Hays (HAS) H2 2024 earnings summary

Executive summary

• Net fees declined 12% year-over-year to £1.114bn, with operating profit down 46% to £105.1m and EPS down 53% to 4.03p, reflecting challenging market conditions and lower activity across all regions.

• Strategic focus included cost management, operational rigor, and shifting business mix toward higher-value, resilient areas to drive future profitability.

• Decisive restructuring actions delivered c.£60m in annualised cost savings, with further £30m targeted by FY27; consultant headcount reduced 18% year-over-year and offices closed in underperforming markets.

• Strong cash generation with 107% cash conversion and year-end net cash of £56.8m after £83.3m in dividends and £12.3m in share buybacks; full-year dividend maintained at 3.00p per share.

• Exceptional costs of £80m, including £42.2m restructuring, £22.5m intangible asset impairment, and £15.3m goodwill impairment, are expected to yield long-term cost savings.

Financial highlights

• Net fees decreased 12% year-over-year to £1.114bn; pre-exceptional operating profit fell 46% to £105.1m.

• Temp fees declined 8%, perm fees down 17% due to a 25% drop in volumes, partially offset by an 8% increase in average perm fee.

• Pre-exceptional EPS dropped 53% to 4.03p, impacted by lower profits, higher finance charges, and a 32.4% tax rate.

• Cash conversion was strong at 107%, ending the year with £56.8m net cash after £83.3m in dividends and £12.3m in share buybacks.

• Group conversion rate at 9.4% (9.7% WDA); Germany 19.3%, UK & Ireland 2.8%, ANZ 8.2%, Rest of World 4.8%.

Outlook and guidance

• Near-term market conditions remain challenging but are in line with expectations; Temp & Contracting volumes stable sequentially but down 8% year-over-year.

• Consultant headcount expected to remain stable in Q1 FY25; cost base per period at ~£82m.

• FY25 CapEx guidance at ~£30m, with ongoing technology investments.

• No surplus cash return for FY24 due to net cash position below £100m buffer.

• Group aims to deliver a conversion rate of 22-25% and exceed prior peak profits of £250m in the medium term.