Hays hit by IT and logistics

ANALYSTS began trimming profit forecasts for Hays after the business services group revealed its IT and logistics businesses were still in financial pain.

Hays said pre-tax profit fell 15% to £103m in the six months to 31 December. Finance director Neil McLachlan said trading in the mail delivery division remained tough and he saw no signs of improvement in the logistics market in the current half.

But he added that the personnel division, which includes such brands as Ac countancy Personnel and Hays Montrose, had restricted the fall in profit to 12%, taking it to £62m.

The result had been buoyed by strong demand for temporary labour, which accounts for 60% of the division's profit. Hays said there were indications that temporary fees had grown by 3% in January and February but permanent placements were down 21%.

The results will fuel speculation that Hays may sell its mail and logistics operations to focus on personnel and IT.

The shares fell 24p to close at 186p.