Full Year 2026 Hays PLC Earnings Call Transcript
Key Points
- Hays PLC (HAYPF) returned to year-on-year profit growth in the second half of FY26, with pre-exceptional operating profit up 3% to $48.6 million.
- The company delivered strong cash performance with cash from operations of $92 million and a 189% cash conversion, ending the year with a net cash position of $20.1 million.
- Consultant productivity improved by 7% overall, with the UK and Ireland up 14%, driven by a focus on higher-value roles and better resource allocation.
- The new 'Momentum' strategy aims to increase consultant net fee productivity by more than 50% and return to a 25% plus conversion rate, targeting a medium-term net fee ambition of $1 billion plus.
- Hays PLC (HAYPF) has made significant progress in cost savings, delivering $50 million in annualized savings in FY26, three years ahead of schedule, and targeting a further $50 million in FY27.
- The company is investing in technology, including AI agents and a next-generation digital platform, which are already improving candidate matching and consultant efficiency.
- Strong performances in key markets such as Spain, Portugal, Japan, and the construction and property sector in Germany, with fees up 44% in the latter.
- The company maintains a strong balance sheet and has a clear capital allocation framework, with a dividend cover of 2.8 times and a commitment to returning surplus cash to shareholders.
- Net fees decreased by 8% to $906 million on a like-for-like basis, with perm fees down 12% and temp and contracting fees down 5%.
- The company incurred significant exceptional costs of $89.6 million in FY26, including restructuring charges, office closures, and impairments, and expects further significant exceptional costs in FY27.
- The pre-exceptional tax rate increased by 10 percentage points to 45%, driven by a concentration of profits in higher-tax countries and losses in others, impacting earnings per share.
- The company is exiting or exploring options for 13 countries, which will reduce net fees by approximately $85 million, and expects some net fee decline in non-core specialisms.
- Trading conditions remain challenging, with no significant change in activity levels in July and August, and perm markets still facing slower client decision-making and weaker confidence.
- The US business was impacted by the loss of a material contract, and France remains tough, although there were some improvements in the fourth quarter.
- The company's medium-term ambition of a 25% plus conversion rate is a significant step up from current mid-single-digit levels, requiring substantial execution and market recovery.
- The net finance charge for FY27 is expected to be around $12 million, and CapEx is expected to increase to $30-35 million, which may pressure cash flow.
Good day and thank you for standing by. Welcome to the Hays preliminary results for the year ended 30 June 2026 conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, please press *11 on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press *1 again. Alternatively, you may also submit your questions on the webcast at any time by typing them in the question box and click submit. Please note that today's conference is being recorded. I would now like to turn the conference over to first speaker, Mark Durney, Chief Executive Officer. Please go ahead.
Good morning and welcome everyone. I'm Mark Durney and I'm excited to present my first set of results as the new CEO of Hays. Our agenda today is slightly different from usual format because we are announcing our new momentum strategy. We'll
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