Hays Net Fees Fall Again But Positioned For Growth

The U.K.'s largest recruiter, Hays PLC (HAS.LN), Thursday said that while net fees continued to fall, the company is positioned better than ever to capitalize on cyclical and structural growth as markets recover over time.

The company said it has seen progress in most of its markets but that dynamics vary by region.

"Where markets are recovering, we are now increasing our capacity and selectively recruiting to meet growing demand," said Chief Executive Alistair Cox.

Hays said its consultant headcount was up 2% with selective investment in Asia, Australia, Germany and Brazil.

Still, third-quarter net fees to March 31 fell 5%, or 10% on an organic basis at constant currency. They were dragged down by operations in the U.K., where net fees fell 18% while Asia Pacific rose 23%.

Temporary placements fell 8% while permanent only fell 1%.

But Hays said it recorded a 2% sequential growth in net fees versus the previous quarter, led by 7% sequential net fee growth in Asia Pacific. It also saw continued stability in the U.K. but that growth in the private sector was offset by reduced demand in the public sector.

European recruiters have been hard hit by the credit crunch and subsequent recession, as companies have contracted and reduced staff or stopped hiring. Individuals are also not ready to move jobs in the uncertain climate, which caused demand for recruitment consultants to drop.

Hays shares closed Wednesday at 112 pence, valuing the company at GBP1.55 billion. They have gained 8% since the start of the year on hopes that the recruitment market, previously shattered in the recession, has slowly started to improve.

-By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; anita.likus@dowjones.com

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