Hays Shares Soar 11% on Strong Profit Forecast and Cost Savings

Shares of HAYS jumped more than 11% following an upbeat update on its annual profit outlook. The UK-based recruiter signaled it expects operating profit for the fiscal year 2026 to land at the top of analyst estimates, energizing investor sentiment.

Despite a 5% like-for-like drop in net fees in the latest quarter, the firm highlighted solid gains in consultant productivity and tight control over costs as key drivers keeping profits buoyant. The decline in net fees was less severe than the 6% drop analysts had predicted.

Germany, Hays' largest market, posted a 7% fall in net fees-better than the anticipated 9% decline. Meanwhile, other regions experienced mixed results: minimal declines in the Rest of World segment, a slightly worse-than-expected dip in the UK and Ireland, and a modest downturn in Australia and New Zealand.

CEO Mark Dearnley commented on the numbers, noting that growth in temporary and contracting roles across several countries helped offset softer permanent hiring activity, particularly in Germany where average hours worked remained stable.

On the cost-efficiency front, Hays outperformed earlier targets by delivering approximately £50 million in annualised structural cost savings this fiscal year-three years ahead of schedule. Since fiscal 2024 began, total annualised savings reached around £115 million.

The company continues to streamline its operations, having completed the sale of businesses in six European countries to Meraki Capital in June, netting about £4 million after costs. It is also evaluating options for several other international markets, focusing on core regions to sharpen its strategic focus.

Looking ahead, Hays expects a restructuring charge near £40 million plus an additional £30 million impairment related to office consolidations globally. Despite these costs, it ended the quarter with about £20 million net cash, a marked improvement from net debt of approximately £15 million at the end of March.

The recruiter employs around 8,100 people in 155 offices across 23 countries and plans to release its full-year financial results and strategy update on August 20.

Meanwhile, fellow staffing firms Adecco and Randstad also posted gains of 3.9% and 4.6%, respectively, lifted by Hays' stronger-than-expected quarterly performance, which seemed to boost confidence across the European recruitment sector.