Shares in recruitment specialist Hays (HAS) jumped 4% to 169p after the firm posted a 41% rise in net fee income for the first quarter to September. The surge came as demand for permanent workers soared as the global economic boom gathers pace.

The results mark the second consecutive quarter of 40% or so like for like growth in overall net fees and another increase of more than 60% in like for like permanent fees.

If anything, this quarter’s results are more impressive than the previous set as the year-on-year comparisons were stiffer given the job market had already started to rebound last summer and the strength of sterling against other currencies is proving more of a headwind this year.

TIGHTEST MARKET IN OVER A DECADE

No fewer than 12 countries produced record net fees including the US and China, while by segment the technology business also posted record fees for a single quarter.

According to finance director Paul Venables, the permanent recruitment market is the tightest since 2007, which he describes as ‘remarkable’ considering only 18 months have passed since the onset of the pandemic.

‘In contrast to previous recoveries, when companies opted for temporary workers, business confidence is a lot higher and so is candidate confidence which will drive this market for the next six to 12 months at least’, says Venables.

Demand in continental Europe is particularly strong, with Germany seeing a 39% rise in like for like net fee income in the last quarter even though manufacturing has been badly affected by supply chain issues and the global shortage of chips has led to a drop in car production.

SHAREHOLDER PAYOUTS SET TO RISE

The firm continues to invest heavily not just in consultants but in new business segments, leveraging its number one position in technology hiring to push into new sub-sectors and more specialist areas.

The medium-term aim is to double annual fees in the technology division from a pre-pandemic level of £250 million to £500 million, generating a significant uplift in free cash flow which will enable the return of yet more cash to shareholders in form of ordinary and special dividends.

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Issue Date: 14 Oct 2021