Interim Management Statement
HAYS PLC
INTERIM MANAGEMENT STATEMENT
QUARTER ENDED 30 SEPTEMBER 2010
7 October 2010
Financial summary
Growth in net fees for the quarter ended 30 September 2010 (Q1)
(versus the same period last year) growth
actual LFL*
By region
Asia Pacific 59% 39%
Continental Europe & Rest of World 24% 27%
United Kingdom & Ireland 1% 1%
Total 21% 18%
By segment
Temporary 12% 9%
Permanent 34% 30%
Total 21% 18%
* LFL (like-for-like) growth represents organic growth at constant currency.
Highlights
- Group net fee growth of 18%* versus prior year, driven by strong
performances in Asia Pacific and Continental Europe & Rest of World
divisions
- Strong and broad based recovery with 17 countries achieving net fee growth
in excess of 25%*
- Continued stability in the UK with 23% growth in private sector markets
offsetting tough conditions in parts of the public sector
- International consultant headcount increased by 6% during the quarter
Commenting on trading for the quarter ended 30 September 2010, Alistair Cox,
Chief Executive of Hays plc, said:
"This quarter we have seen strong and broad based growth across most of our
markets, with net fees from our International business growing by a third*
versus last year. The outlook remains good across 90% of our markets and we are
continuing to invest in headcount across Asia Pacific, Continental Europe and
South America.
Our international diversification is delivering clear benefits with 60% of the
Group's net fees now generated outside the UK. Our global reach, combined with
the investments we have made in the business throughout the downturn, place us
in a strong position to capitalise on the significant growth opportunities in
the professional recruitment markets across the world."
Group
In the quarter ended 30 September 2010, Hays, the leading global professional
recruitment group, increased net fees by 21% (18% on a like-for-like basis*)
versus the same period last year. Net fees from the temporary placement
business increased by 9%* and net fees from the permanent placement business
increased by 30%* as we saw continued strong improvement across nearly all of
our markets.
On a sequential basis, total Group net fees increased by 5%* against the
previous quarter. This growth reflects improved underlying trends and the
benefit of four additional working days compared to the previous quarter,
partially offset by the traditionally quieter summer months of July and August,
particularly in our businesses in Continental Europe. The Group's underlying
temporary placement margin** remained stable and in line with the previous
quarter. The Group's consultant headcount was increased by 4% during the
quarter, driven by ongoing investment in Australia, Asia, Continental Europe
and South America. New offices were opened in Campinas in Brazil and in Suzhou
in China.
Overall, the Group's performance in the quarter has been in line with the
Board's expectations.
Asia Pacific
In Asia Pacific we recorded net fee growth of 39%* versus prior year, with 12%*
sequential net fee growth against the previous quarter. In our market-leading
Australia & New Zealand business, we recorded net fee growth in our permanent
placement business of 60%*, with temporary placement net fees up 19%* versus
prior year. Our performance in Asia, which accounts for 14% of the division's
net fees, was again very strong with the region achieving growth of 76%*
against prior year.
Consultant headcount was increased by 9% during the quarter, with headcount up
19% in Asia, as we continue to invest to ensure we capitalise on the
opportunities for growth we are seeing across the division.
Continental Europe & Rest of World ('RoW')
In Continental Europe & RoW we recorded net fee growth of 27%* versus prior
year, with net fees flat against the previous quarter with improving underlying
trends offsetting the traditionally quieter summer period. Our German business
had another strong quarter with net fees increasing 26%* versus prior year.
Here, our market-leading IT Contracting business saw contractor numbers reach
pre-downturn levels and we have seen increasing momentum across our temporary
and permanent placement businesses in our other specialisms. Most other
countries in the division have continued to see improving market conditions,
led by strong performances in Brazil, Italy, Portugal, Austria and Poland which
each achieved net fee growth in excess of 35%* versus prior year.
Consultant headcount was increased by 4% during the quarter and we are
continuing to add heads across the division.
United Kingdom & Ireland
In the United Kingdom & Ireland, we have again seen stable net fee trends with
net fees increasing by 1% versus prior year and with quarter-on-quarter net
fees increasing by 4%. We achieved strong growth in the private sector
business, which increased by 23% against prior year, driven by strong
performances in our Accountancy & Finance, Pharma, Corporate Accounts and
City-related businesses. Our public sector business, which represents 26% of
the division's net fees, decreased by 34% versus prior year as public sector
markets continue to weaken.
