Hays Q4 Earnings Call Highlights

Key Points

• Hays reported a 5% like-for-like decline in quarterly net fees, but cost cuts and productivity gains led management to raise its fiscal 2026 profit outlook to the top of consensus at GBP 37 million to GBP 46 million.
• The company accelerated restructuring, delivering GBP 50 million of annualized savings in fiscal 2026 and moving ahead of its prior target, while also planning property cuts that should add about GBP 10 million in annual savings.
• Market conditions remained mixed and cautious: Germany and the U.K. were weaker, while Asia held up better and parts of Southern Europe improved; Hays continues to reshape its portfolio by exiting or reviewing smaller, lower-return markets.

Hays LON: HAS reported a 5% like-for-like decline in group net fees for the quarter ended 30 June 2026, but said cost actions and productivity gains had improved its profit outlook for the full year.

James Hilton, Chief Financial Officer, told investors that the recruitment group now expects fiscal 2026 pre-exceptional operating profit to be “at the top” of the consensus range of GBP 37 million to GBP 46 million. Hilton said the company had delivered “a strong return to year-on-year profit growth in the second half,” despite continuing challenges in several recruitment markets.

Group temporary and contracting net fees fell 3% in the quarter, while permanent recruitment fees declined 7%. Permanent placement volumes were down 10%, partly offset by a 3% increase in the average permanent fee, which Hilton said reflected the company’s focus on higher-salary roles.

Productivity gains offset weaker fees

Hilton said Hays continued to reallocate consultants toward business lines with better productivity and long-term growth prospects, while also targeting higher-paid candidate roles and investing in tools for consultants.

Those efforts helped average consultant net fee productivity rise 8% year over year in the fourth quarter. Hilton said productivity had increased for “a sector-leading 11 consecutive quarters” on a seasonally adjusted basis.

Excluding country disposals and exits, group consultant headcount fell 4% sequentially during the quarter and 12% year over year. Non-consultant headcount ended the period down 13% from a year earlier.

Hays also accelerated its cost-reduction efforts. Hilton said the company delivered a further GBP 20 million of annualized savings in the fourth quarter, bringing fiscal 2026 savings to GBP 50 million. That exceeded the company’s prior target of GBP 45 million in annual savings by fiscal 2029, three years ahead of schedule.

Since the start of fiscal 2024, Hays has delivered GBP 115 million of annual structural savings, according to Hilton. The company expects to book a restructuring charge of about GBP 40 million related to the accelerated cost program, which is expected to reduce annual costs by GBP 40 million.

Separately, Hays reviewed its global property estate and plans to consolidate or downsize about 80 properties. Hilton said that action is expected to generate around GBP 10 million in annual savings and result in an impairment of right-of-use property assets of about GBP 30 million.

Germany and U.K. fees decline

In Germany, Hays’ largest market, net fees fell 7% year over year. Temporary and contracting fees were down 7%, with volumes declining 6% and an additional 1% impact from hours and mix. Hilton said average hours worked in Germany were stable through the quarter and in line with expectations.

Permanent recruitment in Germany remained challenging, with net fees down 12%. Technology was flat year over year, while Engineering declined 20%, a smaller drop than in prior periods due to greater stability in the automotive sector. Property was a bright spot, growing 38%, driven by infrastructure and energy. Hilton said Property now represents 10% of German net fees, up from 4% in fiscal 2024.

In the U.K. and Ireland, fees fell 8%. Temporary and contracting net fees declined 5%, while permanent recruitment was down 12%. Private-sector fees declined 9%, and public-sector fees were down 6%. Technology was stable, while Accountancy & Finance fell 9% and Construction & Property declined 2%.

Hilton said consultant productivity in the U.K. and Ireland rose 8%, helped by a greater focus on high-skilled roles. Average candidate salaries for permanent placements in the region increased 7% year over year in the fourth quarter.

ANZ slips, Rest of World nearly stable

In Australia and New Zealand, net fees declined 2%. Temporary and contracting fees were down 2%, while permanent recruitment fell 1% and became “slightly more challenging” through the quarter, Hilton said. The private sector grew 5%, but public-sector fees fell 14%. Australia was down 2%, while New Zealand declined 13%.

In the Rest of World division, which now includes 18 countries, like-for-like fees declined 1%. Temporary recruitment grew 5% for the second consecutive quarter of year-over-year growth, while permanent recruitment fell 5%.

Performance varied across regions. In EMEA excluding Germany, fees fell 2%, with France down 17%. Hilton said actions to improve productivity and costs in France were being delivered as planned, and profit performance improved in the fourth quarter. Portugal and Spain performed strongly, with net fees up 31% and 23%, respectively, and Spain again posting record quarterly net fees. Poland grew 6%.

In the Americas, fees declined 2%. The U.S. was down 1% but improved through the quarter, while Canada fell 8%. Hilton said Hays had a substantial bid pipeline with large enterprise clients in North America and expects recent wins to mobilize over coming quarters.

Asia net fees rose 8%, with Japan up 9% and Greater China up 22%. Hilton said Japan’s growth was driven by temporary and contracting, while Greater China benefited from improved permanent recruitment activity.

Portfolio reshaping continues

Hays has exited four countries and sold operations in six European countries over the past year. During the quarter, Hilton said the group incurred a modest non-cash loss on the disposal of operations in the six European countries.

The company is also exploring options for its businesses in Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore and the U.A.E. Hilton said Hays is focusing on markets where it can build scale and establish or maintain leading positions.

“Where we can’t, we’ll step back and reallocate investment to generate superior returns elsewhere,” Hilton said.

During the question-and-answer session, Hilton said the six recently disposed countries generated about GBP 15 million in annual net fees and “pretty much zero” profit and loss contribution. He said the seven countries currently under review are expected to generate about GBP 70 million in net fees this year, with only a modest operating profit contribution.

Outlook remains cautious

Hilton said Hays had observed minimal direct impact so far from developments in the Middle East, but noted modest softening in permanent recruitment activity in some markets during the quarter. He said near-term market conditions are expected to remain challenging given heightened global macroeconomic uncertainty, with temporary and contracting recruitment more resilient than permanent recruitment.

In response to an analyst question, Hilton said permanent job inflow in the U.K. and Ireland, Australia and Northern Europe was down about 5% compared with February and March pre-Easter levels. He described the softening as “modest” rather than significant, with decision-making taking slightly longer.

By contrast, Hilton said North America had seen improving momentum in permanent recruitment, particularly in the U.S., while Asia and Southern Europe remained stronger. He also said temporary and contracting trends had been stable overall, with clients continuing to hold on to temporary workers and contractors.

Hays ended the quarter with net cash of about GBP 20 million, in line with expectations and reflecting normal seasonal cash flows. The company said consultant headcount capacity is appropriate for current market conditions and is expected to remain broadly stable in the first quarter of fiscal 2027.

Hays plans to provide a strategy update alongside its full-year results on 20 August.

About Hays LON: HAS

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.