“Strength through People”files.investis.com/hays/docs/ar_1998-06-30.pdf · 2009. 1. 7. · Hays • 1/10/98 • Proof 6-1: Review Hays provides business-to-business services 24

Report & Accounts 1998

“Strengththrough People...”

“Meeting the Demand...”

“Focused on Quality...”

“Sharing inour future...”

“Business Servicesacross Europe...”

Hays • 1/10/98 • Proof 6-1: Review

from left to right

Vernon Thomas Hays DX

Tarin D’Este-Appleby Hays Accountancy Personnel

Dave Dyer Hays Logistics (UK)


Hays provides business-to-business services

24 hours a day to industrial,

commercial and professional customers

under the three core activities – Distribution,

Commercial and Personnel services.

1 Financial highlights2 Chairman’s statement4 Group Managing Director’s summary6 Review of operations: Distribution

12 Commercial

16 Personnel

20 Board of Directors

22 Directors and corporate information23 Shareholders’ information24 Financial contents25 Report of the Directors29 Corporate governance31 Statement of Directors’ responsibilities32 Auditors’ report on corporate

governance matters33 Auditors’ report on financial statements34 Consolidated profit and loss account35 Consolidated balance sheet36 Company balance sheet37 Consolidated cash flow statement38 Statement of total recognised

gains and losses38 Reconciliation of movements in equity

shareholders’ interests39 Accounting policies41 Notes to the accounts58 Five year summary59 Notice of meeting61 Company details

Contents


Hays concentrates on activities which display

most of the following characteristics:

➔ Leading position in growth markets

➔ Provision of essential and added value services

➔ Repeat business

➔ Long-standing customer relationships

➔ High quality customers

➔ Significant barriers to entry

➔ Advantages of scale

➔ Strong cash flow

➔ High return on capital

Financial highlights HAYS plc 1


➔ Profit before tax up 30% before exceptional items

➔ Earnings per share up 29% before exceptional items

➔ Dividend per share up 15%

➔ Over £216 million invested in acquisitions and

capital expenditure

➔ Over £53 million cash generated after all outgoings

other than acquisitions

Profit before tax*£’s millions

Earnings per ordinary share*pence

Net dividend per ordinary sharepence

* Adjusted for exceptional items

Chairman’s statementHAYS plc2


Financial HighlightsThe Group’s profit before tax and exceptional items has

risen by 30% to £201.2m. Each of our three core activities

has made a significant contribution to the growth that

has been achieved. Earnings per share, pre exceptional

items, have increased by a record 29% to 33.9p.

The exceptional items of £3.9m relate to rationalisation

and restructuring costs following the acquisition of new

businesses and small losses on the disposal of certain non

core activities offset by the profit on sale of our parcels

business Hays Express. The net effect of foreign currency

translation differences reduced profit by £2.5m.

The Group has continued to generate the strong cash

flow on which our growth will continue to be based. After

spending a total of £216m on acquisitions and capital

projects in the year, gearing stands at 72% and interest is

covered 22 times by operating profit compared to 19

times in the previous year.

DividendsOn 29 May 1998 an interim dividend of 3.45p per share

(net) was paid. A final dividend of 7.25p per share (net) is

proposed for the year to 30 June 1998 to be paid on 30

November 1998 to shareholders on the register at 30

October 1998. The total dividend for the year amounts to

10.7p per share (net), a rise of 15%.

The increase in dividend continues the Board’s policy

of providing shareholders with a steadily rising income,

while meeting the reasonable needs of the business

for its growth. The dividends are covered 3.1 times

by earnings.

New ContractsSubstantial organic growth has been achieved in the year

supported by the winning of many important new

contracts. The most notable contracts awarded to Hays in

the last six months were:-

➔ Carrefour - In February 1999 a new chilled platform

will open at Lyon for the management of meat, fish,

dairy and other perishable products for Carrefour.

➔ National Westminster Bank - Hays Information

Management has won a major new records management

contract.

➔ ICL - Hays Personnel have won a unique contract to

provide a comprehensive permanent recruitment service

covering IT and other staff for ICL.

In addition Hays has renewed a substantial contract to staff

and operate a call centre for a major utility whereby we

handle customer telephone calls from throughout the UK.

In an increasingly competitive environment, our customers

are understandably becoming even more demanding. The

success that has been achieved in winning new contracts

demonstrates our ability to design innovative solutions and

to offer a wide range of sophisticated business services in

the UK and elsewhere in Europe. Our competitive position

has been enhanced substantially by our ability to offer

strong management and services in more than one country.

AcquisitionsThe acquisitions that have been made in the year reflect

the Board’s commitment to prudent development of the

Group’s three core activities throughout Europe. In all

“The commitment and

enthusiasm of our management

and staff is fundamental to

the success of Hays.”

Ronnie FrostChairman

Chairman’s statement HAYS plc 3


three cores acquisitions have extended or strengthened

our activities outside the UK whilst in Commercial we

have taken our first steps to develop a significant

Business Process Outsourcing operation.

The principal acquisitions in the year have been:-

Distribution➔ FDS and Van der Heijden were acquired on 19 August

1997 for £93.4m. We now have a strong position in

retail supply chain logistics in France and Benelux.

➔ The Sodibelco Group was acquired on 20 March 1998 for a

maximum total consideration of £9m. Sodibelco provides

warehousing and distribution services primarily in the

food sector for major retailers and manufacturers in Italy.

Commercial➔ DEI Group Ltd was acquired on 3 November 1997 for up to

£20.5m depending on performance. DEI provides document

management, imaging and data capture services to a range

of government departments and blue chip companies.

➔ Paperstream was acquired on 2 July 1997 for £13.3m.

Paperstream has extended our range of office support

services to include invoicing and payment processing.

➔ Since the year end we have acquired Castleton, a

billing services business, for a maximum of £15m

depending on performance.

Personnel➔ Alpha TT, Arec and Quasar were acquired on 25 June 1998

for up to £22m depending on performance. These three

specialist recruitment agencies are market leaders in the

provision of temporary staff and training to the banking

and insurance sectors in France.

We will continue to seek acquisitions throughout Europe

to assist the further development of the Group.

Group Management and StaffDuring the year, there have been a number of changes to

the Board of Directors which reflect our succession

planning and the continuing expansion of the Group. John

Cole, who had been the executive Director responsible for

our Distribution core activity since he joined Hays in 1996

from Mayne Nickless Europe, succeeded John Napier as

Group Managing Director. Following the promotion of John

Cole and the retirement of Dennis Matthewman, our

Distribution activity is now represented at Board level by

Keith Charlton and Xavier Urbain. Denis Waxman has joined

the Board to represent Personnel and Graham Williams

continues to represent the Commercial core activity. Xavier

Urbain joined the Group with the acquisition of FDS in

France and we are particularly pleased to have made our

first appointment of a Director from outside the UK. I would

like to take this opportunity of thanking John Napier and

Dennis Matthewman for their contribution to the growth of

the Group.

