DECISIVE ACTIONS TAKEN IN CHALLENGING MARKETS. EXECUTING ON
OUR FOCUSED STRATEGY TO IMPROVE RESILIENCE, GROWTH AND
PROFITABILITY
|
Year ended 30 June
(In £s million)
|
2024
|
2023
|
Actual
growth
|
LFL
growth
|
|
|
Net
fees (1)
|
1,113.6
|
1,294.6
|
(14)%
|
(12)%
|
|
Operating profit (before
exceptional items) (2)
|
105.1
|
197.0
|
(47)%
|
(46)%
|
|
Conversion
rate(3)
|
9.4%
|
15.2%
|
(580)
bps
|
|
|
Profit before tax (before
exceptional items) (2)
|
94.7
|
192.1
|
(51)%
|
(50)%
|
|
Profit before tax
|
14.7
|
192.1
|
(92)%
|
(91)%
|
|
Cash generated by operations
(4)
|
112.3
|
199.3
|
(44)%
|
|
|
Basic earnings per share (before
exceptional items) (2)
|
4.03p
|
8.59p
|
(53)%
|
|
|
Basic earnings per
share
|
(0.31)p
|
8.59p
|
(104)%
|
|
|
Core dividend per share
|
3.00p
|
3.00p
|
-
|
|
|
|
|
|
|
|
|
| |
Note: unless otherwise stated all growth rates discussed in
this statement are LFL (like-for-like), YoY (year-on-year) net fees
and profits, representing organic growth of continuing operations
at constant currency. WDA = working-day adjusted.
Dirk Hahn, Chief Executive, commented:
"We saw increasingly challenging market conditions through
FY24 in both Perm and Temp, with low confidence levels and
longer-than-normal 'time-to-hire', and our profitability was
significantly impacted, including our three largest markets of
Germany, Australia and the UK. Against this backdrop, we have
focused on enhanced operational rigour, driving consultant
productivity and strong cost management, and are determined to
build a more resilient Hays. Our strategy, launched in February, is
designed to capitalise on the many growth opportunities we see,
while increasing our resilience, quality of earnings and cash
generation.
We have made a strong start in restructuring operations and
repositioning our business to be a global leader in recruitment and
workforce solutions. We are driving productivity and as previously
reported we delivered c.£60 million of annualised
savings in
FY24. Additionally, our ongoing efficiency actions will deliver a
further c.£30 million annual cost savings by
FY27.
We have a strong financial position, and great teams of
talented colleagues worldwide, whom I thank wholeheartedly for the
deep commitment they show every day. Our key markets are also being
driven by powerful, supportive megatrends and remain characterised
by significant talent shortages, which we help solve for our
clients. Our actions are better positioning Hays to benefit when
markets recover, and when they do, we can return to, and then
exceed, prior peak profits."
|
•
|
Group fees decreased by 12%.
Temp, down 8%, was more resilient than Perm, down 17%. As
previously reported, pre-exceptional operating profit decreased 46%
YoY to £105.1 million, impacted by tough conditions in key
markets
|
|
•
|
Our decisive actions reduced
costs by an annualised c.£60 million, half of which are structural
savings. Group headcount decreased 15% and we restructured our
operations, while accelerating efficiency programmes. As previously
reported, this drove a £42.2 million cash exceptional
charge(2) and we also incurred £37.8 million in non-cash
asset write downs(2)
|
|
•
|
Good overall productivity at
near record levels, up 1% YoY, despite reduced market volumes as we
aligned capacity to current market conditions and closed
unprofitable business lines. We see significant scope to increase
both fees and operating profit from our current capacity as our
average placement volumes per consultant returns to more normal
levels
|
|
•
|
We now expect to deliver
further structural cost
savings of c.£30 million per annum by the end of FY27 via
our ongoing back-office efficiency programmes, particularly in our
technology and finance functions
|
|
•
|
Strong balance sheet with net
cash of £56.8 million and good cash conversion(4) of
107%. Given the Board's confidence in our strategy and our strong
financial position, a final dividend of
[2.05 pence per share is proposed, representing an unchanged FY24
dividend of 3.00 pence per share]
|
|
•
|
Current trading in July and
August has been in line with our expectations. However, September
is the key trading month in our first quarter, and it is too early
to assess trends
|
|
•
|
Reiterate medium-term conversion rate target
of 22-25%. To achieve this, as end markets
recover and then grow, we will drive consultant productivity in
excess of inflation through pricing and mix, technology tools and
data. We have also identified efficiencies from greater consistency
of operating models, and from reducing Group overhead
costs
|
|
(1)
|
Net fees comprise turnover less
remuneration of temporary workers and other recruitment
agencies.
|
|
(2)
|
FY24 operating profit is presented
before exceptional costs of £80.0 million, of which £42.2 million
relates to restructuring of our operations across the Group. The
remaining £37.8 million is non-cash and comprises £15.3 million
relating to the partial impairment of goodwill in our US business,
which was previously reported at our H1 results, and £22.5 million
relating to the impairment of finite-lived intangible assets.
Further details of our exceptional costs are provided in note 4 to
the preliminary report. Reconciliation of PBT (before exceptional
items) of £94.7 million to PBT of £14.7 million is shown on the
Consolidated Income Statement. Pre-exceptional EPS is reconciled to
post-exceptional EPS in note 9 to the preliminary
report.
|
|
(3)
|
Conversion rate is the conversion
of net fees into pre-exceptional operating
profit.
|
|
(4)
|
Cash generated by operations is
stated after lease payments of £51.0 million (FY23: £49.9.
million). Cash conversion represents cash generated by operations
divided by pre-exceptional Group operating profit.
|
|
(5)
|
Due to the timing of public
holidays, our largest market of Germany had two fewer working days
in FY24 versus FY23, which had a £3.5 million net fee and operating
profit impact.
|
|
(6)
|
Underlying Temp margin is
calculated as Temp net fees divided by Temp gross revenue and
relates solely to Temp placements in which Hays generates net fees.
This specifically excludes transactions in which Hays acts as agent
on behalf of workers supplied by third party agencies and
arrangements where Hays provides major payrolling
services.
|
|
(7)
|
Represents percentage of Group net
fees and pre-exceptional operating
profit.
|
|
(8)
|
Due to our internal Group
reporting cycle, the Group's annual cost base equates to c.12.5x
our cost base per period. This is consistent with prior
years.
|
Enquiries
|
Hays plc
|
|
|
|
James Hilton
|
Chief Financial Officer
|
+ 44 (0) 203 978 2520
|
|
David Phillips
|
Head of Investor Relations &
ESG
|
+ 44 (0) 333 010 7122
|
|
|
|
|
|
FGS
Global
|
|
|
|
Guy Lamming / Anjali
Unnikrishnan
|
|
hays@fgsglobal.com
|
Results presentation & webcast
Our results webcast will take
place at 8.30am on 22 August 2024. To register for the webcast
only, please click or copy
https://edge.media-server.com/mmc/p/kury92js
To register and be able to ask questions via our
audio link, please click or copy this link
https://register.vevent.com/register/BI4c328f5731dc47beae29f90462288e60
A recording of the webcast will be available on our website
later the same day along with a copy of this press release and all
presentation materials.
Reporting calendar
|
Trading update for the quarter
ending 30 September 2024 (Q1 25)
|
11 October 2024
|
|
Trading update for the quarter
ending 31 December 2024 (Q2 25)
|
16 January 2025
|
|
Half-year results for six months
ending 31 December 2024 (H1 25)
|
20 February 2025
|
Hays Group Overview
As at 30 June 2024, Hays had
c.11,100 employees in 236 offices in 33 countries. In many of our
global markets, the vast majority of professional and skilled
recruitment is still done in-house, with minimal outsourcing to
recruitment agencies, which presents substantial long-term
structural growth opportunities. This has been a key driver of the
diversification and internationalisation of the Group, with the
International business representing 80% of the Group's net fees in
FY24, compared with 25% in FY05.
Our consultants work in a broad
range of industries covering recruitment in 21 professional and
skilled specialisms. Our four largest specialisms of Technology
(25% of Group net fees), Accountancy & Finance (15%),
Engineering (11%) and Construction & Property (10%)
collectively represented c.61% of Group fees in FY24. In addition
to our international and sectoral diversification, in FY24 the
Group's net fees were generated 59% from temporary and 41% from
permanent placement markets. This well-diversified business model
continues to be a key driver of the Group's financial
performance. In our 2024 employee
'YourVoice' survey, 73% of employees said they would recommend Hays
as a great place to work.
Current trading
Overall, near-term conditions
remain challenging but in line with our expectations. September is
the key trading month in our first quarter, and it is too early to
assess trends
Group commentary
Overall Temp & Contracting
('T&C') volumes are currently in line with Q4 24, after
adjusting for normal seasonal trends.
In Perm, as reported at our Q4 24
trading update, weaker activity levels in Q4 24 have resulted in
more subdued summer trading than normal in Germany, UK&I and
EMEA.
Given our focus on driving
consultant productivity in recent quarters, we expect overall Group
consultant headcount will remain broadly stable in Q1 25. Overall,
our current capacity has significant scope to deliver material fee
and profit growth when our key markets recover. Our cost base per period(8) is currently c.£82
million.
There are no material working-day
impacts anticipated in either H1 25 or FY25.
Germany
Temp & Contractor volumes are
stable, and we continue to expect Q1 25 volumes will be down c.8%
YoY. Also as expected, the impact of reduced Temp & Contracting
working hours is easing, with Q1 25 likely down c.5% (H2 24: down
9%). Perm remains challenging.
UK&I
As anticipated, activity levels
have been relatively subdued since the general election and
conditions remain challenging.
ANZ
Activity levels have remained
sequentially stable versus H2 24.
RoW
Activity levels in Asia and the
Americas have remained sequentially stable overall versus H2 24.
EMEA activity levels are broadly consistent with H2 24, apart from
in France, which as we anticipated has been subdued.
FY24 operational and strategic review
Market backdrop
FY24 was a year of significant
operational and strategic transition and was characterised by
increasingly challenging market conditions, with reduced client and
candidate confidence driving lower placement volumes and a material
lengthening of our 'time-to-hire'. Given this backdrop, our fee
performance was significantly impacted, down 9% in H1 24, and 15%
in H2 24.
Temp fees were more resilient than
Perm, decreasing by 8% and 17% respectively. Volumes were lower in
both Temp and Perm, down 7% and 25%, with lower Perm volumes
partially offset by wage inflation and improved average
pricing.
A feature of our key markets in
FY24 was that overall activity levels remained relatively high, and
we continued to see solid levels of job inflow. Our consultants
have therefore been very busy and have worked extremely hard, and
the Board is very grateful for this as well as the deep commitment
shown by all our colleagues. However, closing placements became
materially harder through the year. This had a significant impact
on our average placement volumes per consultant, or volume
productivity, which currently sits c.15-20% below normal levels,
causing a material drag on Group profitability and conversion
rate.
Given this backdrop, we have
worked hard to balance cost reductions with protecting our
productive capacity in key markets. Consultant headcount was reduced by
18%, through a mix of natural attrition
and performance management. This meant
that despite our volume productivity being down significantly, our
average productivity per consultant was up 1% YoY and increased
sequentially in our second half.
Non-consultant headcount declined by 9%, which included
the restructuring of operations in several
regions, including delayering of management and accelerating our
back-office efficiency programmes. Despite these actions,
Group pre-exceptional operating profit declined
by 46%.
