Hays profit beats forecast, enters new markets

By IBTimes Staff Reporter | September 02 2010 9:00 AM

Recruiter Hays posted a halving of full-year pretax profit, beating forecasts, after growth in Asia helped it counter a tough first half which was battered by a difficult economic climate.

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Hays, which places people in white-collar jobs, said it made a pretax profit of 71.1 million pounds, compared with 151 million pounds in the year-ago period, but ahead of the 67.5 million pound consensus found by Thomson Reuters Starmine.

Shares in Hays were up 4.3 percent at 98.5 pence by 9:33 a.m., while the FTSE All Share index was up 0.06 percent.

(The results) were ahead of consensus ... parts of the business have seen good recovery now, it looks like we've seen the worst. The UK is still a bit of a laggard, but they're well positioned in Asia, said Mike Allen, an analyst at Panmure Gordon.

Net fees in the second half grew by 8 percent and the company said the British private sector job market improved, although overall fees were down 17 percent for the full year.

The results really are a story of two halves. Our fist half saw a very tough market, one of the toughest ever witnessed ... we believe we turned the corner around December, Chief Executive Alistair Cox told reporters in a conference call.

The first growth areas we saw were in Asia and Australia, we've now seen a much more broad-based recovery, he said.

ASIAN BUSINESS HITS RECORD LEVELS

Performance in New Zealand and Australia had been excellent, and fees from the company's Asian offices reached record levels towards the end of the year, Cox said.

Hays' recovery in Europe has been underpinned by its performance in Germany.

But, demand in the British public sector job market deteriorated, particularly in construction and back-office staffing.

Both sub-sectors represent about 8 percent of Hays' total fees, while the British public sector job market as a whole reflects about 32 percent of Hays' business.

Cox said Hays would open a new office in Mexico in the coming months, as well as one in New Jersey in the United States, focussed on the pharmaceutical industry, which has become one of Hays' biggest markets.

Job churn -- the movement of people from one job to another, rather than job creation -- has been healthy in corporate accounts and in London's financial district.

(Editing by Sharon Lindores)