TIDMHAS
RNS Number : 2691K
Hays PLC
24 August 2023
PRELIMINARY
RESULTS
FOR THE YEARED
30 June 2023
24 August 2023
RECORD FEES AND EXCELLENT CASH CONVERSION. CORE DIVID UP 5%,
PLUS GBP35.6 MILLION SPECIAL DIVID
Year ended 30 June 2023 2022 Reported LFL
(In GBPs million) growth growth
--------------------------------- ------- ------- --------- -------
Net fees (1) 1,294.6 1,189.4 9% 6%
--------------------------------- ------- ------- --------- -------
Operating profit 197.0 210.1 (6)% (9)%
--------------------------------- ------- ------- --------- -------
Conversion rate (2) 15.2% 17.7% (250) bps
--------------------------------- ------- ------- --------- -------
Profit before tax 192.1 204.3 (6)% (9)%
--------------------------------- ------- ------- --------- -------
Cash generated by operations (3) 199.3 182.9 9%
--------------------------------- ------- ------- --------- -------
Basic earnings per share 8.59p 9.22p (7)%
--------------------------------- ------- ------- --------- -------
Core dividend per share 3.00p 2.85p 5%
--------------------------------- ------- ------- --------- -------
Note: unless otherwise stated all growth rates discussed in this
statement are LFL (like-for-like), YoY (year-on-year) net fees and
profits, representing organic growth of continuing operations at
constant currency.
-- Record fees : up 6%, driven by a good performance in Temp, up
9%; Perm up 3%. Growth driven by our actions to increase fee
margins, supported by positive effects of wage inflation globally,
offsetting volume decline as Perm markets toughened through the
year
-- Operating profit: down 9% to GBP197.0 million, or (6)% WDA(4)
. In line with our expectations, operating profit and conversion
rate increased in H2 FY23 versus H1
-- Germany : record fees, up 19%, and operating profit up 29% to
GBP100.2 million (up 36% WDA(4) ). Strong performances in
Contracting & Temp, with fees up 18%, and Perm up 22%
-- UK & Ireland: fees up 1%; operating profit down 34% to
GBP28.7 million as markets slowed sharply through the year,
particularly in Perm. Consultant headcount down 11% YoY, including
H2 down 7%
-- Australia & New Zealand: fees down 6%; operating profit
down 39% to GBP32.1 million. Particularly tough conditions in the
Public Sector and in Banking, and a significant overall slowdown in
Perm in H2. Consultant headcount down 6%
-- Rest of World: fees up 5%, operating profit down 14% to
GBP36.0 million. Strong performance in EMEA, with fees up 12%,
although the Americas was tougher, down 6%. Asia fees flat
-- Managing capacity: Consultant headcount decreased by 5% YoY
as we aligned capacity to market conditions, with overall
consultant productivity remaining at good levels. At the same time,
we made good progress in our long-term strategy to position our
business in the most attractive structural growth sectors
-- Excellent cash generation; core dividend up 5%: net cash of
GBP135.6 million, driven by cash conversion(3) of 101% and after
returning GBP240.1 million to shareholders in FY23. The Board
proposes an FY23 core dividend up 5% to 3.00 pence per share, and
announces a further 2.24 pence per share / GBP35.6 million return
of cash via special dividend
-- Chief Executive appointment: as separately announced, Dirk
Hahn, currently Managing Director of Hays Germany and CEMEA, has
been appointed as Chief Executive Officer and to the Board, with
effect from 1 September 2023
Commenting on the FY23 results Alistair Cox, Chief Executive,
said:
"Despite facing tough economic conditions globally, we delivered
record Group fees. 21 countries hit individual records, including
our largest market of Germany, together with records in key
strategic markets of Technology, Engineering and Enterprise
clients. We delivered all of this from our decisive actions to
increase fee margins in skill-short sectors and our shift towards
the most in-demand markets, supported by wage inflation globally.
Temp & Contracting, our largest business and key strategic
focus, performed well although Perm fees decreased in the second
half as market conditions toughened.
While we cannot control the macroeconomic environment, we do
control our reaction to it. We acted swiftly to manage our capacity
and costs in the face of toughening markets, delivering increased
profits in our second half. At the same time, we protected the
investments which are successfully positioning Hays as a leader in
attractive long-term growth markets. We will continue to do this,
as it sets us up well for the future. We also remain highly cash
generative, and as a sign of confidence in our strategy and our
strong financial position, the Board proposes an increased core
dividend and announces a further GBP35.6 million cash return to
shareholders".
(1) Net fees comprise turnover less remuneration of temporary
workers and other recruitment agencies.
(2) Conversion rate is the conversion of net fees into operating
profit.
(3) Cash generated by operations is stated after IFRS 16 lease
payments of GBP49.9 million (2022: GBP45.0 million). Cash
conversion represents cash generated by operations divided by Group
operating profit.
(4) Due to the timing of public holidays, our largest market of
Germany had three fewer working days in FY23 versus FY22 which had
a GBP5.0 million net fee and operating profit impact.
(5) Underlying Temp margin is calculated as Temp net fees
divided by Temp gross revenue and relates solely to Temp placements
in which Hays generates net fees. This specifically excludes
transactions in which Hays acts as agent on behalf of workers
supplied by third party agencies and arrangements where Hays
provides major payrolling services.
(6) Represents percentage of Group net fees and operating
profit.
Enquiries
Hays plc
+ 44 (0) 203 978
James Hilton Group Finance Director 2520
Head of Investor Relations + 44 (0) 333 010
David Phillips & ESG 7122
FGS Global
Guy Lamming / Anjali Unnikrishnan hays@fgsglobal.com
Results presentation & webcast
Our results webcast will take place at 8.00am on 24 August 2023.
To register for the webcast only, please click:
https://edge.media-server.com/mmc/p/twtr63bv
To register and be able to ask questions via our audio link,
please click:
https://register.vevent.com/register/BI67bcec8d11d345ed872f78602faf69f2
A recording of the webcast will be available on our website
later the same day along with a copy of this press release and all
presentation materials.
Reporting calendar
Trading update for the quarter ending 30 September
2023 (Q1 FY24) 12 October 2023
Trading update for the quarter ending 31 December
2023 (Q2 FY24) 12 January 2024
Half-year results for the six months ending
31 December 2023 (H1 FY24) 22 February 2024
Hays Group Overview
As at 30 June 2023, Hays had over 13,000 employees in 252
offices in 33 countries. In many of our global markets, the
majority of professional and skilled recruitment is still done
in-house, with minimal outsourcing to recruitment agencies, which
presents substantial long-term structural growth opportunities.
This has been a key driver of the diversification and
internationalisation of the Group, with the International business
representing 79% of the Group's net fees in FY23, compared with 25%
in FY05.
Our consultants work in a broad range of industries covering
recruitment in 21 professional and skilled specialisms. In FY23 our
four largest specialisms of Technology (26% of Group net fees),
Accountancy & Finance (15%), Engineering (10%) and Construction
& Property (10%) collectively represented 61% of Group
fees.
In addition to our international and sectoral diversification,
in FY23 the Group's net fees were generated 57% from temporary and
43% from permanent placement markets, and this balance gives our
business model relative resilience. This well-diversified business
model continues to be a key driver of the Group's financial
performance.
In our 2023 employee 'YourVoice' survey, 81% of employees said
they would recommend Hays as a great place to work.
Introduction & market backdrop
FY23: record Group fees, led by our key strategic areas, despite
global economic slowdown
Trading in the year to 30 June 2023 represented a fee record for
the Group and included 21 individual country records. Net fees
increased by 6% on a like-for-like basis, and by 9% on a reported
basis, to GBP1,294.6 million. This represented like-for-like fee
growth of GBP72.5 million versus the prior year. However, fee
growth slowed sharply through the year, with H1 up 12% and H2 up
only 1%, as the economic backdrop deteriorated across our markets.
Growth in our fourth quarter was (2)%, as was our June net fee
growth exit rate.
Temp fees (57% of Group) increased by 9%, including H2 up 6%. We
benefitted from a 40 basis points (bps) increase in underlying Temp
margin(5) , or 3%, plus 8% growth from positive mix / hours
effects. This was partially offset by 2% lower Temp volumes
year-on-year, although volumes remained stable sequentially through
our second half.
Perm fees (43% of Group) grew 3%, however activity slowed
sharply through the year, with fees up 12% in H1 and down 6% in H2.
Overall, volumes decreased by 8%, including H2 down 15%, as job
inflow decreased and hiring processes extended. This was partially
offset by strong growth in our average Perm fee, up 11%.
Our growth in both underlying Temp margin(5) and average Perm
fee are the direct results of management actions to increase fee
margins in skill-short markets and our focus on higher value roles
in the most in-demand markets, reinforced by the positive effects
of wage inflation globally. We expect to see some continued benefit
from this in our fees in H1 FY24.
We made good progress in our long-term strategy to position our
businesses in the most attractive structural growth sectors. Our
largest global specialism of Technology (26% of Group net fees)
grew by 6% to a record GBP333 million. Accountancy & Finance
increased by 9%, with Senior Finance hires materially outperforming
lower salary levels, while Engineering grew by an excellent 21% to
a new record and is now our third largest global specialism. Direct
and indirect outsourcing fees with Enterprise clients also produced
record fees, up 10%, and we continue to win market share and
broaden our service offering, with a good pipeline of
opportunities. Fees in Construction & Property were flat.
Overall, fees in the Private sector, up 5%, was outperformed by the
Public sector, up 10%.
Operating profit and conversion rate increased in H2, driven by
good overall consultant productivity
FY23 Group operating profit of GBP197.0 million represented a
like-for-like decrease of 9% (down 6% working day-adjusted(4) ). In
line with the guidance given at our H1 FY23 results, in the second
half both operating profit (GBP100.0 million) and conversion rate
(15.6%) increased versus H1 as we controlled costs and drove
consultant productivity. Overall in FY23, Group conversion rate
decreased by 250 bps year-on-year to 15.2%.
