UPDATE: Hays Returns To Growth On Strong International Business
08 Julho 2010 - 6:14AM
Dow Jones News
The U.K.'s largest recruiter Hays PLC (HAS.LN) Thursday said it
has returned to year-on-year growth in net fees for the first time
in two years, despite continued woes in the U.K. public sector.
The company, which was hit in the recession as weak consumer
confidence discouraged workers from changing jobs, saw its business
boosted by permanent recruitment and by its international
operations.
Temporary recruitment, which usually holds up better than
permanent during a recession, grew only 3% while permanent
placements grew 33%.
In order to reduce its reliance on one market, Hays has been
working hard to expand its business internationally and now makes
59% of its net fees outside the U.K.
It reported fourth-quarter net fee growth of 14%, or 8% organic
growth and at constant currency, with Asia Pacific showing the
strongest growth followed by Continental Europe and the rest of the
world division.
Investors cheered the news. At 0820 GMT, Hays shares traded up 5
pence, or 5.5%, at 96 pence in a broadly higher London market.
Still, Finance Director Paul Venables expects a further fallout
from spending cuts in the U.K. public sector, and is waiting for
the government to announce how many jobs will be cut in its autumn
spending review.
While Hays normally benefits from workers switching jobs,
Venables doesn't expect to find masses of new clients once
public-sector jobs are cut. He said it will not be easy to transfer
public-sector employees into the private sector, as they lack a
natural skill set and the working pace is faster in the private
sector.
"It's not an easy transfer so it will take a couple of years,"
he said.
The company saw a fallout in the public sector about 15 months
ago, when authorities made a decision not to replace staff that
left and movement between jobs declined, but Venables said this
accelerated three months ago, partly due to the current environment
of austerity.
While U.K. private sector net fees grew 10% from the previous
quarter, in the public sector, net fees fell 14%, resulting in an
overall fall of 6% in the U.K. and Ireland. The company now is
redirecting consultants from the public sector to the private
sector and cut 2% of its headcount in the U.K.
But KBC Peel Hunt analyst Henry Carver said that the anticipated
fall-off in the U.K. public sector already is in the numbers and
share price. Seymour Pierce analyst Caroline de La Soujeole
welcomed the performance, saying that "the return to year-on-year
growth is clearly a good sign, however, growth rates achieved are
slightly disappointing compared to those reported by peers."
Chief Executive Alistair Cox said in the statement, "Whilst we
remain mindful of the risks to the economic recovery in many of the
countries in which we operate, the outlook in our markets continues
to improve."
Venables agreed, saying, "The important thing is that the job
market in the U.K. is recovering more broadly ... although Scotland
and the north of England still lag behind," but otherwise recovery
is U.K.-wide.
The company is continuing with its international expansion as
its international divisions are performing strongly. Hays plans to
enter Mexico in September and expand further into the U.S. through
a pharmaceutical subsidiary. Venables said that the move further
into the U.S. has been requested by clients so it is relatively
risk-free.
Hays will also move into Argentina next year. Expansion into
South America began in 2006 with Brazil, which has been growing
strongly and this year will become Hays' sixth-biggest market
globally, Venables said.
-By Anita Likus, Dow Jones Newswires; +44 20 7842 9407;
anita.likus@dowjones.com
Hays (PK) (USOTC:HAYPY)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Hays (PK) (USOTC:HAYPY)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024