Recruitment firm Hays saw full-year profits dip as it was weighed down by the cost of restructuring its European operations and declines in business confidence.
The company reported a 3% fall in pre-tax profits to £231m for the 12 months to June 30, after it was dented by a £15m one-off charge due to cutting costs related to senior management in Europe.
Weakening market conditions in some of its key markets, such as Germany, Australia and the UK, pressed down on profitability towards the end of the year.
Hays said that net fees increased 2% in the UK, while profits rose on the back of strong cost control, but it reported “signs of reduced business confidence” in the fourth quarter.
The company’s largest market, Germany, was weighed down by slowdowns in the country’s manufacturing and automotive sectors, resulting in “increasing signs of cost control and slower decision-making”.
Hays’ restructuring in Europe cost the company £6.8m, it said, while it is expected to deliver around £5 million in savings each year.
Profitability was also dented by more than £8 million in off-off costs following a legal ruling last year which required companies to equalise pension provision for men and women.
Hays chief executive Alistair Cox said: “We invested in strengthening our leading positions in key markets like Australia and Germany, while also restructuring some of our European businesses to maximise their profitability.
“Our UK business delivered a solid result, despite ongoing uncertainties.
“Looking ahead, despite an increasingly tough global economic backdrop, our market positions, combined with our highly experienced global management teams and strong financial position, means I am confident we will continue to appropriately balance our long-term potential with the more challenging markets we currently face.”
Shares in the company slipped 3% to 134.9p in early trading on Thursday.