Like-for-like costs increased by 9% year-on-year or GBP91.2
million (GBP118.2 million on a reported basis). This comprised a 9%
increase in average consultant headcount, with H1 up 17% and H2 up
1% YoY, and our own cost inflation, including base salary increases
and our long-term strategic investments (see overleaf). Consultant
commissions decreased slightly year-on-year, primarily reflecting
the slowdown in Perm markets.
Prior to the start of our financial year, we had invested
significantly in consultant headcount to meet current and expected
levels of demand and to further strengthen our position in long
term strategic growth markets such as Technology and Enterprise
clients. As a result, we entered FY23 with consultant headcount up
26% year-on-year. However, market conditions became more
challenging through the year, particularly in Perm, resulting in a
decrease in average placement volumes per consultant and a
consequential negative profit leverage. Accordingly, we moved
quickly to align capacity to underlying market demand and reduce
costs, reducing consultant headcount in several markets, while
protecting our investments in key structural areas.
Overall, Group consultant headcount in FY23 decreased by 447, or
5% versus June 2022, primarily through natural attrition. Although
more challenging market conditions meant that Group average volume
productivity per consultant was down significantly versus the prior
year, and pre-pandemic peak levels. Average fee productivity per
consultant remained at good overall levels, driven by our actions
to increase fee margins and focus on higher value roles. We remain
focused on driving productivity in FY24.
We closely managed our overhead costs, including travel,
entertainment and property, together with savings realised from our
back-office efficiency projects.
Strategic investments
During FY23, we invested c.GBP8 million to seed highly
complementary new service lines to enhance our Enterprise business
and which sit alongside our core recruitment expertise. These
organic investments provide a broader client offering, offer
attractive returns, and will accelerate our future growth. Examples
include scaling our German Statement of Works solutions business,
where we now employ over 100 engineers based at our facilities in
Romania, delivering technology-led projects for large Engineering
and Automotive clients in Germany. Similarly, we have opened
Project Services advisory businesses in France and Australia.
To support fulfilment and the growth of our Enterprise
businesses in Europe and the USA, we invested c.GBP2 million in
opening three new shared service recruitment centres (Casablanca,
Zaragoza and Mexico City). These give us more cost effective and
scalable operations to meet our Enterprise clients' recruitment
demands. In addition, we invested a further GBP2 million to
reinforce our senior management infrastructure globally in key
strategic sectors such as Technology, Engineering and Enterprise
clients.
We also invested in new services to provide a broader client
offering and which will accelerate our future growth. This included
our May 2023 purchase of a majority stake in Vercida Consulting, a
UK-based Diversity, Equity and Inclusion consulting business which
provides organisations with advisory services to improve their
ability to attract, retain and progress talent from diverse
backgrounds. Our initial investment was c.GBP1 million, with
further amounts payable based on achieving our ambitious growth
plans.
Working-day adjustments
As previously reported, our Germany business had three fewer
working days versus the prior year, which impacted our fees and
operating profit by c.GBP5.0 million. Therefore, on a WDA basis
Group operating profit was GBP202.0 million, representing a
conversion rate of 15.5%.
Earnings per share
The Group's Basic Earnings per share (EPS) of 8.59p was 7% lower
than the prior year. The reduction was primarily driven by 6% lower
profit before tax. In addition, we incurred a higher Effective Tax
Rate (ETR) of 28% in FY23, given the prior year ETR of 24.5% had
benefitted from positive one-off settlements with certain tax
authorities. The impact on EPS was partially offset by a 3.7%
reduction in average shares in issue, resulting from our share
buyback programme.
Excellent cash generation, core dividend & surplus cash
return
Given the good growth in our Temp business, with fees up 9%, we
saw a working capital outflow of GBP28.7 million in the full-year,
resulting from growth in our Temp debtor book. As a result, we
converted 101% of operating profit into operating cash flow(3)
(FY22: 87%(3) ), driven by another excellent performance from our
credit control teams, with debtor days maintained at our historic
low level of 33 days (FY22: 33 days). Our net cash position on 30
June 2023 was GBP135.6 million, after paying GBP165.1 million in
core and special dividends in FY23 and also purchasing GBP75.0
million in shares in the full-year under our share buyback
programme.
Our business model remains highly cash generative. The Board's
free cash flow priorities are to fund the Group's investment and
development, maintain a strong balance sheet, deliver a
progressive, sustainable and appropriate core dividend and to
return any surplus cash to shareholders through a combination of
special dividends and share buybacks, subject to the economic
outlook.
Given confidence in the Group's strategy and reflecting our
strong financial position, the Board proposes an FY23 full-year
core dividend up 5% to 3.00 pence per share, representing dividend
cover of 2.9x. The ex-dividend date is 5 October 2023, and our
final dividend payment date will be 17 November 2023. Our target
core full-year dividend cover range remains 2.0 to 3.0x
earnings.
Our policy for returning surplus cash to shareholders remains
unchanged and is based on paying capital above our cash buffer at
each financial year-end (30 June) of GBP100 million, subject to the
economic outlook. Given our year-end net cash position of GBP135.6
million, the Board has separately proposed a 2.24 pence per share
special dividend, representing GBP35.6 million, to be paid
alongside the final dividend. This continues our strong track
record of paying cash to shareholders, with c.GBP950 million in
core and special dividends paid in respect of FY17 to FY23, and
additionally GBP93.2 million of share buybacks since April
2022.
Chief Executive appointment
Following the announcement on 23 February 2023 that the Board
had commenced a process to identify a successor to Alistair Cox as
CEO, the Board is delighted to announce that Dirk Hahn has been
appointed as Chief Executive Officer and to the Board, with effect
from 1 September 2023.
Dirk is a long-standing member of the Hays Executive Board and
is currently Managing Director of Hays Germany and CEMEA
(Continental Europe, Middle East and Africa), where he leads over
5,500 employees. Having worked for Hays for over 20 years, Dirk led
the expansion of our German business, which is our largest division
representing over 30% of Group fees, and which has doubled
operating profit under his tenure. Dirk was also Group Strategy
Director between 2017 and 2019.
Alistair Cox will step down as CEO, and from the Board, with
effect from 31 August 2023. The Board would like to thank Alistair
for his leadership of Hays over the past 16 years. During his
tenure Hays has transformed into a global business with offices in
33 countries, with a leading position in many of those markets. The
Company is well set for the next stage of its development, and the
Board wishes him all the best for the future.
Foreign exchange
Overall, net currency movements versus sterling positively
impacted results in the full-year, increasing net fees by GBP32.7
million, and operating profit by GBP5.7 million.
Fluctuations in the rates of the Group's key operating
currencies versus sterling represent a significant sensitivity for
the reported performance of our business. By way of illustration,
each 1 cent movement in annual exchange rates of the euro and
Australian dollar impacts net fees by c.GBP5.1 million and c.GBP1.1
million respectively per annum, and operating profits by c.GBP1.2
million and c.GBP0.2 million respectively per annum.
The rate of exchange between the Australian dollar and sterling
over the full-year averaged AUD $1.7895 and closed at AUD $1.9077.
As at 21 August 2023 the rate stood at AUD $1.9923. The rate of
exchange between the euro and sterling over the full year averaged
EUR1.1503 and closed at EUR1.1639. As at 21 August 2023 the rate
stood at EUR1.1697.
The strengthening of sterling versus our main trading currencies
of the euro and Australian dollar is currently a headwind to Group
operating profit in FY24. If we re-translate FY23 operating profit
of GBP197.0 million using 21 August 2023 exchange rates, operating
profit would decrease by c.GBP8 million, compared to a c.GBP7
million decrease at our Q4 results in July 2023.
Movements in consultant headcount and office network changes
Consultant headcount at 30 June 2023 was 8,590, down 5%
year-on-year and down 6% versus December 2022. Total Group
headcount decreased by 1% year-on-year, which included our
Statement of Works headcount investment and three new shared
service centres. We expect headcount will decrease c.3-4% in Q1
FY24 as we continue our focus on driving consultant productivity
and returns from our investments.
Net change Net change
(vs. 30 (vs. 31
30 Jun 30 Jun Jun 31 Dec Dec
Consultant headcount 2023 2022 2022) 2022 2022)
========================== ======= ======= =========== ======= ===========
Germany 2,044 2,016 1% 2,072 (1)%
United Kingdom & Ireland 1,935 2,175 (11)% 2,082 (7)%
Australia & New Zealand 1,071 1,136 (6)% 1,110 (4)%
Rest of World 3,540 3,710 (5)% 3,835 (8)%
========================== ======= ======= =========== ======= ===========
Group 8,590 9,037 (5)% 9,099 (6)%
========================== ======= ======= =========== ======= ===========
We opened a new office in Bangkok plus shared service centres in
Casablanca, Zaragoza and Mexico City. We also consolidated several
smaller locations, meaning our office network decreased by a net
one location in FY23.
Net change
(vs. 30
30 Jun Jun 30 Jun 31 Dec
Office network 2023 2022) 2022 2022
========================== ======= =========== ======= =======
Germany 26 - 26 26
United Kingdom & Ireland 85 (2) 87 87
Australia & New Zealand 39 (1) 40 39
Rest of World 102 2 100 103
========================== ======= =========== ======= =======
Group 252 (1) 253 255
========================== ======= =========== ======= =======
Deep engagement with enterprise customers and developing in
Talent Advisory Services
The global recruitment and staffing market was estimated to be
worth over $600 billion in 2023, and we believe approximately one
third was outsourced to consultancies like Hays. Historically, we
also believe this outsourced part of the market has grown at twice
the overall market rate. Our global network, strong brand and
market leadership in the most attractive structural growth areas
positions Hays as a global leader in white collar recruitment. We
have built a strong platform from which to grow and take
significant further market share with both SME and large enterprise
clients.
