Hays to hand out £150m shareholder dividend despite profit plunge

Recruitment giant Hays has said it will hand shareholders a special dividend of £150 million despite its operating profits falling by three-quarters for the past six months.

The London-based firm said it has identified “£150 million in surplus capital”, which it will give out in two payments.

It comes despite a tough period for the recruitment sector, as the labour market has been constrained by the economic impact of the pandemic.

Hays told investors that its net fees slid by 24% to £422.8 million for the six months to December 31.

Meanwhile, pre-tax profits tumbled by 78% to £21.1 million for the period, after it was impacted by the reductions in fees.

Hays also completed a restructuring which cut its headcount by around 14% during the period.

Alistair Cox, chief executive, said the recovery in fees and profits accelerated during the second quarter, giving it confidence to resume dividend payouts.

Mr Cox said: “Since the pandemic began, we have helped over 200,000 talented people find their next job and provided advice, guidance and training to millions of others.

“We have prioritised the wellbeing of our own people and temps, and I am proud of the steadfast way all our colleagues have adapted to the changing world, helping their clients and candidates at a time of great need.

“Their resilience, together with the investments we have made across our business, delivered improving profit momentum through the half with overall trading distinctly stronger than we had earlier anticipated.”

Julie Palmer, partner at Begbies Traynor, said: “Although the economy has taken a battering during the pandemic, it has flipped the job market from candidate to company-lead.

“It is abundant with a wide variety of talented workers, either from being made redundant over the past year, or having taken the time during lockdown to consider a new career.

“Therefore, after having ridden out the storm of 2020, Hays will be poised to launch into the year ahead and catch up on the losses in the last 12 months as the Government aims to end the lockdown in the near future and give a kick-start to the economy.”