Five-year profits plan on track at Hays
operates in 33 countries, finding permanent, contractual and temporary jobs for white collar and professional workers.
Midas last looked at the firm in October 2014, with the shares at 116p. Today they are 159¾p and chief executive Alistair Cox is on track with a five-year plan to take profits from £125million in 2013 to almost £250million by next year.
The firm’s three largest markets are Germany, Australia and the UK. In the six months to December, fees in Germany grew by 10 per cent and Australia 11 per cent, but in the UK they fell by 10 per cent. The fall was especially marked in the public sector, but private sector activity was slow too, with firms reluctant to hire permanent staff, especially in the weeks after the referendum.
But confidence is returning and activity has been increasing in recent weeks. Echoing Gleeson’s experience, Cox suggests that the further firms are from London, the more optimistic they seem.
Globally, Hays derives almost 60 per cent of its profits from temporary and contractual work.
Brokers expect annual profits of £197million in
the year to June 30, up 14 per cent from 2016. A 3p dividend is pencilled in but there is every chance of a special payout of about 3p. Next year, a basic 3p could be supplemented by a special of 5p or more.
Midas verdict: Hays’ UK arm has not fared well recently but the rest of the group is making good progress. The shares dipped following the Brexit vote but have recovered strongly since, and the prospect of special dividends adds to the attractions. A solid buy, particularly for income-seekers. Traded on: Main market Ticker: HAS Contact: haysplc.com or 020 7383 2266