TIDMHAS
RNS Number : 6652D
Hays PLC
11 October 2018
QUARTERLY UPDATE
FOR THE THREE MONTHSED
30 September 2018
11 October 2018
Financial summary
Growth in net fees for the quarter ended 30 September 2018 (Q1
FY19)
(versus the same period last year) Growth
-------------
Actual LFL
By region
Australia & New Zealand (1)% 7%
Germany 12% 13%
United Kingdom & Ireland 3% 3%
Rest of World 12% 14%
------------------------------------ ------- ----
Total 7% 9%
------------------------------------ ------- ----
By segment
Temporary 6% 8%
Permanent 9% 11%
------------------------------------ ------- ----
Total 7% 9%
------------------------------------- ------- ----
Note: unless otherwise stated, all growth rates discussed in
this statement are LFL (like-for-like) fees, representing organic
growth of continuing operations at constant currency.
Highlights
-- Good 9% growth, driving another quarter of record Group net
fees. 17 countries exceeded 10% net fee growth, with 10 all-time
records
-- Australia & New Zealand: good growth of 7% despite
increasingly tough comparatives, led by strong Temp growth of 10%,
with Perm up 1%. Australia up 9%, delivering our strongest quarter
since 2008
-- Germany: strong performance with net fees up 13%. Excellent
Perm growth of 29%, with Temp & Contracting up 10%
-- UK & Ireland: solid growth of 3%, led by Temp growth of
7%, with Perm down 2%. Public sector net fees up 8%, helped in part
by easier comparatives, while our Private sector business grew by
1%
-- Rest of World (RoW): strong growth of 14%, against tough
comparatives. France, our largest RoW country, delivered 8% growth,
Spain grew 16% and Belgium 3%. Excellent performances in our second
and third largest RoW countries, the USA and China, up 27% and 29%
respectively
-- Group consultant headcount up 5% in the quarter, in line with
our expectations and reflecting the normal seasonal graduate
intake. Headcount up 7% year-on-year, led by our International
business up 11%
-- Good net cash position of c.GBP80 million, in line with our
expectations (30 September 2017: c.GBP60 million; 30 June 2018:
GBP122.9 million)
Commenting on the Group's performance, Alistair Cox, Chief
Executive, said:
"We have made a good start to our financial year, delivering
another record quarterly net fee performance. Against increasingly
tough comparatives, net fees in our International businesses grew
by 11%, including 10 all-time records. Germany and RoW continued to
perform strongly, Australia delivered its 17th consecutive quarter
of growth and, despite ongoing economic uncertainties, our UK
business continued to grow modestly.
Looking ahead, while we are mindful of macroeconomic conditions,
the outlook remains positive across our International markets. We
are continuing to invest in our key structural growth markets,
notably Germany, France, the USA and Asia to capitalise on the many
opportunities we currently see. We remain focused on driving
profitable, cash-generative growth and leveraging our platform,
which is the largest and most balanced in our industry. This means
we can look to the future with confidence."
Group
In the first quarter, ended 30 September 2018, Group net fees
increased 7% on a headline basis and 9% on a like-for-like basis
versus the prior year. This represented our 22nd consecutive
quarter of year-on-year growth. The relative strength of sterling
against the Australian dollar and the Euro reduced our reported net
fee growth.
Our Temp business, which represented 57% of Group net fees, grew
8% in the quarter. Net fees in our Perm business, which accounted
for 43% of Group net fees, grew strongly, up 11%. There were no
working day impacts year-on-year in the quarter.
The Group net fee growth exit rate was below that of the quarter
as a whole at 7%. The reduction, which was driven by Europe
including our largest market of Germany, was in part due to
increasingly tough growth comparatives versus the prior year, and a
growth rate in Europe in September of 7%.
Consultant headcount was up 5% in the quarter and up 7%
year-on-year, boosted by our normal seasonal graduate intake,
together with ongoing selective investment in markets where we see
strong growth opportunities like Germany, the USA and China. We
expect that sequential increases in Q2 will be below those of Q1.
During the quarter we opened two new offices, one in Belgium
(Herentals) and one in the Czech Republic (Brno).
Looking to Q2 FY19, our Germany business benefits from two
additional trading days versus prior year. We expect this will have
a c.1% positive impact on Group headline Q2 FY19 net fee growth,
and c.3% positive impact on Germany headline growth.
Exchange rate movements remain a material sensitivity to the
Group's reported profitability. If we re-translate FY18 profits of
GBP243.4m at 9 October 2018 exchange rates (AUD1.8510 and
EUR1.1442), we currently estimate a negative c.GBP5m operating
profit currency headwind for FY19. This represents a negative
c.GBP8m reversal from the position at our preliminary results on 30
August 2018.
Australia & New Zealand (18% net fees)
Australia & New Zealand (ANZ) delivered another good quarter
with net fees up 7%, despite tough comparatives. This represented
our 17th consecutive quarter of growth, and Q1 FY19 was also our
strongest net fee quarter since 2008. Growth in our Temp business,
which represents 67% of our ANZ net fees, was strong at 10%, while
growth in our Perm business was 1%. Private sector net fees, which
represent 67% of ANZ, grew by 7%, with public sector net fees up
5%.
Australia delivered another good quarter of net fee growth, up
9%. Market conditions remained favourable, and growth was
broad-based across most States and specialisms. Our largest regions
of New South Wales and Victoria, representing 58% of Australia net
fees, were up by 9% and 11% respectively. Queensland grew by 11%,
with South Australia strong at 18%. ACT grew by 5%.
At the Australia specialism level, net fee growth in IT was
again excellent, at 26%. Office Support grew by 12%, and Sales
& Marketing delivered an excellent 20% growth. Net fees in
Construction & Property, our largest business in Australia,
declined by 1%, and Accountancy & Finance declined by 3%.
