RECRUITER Hays posted a one per cent fall in second quarter group net fees after lower activity in its high margin mining industry in Western Australia led to a hiring slowdown.
The weaker performance in Asia, which represents 29 per cent of group fees, was partially offset by 12 per cent net fee growth in Europe and the rest of the world, worth 40 per cent of the group, with Germany again its top performer.
Chief executive Alistair Cox said yesterday that he was pleased 12 countries delivered growth of more than 10 per cent but that the UK, southern Europe and banking-related specialisms remained tough.
“Overall, we expect conditions to remain fragile,” he said.
The slowdown in resources and mining hit permanent recruitment particularly hard in Australia and New Zealand in the three months to the end of December, with overall fees there down 15 per cent and Asia also declining.
Hays cut its headcount in the Asia Pacific region by six per cent in the quarter. The overall group net fee decrease of one per cent was slightly ahead of consensus estimates of a two per cent drop. UK and Ireland net fees fell four per cent year-on-year.
Analysts at Jefferies said they were hopeful of improved momentum in the second half of the year but downgraded 2013 earnings per share by five per cent on the news to 4.47p.
“A deterioration in high margin Asia Pacific and improvement in low margin UK is unhelpful for profitability,” analysts said
City A.M. Reporter