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REFILE-UPDATE 1-Hays to raise full-year dividend after UK recruitment grows strongly
July 10, 2014 / 9:43 AM / 3 years ago

REFILE-UPDATE 1-Hays to raise full-year dividend after UK recruitment grows strongly

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By Li-mei Hoang

July 10 (Reuters) - British recruiter Hays said it planned to increase its full-year dividend in August, for the first time since 2008, after strong growth in net fees in the UK and Ireland of 11 percent.

The company said demand in the UK and Ireland, which accounts for 31 percent of fees, was boosted a pick up in permanent placements in finance, information technology and construction, and reaffirmed its full-year operating profit outlook of around 140 million pounds ($238 million).

“We are very confident that we will deliver good profit growth next year ... having driven 140 million profit with a positive outlook, we will be increasing our dividend,” Chief Financial Officer Paul Venables told Reuters.

Hays increased its headcount in Britain by 5 percent in the fourth quarter, its biggest quarter increase in more than 10 years. It expects further double digit growth in the coming year as Britain’s recovery from recession gathers momentum.

“The UK continues to be very strong and we made a big headcount investment in the UK. That’s a big uplift and clearly a sign of confidence in how we view the UK market,” said Venables.

Britain’s labour market recovery gathered speed last month as a record number of people found work and drove unemployment to its lowest level in more than five years, data from the Office of National Statistics showed.

The company said it had also seen continued recovery in many European markets, where net fees grew by 7 percent, and 10 of its business delivered record net monthly fees in the quarter including Canada and Japan.

However net fees fell by 5 percent in Australia and New Zealand, hit by a slowdown in the mining sector.

Shares in Hays were down 5.4 percent at 130 pence by 0918 GMT, the bigger loser on the FTSE 250 index.

“Today’s lower growth if anything is slightly disappointing, currency is a negative and the Australian jobs data overnight whilst better, remains subdued,” said RBC Capital Markets analyst Andrew Brooke.

“The real question is 2015 forecasts ... with the overall recovery relatively subdued, especially in Europe and Australia uncertain, we think a single digit net fee growth outlook is more likely - we thus believe we could see 2015 forecasts of 170 million move down more towards 160 million,” he added. ($1 = 0.5877 British Pounds) (Editing by Kate Holton and Ruth Pitchford)

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