Our customers - particularly large enterprise clients and
candidates - are increasingly looking to Hays to broaden our
service offering to support them across their entire range of their
human capital and talent challenges, helping to shape, upskill and
deliver the skilled workforces they need to thrive. Our May 2023
acquisition of Vercida Consulting, a leading Diversity, Equity
& Inclusion (DE&I) consulting business in the UK, will
support growth in this area, as will our investment in senior
management in HR Services.
Our expertise, scale, data insights and strong relationships
with SME's and large enterprise clients globally positions Hays as
the recruitment and workforce solutions company at the heart of
thousands of organisations. Given the complex challenges our
customers face, their expectations and needs have significantly
increased, moving away from transactional relationships towards
much deeper partnerships - what we term 'Leadership Partners'.
Outsourced contracts or preferred supplier agreements are being
increasingly awarded on a regional or global level, and Hays is
ideally placed to capitalise.
We believe delivering 'Leadership Partner' status can set us
apart from the competition and drive material market share gains.
We can achieve this by:
-- Highly personalised services for both clients and candidates,
supported by using technology at scale to inform and enhance the
human elements of the process;
-- Deep expertise on the best practice of today and the future;
-- Scale, breadth and depth of insights to drive better decision making; and
-- Building very large, but highly focused and engaged Talent communities.
Our enterprise customers are increasingly demanding that more of
their workforce services, plus elements of HR Services advice and
execution, are provided by one trusted partner. Examples of
services we currently or are targeting to provide include: DE&I
consultancy and analysis; Assessment & Development processes;
EVP & Employer brand insights; Change management; Skills &
re-skilling; Services procurement and Early careers.
Purpose, Net Zero, Equity and our Communities
Our purpose is to benefit society by investing in lifelong
partnerships that empower people and organisations to succeed,
creating opportunities and improving lives. Becoming lifelong
partners to millions of people and thousands of organisations also
helps to make our business sustainable. Our core company value is
that we should always strive to 'do the right thing'. Linked to
this and our commitment to Environmental, Social & Governance
(ESG) matters, Hays has endorsed four United Nations Sustainable
Development Goals (UNSDG's) - Decent Work & Economic Growth;
Gender Equality; Climate Action and Supporting Industry Innovation
and Infrastructure. These call upon businesses to advance
sustainable development through the investments they make, the
solutions they develop and the practices they adopt.
We believe that responsible companies should have Diversity,
Equity & Inclusion at their heart. Our global DE&I Council
helps co-ordinate and drive our actions. We made progress in FY23
by further embedding UNSDG Goal 5: Gender Equality in our strategy.
We have set stretching targets on female representation in senior
management. By 2025, we have committed to reach a level of 45%
female leaders (FY23: 44.3% female) among our senior leadership of
c.680 individuals, and to reach 50% by 2030.
As a business which exists to help people further their careers
and fulfil their potential, UNSDG Goal 8: Decent Work &
Economic Growth aligns very closely with Hays' purpose. Over the
last four years we are proud to have placed well over one million
people globally in their next job; helping the individual, their
employer and society. Our commitment to this goal is further
reinforced through Hays MyLearning, our free-to-use online Training
& Wellbeing platform. Overall, across our online platforms,
c.800,000 individual training courses were undertaken in the last
12 months.
We are also committed to playing a positive role in the
communities in which we operate. As part of this, our 'Helping for
your tomorrow' volunteering programme led to 17,673 hours of
community volunteering by our Hays colleagues worldwide in FY23, up
c.85% versus FY22.
We believe we have a significant role to play in combating
climate change. In 2021, we became a Carbon Neutral company - our
first step under UNSDG Goal 13: Climate Action to achieve emissions
reductions consistent with limiting global warming to 1.5degC, the
most ambitious goal of the Paris Agreement. In March 2022, the
Science-Based Targets initiative (SBTi) approved Hays'
Science-Based targets to reduce i) absolute scope 1 and 2 GHG
emissions by 50% by FY26; ii) absolute scope 3 GHG emissions from
purchased goods and services and capital goods by 50% by FY30; and,
iii) absolute scope 3 GHG emissions from business travel by 40% by
FY26. This landmark step demonstrates Hays' firm commitment to be
the first global specialist recruitment firm to reach Net Zero.
During FY23 we conducted our most comprehensive GHG emissions data
gathering exercise ever, engaging with a new expert third party
consultant. The full results of this GHG analysis and Task Force on
Climate-Related Financial disclosures (TCFD) will be reported in
our FY23 annual report.
Hays also actively supports UNSDG Goal 9: Supporting Industry,
Innovation and Infrastructure. We do this via our global Green Labs
initiative, which identifies and supports growth in 'Green Collar'
and Sustainability jobs. We are already a large recruiter of
skilled workers in low carbon, social infrastructure and ESG roles,
and we have invested to grow these areas, helping to solve global
skill shortages. As Technology is our largest recruitment
specialism, Hays clearly supports the growth of higher-technology
industries, and our position as global leaders in Engineering and
Construction & Property supports resilient infrastructure
development. Also, our MyLearning training portal also gives access
to learning and development for candidates. As many courses are
free, MyLearning also supports marginalised groups to access labour
markets.
Germany (30% (6) net fees, 51% (6) operating profit)
Record fees & strong underlying profit growth, including H2
conversion rate of 28.2%
Growth
=====================
Year ended 30 June
(In GBPs million) 2023 2022 Reported LFL
===================================== ======== ======== ============ =======
Net fees(1) 382.0 313.9 22% 19%
Operating profit 100.2 75.6 33% 29%
Conversion rate(2) 26.2% 24.1%
Period-end consultant headcount 2,044 2,016 1%
===================================== ======== ======== ============ =======
Our largest market of Germany saw net fees increase by 19% to a
record GBP382.0 million. Operating profit increased by 29% to
GBP100.2 million, despite three fewer working-days in H1 FY23
year-on-year, which reduced fees and profit by GBP5.0 million.
Adjusting for working days, operating profit growth was 36%.
Conversion rate was 26.2% (2022: 24.1%), or 27.2% on a working-day
adjusted basis, and included an H2 FY23 conversion rate of 28.2%.
Currency impacts were positive in the full-year, increasing net
fees by GBP8.3 million and operating profit by GBP2.0 million. Cost
increases were driven by 15% higher average headcount year-on-year,
together with the impact of pay increases effective from 1 July
2022.
At the specialism level, our largest specialism of Technology,
comprising 35% of Germany net fees, increased by 10%, with
Engineering, our second largest, up an excellent 22%. Accountancy
& Finance and Construction & Property increased by 26% and
6% respectively, while HR grew by an excellent 82%. We also
produced record fees in our Public sector business (14% of Germany
fees), up 30%.
Temp and Contracting, which represented 83% of Germany fees,
increased by 18%. Within this, Contracting (58% of Germany) grew by
23%, driven by 14% growth in contractor volumes, to record levels.
Margin, mix and increased contractor rates added a further 11%,
which was partially offset by three fewer working days and slightly
lower average hours worked.
Our Temp business, 25% of Germany fees and where we employ
temporary workers as required under German law, increased fees by
8%. Underlying Temp volumes increased by 11%, margin, mix and
increased Temp rates added a further 4%, offset by 7% from three
fewer working days year-on-year and modestly lower average hours
worked.
Perm, 17% of Germany fees, also delivered a fee record and
increased by an excellent 22%. This included a 13% increase in our
average Perm fee.
Consultant headcount increased by 1% year-on-year.
United Kingdom & Ireland (21% (6) net fees, 15% (6)
operating profit)
Markets slowed sharply through the year, particularly in Perm,
driving negative profit growth. Action taken to align consultant
headcount to market demand
Growth
=====================
Year ended 30 June
(In GBPs million) 2023 2022 Reported LFL
===================================== ======== ======== ============ =======
Net fees(1) 266.1 263.3 1% 1%
Operating profit 28.7 43.4 (34)% (34)%
Conversion rate(2) 10.8% 16.5%
Period-end consultant headcount 1,935 2,175 (11)%
===================================== ======== ======== ============ =======
In the United Kingdom & Ireland ("UK&I"), net fees
increased by 1% to GBP266.1 million. Operating profit of GBP28.7
million represented a decrease of 34% versus the prior year, and a
conversion rate of 10.8% (2022: 16.5%). Perm markets slowed
materially through the year as client and candidate confidence
levels decreased, while Temp markets remained broadly stable. Net
fee growth slowed from 7% in H1 to down 5% in H2.
Cost increases were driven by 7% higher average headcount
year-on-year, together with the impact of pay increases effective
from 1 July 2022, which lead to negative profit growth. Having
entered FY23 with significant headcount investment, up 24%
year-on-year, as markets slowed we took action to reduce headcount
and importantly ended the year with headcount down 11%
year-on-year, versus fees down 7%.
Temp, which represented 56% of UK&I, increased by 4%. Growth
was entirely driven by improved fee margin and positive salary mix,
with Temp volumes down 6%. Our Perm business saw fees decrease by
3%, again all driven by higher average Perm fee, with volumes down
13%, including H2 volumes down 23%. The Private sector, which
represented 70% of UK&I net fees, declined by 1%, with the
Public sector up 7%.
All regions traded broadly in line with the overall UK&I
business, except for Northern Ireland, up 9%, and the North West,
down 4%. Our largest region of London decreased by 3%, including
London City up 1%, while Ireland grew by a strong 13%.
Technology delivered a record fee performance, up 5%, with
Accountancy & Finance up 2%. Conditions were tougher in
Construction & Property, down 3%, and Office Support, down 10%.
We saw strong growth in Enterprise clients, up 15%, and Engineering
increased by an excellent 32%, driven by our longer-term
investments in the Green economy.
Consultant headcount in the division decreased by 11%
year-on-year and decreased by 7% in the second half.
