UK conglomerate Hays has released its H1 2002 financial results. Given the difficult trading conditions, it’s unsurprising that the logistics division’s profits are down – but well-managed rivals have managed to thrive despite the downturn. Hays will need strong leadership and clear direction if it is to grow profits and revenues.
Business services group Hays is struggling in the present economic climate.
Hays, the UK based recruitment-to-logistics conglomerate, has released its figures for H1 2002. They show that the company has suffered from the downturn in the UK economy, especially in its commercial and distribution divisions.
Overall, Hays’ revenue figures were almost exactly the same as the same period in 2001, with turnover of GBP2,434 million. Hays’ Logistics division also reported unchanged revenues at GBP880 million, although its profits fell from GBP52.6 million to GBP45.7 million.
Acting CEO Bob Lawson claims that the disappointing performance of the division was in line with the market as a whole, which would continue for the foreseeable future. However, Mr Lawson says that the major contracts Hays won earlier in the year with blue chip companies such as Carrefour, Waitrose and Sainsbury’s will help achieve growth in the period ahead.
The excuse that challenging market conditions are to blame for its falling profits is true enough. Competitors such as TDG, Christian Salvesen, Exel and Tibbett and Britten have all released figures showing falling profits in the UK. However, Wincanton has also shown that it is possible to increase revenue, profit and margin throughout difficult periods with strong management.
Hays says that a new CEO will be announced in November, filling a position which has been vacant since the resignation of Ronnie Frost last year. It is also rumored that the Logistics Division could also be sold off, giving the parent company more focus on its commercial and recruitment activities. Either way, a strong leadership and a well-defined strategy will be essential to get Hays’ profits back on track.
Related research: Datamonitor, UK Logistics – The Competitive Environment (BFAU0068)
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