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(Alliance News) - Hays PLC expects annual profit to be ahead of market expectations, despite net fees continuing to fall in the third quarter, it said on Tuesday.
Operating profit for the financial year ending on June 30 is expected to be at least GBP85 million, driven by "improving fees and good underlying cost management". This is still lower than the GBP95.1 million operating profit figure for 2020 and significantly less than the pre-pandemic figure for 2019 of GBP233.7 million.
According to Bloomberg, market consensus called for Hays's full-year operating profit to be GBP61.0 million.
Despite the positive earnings outlook, the recruitment firm said net fees fell again in the latest quarter as the pandemic continued to adversely affect trading, although the decline was smaller than the preceding three months.
In its third quarter to the end of March, net fees fell 10% on a like-for-like basis versus the prior year. This is compared to a drop of 19% in the company's second quarter and 29% in its first quarter.
Chief Executive Alistair Cox commented on Hays's performance: "Despite our markets remaining impacted by the pandemic, we continued to see improving momentum across the quarter and I am pleased to say group fees were ahead of our expectations.
"This was most evident in our largest market of Germany, driven by increased business confidence and client investments. Australia and the UK saw improvement, particularly in Perm, while fees in the Americas and Asia both grew sequentially, led by the USA and China.
"We are confident we will continue to take further market share as clients and candidates look for our expert recruitment guidance, both during and after Covid."
Hays shares reached 165.50 pence in London on Monday morning, up 3.6%. The stock has climbed 15% so far in 2021.
By Will Paige; willpaige@alliancenews.com
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