Hays reported a 65% reduction in its full-year dividend to 0.44 pence per share as the British recruitment firm implemented a sweeping restructuring plan to address a prolonged slump in permanent hiring. The final dividend was maintained at 0.29 pence per share, aligning with a revised capital allocation framework and dividend policy, while the full-year payout covered pre-exceptional earnings 2.8 times.
The company’s Momentum strategy involves narrowing its geographic footprint from 23 countries to 16, having already exited operations in six markets—Czech Republic, Denmark, Hungary, Luxembourg, Romania and Sweden—via a June sale to Meraki Capital. Hays is now reviewing options for its remaining presence in Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore and the UAE.
Permanent placement net fees fell 12% group-wide, with declines of 13% in both Germany and the UK and Ireland, 4% in Australia and New Zealand, and 19% in France. Group net fees declined 8% on a like-for-like basis to £905.5 million, driven by a 12% drop in permanent placements and a 5% decline in temporary and contracting net fees.
Despite the revenue pressures, pre-exceptional operating profit rose 3% on a like-for-like basis to £48.6 million, supported by a 7% increase in consultant net fee productivity and approximately £50 million in annualized structural cost savings achieved during the year. However, statutory pre-tax loss widened to £54.5 million from a £1.5 million profit a year earlier, after an £89.6 million exceptional charge tied to the Momentum strategy.
The exceptional costs included £45.1 million for operational restructuring, expected to generate around £40 million in annualized savings, and £26.6 million for property portfolio consolidation, involving the exit or consolidation of 74 offices. Cash generated from operations fell 28% to £92.0 million, while consultant headcount declined 12% year-on-year to 5,194 by June 30. The net cash position stood at £20.1 million, down from £37.0 million a year earlier.
Hays expects further exceptional costs in fiscal 2027 as it targets an additional £50 million in annual structural cost savings. Current trading in July and August has met expectations, with no significant change in activity levels compared to the fourth quarter, though September remains too early for trend assessment.
