Sluggish UK takes shine off earnings rise at recruiter Hays

Sluggish growth in net fees in Britain overshadowed strong overseas results and higher dividend payments from recruitment firm Hays on Thursday, as investors worried about the impact of Brexit on UK businesses.

Shares in the company fell as much as 5 per cent, even though full-year earnings per share at the company – which now makes 80 per cent of its profit outside the United Kingdom – beat analysts’ average forecast.

"I think it is understandable that people are taking time to think through their capital investment plans and I can't see that it would change really until we've got clarity or some degree of clarity on what those relationships will be with the EU post Brexit, " chief executive Alistair Cox said.

“I don’t expect, in the immediate future, for all of that to become clear.”

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‘Good cost control’

Hays’ net fees in the Britain and Ireland rose just 2 per cent in the year ended June 30th. However, operating profit climbed 13 per cent due to “good cost control”, it said.

Like other British recruiters, Hays has helped to offset challenges at home with growth abroad. Its German business saw a 16 per cent increase in net fees, while Australia and New Zealand recorded 14 per cent growth.

Group-wide net fees climbed 12 per cent to £1.07 billion, while earnings per share rose 18 per cent to 11.44 pence, beating analysts’ average forecast of 11.3p.

The company proposed an 18 per cent rise in its special dividend to 5p per share, and declared a full-year core dividend of 3.81p a share, up from 3.22p a year earlier. – Reuters