Hays Shares Tumble Amid CEO Departure and Profit Dip

Shares in Hays (LON: HAS) have fallen sharply following the announcement of CEO Dirk Hahn's immediate departure and a disappointing set of half-year results.

The dual blow has rattled markets, overshadowing strategic progress and cost-saving measures highlighted in the company's report.

Hays reported a 9% decrease in net fees for the six months ended December 31, 2025, with both temporary & contracting and permanent recruitment sectors experiencing declines. The more volatile permanent recruitment sector saw a steeper fall of 14% compared to the 7% dip in temporary & contracting. Operating profit before exceptional items also decreased by 21% to £20.1 million.

Profit before tax took a bigger hit, falling 29% to £13.4 million. Basic earnings per share before exceptional items fell 44% to 0.46p, and the dividend per share was slashed by 84% to 0.15p. The dividend cut reflects the company's revised capital allocation framework.

Despite the profit downturn, Hays emphasized strategic advancements. Consultant net fee productivity increased by 7% year-over-year, marking nine consecutive quarters of growth. The company also reported substantial progress in its structural cost savings program, securing approximately £15 million in annualized savings during the first half of FY26, bringing total savings since the start of FY24 to around £80 million per annum. These cost savings resulted in an £8.8 million exceptional charge.

The UK & Ireland region returned to profitability, and pre-exceptional operating profit in Australia and New Zealand tripled. Germany, however, faced headwinds in the temporary business due to reduced average hours worked.

Key Financial Metrics

• Net Fees: £453.3 million (down 9%)
• Operating Profit (pre-exceptional): £20.1 million (down 21%)
• Basic Earnings per Share (pre-exceptional): 0.46p (down 44%)
• Dividend per Share: 0.15p (down 84%)

Hays is investing in a next-generation digital platform to enhance service delivery and drive efficiencies. The company maintains a strong cash flow and balance sheet, with a 217% cash conversion rate and net cash of £40.3 million.

Driver Breakdown

• Productivity Gains: Consultant net fee productivity up 7% YoY.
• Cost Savings: £80 million in annualized structural cost savings achieved since FY24.
• Regional Performance: UK&I returned to profitability; ANZ profits tripled.

Michael Findlay, Chair of Hays plc, acknowledged Dirk Hahn's contributions: “On behalf of the Board, I would like to thank Dirk for his significant contribution to Hays over the last 28 years…We are grateful to Mark for agreeing to step in as Interim CEO.”

Interim CEO Mark Dearnley's appointment provides temporary leadership while the search for a permanent successor begins. The recruitment process, led by the Nomination Committee with external consultant support, will be closely watched by markets.

Hays' outlook hinges on improved client and candidate confidence and a recovery in the recruitment cycle. The company's focus on high-demand sectors and temporary recruitment, coupled with digital platform investments, positions it to capitalize on long-term industry trends.