Recruiter hit over fears for London jobs market

DARK clouds hung over the UK job market yesterday after recruitment firm Hays revealed a sharp decline in hiring activity.

Despite record overall fee growth of 15pc for the quarter ended June 30, Hays said UK recruitment activity fell 5pc over the period, topping off a mixed week for British recruiters. Ironically, it comes in a week where the country is near record-low unemployment.

With Hays reporting 25pc growth in Asia Pacific and 24pc growth across Europe and the rest of the world, the UK was the only part of its business in decline.

Digging deeper, the firm saw public sector hiring fall a considerable 17pc, while fees from London hiring fell 9pc, driven by a drop in demand for jobs in accountancy and finance.

Hays was careful not to mention Brexit specifically in its explanation for the fall, instead citing fewer trading days, tough market conditions and changes to the law.

UK aside, Hays expects full-year profits to be marginally ahead of market expectations, which come in at around £210m.

Furthermore, chief executive Alistair Cox said the firm’s ‘excellent cash position’ has led it to consider a dividend hike, which prompted analysts at RBC to give the stock a ‘sector perform’ rating.

‘This looks a sensible place to be for those looking for staffing exposure,’ they said in a note. Shares rose 0.1pc, or 0.1p, to 167.6p.

Hays’s damning outlook for the UK echoes rival Page Group, which earlier this week reported a 4.5pc decline in UK hiring activity over the last quarter and a 2.3pc decline over the first half of the year.

But unlike Hays, Page Group was quick to specifically pinpoint Brexit as a headwind for its UK operations. ‘There remain a number of uncertainties as we continue through 2017, including the impact of Brexit negotiations and political uncertainty in the UK,’ said chief executive Steve Ingham.

Shares yesterday fell 0.7pc, or 3.3p, to 475.1p. That being said, fellow recruiter

Robert Walters was notably nonchalant about the UK in its update on Wednesday, reporting a 13pc year-on-year rise in profits across the region over the last quarter. Its shares were down 1.1pc, or 5.25p, at 459.75p yesterday.

The FTSE 100 closed in the red yesterday, although it still managed to narrowly clock a weekly gain. It fell 0.5pc, or 35.1 points, to 7378.4, but rose 0.2pc over the week.

Acacia Mining has agreed higher royalty payments on its revenues in Tanzania, despite an ongoing row with the country’s government. In what RBC analysts called ‘a show of good faith’, Acacia will now have to pay a 6pc surcharge to the government on all its gold from its three mines in the country, up from 4pc.

It will also pay a 1pc clearing fee on exports.

The FTSE 250 company has been at loggerheads with Tanzania’s government since March, when it banned the export of gold concentrate. It also accuses Acacia of failing to declare tens of billions of dollars worth of revenues and tax payments. Shares rose 1.4pc, or 3.9p, to 285.8p.

Shares in Dixons Carphone were off slightly after the firm sold its Spanish assets for around £48m.

Despite the firm promising to reinvest the money made from the sale back into its business – which is currently beating forecasts – investors were nonplussed, and shares fell 1.7pc, or 4.5p, to 260p. Stamp and coin collecting firm

Stanley Gibbons suffered after announcing that the £2.4m sale of parts of its interiors business would be delayed due to funding issues.

Shares in the firm fell 3.8pc, or 0.38p, to 9.62p.