British recruiter Hays posts 14th straight net fee drop, shares fall

Oct 12 (Reuters) - Recruiter Hays reported its 14th straight quarterly decline in net fees on Monday as weak hiring in Germany's auto industry and Britain's private sector offset growth in the US and parts of Asia, sending its shares down 10%.

Geopolitical tensions, tariffs and conflict in the Middle East have weighed on hiring and pushed employers toward temporary and shorter-term contracts, while recruiters have relied on cost cuts to protect their profits. 

Hays' 3% decline in like-for-like net fees in the quarter ended September came in better the 4% drop expected by analysts, and eased from an 8% fall in the same quarter a year ago.

However, net fees rose 8% in the US on strong demand for construction in the data centre and energy sectors and climbed 12% in Canada, 27% in China and 2% in Japan.   

Still, the prolonged weakness in the European jobs market sent its shares and those of its peers lower on Monday. 

Shares in recruitment firms Michael Page, Adecco, Randstad and Robert Walters were down between 2.6% and 5% by 0830 GMT.  

Net fees in Germany dropped 6% and in UK fell 5%, with weakness across both permanent and temporary hiring across the private and public sectors. 

On an analyst call, Hays finance chief James Hilton said the German temporary staffing business, where it has automotive exposure, remained heavily down, with temp volumes down about 20% year-on-year.

To offset the downturn, Hays has been reshaping its portfolio under CEO Mark Dearnley, exiting several countries and narrowing its focus to 16 core markets.

Hays said it was in advanced discussions to sell several of its businesses including Belgium, Brazil, Greater China, Malaysia, the Netherlands, Singapore, and the UAE.

The London-listed firm said it expects market conditions to remain stable in the near term. 

(Reporting by Nithyashree R B and Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Nivedita Bhattacharjee)