New Zealand trading (which represents c.4% of ANZ net fees)
remained tough, and net fees fell 29%. We have taken action to
improve our performance.
Consultant headcount in ANZ grew 4% in the quarter and is up 7%
year-on-year.
Germany (27% net fees)
Our largest market of Germany delivered another record net fee
quarter, with strong growth of 13%, against increasingly tough
comparatives.
Our Temp & Contracting business, which together represented
83% of Germany net fees, grew by 10%. Contracting, which
represented 56% of Germany net fees, grew 8% and Temp, 27% of net
fees, delivered strong growth of 14%.
Our growth in Perm continued to be excellent, up 29%.
Our largest specialisms of IT and Engineering grew by 8% and 9%
respectively. Growth in Accountancy & Finance was again
excellent at 27%, with Sales & Marketing up 18%. Construction
& Property grew by 9%, and Legal by an impressive 69%.
Consultant headcount grew 4% in the quarter and increased 7%
year-on-year.
United Kingdom & Ireland (24% net fees)
Growth in the United Kingdom & Ireland (UK&I) was 3%,
led by our public sector business up 8%. This was in part due to
easier comparatives following the negative impact of IR35 changes
in the public sector, implemented in April 2017 and which had a
negative impact on Q1 FY18. Conditions remained broadly stable in
private sector markets, which represented 74% of UK&I net fees
and grew by 1%.
Our Temp business delivered good growth, up 7%. Growth in Public
sector Temp was strong, up 15%, with the Private sector up 4%. Net
fees in Perm were down 2% in the quarter.
All regions traded broadly in line with the overall UK business,
with the exception of Northern Ireland and the South West &
Wales, up 15% and 12% respectively, and the South East and the
Midlands, down 7% and 5% respectively. Our largest UK region of
London grew by 5%. In Ireland, our business delivered another
strong performance, with net fees up 12%.
At the specialism level, IT delivered strong growth in net fees,
up 14%. Construction & Property grew by 7%, with Office Support
up 5% and Accountancy & Finance up 1%. Education continues to
be impacted by tough market conditions, falling 12%.
Consultant headcount grew by 3% in the quarter, driven by our
seasonal intake of graduates. Year-on-year our headcount declined
by 1%, as we continued to focus on driving consultant
productivity.
Rest of World (31% net fees)
Our Rest of World division, encompassing 28 countries, delivered
strong net fee growth of 14%. 15 countries grew more than 10%,
including nine all-time quarterly records.
Europe-ex Germany produced good growth of 9%, despite
increasingly tough year-on-year comparatives. France, our largest
RoW market, grew by 8% while Spain delivered another strong
quarter, up 16%. Belgium, our fourth largest RoW country by net
fees, grew 3%.
Asia delivered excellent performance overall, with net fees up
20%. China, our third largest RoW country, grew by an excellent
29%, including Hong Kong net fees up 41%. Japan's growth of 19% was
also strong.
Net fee growth in the Americas was excellent, up 22%. The USA,
our second largest RoW country by net fees, delivered another
excellent quarter, growing by 27%. Growth in Canada was also an
excellent 27%, while Brazil net fees fell 3%. Mexico remains a
tough market, with net fees down 7%.
Consultant headcount in RoW was up 7% in the quarter and 14%
year-on-year.
Cash flow and balance sheet
Net cash was c.GBP80 million as at 30 September 2018 (30
September 2017: c.GBP60 million; 30 June 2018: GBP122.9 million).
The decrease in the quarter was in-line with our expectations and
is due to the normal timing and phasing of cash flows.
Enquiries
Hays plc
Paul Venables
David Phillips +44 (0) 20 7383 2266
+44 (0) 20 3486 2022
Finsbury
Guy Lamming Group Finance Director
Anjali Unnikrishnan Head of Investor Relations + 44 (0) 20 7251 3801
Conference call
Paul Venables and David Phillips of Hays plc will conduct a
conference call for analysts and investors at 8:00am United Kingdom
time on 11 October 2018. The dial-in details are as follows:
+44 (0) 20 3003
Dial-in number 2666
Dial-in number (UK +44 (0) 80 8109
toll-free) 0700
Password Hays
The call will be recorded and available for playback for seven
days as follows:
+44 (0) 20 8196
Replay dial-in number 1998
Access code 3152826#
Reporting calendar
Trading Update for the quarter ending 31 December
2018 15 January 2019
Interim results for the six months ending 31
December 2018 21 February 2019
Trading Update for the quarter ending 31 March
2019 16 April 2019
Hays Group overview
As at 30 June 2018, Hays had c.11,000 employees in 257 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 diversification and internationalisation
of the Group, with the International business representing c.76% of
the Group's net fees, compared with 25% in 2005.
Our c.7,500 consultants work in a broad range of sectors, with
no sector specialism representing more than 21% of Group net fees.
While Accountancy & Finance, Construction & Property and IT
represent 50% 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 sectoral diversification,
the Group's net fees are generated 57% from temporary and 43%
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 Quarterly Update (the "Report") has been prepared in
accordance with the Disclosure Guidance 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 contained 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 shall not be placed on any forward-looking
statement. Additionally, forward-looking statements regarding past
trends or activities shall 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
shall 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, advisors 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 announcement contains inside information.
LEI code: 213800QC8AWD4BO8TH08
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTBCBDGLBBBGIG
(END) Dow Jones Newswires
October 11, 2018 02:00 ET (06:00 GMT)
Hays (LSE:HAS)
Historical Stock Chart
From Apr 2024 to May 2024
Hays (LSE:HAS)
Historical Stock Chart
From May 2023 to May 2024