Hays’ annual pre-tax profit slides to £86.3 million in fiscal 2020

In an announcement on Thursday, Hays plc (LON: HAS) said that its annual pre-tax profit declined on the back of higher costs in fiscal 2020. The company resorted to suspending its final dividend to cushion the economic blow from COVID-19 that has so far infected more than 325 thousand people in the United Kingdom and caused over 41 thousand deaths. Here’s what Technavio has to say about the impact of COVID-19 on Recruitment Process Outsourcing (RPO) market.

Shares of the company were reported over 2% up in premarket trading on Thursday. Hays plc, however, lost the entire gain on market open as it slid back to a per-share price of 117 pence. In the first week of April, when new hiring in the UK due to the health crisis, the stock had plummeted to as low as 92 pence per share. Choosing a reliable stockbroker can be challenging. Here’s a list of a top few to get you started in the stock market.

Hays says dividend will be reinstated when appropriate

For the financial year that concluded on 30^th June, Hays reported £86.3 million of pre-tax profit that was significantly lower than £231.2 million in the previous year. The London-based firm’s turnover printed on Thursday at £5.93 billion. In comparison, its turnover was recorded at a higher £6.07 billion in 2019.

The human resources services company blamed the ongoing Coronavirus pandemic for suspending its final dividend. It, however, expressed confidence that dividend payments will be reinstated as soon as financially viable for the firm. In its report in July, Hays had revealed a 34% decline in net fees as COVID-19 froze new hiring in the fiscal fourth quarter.

Hays expects headcount to be lower in fiscal 2021

According to Hays, its headcount by the end of Q1 next year is expected to be lower on a year over year basis. The FTSE 250 listed company registered £58 million of cost base in June. It now estimates the figure to jump to £63 million in August. As per the Hays:

“We will incur more normal levels of operating and employee costs as government job support schemes end, we begin to return to more normal working practices and reverse voluntary pay reductions.”

At the time of writing, the British recruitment and human resources services firm has a market cap of £1.97 billion and has a price to earnings ratio of 12.09.