Recruitment firm Hays reported a fall in profit this morning after the UK general election and a weak economy in Germany hurt revenue.
Like-for-like operating profit dropped 18 per cent to £100.1m, down from £124.1m in 2018, as net fees slumped two per cent to £553.1m.
Profit before tax was also down 22 per cent to £95.6m, and basic earnings per share also fell 22 per cent to 4.6p.
The company held its dividend per share at 1.11p.
Why it’s interesting
Net fees in Germany – Hays’ largest market – were down five per cent with operating profit down 20 per cent, due to a slowdown in the economy.
The recruitment firm’s performance in the UK was impacted by “pre-election uncertainties”, which led to private sector fees dropping eight per cent, however it added that “in time the result could provide impetus”.
Meanwhile, public sector fees jumped eight per cent.
Hays said that the Australian bushfires in December “severely impacted the market”, although fees were broadly stable beforehand.
Meanwhile, the company said the near term trading conditions “remain difficult”, with the outbreak of coronavirus cited as a concern.
What did Hays say?
Chief executive Alistair Cox said : “Overall, we have seen a marginally slower New Year ‘return to work’ than prior years. We expect near-term macro conditions to remain difficult and are mindful of continuing uncertainties, including the coronavirus.
“While our focus will be on cost management, we also see growth opportunities, for example on the IT sector globally and in the USA, and we will continue to invest in them.
“Our task is to balance such opportunities while driving efficiency. Our highly experienced management teams, combined with our financial strength, gives us confidence in achieving this balance.”