We had for some time been seeking an additional non-

executive Director who could make a valuable contribution

to the Group. I am very pleased that Bob Lawson, who is

the Chief Executive of Electrocomponents plc, accepted our

invitation to join the Board as a non-executive Director.

The commitment and enthusiasm of our management and

staff is fundamental to the success of Hays. We will continue

to recruit and develop management at all levels so that we

have the capacity to go on growing all of our businesses.

The financial results reflect the dedication of our

people at all levels. The year brought many new challenges

for our businesses and our employees responded very

positively to deliver the objectives set by the Board. We

thank them all for their dedication to the Group.

ProspectsEach of our three core activities has made an encouraging

start to the new year. Whilst a slowdown in the UK economy

will impact some of our businesses we remain confident of

achieving satisfactory profit growth in the current year.

Ronnie Frost

Chairman14 September 1998

A Record Performance

Group Managing Director’s summaryHAYS plc4


Group operating profit before exceptional items grew by

29% on a revenue increase of 37%. The margin on

continuing businesses was maintained but the overall

group margin was reduced by the initial impact of

acquisitions during the year. The Group has continued to

fund new development projects with particular emphasis

on the geographic spread of our Supply Chain systems

business, the establishment of our Personnel business on

the Continent, the further expansion of Partspeed in the

UK and the continued development of new segments in

Mail and Express Services.

Key features of the year were:

➔ The successful integration of ICS within Hays DX with

synergy benefits ahead of expectations.

➔ The rapid integration of Hays Fril and FDS into a single

cohesive French logistics business.

➔ The strong organic growth and new range of added

value services in our Personnel business.

➔ The rapid expansion of Retail Support Services business

in the UK with a further expansion already planned.

➔ The success of our Supply Chain systems business in

the UK winning contracts with BP and Shell.

➔ The improvement in operating profits and margins in

our Chemical Distribution business.

➔ The continued strong cash generation and high

standards of financial control.

➔ The quality of the management team to match the

needs of current and planned growth.

In Distribution, operating profits were 23% ahead of

the previous year despite an adverse currency impact of

£3m and expensed costs of £1m associated with the

establishment of the Supply Chain systems business in

the UK. The main contributions came from the UK and

from the synergy benefits from merging FDS and Hays Fril

in France.

UK Logistics implemented the Shell contract smoothly

and within one year will be servicing more than 900

outlets. The BP trial was successful and the full scale roll-

out has now commenced. Our business with Scottish

Courage was expanded substantially and further

investment in support of Waitrose has been made in an

extension to the chill warehouse and a tray washing

plant. The growth of our crate hire and washing

business has exceeded our expectations with contract

wins in both the UK and Ireland. Growth in the Hays

Retail Support Services business has enabled us to plan

a further substantial investment at Dove Valley. The

automotive and industrial activity achieved real progress

during the year. The Chemicals operation had a good year

bouncing back from the slightly disappointing results

last year.

In France the integration of FDS and Hays Fril has been

completed apart from the transfer of the FDS IT systems

onto Hays ‘Logistar’. Our French logistics business has

doubled in size whilst simultaneously improving margins

and return on assets. New contracts have been won with

Carrefour and Michelin, both commencing in spring 1999

and the acquisition of Cedima was completed.

In Germany the profits generated at Mordhorst fell

again under price and margin pressure. However,

Daufenbach increased profits substantially with contract

wins with Volvo and Siemens Nixdorf. The integration of

the two businesses is well advanced and they will be

trading as Hays Logistics Germany by January 1999.

“In both management

and financial terms we are

able to exploit opportunities

as they arise.”

John ColeGroup Managing Director

Group Managing Director’s summary HAYS plc 5


Continued Organic GrowthIn Benelux the Bijsterbosch business continued to grow

with benefits from the extension to our operations at

Vaassen and Tilburg and the new tray wash operation for

Albert Heijn. The integration of Bijsterbosch and Heijden

is underway and early in 1998 we acquired FoodCargo,

further strengthening our position in the Dutch chill

sector.

Commercial had another successful year increasing

operating profit by 24%. In Mail and Express Services the

highlight was the success of the complex integration of

the ICS acquisition into Hays DX. The anticipated synergy

benefits were exceeded and the strategic and competitive

advantages inherent in the merger are apparent. Also in

Mail Services we are piloting the automation of the

sortation process which will improve productivity and

joint sorting of DX and ICS mail. New software has also

been introduced to both improve customer service and

promote the insertion of DX addresses onto PC based mail.

Following the acquisition of Securicor’s Office Services

activity we are now a leader in secure destruction and

mail room management in the UK. The acquisition of

Delta in Belgium was completed during the year and the

management team is focusing on further expansion in

continental Europe. Hays Partspeed moved into profit as

planned.

The Information Management sector made solid

progress having made property investments to further

support growth in the UK and Belgium.

Our Business Process Outsourcing business continues to

gain momentum. Hays DEI has expanded rapidly, winning

contracts with Avis, Thomas Cook and the Common

Services Agency (Scotland). Although Paperstream had a

disappointing first year in Hays, new contracts have been

won with Scottish Telecom and Sky. After the year end we

bought Castleton, a similar business to Paperstream and we

now have a strong presence in the billing services sector.

The Call Centre operation has performed well, winning a

number of new contracts. Our range of services is increasing

and further expansion is seen as a priority by the Board.

Personnel had an excellent year, growing its operating

profit by 41%. Particularly strong progress was made by

Hays Accountancy Personnel and by Hays Montrose,

which specialises in technical staff mainly for the

construction industry. We are also delighted to report

excellent progress in Australia and by our IT staff agency.

Although there are no signs yet of a slowdown in

growth we remain vigilant, keeping our fixed costs to a

minimum and continuing to monitor productivity and

margins very closely. The majority of our customers are in

the service sector and likely to be less affected by a

slowdown in the economy.

We have reduced our exposure to the UK economic

cycle by creating Hays Recruitment Management, who

provide complete facilities management of the Human

Resource function. Customers include ICL and Lehman

Brothers.

Our continental expansion has started with the

acquisition of Alpha, a specialist banking and insurance

staff agency in France and also by setting up offices in

Holland, Germany and the Czech Republic. We are pleased

with progress so far in these new geographical areas.

The Group plans for sustained growth from both

organic development and acquisitions where we are

looking at a number of opportunities in all our core

activities. Our management strength across the Group

continues to be developed to meet future needs and we

aim to maintain the balance of profit contribution from

each of the core activities. In both management and

financial terms we are able to exploit opportunities as

they arise.

John Cole

Group Managing Director14 September 1998

Review of operationsHAYS plc6


A commitmentto Service

DistributionOverview

Providing value to our customers

through the design, implementation and management of innovative

supply chain solutions throughout Europe.

