Despite the post-Brexit vote uncertainty that continued to lurk over the UK economy in 2017, the recruiting firm still ended up having a pretty strong 12 months. Starting at £1.50, it closed December at £1.83 – down from the £1.96 highs struck in October, but nevertheless a 22% increase year-on-year.
Early 2018 saw this upward swing continue, with the stock crossing the £2 mark for the first time in since the start of 2002. However, the first late-February half year results undid a lot of its recent good work, sending the company spiralling towards a near 3 month low of £1.84 at the end of March. Hays PLC now sits at a current trading price of £1.86.
While February’s interim report dragged the stock nearly 4.5% lower, it wasn’t all that bad. For the 6 months ending 31st December like-for-like net fees jumped 12% to £525.8 million, with a 14% leap in comparable operating profit to £116.5 million and an 18% increase in pre-tax profit to £113.9 million. There was also an 18% rise in basic earnings to 5.39p per share, and a 10% bump to its half year dividend to 1.06p per share.
Yet those healthy figures were marred by news that the UK market, while ‘stable overall’, was ‘subdued’. Even then it is important to note that despite the region posting a meagre 1% rise in LFL net fees, the UK and Ireland still saw a 24% surge in operating profit thanks to ‘good cost control and certain IT assets becoming fully depreciated’.
Hays will be hoping that another set of figures like those posted back in February, but maybe without any distracting comments about the state of play in the UK – which isn’t even the firm’s biggest division; that honour goes to Germany, which delivered an ‘all-time record performance’ during the half year – can revitalise its market performance next week.
Hays PLC (LON:HAYS) has a consensus rating of ‘Hold’ alongside an average target price of £1.86.
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