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Hays UK and Ireland delivers strong net fee growth of 11%

  • UK & Ireland division records net fees of £271.9 million, with operating profits of £45.7 million
  • Strong growth in IT, Construction and Property and Accountancy and Finance

Hays, the leading recruiting expert, has today (Thursday) reported excellent 11% like-for-like growth in net fees in its UK and Ireland operations. Hays Ireland has offices in Dublin, Cork, Limerick and Galway.

The strong UK and Ireland performance was reported today as part of Hays preliminary results for the year ended 30 June, 2015. Hays Ireland is part of the FTSE 250 listed specialist recruitment group Hays, which has a global reach across 33 countries worldwide.

Overall, Hays’ net fees for the year ended 30 June 2014 grew by 9% on a like-for-like basis across its geographic areas of operation. Other highlights from today’s preliminary results include:

Highlights:

17% headline growth in operating profit despite a £9.6m foreign exchange headwind

• Sector leading conversion rate up 210bps to 21.5%, back above 20% for the first time since 2009

• Excellent like-for-like profit growth of £33.1m from like-for-like net fee growth of £65.1m, a 51% drop-through

• Further strong, broad-based net fee growth in UK & Ireland - Net fees up 11%(1) , or £26.5m(1) , generating £19.6m(1) operating profit improvement; a 74% drop-through

• Asia Pacific net fees up 8%(1) , driven by return to growth in Australia and continued strength in - Asia - Australia net fees up 7%(1) , led by strong Perm growth - Strong 13%(1) net fee growth in Asia, driving record profit performance

Continental Europe & Rest of World good net fee growth of 9%(1) and excellent operating profit growth of 18%(1) - Good growth in key businesses with net fees in Germany up 6% (1); France and Canada both up 10%(1) - 16 countries delivered net fee growth of 10% (1) or more, including Belgium, Spain, Switzerland and US

• Consultant headcount up 9%(4) , as we invested on a targeted basis to support growth opportunities

• Strong cash performance, with 116% conversion of operating profit into operating cash flow, and net debt reduced by £32m to £31m despite the £36m spend in relation to the acquisition of Veredus in the US

• Strong growth in EPS of 21%, reflecting strong operating profit performance and lower effective tax rate

• Full year dividend increased 5%, in line with our strategy to build full year cover towards 3.0x earnings

Commenting on Hays Ireland’s performance, Richard Eardley, Managing Director of Hays Ireland, said:

“Our results today reflect the strong growth in the jobs market in Ireland. Yesterday’s unemployment figure of 9.5%, the lowest in six years, is a further positive indication that the last 12-18 months have seen confidence return to the Irish economy and employers increasingly looking to expand their workforces and grow their businesses.

For Hays our recruitment activity levels have been very strong in Ireland, particularly over the course of 2015 to date. Permanent employment is on the increase across a number of sectors such as IT, Construction and Property and Accountancy and Finance.

Across key sectors of the economy there are shortages of suitable candidates are now emerging, at Hays we have been actively encouraging skilled Irish workers who left during the downturn to consider coming home to Ireland. We need to get the message out, at every opportunity, that there are now jobs and career opportunities in Ireland.”

Commenting on Hays plc’s performance, Alistair Cox, Chief Executive, said:

“This is another strong financial performance as we delivered excellent 25% operating profit growth and further increased our sector leading conversion rate. All three divisions delivered good growth and we are on schedule to deliver our five-year aspiration to broadly double the Group’s operating profits by 2018, despite the material negative impact of foreign exchange movements.

In the UK we delivered excellent profit leverage and strong fee growth across all regions. Our Australia business returned to growth, driven by Perm, though the mining-focused regions remained tough. In Germany, our trading performance was good and around the rest of the Group, we continued to deliver good broad-based growth as 21 countries delivered net fee growth of 10% or more.

We have made further significant strategic and operational progress this year, building on the existing strength of our business globally. We acquired Veredus in the US, giving us a significant platform from which to build a large business in the world’s biggest recruitment market, and continued the rollout of our contractor model.

We enter our new year in a position of strength, with unrivalled breadth, scale and balance around the world and the best people and technology tools in our industry. We see many clear opportunities to grow further and are focused on capturing these while simultaneously driving profits and cash generation along the way. That combination of delivering short-term results and investing to capitalise on long-term opportunity is unique in our industry today."

Notes:

(1) LFL (like-for-like) growth represents organic growth of continuing operations at constant currency.

(2) The underlying Temp gross margin is calculated as Temp net fees divided by Temp gross revenue and relates solely to Temp placements in which Hays generates net fees and specifically excludes transactions in which Hays acts as agent on behalf of workers supplied by third party agencies and arrangements where the Company provides major payrolling services.

(3) Exchange rate as at 25 August 2015: £1 / €1.3627; £1 / AUD2.2019.

(4) Excludes the impact of the Veredus acquisition. 

For further press information contact:

Amanda Glancy, PR360 01 6371777/ 087 2273108/ amanda@pr360.ie

Paddy O’Dea, PR360 01 637177/ 0863573365/ paddy@pr360.ie

Hays Group Overview

Hays has 9,023 employees in 240 offices in 33 countries. In many of our global markets, the vast majority of professional and skilled recruitment is still done in-house, with minimal outsourcing to recruitment agencies which presents substantial long-term structural growth opportunities. This has been a key driver of the rapid diversification and internationalisation of the Group, with the International business representing 64% of the Group’s net fees as at 30 June 2015, compared with just over 25% 10 years ago.

Our 5,969 consultants work in a broad range of sectors with no sector specialism representing more than 18% of Group net fees. While Accountancy & Finance, Construction & Property and IT represent 50% of Group net fees, our expertise across 20 professional and skilled recruitment specialisms gives us opportunities to rapidly develop newer markets by replicating these long-established, existing areas of expertise.

In addition to this international and sectoral diversification, the Group’s net fees are generated 58% from temporary and 42% permanent placement markets, and this balance gives our business model relative resilience.

This well diversified business model continues to be a key driver of the Group’s financial performance.

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