Australia & New Zealand (15% (6) net fees, 16% (6) operating
profit)
Tough market conditions, particularly in the Public sector and
Banking, led to reduced productivity and a disappointing
performance
Growth
=====================
Year ended 30 June
(In GBPs million) 2023 2022 Reported LFL
===================================== ======== ======== ============ =======
Net fees(1) 188.4 195.7 (4)% (6)%
Operating profit 32.1 51.6 (38)% (39)%
Conversion rate(2) 17.0% 26.4%
Period-end consultant headcount 1,071 1,136 (6)%
===================================== ======== ======== ============ =======
In Australia & New Zealand ("ANZ"), net fees decreased by 6%
to GBP188.4 million, with operating profit down 39% to GBP32.1
million. This represented a conversion rate of 17.0% (2022: 26.4%).
Currency impacts were positive in the year, increasing net fees by
GBP4.5 million and operating profit by GBP1.3 million. Market
conditions deteriorated through the year, with fee growth slowing
from (1)% in H1 to (11)% in H2.
Cost increases were driven by 5% higher average headcount in the
year, together with the impact of pay increases effective from 1
July, leading to negative profit growth. Having entered FY23 with
significant headcount investment, up 20% year-on-year, as markets
slowed, we took action to reduce headcount and importantly ended
the year with headcount down 6% year-on-year, including a reduction
of 8% since October 2022. We also restructured our ANZ leadership
team.
Temp (61% of ANZ) decreased by 6%, with volumes down 13%. This
was impacted by an overall candidate scarcity in Temp markets, the
Federal government's policy decision to reduce the use of Temps in
the Public sector and by reduced activity in large Enterprise
clients, particularly in Banking. Perm fees decreased by 5%, with
volumes down 16%, partially offset by higher average Perm fees. The
Private sector, which represented 65% of ANZ net fees, declined by
7%, with Public sector fees down 4%.
Australia, 91% of ANZ, saw net fees decrease by 7%. New South
Wales and Victoria decreased by 6% and 12% respectively. Queensland
fell by 4%, with ACT and South Australia down 13% and 7%
respectively. At the ANZ specialism level, Construction &
Property, 21% of fees, increased by 2%, with our second largest,
Technology down 2%. Accountancy & Finance increased by 5%,
although conditions in Banking and HR were much tougher, down 36%
and 9% respectively.
New Zealand delivered a record performance, with fees up 9%.
ANZ consultant headcount decreased by 6% year-on-year and
decreased by 4% in the second half.
Rest of World (34% (6) net fees, 18% (6) operating profit)
Record fees in 19 countries, led by a strong performance in
EMEA. Tougher market conditions in China and the USA negatively
impacted operating profit
Growth
=====================
Year ended 30 June
(In GBPs million) 2023 2022 Reported LFL
===================================== ======== ======== ============ =======
Net fees(1) 458.1 416.5 10% 5%
Operating profit 36.0 39.5 (9)% (14)%
Conversion rate(2) 7.9% 9.5%
Period-end consultant headcount 3,540 3,710 (5)%
===================================== ======== ======== ============ =======
Our Rest of World ("RoW") division, which comprises 28
countries, delivered record fees, up 5% and included 19 individual
country records. Fee growth was led by Temp, 34% of RoW, which
increased by 9%, with Perm up 3% as markets slowed across RoW,
especially in H2.
Operating profit decreased by 14% to GBP36.0 million and RoW
conversion rate was 7.9% (2022: 9.5%). Our business in Mainland
China, which was significantly impacted by the Covid pandemic, saw
operating profit GBP6.1 million below prior year. Partially
offsetting this, FY22 included the one-off costs of closing our
Russia business, which had a positive impact of GBP3.3 million
year-on-year. Currency impacts were positive in the year,
increasing net fees by GBP19.6 million and operating profit by
GBP2.3 million.
EMEA ex-Germany (60% of RoW) fees increased by 12%, with 11
country records including France, our largest RoW country, up 18%,
and Switzerland, Poland and Spain up 16%, 12% and 11% respectively.
Belgium increased by 9%, while Portugal, up 28%, and the UAE, up
53% also produced fee records.
The Americas (24% of RoW) fees decreased by 6%. Conditions were
tough in the USA and declined by 13%, including H2 down 26%. Latin
America grew by 14% overall, and Canada increased by 1%.
Asia (16% of RoW) flat YoY, with tough conditions in China, down
21% and including Mainland China down 46%, materially
underperforming Hong Kong, which grew by 16%. Japan and Malaysia
delivered fee records, both up 21%.
Consultant headcount in the RoW division decreased by 5%
year-on-year. EMEA ex-Germany consultant headcount increased by 4%,
the Americas decreased by 22% and Asia was down 4%.
Current trading
Overall, Temp volumes remain stable. Conditions remain tough in
Perm globally, with reduced client & candidate confidence
driving increased time-to-hire
Group commentary
Despite macroeconomic challenges, Temp volumes have remained
stable overall on a sequential basis. In Perm, conditions remain
tough, with increased time-to-hire, driven by reduced client and
candidate confidence.
Our key markets continue to be supported by skill shortages.
Both Temp and Perm fees continue to benefit from our actions to
increase margins, which we expect to continue through H1 24, and by
the positive effects of wage inflation globally.
We expect Group consultant headcount will reduce by c.3-4% in Q1
FY24 as we continue to focus on consultant productivity and
leveraging our infrastructure investments.
As previously reported, the Group's June 2023 net fee exit rate
was down 2% year-on-year, and given strong fee growth in the prior
year, we have a tough H1 FY24 growth comparative. Overall, we
expect Group net fees will decline year-on-year in H1 FY24, driving
a reduction in first half conversion rate year-on-year, as we
protect key strategic investments in order to benefit from future
recovery and structural growth opportunities.
Germany
Temp & Contracting remains good overall, with modest volume
growth supported by positive pricing. Perm is flat YoY, against
tough comparatives. There are two fewer working days in Germany in
the first half of FY24, which will negatively impact fees and
profit in our Temp & Contracting businesses by c.GBP3.5 million
in H1.
UK&I and ANZ
Temp & Contracting remains broadly stable overall, with Perm
continuing to see increasing time-to-hire.
RoW
EMEA remains solid overall, while the Americas remains tough. In
Asia, China remains tough, with activity elsewhere stable.
Foreign Exchange
The recent strengthening of sterling versus our main trading
currencies of the euro and Australian dollar is currently a
headwind to Group operating profit in FY24. If we re-translate FY23
operating profit of GBP197.0 million at 21 August 2023 exchange
rates (EUR1.1697 and AUD $1.9923), operating profit would decrease
by c.GBP8 million, compared to a c.GBP7 million decrease at our Q4
results in July 2023.
FINANCIAL REVIEW
Summary Income Statement
Growth
=================
Year ended 30 June
(In GBPs million) 2023 2022 Reported LFL
==================================== ============ ========== ======== =======
Turnover 7,583.3 6,588.9 15% 12%
Temp 735.8 659.2 12% 9%
Perm 558.8 530.2 5% 3%
==================================== ============ ========== ======== =======
Net fees(1) 1,294.6 1,189.4 9% 6%
Administrative expenses (1,097.6) (979.3) 12% 9%
==================================== ============ ========== ======== =======
Operating profit 197.0 210.1 (6)% (9)%
==================================== ============ ========== ======== =======
Conversion rate(2) 15.2% 17.7%
Underlying Temp margin(3) 15.9% 15.5%
Temp fees as % of total net fees 57% 55%
Period-end consultant headcount 8,590 9,037 (5)%
==================================== ============ ========== ======== =======
(1) Net fees comprise turnover less remuneration of temporary
workers and other recruitment agencies.
(2) Conversion rate is the conversion of net fees into operating
profit.
(3) The underlying Temp margin is calculated as Temp net fees
divided by Temp gross revenue and relates solely to Temp placements
in which Hays generates net fees. This specifically excludes
transactions in which Hays acts as agent on behalf of workers
supplied by third party agencies and arrangements where Hays
provides major payrolling services.
(4) Due to the timing of public holidays, our largest market of
Germany had three fewer working days in FY23 versus FY22 which had
a GBP5.0 million net fee and operating profit impact.
(5) Cash generated by operations is stated after IFRS 16 lease
payments of GBP49.9 million (2022: GBP45.0 million). Cash
conversion represents cash generated by operations divided by Group
operating profit.
Turnover for the year to 30 June 2023 increased by 12% (15% on a
reported basis), with net fees increasing by 6% (9% on a reported
basis). The higher turnover growth compared to net fee growth was
due to relatively stronger growth in Temp fees versus Perm,
together with the first full-year of a large Temp outsourcing
contract in our RoW division, where we manage a supply chain which
includes a significant volume of third-party agency supply. Over
time, we expect to increase our direct-fill proportion, driving fee
growth.
Fee growth was driven by our early management actions to
increase fee margins, supported by the positive effects of wage
inflation globally, offsetting volume declines, particularly in
Perm. Temp, our largest business, increased by 9% driven by a 40
bps increase in underlying Temp margin(3) , or 3%, plus 8% from
positive mix / hours effects, despite three fewer working days in
Germany versus the prior year. This was partially offset by 2%
lower Temp volumes year-on-year. Perm fees rose 3%, however slowed
sharply during FY23, with H2 fees down 6%. Overall Perm growth was
entirely driven by higher average Perm fees, up 11%, with Perm
volumes down 8% year-on-year.
Like-for-like costs increased by 9% year-on-year or GBP91.2
million (GBP118.2 million on a reported basis). This was driven by
9% growth in average consultant headcount, the impact of salary
increases which became effective from 1 July 2022 and our
longer-term strategic investments. Consultant commissions and
bonuses decreased slightly year-on-year, primarily reflecting the
slowdown in Perm markets. We continued to closely manage our
overhead costs, including advertising, travel, entertainment,
property and back-office costs.
