ii view: recruiter Hays hunkers down

Full-year results to 30 June

• Net fees down 11% to £972 million
• Operating profit down 56% to £45.6 million
• Final dividend of 0.29p per share
• Total dividend for the year down 59% to 1.24p per share
• Net cash of £37 million, down from £57 million a year ago

Chief executive Dirk Hahn said:

"Market conditions remained challenging during the year, with economic and political uncertainty weighing on confidence, increasing 'time-to-hire' and reducing placement volumes. 

“Our strategy, targeting the most in-demand sectors, roles and geographies, building stronger client relationships and increasing exposure to Temp & Contracting recruitment, continues to develop. 

“I am confident we have the right strategy and people and we remain well positioned to drive material net fee and profit growth when key markets recover."

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ii round-up:

In what is now being seen as the longest hiring downturn on record, recruiter Hays (LSE:HAS) today more than halved the group’s annual dividend payment as well as announcing a further £45 million cost saving programme that will run to 2029.

Exposure to economic woes in Germany and the UK left annual net fees to late June down 11% at £972 million, driving a 56% fall in operating profits to £46.7 million. A total dividend payment for the year of 1.24p per share is down from last year’s 3p. Accompanying outlook comments flagged trading for July and August were in line with the tough prior fourth quarter, with trends during the important month of September too early to judge. 

Shares in the FTSE 250 company fell 3% in UK trading having come into these latest results down around a fifth so far in 2025. That’s similar to rival PageGroup (LSE:PAGE). The FTSE 250 index is up almost 6% year-to-date. 

Hays recruits across industries including IT, accountancy and engineering. Group net cash held of £37 million is down from £57 million a year ago, with the cut in the dividend realigning towards its target of two-to-three times earnings cover.

Employee numbers of 9,500 in 207 offices and across 31 countries is down from more than 10,500 staff in 2021 situated in 256 offices and across 33 countries. 

Cost savings totalling £35 million over this latest financial year exceeded management’s initial target of £30 million. 

Capital expenditure for the year ahead is expected to rise to £35 million from £22.7 million over the year just gone. Spending will be focused on AI investment and technology infrastructure.  

A trading update for the current first-quarter period to late September is scheduled for 10 October. 

ii view:

Headquartered in London, Hays recruits across 21 specialisms, with information technology generating a quarter of all fees. That’s followed by accountancy and finance at 15%, engineering 11%, construction and property 11% and others the balance. Temporary and contracting hires account for most fees at 62% with permanent hires the balance of 38% over this latest year. 

For investors, the tough economic backdrop continues to hinder confidence among both corporate clients and job seekers, particularly for permanent positions. US trade tariff uncertainty overhanging corporate customers in countries such as Germany, France, the UK, and Ireland cannot be forgotten. A rebasing of the dividend now leaves the shares on a forecast dividend yield of under 1%, while currency movements such as those for the group’s Australasian business can impact performance. 

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More favourably, an ongoing focus on costs persists with a further savings programme being launched. A diversity of client industries and geographical locations exist. Investment in potentially cost saving AI tools is being made, while the group still holds net cash, although down from a year ago.

In all, and while exposure to an eventual economic recovery offers interest, more cautious investors will likely await evidence of an upturn in core regions such as Germany.   

Positives: 

• Business sector and geographical diversity
• Focus on improving efficiency

Negatives:

• Economic outlook uncertainty
• Currency moves can impact

The average rating of stock market analysts:

Strong hold

ii's head of editorial Lee Wild owns Hays shares