Hays' (HAS) cyclical recovery story continued during its first half, with operating profits up by 22 per cent to £81.5m. The recruiter's businesses in the UK and Ireland were the stand-out performers. Renewed candidate confidence drove regional operating profits up 113 per cent to £21.1m. Increased consultant headcount and automation of the group's back-office functions helped the UK and Irish businesses almost double their conversion rate - a measure of how much fee income is turned into profit - to 16 per cent.
Strip out the effects of the strong pound, and net fees for Hays' continental Europe and rest-of-the-world division grew 9 per cent. Germany, which accounts for more than half of the division's fees, saw particularly strong growth among its newer specialisms. These include accounting and finance and sales and marketing. However a gloomy macroeconomic picture meant the Brazilian business continued to struggle, with net fees down by almost a fifth.
Prospects in Australia and New Zealand were brighter, with the latter posting strong net fee growth. The Australian business also returned to growth during the first half, delivering net fee growth of 5 per cent. Taking advantage of increased candidate confidence, Hays upped its Australian and New Zealand headcount by 10 per cent.
Broker Jefferies expects adjusted EPS of 7.38p in 2015.
HAYS (HAS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 150p | MARKET VALUE: | £2.1bn | |
| TOUCH: | 149-150p | 12-MONTH HIGH: | 164p | LOW:108p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 16p* | NEBT DEBT: | 36% | |
| Half-year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.8 | 62.5 | 2.90 | 0.83 |
| 2014 | 1.9 | 77.3 | 3.64 | 0.87 |
| % change | +3 | +24 | +26 | +5 |
Ex-div: 5 Mar Payment: 8 Apr *includes intangible assets of £239m, or 17p a share | ||||
