Hays plc (LSE:HAS) reported a 3% increase in pre-exceptional operating profit to £48.6 million for the fiscal year ended June 30, 2026, as £50 million in annualized structural cost savings offset an 8% decline in net fees to £905.5 million.
The London-based recruitment firm attributed the cost reductions to efficiency programs, operational restructurings, and property portfolio consolidation, including the closure of 74 offices globally. Chief Executive Mark Dearnley described the company’s "Momentum" strategy as "first and foremost a growth strategy," despite the net fee decline.
Permanent recruitment fees fell 12% year-over-year, driven by a 14% drop in volume, though average fees rose 2%. Temporary and contracting fees declined 5%. The conversion rate improved to 5.4% from 4.7%, though it remains below the 25% target. Pre-exceptional earnings per share decreased 8% to 1.21 pence.
Regional performance varied, with Germany’s net fees down 9% and operating profit falling 24% to £41.2 million. The UK & Ireland segment turned profitable, reporting a £4.0 million operating profit compared to a £5.8 million loss the prior year, while Australia & New Zealand saw a 130% rise in operating profit to £8.5 million. The Rest of World segment recorded an operating loss of £5.1 million.
Hays generated £92 million in operating cash flow, with a 189% cash conversion rate and £22 million in free cash flow. The company maintained a net cash position of £20.1 million after exceptional costs of £89.6 million, including £71.7 million for restructuring and property consolidation. A final dividend of 0.29 pence per share was declared, unchanged from the prior year, with full-year dividends totaling 0.44 pence per share.
Looking ahead, Hays expects further structural cost savings of around £50 million annually in FY27, alongside net finance charges of approximately £12 million and capital expenditure of £30–35 million. The company’s medium-term targets include growing net fees beyond £1 billion, achieving a 25%+ conversion rate, and increasing consultant net fee productivity by over 50%.
