Recruiter Hays warns on profits after December slowdown

(Sharecast News) - Recruiter Hays warned on profits on Tuesday as it highlighted a hiring slowdown in December. In an update for the three months to the end of December, the company said group net fees were down 10%, having fallen 15% in December alone.

As a result, and despite ongoing actions to reduce costs, the recruiter now expects first-half pre-exceptional operating profit of around £60m, which is below consensus expectations of £73m.

Chief executive Dirk Hahn said: "Overall market conditions became increasingly challenging through the quarter, including a clear slowdown in most markets in December, notably in our perm businesses as client and candidate decision-making slowed.

"Temp volumes remained broadly stable sequentially through the quarter, but declined year-on-year as we did not see our normal seasonal step-up in worker volumes."

Hahn said it was too early to say if December's weakness reflects a sustained market slowdown or some placement deferrals. However, the company expects near-term market conditions to remain challenging.

"Consequently, we accelerated our cost reduction and efficiency programmes, while focusing on increased operational performance and rigour. Looking ahead, our strategy is increasingly focused on enhancing our leading positions in the most attractive and skill-short markets globally, including Germany, non-perm and enterprise clients," he said.