Hays beats expectations in first quarter as Europe and UK shine

10th Oct 2013 07:27

Like-for-like net fee income increased ahead of expectations in the first quarter for FTSE 250 recruiter Hays, as market conditions begin to improve. Net fees grew 2% in the three months to September 30th on a like-for-like basis, with the temporary worker segment leading the way.Chief Executive Alistair Cox was encouraged by the start to the new financial year and reported stable market conditions overall and improved performance in many parts of the business. "We delivered meaningful growth in the UK, invested selectively to capitalise on opportunities and kept a tight control of costs in tougher markets to maximise our financial performance."The largest division, Continental Europe & Rest of the World, delivered net fee growth of 6% with two record monthly performances helped by strength in Germany and Russia.During the quarter Hays opened an office in Seattle, its third in the US, and closed an office in Mumbai, India.Net fees slipped badly in Asia Pacific, which represents just over a quarter of the group, due to tough conditions in Australia. Net fees from the antipodean countries collapsed 17%, meaning despite a 17% rise from Asia that the division saw a 12% decline.Broker Jefferies suggested that there were "tentative signs that Australia/New Zealand may be bottoming out" as the year-on-year decline in net fee growth remained steady and recent jobs data had been encouraging.The UK & Ireland division, providing 32% of group net fees, increased 8% on a like-for-like basis, with temp business up 8% and permanent 9%.On the outlook for the business Cox said: "Looking ahead we see clear growth opportunities as a number of markets continue to improve, including some that have been challenging for some time, such as the UK and Asia."Our well balanced diverse business and focus on controlling costs and driving productivity position us well to deliver long-term, sustainable growth while continuing to drive profits and cash along the way."Jefferies, which noted that outlook statements "have evolved from 'fragile' six months ago, to 'mixed' in July, to 'improving' currently", has not changed its estimates at this early stage in the year.OH