By Uday Sampath Kumar
(Reuters) – Hays Plc <HAYS.L> bucked the gloomy trend among British recruiters on Tuesday, with strong net fees growth in the United States and China helping to offset slowing markets closer to home.
The company’s shares rose as much as 9% to a three month high of 156.3 pence, and were among the biggest gainers on London’s midcap index <.FTMC>.
Sluggish growth in Europe’s major economies has led many of Britain’s recruiters – important barometers of economic health – to expand further afield in search of growth.
However, Hays’ rivals PageGroup Plc <PAGE.L> and Robert Walters Plc <RWA.L> warned last week that profits would take a hit this year as challenges, ranging from Brexit to protests in Hong Kong, were making businesses reluctant to take on staff.
Hays soothed some of those fears, saying fees from ten countries rose more than 10% in the first quarter of its financial year. Fees in the United States and China rose 12% and 7% respectively, hitting record levels.
The company will continue its geographic expansion into countries in Europe, Asia and parts of the Americas where there is a high degree of first-time outsourcing, Finance Director Paul Venables told Reuters.
Hays reported flat overall net fees in the three months to Sept. 30, which analysts described as better than feared, especially given the warnings from its peers last week.
But echoing the same concerns as those rivals, Hays said it expected fees in the current quarter to fall 2%.
Germany, Hays’ largest market, was also a cause for concern, as slumping exports sent Europe’s largest economy to the edge of a recession.
Venables said stalled investment by German businesses was temporary, and spending should bounce back when there is more clarity around the resolution of a trade dispute between the United States and China.
“It is quieter in Germany, but it is still the largest structural growth opportunity in the white collar recruitment market,” he said.
Hays reported flat net fees in Germany in the quarter, in line with expectations, according to Jefferies analysts.
The company, which operates in 33 countries, said net fees fell 4% in the United Kingdom and Ireland, dented by weakening confidence among private sector candidates. (https://reut.rs/2IO0cPZ)
Businesses in London and the rest of Britain have put off major hiring decisions amid uncertainty over the terms of the country’s departure from the European Union, or indeed whether it will leave at all.
(Reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta and Mark Potter)