Building the global leader in Recruitment and Workforce
Solutions
Our goal is to be the leading
Recruitment and Workforce Solutions business globally. Contracting,
Temp and Perm recruitment is our core expertise, and placing
talented workers in roles to solve our client's skills shortages is
the heart of Hays.
Our expertise combines large
Enterprise clients, the Public sector, SME's and start-ups. We have
market-leading direct outsourcing expertise, mainly via Managed
Service Provision (MSP), but also in Recruitment Process
Outsourcing (RPO). Our broader Workforce Solutions capability is
evolving and includes DE&I Consulting, Training & Skills,
Demand & Capacity planning and Assessment & Development.
Each of these has great potential to enhance our relationships with
clients and are expected to represent profitable business
lines.
Focused strategy and progress made
Despite the challenging backdrop
for our industry, we are not satisfied with our financial
performance in FY24. We are market leaders in some of the most
attractive, long-term growth recruitment markets globally and our
focused strategy, announced at our H1 24 results, is designed to
better position Hays to benefit from recovery and capitalise on the
many structural growth opportunities we see. It will also increase
our business resilience, quality of earnings and cash
generation.
We expect all business lines to be
able to deliver a conversion rate of at least 25% (pre-central
costs) in normal market conditions, with an overall Group
conversion rate of 22-25%. As part of our programme to return to,
and then exceed, previous peak profits of c.£250 million we will
also seek to improve medium-term consultant productivity in excess
of inflation.
Our focused strategy is based on
five strategic levers:
|
1.
|
Grow our leading positions in the
most in-demand future job categories;
|
|
2.
|
Increase our focus on higher
skilled, higher paid roles;
|
|
3.
|
Greater focus on resilient and
growing industries and markets;
|
|
4.
|
Continue to build stronger
relationships with our clients and candidates; and
|
|
5.
|
Drive an increased proportion of
non-Perm fees across our businesses.
|
Our medium-term goal is driving
material profit contributions from more Hays countries globally.
Our Key
Countries (Germany, Australia and the UK) are each
progressing well in developing these five levers, but we have work
to do to increase operational performance and profitability. Our
Focus Countries (Austria,
France, Italy, Japan, Poland, Spain, Switzerland and the USA) have
most of the five levers, and we are actively allocating resource
and selectively investing to complete all five. Our Emerging Countries represent the rest
of our global network, and we are firmly focused
on driving improved operational performance and increasing
profitability in each country, in line with our conversion rate
targets noted above.
Enhanced operational rigour in action
Key to implementing our strategy
is our enhanced operational rigour, our focus on building
leadership in the most in-demand job categories and analysing our
operations on a much deeper level. We have performed detailed
analysis and reviewed each sector within key and focus countries on
a business-line basis, separately analysing each of Contracting,
Temp and Perm. We have improved our resource allocation within
sectors and countries including c.400 consultants moving to more
resilient business lines, and in addition we have closed a number
of business lines including:
|
•
|
Temp business in Italy (refocusing our resource
on Contracting)
|
|
•
|
Healthcare & Education in ANZ
(sub-scale)
|
|
•
|
Healthcare & Social Care in UK&I
(sub-scale)
|
|
•
|
Sales & Marketing Temp in Germany (low
profitability)
|
|
•
|
Statement of Works in France
(loss-making)
|
In our Key
countries, Germany conducted a
management de-layering, and is progressing with ongoing back-office
efficiency programmes, and our ratio of fee earning consultants to
non-fee earners improved by 10% YoY. Our leaner structure will
accelerate Germany's conversion rate recovery when markets improve.
In ANZ, we enter FY25 with improving productivity and positive
conversion rate momentum, despite fees being down over 20% YoY, achieved via greater focus and increased
productivity. And in the UK, we have made material operating model
improvements, particularly in our Temp business, and analysed each
business line, ensuring their medium-term plans are
fit-for-purpose.
In our Focus
countries, we are also ensuring we
have appropriate, and scalable, operating models in place. Early
examples of success in our focus countries include in the USA,
where improvements to our delivery model have significantly
improved productivity and profitability. We have gone from a
loss-making position in the USA through FY23 and H1 24, to
delivering profitability through H2 24. Several other focus
countries increased Contractor and Temp volumes through FY24,
including the USA, Italy (which also delivered a record monthly
fees in May 2024), Poland and Japan.
Similarly, in our
Emerging
countries overall productivity
improved through H2 24 in Belgium, the Netherlands, Mexico,
Singapore and Canada, and we saw record half-year fees in H2 in
Portugal and UAE. In China, we returned to profitability in H2 24
after a tough period, again due to our focus on productivity,
operational rigour and cost management.
All countries are focused on
implementing our 'Golden Rule', namely that operating profit growth
should be greater than fee growth, which should in turn exceed
headcount growth through the cycle. This underpins our target of
growing consultant productivity at least in line with inflation and
increasing operating leverage to drive greater profitability
through the cycle.
Further focus areas in FY25
include improving our performance in markets which were
particularly challenging in H2 24, including Latin America, New
Zealand, the Nordics, Romania and the Czech Republic.
Reducing Group costs
As reported on the front page, in
FY24 we delivered substantial annualised cost savings of c.£60
million, of which c.£30 million is structural, through our focus on
improving consultant productivity and managing our back office and
overhead costs. As a result, we incurred a £42.2 million
exceptional restructuring charge, detailed on page 8.
Looking ahead, a number of
back-office efficiency programmes are well underway, which we
expect to structurally reduce the Group's overhead cost base by a
further c.£30 million per annum over the next three years, notably
in our finance and technology functions. This will be achieved via
removing duplicated costs, selective outsourcing opportunities,
further standardisation and globalisation of processes, and further
expansion of our shared service centres
(SSC).
Technology improvements and increasing our digital
capability
We continue to make progress in
our own technology stack and capability, with greater alignment to
our current and future needs. This includes a multi-year
outsourcing deal of our back-office infrastructure to a leading
global IT Services provider. We expect this will deliver improved
capability and better tailor our technology to our operations. In
front-office systems, we continue to seek to better leverage our
data assets and our strategy is one of partnering with
best-in-class leading providers, plus working at scale and pace to
bring in the best of AI and automation into our processes
worldwide.
During FY24, the Board concluded
that certain intangible assets would either no longer be used in
the Group's operations or that their carrying value was impaired.
This resulted in an impairment charge of £22.5 million.
Financial Review
|
Summary Income Statement
|
|
|
|
Growth
|
|
Year ended 30 June
(In £s million)
|
2024
|
2023
|
|
Reported
|
LFL
|
|
Turnover
|
6,949.1
|
7,583.3
|
|
(8)%
|
(6)%
|
|
|
|
|
|
|
|
|
Temp
|
662.1
|
735.8
|
|
(10)%
|
(8)%
|
|
Perm
|
451.5
|
558.8
|
|
(19)%
|
(17)%
|
|
Net fees (1)
|
1,113.6
|
1,294.6
|
|
(14)%
|
(12)%
|
|
Administrative expenses
|
(1,008.5)
|
(1,097.6)
|
|
(8)%
|
(6)%
|
|
Operating profit (before
exceptional items) (2)
|
105.1
|
197.0
|
|
(47)%
|
(46)%
|
|
Operating profit (after
exceptional items) (2)
|
25.1
|
197.0
|
|
(87)%
|
(87)%
|
|
|
|
|
|
|
|
|
Conversion rate
(3)
|
9.4%
|
15.2%
|
|
|
|
|
Underlying Temp margin
(6)
|
15.5%
|
15.9%
|
|
|
|
|
Temp fees as % of total net
fees
|
59%
|
57%
|
|
|
|
|
Period-end consultant
headcount
|
7,045
|
8,590
|
|
(18)%
|
|
Turnover for the year ended 30
June 2024 decreased by 6% (8% on a reported basis).
Net fees for the year ended 30
June 2024 decreased by 12% on a like-for-like basis, and by
14% on a reported basis, to £1,113.6 million. This represented a
like-for-like fee decline of £152.3 million versus the prior
year.
The decrease in fees was due to
lower volumes in both Temp and Perm, partially offset by
increases in our average fees per placement,
which were driven by the impact of wage inflation and
our management actions.
The higher net fee decline compared to turnover
was due to the relatively resilient performance in Temp fees versus
Perm, and the impact of greater resilience in our MSP
contracts.
Temp fees (59% of Group) decreased
by 8%. Temp volumes declined by 7% YoY, with a further 2% or c.£16
million fee impact from lower average hours worked per contractor
in Germany. Partially offsetting this, we saw an increase of 1%
from higher Temp rates, which included our underlying Temp
margin(6) down 40bps YoY at 15.5%. This was primarily
due to resilience in Enterprise clients, which tend to be slightly
lower margin but where volumes are higher.
Perm fees (41% of Group) decreased
by 17%. Perm volumes decreased by 25% as job inflow decreased and
hiring processes extended as FY24 progressed. As with prior years,
this was partially offset by good growth in our average Perm fee,
up 8%.
Fees in the Private sector (83% of
Group), decreased by 13%, with the Public sector also challenging,
down 7%.
Our largest global specialism of
Technology (25% of Group fees) decreased by 15%, with Perm
significantly more challenging than Temp. Accountancy & Finance
decreased by 10%, which included Senior Finance outperforming
Junior Finance. Construction and Property was down 14%, with
Engineering performing better, down 3%. Direct and indirect
outsourcing fees with Enterprise clients was more resilient than
preferred supplier list or spot fees, decreasing by 4%, and we
continue to have a solid pipeline of opportunities.
Operating Profit impacted by lower fees but supported by
decisive cost actions taken
FY24 pre-exceptional(2)
Group operating profit of £105.1 million represented a
like-for-like decrease of 46% (down 43% WDA(5)). Group
conversion rate(2) decreased by 580 bps year-on-year to
9.4% (9.7% WDA(5)).
Like-for-like administrative
expenses decreased by 6% YoY or £64.6 million (£89.1 million on
reported basis, down 8%). This was driven by a 9% lower average
Group consultant headcount, lower commissions and bonuses and
reduced operational overhead spend. This was partially offset by
our own salary increases and underlying cost inflation, notably in
property and insurance costs.
Since our FY23 preliminary
results, our actions have reduced our costs per
period(8) by c.£5 million, equating to annualised Group
cost savings of c.£60 million. Of these savings, c.£30 million
arose from the reduction in consultant headcount. A further c.£30
million of savings is more structural and resulted from our
decisive response to increasingly challenging market conditions and
to improve our operational performance. We restructured operations
and back-office functions and closed or merged 17 offices in our
network in FY24, including 12 in Q4, ending FY24 with 236 offices.
Collectively, these actions resulted in FY24 exceptional
restructuring charges of £42.2 million(2), detailed
below. In addition, we expect our ongoing actions will deliver
further annualised back-office cost reductions of c.£30 million by
the end of FY27.
Exchange rate movements decreased
net fees and operating profit by £28.7 million and £4.2 million,
respectively. This resulted from the strengthening in the average
rate of exchange of sterling versus our main trading currencies,
notably the Australian dollar. Currency fluctuations remain a
significant Group sensitivity.
Working-day adjustments
As previously reported, our
Germany business had two fewer working days versus the prior year,
which impacted our fees and operating profit by c.£3.5 million.
