Gold rally may be losing steam but no major correction seen: DB
Investing.com -- British recruitment firm Hays Plc on Friday reported an 8% decline in group net fees for the quarter ended Sept. 30 compared with the same period a year earlier, reflecting continued weakness across permanent and temporary hiring markets.
On a like‑for‑like basis, net fees fell by 8%, unchanged from the prior quarter. Temporary and contracting net fees were down 5%, while permanent net fees dropped 14%, driven primarily by a 13% fall in placement volumes.
Consultant headcount fell 4% sequentially and 15% year‑on‑year, though productivity per consultant rose by 7% over the prior year.
By region, the decline was broad‑based. In Germany, like‑for‑like net fees fell 7%, with temporary and contracting fees down 5% and permanent net fees down 12%.
Volumes declined 9% while consultant headcount decreased 2% from the previous quarter and 13% year‑on‑year, accompanied by a 6% rise in productivity. In the United Kingdom and Ireland, net fees dropped 9%, with temporary and contracting down 10% and permanent net fees down 9%.
The private sector saw net fees fall by 5% and the public sector by 20%. Consultant headcount in the UK and Ireland fell 7% sequentially and 25% year‑on‑year, with a 14% increase in productivity and a year‑on‑year rise in pre‑exceptional operating profit.
In Australia and New Zealand, net fees were down 5%, driven by a 2% decline in temporary and contracting fees and a 9% fall in permanent fees. New South Wales and Victoria recorded net fee declines of 5% and 7% respectively.
Consultant headcount declined 4% sequentially and 11% year‑on‑year, while productivity rose 5% and pre‑exceptional operating profit increased year‑on‑year. In the Rest of the World segment, net fees fell 10%, with temporary and contracting down 4% and permanent fees down 14%.
Growth in Spain and Japan of 18% and 5% respectively was offset by declines in France, Switzerland, Italy and Poland, which fell between 11% and 20%. Consultant headcount in the Rest of the World declined 4% sequentially and 13% year‑on‑year.
Hays ended the quarter with net debt of about £40 million, compared with £26 million net cash at the end of FY25, reflecting seasonal cash outflows and timing of month‑end payments.
Constant currency costs for the quarter were £74 million, down slightly from £75 million in the prior quarter. The company continues a programme targeting annual structural cost savings of £45 million by the end of FY29, supported by a 17% reduction in non‑consultant headcount year‑on‑year.
Looking ahead, Hays said it expects market conditions to remain challenging through FY26, with consultant headcount expected to remain broadly stable in the coming quarter.
The company noted limited visibility on trends for the remainder of the year and no material impact from working‑day changes is anticipated.
Analysts at Jefferies noted Hays’s like‑for‑like net fee decline of 8% in the first quarter was in line with consensus expectations but showed no improvement from the prior quarter.
They highlighted Europe as a persistent weakness and pointed to deterioration in the U.S. market over the summer, forecasting full‑year FY26 like‑for‑like net fee growth of a 6% decline and adjusted EBIT of £45 million, compared with consensus forecasts of a 4% decline and £52 million, respectively.