Hays FY operating profit jumps amid 'excellent' fee performance

Recruiter Hays reported a jump in full-year profit on Thursday thanks to an "excellent" fee performance across all regions amid a recovery from the pandemic.

In the year to 30 June, operating profit rose to £210.1m from £95.1m a year earlier, with net fees up 32% to £1.2bn. Analysts had been expecting operating profit of £210.5m.

The core dividend per share was lifted 134% to 2.85p and the company declared a special dividend of 7.34p a share, down a touch from 8.93p a year earlier.

Hays also said it had increased its share buyback programme by a further £18.2m, meaning it began FY23 with £75m available for buybacks.

Chief executive Alistair Cox said: "Performance in all regions was excellent. Our actions to capitalise on long-term structural opportunities, acute skill shortages and strong markets, supported by our ability to increase fee margins and the benefits of wage inflation, delivered record group fees, 24 country records and 128% operating profit growth.

"Germany, our largest business, was the biggest absolute contributor to our profit growth, while the UK & Ireland and Rest of World divisions delivered strong profit recoveries."

At 1540 BST, the shares were up 1.9% at 117p.

Victoria Scholar, head of investment at Interactive Investor, said: "Despite concerns about a UK recession, the recruitment business is still faring extremely well, thanks to strength in the underlying labour market, skill shortages and historically high unfilled job vacancies in the economy.

"Hays is well positioned to benefit from the mismatch between demand and supply of labour across the UK jobs market. Its other markets such as Australia & New Zealand as well as Germany also enjoyed strong performances with fees up 24% and 34% respectively. However, there could be macro headwinds to come with the labour market beginning to show signs of cooling and with rising inflation and interest rates weighing on businesses and their capacity to hire.

"Shares in Hays are enjoying a bounce today but have struggled lately, shedding around a third of their value since September 2021."