Hays H1 profits fall as German business weighs
Recruiters Hays posted a drop in first-half profit on Thursday as tough market conditions took their toll on its German business.
In the six months to the end of December, pre-tax profit fell 22% to £95.6m, while operating profit declined 19% to £100.1m and net fees slipped 3% to £553.1m. The company had said in January that first-half operating profit would come in at around £100m.
Hays pointed to a sharp slowdown in Germany - its largest country - as well as three specific external events in December: general strikes in France, Australian bushfires and the UK election. It also highlighted around £9m of net reported cost increases, driven by strategic investment in its IT specialism globally, property and IT capability.
Chief executive Alistair Cox said: "In Germany, trading was increasingly difficult, with reduced business confidence and greater client cost control, particularly in automotive. The rest of Europe was broadly stable, although France was impacted by general strikes. Australia remained subdued, although fees were broadly sequentially stable until December, when bushfires severely impacted the market.
"Conditions in the UK remained uncertain, particularly before the election, although in time the result could provide impetus."
Hays said it had seen a "marginally slower" start to the new year than in prior years.
"We expect near-term macro conditions to remain difficult and are mindful of continuing uncertainties, including the coronavirus," said Cox.