Hays shareholders will benefit from higher group profits
Hays increases shareholder payouts after FTSE 250 recruitment group profits jump 128% as skills shortage continues
- Recruitment firm Hays saw its profits rise in the six months to June 30
- The company unveiled a dividend to shareholders of 7.34 pa per share
Staffing agency Hays reported rising annual profits and increased its share buyback program by a further £18.2million.
The FTSE 250 group was buoyed by a surge in demand for new hires as employers rush to fill vacancies, with operating profits up 128% to £210.1m for the year ending June 30, up from £95.1m a year earlier.
Hays has now announced a special dividend of 7.34 pence per share and plans to return almost £170 million in dividends to its shareholders,
Hays Shares rose today and rose 4.01% or 4.60p to 119.40p in early morning trading, after falling more than 20% last year.
On the rise: recruitment agency Hays today announced an increase in its annual profit
The group’s key market, Germany, was the main contributor to growth, while the UK, Ireland and Rest of the World divisions also saw “strong profit reversals”, the company said.
In the UK and Ireland, costs rose 31%, while operating profit jumped 277% to £43.4 million.
With total fees across all deals up 32%, the recruiter was able to return cash to shareholders by increasing its share buyback program.
The company’s revenue rose by a third and exceeded £1.1 billion during the year.
Boss Alistair Cox said: “Performance across all regions was excellent. Our actions to take advantage of long-term structural opportunities, acute skills shortages and strong markets, supported by our ability to increase expense margins and the benefits of wage inflation, generated group expenses records, 24 records per country and operating profit growth of 128%.
“As macroeconomic uncertainties increase, we are closely monitoring our activity levels and KPIs, which remain broadly stable at elevated levels.
“Our goal now is to leverage the investments we have made and increase the already high productivity of our consultants.
“We have a clear strategy to continuously build leadership positions in the most attractive structural growth markets, which are characterized by continued skills shortages.
“Our global network, financial strength and highly experienced management teams give me confidence in our ability to weather the current uncertainties and remain highly focused on achieving our long-term goals.”
On costs, the group said: “Comparable costs increased by 22% year-on-year to £173.9m (£156.3m on a reported basis). ).
“This was driven by our investment in production capacity, with a 26% increase in consultant headcount at year-end and an increase in consultant commissions, which increased in line with net fees. During the year, we added 1,847 consultants, investing to capitalize on the cyclical recovery globally and in our Strategic Growth Initiatives (SGI), which continued to perform well and where we added approximately 550 consultants.
Victoria Scholar, Head of Investments at Interactive Investor, said: “Despite concerns about a recession in the UK, recruitment activity is still doing extremely well, thanks to the strength of the underlying labor market, shortages of skills and historically high vacancies in the economy.
“Hays is well placed to take advantage of the mismatch between labor demand and supply in the UK labor market.
“Its other markets such as Australia and New Zealand and Germany also performed strongly with fees up 24% and 34% respectively.
“However, there could be macroeconomic headwinds ahead with the labor market beginning to show signs of cooling and with rising inflation and interest rates weighing on businesses and their ability to hire.”