REG - Hays PLC - Trading Update <Origin Href="QuoteRef">HAYS.L</Origin>

HaysAnnouncement

06/09/2014 14:36

For best results when printing this announcement, please click on the link
below:

http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20140710:nRSJ9151La


RNS Number : 9151L
Hays PLC
10 July 2014 
 
- 
 
TRADING UPDATE 
 
QUARTER ENDED
30 JUNE 2014 
 
10 July 2014 
 
Financial summary 
 
Growth in net fees for the quarter ended 30 June 2014 (Q4 FY14) 
 
 (versus the same period last year)  Growth                              
 Actual                              LFL(1)                              
 By region                                                                      
                                     Asia Pacific                        (13)%  0%   
                                     Continental Europe & Rest of World  1%     7%   
                                     United Kingdom & Ireland            11%    11%  
                                     Total                               0%     7%   
                                                                                     
 By segment                                                                     
                                     Temporary                           1%     8%   
                                     Permanent                           (1)%   5%   
 Total                               0%                                  7%     
 
 
Highlights 
 
·      Continued good Group performance in both Temp and Perm 
 
·      Strong, broad-based growth of 11%(1) in the UK & Ireland, driven by
Perm growth of 17%(1). Major specialisms of Accountancy & Finance,
Construction & Property and IT all grew by over 15%(1) 
 
·      Good growth of 7%(1) in Continental Europe & Rest of World, with good
growth of 7%(1) in both Germany and France. Elsewhere in the region, 12 other
countries delivered strong net fee growth of 10%(1) or more 
 
·      Asia Pacific net fees were flat(1). Australia net fees decreased by
7%(1) but we have seen broad-based stability in activity levels for the last 6
months. Asia delivered further excellent growth of 27%(1) 
 
·      Group consultant headcount was up 3% during the quarter and increased
by 6% year-on-year as we continued to invest to capitalise on positive market
conditions around the world 
 
·      We reiterate the guidance issued at Q3 when we upgraded full year
operating profit expectations to around £140m 
 
Commenting on the Group's performance, Alistair Cox, Chief Executive, said: 
 
"We have delivered another good set of quarterly results to end our financial
year as we continued to capitalise on good conditions in many of our key
markets. In the UK & Ireland we delivered strong and broad-based net fee
growth, including Perm growth of 17%(1) as candidate confidence remained
strong. Elsewhere we saw the continued recovery of many European, Asian and
American markets and ten of our businesses delivered record monthly net fees
in the quarter, including key businesses such as Canada and Japan. 
 
Looking ahead we see clear growth opportunities for the Group and therefore
during the quarter we increased consultant headcount by 3%, the highest
quarterly rise since September 2011. We will continue to invest to capture all
opportunities for growth and maintain our focus on driving productivity to
deliver on our long-term profit and cash objectives." 
 
Group 
 
In the fourth quarter ended 30 June 2014 net fees were flat on a headline
basis and increased 7% on a like-for-like basis(1) against the prior year. The
difference between the actual growth and like-for-like growth rates was
primarily the result of a material depreciation in the rate of exchange
between both the Australian Dollar and the Euro against Sterling. The timing
of Easter generated a c.1% reduction in the Group's year-on-year net fee
growth rate in the quarter, reversing the benefit experienced in Q3. Net fees
in the Temp business, which accounted for 59% of Group net fees in the
quarter, increased by 8%(1) and the underlying temp margin(2) was broadly
stable. Net fees in the Perm business increased by 5%(1). 
 
The exit rate of overall Group net fee growth was broadly in line with the
quarter as a whole. 
 
Consultant headcount was up 3% in the quarter and increased by 6%
year-on-year. 
 
We expect full year operating profit to be around £140m, reiterating the
upgrade to guidance given at our Q3 Interim Management Statement. 
 
Asia Pacific 
 
In Asia Pacific, which represented 24% of Group net fees, net fees were
flat(1). 
 
