Hays set to offload chemicals and mail businesses

Hays is considering selling its chemical business and a lossmaking Spanish mail operation.

Ronnie Frost, executive chairman of the business services group, said Hays was expected to make a decision on whether to sell the two businesses before September.

Analysts estimate the chemicals division could be worth between £80m ($112.4m) and £150m. They said it was not possible to put a value on the Spanish parcels business, because the division was lossmaking.

They said Hays had hinted that it was considering selling its chemicals division, and had also indicated that it was looking at ways to remedy the problems in the Spanish business.

“I would be very surprised if chemicals does not go very soon,” said one analyst.

Mr Frost said the chemicals business and the Spanish parcels operation were the only parts of the group that Hays was considering selling. Some analysts want the group to go further and seek a partial break-up. They suggest the most obvious candidate to be sold or floated is the personnel division, which accounts for 45 per cent of group profits, and could be worth more than £1bn.

One banker specialising in support services said floating off the personnel division made sense because Hays appeared to be developing links between its logistics and business process outsourcing divisions.

However, a rump business comprising logistics, business process outsourcing and mail operations could be an attractive target for a predator seeking inroads in these markets.

Hays’ bulk and packaged chemicals operation has been part of the business for 34 years. Last year, it made operating profit of £17.7m on turnover of £160m.

Hays acquired the two Spanish overnight delivery businesses, DUN and Driver Pack, in February last year for an initial £7.7m, but they have continued to generate losses.