Therefore, on a WDA basis Group operating profit was £108.6
million, down 43% YoY, and represented a conversion rate of 9.7%.
There are no material working-day impacts in FY25.
Impairment of goodwill, intangible assets and exceptional
restructuring charge
During FY24, the Group incurred an
exceptional charge of £80.0 million (FY23: £nil). Of this, £15.3
million resulted from the partial impairment, in H1, of the
carrying value of goodwill relating to the 2014 Veredus acquisition
in the USA, given ongoing challenges in US trading conditions. The
remaining Veredus goodwill balance at 30 June 2024 is £7.2 million.
During the year a Group-wide project was initiated to transform our
IT infrastructure to better support the operations of the business.
This led the Directors to conclude that certain intangible assets
would either no longer be used in the Group's operations or that
their carrying value was impaired and this resulted in an
impairment charge of £22.5 million. Both the goodwill and
intangible impairment charges are material non-cash items, that
based on their size and nature are considered to be
exceptional.
As noted at the top of this page,
in a direct and decisive response to increasingly challenging
market conditions and a clear slowdown in most markets, we
restructured the business operations of several countries across
the Group, to better align business operations to market
opportunities and reduce operating costs. The restructuring
exercise led to the redundancy of a number of employees, including
senior and operational management and back-office positions. In
addition, we closed several business units and a number of our
offices. As reported at our Q4 results, the combined costs relating
to this were £42.2 million and are considered exceptional given
their size and impact on business operations. The cash impact of
the exceptional charge was £22.9 million in FY24, with a further
£17.8 million cash outflow expected in FY25. We estimate that these
restructuring actions will result in c.£30 million per annum in
longer-term cost savings, which are included in the overall c.£60
million of annualised cost savings resulting from our FY24
actions.
Net finance charge
The net finance charge for FY24
was £10.4 million (FY23: £4.9 million). The increase YoY was
primarily due to a £1.3 million charge on defined benefit pension
scheme obligations (FY23: credit of £1.1 million) and is non-cash.
The non-cash interest charge on lease liabilities under IFRS 16 was
£5.0 million (FY23: £4.2 million) and net bank interest payable
(including amortisation of arrangement fees) was £4.0 million
(FY23: £1.7 million). The Pension Protection Fund levy was £0.1
million (FY23: £0.1 million).
We expect the net finance charge
for FY25 to be c.£10 million, broadly in line with FY24.
Taxation
Taxation for the year on profit
before exceptional items was £30.7 million (2023: £53.8 million),
representing a pre-exceptional(2) effective tax rate
(ETR) of 32.4% (2023: 28.0%). The tax charge on post exceptional
profit was £19.6 million, representing an effective tax rate on
reported profits of 133%, due to the lower effective tax credit on
exceptional costs.
The increase in the
pre-exceptional ETR year-on-year is primarily driven by the
geographic mix of operating profit, notably the higher proportion
of profits made in Germany, which has one of our highest country
tax rates and which accounted for 65% of group profits in the year.
We expect the Group's ETR will be c.32% in FY25, unless our
geographic profit mix changes materially.
Earnings per share
The Group's pre-exceptional basic
earnings per share (EPS) of 4.03p was 53% lower than the prior
year, with post-exceptional EPS of (0.31)p down 104%. The reduction
was primarily driven by 46% lower pre-exceptional operating profit.
In addition, we incurred a higher net finance charge and a higher
ETR, both noted above. The impact on EPS was partially offset
by a 1% reduction in average shares in issue,
arising from our FY23 share buyback programme.
Strong balance sheet and cash generation
Our net cash position at 30 June
2024 was £56.8 million.
We converted 107% of operating
profit(2) into operating cash flow(4), up YoY
(FY23: 101%(4)). We saw a working capital outflow of
£16.5 million in FY24 (FY23: £28.7 million outflow), driven by an
increase in debtor days to 36 days (FY23: 33 days), largely due to
greater resilience in our Enterprise client business and relative
resilience in Germany and EMEA, each of which have longer payment
terms than the Group average. Debtor days remain below pre-pandemic
levels and our aged debt profile remains strong. Group bad debts
remain in line with FY23 and are at historically low
levels.
Cash tax paid in the year was
£26.4 million (FY23: £65.8 million) and included some pre-payments
to certain tax authorities. Net capital expenditure was £23.4
million (FY23: £29.1 million), with continued investments in
infrastructure and cyber security. We expect capital expenditure
will be c.£30 million in FY25.
Company pension contributions were
£18.2 million (FY23: £17.7 million) and net interest paid was £4.0
million (FY23: £1.7 million). The cash impact of the exceptional
restructuring charge in FY24 was £22.9 million.
During the year we paid
a £32.6 million final core dividend for FY23, a
£15.0 million FY24 interim dividend and a special dividend of £35.7
million. During H1 we also purchased £12.3 million in shares
under our Treasury share buyback programme announced in September
2023, which was completed during FY24.
Retirement benefits
The Group's defined benefit
pension scheme position under IAS 19 at 30 June 2024 has resulted
in a surplus of £19.4 million, compared to a surplus of £25.7
million at 30 June 2023. The decrease in surplus of £6.3 million
was driven by a decrease in expected returns from scheme assets and
a change in financial assumptions, notably a decrease in discount
rate, partially offset by company contributions.
During the year, the Group
contributed £17.7 million of cash to the defined benefit scheme
(2023: £17.2 million), in line with the agreed deficit recovery
plan. The Trustees are currently performing our 2024 triennial
valuation review and the 2021 triennial valuation quantified the
actuarial deficit at £23.9 million on a Technical Provisions basis.
Our long-term objective continues to be reaching full buy-out of
the scheme and therefore our recovery plan remained unchanged and
comprised an annual payment of £16.7 million from July 2021, with a
fixed 3% uplift per year. The scheme was closed to new entrants in
2001 and to future accrual in June 2012.
Capital allocation
Our business model remains highly
cash generative. The Board's free cash flow priorities are to fund
the Group's investment and development, maintain a strong balance
sheet, deliver a progressive, sustainable and appropriate core
dividend and to return any surplus cash to shareholders through a
combination of special dividends and share buybacks subject to the
economic outlook.
The Board has proposed an
unchanged final core dividend of 2.05 pence per share giving a
full-year dividend of 3.00 pence per share. This represents
pre-exceptional dividend cover of 1.34x, below our target core
dividend cover range of 2.0-3.0x earnings. Given the Board's
confidence in the Group's strategy and long-term prospects, plus
our strong financial position, the Board considers an unchanged
dividend payment is appropriate. The dividend record date is 18
October 2024, and the proposed payment date is 25 November
2024.
Our policy for returning surplus
cash to shareholders remains unchanged and is based on paying
capital above our net cash buffer at each financial year-end (30
June) of £100 million, subject to the economic outlook. As at 30
June 2024 our net cash position was £56.8 million, and therefore
the Board does not propose a return of surplus capital to
shareholders in respect of FY24. As a reminder, we have a strong
track record of paying cash to shareholders, with c.£950 million in
core and special dividends paid in respect of FY17 to FY23, and
additionally £93.2 million of share buybacks since April
2022.
Foreign exchange
Overall, net currency movements
versus sterling negatively impacted results in the year, decreasing
net fees by £28.7 million, and operating profit by £4.2 million,
primarily due to the strengthening of sterling versus the
Australian dollar.
Fluctuations in the rates of the
Group's key operating currencies versus sterling represent a
significant sensitivity for the reported performance of our
business. By way of illustration, based on our FY24 results, each 1
cent movement in annual exchange rates of the euro and Australian
dollar impacts net fees by c.£4.6 million and c.£0.7 million
respectively per annum, and operating profits by c.£0.9 million and
c.£0.1 million respectively per annum.
The rate of exchange between the
Australian dollar and sterling over the year averaged AUD $1.9213
and closed at AUD $1.8935. As at 20 August 2024 the rate stood at
AUD 1.9332. The rate of exchange between the euro and sterling over
the year averaged €1.1644 and closed at €1.1798. As at 20 August
2024 the rate stood at €1.1730.
The strengthening of sterling
versus our main trading currencies of the euro and Australian
dollar is currently a modest headwind to Group operating profit in
FY25.
Movements in consultant headcount and office network
changes
Consultant headcount at 30 June
2024 was 7,045, down 18% year-on-year and 24% lower versus peak (Q1
23), almost entirely outside of our restructuring programmes. Total
Group headcount decreased by 15% year-on-year, including the impact
of our restructuring programmes noted earlier. Given our focus on driving consultant productivity in recent
quarters, we believe our consultant capacity is appropriate for
current market conditions and expect overall consultant headcount
will remain broadly stable in Q1 25. We expect total group
headcount will decrease slightly as we continue our back-office
efficiency programmes.
|
Consultant headcount
|
30 June
2024
|
30
June
2023
|
Net change
YoY
|
31
Dec
2023
|
Net change
(vs. 31 Dec
2023)
|
|
Germany
|
1,858
|
2,044
|
(9)%
|
2,055
|
(10)%
|
|
United Kingdom &
Ireland
|
1,629
|
1,935
|
(16)%
|
1,800
|
(10)%
|
|
Australia & New
Zealand
|
729
|
1,071
|
(32)%
|
887
|
(18)%
|
|
Rest of World
|
2,829
|
3,539
|
(20)%
|
3,229
|
(12)%
|
|
Group
|
7,045
|
8,590
|
(18)%
|
7,971
|
(12)%
|
As part of our focus on
operational rigour, we consolidated 17 locations in FY24, including
12 in Q4 24, and opened one new office in Australia.
|
Office network
|
30 June
2024
|
30
Jun
2023
|
Net change
YoY
|
31
Dec
2023
|
|
Germany
|
26
|
26
|
-
|
26
|
|
United Kingdom &
Ireland
|
75
|
85
|
(10)
|
85
|
|
Australia & New
Zealand
|
37
|
39
|
(2)
|
38
|
|
Rest of World
|
98
|
102
|
(4)
|
100
|
|
Group
|
236
|
252
|
(16)
|
249
|
Germany (32%(7) net fees, 65%(7)
operating profit)
H2 performance impacted by tough
economic conditions and client cost controls
|
|
|
|
|
Growth
|
|
Year ended 30 June
(In £s million)
|
2024
|
2023
|
|
Reported
|
LFL
|
|
Net fees (1)
|
351.8
|
382.0
|
|
(8)%
|
(7)%
|
|
Pre-exceptional operating profit
(2)
|
68.0
|
100.2
|
|
(32)%
|
(31)%
|
|
Conversion rate
(3)
|
19.3%
|
26.2%
|
|
|
|
|
Period-end consultant
headcount
|
1,858
|
2,044
|
|
(9)%
|
|
Our largest market of Germany saw
net fees decrease by 7% to £351.8 million, with fees and activity
slowing through H2 24 and particularly in Q4. Operating
profit(2) decreased by 31% to £68.0 million, although
adjusting for two fewer working days, which impacted fees and
profit by £3.5 million, fees decreased by 6% and operating profit
by 27%. Conversion rate was 19.3% (FY23: 26.2%), or 20.1%
WDA(5).
Having been resilient during FY23
and H1 24, despite a deteriorating economic outlook, demand for
skilled Contractors and Temps decreased in H2 24, which led to
lower YoY volumes including Q4 down 6%. Additionally, average hours
worked per Contractor declined by 8% in Q3 and 10% in Q4, primarily
driven by client cost controls. This led to a negative fee and
operating profit impact of c.£16 million YoY, reducing conversion
rate.