Distribution has achieved excellent results both in the UK and the rest of Europe, despite

continued difficult market conditions in Germany.

Considerable expansion has taken place in all sectors with major contracts such as Scottish

Courage and Waitrose substantially increasing in size. Retail Support Services are currently

extending their Dove Valley site to service contracts with Tesco, Marks & Spencer and Sainsbury’s.

In France and Benelux, following the successful integration of FDS and Heijden, Hays has

become the clear leader in supply chain logistics for consumer goods on behalf of both retailers

and manufacturers.

The Sodibelco acquisition was an important move into Italy. In Germany, Daufenbach achieved

a substantial rise in sales and profits which offset the increased pressure on Mordhorst’s margins.

Chemicals, through innovative marketing, won a number of important contracts and succeeded

in increasing sales and profits against a background of depressed prices.

Review of operations HAYS plc 7


Key events in the year Key Management

➔ Successful integration of FDS and Fril ahead of schedule.

➔ The establishment of Hays Supply Chain system business

in the UK – Successful start to Shell and BP contracts.

➔ Strategic acquisitions in France, Italy and the Netherlands.

➔ Major contract expansions with Scottish Courage and

Waitrose.

➔ Rapid growth of our Retail Support Services business

in the UK.

➔ Chemical distribution business improves profits and margins.

Ken Hough

Business Sector Director

Chemical Distribution

Didier Löchen


Hays Supply Chain

Doug Taylor


Northern Europe

European overview European key events

Review of operations – DistributionHAYS plc8


Hays Logistics aims to provide value to its customers

through the design, implementation and management

of innovative supply chain solutions. Our capability

includes initial consultancy and solution design,

integrated software to manage the supply chain

process, IT facilities management and physical

operations. Physical operations extend to co-packing

and a wide range of retail support services, in

addition to transport, warehousing and distribution.

Increasingly this capability is available on a European

basis. We aim to provide a competitive advantage

through well trained, experienced and professional

people and the sensible use of systems and

technology.

Hays Supply ChainThis new European business was established in July

1997, having previously been a division of Hays Fril. It

is based in Nantes in France and provides supply

chain software known as ‘Logistar’, IT facilities

management and help desk support to a wide range

of retailers and manufacturers, both directly and

through the Hays Logistics operations. Whilst well

established in France for a number of years, some

£1m was expensed during the year to support the

development of a UK facility at Fleet. Early in the year

a contract was won with Shell UK to provide the

supply chain software and IT facilities management

required to support their convenience store

operations. Towards the end of the year BP confirmed

that a contract had been awarded for similar

facilities.

UK LogisticsStrong revenue growth helped to raise profits to

record levels during the year. Whilst new customers

played a major part in this growth, it was particularly

pleasing to see the high level of organic growth in

business from our existing customers. The increased

cohesion across the sector-focused divisions has

enabled us to transfer skills and ideas more

effectively and offer a wider range of services to our

customers. In particular this approach has worked

well in Retail Support and Crate Services.

In the Consumer division a number of important

contracts were won with new customers, including

Sony, Siemens Nixdorf and Veka, while the Philips

contract was extended for a further three years. The

contract to deliver non-fuel products to Shell

forecourts, announced at the start of the year, is

rapidly being rolled out with a separate operation for

BP to be rolled out in full next year.

There was considerable expansion at Brinklow with

the opening of a new 50,000 sq.ft. extension which

enables us to double the capacity of the chilled food

facility on behalf of Waitrose.

➔ Revenue well balanced between UK –

France and Italy – Germany, Poland

and Benelux.

➔ Successful merging of businesses

provides cross border services for major

European customers.

➔ UK benefiting from Bijsterbosch crate

management expertise – expansion

of Brinklow site and move into

Northern Ireland.

➔ Further organic and strategic growth

in all countries.

➔ Logistar systems successfully extended

into UK.

The major change that has taken place during

the last financial year is the increased

contribution to logistics sales from our non UK

activities. The revenues from France and Italy,

combined with those from Germany, Poland and

Benelux, now total nearly twice that of the UK.

This European trend will continue as demand

from international companies for logistics

services across several countries accelerates.

Strategic acquisitions such as Sodibelco in

Italy, Cedima in France and FoodCargo in the

Netherlands will continue making us the

leading provider of integrated supply chain

solutions in the market place.

Review of operations – Distribution HAYS plc 9


Our crate management and washing activities saw

significant growth with the opening of new facilities

in Ireland and the commencement of two major

contracts for Waitrose.

For our Retail Support Services too it was a year of

expansion. Our newly opened Dove Valley facility near

Derby is working at full capacity and a 74,000 sq.ft.

extension is due to open in early 1999 to handle

additional business for our existing clients who

include Tesco, Marks & Spencer and Sainsbury’s.

The Home Delivery businesses in the UK and US

continued to grow, the UK division winning valuable

new contracts with customers such as Debenhams.

These gains, together with substantial volume growth

for Marks & Spencer and IKEA, led to a significant

increase in profits.

Continental European LogisticsHays greatly strengthened its position in Continental

Europe during the year and is now better placed to

support the increasingly demanding requirements of

our customers.

FDS was acquired in August 1997 and immediately

integrated with Hays Fril, doubling the size of our

French logistics business. The resultant operation -

Hays Logistique - is the clear market leader in the

consumer goods sector in France, working both for

manufacturers and retailers. The French activities

were further enlarged by the acquisition of Cedima in

Lens, providing us with a chill platform in Northern

France in support of existing and new customers. A

major new chill platform is being developed in Lyon

for Carrefour. Two substantial contracts with Seagram

were also won.

During the year we also acquired Sodibelco, a

leading Italian logistics company which operates

primarily in the food sector for both retailers and

manufacturers. This latter step was undertaken partly

to support the expansion of French based customers

into Italy.

Intense competition in Germany continued to

squeeze margins at Hays Mordhorst but this was

offset by another year of profitable growth at

Daufenbach.

Although Mordhorst again increased sales and kept

tight control over costs, it experienced a further

reduction in profits. During the year it opened a large

rail-connected site in Leipzig, thereby strengthening

its coverage in eastern Germany and also opened a

major extension at its Wülfrath site, near Düsseldorf.

Daufenbach, in its second year of Hays ownership,

achieved a substantial rise in sales and profits.

Valuable new business was gained with Volvo, Opel

and Autoglas Hansa, Europe’s largest distributor of

windscreens. A European Distribution Centre for

Siemens Nixdorf was opened near Frankfurt during

We aim to provide a competitive advantagethrough well trained, experienced and professional people and

the sensible use of systems and technology.

Hays greatly strengthened its positionin Continental Europe during the year and is now

better placed to support the increasingly demanding

requirements of our customers.from left to right

Jeff Ford Hays Logistics (UK)

Chris Gillard Hays Logistics (UK)

Paul Hobbs Hays Logistics (UK)

1. ‘Added Value’ operations are a

feature of Hays Logistics services

to customers.

