Hays profits crumble

25th Feb 2010 08:07

Profit slumped at recruitment firm Hays during the first half as companies remained more concerned with laying people off than taking them on.Profit before tax crashed to £3.4m in the six months to 31 December from £100.8m in 2008 and plunged 70% to £30.4m, excluding the £27m OFT fine that is currently under appeal. Turnover actually increased by 1% to £1.29bn and fell just 5% on a like for like basis due to the withdrawal of the staff hire concession last April. Net fees tumbled 31% to £264.8m, or 35% like for like (LFL). Fees from the temporary business dropped 21% (26% LFL) to £157.3m and were down 42% (45% LFL) on the permanent side to £107.5m. Overall, fees received a £25m boost from moves in the Aussie dollar and the euro.In the UK, net fees fell 37% on an actual and like for like basis to £121.5m and, while overall demand stabilised sequentially during the period, market conditions remain "challenging". Private sector trends improved towards the end of the period, but there are still only limited signs of recovery and trends continue to weaken in the public sector."Currently we are seeing improved candidate and client confidence across the business in most of our private sector markets. Asia Pacific and parts of Continental Europe have continued to deliver modest rates of sequential improvement," says chief executive Alistair Cox."Our remaining businesses continue to see overall stability in their markets and in the UK we expect our performance to be broadly similar in the second half."The dividend stays at 1.85p a share.