Hays warns on profits, cites 'more challenging' permanent markets

(Sharecast News) - Recruiter Hays warned on full-year profits on Thursday as it cited "more challenging" permanent markets. In a pre-close year-end trading update, the company said it now expects FY25 pre-exceptional operating profit of around £45m. This is below company-compiled consensus for £56.4m, based on ten analysts.

Hays said activity levels in the fourth quarter reduced sequentially, driven mainly by broad-based weakness in permanent markets globally. This reflects low levels of client and candidate confidence due to macroeconomic uncertainty. Temporary and contracting activity remains more resilient, it said.

The firm expects group like-for-like net fees to fall 9% year-on-year in Q4 against a soft prior-year comparative, with perm and temp & contracting down 14% and 5% respectively.

At a regional level, Hays expects LFL net fees in its largest country Germany to decline 5% with continued stability in the contracting segment but weaker conditions in perm and temp, mainly due to a subdued automotive sector.

Hays said the permanent segment has also weakened in the UK & Ireland, and it now expects a 13% divisional net fee decline.

"We expect current challenging market conditions to persist into FY26 and remain committed to delivering our focused strategy," Hays said.

"Our initiatives to improve net fee productivity in real terms and back-office efficiency will be important drivers of medium-term profit recovery when the market recovers."