Temp and Contracting, (82% of
Germany fees), decreased by 7%, or down 6%
WDA(5). This was driven by 1%
decline in volumes and 6% from materially lower average hours
worked in H2 24. Pricing and mix remained solid and is expected to
remain steady in H1 25. As previously reported at our Q4 results,
overall Temp and Contracting volumes in June 2024 were down 6% YoY
and we expect a further 2% YoY decline in volumes in Q1 25. Temp
margin was flat versus the prior year.
In Perm, activity slowed through
the year and fees decreased by 5%, including Q4 down 20%. This
resulted from a 12% decrease in Perm volumes, partially offset by a
7% increase in our average Perm fee.
At the specialism level, our
largest specialism of Technology (33% of Germany fees), decreased
by 12%, with Engineering, our second largest, down 3%. Accountancy
& Finance decreased by 4% and Construction & Property
increased by 3%, with HR down 13%. Fees in our Public sector
business (15% of Germany fees) increased by 4%.
Although conditions were tough,
and after several years of significantly outperforming the market,
in FY24 we consolidated our market-leading share in Germany. Fees
with outsource / MSP clients were flat in the year, demonstrating
greater resilience than more transactional parts of the market, and
overall we are very well-positioned to benefit from recovery when
it comes.
Significant actions were also
taken to restructure our Germany business, particularly in H2.
Details of the resulting exceptional costs are provided in note 3
and note 4. Consultant headcount decreased
by 9% YoY, including a 10% reduction YoY in H2.
United Kingdom & Ireland (20%(7) net fees,
6%(7) operating profit)
Markets slowed through the year,
particularly in Perm, significantly impacting profit
|
|
|
|
|
Growth
|
|
Year ended 30 June
(In £s million)
|
2024
|
2023
|
|
Reported
|
LFL
|
|
Net fees (1)
|
225.7
|
266.1
|
|
(15)%
|
(15)%
|
|
Pre-exceptional operating profit
(2)
|
6.4
|
28.7
|
|
(78)%
|
(78)%
|
|
Conversion rate
(3)
|
2.8%
|
10.8%
|
|
|
|
|
Period-end consultant
headcount
|
1,629
|
1,935
|
|
(16)%
|
|
In the United Kingdom &
Ireland ("UK&I"), net fees decreased by 15% to £225.7 million.
Operating profit(2) of £6.4 million represented a
decrease of 78% versus the prior year, at a conversion rate of 2.8%
(FY23: 10.8%).
Driven by decreased client and
candidate confidence, Perm fees and activity slowed materially
through H1 and, after a period of relative stability in H2,
decreased again in the lead-up to the general election. Temp was
less impacted, although down YoY due to lower volumes. Against this
backdrop, we actively managed costs, down 8% YoY, as we aligned
capacity to market conditions and reduced our back-office and
overhead costs as part of our exceptional restructuring programme
noted earlier. Given the pace of decline in fees through the year,
we incurred negative operating profit leverage, which was magnified
by a weaker June fee exit rate.
Temp (57% of UK&I), decreased
by 13%, with Temp volumes down 12% and the mix of price and margin
down 1%. Our Perm business saw fees decrease by 17%, with volumes
down 26%, partially offset by a 9% increase in average Perm fee.
The Private sector (68% of UK&I fees) declined by 17%, with the
Public sector down 10% and including a slowdown in June
2024.
All UK&I regions traded
broadly in line with the overall UK&I business, except for
Northern Ireland, down 5%, and the South East, down 21%. Our
largest region of London decreased by 18%, while Ireland declined
by 10%. Direct outsourced fees with Enterprise clients performed
strongly, up 12%.
Our largest UK&I specialism of
Accountancy & Finance decreased by 13%, with Construction &
Property down 12%. Technology and Office Support decreased by
29% and 19% respectively.
Despite tough market conditions,
we maintained our market share in UK&I. Significant actions
were also taken to restructure the UK&I business appropriately
for market conditions. Details of the resulting exceptional costs
are provided in note 3 and note 4. Our actions will help to
increase our profit and conversion rate when markets recover.
Consultant headcount decreased by 16% YoY.
Australia & New Zealand (13%(7) net fees,
11%(7) operating profit)
Markets slowed sharply through the
year, but significant actions taken to align capacity to current
market conditions
|
|
|
|
|
Growth
|
|
Year ended 31 December
(In £s million)
|
2024
|
2023
|
|
Reported
|
LFL
|
|
Net fees (1)
|
139.7
|
188.4
|
|
(26)%
|
(20)%
|
|
Pre-exceptional operating profit
(2)
|
11.5
|
32.1
|
|
(64)%
|
(61)%
|
|
Conversion rate
(3)
|
8.2%
|
17.0%
|
|
|
|
|
Period-end consultant
headcount
|
729
|
1,071
|
|
(32)%
|
|
In Australia & New Zealand
("ANZ"), net fees decreased by 20% to £139.7 million, with
operating profit(2) down 61% to £11.5 million. This
represented a conversion rate of 8.2% (FY23: 17.0%). Currency
impacts were negative in the year, decreasing net fees by £12.8
million and operating profit by £2.4 million.
As a result of changing our ANZ
leadership in H2 23, we undertook a restructuring of the business,
focusing on improving consultant productivity and driving
operational efficiencies. Overall costs decreased by 12%, driven by
21% lower average consultant headcount YoY, partially offset by our
own cost inflation. We also conducted a full review of operational
management capacity, which we aligned to market conditions. This
said, the pace of decline in fees through the year meant we
incurred negative operating profit leverage.
Temp (65% of ANZ) decreased by
16%, with volumes down 17%, but remained sequentially stable
through H2. Fees and activity in the Public sector continued to
reduce, and we saw lower activity in some large Enterprise clients.
Perm fees decreased by 28%, with volumes down 24% and slowing
through the year. The Private sector (63% of ANZ fees), declined by
23%, with Public sector fees down 16%.
Australia, 92% of ANZ, saw fees
decrease by 19%. New South Wales and Victoria decreased by 23% and
18% respectively. Queensland fell by 14%, with ACT down 24%. At the
ANZ specialism level, Construction & Property (20% of fees),
decreased by 24%, with Technology down 19%. Accountancy &
Finance decreased by 18%, with Banking down 25%, although
HR was less impacted, down 16%. New Zealand fees
decreased by 36%.
Although conditions in ANZ remain
challenging, we maintained our market share in Australia and our
management team's decisive actions and increased rigour are
improving our operational performance, and productivity increased
by 1% YoY in FY24. Significant actions were taken to restructure
the ANZ business appropriately for market conditions. Details of
the resulting exceptional costs are provided in note 3 and note 4.
We enter FY25 with positive conversion rate momentum and are
well-positioned to benefit from market recovery when it comes. ANZ
consultant headcount decreased by 32% YoY.
Rest of World (35%(7) net fees, 18%(7)
operating profit)
EMEA slowed through the year,
negatively impacting operating profit. Stability and improved
profitability in H2 in China and the USA
|
|
|
|
|
Growth
|
|
Year ended 30 June
(In £s million)
|
2024
|
2023
|
|
Reported
|
LFL
|
|
Net fees (1)
|
396.4
|
458.1
|
|
(13)%
|
(11)%
|
|
|
|
|
|
|
|
|
Pre-exceptional operating profit
(2)
|
19.2
|
36.0
|
|
(47)%
|
(46)%
|
|
|
|
|
|
|
|
|
Conversion rate
(3)
|
4.8%
|
7.9%
|
|
|
|
|
Period-end consultant
headcount
|
2,829
|
3,539
|
|
(20)%
|
|
Fees in our Rest of World ("RoW")
division, which comprises 28 countries, decreased by 11%. Fees in
Temp (39% of RoW) were resilient and flat YoY, whilst Perm was down
17% as markets slowed through the year, particularly in EMEA.
Operating profit(2) decreased by 46% to £19.2 million,
with RoW operating costs down 8% YoY, representing a conversion
rate of 4.8% (FY23: 7.9%). Currency impacts were negative,
decreasing fees by £11.1 million and operating profit by £0.6
million.
EMEA ex-Germany (64% of RoW)
fees decreased by 7%. France, our largest RoW country, decreased by
6%, as activity slowed through the year, particularly in Q4 with
the impact of elections being felt across Northern Europe. Southern
Europe was much more resilient with Portugal and Italy producing
record performances and increasing by 10% and 8% respectively, and
the UAE delivered record fees, up 10%. Switzerland and Poland
decreased by 8% and 26% respectively. In response to market
conditions, we reduced EMEA ex-Germany headcount by 15% YoY,
primarily in H2.
The Americas (21% of RoW)
fees decreased by 21%. Conditions were tough throughout the region
in H1, although we saw stabilisation and then some early signs of
recovery in the USA in Q4. USA fees declined by 19%, Latin America
by 25% and Canada by 23%. Overall, the Americas was modestly
loss-making in H1, although encouragingly returned to profit in
H2.
Asia (15% RoW) fees decreased
by 13%, with mainland China down 14%, including H2 up 4%, and our
actions taken to reduce costs drove a return to China
profitability. Japan and Malaysia fees decreased by 5% and 8%
respectively.
Significant actions were also
taken to restructure the RoW business appropriately for market
conditions, in the Americas and Asia in H1 and in EMEA in H2.
Details of the resulting exceptional costs are provided in note 3
and note 4.
Overall consultant headcount in
the RoW division decreased by 20% YoY. EMEA ex-Germany consultant
headcount decreased by 18%, the Americas decreased by 31% and Asia
was down 14%.
A key part of our focused strategy
is delivering 25% conversion rates in each country, and to deliver
materially greater profits across the Group. This said, given many
markets are currently facing cyclical pressure, we will give our
businesses an appropriate time to improve their profitability. So,
while we are not satisfied with our overall RoW profitability, we
are confident our actions will improve performance, particularly in
our Americas and Asian Focus countries, where productivity is
currently increasing.
Purpose, Net Zero, Equity and our
Communities
Our purpose is to benefit society
by investing in lifelong partnerships that empower people and
organisations to succeed, creating opportunities and improving
lives. Becoming lifelong partners to millions of people and
thousands of organisations also helps to make our business
sustainable. Our core company value is that we should always strive
to 'do the right thing'. Linked to this and our commitment to
Environmental, Social & Governance (ESG) matters, Hays has
shaped its Sustainability Framework around the United Nations
Sustainable Development Goals (UNSDG's), and further details can be
found in our
FY23 ESG report.
Treasury management
The Group's operations are
financed by retained earnings and cash reserves. In addition, the
Group has in place a £210 million revolving credit facility, which
reduces in November 2024 to £170 million and expires in November
2025 and we are actively planning the renewal process. This
provides adequate headroom versus current and future Group funding
requirements.
The covenants within the facility
require the Group's interest cover ratio to be at least 4:1 (ratio
as at 30 June 2024: 34.2:1) and its leverage ratio (net debt to
EBITDA) to be no greater than 2.5:1 (as at 30 June 2024 the Group
held a net cash position). The interest rate of the facility is on
a ratchet mechanism with a margin payable over Compounded Reference
Rate in the range of 0.70% to 1.50%.
