Hays says hiring levels weakened after Brexit vote

By Esha Vaish

(Reuters) - International recruitment firm Hays Plc (HAYS.L) said hiring in Britain weakened significantly shortly after the June 23 vote to leave the European Union, as private sector clients became hesitant to take on new staff.

However, the company, which places workers in areas such as finance, construction and IT, said in its annual results on Thursday that it was too early to know the longer-term impact of Brexit and it had seen no evidence that it had affected hiring levels in its many other markets.

So far, Hays had seen the largest impact in the UK among larger companies, Finance Director Paul Venables told Reuters

"What we have seen...is a bit more hesitancy about increasing headcount. More of the caution is coming from the larger corporates and, understandably, London is bound to be the more cautious area simply because it's got both banking and construction and property," he said.

Hays' shares were down 2.8 percent at 126.94 pence at 0917 GMT, making it the second largest percentage loser on the pan-European Stoxx 600 index (.STOXX).

The UK labour market entered "freefall" after the referendum, with the number of permanent jobs placed by recruitment firms in July falling at the fastest pace since May 2009, the Recruitment and Employment Confederation said last month.

In Britain, Hays said net fees in its private sector business grew 2 percent in constant currency terms across its continuing operations, while it fell 4 percent in its public sector business over the financial year ended June 30.

Net fees for the UK & Ireland division, which accounts for more than a third of the group' business, were flat overall, as conditions became "more challenging" ahead of the referendum.

Since the end of June, Hays said conditions in its UK business that places people in permanent jobs remained tough but no worse, after a fall immediately after the vote.

In its temporary jobs business, activity levels in the UK had remained broadly at pre-referendum levels, it added.

However, helped by strong growth in Germany, France and the United States, Hays' full-year operating profit rose by 13 percent on a like-for-like basis to 181 million pounds, broadly in line with its July estimate.

The company, which operates in 33 countries, raised its full-year dividend by 5 percent to 2.90 pence and said it remained on track to make a special payout in 2017.

(Editing by Greg Mahlich and Alexander Smith)