Recruiter blames political uncertainty for share price drop

Hays issues profit warning, citing candidates and hirers who are 'nervous' about the future

                                

Recruitment firm Hays has blamed uncertainty over the UK economy for its recent share price performance.

It says both recruiters and candidates are nervous over future prospects as the UK heads for Brexit. In a second quarter trading update it said both candidates’ and firms’ confidence had been “significantly impacted” by political uncertainty, particularly in December, with employers reluctant to take on new staff.

Net fees from private firms in its UK and Ireland operations fell by eight per cent in the final three months of 2019. The result was a share price drop from 183 to 167 since the end of the year. Hays has now issued a profit warning.

It may have turned its attention to the UK and RoI in finding a cause for its woes, but Hays is also seeing tough trading in other markets. Strikes in France and poor manufacturing figures from Germany have seen recruitment hit there too. The global business has also cited the Australian bushfires as a reason for falling figures.

“Each event impacted markets already facing challenging economic conditions and low business confidence,” said chief executive Alistair Cox.

Hays itself has not escaped the impact. The number of its staff consultants has fallen by one per cent over the quarter and overall group staffing levels are expected to fall again this quarter.

Despite the warning, Cox is optimistic the firm will weather the storm. Fees from the UK public sector were up eight per cent. “Overall, we expect near-term macro conditions to remain difficult, but see continued opportunities for growth in key specialisms like IT,” he said.

As markets opened, Hays (HAS.L)was trading down 3.48 per cent.

FURTHER READING: UK labour market freezes

FURTHER READING: German manufacturing falls for fourth consecutive month

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