- Hays plc reports a 30% decline in Q1 net fees due to the Coronavirus pandemic.
- The recruitment company expects to be modestly profitable in the fiscal first half.
- The British firm valued its net cash at £350 million at the end of the first quarter.
In an announcement on Thursday, Hays plc (LON: HAS) said that its net fees in the fiscal first quarter remained under pressure due to the ongoing Coronavirus pandemic that has so far infected more than 38 million people worldwide and caused over a million deaths.
Hays plc slid close to 0.5% in premarket trading on Thursday and lost another 1.5% on market open. Including the price action, shares of the company are now exchanging hands at 113 pence versus a year to date low of 92 pence per share in the first week of April.
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In comparison, Hays had started the year in the stock market at a significantly higher 183 pence per share. Learn more about the stock market volatility.
Hays expects to be modestly profitable in the fiscal first half
In the fiscal first half, however, the company expressed confidence that it will turn modestly profitable, provided that its key markets are not pushed again into lockdowns due to the COVID-19 crisis in the upcoming months.
In separate news from the United Kingdom, Schroders plc posted an increase in its assets under management in the third quarter.
According to the British recruitment company, its net fees in the quarter that concluded on 30th September came in 30% lower on a year over year basis and 29% lower on a like-for-like basis. Its net fee rate posted a 26% decline in Q1 that, Hays said, was modestly better as compared to its overall performance.
Hays revealed a 25% decline in temporary work in the first quarter and a broader 35% decline in permanent work. In the prior quarter (Q4), the human resources services company had revealed a broader 34% decline in net fees as the pandemic pushed companies into freezing new hiring.
Hays says it exited state-backed support programs globally
The London-based firm also highlighted on Thursday that it had pulled out of all of the prominent state-backed support programs globally. Hays’ performance in Australia and New Zealand showed resilience in the first quarter. Performance in Germany, the company added, was also stable.
CEO Alistair Cox commented on the financial update on Thursday and said:
“Countries with previously stringent lockdowns, such as the UK, France and Spain, saw improvement, and Asia and the Americas were broadly flat sequentially.”
Hays valued its net cash at the end of Q1 at £350 million. At the time of writing, it is valued at £1.90 billion and has a price to earnings ratio of 36.40.