Profits have plunged at recruitment agency Hays which has cuts its dividend by more than half and increased its savings target following a slowing of the hiring environment.
Full year figures show net fees fell by 11% to £972.4 million, and operating profit (before exceptional items) decreased by 56% to £45.6 million.
Pre-tax profit (before exceptional items) fell by 66% to £32.2m, and by 90% to £1.5m after exceptional items.
The board proposes a 59% cut in the final dividend to 1.24p per share.
The company realised £35m in cost savings, exceeding its target, and aims for an additional £45m in savings by FY29. Current trading in July and August was in line with expectations.
Dirk Hahn, chief executive, said: “Market conditions remained challenging during the year, with economic and political uncertainty weighing on confidence, increasing ‘time-to-hire’ and reducing placement volumes.
“Despite making significant strategic and operational progress towards our long-term ambitions, our overall financial performance was impacted by these headwinds.
“We maintained strong cost-discipline, generated good progress in consultant fee productivity, grew our Enterprise business, and improved our business mix.
“Our strategy, targeting the most in-demand sectors, roles and geographies, building stronger client relationships and increasing exposure to Temp & Contracting recruitment, continues to develop.
“In addition, we have exceeded our cost initiatives target and have set an ambition to target a further c.£45 million per annum structural cost savings by FY29.
“I am confident we have the right strategy and people and we remain well positioned to drive material net fee and profit growth when key markets recover.”
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