2. Hays distributes Nissan spares

to garages throughout Germany.

3. Two thirds of logistics sales are

now generated from outside

the UK.

Review of operations – DistributionHAYS plc10


4. In Benelux a fully automated

warehouse and distribution

centre provides the ultimate in

efficient product handling.

5. Leading edge technology and

control systems were developed

to meet our requirements.

6. As a contrast to automation there

are many jobs requiring a ‘hands

on’ approach to provide customers

with the service they demand.

7. Communication plays an

important role in keeping in

touch with both our customers

and distribution centres.

8. Meticulous planning is

paramount when dealing with

a wide range of goods bound

for individual retailers.

9. A combination of bar coding and

visual references ensure that the

pallets are tracked through to

their correct destination.

the year, this was followed by Daufenbach and UK

management working closely together to win a

Siemens Nixdorf contract in the UK, a good example

of Hays providing European solutions for multi-

national clients.

The Dutch business, originally centred on the crate

management operations of Hays Bijsterbosch, was

greatly expanded during the year by the acquisition of

Van der Heijden and later of FoodCargo. This has

created the leading ambient and chill logistics

business for food manufacturers in Holland. During

the year it won a substantial new contract from

Kimberly Clark, as well as opening a third tray wash

and returns centre for Albert Heijn.

We are in the process of establishing an integrated

German logistics business with shared finance,

administration and IT, supporting sector-focused

operating divisions. This exercise will be completed

by January 1999. A similar process in Benelux has

commenced.

Hays ChemicalsThe year started well with good first half results and

substantial second half price increases planned.

However, the further strengthening of sterling slowed

UK manufacturing in the second half, depressing

demand for chemicals. Price increases were achieved

but not at the level initially anticipated. Despite these

difficult market conditions our operations, with their

broad customer base, demonstrated their resilience and

produced profit growth over the twelve month period.

Thanks to very tight control of production costs,

Process Chemicals improved its margins. These will be

further boosted at the end of this year by the opening

on the Sandbach site of a £30 million power station

funded by Yorkshire Electricity, a development that

will reduce operating costs by £2.5 million a year.

During the year Process Chemicals became the

leading UK supplier of sodium hypochlorite (bleach),

the world’s most widely used germicide.

Against a background of depressed prices,

exacerbated by the dumping of imports, Chemical

Distribution did well to increase its sales and profits

yet again through innovative marketing. During the

year it signed important new packaged chemical

distribution deals with Witco, Shell Chemicals, BP

Chemicals and ICI. It also signed long-term supply

contracts with British Nuclear Fuels, Manro Products

and Shorts Aircraft.

7 8 9

4 5 6

31

2

from left to right

Fabrice Gaulard Hays Logistics (France)

Maryline Duplan Hays Logistics (France)

Iner Sahti Hays Logistics (Netherlands)

Review of operations – Distribution HAYS plc 11


Overview

Commercial had another successful year achieving good results across its businesses.

The Mail and Express Services sector in particular performed well supported by the successful

integration of Hays DX and ICS. In addition they won substantial new contracts consolidating

their leading position in the market place.

Within the same sector Apollo continued to grow and Partspeed moved into profit.

Hays Information Management won a major new contract with NatWest and expanded its

storage facilities in a number of sites around the UK.

There were important moves into Business Process Outsourcing with new contracts won with

major utilities.

Following its acquisition in November, Hays DEI has won several new contracts and shows

great promise. Hays Clinical Support Services, another embryonic business, also started trading

profitably by the end of the year.



Commercial


A solidPerformanceFirst steps in business process outsourcing

and the establishment of mail services on the continent.


➔ Successful integration of ICS within Hays DX.

➔ Hays Partspeed moves into profit.

➔ Acquisition of Securicor Omega Office Services activity

makes us one of the leaders in secure destruction

and mail room management.

➔ Business Process Outsourcing gains momentum.

➔ Hays Information Management makes solid progress –

major contract win with NatWest.

➔ Hays DX introduces new software support for customers.

Brian Fuller


Hays Office Support Services

Robert Morgan


Hays Mail and Express Services

Review of operations – CommercialHAYS plc14


1. HIM stores a range of items

for major oil companies

including core samples and

seismic records.

4. Data entry requires a high degree

of skill to accurately input

information at speed.

2. Hays has designed a number of

innovative storage methods to

suit all customers needs.

5. Quality control is an

integral part of the system

to ensure accuracy.

3. Depending on customer

requirements we can offer

retrieval services ranging from

‘on line’ requests and personal

delivery to deep archive storage.

6. The first stage of data

capture is scanning original

forms with character

recognition equipment.

7. A visual comparison is made

to check transfer accuracy.

8. Another example of Business

Process Outsourcing is the

automated billing facility that we

offer to domestic service providers.

9. Thanks to computer technology

we can utilise expertise both off

site and on site to capture data

from documents.

Hays Commercial has experienced an excellent year of

growth and development across its range of businesses.

Hays Mail and Express Services has very successfully

merged ICS with Hays DX, a complex operation which

not only produced synergy benefits, but has also

created a number of commercial opportunities.

The year also saw the introduction of Business

Process Outsourcing, offering businesses a range of

services including sophisticated call centres, scanning

and data input, personalised electronic printing and the

processing of cheques received. Successes included the

winning of substantial call-centre contracts with two

major public utility companies.

Hays Mail Services, which is now branded as Hays

DX, enjoyed another excellent year, increasing its profits

through strong organic growth, selective acquisitions

and further benefits from the integration of its

document exchange and specialist courier businesses.

Usage of the document exchange service was enhanced

through the successful introduction of Address Plus, a

software programme promoted to members that allows

the quick and easy insertion of DX address codes

directly into PC based documents.

In the UK, the document exchange service won

several new contracts by developing special applications

for key markets such as the health, insurance and

financial service sectors. Profits from Hays DX were

further boosted by a solid performance from Specialist

Courier Services, who won a substantial new contract

with Halifax plc while consolidating their customer base.

These initiatives, together with increased investment in

tracked products in the optical and insurance sectors,

provide exciting prospects for future growth.

In a programme of selective acquisitions, Hays DX

acquired Securicor Omega Office Services, thereby

strengthening its position as a leader in ‘secure

destruction’ and mailroom facilities management. The

European business was expanded with the acquisition

1 2 3

from left to right

Debbie Oliver Hays DX

Ray Moore Hays DX

Grace Brown Hays DX

Review of operations – Commercial HAYS plc 15

of Delta Express, a company serving the medical sector

in Belgium and France. This is a significant move which

heralds further plans to expand into Continental

Europe. In Ireland, two sector-focused courier

companies were acquired to strengthen the market

position of Hays DX.

Hays Partspeed, offering a specialist spares

distribution service for field-based personnel, successfully

established itself and moved into profitability this year.

