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Hays sees UK jobs market stabilising

Source: Reuters - Thu 3rd Sep 2009

Hays, Britain's biggest recruitment firm, reported a 43 percent drop in full-year profit, but said the British jobs market is stabilising, boosting hopes the UK is beginning to emerge from recession.

Hays, whose largest markets are Britain and Australia, on Thursday posted a pretax profit of 151 million pounds for the year to the end of June, meeting expectations, on revenues 4 percent lower at 2.44 billion pounds.

Like-for-like net fees fell 18 percent to 670.8 million pounds as firms across the world slashed their workforces to offset the fallout from the economic slump, but Hays said the pace of decline had eased in some markets recently.

"Currently we are seeing initial signs of stability in the United Kingdom and Asia Pacific markets although no indications of recovery. The continental European markets, which entered the downturn later than the other regions, are still experiencing deteriorating conditions" the company said in a statement.

Hays said net fees fell 27 percent in the UK and Ireland as market conditions deteriorated further in the second half, especially in the private sector.

The company was expected to report a pretax profit of 151 million pounds for the year, according to Reuters Estimates.

The recruiter, which last year placed 80,000 people into permanent jobs and found temporary work for some 300,000 people, said net fees from permanent placements fell 29 percent from last year, while temporary fees fell 7 percent.

Hays' main UK rival, Michael Page, reported a flat second quarter profit last month and said the rate of decline had slowed in Britain, while Switzerland's Adecco, the world's biggest staffing firm, recently posted a 31 percent drop in second-quarter sales. 

The number of Britons claiming jobless benefit rose more than expected in August and pushed the unemployment rate to its highest in 13 years, according to official data.

Unemployment is likely to break through the 10 percent mark before long in the euro zone, after climbing to a 10 year high of 9.5 percent in July, but the U.S. lost fewer private sector jobs in August than in the prior month, suggesting modest improvement in the U.S. labour market.

Hays, which cut a fifth of its own staff in 2008 to protect margins, said it had reduced its headcount by a further 26 percent during the year after closing 48 offices.

The group maintained the final dividend at 5.80 pence after cutting its debt by around 82 million pounds during the year.

In the Asia Pacific region Hays' full-year like-for-like profit fell 26 percent, while in continental Europe and the rest of the world it dropped 16 percent.

Shares in Hays, which have increased by 45 percent so far this year, closed at 99.80 pence on Wednesday, valuing the group at around 1.4 billion pounds.

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