Weaker growth rates across all markets at recruitment outfit Hays (HAS) sends shares 2.6% lower to 160p.
Growth in net fee income, a key recruitment metric, slowed to 8% in the three months to end-March on a like-for-like, constant currency basis. Fourth quarter growth by the same metric was 11%.
Chief executive Paul Venables maintains Hays is ahead of its target to repay £80 million of debt over the next 15 months, at which point annual special dividends of around 4p a share are planned.
‘In the next financial year we will eliminate net debt and as we move into a net cash position we will move to the special dividend policy,’ Venables tells Shares.
‘We are currently spinning off £60 million of surplus cash a year.’
Markets are in good shape, Venables adds, saying it would take a major shock to slow the business’s operational momentum.
Currency depreciation in Europe and Australia, key international markets for Hays, is another headwind. Current euro and Aussie dollar rates imply an £8 million operating profit hit versus last year.