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Hays Full-Year Pre-tax Profit Down 80% - Update

(RTTNews) - British recruitment firm Hays Plc (HAS.L) Thursday posted an 80% decline in pre-tax profit for the full year ended June 30, but said it saw a return to growth in the second half, driven by strong performances in Asia Pacific and Germany.

The significant decline in pre-tax profit, hurt by a 17% drop in net fees, reflected tough trading conditions during first half. However, the company said outlook across 90% of its markets, including the UK private sector, continues to improve.

Pre-tax profit for the year plunged 80% to GBP 29.7 million from GBP 151.0 million last year.

Excluding exceptional items of GBP 41.4 million, pre-tax profit decreased 53% to GBP 71.1 million.

Included in the one-time items were a charge of GBP 29.0 million related to The Office of Fair Trading or OFT and restructuring costs of GBP 12.4 million related to the United Kingdom back office automation project.

Profit attributable to equity holders of the parent plummeted to GBP 9.3 million from GBP 105.8 million in the prior year. On a per share basis, earnings dipped to 0.67 pence from 7.71 pence a year ago.

Profit before exceptional items was GBP 44.5 million or 3.21 pence per share for the year.

Turnover was GBP 2.69 billion, up 5% from GBP 2.45 billion last year.

Net fees for the year declined to GBP 557.7 million from GBP 670.8 million in the previous year. On a like-for-like basis, which represents organic growth at constant currency, net fees dipped 21% from last year.

Net fees from temporary placement business, which represents 58% of group net fees, dropped 18% on a like-for-like basis, with a 9% decrease in temporary placement volumes.

Net fees in the permanent placement business, representing 42% of group net fees, declined 26% on a like-for-like basis, with permanent placement volumes decreasing by 19%.

However, the company said that it saw a broad based recovery in the second half with sequential like-for-like net fee growth of 8% versus the first half.

The UK-based company also said 20 countries across the group delivered like-for-like net fee growth of over 10% during the fourth quarter, as it added headcount to capitalise on the upturn.

The company's board will propose a final dividend for 2010 of 3.95 pence per share, flat with last year, at the AGM on November 10. If approved, the final dividend will be paid on November 19 to shareholders on the register at the close of business on October 22.

HAS.L is currently trading at 97.85 pence, up 3.85 pence or 4.10% in the London Stock Exchange.