Hays shares up 9% after Cole resigns

John Cole, managing director of Hays, the UK logistics and support services group, has resigned just a week after shares in the group fell more than 30 per cent after the company’s first ever profit warning. But in early London trading, shares in the group were up nearly 9 per cent on Tuesday’s close, following the announcement.

The company had said profits for the year to June 30 would be lower than expected following a downturn in its logistics business.

Bob Lawson, chief executive of Electrocomponents, who is set to take over from Ronnie Frost as Chairman at the end of the month, will now also take on the role of acting chief executive until a replacement is found for Mr Cole.

The sharp fall in Hays shares followed collapse of the belief previously held by many analysts that the company’s logistics operations would be immune from downturns in the economic cycle even if its recruitment division would be vulnerable.

The problems in the logistics division come as the company sets out to be the first serious competitor to the Royal Mail, but Hays has experienced problems in its Spanish and French mail businesses.

Shares in the group stood at 183p in early London trading on Wednesday. Their closing price of 168p on Tuesday was just 1p above their 52 week low and significantly below their 52 week high of 468p.

Financial Times