FINANCIALS: Hays sees 6% rise in NFI

Recruitment giant Hays has recorded a 6% increase in net fee income year-on-year, according to preliminary results for the year ended 30 June 2019.

The results, released this morning, reveal NFI rose from £1.072bn to £1.129bn with operating profit before exceptional items up 4% from £243.4m to £248.8m and profit before tax before exceptional items up 3% from £238.5m to £246.3m over the same period.

The period saw the group invest in consultant productivity tools and back office scalability and open eight new offices across the globe. But it also saw the restructure of several country operations, mainly in Europe, incurring an exceptional £6.8m charge. The restructure was expected to deliver £5m in savings in the future, however.

Across the group’s regions of operation, NFI was up 2% in the UK & Ireland, and Germany was the standout performer with NFI up 9%. The group also NFI rise 4% in Australia and New Zealand, and 8% in its rest of world segment.

Hays CEO Alistair Cox said: “Nineteen countries delivered all-time records, including Germany, France, Canada, the USA and China, and our International business grew net fees by 7%. We invested in strengthening our leading positions in key markets like Australia and Germany, while also restructuring some of our European businesses to maximise their profitability. Our UK business delivered a solid result, despite ongoing uncertainties.

“Looking ahead, despite an increasingly tough global economic backdrop, our market positions, combined with our highly experienced global management teams and strong financial position, means I am confident we will continue to appropriately balance our long-term potential with the more challenging markets we currently face.”

Offering their analysis on Hays’ performance, Steve Miley, senior market analyst at broker comparison service Ask Traders, said: “The uncertainties regarding the economic growth during the year have been recognised in the company working day adjusted fee growth, that slowed through the year from 14% in the last quarter of 2018 to just 1% in the last 2019 reported quarter. 

“The UK and Ireland market that represents 23% of Hays net fees has recorded a 2% increase in annual terms. The uncertainty regarding Brexit affected the business sentiment and generated a decrease of 1% in net fees generated by the private sector. The 11% growth in public sector counterbalanced the private sector performance and brought the region net fees into positive territory. With the Brexit outcome dominating the business sentiment and a second quarter economic contraction, net fees growth in this area will be at least uncertain.

“Overall the company is on track of deliver the five-year plan running a cash generative business. The macroeconomic environment, though, can and will affect the company evolution and profitability.”

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