Recruiter Hays warns of more jobs pain to come
LONDON (Reuters) - British recruitment firm Hays (HAYS.L) said business was getting increasingly tough in many of its regions and it would struggle to find growth from a dwindling set of healthy markets in a weak global economy next year.
Shares in Hays, which specializes in placing workers in accountancy, construction and IT jobs and makes almost 70 percent of fees overseas, fell 7 percent to 71.2 pence at 1030 GMT.
The recruitment sector has suffered heavily in the last year as a deteriorating outlook for the economy and weakness in the banking sector has led to companies delaying hiring and workers being more cautious about changing jobs.
Earlier this month, rival recruiter Michael Page International (MPI.L) said it saw no sign of improvement in the job market.
"Our markets over the last 12 months have got progressively more difficult and a number of them do not have any momentum in them today," Hays chief executive Alistair Cox said on Thursday.
"That will make it difficult to grow the business in that environment because the markets today feel worse than they did a year ago."
In another sign of weakening confidence, WPP (WPP.L), the world's largest advertising group, cut its annual growth forecast on Thursday, saying that customers in the United States and western Europe were becoming increasingly cautious.
Hays posted an 11 percent rise in pretax profit to 122 million pounds ($194 million) for the year ended June 30, in line with expectations.
It said it would continue to focus on countries like Brazil, Australia and IT and engineering-led Germany, which are helping to ease the pain of many slowing markets elsewhere.
Seymour Pierce analyst Caroline de La Soujeole said she would likely reduce profit forecasts for 2013: "Whilst this is a good set of results given the uncertain macroeconomic background, markets have become increasingly more challenging as the year progressed which does not augur well for 2013."
Full-year group net fees rose 8 percent to 734 million pounds on a like-for-like basis, with Brazil and Germany up 30 percent, reflecting a strong international performance. Overseas fees were up 16 percent overall.
Hays said its British market became increasingly tough as the year progressed, with net fees down 7 percent as both public and private sector clients cut jobs and halted hiring as government austerity measures started to bite.
The company said it had not seen any improvement in a moribund banking sector, meaning its financial services markets in Asia and Britain would remain tough. Growth had slowed across much of continental Europe and in non-resource related work in Australia.
The group said it would try to protect profit by continuing to reduce costs in tougher markets by cutting its own staff.
(Editing by Erica Billingham)