Hays Apollo Despatch, offering a same day courier

service, improved its performance. Both businesses are

being integrated into Hays DX, allowing synergies in

operations and revenue development to be captured.

Hays Express, the next day parcels business, was

successfully sold at the end of the year to Securicor. The

business had grown steadily over the years but had

started to face increasing competition from other larger

international companies with greater economies of

scale in an already over-crowded market. Hays DX will

focus on pre-9 a.m. and same day services.

Despite only a modest increase in profits, it was a

year of strong underlying growth for Hays Information

Management in the UK and abroad. Considerable

investment was made both in senior management and

in new facilities, the benefits of which will start to show

through in the coming year. The Commercial operation

had a series of new business gains, including a

substantial contract with NatWest, the largest of its

kind to be awarded in the UK for some years. Two

important acquisitions were made in the energy sector:

TTN in Norway and Oil Data Inc, in the USA. Both

companies are leaders in the provision of tape

transcription and remastering services to the oil and

gas exploration industry, and their acquisition will add

significantly to the range of support services we can

offer our clients. A new building was opened in London

to accommodate the expansion of the Commercial

operation and to provide a Magnetic Media Library for

the City and Docklands. On the Continent a new

building was acquired in Brussels and approval given

for a further new building to be constructed in

Rotterdam.

Hays DEI, which provides imaging and data capture

services, has made excellent progress since it was

acquired in November. The business won several

important new contracts and is well placed for further

growth. Hays Paperstream, after a promising start,

performed slightly below expectations but we expect

improvement over the next 12 months following the

integration with Castleton, an acquisition completed

since the year end. As a result of this second acquisition

Hays will be a market leader in the billing sector of the

business process outsourcing market. Hays Rentacrate

continued to invest heavily in new equipment and

maintained its leadership in the office-moving market.

Hays Clinical Support Services, which sterilises operating

theatre packs for hospitals, expanded its operations and

was trading profitably by the end of the year.

7 8 9

4 5 6

Overview

Personnel achieved record results with all its specialist sectors doing well.

The outstanding performer was Hays Montrose. Excellent growth was also achieved

by Hays Accountancy and Banking personnel whilst the growth of Hays IT and Australia

accelerated in the second half.

During the year Hays Recruitment Management was established. It is a new specialist

business providing facilities management for the Human Resource function and has already

won a number of long term contracts with significant customers.

Hays Personnel also took an important step with the acquisition of Alpha, a specialist

banking and recruitment agency in France, as well as opening offices in Holland, Germany

and the Czech Republic.



Personnel


➔ Record results across all businesses.

➔ Acquisition of specialist staff agency in Paris.

➔ New specialist business linked to management/recruitment

of Human Resources.

➔ New offices opened in Holland, Germany and the

Czech Republic.

➔ Hays Montrose performs well – substantial rise

in fee income and profits.

Ross Hetherington

Divisional Managing Director

Hays Accountancy Personnel

North and South

Laurence Hoefkens


Specialist Agencies

Leigh McMaster


Hays Accountancy Personnel

UK, South East and Australia

Robert Smith


Hays Personnel Services

Managing Director

Hays Montrose



Strengththrough People

As market leaders, we continue

to develop new market niches in order to broaden the base of this core activity.

Review of operations – PersonnelHAYS plc18


It was a year of further strong growthin which all businesses saw sales, profits and margins

reach record levels.

Hays IT Services had an outstanding year,enjoying a very substantial increase in fees and profits.

Review of operations – Personnel HAYS plc 19


1. Sales reviews are an important

feature of Personnel’s strategy.

2. Personnel has a number of

dedicated training centres

around the country ensuring

that customers receive the

highest level of service.

3. Staff are regularly appraised to

help their career development.

4. Each recruitment specialist

must build customer

confidence through regular

telephone contact.

5. Successful recruitment is very

much a team effort.

6. Regional performance reviews

quickly identify strengths

and weaknesses which

respectively can be built

upon and supported.

7. Technology ensures that both

candidate and prospective

employer have the widest

range of choice.

8. Listening is a management

strength that is encouraged.

9. Training methods include

role playing followed by

critical analysis.

It was a year of further strong growth in which all

businesses, including Australia, saw sales, profits and

margins reach record levels. As market leaders in a

number of specialist sectors, we took full advantage of

the increasing demand for both temporary and

permanent staff. While consolidating our existing

operations, we continued to develop new market

niches in order to broaden the base of this core activity

and move the business onto mainland Europe through

the acquisition of Alpha and the setting up of specialist

offices in Amsterdam, Hamburg and Prague.

Hays Accountancy Personnel had an excellent year,

achieving a substantial growth in fees while

maintaining strict control over costs. As a result, profits

were considerably above those of the previous year.

Hays Montrose, which provides staff to the

construction and technical sectors, also had an

outstanding year, with a substantial rise in fee income

and profits. Although the use of temporary staff

continues to grow, the most marked increase was in

permanent recruitment, an indication of the long-

term confidence felt in the building industry.

There was a strong finish to the year for Hays

Banking Personnel, which provides back office and

support staff to leading investment banks. In the

insurance sector Hays Inter-Selection had a year of

steady growth, winning a number of exclusive

contracts with important clients.

Strengthened by a new management team, Hays IT

Services had an outstanding year, enjoying a very

substantial increase in fees and profits. During the

year it opened new offices in Bristol and Coventry,

and further extended its overseas operations by

opening an office in Dublin.

A significant development during the year was a

two year contract to manage all permanent

recruitment for ICL within the UK.

There was a major turnaround in Australia

following the reorganisation of the business and

strengthening of the management team. There was

particularly strong growth in fees and profits during

the last quarter of the year. A highly successful new

programme was introduced for placing quality

candidates between UK and Australia.

7 8 9

4 5 6

31

2

from left to right

Justine Catherwood Hays Montrose

Nicole Donaldson Hays Accountancy Personnel

Subhas Madlani Hays Montrose

Board of DirectorsHAYS plc20


Strength through people

Ronnie Frost62, ChairmanChairman of the Board and of the Nomination Committee

and is also a member of the Audit and Remuneration

Committees. Joined the Hays Group in 1981 when it

purchased Farmhouse Securities, whose business was

founded by him in 1965. He was immediately appointed

Chief Executive of the Distribution Division and in 1983

became Chief Executive and Managing Director of the Group.

In November 1987 he led the Buyout of the Group from the

KIO and then in October 1989 the Group’s Flotation. He was

appointed Chairman of the Company in September 1989.

John Cole52, Group Managing DirectorWas appointed Group Managing Director on 1 July 1998

having been an Executive Director since 1996 and is also a

member of the Nomination Committee. He joined Hays from

Mayne Nickless Europe plc where he was Chief Executive

Officer for over two years. Prior to that he was with Transport

Development Group plc for seven years and during that time

was appointed to the main Board. His early career was with

Fisons, working in marketing, finance and acquisitions.

