- Annual revenues top pre-pandemic levels
- Operating profits surge almost 130%
- Announces special dividend of 7.34p
Shares in global recruitment firm Hays (HAS) jumped as much as 8% to 124p in early trading, reversing the previous day’s losses, after the company released full year earnings which were at the top of estimates and unveiled another special dividend.
NEW NORMAL
Revenues for the year to June rose 32% on a like-for-like basis to £1.19 billion, topping 2019’s pre-pandemic £1.13 billion for the first time, with 24 countries setting new records for net fee income.
Fees accelerated from £565 million in the first half to £624 million in the second half with March marking a record month.
Moreover, the three months to June set a new quarterly record for the group, with fees and activity levels ‘sequentially stable at strong levels’ thanks to higher margins and improved client and candidate confidence.
Operating profits jumped 128% to £210 million, at the top of the company’s forecast range, with cash conversion strongly ahead of last year at 17.7% against 10.4% as the firm improved its cash collection.
Germany, the group’s largest business representing 26% of net fees and 35% of operating income, was the biggest absolute contributor to profit growth registering 152% organic growth.
The UK and Ireland, which account for 22% of fees and 21% of operating profits, staged a strong recovery with profits rebounding by 277% to just shy of their 2019 level.
The firm also marked two more milestones, with the Technology specialism exceeding £300 million in fees for the first time and the Enterprise business reaching a £200 million in fees.
GREATER RETURNS
In line with its long-held policy of returning surplus cash, Hays announced a core dividend of 2.85p per share, up 134% on last year, and a special dividend of 7.34p per share, taking the total payout to over 10p per share or £168 million in total.
In addition, after consulting its institutional investor base, the firm increased its share buyback by £18 million since, as outgoing finance director Paul Venables put it, ‘the shares seem to be priced for a recession’ rather than reflecting the firm’s strong profitability and growth potential.
Richard Sloss, director at research firm Edison, described today’s announcement as ‘a strong set of results that gives Hays a strong foundation for the year ahead’.
