Australian temp division crucial to Hays 2021 global results
The past 18 months have provided all the evidence that the Hays Australian temp division is the single most important business unit in the Hays global empire.
I compared the Hays 2021 financial year results for the period 1 July 2020 to 30 June 2021 with the Page Group results (comprising the brands Page Executive, Michael Page and Page Personnel) for the same twelve months period, firstly including the Hays ANZ division, then excluding it.
| Hays Global (inc. ANZ) | Page Global | Hays Global (exc. ANZ) |
|
|---|---|---|---|
| Gross profit (£ millions) | 918.1 | 713.7 | 758.2 |
| Operating profit (£ millions) | 95.1 | 80.9 | 55.4 |
| Conversion rate* | 10.4% | 11.3% | 7.3% |
| Consultants as at 30 June 2021 | 7,190 | 7,075 | 6,245 |
| Service line contribution to gross profit | Temp 61% Perm 39% | Temp 23% Perm 77% | Temp 59% Perm 41% |
| Average consultant fee income for the 6 months, Jan - June 2021# | £70.7 | £75.8 | £66.0 |
| Net cash (£ millions) | £410 | £164 |
*The percentage of gross profit that is represented by operating profit, # Page Group provides this figure, the Hays figures are my estimation based on data provided in the Hays 2021 preliminary full-year results.
I have used £ figures for all financial data to enable comparisons.
In excluding the Hays ANZ division (Australia and New Zealand) from the Hays global results the significant contribution that division makes, especially the Australian temp business, is stark.
For the 2021 financial year Hays ANZ generated £159.9 million in gross profit (net fee income), £39.7 million in operating profit and delivered a conversion rate of 24.8%.
Average fee income per consultant for the January to Jun 2021 six-month period I estimate to be £94,000; an astonishing 42 per cent better result than the Hays global consultant average (excluding ANZ) of £66,000.
Hays noted in their 2021 Preliminary 2021 Results that “Despite increased headcount, we delivered record (global) consultant productivity in Q4”.
The Hays Australia temp division accounted for approximately £105 million of the ANZ total net fee income of £160 million and (using the same ratios as specifics are not provided by Hays) contributing a whopping 27 per cent (£26 million) to the Hays full year global operating profit of £95.1 million.
By contrast the most recent Page Group full financial year (1 Jan 2020 – 31 Dec 2020) Page Group ANZ only contributed 4.2% (£25.5 million) to global gross profit (£610.2 million).
Hays ANZ was the most important operating division in the Hays global business throughout 2020 and its consultant productivity figures for the first six months of the 2021 calendar year suggest it’s also going to play a huge part in Hays’s rapid return to pre-COVID levels of global profitability.
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