- Profit forecasts still intact
- Higher fees partially offset lower workload
Net fee income at Hays (HAS) dipped by 2 per cent in the three months to 30 June 2023, but the recruitment agency is still on track to hit its full-year profit target.
In a fourth-quarter trading update, the group reported “tough market conditions” despite the “positive effects of wage inflation”. Fees from permanent placements – which account for 42 per cent of the business – fell by 9 per cent year on year. The temp and contracting division proved more robust, with fees up 4 per cent year on year. However, growth was driven by price hikes as opposed to higher volumes.
Trading conditions varied around the world. The European labour market still seems strong, with Germany growing net fees by 11 per cent on a like-for-like basis. By contrast, fees from the UK and Ireland fell by 7 per cent, and fees from Australia and New Zealand plunged by 15 per cent.
“Despite macroeconomic uncertainties, our key markets remain characterised by skill shortages and wage inflation,” said chief executive Alistair Cox. “Our early management actions to increase average fee margins and control our costs have underpinned our performance, and consultant productivity is good overall, with headcount aligned to current market conditions.”
The group’s full-year operating profit is expected to be in line with market consensus expectations of £196mn. This compares with operating profit of £210mn in the 2022 financial year.
Recruitment rival PageGroup (PAGE) reported “lower levels of both candidate and client confidence” this week. However, it is also on track to fulfil market expectations with a full-year operating profit of £138mn.
Robert Walters (RWA) is having a rockier time: last month it warned that its profits for 2023 would be “significantly lower” than the market expected, and has yet to see any “sustained improvement” in client and candidate confidence.
