Hays Plc on Friday said it anticipates its pre-exceptional operating profit for fiscal 2026 will sit at the top of the market consensus, as gains in consultant productivity and rigorous cost control offset a decline in net fees in the second half of the year.
The company told investors it expects fiscal 2026 pre-exceptional operating profit to come in at the top of the £37 million to £46 million consensus range. Hays compiled that range from 10 sell-side analysts, with the midpoint of £43.5 million based on figures as of July 9.
In the quarter ended June 30, the group recorded a 5% like-for-like decline in net fees, a slightly weaker outcome than normalised growth but marginally better than the consensus decline of 6% compiled from seven analysts.
By geography, the company reported the following movements in net fees for the period:
- Germany -7%, ahead of the expected 9% fall.
- Rest of World -1%, versus a consensus expectation of a 5% decline.
- UK and Ireland -8%, slightly worse than the 7% drop that analysts had forecast.
- Australia and New Zealand -2%, compared with forecasts anticipating flat performance.
"The YoY decline in Group net fees eased to 5% in Q4 driven by good Temp & Contracting growth in several of our countries and stable average hours worked in Germany despite slightly softer Perm activity through the quarter," said chief executive Mark Dearnley.
On cost control, Hays said it has delivered roughly £50 million of annualised structural savings in fiscal 2026, exceeding its target of £45 million a year by fiscal 2029 and achieving that goal three years ahead of schedule. Since the start of fiscal 2024, total annualised structural savings have reached about £115 million.
The company completed the sale of its operations in six European countries to Meraki Capital on June 16, generating net cash proceeds of approximately £4 million after transaction costs. Hays is also exploring options for businesses in Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore and the United Arab Emirates as it sharpens focus on 16 core markets.
As part of an ongoing consolidation of its office footprint, Hays said it expects to recognise a restructuring charge of about £40 million and an additional £30 million impairment on right-of-use assets.
Financially, the group finished the quarter with net cash of about £20 million, a swing from net debt of around £15 million at March 31. Hays will publish its full-year results and a strategy update on Aug. 20.
At June 30 the group reported approximately 8,100 employees operating across 155 offices in 23 countries.
Contextual note - The company mix of revenue and cost actions, along with portfolio sales and targeted market exits, are positioned to support operating margin improvements and to reduce capital tied up in non-core jurisdictions. Hays is continuing a programme of structural savings and market rationalisation while reporting mixed revenue trends across its regional operations.