Hays struggles to find new CEO as it admits trading stays tough
HAYS, the staff recruitment-to-supply chain management group, admitted yesterday it was struggling to find a new chief executive as it signalled that trading conditions were unlikely to recovery until the first half of next year.
The group, which ousted its former managing director, John Cole, last June after a shock profits warning, said it had widened its search for a new chief executive but was “still interviewing”.
Bob Lawson, the chairman, said: “The talent pool is extremely small. In the pool we’re fishing in everybody has a full-time job [and] this climate doesn’t encourage people to move.” He added that Hays was looking for someone who worked in the services sector and who had European experience “because that’s where growth will come from”.
His comments came as Hays revealed it expected its annual results to be slightly ahead of market expectations, helped by current stable trading. Analysts expect the group to report full-year profits before tax, goodwill and exceptional items of about pounds 230m, down from pounds 263m the year before.
Mr Lawson said Hays’s personnel division, which has been hit by companies axing staff to cut costs, was stable. “God knows when we will see a recovery. It’s tougher than we all thought in March [at our interims],” he added.
The group revealed that the number of permanent placements it had found was down by one-fifth compared with a year ago, although it added that temporary placements had held up slightly better. Hays is looking to expand its recruitment operations in Europe through a combination of organic growth and small acquisitions.
The group’s admission that business was unlikely to pick up before the first half of 2003 sent its shares 3 per cent lower to close at 160.5p. “The economic outlook for many business sectors in Europe remains uncertain, making it difficult to predict when our businesses will return to growth from their current stable trading position,” it said.
Hays said its commercial division, which includes the biggest competitor to the UK mail delivery group Consignia and accounts for a third of its annual profits, would fall short of expectations due to delays in rolling out an information management system for the police. These delays would force the company to take a pounds 50m hit to the unit’s carrying value of goodwill and assets, it said.
The group added that its logistics division would report results in line with market expectations. It announced that the unit had secured a pounds 20m contract with the French retailer Carrefour and renewed a four- year contract with Waitrose supermarkets worth pounds 25m.
One analyst said: “[The trading update] was mainly reassuring. But the outlook statement and lack of news on the CEO were perhaps a little disappointing.”
Caption: Bob Lawson, the Hays chairman: ‘The talent pool is small. This climate doesn’t encourage people to move’ FT
