Hays Shares Tumble After Net Fees Decline Eases But Permanent Hiring Shrinks

Hays (HAS.L), the recruitment firm, said like-for-like net fees fell 3% in the September quarter, and its shares fell about 8% in early trading today after the update. Analysts had expected a 4% decline.

The shares were quoted at 59.04p at about 08:20 UK time, down 8.11% from Friday’s 64.25p close, in a delayed quote. The day’s range so far runs from 58.04p to 65.79p. That leaves them roughly 25% below the 52-week high of 78.45p, set in the week of the 24th of August, but about double the April low of 28.68p.

In its first-quarter trading statement, released at 7:00am UK time, Hays said net fees, its measure of revenue from placing staff, fell 3% like-for-like and 5% on an actual basis. The gap partly reflects country disposals. September alone was down 2%.

Temporary and contracting fees fell 1%. Permanent placement fell 7% as volumes dropped 12%, with continued fragility in Northern Europe.

By region, Germany fell 6%, the UK and Ireland 5% and Australia and New Zealand 3%, while Rest of World was flat. The US rose 8% and Asia 6%. Consultant net fee productivity rose 8%, and Hays delivered about £10m of cost savings in the quarter.

Net debt stood at about £45m at the end of September, against net cash of £20.1m at the end of June.

Hays said it expects broadly stable market conditions near term. It also said it is in advanced discussions over strategic options and exits for several international businesses.

For UK traders, a less bad print did not stop the shares falling while permanent placement is down 7% and net debt has replaced net cash. The shares remain about double April’s low but well below August’s high.