Hays H1 Trading Statement

LONDON (AFX) – Hays PLC, the business services group, reported a fall in
first half profit, but said its personnel division is performing better than it
predicted it would last Autumn.
For the six months to Dec 31 2001 Hays reported a pretax profit before
goodwill amortisation, exceptional items and discontinued operations of 115.1
mln stg — slightly above analysts’ forecasts of 112-114 mln stg but down on
last year’s 125.8 mln stg.
Operating profit on the same basis was 122.8 mln stg, down from 137.8 mln
stg.
Turnover from continuing operations was 1.199 bln stg versus 1.173 bln stg.
Earnings per share before goodwill amortisation and exceptional items was
4.65 pence, down from 5.29 pence.
An interim dividend of 1.52 pence was proposed, up from 1.32 pence.
Hays believes its personnel business — which accounts for about 45 pct of
group profits — will continue to demonstrate its resilience in a difficult mark
et.
It said the number of temporary workers restarting contracts in January was
similar to the level working in the final quarter of last year, but permanent
fees remain sensitive to the current economic weakness.
Hays said early indications for January and February suggest that temporary
fees have continued to grow by circa 3 pct compared to the same period last
year, whilst permanent placements are down circa 21 pct on a like-for-like
basis. In total the personnel division’s turnover is similar to the same
periods of last year.
The group said the logistics market remains competitive and it does not see
this improving in the second half whilst the commercial division’s profits will
continue to be impacted by the cost of the reorganisation of the information
management business.
Bob Lawson, chairman, said: “The group has continued to make progress in
developing and focusing its businesses against the backcloth of tough market
conditions.
“The reduction in our earnings per share was as expected being driven
principally by the sensitivity to the economy of our personnel business and by
the weak performance of our UK logistics activity.”
Lawson said that in recent months the personnel business has performed
better than was predicted last Autumn but against this, parts of the commercial
division are performing below expectation.
He said Hays’ balance sheet remains strong with net debt 42 mln stg lower
than last year and interest costs covered 12 times.
Lawson said Hays’ first priority is to maintain and develop its existing
customer relationships and to continue its organic development.
“We are continuing to invest in our businesses through the downturn and this
investment will position the group to benefit when the economies of Europe begin
to improve.”
Hays said it is continuing to search for a new chief executive.