Hays PLC on Tuesday reported ‘a more difficult December’ with a decline in fees, as it reported a weaker than expected outlook.
The London-based recruitment company said second-quarter group fees fell 10% annually on a like-for-like basis, with a slowdown seen in December.
Hays added it expects pre-exceptional operating profit for the six months to December 31 to be around £60 million, lower than current market expectations of £73 million.
For the six months to December 31, 2022, it had reported operating profit of £97.0 million, down 4.5% from £101.6 million a year prior.
The company expects a decline of 12% in net fees for the three months to December 31, compared to a year prior. In Germany, it expects net fees to remain flat while it eyes a fall of 24% in Australia & New Zealand, 17% in the UK & Ireland and 13% in the rest of the world.
Chief Executive Officer Dirk Hahn said: ‘Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our Perm businesses as client and candidate decision-making slowed. Temp volumes remained broadly stable sequentially through the quarter, but declined YoY as we did not see our normal seasonal step-up in worker volumes.’
He added: ‘Given increased uncertainties and reduced client and candidate confidence, our New Year ’return to work’ is particularly important, and we are closely monitoring activity levels. It is too early to say if December’s weakness reflects a sustained market slowdown or some placement deferrals, however, we expect near-term market conditions to remain challenging. Consequently, we accelerated our cost reduction and efficiency programmes, while focusing on increased operational performance and rigour.’
Hays shares fell 14% to 93.05 pence each on Tuesday morning in London.
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