In Australia & New Zealand net fees decreased by 5%(1) but we have now seen
broad-based stability in activity levels for six months. Temp net fees, which
represented 69% of net fees in the quarter, decreased by 4%(1) but have now
been sequentially stable for twelve months. Perm net fees decreased by 9%(1)
as candidate activity remained stable but subdued. 
 
In Australia net fees decreased by 7%(1), within which net fees in New South
Wales and Victoria, which together accounted for 51% of our business,
decreased by 4%(1). In Western Australia and Queensland, which together
accounted for 31% of our business, net fees decreased by 13%(1). In New
Zealand, we saw strong net fee growth of 18%(1). 
 
In Asia, which accounted for 22% of the division, net fees increased by 27%(1)
and the region reported a record quarterly net fee performance. Hong Kong and
China both delivered excellent net fee growth of 45%(1) or more while Malaysia
and Singapore both reported strong net fee growth of over 10%(1). Japan, our
largest business in Asia, delivered excellent net fee growth of 20%(1) and had
a record monthly net fee performance in June. 
 
Consultant headcount in the division was up 1% in the quarter and up 3%
year-on-year. In Australia & New Zealand, consultant headcount was flat in the
quarter and down 2% year-on-year. In Asia, consultant headcount was up 3% in
the quarter and up 16% year-on-year. 
 
Continental Europe & Rest of World ('RoW') 
 
In Continental Europe & RoW, our largest division which represented 41% of
Group net fees, we delivered good net fee growth of 7%(1). Net fee growth of
7%(1) in Germany was good, driven by solid growth of 5%(1) in our core IT &
Engineering business and continued strong growth in our newer specialisms
including Accountancy & Finance which grew by 21%(1). Overall Temp net fees
were up 8%(1) and Perm net fees decreased by 1%(1). 
 
Net fees increased by 7%(1) in the rest of the division, which is primarily a
Perm business. Within this, 12 countries delivered net fee growth of 10%(1) or
more including key businesses such as Belgium and Poland which both grew by
15%(1) and reported record monthly net fee performances during the quarter.
The Netherlands grew by 10%(1), while France, which is our second largest
business in the division, delivered a good performance with net fees up
7%(1). 
 
Consultant headcount in the division was up 2% in the quarter and 3%
year-on-year. 
 
United Kingdom & Ireland 
 
In the United Kingdom & Ireland, which represented 35% of Group net fees, we
delivered further strong net fee growth of 11%(1). Our Temp business delivered
good growth of 7%(1) and our Perm business delivered strong growth of 17%(1)
as we saw continued strong candidate confidence. Activity levels were strong
and broad-based as all regions delivered year-on-year net fee growth. We saw
particularly strong performances from Scotland, Northern Ireland, the North,
North West, Midlands, the East of England, the South Coast and the Home
Counties, all of which grew by more than 10%(1). Ireland again performed well
and delivered strong net fee growth of 12%(1). 
 
In our private sector business, net fees increased by 12%(1). Overall market
conditions saw further improvement, with Construction & Property and IT both
delivering excellent growth of around 20%(1). Net fees in our largest
specialism of Accountancy & Finance grew by 17%(1), within which our Senior
Finance business grew by 18%(1). Our public sector business again delivered
good net fee growth of 8%(1), including a strong performance in our Education
business. 
 
Consultant headcount in the division was up 5% in the quarter and up 12%
year-on-year as we invested to capitalise on the clear, strong opportunities
for growth. 
 
Cash flow and balance sheet 
 
Cash performance in the quarter was good, with net debt at the end of June at
c.£65 million (31 March 2014: c.£75 million, 30 June 2013: £105m). 
 
(1)   LFL (like-for-like) growth represents organic growth at constant
currency. 
 
(2)   The underlying temp gross margin is calculated as temp net fees divided
by temp gross revenue and relates solely to temporary placements in which Hays
generates net fees and specifically excludes transactions in which Hays acts
as agent on behalf of workers supplied by third party agencies. 
 