As at 30 June 2024, £145 million
of the committed facility was undrawn (30 June 2023: £200 million
of the committed facility was undrawn).
The Group's UK-based Treasury
function manages the Group's currency and interest rate risks in
accordance with policies and procedures set by the Board and is
responsible for day-to-day cash management; the arrangement of
external borrowing facilities; and the investment of surplus funds.
The Treasury function does not operate as a profit centre or use
derivative financial instruments for speculative
purposes.
Principal risks facing the business
Hays plc operates a comprehensive enterprise
risk management framework, which is monitored and reviewed by the
Board. There are a number of potential risks and uncertainties that
could have a material impact on the Group's financial performance
and position. These include risks relating to the cyclical nature
of our business and inflation, business model, talent recruitment
and retention, compliance, reliance on technology, cyber security,
data protection and contracts. These risks and our mitigating
actions are set out in the
2023 Annual Report, and remain relevant.
There are no additional risks since this date which impact Hays'
financial position or performance, although as noted earlier in
this statement, with macroeconomic uncertainties increasing, we are
closely monitoring our activity levels and KPI's.
This preliminary report was approved and
authorised for issue by the Board of Directors on 21 August
2024.
Dirk
Hahn
James Hilton
Chief Executive
Chief Financial Officer
Hays plc
20 Triton Street
London
NW1 3BF
haysplc.com/investors
Cautionary statement
This Preliminary Report (the "Report") has
been prepared in accordance with the Disclosure Guidance and
Transparency Rules of the UK Financial Conduct Authority and is not
audited. No representation or warranty, express or implied, is or
will be made in relation to the accuracy, fairness or completeness
of the information or opinions contained in this Report. Statements
in this Report reflect the knowledge and information available at
the time of its preparation. Certain statements included or
incorporated by reference within this Report may constitute
"forward-looking statements" in respect of the Group's operations,
performance, prospects and/or financial condition. By their nature,
forward-looking statements involve a number of risks, uncertainties
and assumptions and actual results or events may differ materially
from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be
met and reliance shall not be placed on any forward-looking
statement. Additionally, forward-looking statements regarding past
trends or activities shall not be taken as a representation
that such trends or activities will continue in the future. The
information contained in this Report is subject to change without
notice and no responsibility or obligation is accepted to update or
revise any forward-looking statement resulting from new
information, future events or otherwise. Nothing in this Report
shall be construed as a profit forecast. This Report does not
constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to purchase or subscribe for any shares
in the Company, nor shall it or any part of it or the fact of its
distribution form the basis of, or be relied on in connection with,
any contract or commitment or investment decisions relating
thereto, nor does it constitute a recommendation regarding the
shares of the Company or any invitation or inducement to engage in
investment activity under section 21 of the Financial Services and
Markets Act 2000. Past performance cannot be relied upon as a guide
to future performance. Liability arising from anything in this
Report shall be governed by English Law, and neither the Company
nor any of its affiliates, advisors or representatives shall have
any liability whatsoever (in negligence or otherwise) for any loss
howsoever arising from any use of this Report or its contents or
otherwise arising in connection with this Report. Nothing in this
Report shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
LEI code: 213800QC8AWD4BO8TH08
|
CONSOLIDATED INCOME STATEMENT
|
|
|
|
|
|
FOR
THE YEAR ENDED 30 JUNE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
2024
|
|
|
|
|
|
Before
|
Exceptional
|
|
|
|
|
|
exceptional
|
items
|
|
|
|
(In £s million)
|
Note
|
items
|
(note
4)
|
2024
|
2023
|
|
Turnover
|
3,5
|
6,949.1
|
-
|
6,949.1
|
7,583.3
|
|
Net
fees (1)
|
3,5
|
1,113.6
|
-
|
1,113.6
|
1,294.6
|
|
Administrative expenses
(2)
|
5
|
(1,008.5)
|
(80.0)
|
(1,088.5)
|
(1,097.6)
|
|
Operating profit
|
3
|
105.1
|
(80.0)
|
25.1
|
197.0
|
|
Net finance charge
(3)
|
6
|
(10.4)
|
-
|
(10.4)
|
(4.9)
|
|
Profit before tax
|
|
94.7
|
(80.0)
|
14.7
|
192.1
|
|
Tax
|
7
|
(30.7)
|
11.1
|
(19.6)
|
(53.8)
|
|
Profit/(loss) after tax
|
|
64.0
|
(68.9)
|
(4.9)
|
138.3
|
|
Profit/(loss) attributable to equity holders of the parent
company
|
|
64.0
|
(68.9)
|
(4.9)
|
138.3
|
|
Earnings per share
(pence)
|
|
|
|
|
|
|
- Basic
|
9
|
4.03p
|
(4.34p)
|
(0.31p)
|
8.59p
|
|
- Diluted
|
9
|
4.00p
|
(4.31p)
|
(0.31p)
|
8.52p
|
|
|
|
|
|
|
|
|
(1) Net fees comprise turnover less remuneration of temporary
workers and other recruitment agencies.
|
|
(2) Administrative expenses include impairment loss on trade
receivables of £1.4 million (2023: £3.0 million).
|
|
(3) Net finance charge is stated net of interest received on bank
deposits of £3.2 million (2023: £2.0 million).
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
|
|
FOR
THE YEAR ENDED 30 JUNE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
(Loss)/profit for the
year
|
|
|
|
(4.9)
|
138.3
|
|
Items that will not be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
Actuarial remeasurement of defined
benefit pension schemes
|
|
|
|
(23.2)
|
(95.1)
|
|
Tax relating to components of other
comprehensive income
|
|
|
|
5.6
|
19.5
|
|
|
|
|
|
(17.6)
|
(75.6)
|
|
Items that may be reclassified subsequently to profit or
loss:
|
|
|
|
|
|
|
Currency translation
adjustments
|
|
|
|
(4.1)
|
(15.6)
|
|
Other comprehensive loss for the
year net of tax
|
|
|
|
(21.7)
|
(91.2)
|
|
Total comprehensive (loss)/income
for the year
|
|
|
|
(26.6)
|
47.1
|
|
Attributable to equity shareholders
of the parent company
|
|
|
|
(26.6)
|
47.1
|
|
CONSOLIDATED BALANCE SHEET
|
|
|
|
|
AT
30 JUNE
|
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
Note
|
2024
|
2023
|
|
Non-current assets
|
|
|
|
|
Goodwill
|
|
182.9
|
200.3
|
|
Other intangible assets
|
|
37.7
|
53.7
|
|
Property, plant and
equipment
|
|
25.2
|
29.7
|
|
Right-of-use assets
|
10
|
162.2
|
176.1
|
|
Deferred tax assets
|
|
25.4
|
21.4
|
|
Retirement benefit
surplus
|
11
|
19.4
|
25.7
|
|
|
|
|
452.8
|
506.9
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
|
1,194.5
|
1,244.6
|
|
Corporation tax debtor
|
|
9.1
|
6.8
|
|
Cash and cash equivalents
|
|
121.8
|
145.6
|
|
Derivative financial
instruments
|
|
-
|
0.1
|
|
|
|
|
1,325.4
|
1,397.1
|
|
Total assets
|
|
1,778.2
|
1,904.0
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
(926.6)
|
(991.3)
|
|
Lease liabilities
|
10
|
(44.2)
|
(41.3)
|
|
Corporation tax
liabilities
|
|
(13.0)
|
(16.2)
|
|
Provisions
|
12
|
(24.0)
|
(10.8)
|
|
|
|
|
(1,007.8)
|
(1,059.6)
|
|
Non-current liabilities
|
|
|
|
|
Bank loans
|
|
(65.0)
|
(10.0)
|
|
Deferred tax liabilities
|
|
-
|
(2.8)
|
|
Lease liabilities
|
10
|
(135.1)
|
(148.5)
|
|
Provisions
|
12
|
(12.7)
|
(12.8)
|
|
|
|
|
(212.8)
|
(174.1)
|
|
Total liabilities
|
|
(1,220.6)
|
(1,233.7)
|
|
Net
assets
|
|
557.6
|
670.3
|
|
Equity
|
|
|
|
|
Called up share capital
|
|
16.0
|
16.0
|
|
Share premium
|
|
369.6
|
369.6
|
|
Merger reserve
|
|
28.8
|
43.8
|
|
Capital redemption
reserve
|
|
3.4
|
3.4
|
|
Retained earnings
|
|
62.0
|
155.4
|
|
Cumulative translation
reserve
|
|
53.9
|
58.0
|
|
Equity reserve
|
|
23.9
|
24.1
|
|
Total equity
|
|
557.6
|
670.3
|
|
|
|
|
|
|
|
The Consolidated Financial
Statements of Hays plc, registered number 2150950, were approved by
the Board of Directors and authorised for issue on 21 August
2024.
|
|
|
|
|
|
|
|
Signed on behalf of the Board of
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D
HAHN
|
J
HILTON
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
|
|
|
|
FOR
THE YEAR ENDED 30 JUNE 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
Called
up share capital
|
Share
premium
|
Merger
reserve(1)
|
Capital
redemption reserve
|
Retained
earnings
|
Cumulative translation reserve
|
Equity reserve(2)
|
Total
equity
|
|
At 1 July 2023
|
16.0
|
369.6
|
43.8
|
3.4
|
155.4
|
58.0
|
24.1
|
670.3
|
|
Currency translation
adjustments
|
-
|
-
|
-
|
-
|
-
|
(4.1)
|
-
|
(4.1)
|
|
Remeasurement of defined benefit
pension schemes
|
-
|
-
|
-
|
-
|
(23.2)
|
-
|
-
|
(23.2)
|
|
Tax relating to components of other
comprehensive income
|
-
|
-
|
-
|
-
|
5.6
|
-
|
-
|
5.6
|
|
Net expense recognised in other
comprehensive income
|
-
|
-
|
-
|
-
|
(17.6)
|
(4.1)
|
-
|
(21.7)
|
|
Loss for the year
|
-
|
-
|
-
|
-
|
(4.9)
|
-
|
-
|
(4.9)
|
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
(22.5)
|
(4.1)
|
-
|
(26.6)
|
|
Dividends paid
|
-
|
-
|
(15.0)
|
-
|
(68.3)
|
-
|
-
|
(83.3)
|
|
Purchase of own shares
|
-
|
-
|
-
|
-
|
(12.3)
|
-
|
-
|
(12.3)
|
|
Share-based payments charged to the
income statement
|
-
|
-
|
-
|
-
|
-
|
-
|
9.5
|
9.5
|
|
Share-based payments settled on
vesting
|
-
|
-
|
-
|
-
|
9.7
|
-
|
(9.7)
|
-
|
|
At
30 June 2024
|
16.0
|
369.6
|
28.8
|
3.4
|
62.0
|
53.9
|
23.9
|
557.6
|
|
|
|
|
|
|
|
|
|
|
|
FOR
THE YEAR ENDED 30 JUNE 2023
|
|
|
|
|
|
|
|
|
(In £s million)
|
Called
up share capital
|
Share
premium
|
Merger
reserve(1)
|
Capital
redemption reserve
|
Retained
earnings
|
Cumulative translation reserve
|
Equity reserve(2)
|
Total
equity
|
|
At 1 July 2022
|
16.7
|
369.6
|
43.8
|
2.7
|
268.2
|
73.6
|
21.6
|
796.2
|
|
Currency translation
adjustments
|
-
|
-
|
-
|
-
|
-
|
(15.6)
|
-
|
(15.6)
|
|
Remeasurement of defined benefit
pension schemes
|
-
|
-
|
-
|
-
|
(95.1)
|
-
|
-
|
(95.1)
|
|
Tax relating to components of other
comprehensive income
|
-
|
-
|
-
|
-
|
19.5
|
-
|
-
|
19.5
|
|
Net expense recognised in other
comprehensive income
|
-
|
-
|
-
|
-
|
(75.6)
|
(15.6)
|
-
|
(91.2)
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
138.3
|
-
|
-
|
138.3
|
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
62.7
|
(15.6)
|
-
|
47.1
|
|
Dividends paid
|
-
|
-
|
-
|
-
|
(165.1)
|
-
|
-
|
(165.1)
|
|
Purchase of own shares
|
(0.7)
|
-
|
-
|
0.7
|
(19.0)
|
-
|
-
|
(19.0)
|
|
Share-based payments charged to the
income statement
|
-
|
-
|
-
|
-
|
-
|
-
|
11.1
|
11.1
|
|
Share-based payments settled on
vesting
|
-
|
-
|
-
|
-
|
8.6
|
-
|
(8.6)
|
-
|
|
At 30 June 2023
|
16.0
|
369.6
|
43.8
|
3.4
|
155.4
|
58.0
|
24.1
|
670.3
|
|
|
|
|
|
|
|
|
|
|
|
(1) The Merger reserve was generated under Section 612 of the
Companies Act 2006, as a result of the cash box structure used in
the equity placing of new shares issued during the year ended 30
June 2020.
