UK recruiter Hays sees annual profits below market expectations

(Reuters) -British recruitment firm Hays warned annual profit would come in below market expectations on Thursday after a challenging June hurt partly by elections in Britain and France.

Hays expects to log an annual pre-exceptional operating profit of 105 million pounds, below a company-provided analyst consensus range of 106 million pounds to 113 million pounds.

“Given ongoing global uncertainties, in the near-term we expect our key markets will remain challenging,” CEO Dirk Hahn said in a statement.

Peer PageGroup earlier this week warned that profit would nearly halve this year after a tough June for hiring, sending shockwaves across recruiters in London and Europe.

Recruitment firms across the globe have flagged difficult last few quarters as workers avoid switching jobs and companies take longer to fill vacant positions.

Higher interest rates and inflationary pressures have also forced global firms to layoff employees or freeze hiring, while political uncertainty amid elections has also weighed.

“In the UK&I (UK & Ireland) and France we expect a subdued summer, and it is too early to determine when we will see a meaningful recovery,” Hays added.

Hays, however, logged total savings of 60 million pounds ($77.16 million) for the year, exceeding its expectations, as it tightened its control on costs.

Shares in Hays were marginally down 0.5% in early trade.

Hays said it expects slower temporary and contract hiring activity to impact first quarter volumes by 2 to 3% in Germany, its largest single market. Germany like-for-like net fees fell 17% in the reported quarter.

The company, which focuses largely on hiring for white-collar roles, said its like-for-like net fees fell 15% in the three months that ended June 30.

In Britain, both public and private sector hiring slowed in the quarter because of the elections, Hays said.

($1 = 0.7776 pounds)

(Reporting by Yadarisa Shabong and Prerna Bedi in Bengaluru; Editing by Subhranshu Sahu)


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