Recruiter's profits fall by 68% due to slump in the market
Recruitment firm Hays, which has an office in Northern Ireland, has reported a sharp drop in UK profits following a slump in public sector business and a squeeze on City hirings.
The group's operating profits for the UK and Ireland fell 68% to £3.6m in the year to June 30, although this was offset by "exceptional" net fees growth of 51% in Asia and record growth in other overseas offices. Overall, pre-tax profits before exceptional items rose 50% in the period to £106.6m.
UK and Ireland net fees were down 1%, driven by a 35% decrease in public sector work as austerity measures continue to have an impact.
In the private sector, which represents 78% of UK fees, growth of 19% was driven by hirings in accountancy and finance and construction and property, although Hays said the second half of the period saw tougher market conditions in banking and City-related businesses.
Hays cut its UK consultant headcount by 5% to 2,158 but said it won a number of key contracts.
Two-thirds of the company fees are now generated outside the UK and Hays chief executive Alistair Cox said the majority of international operations were trading at record levels, leading to 31% overseas fee growth.
He added: "The UK market has been tougher, particularly as recruitment activity in the public sector has dropped significantly over the year. The UK private sector grew strongly in the first half but growth slowed as the year progressed."