Hays (HAS) continues to demonstrate that a Brexit-related UK slowdown will not hold it back. In the year to June 2018, the group hit a new record for total dividends (once its 5p per share special dividend is included) and for international profits. The operative word when it comes to profit is 'international'. Hays was shy of the £254m operating profit level it hit in 2008 when 58 per cent of gross profits came from the UK and Ireland. Now that figure is 24 per cent, which hopefully means there is little chance its 2019 results will look anything like those posted in 2009, in the wake of the global financial crisis.
Despite Brexit challenges, the UK business also performed well, posting 13 per cent operating profit growth on net fee income increases of 2 per cent. However, this was due in large part to the depreciation of a major IT overhaul completing, so profitability is unlikely to continue growing at such a high rate.
Across the group, management is focused on improving productivity, with finance director Paul Venables noting that given the group’s headcount – up 8 per cent in the year – profitability grows around £8m for every 1 per cent uplift in productivity. The group is forming partnerships with technology platforms such as Xing and Google-owner Alphabet (US:GOOGL) to improve their consultants' data sources and generate efficiency increases.
Analysts at UBS increased their EPS forecast by more than 3 per cent to 12.51p following the results (from 11.30p in 2018).
| HAYS (HAS) | ||||
| ORD PRICE: | 193p | MARKET VALUE: | £2.8bn | |
| TOUCH: | 192.6-192.8p | 12-MONTH HIGH: | 213p | LOW: 167p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 48p | NET CASH: | £123m | |
| Year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 3.68 | 132 | 6.1 | 2.63 |
| 2015 | 3.84 | 156 | 7.4 | 2.76 |
| 2016 | 4.23 | 173 | 8.5 | 2.90 |
| 2017 | 5.08 | 205 | 9.7 | 3.22 |
| 2018* | 5.75 | 239 | 11.4 | 3.81 |
| % change | -13 | +17 | +18 | +18 |
| Ex-div: | 4 Oct | |||
| Payment: | 16 Nov | |||
| *Excludes special dividend of 5p a share | ||||
