Hays' profits to beat expectations despite Brexit slump

Hays, the country’s biggest recruitment firm by market value, said it would beat profit expectations this year despite seeing a marked downturn in UK demand in the past three months ahead of the Brexit vote.

It said operating profits for the year ended last month would be around £180 million, which was ahead of analysts’ average forecasts of £177 million.

Hays’ shares jumped by 7p, or 6.5%, to 115p and broker Jefferies raised its target price from 110p to 120p.

“We delivered a good performance to end our financial year,” chief executive Alistair Cox said.

“We have also achieved our goal of eliminating the group’s net debt. Europe delivered further excellent growth, benefiting from all-time record performances in Germany and France.”

But he was less upbeat about this country. “In the UK the public-sector recruitment market remained challenging, while private-sector sentiment weakened in the run-up to the EU referendum,” he said.

Hays saw like-for-like revenues rise by 8% in its final quarter but in the UK they were down 4%, with the public sector off 8% and the private sector losing 2%.

And, like other recruiters, the firm said the nervousness ahead of the vote had seen many of its clients preferring to hire temporary workers rather than take on full-time staff.