Hays (HAS) H2 2024 earnings summary

Executive summary

• Net fees declined 12% year-over-year to £1.114bn, with operating profit down 43–46% to £105.1m and EPS down 53% to 4.03p, reflecting challenging market conditions and lower activity across all regions.

• Decisive restructuring actions included a 15–18% reduction in group headcount and restructuring in key markets, incurring £42m in exceptional costs and delivering £30m in annual structural savings, with c.£60m in annualised cost savings and a further £30m targeted by FY27.

• 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 3p per share.

• Exceptional costs totaled £80m, including £42.2m for restructuring, £22.5m for intangible asset impairment, and £15.3m for goodwill impairment.

Financial highlights

• Net fees down 12% to £1.114bn year-over-year; Temp fees decreased 8%, Perm fees down 17% (volumes -25%, partially offset by 8% higher average perm fee).

• Operating profit fell 43–46% to £105.1m; conversion rate at 9.4% (9.7% working day adjusted).

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

• FX movements reduced net fees by £28.7m and operating profit by £4.2m.

• Cash conversion at 107%, with closing net cash of £56.8m; debtor days increased to 36 but remain below pre-pandemic levels.

Outlook and guidance

• Near-term market conditions remain challenging but are in line with expectations; Temp and contracting volumes stable with Q4 FY24, but 8% down year-on-year; perm activity subdued in core European markets.

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

• Further £30m annual savings targeted by FY27 from ongoing back-office transformation.

• CapEx guidance for FY25 at ~£30m, up from FY24 due to technology projects.

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