Hays to consider break up
The new boss of troubled business services group Hays today hinted he may break-up the firm in a bid to improve shareholder returns.
Colin Matthews, who joined as chief executive at the beginning of the month, said he wanted to complete a strategical review as soon as possible.
Addressing shareholders at the group’s annual general meeting, he added: “I can tell you we will not be defending the status quo.
“Indeed I would go a little further in saying we expect that the review will lead to changes in the shape of the group.”
Mr Matthews took over at the Guildford-based group just 24 hours after it stunned investors by lowering profits goals for the year by between 10% to 15%.
Hays operates recruitment, outsourcing and logistics division and last year became the first plc to be awarded a licence to deliver mail.
But the group blamed tougher competition from Royal Mail and pricing pressures in its logistics market for the profits warning.
Shares rose 7% today as analysts in the City welcomed signs 46-year old Mr Matthews may bring a tighter focus to the business.
Some have argued Hays may decide to float its Hays Personnel arm as a separate company on the stock market to raise cash and revive its fortunes.
Trish Reay, at Teather & Greenwood, said: “Perhaps a greater focus will, as we have seen in other companies, be of a benefit to Hays.”
Addressing shareholders at Hays’ annual general meeting, Mr Matthews said he was “very pleased” to have joined the group from gas pipeline firm Lattice.
An update on the review is expected in March at the time of Hays’ interim results, the guidance for which the group left unchanged today.
Chairman Bob Lawson added, however, that #10 million of potential savings had been identified, although no detail was given on where the cuts may fall.
Hays employs 27,000 staff across its operations, the bulk of which are based in Europe with a smaller satellite division in Australia.
Mr Matthews’ appointment marked the end of a 16-month search for a successor to John Cole, who resigned after a profits warning last year.