Operating profit decreased by 9% to GBP197.0 million, or down 6%
to GBP202.0 million on a working day-adjusted(4) basis. In line
with our guidance at our half-year results, second half operating
profit (GBP100.0 million) and conversion rate (15.6%) increased
versus our H1 performance as we focused on driving consultant
productivity, despite more challenging market conditions. Overall
in FY23, Group conversion rate decreased by 250 bps year-on-year to
15.2%.
Exchange rate movements increased net fees and operating profit
by GBP32.7 million and GBP5.7 million, respectively. This resulted
from the weakening in the average rate of exchange of sterling
versus our main trading currencies, notably the euro and Australian
dollar. Currency fluctuations remain a significant Group
sensitivity.
Net finance charge
The net finance charge for the year was GBP4.9 million (2022:
GBP5.8 million). Net bank interest payable (including amortisation
of arrangement fees) was GBP1.7 million (2022: GBP0.5 million). The
interest charge on lease liabilities under IFRS 16 was GBP4.2
million (2022: GBP3.9 million), and the credit on defined benefit
pension scheme obligations was GBP1.1 million (2022: charge of
GBP1.4 million). The Pension Protection Fund levy was GBP0.1
million (2022: GBP0.1 million). We expect the net finance charge
for FY24 to be c.GBP6 million, of which c.GBP4 million is
non-cash.
Taxation
Taxation for the year was GBP53.8 million (2022: GBP50.1
million), representing an effective tax rate (ETR) of 28.0% (2022:
24.5%). The increase in the ETR year-on-year is primarily driven by
the non-recurrence of positive one-off settlements with certain tax
authorities in FY22, plus the recognition of deferred tax assets
driven by the positive movement in the Group's defined benefit
surplus in the prior year. We expect the Group's ETR will be c.29%
in FY24, with the increase resulting from the rise in UK
corporation tax rate which was effective from April 2023.
Earnings per share
The Group's Basic Earnings per share (EPS) of 8.59p was 7% lower
than the prior year. The reduction was primarily driven by 6% lower
profit before tax. In addition, we incurred a higher Effective Tax
Rate (ETR) of 28% in FY23, given the prior year ETR of 24.5% (noted
above) had benefitted from positive one-off settlements with
certain tax authorities. The impact on EPS was partially offset by
a 3.7% reduction in average shares in issue, resulting from our
share buyback programme.
Cash flow and balance sheet
Conversion of operating profit into operating cash flow(5) was
an excellent 101% (2022: 87%(5) ). Working capital increased by
GBP28.7 million as our Temp debtors increased in line with our Temp
fee growth. We continued to see a strong performance by our credit
control teams globally, with debtor days of 33 days (2022: 33
days), versus 39 days pre-pandemic.
Net capital expenditure was GBP29.1 million (2022: GBP24.4
million), with continued investments in technology infrastructure
and cyber security, with an additional GBP1.0 million investment
acquiring the majority stake in Vercida Consulting, a UK-based
Diversity, Equity & Inclusion advisory business. We expect
capital expenditure will be c.GBP30 million in FY24.
We paid GBP165.1 million in core and special dividends in the
year (2022: GBP186.4 million) and company pension contributions
were GBP17.7 million (2022: GBP17.2 million). Net interest paid was
GBP1.7 million (2022: GBP0.5 million) and corporation tax payments
were GBP65.8 million (2022: GBP39.0 million).
During the year we purchased and cancelled 66.2 million shares
at an average price of 113.3 pence per share and cost of GBP75.0
million, which completed our GBP93.2 million initial share buyback
programme. We ended the year with a net cash position of GBP135.6
million (2022: GBP296.2 million).
Retirement benefits
The Group's defined benefit pension scheme position under IAS 19
at 30 June 2023 has resulted in a surplus of GBP25.7 million,
compared to a surplus of GBP102.0 million at 30 June 2022. The
decrease in surplus of GBP76.3 million was driven by a decrease in
expected returns from scheme assets, partially offset by the
favourable impact of changes in financial assumptions, most notably
an increase in the discount rate as interest rates increased, and
company contributions. In respect of IFRIC 14, the Schemes'
Definitive Deeds and Rules are considered to provide Hays with an
unconditional right to a refund of surplus assets and therefore the
recognition of a net defined benefit scheme asset is not
restricted. Agreements to make funding contributions do not give
rise to any additional liabilities in respect of the scheme.
During the year, the Group contributed GBP17.2 million of cash
to the defined benefit scheme (2022: GBP16.7 million), in line with
the agreed deficit recovery plan. The 2021 triennial valuation
quantified the actuarial deficit at GBP23.9 million on a Technical
Provisions basis. Our long-term objective continues to be reaching
full buy-out of the scheme and therefore our recovery plan remained
unchanged and comprised an annual payment of GBP16.7 million from
July 2021, with a fixed 3% uplift per year. The scheme was closed
to new entrants in 2001 and to future accrual in June 2012.
Capital structure, final and special dividend
Our business model remains highly cash generative. The Board's
free cash flow priorities are to fund the Group's investment and
development, maintain a strong balance sheet, deliver a
sustainable, progressive and appropriate core dividend and to
return surplus cash to shareholders through an appropriate
combination of special dividends and share buybacks.
Given the Group's profitability, strong balance sheet and
confidence in our long-term strategy, the Board has proposed a
final core dividend of 2.05p. When added to the interim dividend of
0.95p paid in April 2023, the Group's total FY23 core dividend is
3.00 pence per share (2022: 2.85p), representing dividend cover of
2.9x our EPS of 8.59 pence per share and a 5% increase versus FY22.
The ex-dividend date is 5 October 2023, and the dividend payment
date will be 17 November 2023. Our target core full-year dividend
cover range remains 2.0 to 3.0x earnings.
The Board is also pleased to propose a further GBP35.6 million
return of surplus cash to shareholders, via special dividend of
2.24 pence per share, which will be paid alongside the final
dividend.
We have established a track record of paying cash to
shareholders, with c.GBP950 million in core and special dividends
paid in respect of FY17 to FY23, plus GBP93.2 million in share
buybacks since April 2022.
Treasury management
The Group's operations are financed by retained earnings and
cash reserves. In addition, the Group has in place a GBP210 million
revolving credit facility, which reduces in November 2024 to GBP170
million and expires in November 2025. This provides considerable
headroom versus current and future Group funding requirements.
The covenants within the facility require the Group's interest
cover ratio to be at least 4:1 (ratio as at 30 June 2023: 174:1)
and its leverage ratio (net debt to EBITDA) to be no greater than
2.5:1 (as at 30 June 2023 the Group held a net cash position). The
interest rate of the facility is on a ratchet mechanism with a
margin payable over Compounded Reference Rate in the range of 0.70%
to 1.50%.
The Group's UK-based treasury function manages the Group's
currency and interest rate risks in accordance with policies and
procedures set by the Board and is responsible for day-to-day cash
management; the arrangement of external borrowing facilities; and
the investment of surplus funds. The treasury function does not
operate as a profit centre or use derivative financial instruments
for speculative purposes.
Principal risks facing the business
Hays plc operates a comprehensive enterprise risk management
framework, which is monitored and reviewed by the Board. There are
a number of potential risks and uncertainties that could have a
material impact on the Group's financial performance and position.
These include risks relating to the cyclical nature of our business
and inflation, business model, talent recruitment and retention,
compliance, reliance on technology, cyber security, data
protection, contracts and the covid pandemic. These risks and our
mitigating actions are set out in the 2022 Annual Report , and
remain relevant. There are no additional risks since this date
which impact Hays' financial position or performance, although as
noted earlier in this statement, with macroeconomic uncertainties
increasing, we are closely monitoring our activity levels and
KPI's.
This preliminary report was approved and authorised for issue by
the Board of Directors on 23 August 2023.
Alistair Cox James Hilton
Chief Executive
Group Finance Director
H ays plc
20 Triton Street
London
NW1 3BF
haysplc.com/investors
Cautionary statement
This Preliminary Report (the "Report") has been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the UK Financial Conduct Authority and is not audited. No
representation or warranty, express or implied, is or will be made
in relation to the accuracy, fairness or completeness of the
information or opinions contained in this Report. Statements in
this Report reflect the knowledge and information available at the
time of its preparation. Certain statements included or
incorporated by reference within this Report may constitute
"forward-looking statements" in respect of the Group's operations,
performance, prospects and/or financial condition. By their nature,
forward-looking statements involve a number of risks, uncertainties
and assumptions and actual results or events may differ materially
from those expressed or implied by those statements. Accordingly,
no assurance can be given that any particular expectation will be
met and reliance shall not be placed on any forward-looking
statement. Additionally, forward-looking statements regarding past
trends or activities shall not be taken as a representation that
such trends or activities will continue in the future. The
information contained in this Report is subject to change without
notice and no responsibility or obligation is accepted to update or
revise any forward-looking statement resulting from new
information, future events or otherwise. Nothing in this Report
shall be construed as a profit forecast. This Report does not
constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to purchase or subscribe for any shares
in the Company, nor shall it or any part of it or the fact of its
distribution form the basis of, or be relied on in connection with,
any contract or commitment or investment decisions relating
thereto, nor does it constitute a recommendation regarding the
shares of the Company or any invitation or inducement to engage in
investment activity under section 21 of the Financial Services and
Markets Act 2000. Past performance cannot be relied upon as a guide
to future performance. Liability arising from anything in this
Report shall be governed by English Law, and neither the Company
nor any of its affiliates, advisors or representatives shall have
any liability whatsoever (in negligence or otherwise) for any loss
howsoever arising from any use of this Report or its contents or
otherwise arising in connection with this Report. Nothing in this
Report shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
LEI code: 213800QC8AWD4BO8TH08
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 30 JUNE
(In GBPs million) Note 2023 2022
----------------------------------------------------------- ----- ---------- --------
Turnover 3, 4 7,583.3 6,588.9
----------------------------------------------------------- -----
Net fees(1) 3, 4 1,294.6 1,189.4
----------------------------------------------------------- ----- ----------
Administrative expenses(2) 4 (1,097.6) (979.3)
----------------------------------------------------------- -----
Operating profit 3 197.0 210.1
Net finance charge 5 (4.9) (5.8)
----------------------------------------------------------- -----
Profit before tax 192.1 204.3
Tax 6 (53.8) (50.1)
---------- --------
Profit after tax 138.3 154.2
----------------------------------------------------------- ----- ---------- --------
Profit attributable to equity holders of the parent
company 138.3 154.2
----------------------------------------------------------- ----- ---------- --------
Earnings per share (pence)
- Basic 8 8.59p 9.22p
- Diluted 8 8.52p 9.11p
(1) Net fees comprise turnover less remuneration of temporary
workers and other recruitment agencies.