Enquiries 
 
 Hays plcPaul Venables           Group Finance Director       + 44 (0) 20 7383 2266       
 David Walker                    Head of Investor Relations   + 44 (0) 20 7383 2266       
 
Bell Pottinger                                              
                           
 Gavin Davis / Elly Williamson                                + 44 (0) 20 7861 3232       
 
 
Conference call 
 
Paul Venables and David Walker of Hays plc will conduct a conference call for
analysts and investors at 9:00am United Kingdom time on 10 July 2014. The
dial-in details are as follows: 
 
 Dial-in number                                                                     +44 (0)20 3139 4830  
 Password                                                                           43519338#            
                                                                                                         
 The call will be recorded and available for playback for seven days as follows:  
 Replay dial-in number                                                              +44 (0)20 3426 2807  
 Access code                                                                        649176#              
                                                                                                         
 
 
Reporting calendar 
 
 Preliminary Results for the year ended 30 June 2014                28 August 2014  
 Interim Management Statement for quarter ending 30 September 2014  9 October 2014  
 Trading Update for quarter ending 31 December 2014                 8 January 2015  
                                                                                    
 
 
Hays Group overview 
 
Hays has 7,979 employees in 240 offices in 33 countries. In many of our global
markets, the vast majority of professional and skilled recruitment is still
done in-house, with minimal outsourcing to recruitment agencies which presents
substantial long-term structural growth opportunities. This has been a key
driver of the rapid diversification and internationalisation of the Group,
with the International business representing 67% of the Group's net fees as at
31 December 2013, compared with just over 20% 10 years ago. 
 
Our 5,150 consultants work in a broad range of sectors with no sector
specialism representing more than 26% of Group net fees. While Accountancy &
Finance, Construction & Property and IT & Engineering represent 59% of Group
net fees, our expertise across 20 professional and skilled recruitment
specialisms gives us opportunities to rapidly develop newer markets by
replicating these long-established, existing areas of expertise. 
 
In addition to this international and sector diversification, the Group's net
fees are generated 59% from temporary and 41% permanent placement markets, and
this balance gives our business model relative resilience. This well
diversified business model continues to be a key driver of the Group's
financial performance.

Cautionary statement 
 
This Trading Update (the "Report") has been prepared in accordance with the
Disclosure Rules and Transparency Rules of the UK Financial Conduct Authority
and is not audited. No representation or warranty, express or implied, is or
will be made in relation to the accuracy, fairness or completeness of the
information or opinions made in this Report. Statements in this Report reflect
the knowledge and information available at the time of its preparation.
Certain statements included or incorporated by reference within this Report
may constitute "forward-looking statements" in respect of the Group's
operations, performance, prospects and/or financial condition. By their
nature, forward-looking statements involve a number of risks, uncertainties
and assumptions and actual results or events may differ materially from those
expressed or implied by those statements.  Accordingly, no assurance can be
given that any particular expectation will be met and reliance should not be
placed on any forward-looking statement.  Additionally, forward-looking
statements regarding past trends or activities should not be taken as a
representation that such trends or activities will continue in the future. The
information contained in this Report is subject to change without notice and
no responsibility or obligation is accepted to update or revise any
forward-looking statement resulting from new information, future events or
otherwise. Nothing in this Report should be construed as a profit forecast.
This Report does not constitute or form part of any offer or invitation to
sell, or any solicitation of any offer to purchase or subscribe for any shares
in the Company, nor shall it or any part of it or the fact of its distribution
form the basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it constitute a
recommendation regarding the shares of the Company or any invitation or
inducement to engage in investment activity under section 21 of the Financial
Services and Markets Act 2000. Past performance cannot be relied upon as a
guide to future performance. Liability arising from anything in this Report
shall be governed by English Law, and neither the Company nor any of its
affiliates, advisers or representatives shall have any liability whatsoever
(in negligence or otherwise) for any loss howsoever arising from any use of
this Report or its contents or otherwise arising in connection with this
Report. Nothing in this Report shall exclude any liability under applicable
laws that cannot be excluded in accordance with such laws. 
 
This information is provided by RNS
The company news service from the London Stock Exchange