David Tibble46, Group Finance DirectorIs a qualified accountant and joined the Hays Group in 1992 as

Group Finance Director. He was for two years Head of Financial

Control of BTR plc, a major industrial holding company. Prior

to that he was Finance Director of Lowndes Queensway plc.

Graham Williams55, Executive DirectorIs a qualified accountant and holds an MBA. Following ten

years with Charterhouse in the UK and France, he became a

founder Director of Barclays Development Capital in 1979

and later Deputy Managing Director. He joined the Board

of the Hays Group in 1984.

Keith Charlton48, Executive DirectorJoined the Group in 1995 and was the Business Sector

Director responsible for Hays UK Distribution prior to his

appointment as an Executive Director on 14 July 1998. He

has considerable experience in management having

studied personnel management and then worked in

logistics for more than 10 years before joining Hays.

Xavier Urbain41, Executive DirectorWas Chief Executive of France Distribution System SA

(FDS) at the time it was acquired by Hays in August 1997

and was appointed to the Board as an Executive Director

on 14 July 1998. Before the acquisition of FDS by Hays

he had worked for 11 years at a senior level in the Mayne

Nickless Group and the SDV (Scac Delmas Vieljeux)

Group. Prior to that he had worked in logistics with

Auchan in France and in finance with Deloitte & Touche.

Denis Waxman51, Executive DirectorWas appointed as an Executive Director on 10 March

1998 having previously been the Business Sector

Director responsible for the Personnel core activity. He

had been Managing Director of Hays Personnel Services

since that business was acquired by the Group in 1986

and was one of the original founder directors of the

business in 1969.

Bob Lawson53, Non-executive DirectorWas appointed as a Non-executive Director on 1 July

1998 and is a member of the Audit, Remuneration and

Nomination Committees. He is the Chief Executive of

Electrocomponents plc, a position that he has held since

April 1992. He is a qualified engineer with an MBA.

Lionel Stammers65, Non-executive DirectorChairman of the Remuneration Committee and a

member of the Audit and Nomination Committees. He is

also a Non-executive Director of McKechnie plc,

Bullough plc, Britax International plc and Barlo plc; he

joined the Board of Hays plc as a Non-executive Director

in September 1989. He was previously an Executive

Director of BTR plc.

Christopher Taylor57, Non-executive DirectorAppointed as a Non-executive Director and Chairman of

the Audit Committee in December 1995. He is a member

of the Nomination and Remuneration Committees. He is

also a Non-executive Director of JBA Holdings plc. He

was a Director of The Economist Newspaper Limited and,

prior to that, Finance Director of Smiths Industries plc.

Board of Directors HAYS plc 21


Clockwise from top left

Ronnie Frost

John Cole

David Tibble

Graham Williams

Lionel Stammers

Christopher Taylor

Bob Lawson

Keith Charlton

Denis Waxman

Xavier Urbain

Chairman

R E Frost

Group Managing Director

J R Cole

Directors

K P Charlton

D C Tibble

X F E Urbain

D R Waxman

G J Williams

R A Lawson (non-executive)

L J Stammers (non-executive)

C S Taylor (non-executive)

Secretary

S J Charnock

Registered office

Hays House

Millmead

Guildford

Surrey GU2 5HJ

Telephone : Guildford (01483) 302203

Registrars

Lloyds Bank Registrars

The Causeway

Worthing

West Sussex BN99 6DA

Auditors

Deloitte & Touche

Chartered Accountants

Hill House

1 Little New Street

London EC4A 3TR

Solicitors

Freshfields

65 Fleet Street

London EC4Y 1HS

Principal Bankers

Barclays Bank PLC

54 Lombard Street

London EC3P 3AH

Lloyds Bank Plc

St Georges House

6/8 Eastcheap

London EC3M 1LL

Financial Advisers

J Henry Schroder & Co Limited

120 Cheapside

London EC2V 6DS

Stockbrokers

Warburg Dillon Read

1 Finsbury Avenue

London EC2M 2PP

Directors and corporate informationHAYS plc22

Hays • 2/10/98 • Proof 5-2: Accounts

SHAREHOLDER ENQUIRIESEnquiries relating to the following administrative matters should be addressed to the Company’s registrars:

Lloyds Bank Registrars, The Causeway, Worthing, West Sussex BN99 6DA. Telephone: 01903 502541.

• Dividend payment enquiries.

• Dividend mandate instructions. Dividends may be paid directly into your bank or building society account on completion of a mandate

instruction form. Tax vouchers are sent to the shareholder’s registered address.

• Loss of share certificates/dividend warrants/tax vouchers.

• Notification of change of address.

• Transfer of shares to another person.

• Amalgamation of accounts. If you receive more than one copy of the annual report, you may wish to amalgamate your accounts

on the share register.

For other enquiries relating to shareholder services or general enquiries about the Company, please contact:

David G Beckley, Group Communications Manager, Hays plc, Hays House, Millmead, Guildford, Surrey GU2 5HJ. Telephone: 01483 302203.

SHARE INFORMATIONInformation concerning the day to day movement of the share price of the Company can be found under Reuters RIC code HAS.L,

Bloomberg code HAS LN Equity, TOPIC code 45326, or by dialling 0891 435377 for the FT Cityline share price service. Calls are charged at

50p per minute at all times.

LOW COST DEALING SERVICECazenove & Co operate a low cost dealing service for ordinary shares in Hays plc. This provides for the sale or purchase of shares at a basic

commission of 1% subject to a £10 minimum charge. Further information is available from Cazenove & Co, 12 Tokenhouse Yard, London

EC2R 7AN. Telephone: 0171 606 1768.

CORPORATE PERSONAL EQUITY PLANSThe Hays plc General and Single Company Corporate Personal Equity plans are open to existing and prospective shareholders in Hays plc.

Further information is available from the Plan Manager, Bank of Scotland, Personal Equity Plans, PO Box 41, 101 George Street, Edinburgh

EH2 3JH. Telephone: 0131 243 8053.

UNSOLICITED MAILAs the Company’s share register is, by law, open to public inspection, shareholders may receive unsolicited mail from organisations that use

it as a mailing list. To limit the amount of unsolicited mail you receive, contact the Mailing Preference Service, FREEPOST 22, London

W1E 7EZ. Telephone: 0345 034599.