(2) Administrative expenses include impairment loss on trade receivables
of GBP3.0 million (2022: GBP2.4 million).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE
(In GBPs million) 2023 2022
----------------------------------------------------------- ----- ---------- --------
Profit for the year 138.3 154.2
----------------------------------------------------------- ----- ---------- --------
Items that will not be reclassified subsequently
to profit or loss:
Actuarial remeasurement of defined benefit pension
schemes (95.1) 39.6
Tax relating to components of other comprehensive
income 19.5 (8.6)
(75.6) 31.0
---------------------------------------------------------- ----- ---------- --------
Items that may be reclassified subsequently to
profit or loss:
Currency translation adjustments (15.6) 10.5
Other comprehensive income for the year net of
tax (91.2) 41.5
----------------------------------------------------------- -----
Total comprehensive income for the year 47.1 195.7
----------------------------------------------------------- -----
Attributable to equity shareholders of the parent
company 47.1 195.7
----------------------------------------------------------- ----- ---------- --------
CONSOLIDATED BALANCE SHEET
AT 30 JUNE
(In GBPs million) Note 2023 2022
Non-current assets
Goodwill 200.3 202.3
Other intangible assets 53.7 47.1
Property, plant and equipment 29.7 29.3
Right-of-use assets 9 176.1 171.7
Deferred tax assets 21.4 18.5
Retirement benefit surplus 10 25.7 102.0
506.9 570.9
Current assets
Trade and other receivables 1,244.6 1,205.1
Corporation tax debtor 6.8 5.2
Cash and cash equivalents 145.6 296.2
Derivative financial instruments 0.1 -
----------- -----------
1,397.1 1,506.5
--------------------------------------------------- ------ ----------- -----------
Total assets 1,904.0 2,077.4
---------------------------------------------------- ------ ----------- -----------
Current liabilities
Trade and other payables (991.3) (1,029.8)
Lease liabilities 9 (41.3) (39.8)
Corporation tax liabilities (16.2) (34.5)
Derivative financial instruments - (0.1)
Provisions 11 (10.8) (12.7)
(1,059.6) (1,116.9)
Non-current liabilities
Bank loans (10.0) -
Deferred tax liabilities (2.8) (10.0)
Lease liabilities 9 (148.5) (145.3)
Provisions 11 (12.8) (9.0)
----------- -----------
(174.1) (164.3)
--------------------------------------------------- ------ ----------- -----------
Total liabilities (1,233.7) (1,281.2)
---------------------------------------------------- ------ ----------- -----------
Net assets 670.3 796.2
---------------------------------------------------- ------ ----------- -----------
Equity
Called up share capital 16.0 16.7
Share premium 369.6 369.6
Merger reserve 43.8 43.8
Capital redemption reserve 3.4 2.7
Retained earnings 155.4 268.2
Cumulative translation reserve 58.0 73.6
Equity reserve 24.1 21.6
Total equity 670.3 796.2
---------------------------------------------------- ------ ----------- -----------
The Consolidated Financial Statements of Hays plc, registered number 2150950,
were approved by the Board of Directors and authorised for issue on 23
August 2023.
Signed on behalf of the Board of Directors
A R COX J HILTON
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30
JUNE 2023
Called Merger Capital Cumulative Equity
up share Share reserve redemption Retained translation reserve Total
(In GBPs million) capital premium (1) reserve earnings reserve (2) equity
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
At 1 July 2022 16.7 369.6 43.8 2.7 268.2 73.6 21.6 796.2
Currency translation
adjustments - - - - - (15.6) - (15.6)
Remeasurement of
defined
benefit pension
schemes - - - - (95.1) - - (95.1)
Tax relating to
components
of other
comprehensive
income - - - - 19.5 - - 19.5
Net expense
recognised
in other
comprehensive
income - - - - (75.6) (15.6) - (91.2)
Profit for the year - - - - 138.3 - - 138.3
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
Total comprehensive
income
for the year - - - - 62.7 (15.6) - 47.1
Dividends paid - - - - (165.1) - - (165.1)
Purchase of own
shares (0.7) - - 0.7 (19.0) - - (19.0)
Share-based payments
charged to the
income
statement(3) - - - - - - 11.1 11.1
Share-based payments
settled on
vesting(3) - - - - 8.6 - (8.6) -
At 30 June 2023 16.0 369.6 43.8 3.4 155.4 58.0 24.1 670.3
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
FOR THE YEARED 30
JUNE 2022
Called Merger Capital Cumulative Equity
up share Share reserve redemption Retained translation reserve Total
(In GBPs million) capital premium (1) reserve earnings reserve (2) equity
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
At 1 July 2021 16.8 369.6 193.8 2.7 207.8 63.1 18.0 871.8
Currency translation
adjustments - - - - - 10.5 - 10.5
Remeasurement of
defined
benefit pension
schemes - - - - 39.6 - - 39.6
Tax relating to
components
of other
comprehensive
income - - - - (8.6) - - (8.6)
Net income recognised
in other
comprehensive
income - - - - 31.0 10.5 - 41.5
Profit for the year - - - - 154.2 - - 154.2
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
Total comprehensive
income
for the year - - - - 185.2 10.5 - 195.7
Dividends paid - - (150.0) - (36.4) - - (186.4)
Purchase of own
shares (0.1) - - - (94.7) - - (94.8)
Share-based payments
charged to the
income
statement(3) - - - - - - 9.9 9.9
Share-based payments
settled on
vesting(3) - - - - 6.3 - (6.3) -
At 30 June 2022 16.7 369.6 43.8 2.7 268.2 73.6 21.6 796.2
---------------------- ---------- --------- --------- ------------ ---------- ------------- --------- --------
(1) The Merger reserve was generated under Section 612 of the Companies
Act 2006, as a result of the cash box structure used in the equity placing
of new shares issued during the year ended 30 June 2020.
(2) The Equity reserve is generated as a result of IFRS 2 'Share-based
payments'.
(3) The Share-based payments charged to the Consolidated Income Statement
and Share-based payments settled on vesting were previously presented
net as "Share-based payments". The presentation in the prior year has
been updated to enhance the consistency and understandability of the disclosures.
There has been no change in the underlying activity.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 30 JUNE
(In GBPs million) 2023 2022(2)
Operating profit 197.0 210.1
Adjustments for:
Depreciation of property, plant and equipment 10.9 10.0
Depreciation of right-of-use assets 46.0 44.0
Amortisation of intangible assets 10.0 10.1
Loss on disposal of business assets 0.1 1.5
Loss on closure of Russian business - 4.2
Net movements in provisions 1.9 2.1
Share-based payments 12.0 10.9
80.9 82.8
------------------------------------------------------------ ---------- ----------
Operating cash flow before movement in working
capital 277.9 292.9
Movement in working capital:
Increase in receivables (53.2) (259.4)
Increase in payables(1) 24.5 194.4
Movement in working capital (28.7) (65.0)
------------------------------------------------------------- ---------- ----------
Cash generated by operations 249.2 227.9
Pension scheme deficit funding (17.7) (17.2)
Income taxes paid (65.8) (39.0)
------------------------------------------------------------- ---------- ----------
Net cash inflow from operating activities 165.7 171.7
Investing activities
Purchase of property, plant and equipment (12.3) (12.1)
Purchase of intangible assets (16.8) (12.3)
Acquisition of subsidiaries (1.0) -
Interest received 2.0 0.8
------------------------------------------------------------- ---------- ----------
Net cash used in investing activities (28.1) (23.6)
Financing activities
Interest paid (3.7) (1.3)
Lease liability principal repayment (49.9) (45.0)
Purchase of own shares(2) (75.7) (38.0)
Equity dividends paid (165.1) (186.4)
Increase in bank loans and overdrafts 10.0 -
Net cash used in financing activities (284.4) (270.7)
------------------------------------------------------------- ---------- ----------
Net decrease in cash and cash equivalents (146.8) (122.6)
Cash and cash equivalents at beginning of year 296.2 410.6
Effect of foreign exchange rate movements (3.8) 8.2
Cash and cash equivalents at end of year 145.6 296.2
------------------------------------------------------------- ---------- ----------
(1) Included within trade and other payables at 30 June 2022 was an amount
of GBP56.8 million in relation to the outstanding liability on the Group's
initial GBP75.0 million share buyback programme, as announced on 28 April
2022. The programme was completed during the current year and therefore
no liability has been recognised at 30 June 2023. The resulting movement
in trade and other payables is not included within increase in trade payables
in the Consolidated Cash Flow Statement; cash flows under the share buyback
programme have been recognised as purchase of own shares.
