ii view: a slimmer Hays moves to mitigate AI’s impact on jobs

Full-year results to 30 June

• Net fees down 7% to £906 million
• Operating profit up 7% to £48.6 million
• Final dividend unchanged at 0.29p per share
• Total dividend for the year down 65% to 1.44p per share
• Net cash of £20.1 million held, down from £37 million a year ago

Chief executive Mark Dearnley said: “Our new Momentum strategy addresses the future hiring needs of our clients, sharpens our focus and captures the benefits associated with market leadership. As we leverage our sources of competitive advantage, we will drive higher market share, further material productivity growth, and a significant reduction in overhead costs, generating increased profitability, client and candidate satisfaction, long-term growth and improved returns.”

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ii round-up:

Global recruitment agency Hays (LSE:HAS) today reported no significant change in activity levels in July and August with the key month of September as yet too early to assess.

A refocusing on 16 core geographical markets during the full year to late June resulted in the closure or consolidation of more than 70 offices. Exceptional costs including those for restructuring of £89.6 million resulted in an annual pre-tax loss of £54.5 million, down from a profit of £1.5 million in the prior year.

Shares in the FTSE 250 company fell 2% in UK trading having come into these latest results up by a quarter so far in 2026. The FTSE 250 index is up by close to a tenth during that time, while shares for rival Michael Page (LSE:PAGE) have fallen by a tenth year-to-date.

Under relatively new head Mark Dearnley, Hays has been pursuing a refreshed strategy as it looks to battle both tough economic backdrops for key markets, as well as the uncertainty raised by AI for the jobs market.

Adjusted or operating profits for the year stripped of exceptional charges rose 7% year-over-year to £48.6 million. Cost savings totalled £50 million during the period, with a further £50 million targeted for the newly began 2027 fiscal year.

A final dividend of 0.29p per share is unchanged from that paid a year ago, although with previous adjustments leaving the total payment for the year down 65% to 1.44p per share.

Group net cash held of £20.1 million fell from £37 million a year ago. A first-quarter trading update to late September is scheduled for 12 October.

ii view:

Started over a century ago, Hays today fills over 1,000 jobs per day. Germany generated most operating profit over this latest financial year at £41.2 million. That was followed by Australia and New Zealand at £8.5 million, the UK & Ireland £4 million, and the rest of the world a loss of £5.1 million.

Technology-related jobs generated most net fees this year at 26%, followed by accountancy & finance at 15%, construction & property 12% and engineering 10%. Almost two-thirds of net fees came from temporary hires, with permanent hires the balance.

Initiatives under the group’s Momentum strategy include a more focused geographic footprint, targeting investment in six global specialisms such as accountancy, and looking to recruit for higher-salary jobs where the impact of AI is expected to be lower.

For investors, tough economic conditions in its biggest market Germany have hindered corporate client and job-seeking candidate confidence, particularly for permanent positions and related fees. A previous cut to the dividend payment now leaves the shares sat on a forecast dividend yield of under 1% compared to a prior 4%-plus. An estimated future price/earnings (PE) ratio above the three- and 10-year averages may suggest the shares are not obviously cheap, while the broad threat to the jobs market from AI remains difficult to predict.  

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On the upside, focusing management time and investment on higher-performing markets looks sensible, with the addressable market for its targeted 16 countries estimated at £100 billion and growing. 

Further cost-saving initiatives continue to be pursued. A diversity of client industries and geographical locations persists, while the group’s own investment in AI could eventually help improve productivity and profits. 

For now, and while ongoing management moves to improve productivity and profits offer interest, a consensus analyst estimate of fair value sat at under 50p per share leaves the shares up with events.

Positives:

• Business sector and geographical diversity
• A focus on improving efficiency

Negatives:

• Economic outlook uncertainty
• Currency moves can impact

The average rating of stock market analysts:

Hold