White-collar recruitment specialist Hays' (HAS) plan to double operating profit to £250 million by 2018 is running ahead of schedule, according to chief financial officer (CFO) Paul Venables.
Venables, speaking to Shares after Hays' full year results to end June, says better-than-expected conditions in its UK and Europe segments had helped push the plan ahead of budget.
The £1.8 billion cap posted earnings per share (EPS) of 6.13p and pre-tax profit of £132.3 million, both roughly in line with market expectations. Its shares traded up around 1% at [130p] midday in a falling general market.
'We've had a good first year but there's a long way to go,' Venables says, adding that the target is achievable assuming a continued global economic recovery and 'manageable' shocks.
As well as reporting earnings which were slightly ahead of plan, cash flow was also strong with 125% of operating profit converted into operating cash. Improved management of working capital added £6 million to Hays' bank balance in the period.
Net debt declined £42.5 million to £62.7 million and Hays is expected to be debt-free by the end of 2015. The company's policy will be to distribute excess cash via special dividends when net cash exceeds £50 million, though Venables does not rule out using some of the surplus cash for an acquisition.
'I've been here for eight years and we've done one acquisition; I would guess it to be somewhat the same again in the future” he says. 'Acquisitions are not the core part of our plan.'
