London-listed recruitment firm Hays has reported a sharp drop in profit amid continued weakness in recruitment markets.
The company is reducing its final dividend to 0.29 pence per share, resulting in a full-year dividend of just 1.24 pence, a 59 per cent reduction from the previous year.
This move is intended to realign the dividend policy with the company’s current profitability and capital allocation framework, following a 56 per cent like-for-like decrease in pre-exceptional operating profit, which fell to £45.6m from £105.1m in the previous year.
Hays informed shareholders this morning that its preliminary report for 2025 will show a 66 per cent decline in profit before tax on a pre-exceptional basis to £32.2m, down from £94.7m.
However, the group has a strong cash flow, with operating cash flow increasing by 14 per cent to £128.3m. It also achieved a strong cash conversion rate of 281 per cent and ended the year with £37m in net cash.
Hays looks to slash costs
The group has been focusing on costs over the last year. It has cut £35m in costs so far, exceeding its target. The business has now set an ambitious new goal to deliver a further £45m in annual savings by FY29.
CEO Dirk Hahn stated:”Market conditions remained challenging during the year, with economic and political uncertainty weighing on confidence, increasing ‘time-to-hire’ and reducing placement volumes.”
“Despite making significant strategic and operational progress towards our long-term ambitions, our overall financial performance was impacted by these headwinds,” he added.
The group had a mixed performance after reporting its permanent recruitment business saw a significant like-for-like decline of 17 per cent while temp and contracting proved more resilient, with a smaller decline of 7 per cent.
For its consultants, net fee productivity increased by five per cent year-over-year, achieved by balancing cost reductions with maintaining productive capacity. Consultant headcount declined by 14 per cent during the year through a mix of natural attrition, performance management, and business line closures.
Hays closed its operations in Chile and Colombia, consolidating its office network by closing or merging 29 other locations.
“I am confident we have the right strategy and people, and we remain well-positioned to drive material net fee and profit growth when key markets recover,” Hahn added.