Hays' third flat year as profits stagnate

HAYS, the distribution, postage and recruitment company, has reported a third successive year of flat profits.

A strong performance in distribution offset dire results from Hays' accountancy personnel operation.

Operating profits from distribution rose 15 per cent. Hays benefited from new contracts won because recession-hit customers want to concentrate on their core businesses.

Profits from data storage and postage also rose. Hays is developing a next-day delivery internal post system for business.

However, profits from recruiting slumped nearly 60 per cent from pounds 11.6m to pounds 4.8m as the recession continued to deter employers from taking on new staff.

Overall taxable profits were pounds 57.4m for the year to 30 June compared with pounds 56.8m last time and pounds 56.2m in pro forma accounts prepared for its flotation on the stock market in 1989.

Hays' flotation coincided with the mini-crash in October 1989 and most of the shares issued were left with underwriters. Despite the embarrassment at flotation, and flat profits since, Hays shares have outperformed the FT Actuaries All Share Index by 60 per cent. The shares closed down 0.5p at 184p yesterday.

Earnings per share, helped by a lower tax charge, rose 3 per cent to 10.3p and the full year dividend advanced 15 per cent to 4.6p.

Stockbrokers' analysts predict that Hays will break out of the profits doldrums in the current year.

Nyren Scott-Malden of Barclays de Zoete Wedd thinks Hays will make pounds 71m of pre-tax profits for the year to next June.