 1.45 21.1 Final dividend (proposed) 3.40 49.2 2.90 42.4 5.00 72.4 4.35 63.5

The proposed final dividend of 3.40 pence per share (‚£49.2 million) is subject to approval by shareholders at the Annual General Meeting and has not been

included as a liability in these financial statements.

8 EARNINGS PER SHAREFor the year ended 30 June Weighted average Per share 2007 Earnings number of shares amount ‚£'s million) (million) (pence) Continuing operations: Basic earnings per share from continuing operations 148.1 1,453.2 10.19 Dilution effect of share options - 8.2

(0.06)