Hays raises £200m from cash call; Warns on profit, pulls dividend
Recruitment firm Hays said it had raised £200m from an emergency cash call to combat an expected hit to fee income due to the coronavirus pandemic.
The company on Thursday also warned that full year operating profits would be materially below a Bloomberg consensus of £190m as firms cut staff numbers to save cash and pulled an interim 1.11p a share dividend worth £16.3m.
"Considering the uncertainties arising from government restrictions worldwide on working and movement and how long these may remain in place, it is not currently possible to estimate the extent of the impact on the group's earnings this financial year and beyond," Hays said in a statement.
It added that the crisis has driven a “very material deceleration in client and candidate activity”, especially in Europe and the private sector, and said net fees could fall by about 35% by the end of 2020 based on scenario modelling.
Thursday's placing and subscription of 210.5m new ordinary shares were offered to the market at 95p each, representing a 13.2% discount to Wednesday's closing price of 109.4 pence.
Hays had £35m in net cash at March 27, the company said, and £165m in undrawn credit facilities.
It also expected to defer £100m in tax payments after talks with tax authorities in the UK, Germany and Australia. The timings of these deferrals ranged from three to 12 months, Hays said.