UK still a drag on Hays

1st Sep 2011 07:41

International recruitment firm Hays saw strong growth in profits last year, driven by its overseas interests.Net fees in the year to 30 June rose 21%, or 18% on a like-for-like (LFL) basis, to £672.1m from £557.7m the year before. Fees from temporary placements rose 10% on a LFL basis to £365.4m while fees from permanent placements rose 27% (LFL) to £306.7m.The temporary placement business represented 54% of net fees and the permanent placement business represented 46%. The lower level of growth in the temporary placement business relative to permanent placement reflects the temporary placement business's greater resilience in the prior year and its higher weighting to the UK public sector.Profit before tax and exceptional items jumped 50% to £106.6m from £78.1m a year earlier. Reported profit before tax advanced 273% to £110.7m from £29.7m the previous year.Basic earnings per share stormed up to 5.69p from 0.48p the year before, while with exceptional items stripped out they still soared a handy 60% to 5.19p from 3.25p. The full-year dividend per share has been held at 5.80p and is not fully covered by earnings. The final dividend payment in respect of fiscal 2010/11 will be 3.95p.The group said 64% of net fees are now generated outside the UK, after the UK saw net fees slide 1% year-on-year, largely as a result of a 35% decrease in fees from the public sector, which was only partially offset by 19% growth in private sector fees. Growth in the UK private sector tailed off as the year progressed.Hays hailed its "excellent performance" in the Asia Pacific, which saw 30% net fee growth, while the Continental Europe and Rest of World division also put in a good shift, with 33% growth in net fees.Cash generated by operations rose by a quarter to £97.3m from £78.1m the year before. Net debt increased from £77.2m at the start of the year to £134.8m at the end of the year, primarily due to the payment of the dividend and the increase in working capital. The group expects that net debt will increase in the six months toDecember 2011 due to the proposed payment of the final dividend, beforereducing in the second half. Hays has a £300m unsecured revolvingcredit facility available, which expires in January 2014."This is a strong set of results with operating profits up by 42%," said chief executive Alistair Cox. Underlying operating profits rose by 33% on a LFL basis."Whilst we remain mindful of the continuing economic and fiscal uncertainty around the world, we continue to see good levels of momentum across most of our markets," Cox continued."In Asia Pacific we continue to see good growth in Australia & NewZealand and strong growth in Asia. In Continental Europe & Rest of World growth remains strong across the division, led by our German business. In the UK we have seen slowing levels of growth in the private sector business, with continued tough but broadly stable markets in the public sector," Cox said. --jh