Hays eyes India as H1 profit rises 22 pct

LONDON - British recruitment firm Hays posted a 22 percent rise in first-half profit on Tuesday and said it was considering expansion into India as it made a good start to the second half of its financial year.

By (Reuters)

Published: Tue 26 Feb 2008, 4:27 PM

Last updated: Sun 5 Apr 2015, 12:24 PM

‘Whilst mindful of the economic uncertainty, the board remains confident in its outlook for the year,’ the group said.

Chief Executive Alistair Cox told reporters the group’s strategy to grow internationally had paid dividends and said it would consider further expansion in India, South Africa and the United States. It already operates in 26 countries.

He also added that the group had not seen any signs of an economic slowdown and said it had built a very flexible cost base if that occurred, but he cautioned that Hays only had indications of job bookings about four to six weeks ahead.

Shares in Hays were down 2.6 percent at 113 pence at 0926 GMT.

It reported profit before tax on continuing activities of 122.7 million pounds ($241 million), with net fees up 23 percent on a like-for-like basis at 374.8 million pounds.

Hays said it had seen an outstanding performance from its international business, with net fees up 45 percent on a like-for-like basis, meaning the division now represented 40 percent of group net fees.

Net fee growth in the UK and Ireland was 11 percent on a like-for-like basis, due to growth in permanent and temporary placements, investment in consultants and a focus on specialist sectors.

Profit in the UK and Ireland division has previously been affected by legislative changes and a reduction in the temporary business margin and group Cox has recently taken over leadership of that business to increase efficiency, Hays said.

‘Overall for our business, demand continues to be strong,’ Cox told reporters on a conference call. ‘In the UK, we’ve said while it is slower than the first half of the year, demand is still good.

Analysts at Landsbanki said the results were ‘fine’ and noted that the statement did not indicate any massive correction in forecasts.

‘Even if the UK shows no better growth than in H1 the group looks set to comfortably match our full-year forecasts with something to spare we therefore maintain a buy recommendation and price target of 155p,’ analyst Ian Jermin said in a note.

The dividend per share was increased by 16 percent to 1.85 pence.

Net fees are equal to turnover, less the payroll costs of temporary contractors and workers.