Hays is taking a £25m exceptional charge after being fined by the Office of Fair Trading for breaching competition law.
The company was hit with a £30.4m punishment by the OFT, but it intends to appeal, calling the level of the fine arbitrary and wholly disproportionate. News of the £25m charge comes as the recruitment group reported a net 37% fall in fees in the first quarter to the end of September. It also said this year would be another tough one for its industry, but it would pursue opportunities to gain market share.
Analysts at Panmure Gordon said:
While there are some signs of stability in this statement, we remain cautious on the shares particularly with the public sector getting tougher (around 20% of its business) and the potential for a dividend cut. Our target price of 95p equates to 20 time 2011 recovering earnings per share, which is more than appropriate for now given some of the risks ahead, hence our cautious hold stance on the shares.
In a buoyant stock market Hays has edged up just 0.3p to 106.5p.
