Hays back to 2019 levels with IT surging as construction/property sags
Last week Hays plc released its first half trading results (1 July 2021 – 31 December 2021) for the 2022 financial year.
The improvements on the comparison period for the previous year (1 July 2020 – 31 December 2020) were, as expected, significant given the different stages of the COVID-19 pandemic.
Hays Australia and New Zealand (ANZ) reported a 33 per cent improvement in like-for-like (LFL) net fees and 60 per cent improvement in operating profit with 235 consultants added between 31 December 2020 and 31 December 2021, a 29 per cent increase.
Hays ANZ has now returned to 2019 levels when comparing the corresponding half-year results.
| H1 2019 | H1 2022 | |
|---|---|---|
| Net fees (NF) AUD millions | $174.6 | $178.3 |
| Operating profit AUD millions | $52.5 | $48.5 |
| Conversion rate | 30.1% | 27.2% |
| NF perm/temp split | 31% - 69% | 37% - 63% |
| Australia - New Zealand NF split | $164 m - $10 m | $164 m - $14 m |
| Consultant numbers (offices) | 1006 (42) | 1054 (40) |
The small improvement in the three-year period comparison of regional net fees was due entirely to the rejuvenated New Zealand division, reporting a 40 per cent jump in net fees, a clear sign of Adam Shapley’s significant impact since he was promoted to managing director of Hays New Zealand in August 2018.
| Hays ANZ Net Fees by specialism | H1 2019 | H1 2022 | Variance |
|---|---|---|---|
| Other | $33 m | $39 m | + 18.2% |
| Construction & Property | $38 m | $32 m | -16.5% |
| IT | $23 m | $27 m | +18.1% |
| Banking | $19 m | $20 m | +2.6% |
| Accounting & Finance | $19 m | $20 m | +2.6% |
| Office Support | $19 m | $18 m | -6.8% |
Net fees = permanent placement fees plus temporary margin, Conversion rate = operating profit as a % of net fees,
# Other includes Contact Centre, Legal, Engineering, Life Sciences, Education, Financial Services, Insurance, Procurement, Telecoms, Executive, Retail and Healthcare.
Specialisms not listed above but included in the net fees by specialism data reported by Hasy are HR, Resources & Mining and Sales & Marketing
Data in both tables, above, are drawn from the following sources:
Hays FY20 H1 Interims Presentation pages 6, 18, 42, 43, 62 and Hays FY22 H1 Half-year presentation pages 7, 19, 20, 42, 43, 63
The property and construction market’s pandemic-induced hit on the Hays ANZ net fees was more than made up for by the surge in IT hiring that continued in spite of (or because of) the pandemic’s economic impact. Strong growth was also recorded across the 12 specialisms categorised as Other for reporting purposes. The coverage that Hays ANZ has with both perm and temp recruitment across many specialisms gives them a level of strength in the full range of economic conditions that no competitor comes close to matching.
The robustness of the Hays ANZ business compared to the other three global regions within Hays, let alone its local ANZ competitors, was starkly shown by the way in which Hays ANZ was able to defend its operating margin during the pandemic-induced downturn.
| Hays Region | FY 2019 Conversion rate | FY 2020 Conversion rate | FY 2021 Conversion rate |
|---|---|---|---|
| Australia & NZ | 33.5% | 28.3% | 24.8% |
| Germany | 30.5% | 20.5% | 12.8% |
| UK & Ireland | 18.5% | 7.4% | 5.7% |
| Rest of the World | 11.5% | 5.0% | 4.0% |
ANZ only shed one-quarter of their operating margin, a far superior result to Germany (a 60% decline), UK & Ireland (70% decline), and Rest of the World (65% decline), a testament to the importance of the Australian temp business to Hays globally.
Hays hired 110 consultants across Australia and New Zealand, a 12% jump, during the December 2021 half year and describe the current trading conditions and outlook in the ANZ region in optimistic terms:
Conditions in Perm are strong. We saw a two week slower ‘return to work’ than normal in our Temp and Contracting businesses post-Christmas, in part due to the Omicron variant and as many workers took extended vacations. By early February, our ‘return to work’ was broadly in line with normal years.
HAYS FY22 H1 – Half-year presentation page 29
The local Hays fee machine looks pumped and loaded for a huge calendar year ahead.
Related blogs
How Hays drives scalable and profitable growth around the globe
Australian temp division crucial to Hays 2021 global results
Hays consultants bill 61% more than local rivals during COVID crisis
Federal Government recruitment spend: Hays no surprise; HorizonOne big surprise