European recruitment boosts profits at Hays despite ‘challenging’ London trading

Profits at recruitment firm Hays are set to come in ahead of market expectations, despite the company grappling with a slowdown in its UK and Ireland business as London trading remains "challenging".

The firm hailed a record net fee performance for the quarter to June 30, helped by its European operation.

Total like-for-like sales grew 7% in the period, with continental European and Hays' global arm seeing an 11% rise, but the UK and Ireland fell 5%.

The firm flagged earlier this year that the UK business had suffered a Brexit hit, as British companies applied the brakes to their hiring plans following the EU referendum vote.

But the drag was not enough to dampen the outlook for full-year operating profit, which is expected to be “marginally ahead” of consensus market expectations of £209.5 million.

Chief executive Alistair Cox said: “We have ended our financial year with a record quarterly net fee performance.

“Europe delivered strong results, led by an excellent performance in Germany, where we have increased consultant headcount by over 20% during the year.”

He added that the underlying trends in the UK remain “sequentially stable”, with modest improvements in the private sector offset by a tough public sector market.

In the UK and Ireland, which make up 25% of the group, fees in London tumbled 9% and Hays’ accountancy and finance division was down 4%.

Overall net fees rose 15% and continental Europe and global grew 24%.

PA Wire