Hays has seen its annual profit before tax sink to £14.7m, from £192.1m last year, as the recruitment firm acknowledged it had experienced “increasingly challenging market conditions”.

The group said that activity levels had been “subdued” in its UK business, following the announcement of the General Election, with “low confidence levels” among businesses and workers considering job moves.

In the year to the end of June, Hays reported that its net fees had fallen 12% on a like-for-like basis to £1.1bn, while operating profit before exceptional items fell to £105.1m.

The recruiter also suggested that its profitability was not just impacted in the UK but in its two other largest markets also of Germany and Australia.

“Against this backdrop, we have focused on enhanced operational rigour, driving consultant productivity and strong cost management, and are determined to build a more resilient Hays,” the group’s chief executive, Dirk Hahn, said.

“Our strategy, launched in February, is designed to capitalise on the many growth opportunities we see, while increasing our resilience, quality of earnings and cash generation.”

At the end of June, Hays had an estimated 11,100 employees in 236 offices in 33 countries.

Hays also confirmed that on 30 June its net cash position was £56.8m, having converted 107% of operating profit into its operating cash flow.

Hahn added that the group had made a “strong start” in restructuring operations and repositioning its business.

“We have a strong financial position,” he added. “Our key markets are also being driven by powerful, supportive megatrends and remain characterised by significant talent shortages, which we help solve for our clients. Our actions are better positioning Hays to benefit when markets recover, and when they do, we can return to, and then exceed, prior peak profits.”

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