Hays (LSE:HAS) has reported that net fees fell on a like-for-like basis in the first quarter of its new financial year, the three months ended 30 September, an improvement on the pace of decline seen in the fourth quarter of the prior year.
The London-listed global staffing and recruitment group, which operates across 23 countries, said Temp & Contracting volumes and average hours worked in Germany remained stable and in line with expectations, while Permanent recruitment stayed mixed but stable overall.
North America returned to growth during the quarter, with the US and Canada both expanding, while Japan, Spain and the US drove strong net fee performance within the Rest of World division.
Chief executive Mark Dearnley said the decline in group net fees "eased" in the quarter, "driven by good Temp & Contracting growth in several of our countries", while Perm activity showed "sustained strong growth in North America but ongoing fragility in Northern Europe".
The company reported a twelfth consecutive quarter of consultant net fee productivity growth, which it said was underpinned by rising average candidate salaries and investment in technology.
Hays signed a strategic partnership with Synthesia during the quarter to scale skills development and accelerate AI adoption, and began a phased rollout of its proprietary OneTouch 26 CRM system across Europe, following deployment in Asia-Pacific.
The group said it made good progress on its structural cost savings programme, delivering approximately £10 million in the quarter and bringing total structural savings to approximately £125 million per annum since the start of its 2024 financial year, as it works toward a further £50 million target for the 2027 financial year.
Net debt stood at approximately £45 million at quarter-end, against net cash of £20.1 million at 30 June, which Hays said reflected normal seasonal cashflows, cash exceptional payments and share purchases related to its non-dilutive scheme.
The company said it is making good progress exploring strategic options for its businesses in Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore and UAE, and is in advanced discussions for several of them.
This follows Hays' full-year results in August, when it reported net fees down 8% like-for-like to £905.5 million and a statutory pre-tax loss of £54.5 million, alongside its new Momentum strategy to narrow its footprint to 16 core countries and six global specialisms.
Hays said its September net fee growth rate was negative and it expects stable market conditions in the near term, with greater resilience in Temp & Contracting than in Permanent recruitment.
The company said there are no material working day impacts anticipated in the second quarter of its 2027 financial year.
Hays' next trading update, covering the quarter ending 31 December, is due on 14 January.