|
|
(2) The Equity reserve is generated as a result of IFRS 2
'Share-based payments'.
|
|
CONSOLIDATED CASH FLOW STATEMENT
|
|
|
|
|
FOR
THE YEAR ENDED 30 JUNE
|
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
2024
|
2023
|
|
Operating profit
|
|
25.1
|
197.0
|
|
Adjustments for:
|
|
|
|
|
|
Exceptional items (note
4)
|
|
80.0
|
-
|
|
|
Depreciation of property, plant and
equipment
|
|
11.1
|
10.9
|
|
|
Depreciation of right-of-use
assets
|
|
46.0
|
46.0
|
|
|
Amortisation of intangible
assets
|
|
9.2
|
10.0
|
|
|
Loss on disposal of business
assets
|
|
-
|
0.1
|
|
|
Net movements in provisions
(excluding exceptional items) (1)
|
|
0.2
|
1.9
|
|
|
Share-based payments (excluding
exceptional items)
|
|
8.2
|
12.0
|
|
|
|
|
154.7
|
80.9
|
|
Operating cash flow before movement in working
capital
|
|
179.8
|
277.9
|
|
Movement in working
capital:
|
|
|
|
|
Decrease/(increase) in
receivables
|
|
43.2
|
(53.2)
|
|
(Decrease)/increase in payables
(1)
|
|
(59.7)
|
24.5
|
|
Movement in working
capital
|
|
(16.5)
|
(28.7)
|
|
Cash generated by operations
|
|
163.3
|
249.2
|
|
Cash paid in respect of exceptional
items
|
|
(22.9)
|
-
|
|
Pension scheme deficit
funding
|
|
(18.2)
|
(17.7)
|
|
Income taxes paid
|
|
(26.4)
|
(65.8)
|
|
Net
cash inflow from operating activities
|
|
95.8
|
165.7
|
|
Investing activities
|
|
|
|
|
Purchase of property, plant and
equipment
|
|
(7.6)
|
(12.3)
|
|
Purchase of intangible
assets
|
|
(15.8)
|
(16.8)
|
|
Acquisition of
subsidiaries
|
|
-
|
(1.0)
|
|
Interest received
|
|
3.2
|
2.0
|
|
Net
cash used in investing activities
|
|
(20.2)
|
(28.1)
|
|
Financing activities
|
|
|
|
|
Interest paid
|
|
(7.2)
|
(3.7)
|
|
Lease liability principal
repayment
|
|
(51.0)
|
(49.9)
|
|
Purchase of own shares
|
|
(12.3)
|
(75.7)
|
|
Equity dividends paid
|
|
(83.3)
|
(165.1)
|
|
Increase in bank loans and
overdrafts
|
|
55.0
|
10.0
|
|
Net
cash used in financing activities
|
|
(98.8)
|
(284.4)
|
|
Net
decrease in cash and cash equivalents
|
|
(23.2)
|
(146.8)
|
|
Cash and cash equivalents at beginning of
year
|
|
145.6
|
296.2
|
|
Effect of foreign exchange rate
movements
|
|
(0.6)
|
(3.8)
|
|
Cash and cash equivalents at end of year
|
|
121.8
|
145.6
|
|
|
|
|
|
|
|
(1) Net movements in provisions (excluding exceptionals) for the
year ended 30 June 2024 includes transfer of dilapidation provision
from accruals to provisions, with a corresponding decrease in
payables of £5.4 million. There has been no impact on the Group's
Cash generated by operations, cash inflow from operating
activities, or on cash conversion.
|
|
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
|
|
1
|
STATEMENT UNDER S435 - PUBLICATION OF NON-STATUTORY
ACCOUNTS
|
|
The financial information set out
in this preliminary announcement does not constitute statutory
accounts for the years ended 30 June 2024 or 30 June 2023, as
defined in Section 435 (1) and (2) of the Companies Act 2006, but
is derived from those accounts. The statutory accounts for 2023
have been delivered to the Registrar of Companies and those for
2024 will be delivered following the Company's Annual General
Meeting. The Group's Auditor has reported on those accounts; their
reports were unqualified, did not draw attention to any matters by
way of emphasis without qualifying their report and did not contain
statements under Section 498 (2) or (3) of the Companies Act
2006.
|
|
|
|
|
|
|
|
|
|
2
|
BASIS OF PREPARATION
|
|
Whilst the financial information
included in this preliminary announcement has been prepared in
accordance with UK-adopted International Accounting Standards, this
announcement does not itself contain sufficient information to
comply with IFRS. The accounting policies applied in preparing this
financial information are consistent with the Group's financial
statements for the year ended June 2023; there have been no new
standards or improvements to existing standards that are mandatory
for the first time in the Group's accounting period beginning on 1
July 2023 and no new standards have been early adopted.
|
|
|
|
|
|
|
|
|
|
Going Concern
|
|
The Group's business activities,
together with the factors likely to affect its future development,
performance and financial position, including its cash flows and
liquidity position are described in this preliminary results
announcement for the year ended 30 June 2024. The Directors have
formed the judgment that there is reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. As a result the Directors continue to
adopt the Going Concern basis in the preparation of the
Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
As in prior years, the Board
undertook a strategic business review in the current year which
took into account the Group's current financial position and the
potential impact of the principal risks set out in the Annual
Report.
|
|
|
|
|
|
|
|
|
|
In addition, and in making this
statement, the Board carried out a robust assessment of the
principal risks facing the Group, including those that would
threaten the Group's business model, future performance and
liquidity. While the review has considered all the principal risks
identified by the Group, the resilience of the Group to the
occurrence of these risks in severe yet plausible scenarios has
been evaluated.
|
|
|
|
|
|
|
|
|
|
Financial position
|
|
At 30 June 2024, the Group had net
cash of £56.8 million compared to net cash of £135.6 million at 30
June 2023. The Group had a good working capital performance, with
significant management focus on cash collection, average trade
debtor days remained below pre-Pandemic levels at 36 days (2023: 33
days), with the increase versus prior year being caused by the
relative resilience of our Enterprise clients, that typically have
longer payment terms. The Group has a history of strong cash
generation, tight cost control and flexible workforce
management.
|
|
|
|
|
|
|
|
|
|
Assessment of Going Concern
|
|
The Board approves the annual
budget, which is based on submissions from the Group's divisions,
following a thorough review process. The Board also reviews monthly
management reports and quarterly forecasts. The output of the
planning and budgeting processes has been used to perform base case
projections for going concern purposes, under prudent
assumptions:
|
|
|
|
•
|
FY25 net fees and operating profit
in-line with the approved budget
|
|
•
|
Modest, single digit net fee
growth in FY26
|
|
•
|
Working capital movements expected
to be broadly neutral
|
|
•
|
That the Group's revolving credit
facility is extended beyond the viability period
|
|
•
|
Future dividends are in-line with
current policy
|
|
•
|
No changes to the Group
structure
|
|
2
|
BASIS OF PREPARATION continued
|
|
|
|
|
|
|
A sensitivity analysis of the
Group's cash flow was performed to model the potential effects
should the principal risks occur either individually or in unison.
The sensitivity analysis modelled a range of severe, but plausible,
downside scenarios against the base case projections, including a
worsening of the macroeconomic environment and intensified
competition, increasing inflation and the potential impact of
climate change, with a range of recovery scenarios considered. The
'Stress Case' scenario assumes that the Group experiences a severe
further deterioration in market conditions in H2 FY25, followed by
a period of only gradual recovery.
|
|
|
|
The Directors are satisfied that
the Group would be able to respond to such scenarios with a range
of measures including, but not limited to:
|
|
|
|
•
|
Quickly decreasing headcount
through natural attrition
|
|
•
|
Reductions in discretionary
spend
|
|
•
|
Deferral of capital
expenditure
|
|
•
|
Further rationalisation or
restructuring of business operations
|
|
•
|
Reduction in cash distributions to
shareholders
|
|
|
|
Given the nature of the Temporary
and Contract recruitment business, significant working capital
inflows typically arise in periods of severe downturn, thus
protecting liquidity as was the case during the Global Financial
Crisis of 2008/09 and which we again experienced during the
Covid-19 pandemic.
|
|
|
|
Set against these downside trading
scenarios, the Board also considered key mitigating factors
including the geographic and sectoral diversity of the Group, its
balanced business model across Temporary, Permanent and Contract
recruitment services, and the focus on building a more resilient
business, underpinned by the Group's clear strategy and focus on
operational rigour. Furthermore, whilst our key markets have become
increasingly challenging throughout FY24, skill and talent
shortages are widespread across our major markets and are expected
to remain so for the foreseeable future; the Directors are
therefore satisfied that the demand for recruitment services will
continue, supporting the resilience of our business
model.
|
|
|
|
The Directors also considered a
reverse stress test scenario to understand the reduction required
to cause a breach of financial covenants or loss of solvency. The
conclusion from the reverse stress test is that the likelihood of
the scenarios occurring is remote and therefore does not represent
a realistic threat to the going concern assumption of the
Group.
|
|
|
|
The Group has an unsecured
revolving credit facility of £210 million, that reduces in November
2024 to £170 million and expires in November 2025. The Directors
anticipate no problems in renewing the facility, based on good
early engagement with lenders, and fully intend to do so. This
provides considerable headroom against current and future Group
funding requirements. At 30 June 2024, £145 million of the facility
was undrawn.
|
|
|
|
The Group has sufficient financial
resources which, together with internally generated cash flows,
will continue to provide sufficient sources of liquidity to fund
its current operations, including its contractual and commercial
commitments and any proposed dividends. The Group is therefore
well-placed to manage its business risks. After making enquiries,
the Directors have formed the judgment at the time of approving the
financial statements, that there is a reasonable expectation that
the Group has adequate resources to continue in operational
existence throughout the Going Concern period, being at least 12
months from the date of approval of the Consolidated Financial
Statements. For this reason, they continue to adopt the going
concern basis of accounting in preparing the Consolidated Financial
Statements.
|
|
3
|
SEGMENTAL INFORMATION
|
|
IFRS 8 requires operating segments
to be identified on the basis of internal reports about components
of the Group that are regularly reviewed by the chief operating
decision maker to allocate resources to the segment and to assess
their performance.
|
|
|
|
|
|
|
|
|
|
As a result, the Group segments
the business into four regions, Germany, United Kingdom &
Ireland, Australia & New Zealand and Rest of World. There is no
material difference between the segmentation of the Group's
turnover by geographic origin and destination.
|
|
|
|
|
|
|
|
|
|
The Group's operations comprise
one class of business, that of qualified, professional and skilled
recruitment.
