UK's Hays raises profit forecast after strong first half

(Adds CFO comments, details, share price)

By Li-mei Hoang

LONDON, Jan 8 (Reuters) - British recruiting firm Hays raised its first-half operating profit forecast after strong demand in Britain, Australia and Asia helped it post an 11 percent rise in underlying second-quarter net fees.

The company, which places workers in areas such as finance, construction and IT, said it expected operating profit growth of up to three times that of net fee growth in the first half, after stripping out the impact of foreign currency changes.

"This is a strong quarter ... and certainly a very good half to the year. On the back of that, we were able to increase profit guidance for the first six months of the year," Group Finance Director Paul Venables told Reuters.

Venables said 21 out of the 33 countries Hays (LSE: HAS.L - news) operates in reported growth in net fees of more than 10 percent, adding to hopes that a global economic recovery was under way.

"It's a positive recruitment market, and there's lots of opportunity for growth," he said, adding that the improvement in its third largest market, Australia, was an encouraging start.

Hays said it expected full-year operating profit growth to be at the top end of its forecast range of two to three times net fee growth.

The company, which has 8,237 employees worldwide, said net fees for permanent job placements grew 16 percent in the second quarter on a like-for-like basis, while temporary placement fees rose 8 percent.

Britain, which accounts for 36 percent of group fees, saw a 14 percent rise in the second quarter, with Asia Pacific and continental Europe regions up by 11 and 9 percent respectively.

Fellow recruiter Robert Walters (LSE: RWA.L - news) also reported better than expected net fee growth of 14 percent for the full year, after strong performances in Britain and Asia.

Shares (Dusseldorf: DI6.DU - news) in the firm rose nearly 5 percent in early trading, making it one of the biggest gainers on FTSE 250 index, and were 2.8 percent higher at 146 pence by 1015 GMT.

"Hays' update reveals a strong first-half outturn," said Liberum analysts, who have a "buy" rating on the stock.

"While global confidence levels remain fragile, Hays' positioning, opportunity for share gain and the broad-based nature of improvement underpin our confidence for the remainder of the year," they said. (Editing by David Clarke)