(2) The comparative for the Consolidated Cash Flow Statement includes
a restatement of GBP38.0m in respect of the Group's purchases of its own
shares. These were previously presented within Investing activities, and
are now correctly shown in Financing activities. There has been no impact
on the Group's Cash generated by operations, cash inflow from operating
activities, or on cash conversion.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 STATEMENT UNDER S435 - PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does
not constitute statutory accounts for the years ended 30 June 2023 or
30 June 2022, as defined in Section 435 (1) and (2) of the Companies Act
2006, but is derived from those accounts. The statutory accounts for 2022
have been delivered to the Registrar of Companies and those for 2023 will
be delivered following the Company's Annual General Meeting. The Group's
Auditor has reported on those accounts; their reports were unqualified,
did not draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under Section 498 (2) or (3)
of the Companies Act 2006.
2 BASIS OF PREPARATION
Whilst the financial information included in this preliminary announcement
has been prepared in accordance with UK-adopted International Accounting
Standards, this announcement does not itself contain sufficient information
to comply with IFRS. The accounting policies applied in preparing this
financial information are consistent with the Group's financial statements
for the year ended June 2022; there have been no new standards or improvements
to existing standards that are mandatory for the first time in the Group's
accounting period beginning on 1 July 2022 and no new standards have been
early adopted.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and financial position, including
its cash flows and liquidity position are described in this preliminary
results announcement for the year ended 30 June 2023. The Directors have
formed the judgment that there is reasonable expectation that the Group
has adequate resources to continue in operational existence for the foreseeable
future. As a result the Directors continue to adopt the Going Concern
basis in the preparation of the Consolidated Financial Statements.
As in prior years, the Board undertook a strategic business review in
the current year which took into account the Group's current financial
position and the potential impact of the principal risks set out in the
Annual Report.
In addition, and in making this statement, the Board carried out a robust
assessment of the principal risks facing the Group, including those that
would threaten the Group's business model, future performance and liquidity.
While the review has considered all the principal risks identified by
the Group, the resilience of the Group to the occurrence of these risks
in severe yet plausible scenarios has been evaluated.
Financial position
At 30 June 2023, the Group had net cash of GBP135.6 million compared to
cash of GBP296.2 million at 30 June 2022. In addition, the Group currently
has an unsecured revolving credit facility (RCF) of GBP210 million that
reduces in November 2024 to GBP170 million, and expires in November 2025.
As at 30 June 2023, GBP200 million of the facility was undrawn. The net
cash position is stated after deducting the currently drawn amount on
the RCF. The Group had a strong working capital performance, with significant
management focus on cash collection, average trade debtor days remained
consistent in the year at 33 days (2022: 33 days).
Stress testing
The Board approves an annual budget and reviews monthly management reports
and quarterly forecasts. The output of the planning and budgeting processes
has been used to perform a sensitivity analysis of the Group's cash flow
to model the potential effects should principal risks actually occur either
individually or in unison.
The sensitivity analysis modelled scenarios in which the Group incurred
a sustained loss of business arising from a prolonged global downturn,
with a range of recovery scenarios considered. The Group's 'Stress Case'
scenario assumes that the Group experiences another severe downturn similar
in scale to the one caused by the Covid-19 pandemic in the year ended
30 June 2020, followed by a period of gradual recovery, as opposed to
the significant recovery the Group experienced through the years ended
30 June 2021 and 30 June 2022. The Stress Case scenario assumes a trough
level of operating profit of GBP57 million in the year ended 30 June 2024
before gradually recovering to GBP103 million operating profit in the
year to June 2026, which models the impact of a long-lasting global economic
downturn. In this scenario the Group is forecast to maintain a strong
net cash position in excess of GBP60 million throughout the Going Concern
period, with significant headroom against its banking covenants.
2 BASIS OF PREPARATION continued
Set against these downside trading scenarios, the Board considered key
mitigating factors including the geographic and sectoral diversity of
the Group, its balanced business model across Temporary, Permanent and
Contract recruitment services, and the significant working capital inflows
which arise in periods of severe downturn, particularly in the Temporary
recruitment business, thus protecting liquidity as was the case during
the Global Financial Crisis of 2008/09 and which we again experienced
in the year ended 30 June 2020.
The Group's history of strong cash generation, tight cost control and
flexible workforce management provides further protection, and in addition
the Group has a revolving credit facility of GBP210 million that reduces
in November 2024 to GBP170 million, and expires in November 2025.
The Group has sufficient financial resources which, together with internally
generated cash flows, will continue to provide sufficient sources of liquidity
to fund its current operations, including its contractual and commercial
commitments and any proposed dividends. The Group is therefore well-placed
to manage its business risks. After making enquiries, the Directors have
formed the judgment at the time of approving the Consolidated Financial
Statements, that there is a reasonable expectation that the Group has
adequate resources to continue in operational existence throughout the
Going Concern period, being at least 12 months from the date of approval
of the Consolidated Financial Statements. For this reason, they continue
to adopt the going concern basis of accounting in preparing the Consolidated
Financial Statements.
3 SEGMENTAL INFORMATION
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the
chief operating decision maker to allocate resources to the segment and
to assess their performance.
As a result, the Group segments the business into four regions, Germany,
United Kingdom & Ireland, Australia & New Zealand and Rest of World. There
is no material difference between the segmentation of the Group's turnover
by geographic origin and destination.
The Group's operations comprise one class of business, that of qualified,
professional and skilled recruitment.
(In GBPs million) Note 2023 2022
------------------------------ --- ---------------------------- -------------- ---------- --------------
Turnover
Germany 1,956.3 1,621.9
United Kingdom & Ireland 1,714.6 1,657.2
Australia & New Zealand 1,583.3 1,638.8
Rest of World 2,329.1 1,671.0
---------------------------------------------------------------------------------
Group 4 7,583.3 6,588.9
------------------------------ --- ---------------------------- -------------- ---------- --------------
(In GBPs million) Note 2023 2022
------------------------------ --- ---------------------------- -------------- ---------- --------------
Net fees
Germany 382.0 313.9
United Kingdom & Ireland 266.1 263.3
Australia & New Zealand 188.4 195.7
Rest of World 458.1 416.5
---------------------------------------------------------------------------------
Group 4 1,294.6 1,189.4
------------------------------ --- ---------------------------- -------------- ---------- --------------
(In GBPs million) 2023 2022
------------------------------ --- ---------------------------- -------------- ---------- --------------
Operating profit
Germany 100.2 75.6
United Kingdom & Ireland 28.7 43.4
Australia & New Zealand 32.1 51.6
Rest of World 36.0 39.5
------------------------------
Group 197.0 210.1
------------------------------ --- ---------------------------- -------------- ---------- --------------
4 OPERATING PROFIT
The following costs are deducted from turnover to determine net fees:
(In GBPs million) 2023 2022
------------------------------- --- -------------- --------------------------- ---------- --------------
Turnover 7,583.3 6,588.9
Remuneration of temporary
workers (5,212.9) (4,784.1)
Remuneration of other
recruitment
agencies (1,075.8) (615.4)
------------------------------- --- -------------- ---------------------------
Net fees 1,294.6 1,189.4
--------------------------------------------------------------------------------- ---------- --------------
The increase in remuneration of other agencies during the year is primarily
due to first full-year of large Temp outsourcing contract in our RoW division,
where we manage a complex supply chain which includes a significant volume
of third-party agency supply. Over time we expect to increase our direct-fill
proportion of these contingent workers. Excluding this contract, other
agency supply increased by c.GBP33 million.
Operating profit is stated after charging the following items to net fees
of GBP1,294.6 million (2022: GBP1,189.4 million):
(In GBPs million) 2023 2022
------------------------------- --- -------------- --------------------------- ---------- --------------
Staff costs 868.8 766.5
Amortisation of intangible assets 10.0 10.1
Depreciation of property, plant and
equipment 10.9 10.0
Depreciation of right-of-use assets
(note 9) 46.0 44.0
Loss on closure of Russian business - 4.2
Short-term leases and leases of
low-value
assets 3.8 3.1
Impairment loss on trade
receivables 3.0 2.4
Auditor's remuneration:
- for statutory audit services 2.1 1.8
- for other services 0.2 0.2
Other external charges 152.8 137.0
------------------------------------
Administrative expenses 1,097.6 979.3
------------------------------------ -------------- --------------------------- ---------- --------------
In the year ended 30 June 2022, due to the conflict in Ukraine, the Group
announced that it had taken the decision to close its offices in Moscow
and St Petersburg, cease trading with immediate effect and exit Russia.
Russia generated GBP7.8 million of net fees and GBP1.2 million of operating
profit in the year ended 30 June 2022. The total one-off cost of closing
the Russian business was GBP4.2 million and, due to the amount being immaterial
to the Group, was incurred as an expense within operating profit and not
reported as a discontinued operation.
5 NET FINANCE CHARGE
(In GBPs million) 2023 2022
------------------------------- --- -------------- --------------------------- ---------- --------------
Interest received on bank deposits 2.0 0.8
Interest payable on bank loans and
overdrafts (3.7) (1.2)
Interest on lease liabilities (note
9) (4.2) (3.9)
Pension Protection Fund levy (0.1) (0.1)
Net interest expense on defined
benefit
pension schemes 1.1 (1.4)
------------------------------------ -------------- ---------------------------
Net finance charge (4.9) (5.8)
------------------------------------ -------------- --------------------------- ---------- --------------
6 TAX
The income tax expense for the year can be reconciled to
the accounting profit as follows:
(In GBPs million) 2023 2022
------------------------ -------------------------- ----------- -------------- ---------- --------------
Profit before tax 192.1 204.3
------------------------ -------------------------- ----------- -------------- ---------- --------------
Income tax expense calculated at 20.5% (2022: 19.0%) (39.4) (38.8)
Net effect of items that are non-deductible in
determining taxable profit (3.7) (5.6)
Effect of unused tax losses not recognised for
deferred tax assets (6.6) (1.1)
Effect of tax losses not recognised for deferred
tax utilised in the year 0.3 0.8
Effect of tax losses now recognised for deferred
tax 1.2 3.1
Effect of other timing differences not recognised
for deferred tax assets (1.6) 2.4
Effect of other timing differences previously unrecognised
for deferred tax assets 0.8 0.9
Effect of different tax rates of subsidiaries operating
in other jurisdictions (13.3) (15.7)
Effect of share-based payment charges and share
options (0.3) (0.6)
-----------------------------------------------------------------
Income tax recognised in the current year (62.6) (54.6)
Adjustments recognised in the current year in relation
to the current tax of prior years 6.8 4.0
Adjustments to deferred tax in relation to prior
years 2.0 0.5
-----------------------------------------------------------------
Income tax expense recognised in the Consolidated
Income Statement (53.8) (50.1)
----------------------------------------------------------------- -------------- ---------- --------------
Effective tax rate for
the year 28.0% 24.5%
------------------------ -------------------------- ----------- -------------- ---------- --------------
The tax rate used for the reconciliation above for the year ended 30 June
2023 is the corporation tax rate of 20.5% (2022: 19.0%), being a blend
of the tax rate of 19% up to 31 March 2023 and 25% from 1 April 2023,
payable by corporate entities in the United Kingdom on taxable profits
under tax law in that jurisdiction. The Group operates in jurisdictions
which have tax rates higher than the UK statutory tax rate, the most significant
being Germany and Australia with statutory rates of 31.5% and 30% respectively,
the impact of which is shown in the above reconciliation under effect
of different tax rates of subsidiaries operating in other jurisdictions.
