Hays strong growth hints jobs market recovery
Hays Plc, the U.K’s largest professional-recruitment agency, rose the most in three months amid signs that the outlook for fee income is improving.
In the three months ended June 30 net fees increased 1 per cent on a like-for-like basis from a year earlier, the London-based company said today in a statement. In Asia Pacific net fees fell by 13 per cent on a decline in Australia, while in Asia they increased by 20 per cent. In Continental Europe and the rest of the world, net fees rose 9 per cent and in the U.K. and Ireland they grew 7 per cent.
“The statement looks positive as net fees rose by 1 per cent compared to company provided consensus of a 2 per cent decline,” wrote Robert Plant, an equity analyst at JPMorgan Cazenove, in a note to clients. The performance in the U.K. and Ireland was the “main positive swing factor.”
The company said it now expects full-year operating profit to be at the top end of analysts current estimates, which range from £112.3 million (US$170 million) to £125.5 million.
U.K. jobless claims fell more than economists forecast in May and a wider measure of unemployment also declined, providing further evidence that an economic recovery is under way. Jobless claims declined 8,600 from April to 1.51 million, leaving the rate at a 2 1/2-year low of 4.5 per cent, the Office for National Statistics said last month.
Still, a slump in the euro area, Britain’s biggest export market, and government austerity at home continue to weigh on the U.K. economy. Continental Europe and the rest of the world is the largest division for Hays, representing 40 per cent of total net fees.
“Looking ahead, we expect continued fragile and mixed conditions,” chief executive officer Alistair Cox said in the statement. “Several markets are likely to remain challenging and these will sit alongside clear opportunities for growth.”