FINANCIAL CALENDARInterim Statement March

Interim Dividend 29 May

Preliminary Announcement September

Annual Report posted October

Final Dividend 30 November

Annual General Meeting November

Shareholders’ information HAYS plc 23


Financial contentsHAYS plc24


Report of the Directors 25

Corporate governance 29

Statement of Directors’ responsibilities 31

Auditors’ report on corporate governance matters 32

Auditors’ report on financial statements 33

Consolidated profit and loss account 34

Consolidated balance sheet 35

Company balance sheet 36

Consolidated cash flow statement 37

Statement of total recognised gains and losses 38

Reconciliation of movements in equity shareholders’ interests 38

Accounting policies 39

Notes to the accounts 41

Five year summary 58

Notice of meeting 59

Company details 61

The Directors present their report and the audited financial statements of the Company and its subsidiary undertakings for the year ended

30 June 1998.

ACTIVITIESThe Company and its subsidiary undertakings form a business services group which provides a range of specialist services for commercial,

industrial and professional customers. The Group has three core activities:

Distribution – Specialised distribution activities.

Commercial – Office support services

Mail and express services.

Personnel – Specialist staff recruitment agencies.

REVIEW OF THE BUSINESSThe Group traded satisfactorily during the year, as shown in the financial statements on pages 34 to 57.

The Group intends to secure its leading position in its various markets by continued investment in people and assets of the highest quality.

Further growth will come both organically and through acquisitions.

Details of the Group’s operations are set out in the Chairman’s Statement and the Review of Operations on pages 2 to 19.

RESULTS AND DIVIDENDSThe financial results for the year ended 30 June 1998 set out in the accompanying financial statements were approved by the Board on

14 September 1998. They show a profit before tax of £197.3 million and a profit before tax and exceptional items of £201.2 million. The

retained profit of £95.0 million has been transferred to reserves.

An interim dividend of 3.45p per share (net) in respect of the year to 30 June 1998 was paid on 29 May 1998. The Directors recommend a

final dividend of 7.25p per share (net) which, if approved at the Annual General Meeting, will be paid on 30 November 1998 to shareholders

on the register on 30 October 1998.

SHARE CAPITALDuring the year 5,485,601 ordinary shares of 1p each were allotted in accordance with the rules of Hays plc 1989 Executive Share Option

Scheme, 28,878 Ordinary Shares of 1p each were allotted in accordance with the rules of the 1996 Company Share Option Plan and 314,456

Ordinary Shares of 1p each were allotted in accordance with the rules of the Hays plc Savings-Related Share Option Scheme. In addition

4,043,086 shares were allotted to the Hays plc Qualifying Employee Share Ownership Trust to satisfy future option exercises under the Hays

plc Savings-Related Share Option Scheme.

SUBSTANTIAL SHAREHOLDINGSThe following shareholders had advised the Company of holding an interest of 3% or more in the issued share capital of the Company at

14 September 1998.

Standard Life Group 3.16%

R E Frost 4.67%

Janus Capital Corporation, which is not an ‘authorised person’ under the Financial Services Act, advised the Company that investment

management clients of companies within the Janus Capital Corporation Group were, in aggregate, interested in 4.01% of the issued share

capital of the Company at 14 September 1998.

Report of the Directors HAYS plc 25


DIRECTORSThe following have been Directors during the year and held office throughout the year, unless otherwise indicated.

R E Frost Chairman

J R Cole Group Managing Director

M E Aldridge (resigned 31 March 1998)

K P Charlton (appointed 14 July 1998)

D Matthewman (retired 31 July 1998)

J A Napier (resigned 15 September 1998)

D C Tibble

X F E Urbain (appointed 14 July 1998)

D R Waxman (appointed 10 March 1998)

G J Williams

R A Lawson* (appointed 1 July 1998)

L J Stammers*

C S Taylor*

*Non-executive Directors

Messrs Charlton, Lawson, Urbain and Waxman, having been appointed since the last Annual General Meeting, will retire in accordance with

the Company’s Articles of Association and, being eligible, offer themselves for re-election.

Messrs Cole, Taylor and Williams will retire by rotation and, being eligible, offer themselves for re-election.

At the date of the Annual General Meeting the service contracts of all executive Directors will have a period of two years unexpired. The

non-executive Directors do not have service contracts with the Company.

The beneficial interests of Directors in office at 30 June 1998 in the shares of the Company were as follows. Mr R A Lawson was appointed

on 1 July 1998 and Messrs K P Charlton and X F E Urbain were appointed on 14 July 1998. For completeness their beneficial interests at

the date of appointment have been included in the table below:

30 June 1998 30 June 1998 30 June 1997 30 June 1997(or date of (or date of (or date of (or date of

appointment) appointment) appointment) appointment)shares options shares options

R E Frost 20,000,000 196,236 20,000,000 708,105J R Cole – 75,407 – 41,086K P Charlton – 31,216 – –D Matthewman 1,270,000 319,562 1,270,000 296,162J A Napier 562,495 179,095 440,000 450,888D C Tibble 150,000 168,970 150,000 135,547X F E Urbain – – – –D R Waxman 732,304 78,064 732,304 78,064G J Williams 5,865,000 110,979 5,865,000 447,604R A Lawson – – – –L J Stammers 2,000 – 2,000 –C S Taylor 2,750 – 2,750 –

Shares include Directors’ beneficial holdings and Restricted Share Plan awards but not potential entitlements under the Performance Share

Scheme, further details of which are set out in note 5 to the financial statements.

The options outstanding are exercisable at prices ranging from 184p to 776p per share under the Hays plc Savings-Related Share Option

Scheme, from 164p to 277p per share under the Hays plc 1989 Executive Share Option Scheme, from 358p to 641p per share under the Hays

plc 1995 Executive Share Option Scheme and at 538p under the Hays plc 1996 Company Share Option Plan. The normal exercise dates for

the Savings-Related options are between 1 June 1998 and 1 December 2005 and for the Executive and Company options at any time before

17 September 2007. Details of the options granted, by Director, are shown in note 5 to the financial statements.

The executive Directors of Hays plc are regarded as being interested for the purposes of the Companies Act in 4,832,788 Hays shares

currently held by the Hays plc Employee Share Trust and in 3,550,851 shares currently held by the Hays plc Qualifying Employee Share

Ownership Trust (the ‘Trusts’) since they are, together with other Hays Group employees, beneficiaries of the Trusts.

Report of the DirectorsHAYS plc26


DIRECTORS continued

There have been no changes in the above interests between 30 June 1998 and the date of this report with the exception of small changes

in the holdings of the Trusts. Except as shown above, none of the Directors had any interest in the shares of the Company or any subsidiary

(other than as nominee for the Company) with the exception of shares held by Mr X F E Urbain in Hays France SA, as set out in note 25 to

the financial statements. No rights to subscribe for shares in or debentures of the Company or any subsidiary were granted to or exercised

by any Director or any member of their immediate family during the year, other than the share options shown above.

No Director had an interest at any time during the year in any significant contract or arrangement to which the Company or its subsidiaries

was party, other than the service agreements of the executive Directors with the Company.

EMPLOYEE INVOLVEMENTThe Group maintains a strong commitment to employee involvement and ensures that current practices are evolved in an enlightened

manner. The details are appropriately different in each operating company, as they have been developed over time by local management to

best reflect specific requirements and circumstances. Typically, however, they include staff committees, briefing groups, in-house

newspapers, special publications and videos on particular subjects of interest. The Group has established various share schemes to

encourage the involvement of employees in the Group’s performance.