7 DIVIDS
The following dividends were paid by the Group and have been recognised
as distributions to equity shareholders in the year:
2023 2022
(pence (pence
per 2023 per 2022
(GBPs (GBPs
share) million) share) million)
----------------- ----- -------------------------- ----------- -------------- ---------- --------------
Prior year final dividend 1.90 30.8 1.22 20.5
Prior year special dividend 7.34 119.1 8.93 150.0
Current year interim dividend 0.95 15.2 0.95 15.9
----------------------------------------------------
Total 10.19 165.1 11.10 186.4
---------------------------------------------------- ----------- -------------- ---------- --------------
The following dividends have been proposed by the Group in respect of
the accounting year presented:
2023 2022
(pence (pence
per 2023 per 2022
(GBPs (GBPs
share) million) share) million)
----------------- ----- -------------------------- ----------- -------------- ---------- --------------
Interim dividend (paid) 0.95 15.2 0.95 15.9
Final dividend (proposed) 2.05 32.6 1.90 31.4
Special dividend (proposed) 2.24 35.6 7.34 121.2
----------------------------------------------------
Total 5.24 83.4 10.19 168.5
---------------------------------------------------- ----------- -------------- ---------- --------------
The final dividend for 2023 of 2.05 pence per share (GBP32.6 million)
along with a special dividend of 2.24 pence per share (GBP35.6 million)
will be proposed at the Annual General Meeting on 15 November 2023. Neither
the final dividend nor the special dividend have been included as a liability.
If approved, the final and special dividends will be paid on 17 November
2023 to shareholders on the register at the close of business on 6 October
2023.
8 EARNINGS PER SHARE
Weighted
average
number
of Per share
Earnings shares amount
For the year ended 30 June (GBPs
2023 million) (million) (pence)
------------------------------- ------------------- ----------- -------------- ---------- --------------
Basic earnings per share 138.3 1,610.0 8.59
Dilution effect of share options - 13.9 (0.07)
-----------------------------------------------------------------
Diluted earnings per share 138.3 1,623.9 8.52
----------------------------------------------------------------- -------------- ---------- --------------
Weighted
average
number
of Per share
Earnings shares amount
For the year ended 30 June (GBPs
2022 million) (million) (pence)
------------------------------- ------------------- ----------- -------------- ---------- --------------
Basic earnings per share 154.2 1,671.7 9.22
Dilution effect of share options - 20.7 (0.11)
-----------------------------------------------------------------
Diluted earnings per share 154.2 1,692.4 9.11
----------------------------------------------------------------- -------------- ---------- --------------
9 LEASE ACCOUNTING UNDER IFRS 16
Right-of-use assets
------------------------------------------------------------
Total
Motor Other lease Lease
(In GBPs million) Property vehicles assets assets liabilities
------------------------------- ------------------- ----------- -------------- ---------- --------------
At 1 July 2022 162.4 9.2 0.1 171.7 (185.1)
Exchange adjustments (2.2) - - (2.2) 2.2
Lease additions 53.6 8.5 0.1 62.2 (62.2)
Lease disposals (9.5) (0.1) - (9.6) 9.6
Depreciation of right-of-use
assets (39.8) (6.1) (0.1) (46.0) -
Lease liability principal
repayments - - - - 49.9
Interest on lease liabilities - - - - (4.2)
At 30 June 2023 164.5 11.5 0.1 176.1 (189.8)
------------------------------- ------------------- ----------- -------------- ---------- --------------
(In GBPs million) 2023 2022
------------------------------- ------------------- ----------- -------------- ---------- --------------
Current (41.3) (39.8)
Non-current (148.5) (145.3)
Total lease liabilities (189.8) (185.1)
------------------------------- ------------------- ----------- -------------- ---------- --------------
10 RETIREMENT BENEFIT SURPLUS
(In GBPs million) 2023 2022
------------------------------- ------------------- ----------- -------------- ---------- --------------
Surplus in the scheme brought forward 102.0 46.6
Administration costs (3.2) (2.5)
Employer contributions (towards funded and unfunded schemes) 17.7 17.2
Net interest income 4.3 1.1
Remeasurement of the net defined benefit surplus (95.1) 39.6
---------------------------------------------------------------------------------
Surplus in the scheme carried forward 25.7 102.0
--------------------------------------------------------------------------------- ---------- --------------
11 PROVISIONS
Legal,
tax and
other
(In GBPs million) Restructuring matters Total
------------------------------- ------------------- ----------- -------------- ---------- ----------------
At 1 July 2022 1.8 19.9 21.7
Charged to income statement - 7.6 7.6
Credited to income statement (0.6) (3.9) (4.5)
Utilised (1.2) - (1.2)
At 30 June 2023 - 23.6 23.6
----------------------------------------------------------------- -------------- ---------- ----------------
(In GBPs million) 2023 2022
------------------------------- ------------------- ----------- -------------- ---------- ----------------
Current 10.8 12.7
Non-current 12.8 9.0
----------------------------------------------------------------- -------------- ---------- ----------------
Total provisions 23.6 21.7
----------------------------------------------------------------- -------------- ---------- ----------------
There are no individually material balances within Legal, tax and other
matters, and management does not consider it reasonably possible that
any of these balances will materially change in the next 12 months.
12 LIKE-FOR-LIKE RESULTS
Like-for-like results represent organic growth/(decline) of operations
at constant currency. For the year ended 30 June 2023 these are calculated
as follows:
Foreign 2022
exchange at constant Organic
(In GBPs million) 2022 impact currency growth 2023
------------------------------- ------------------- ----------- -------------- ---------- ----------------
Net fees
Germany 313.9 8.3 322.2 59.8 382.0
United Kingdom & Ireland 263.3 0.3 263.6 2.5 266.1
Australia & New Zealand 195.7 4.5 200.2 (11.8) 188.4
Rest of World 416.5 19.6 436.1 22.0 458.1
-------------------------------
Group 1,189.4 32.7 1,222.1 72.5 1,294.6
------------------------------- ------------------- ----------- -------------- ---------- ----------------
Foreign 2022
exchange at constant Organic
(In GBPs million) 2022 impact currency growth 2023
------------------------------- ------------------- ----------- -------------- ---------- ----------------
Operating profit
Germany 75.6 2.0 77.6 22.6 100.2
United Kingdom & Ireland 43.4 0.1 43.5 (14.8) 28.7
Australia & New Zealand 51.6 1.3 52.9 (20.8) 32.1
Rest of World 39.5 2.3 41.8 (5.7) 36.0
-------------------------------
Group 210.1 5.7 215.8 (18.7) 197.0
------------------------------- ------------------- ----------- -------------- ---------- ----------------
13 LIKE-FOR-LIKE QUARTERLY RESULTS ANALYSIS BY DIVISION
Net fee growth versus same period last year:
Q1 Q2 Q3 Q4 FY
2023 2023 2023 2023 2023
------------------------------- ------------------- ----------- -------------- ---------- --------------
Germany 26% 22% 23% 11% 19%
United Kingdom & Ireland 11% 4% (2)% (7)% 1%
Australia & New Zealand 3% (4)% (8)% (15)% (6)%
Rest of World 16% 6% 2% (4)% 5%
Group 15% 8% 5% (2)% 6%
------------------------------- ------------------- ----------- -------------- ---------- --------------
14 DISAGGREGATION OF NET FEES
IFRS 15 requires entities to disaggregate revenue recognised from contracts
with customers into relevant categories that depict how the nature, amount
and cash flows are affected by economic factors. As a result, we consider
the following information relating to net fees to be relevant:
United Australia
Kingdom & New Rest
Germany & Ireland Zealand of World Group
------------------- ---------- ------------------- ----------- -------------- ---------- --------------
Temporary placements 83% 56% 61% 34% 57%
Permanent placements 17% 44% 39% 66% 43%
Total 100% 100% 100% 100% 100%
Private sector 86% 70% 65% 98% 84%
Public sector 14% 30% 35% 2% 16%
------------------------------- ------------------- ----------- -------------- ---------- --------------
Total 100% 100% 100% 100% 100%
------------------------------- ------------------- ----------- -------------- ---------- --------------
Technology 35% 18% 16% 27% 26%
Accountancy & Finance 17% 19% 11% 11% 15%
Engineering 26% 2% 0% 6% 10%
Construction & Property 4% 16% 21% 9% 10%
Office Support 0% 10% 11% 5% 5%
Other 18% 35% 41% 42% 34%
Total 100% 100% 100% 100% 100%
------------------------------- ------------------- ----------- -------------- ---------- --------------
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