Royal Mail shake up sends Hays into slide
Shares in business services group Hays have plunged to a seven-year low after a shock profits warning.
The company blamed pressure in the business post market from Allan Leighton’s revamped Royal Mail.
The shares collapsed by 203/4p to 893/4p. New chief executive Colin Matthews arrives today, facing the possibility that Hays, whose market value has dived to £1.5bn, will be kicked out of the elite FTSE 100 index.
Retired founder Ronnie Frost has seen more than £300m wiped off his stake, now worth £72m.
Chairman Bob Lawson said trading has deteriorated, with no pickup after the traditional summer lull.
The company predicts that underlying profits for the year will be £190m, 15pc below the market’s previous forecasts.
Lawson warned of ‘hundreds’ of job cuts among Hays’ 28,000 staff, and some analysts believe the group will be broken up.
The most disturbing fall in profits was in the Mail & Express division, only recently described as ‘inherently resilient’.
Consignia, soon to be renamed Royal Mail, has targeted Hays’ contracts, including the delivery of spectacles from manufacturers to High Street stores.
Lawson said: ‘If Leighton wanted to hurt us he has picked very good targets.’ Hopes have been dashed for a recovery in the second half in Hays’ personnel division. The Logistics and Commercial units are also struggling.
