Hays PLC on Thursday reported a record first-quarter, and said sterling weakness is a ‘tailwind’, as it cautioned on continued ‘acute’ skill shortages and wage inflation in key markets.

The London-based recruitment company said net fees surged 19% in the three months to September 30, or 15% on a like-for-like basis, compared to the same period a year ago. This is driven by ‘continued improved margins’.

In the UK, net fees were up 11%. In Germany, net fees increased by 26%, and in Australia & New Zealand, they rose by 12%. ‘The weakening of sterling versus our main trading currencies of the Euro and Australian dollar is currently a tailwind to group operating profit in financial year 23,’ Hays emphasised.

‘We have made a good start to our financial year; fees were stable at high levels over the summer and September delivered a record month, and ended a record quarter,’ Chief Executive Alistair Cox commented.

‘Our forward-looking client and candidate activity levels remain good overall, particularly in Germany and [Europe, the Middle East and Africa], but have reduced modestly in a number of other markets as macroeconomic uncertainties increase. This said, our key markets continue to be characterised by acute skill shortages and wage inflation.’

At current foreign exchange rates, its operating profit from last year would have increased by some £9 million in financial 2023.

For the year which ended June 30, Hays reported a pretax profit of £204.3 million, more than doubled compared to £88.1 million the year before. This was on a revenue of £6.59 billion, up 17% from £5.65 billion.

Its full-year net fees amounted to £1.19 billion, compared to £918.1 million the year before.

Shares were up 0.1% at 103.30 pence each on Thursday morning in London.

Copyright 2022 Alliance News Limited. All Rights Reserved.