FTSE 250-listed recruitment company Hays PLC (LSE: HAS) encountered difficult trading circumstances in its second quarter, witnessing a 12% decrease in group fees year-on-year, as revealed in a recent update on Tuesday.
This decline was most notable in the Permanent recruitment sector, with Temporary recruitment volumes also experiencing a significant drop.
In particular, the UK and Ireland sectors reported a 17% fall in fees, and the Australia & New Zealand and the Rest of the World sectors saw decreases of 20% and 11%, respectively.
In London, @HaysWorldwide (LSE #HAS) experienced a significant 19% drop after announcing that its first-half pre-exceptional operating profit is expected to be around £60 million, falling short of the current market consensus.
The company reported a 10% decrease in group fees… https://t.co/4qlIBzmmy3 pic.twitter.com/ul5cCbtjLq
— Share_Talk ™ (@Share_Talk) January 9, 2024
In response to these tough conditions, Hays has undertaken substantial cost-cutting and efficiency initiatives.
A key strategy was the reduction of consultant headcount, resulting in about £30 million in annual savings, although this was accompanied by an exceptional restructuring expense of approximately £12 million.
Chief Executive Dirk Hahn commented, “Overall market conditions grew increasingly difficult throughout the quarter, with a noticeable slowdown in most markets by December, especially in our Perm businesses as client and candidate decision-making decelerated. Temp volumes were relatively stable sequentially throughout the quarter but fell year-on-year, as we did not observe our usual seasonal increase in worker volumes.”
Consequently, facing these adverse market conditions, Hays anticipates a modest first-half operating profit of £60 million, despite its continued cost reduction efforts.