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
Note
|
2024
|
2023
|
|
Turnover
|
|
|
|
Germany
|
1,900.3
|
1,956.3
|
|
United Kingdom &
Ireland
|
1,594.4
|
1,714.6
|
|
Australia & New
Zealand
|
1,286.9
|
1,583.3
|
|
Rest of World
|
2,167.5
|
2,329.1
|
|
Group
|
|
|
5
|
6,949.1
|
7,583.3
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
Note
|
2024
|
2023
|
|
Net
fees
|
|
|
|
Germany
|
351.8
|
382.0
|
|
United Kingdom &
Ireland
|
225.7
|
266.1
|
|
Australia & New
Zealand
|
139.7
|
188.4
|
|
Rest of World
|
396.4
|
458.1
|
|
Group
|
|
|
5
|
1,113.6
|
1,294.6
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
|
|
|
|
|
|
Before
|
2024
|
|
|
|
|
|
|
exceptional
|
Exceptional
|
|
|
|
(In £s million)
|
|
items
|
items
|
2024
|
2023
|
|
Operating profit
|
|
|
|
|
|
|
Germany
|
|
68.0
|
(23.6)
|
44.4
|
100.2
|
|
United Kingdom &
Ireland
|
|
6.4
|
(7.3)
|
(0.9)
|
28.7
|
|
Australia & New
Zealand
|
|
11.5
|
(5.3)
|
6.2
|
32.1
|
|
Rest of World
|
|
19.2
|
(43.8)
|
(24.6)
|
36.0
|
|
Group
|
|
105.1
|
(80.0)
|
25.1
|
197.0
|
|
|
|
|
|
|
|
|
|
4
|
EXCEPTIONAL ITEMS
|
|
During the year, the Group
incurred an exceptional charge of £80.0 million (2023: £nil). Of
this, £42.2 million relates to a restructuring charge and the
remaining £37.8 million is non-cash, comprising a £22.5 million
charge relating to impairment of intangible assets and a £15.3
million charge relating to the partial impairment of goodwill in
the US business.
|
|
|
|
|
|
|
|
|
|
Effective 31 August 2023, after 16
years of service, Alistair Cox stepped down as CEO and from the
Board. The Executive Leadership Team was restructured, including
the departure of several members of the team, as well as the
appointment of a new Chief People Officer and a new Chief
Technology Officer. The Group incurred a combined cost, including
legal and other third-party costs, of £5.6 million in relation to
the departure of the CEO and members of the Executive Leadership
Team. These costs are considered exceptional given their size,
non-recurring nature and because these changes led to the wider
restructuring events that occurred through the remainder of the
year.
|
|
|
|
|
|
|
|
|
|
Following the appointment of the
new CEO, Dirk Hahn, and in response to increasingly challenging
market conditions and a clear slowdown in most markets, we
restructured the business operations of many countries across the
Group, to better align business operations to market opportunities
and reduce operating costs. The restructuring exercise led to the
redundancy of a number of employees, including senior and
operational management and back-office positions and the closure of
17 offices. This resulted in the Group incurring a restructuring
cost of £42.2 million, including the £5.6 million as noted above, a
detailed breakdown of which is provided in note 5. The
restructuring costs are expected to generate significant cost
savings and are considered exceptional given their size and impact
on business operations.
|
|
|
|
|
|
|
|
|
|
The cash impact of the
restructuring charge in the year was £22.9 million, with a further
£17.8 million cash outflow expected in the year to 30 June
2025.
|
|
4
|
EXCEPTIONAL ITEMS continued
|
|
Following the appointment of the
new Chief Technology Officer, the Group's Technology Senior
Leadership Team was restructured and the Directors initiated a
Group-wide project to transform its IT infrastructure to better
support the operations of the business. This led the Directors to
enter into a contract to outsource the Group's back-office IT
infrastructure and the third-party cost (included in the combined
restructuring cost above) associated with this is considered as
exceptional due to the size of the contract and the anticipated
long-term cost savings to the Group. As part of the transformation,
the Directors cancelled certain in-flight projects and concluded
that the related intangible assets would not be used in the Group's
operations. The Directors also determined that certain intangible
assets currently in use would no longer be used in the Group's
operations as originally anticipated, and therefore concluded that
a material part of their carrying value was impaired. This
cumulatively resulted in an impairment charge of £22.5 million,
which is a material non-cash item and based on its size and nature
is considered to be exceptional.
|
|
|
|
|
|
|
|
|
|
The £15.3 million goodwill
impairment charge resulted from the partial impairment of the
carrying value of goodwill relating to the 2014 Veredus acquisition
in the USA, which was partially impaired in the year ended 30 June
2020. The goodwill impairment charge is a material non-cash item
that based on its size and nature is considered to be exceptional.
The remaining Veredus goodwill balance at 30 June 2024 is £7.2
million.
|
|
|
|
|
|
|
|
|
|
In total the exceptional charge
generated a tax credit of £11.1 million (2023: £nil).
|
|
|
|
|
|
|
|
|
|
The last time that the Group
recognised an exceptional restructuring charge was in the year
ended 30 June 2020, in the immediate aftermath of the Covid-19
pandemic. The last time that the Group incurred an exceptional
impairment charge on other intangible assets was in the year ended
30 June 2008.
|
|
|
|
|
|
|
|
|
|
5
|
OPERATING PROFIT
|
|
The following costs are deducted
from turnover to determine net fees:
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Turnover
|
|
|
|
6,949.1
|
7,583.3
|
|
Remuneration of temporary
workers
|
|
|
|
(4,995.4)
|
(5,212.9)
|
|
Remuneration of other recruitment
agencies
|
|
|
|
(840.1)
|
(1,075.8)
|
|
Net fees
|
1,113.6
|
1,294.6
|
|
|
|
|
|
|
|
|
|
Operating profit is stated after
charging the following items to net fees of £1,113.6 million (2023:
£1,294.6 million):
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
|
|
|
|
|
|
Before
|
2024
|
|
|
|
|
|
|
exceptional
|
Exceptional
|
|
|
|
(In £s million)
|
|
items
|
items
|
2024
|
2023
|
|
Staff costs
|
789.4
|
30.2
|
819.6
|
868.8
|
|
Amortisation of intangible
assets
|
|
9.2
|
-
|
9.2
|
10.0
|
|
Depreciation of property, plant and
equipment
|
|
11.1
|
-
|
11.1
|
10.9
|
|
Depreciation of right-of-use assets
(note 10)
|
|
46.0
|
-
|
46.0
|
46.0
|
|
Loss on disposal of property, plant
and equipment
|
|
-
|
0.4
|
0.4
|
-
|
|
Impairment loss on
goodwill
|
|
-
|
15.3
|
15.3
|
-
|
|
Impairment of property
leases
|
|
-
|
4.9
|
4.9
|
-
|
|
Impairment of intangible
assets
|
|
-
|
22.5
|
22.5
|
-
|
|
Short-term leases and leases of
low-value assets
|
|
3.5
|
-
|
3.5
|
3.8
|
|
Impairment loss on trade
receivables
|
|
1.4
|
-
|
1.4
|
3.0
|
|
Auditor's remuneration:
|
|
|
|
|
|
|
- for statutory audit
services
|
|
2.4
|
-
|
2.4
|
2.1
|
|
- for other
services
|
|
0.3
|
-
|
0.3
|
0.2
|
|
Other external charges
|
|
145.2
|
6.7
|
151.9
|
152.8
|
|
Administrative expenses
|
|
1,008.5
|
80.0
|
1,088.5
|
1,097.6
|
|
|
|
Within exceptional items in the
table above, staff costs (£30.2 million), loss on disposal of
property, plant and equipment (£0.4 million), impairment of
right-of-use assets (£4.9 million) and other external charges (£6.7
million) total £42.2 million and represent the restructuring charge
as disclosed in note 4.
|
|
|
|
There were no exceptional items in
the prior year.
|
|
6
|
NET
FINANCE CHARGE
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Interest received on bank
deposits
|
|
|
3.2
|
2.0
|
|
Interest payable on bank loans and
overdrafts
|
|
|
(7.2)
|
(3.7)
|
|
Interest on lease liabilities (note
10)
|
|
|
(5.0)
|
(4.2)
|
|
Pension Protection Fund
levy
|
|
|
(0.1)
|
(0.1)
|
|
Net interest expense on defined
benefit pension schemes
|
|
|
(1.3)
|
1.1
|
|
Net finance charge
|
|
|
(10.4)
|
(4.9)
|
|
|
|
|
|
|
|
|
|
7
|
TAX
|
|
The income tax expense for the
year can be reconciled to the accounting profit as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
|
|
|
|
|
|
Before
|
2024
|
|
|
|
|
|
|
exceptional
|
Exceptional
|
|
|
|
(In £s million)
|
|
items
|
items
|
2024
|
2023
|
|
Profit before tax
|
94.7
|
(80.0)
|
14.7
|
192.1
|
|
Income tax expense calculated at
25.0% (2023: 20.5%)
|
(23.7)
|
20.0
|
(3.7)
|
(39.4)
|
|
Items not taxable or non-deductible
for tax
|
(6.1)
|
(0.7)
|
(6.8)
|
(3.7)
|
|
Changes in recognition of deferred
tax in relation to losses
|
(3.4)
|
(2.2)
|
(5.6)
|
(5.1)
|
|
Changes in recognition of deferred
tax in relation to temporary differences
|
(2.6)
|
(7.0)
|
(9.6)
|
(0.8)
|
|
Effect of different tax rates of
subsidiaries operating in other jurisdictions
|
(0.8)
|
1.0
|
0.2
|
(13.3)
|
|
Effect of share-based payment
charges and share options
|
(0.6)
|
-
|
(0.6)
|
(0.3)
|
|
Income tax recognised in the current
year
|
(37.2)
|
11.1
|
(26.1)
|
(62.6)
|
|
Adjustments recognised in the
current year in relation to the current tax of prior
years
|
4.9
|
-
|
4.9
|
6.8
|
|
Adjustments to deferred tax in
relation to prior years
|
1.6
|
-
|
1.6
|
2.0
|
|
Income tax expense recognised in the
Consolidated Income Statement
|
(30.7)
|
11.1
|
(19.6)
|
(53.8)
|
|
Effective tax rate for the
year
|
32.4%
|
13.9%
|
133.3%
|
28.0%
|
|
|
|
|
|
|
|
|
|
The tax rate used for the
reconciliation above for the year ended 30 June 2024 is the
corporation tax rate of 25.0% (2023: 20.5%), payable by corporate
entities in the United Kingdom on taxable profits under tax law in
that jurisdiction. The Group operates in jurisdictions which have
tax rates higher than the UK statutory tax rate, the most
significant being Germany and Australia with statutory rates of
31.5% and 30% respectively, the impact of which is shown in the
above reconciliation under effect of different tax rates of
subsidiaries operating in other jurisdictions.
