Hays (HAS) Q4 2024 TU earnings summary

Executive summary

• Group net fees declined 15% year-over-year in Q4 2024, with a June exit rate of -18%, reflecting challenging market conditions and prolonged hiring cycles.

• Pre-exceptional operating profit for FY 2024 is expected to be around GBP 105 million, at the lower end of market expectations.

• Annualized cost savings reached GBP 60 million, with GBP 30 million considered structural, and consultant productivity improved by 3% in Q4.

• Consultant headcount reduced by 18% year-on-year, and 12 offices closed in Q4, improving productivity.

• Net cash at June 30 was GBP 55 million, up GBP 75 million from Q3 and from net debt of GBP 20 million at March 2024.

Financial highlights

• Temp fees decreased 12% year-on-year; perm fees fell 20% due to a 27% drop in volumes, partially offset by a 7% increase in average perm fee.

• Group average temp margin remained flat year-on-year.

• Q4 saw a GBP 8 million fee and profit impact in Germany from reduced contractor hours.

• Group consultant headcount reduced by 5% in the quarter and 18% year-on-year.

• Exceptional restructuring charges of GBP 12.6 million in H1 FY24, with further H2 charges expected at GBP 25–30 million.

Outlook and guidance

• Near-term market conditions expected to remain challenging, with subdued summer trading in the UK, Ireland, and France.

• Germany expected to see further 2%-3% volume reduction in Q1 2025 due to lower temp starter numbers.

• Group consultant headcount anticipated to remain broadly stable in Q1 2025.

• Unless a material market recovery occurs, H1 2025 profits likely to be sequentially lower than H2 2024.

• Ongoing efficiency programs to deliver further permanent overhead savings in FY25 and beyond.