Hays plc

Like-for-like net fees decreased 8% to GBP 906 million. Pre-exceptional operating profit increased 3% to GBP 48.6 million, and pre-exceptional EPS was 1.21p, down 8%. Cash from operations was GBP 92 million, free cash flow was GBP 22 million, and year-end net cash was GBP 20.1 million. Gross margin was not stated. For FY '27, management targets another GBP 50 million of structural savings and expects significant exceptional restructuring costs again; net finance charge is expected to be around GBP 12 million, the tax rate slightly lower, and CapEx in the GBP 30 million to GBP 35 million range.

Mark Dearnley said client feedback strongly supports a consultant-led model with technology enhancing, not replacing, human judgment. He framed Momentum as a growth strategy centered on sharper specialization, better matching, and higher consultant productivity, with the long-term goal of raising consultant net fee productivity by more than 50% and restoring a 25% plus conversion rate. His tone was confident and programmatic, emphasizing that the strategy is already being executed and that the company is only at the beginning of the opportunity.

James Hilton highlighted that fee declines were partly offset by cost action, with operating costs down 8% or GBP 70 million. He pointed to GBP 25 million of annualized savings from finance/technology transformation, GBP 15 million from sales-ops restructuring, and GBP 10 million from office closures, with around GBP 20 million of FY '26 P&L benefit and the remaining GBP 30 million to flow in FY '27. He also noted GBP 89.6 million of exceptional costs in FY '26, net finance charge of GBP 13.5 million, a pre-exceptional tax rate of 45%, and strong cash conversion of 189%, while saying FY '27 CapEx should be GBP 30 million to GBP 35 million and net finance charge about GBP 12 million.

Analysts focused on how much of the FY '27 savings program is already embedded, whether the trading slowdown in Perm had worsened, and how the 50% productivity uplift will be achieved. Management said the GBP 50 million FY '27 savings target is mainly from back-office and mid-office changes, with significant exceptional costs likely again next year but then lower thereafter. On trading, they said July and August were consistent with Q4 and that September is too early to judge. On productivity, Mark said the lift will come from technology, specialism focus, role mix and better desk-level execution, while also saying the new digital/search-and-match tools are already in rollout or testing.