|
|
|
|
|
|
|
|
|
|
8
|
DIVIDENDS
|
|
The following dividends were paid
by the Group and have been recognised as distributions to equity
shareholders in the year:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
(pence per
|
2024
|
(pence
per
|
2023
|
|
|
|
|
share)
|
(£s
million)
|
share)
|
(£s
million)
|
|
Prior year final dividend
|
2.05
|
32.6
|
1.90
|
30.8
|
|
Prior year special
dividend
|
2.24
|
35.7
|
7.34
|
119.1
|
|
Current year interim
dividend
|
0.95
|
15.0
|
0.95
|
15.2
|
|
Total
|
5.24
|
83.3
|
10.19
|
165.1
|
|
8
|
DIVIDENDS continued
|
|
The following dividends have been
proposed by the Group in respect of the accounting year
presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
(pence per
|
2024
|
(pence
per
|
2023
|
|
|
|
|
share)
|
(£s
million)
|
share)
|
(£s
million)
|
|
Interim dividend (paid)
|
0.95
|
15.0
|
0.95
|
15.2
|
|
Final dividend (proposed)
|
2.05
|
32.5
|
2.05
|
32.6
|
|
Special dividend
(proposed)
|
-
|
-
|
2.24
|
35.6
|
|
Total
|
3.00
|
47.5
|
5.24
|
83.4
|
|
|
|
|
|
|
|
|
|
The final dividend for 2024 of
2.05 pence per share (£32.5 million) will be proposed at the Annual
General Meeting on 20 November 2024 and has not been included as a
liability. If approved, the final dividend will be paid on 25
November 2024 to shareholders on the register at the close of
business on 18 October 2024.
|
|
|
|
|
|
|
|
|
|
9
|
EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
average
|
|
|
|
|
|
|
|
number of
|
Per share
|
|
|
|
|
|
Earnings
|
shares
|
amount
|
|
For the year ended 30 June
2024
|
|
|
(£s
million)
|
(million)
|
(pence)
|
|
Before exceptional items:
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
64.0
|
1,586.6
|
4.03
|
|
Dilution effect of share
options
|
|
|
-
|
13.7
|
(0.03)
|
|
Diluted earnings per share
|
|
|
64.0
|
1,600.3
|
4.00
|
|
|
|
After exceptional items:
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
(4.9)
|
1,586.6
|
(0.31)
|
|
Dilution effect of share
options
|
|
|
-
|
13.7
|
-
|
|
Diluted earnings per share
|
|
|
(4.9)
|
1,600.3
|
(0.31)
|
|
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
average
|
|
|
|
|
|
|
|
number
of
|
Per
share
|
|
|
|
|
|
Earnings
|
shares
|
amount
|
|
For the year ended 30 June
2023
|
|
|
(£s
million)
|
(million)
|
(pence)
|
|
Basic earnings per share
|
|
|
138.3
|
1,610.0
|
8.59
|
|
Dilution effect of share
options
|
|
|
-
|
13.9
|
(0.07)
|
|
Diluted earnings per
share
|
|
|
138.3
|
1,623.9
|
8.52
|
|
|
|
|
|
|
|
|
|
The weighted average number of
shares in issue for the current and prior years exclude shares held
in treasury.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
earnings
|
|
|
|
|
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Earnings before exceptional
items
|
|
|
|
64.0
|
138.3
|
|
Exceptional items (note
4)
|
|
|
|
(80.0)
|
-
|
|
Tax credit on exceptional items
(note 7)
|
|
|
|
11.1
|
-
|
|
Total earnings
|
|
|
|
(4.9)
|
138.3
|
|
10
|
LEASE ACCOUNTING UNDER IFRS 16
|
|
|
|
|
|
|
|
|
|
|
|
Right-of-use assets
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
Motor
|
Other
|
lease
|
Lease
|
|
(In £s million)
|
Property
|
vehicles
|
assets
|
assets
|
liabilities
|
|
At 1 July 2023
|
164.5
|
11.5
|
0.1
|
176.1
|
(189.8)
|
|
Exchange adjustments
|
(1.5)
|
(0.2)
|
-
|
(1.7)
|
3.2
|
|
Lease additions
|
29.8
|
10.6
|
-
|
40.4
|
(40.4)
|
|
Lease disposals
|
(1.5)
|
(0.2)
|
-
|
(1.7)
|
1.7
|
|
Depreciation of right-of-use
assets
|
(38.6)
|
(7.4)
|
-
|
(46.0)
|
-
|
|
Lease liability principal
repayments
|
-
|
-
|
-
|
-
|
51.0
|
|
Interest on lease
liabilities
|
-
|
-
|
-
|
-
|
(5.0)
|
|
At
30 June 2024
|
147.8
|
14.3
|
0.1
|
162.2
|
(179.3)
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Current
|
|
|
|
(44.2)
|
(41.3)
|
|
Non-current
|
|
|
|
(135.1)
|
(148.5)
|
|
Total lease liabilities
|
|
|
|
(179.3)
|
(189.8)
|
|
|
|
|
|
|
|
|
|
11
|
RETIREMENT BENEFIT SURPLUS
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Surplus in the scheme brought
forward
|
25.7
|
102.0
|
|
Administration costs
|
(3.0)
|
(3.2)
|
|
Employer contributions (towards
funded and unfunded schemes)
|
18.2
|
17.7
|
|
Net interest income
|
1.7
|
4.3
|
|
Remeasurement of the net defined
benefit surplus
|
(23.2)
|
(95.1)
|
|
Surplus in the scheme carried
forward
|
19.4
|
25.7
|
|
|
|
|
|
|
|
|
|
12
|
PROVISIONS
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
Property
|
Restructuring
|
Legal,
tax and other matters
|
Total
|
|
At 1 July 2023
|
|
-
|
-
|
23.6
|
23.6
|
|
Charged to income
statement
|
|
-
|
35.8
|
2.8
|
38.6
|
|
Credited to income
statement
|
|
-
|
-
|
(4.6)
|
(4.6)
|
|
Utilised
|
|
-
|
(22.9)
|
(3.4)
|
(26.3)
|
|
Transfers from trade and other
payables
|
|
5.4
|
-
|
-
|
5.4
|
|
At
30 June 2024
|
|
5.4
|
12.9
|
18.4
|
36.7
|
|
|
|
|
|
|
|
|
|
(In £s million)
|
|
|
|
2024
|
2023
|
|
Current
|
|
24.0
|
10.8
|
|
Non-current
|
|
12.7
|
12.8
|
|
Total provisions
|
|
36.7
|
23.6
|
|
|
|
|
|
|
Restructuring provisions are as
disclosed in note 5.
|
|
|
|
There are no individually material
balances within this provision, and management does not consider it
reasonably possible that any of these balances will change
materially in the next 12 months.
|
|
13
|
LIKE-FOR-LIKE RESULTS
|
|
Like-for-like results represent
organic growth/(decline) of operations at constant currency. For
the year ended 30 June 2024 these are calculated as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
2023
|
|
|
|
|
|
exchange
|
at
constant
|
Organic
|
|
|
(In £s million)
|
2023
|
impact
|
currency
|
growth
|
2024
|
|
Net
fees
|
|
|
|
|
|
|
Germany
|
382.0
|
(4.6)
|
377.4
|
(25.6)
|
351.8
|
|
United Kingdom &
Ireland
|
266.1
|
(0.2)
|
265.9
|
(40.2)
|
225.7
|
|
Australia & New
Zealand
|
188.4
|
(12.8)
|
175.6
|
(35.9)
|
139.7
|
|
Rest of World
|
458.1
|
(11.1)
|
447.0
|
(50.6)
|
396.4
|
|
Group
|
1,294.6
|
(28.7)
|
1,265.9
|
(152.3)
|
1,113.6
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
2023
|
|
|
|
|
|
exchange
|
at
constant
|
Organic
|
|
|
(In £s million)
|
2023
|
impact
|
currency
|
growth
|
2024
|
|
Operating profit
|
|
|
|
|
|
|
Germany
|
100.2
|
(1.2)
|
99.0
|
(31.0)
|
68.0
|
|
United Kingdom &
Ireland
|
28.7
|
-
|
28.7
|
(22.3)
|
6.4
|
|
Australia & New
Zealand
|
32.1
|
(2.4)
|
29.7
|
(18.2)
|
11.5
|
|
Rest of World
|
36.0
|
(0.6)
|
35.4
|
(16.3)
|
19.2
|
|
Group
|
197.0
|
(4.2)
|
192.8
|
(87.8)
|
105.1
|
|
|
|
|
|
|
|
|
|
14
|
LIKE-FOR-LIKE QUARTERLY RESULTS ANALYSIS BY
DIVISION
|
|
Net fee growth versus same period
last year:
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
Q2
|
Q3
|
Q4
|
FY
|
|
|
2024
|
2024
|
2024
|
2024
|
2024
|
|
Germany
|
7%
|
0%
|
(13)%
|
(17)%
|
(7)%
|
|
United Kingdom &
Ireland
|
(11)%
|
(17)%
|
(16)%
|
(17)%
|
(15)%
|
|
Australia & New
Zealand
|
(17)%
|
(20)%
|
(23)%
|
(22)%
|
(20)%
|
|
Rest of World
|
(11)%
|
(11)%
|
(11)%
|
(11)%
|
(11)%
|
|
Group
|
(7)%
|
(10)%
|
(14)%
|
(15)%
|
(12)%
|
|
|
|
|
|
|
|
|
|
15
|
DISAGGREGATION OF NET FEES
|
|
IFRS 15 requires entities to
disaggregate revenue recognised from contracts with customers into
relevant categories that depict how the nature, amount and cash
flows are affected by economic factors. As a result, we consider
the following information relating to net fees to be relevant and
should be considered alongside note 3:
|
|
|
|
|
|
|
|
|
|
|
|
Germany
|
United Kingdom &
Ireland
|
Australia & New
Zealand
|
Rest of
World
|
Group
|
|
Temporary placements
|
82%
|
57%
|
65%
|
39%
|
59%
|
|
Permanent placements
|
18%
|
43%
|
35%
|
61%
|
41%
|
|
Total
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
Private sector
|
85%
|
68%
|
63%
|
98%
|
83%
|
|
Public sector
|
15%
|
32%
|
37%
|
2%
|
17%
|
|
Total
|
100%
|
100%
|
100%
|
100%
|
100%
|
|
|
|
|
|
|
|
|
|
Technology
|
33%
|
15%
|
16%
|
27%
|
25%
|
|
Accountancy & Finance
|
17%
|
20%
|
12%
|
11%
|
15%
|
|
Engineering
|
27%
|
2%
|
0%
|
7%
|
11%
|
|
Construction &
Property
|
4%
|
16%
|
20%
|
9%
|
10%
|
|
Office Support
|
0%
|
9%
|
11%
|
4%
|
5%
|
|
Other
|
19%
|
38%
|
41%
|
42%
|
34%
|
|
Total
|
100%
|
100%
|
100%
|
100%
|
100%
|
