The most striking thing about Hays' (HAS) first-half results is the recovery in UK profits. UK and Ireland saw like-for-like net fee growth tick up to 9 per cent. Impressively, this drove a leap in operating profits from £0.5m to £9.9m, as a lean cost base meant that 93 per cent of incremental net fees dropped through into operating profit.
This good UK performance, together with good growth in Asia and a solid 6 per cent increase in net fees in continental Europe and the Americas, helped Hays offset continued tough trading in Australia. There net fees dropped 17 per cent year-on-year as the resource-led slowdown continues to bite.
Finance director Paul Venables says the recovery in the UK business has been broad-based across all sectors and geographies, as businesses finally muster the confidence to plug gaps in their workforces. Mr Venables believes the recovery is well stabilised and that the recovery in the group's UK profits has further to run. "We are heavily geared to UK recovery, and that is a good place to be right now," he says. He makes the point that the UK division's annual operating profit was £140m back in the heady days of 2008.
Broker Liberum expects earnings per share of 5.6p for the full year (from 5.1p in 2012-13).
| HAYS (HAS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 141p | MARKET VALUE: | £2.0bn | |
| TOUCH: | 140-141p | 12-MONTH HIGH: | 144p | LOW: 82p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 14p* | NET DEBT: | 54% | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.85 | 56.7 | 2.43 | 0.83 |
| 2013 | 1.85 | 62.5 | 2.90 | 0.83 |
| % change | -0 | +10 | +19 | |
Ex-div: 5 Mar Payment: 9 Apr *Includes intangible assets of £213m, or 15p a share | ||||