Consultant headcount was increased by 3% in the quarter, with modest investment
in the private sector partially offset by reductions in the public sector.
During the quarter, the Group announced that Royston Hoggarth has succeeded Tim
Cook as United Kingdom & Ireland Managing Director. Before joining Hays,
Royston was Chief Executive for BT PLC's Global Services UK. Tim Cook, after
successfully leading the United Kingdom & Ireland business through the
recession and overseeing the implementation of the new front office and back
office systems, has now taken on the role of Group Head of Business Innovation.
Cash flow and balance sheet
The Group continued to deliver a strong cash flow performance. Net debt
increased modestly to around £100 million (30 June 2010: £77.2 million) at the
end of the period due to the phasing of cash flows. As previously guided we
expect this to increase further in the next quarter following the payment of
the final dividend in November.
* LFL (like-for-like) growth represents organic growth at constant currency.
** The underlying temporary placement gross margin is calculated as temporary
placement net fees divided by temporary placement gross revenue and relates
solely to temporary placements in which Hays generates net fees and
specifically excludes transactions in which Hays acts as agent on behalf of
workers supplied by third party agencies.
Enquiries
Hays plc
Paul Venables Finance Director + 44 (0) 20 7383 2266
Martin Abell / Investor Relations + 44 (0) 20 7383 2266
James Hilton
Maitland + 44 (0) 20 7379 5151
Neil Bennett
Liz Morley
Conference call
Paul Venables and Martin Abell of Hays plc will conduct a conference call for
analysts and investors at 8:00am United Kingdom time on Thursday 7 October
2010. The dial-in details are as follows:
Dial-in number + 44 (0) 20 7906 8535
Password hays
The call will be recorded and available for playback for seven days as follows:
Replay dial-in number + 44 (0) 20 3364 5943
Access code 276155#
Reporting calendar
Trading Update for quarter ending 31 December 2010 6 January 2011
Half Year Report for 6 months ending 31 December 2010 28 February 2011
Interim Management Statement for quarter ending 31 March 2011 7 April 2011
Trading Update for quarter ending 30 June 2011 7 July 2011
Note to editors
Hays plc (the "Group") is the leading global professional recruiting group. The
Group is the expert at recruiting qualified, professional and skilled people
worldwide, being the market leader in the UK and Asia Pacific, and one of the
market leaders in Continental Europe. The Group operates across the private and
public sectors, dealing in permanent positions, contract roles and temporary
assignments. As at 30 June 2010, the Group employed 6,845 staff operating from
270 offices in 28 countries across 17 specialisms. For the year ended 30 June
2010:
- the Group reported net fees of £557.7 million and operating profit of £80.5
million;
- the Group placed around 50,000 candidates into permanent jobs and around
180,000 people into temporary assignments;
- 26% of Group net fees were generated in Asia Pacific, 30% in Continental
Europe & RoW and 44% in the United Kingdom & Ireland;
- the temporary placement business represented 58% of net fees and the
permanent placement business represented 42% of net fees; and
- Hays operates in the following countries: Australia, Austria, Belgium,
Brazil, Canada, China, the Czech Republic, Denmark, France, Germany, Hong
Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, the Netherlands,
New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden,
Switzerland, UAE and the United Kingdom.
Cautionary statement
This Interim Management Statement has been prepared solely in compliance with
the Disclosure Rules and Transparency Rules of the UK Financial Services
Authority and is not audited. Statements in this Interim Management Statement
reflect the knowledge and information available at the time of its preparation.
Certain statements included or incorporated by reference within this Interim
Management Statement 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 should not be placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities should not be
taken as a representation that such trends or activities will continue in the
future. 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 Interim Management Statement should be construed as
a profit forecast. This Interim Management Statement does not constitute or
form part of any offer or invitation to sell, or any solicitation of any offer
to purchase 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. Past
performance cannot be relied upon as a guide to future performance. Liability
arising from anything in this Interim Management Statement shall be governed by
English Law. Nothing in this Interim Management Statement shall exclude any
liability under applicable laws that cannot be excluded in accordance with such
laws.