EMPLOYMENT OF THE DISABLEDThe Group’s policy on recruitment is based on the ability of a candidate to perform the job. Full and fair consideration is given to

applications for employment from the disabled where they have the appropriate skills and abilities to perform the job.

If a disabled applicant proves a suitable candidate for employment, modification of facilities and the provision of special equipment and

aids are considered favourably. If employees become disabled during the course of their employment with the Group and as a result are

unable to perform their normal jobs, every effort is made to offer suitable alternative employment to them, to provide assistance with re-

training and to deal with their cases as compassionately as possible.

It is Group policy to encourage the training and further development of all its employees where this is of benefit to the individual and to

the company concerned. This of course includes the provision of training to meet the special needs of disabled employees. The Group pays

attention to employees’ health and safety and pays particular regard to the health and safety at work legislation.

ENVIRONMENTAL POLICYIt is our policy to be sympathetic to the environment in which we work and considerate to others in the way we undertake our business.

Environmental considerations extend from acquisitions to the selection of suppliers ensuring that all our companies meet environmental

legislation and standards as a minimum requirement.

CHARITABLE AND POLITICAL DONATIONSCharitable donations totalling £113,597 were made during the year ended 30 June 1998.

No payments were made to political parties.

PAYMENTS TO CREDITORSIt is the Group’s normal practice to make payments to suppliers in accordance with agreed terms provided that the supplier has performed

in accordance with the relevant terms and conditions.

Creditor days for the year ending 30 June 1998 were an average of 43 for the Group.

YEAR 2000The Group is giving high priority to the impact of the Millennium and is taking positive steps to ensure that systems are Year 2000

compliant. The Group recognises that in some areas compliance is dependant on the performance of suppliers or actions taken by

customers. The Group is working closely with customers and suppliers to limit any risks that may arise.

Each subsidiary within the Group is implementing a Year 2000 programme, using an agreed methodology with clear milestone dates and

defined responsibilities. Progress against plans is regularly monitored by the Group and Subsidiary Boards.

The cost of achieving Year 2000 compliance is difficult to quantify as millennium modifications are often embodied in software purchased

and developed in the normal course of business. However, the Group estimates that it has incurred costs of approximately £0.8 million in

the current financial year in relation to Year 2000 compliance and estimates that the total future spend will not exceed £3.5 million.

Report of the Directors HAYS plc 27


EUROPEAN MONETARY UNION (EMU)Each subsidiary within the Group is completing a review of potential risks and opportunities presented by the move to economic and

monetary union and the introduction of the Euro as a trading currency on 1 January 1999. Day to day responsibility for ensuring that

businesses respond to the opportunities and risks presented by the Euro and monetary union is devolved to divisional boards. Progress is

monitored regularly by the Group Treasury function and reported to Executive Board meetings.

AUDITORSDeloitte & Touche have indicated that they are willing to continue in office. Their re-appointment, at a remuneration to be agreed by the

Directors, will be proposed at the Annual General Meeting.

SPECIAL BUSINESS AT ANNUAL GENERAL MEETINGThe notice of Annual General Meeting on pages 59 to 60 sets out the following special business (resolutions 11,12 and 13).

ALLOTMENT OF SHARESResolution 11 authorises the Directors to allot ordinary shares of the Company up to an aggregate nominal amount of £1,427,237 being one

third of the Company’s issued share capital. This authority will expire at the conclusion of the next Annual General Meeting. The Directors

have no present intention of using this authority.

Resolution 12 empowers the Directors to allot ordinary shares of the Company as if the pre-emption provisions of section 89 of the

Companies Act 1985 did not apply, provided that such power of the Directors is limited to the allotment of ordinary shares up to an

aggregate nominal amount of £214,085 (being 5% of the Company’s issued ordinary share capital) other than the allotment of ordinary

shares pursuant to a rights issue. This power will expire at the conclusion of the next Annual General Meeting or 12 February 2000,

whichever is earlier.

These two resolutions comply with the guidelines issued by the various investor protection committees.

AUTHORITY TO PURCHASE OWN SHARESResolution 13 renews the Company’s general authority to repurchase up to 42,000,000 of its own shares in the market (being approximately

10% of the Company’s issued share capital) at or between the maximum and minimum prices specified in the Resolution giving the

authority. No purchase of shares has been made pursuant to last year’s authority but the Directors consider it desirable that the possibility

of making such purchases under appropriate circumstances remains available. The Directors have no present intention of using such

authority and, in reaching a decision to purchase shares, will take into account the Company’s cash resources, capital requirements and the

effect of any purchase on earnings per share. The authority will only be exercised if to do so would result in an increase in earnings per share

and is in the best interest of shareholders, generally. It is anticipated that renewal of the authority will be requested at subsequent Annual

General Meetings.

BY ORDER OF THE BOARD

S J CHARNOCK

Secretary

14 September 1998

Report of the DirectorsHAYS plc28


CADBURYSince its formation, the Board of Hays plc has always based its actions on the principles of openness, integrity and accountability

emphasised by the Cadbury Report on Corporate Governance. Throughout the year under review the Group complied with the Cadbury

Committee Code of Best Practice in all respects other than the composition of the Audit Committee which has subsequently been addressed

by the appointment of Mr R A Lawson as an additional non-executive Director.

GREENBURYDuring the year under review the Company was substantially in compliance with the principles which are now incorporated in Section A of

the best practice provisions annexed to the Stock Exchange Listing Rules, with the sole exception that Mr R E Frost is a member of the

Remuneration Committee. Mr Frost does not however take part in any discussion regarding his own remuneration. The non-executive

Directors consider that his guidance is essential to the assessment of the performance of the executive Directors and therefore to the proper

determination of their remuneration.

BOARD COMMITTEESThe Board consists of the Chairman, six other executive Directors and three independent non-executive Directors. Day to day running of the

Group is delegated to committees of the executive Directors. All of the non-executive Directors participate in the following Board

committees:

The Audit Committee – assists the Board by reviewing the financial statements and internal controls with the Company’s external auditors.

The Nomination Committee – makes recommendations to the Board regarding the recruitment of any new Director.

The Remuneration Committee – determines the remuneration of the executive Directors and ratifies the remuneration of the Business Sector

Directors and Divisional Managing Directors.

REPORT OF THE REMUNERATION COMMITTEERemuneration Policy

The remuneration policy is designed to attract and retain the senior executives of the Group having regard to other large UK based

International businesses. It provides for a competitive compensation package which reflects market value, sustained individual performance,

job responsibilities and the Company’s performance against financial objectives. The remuneration package consists of short term rewards

(base salary, benefits and annual bonus) together with longer term benefits provided by share options, a long term incentive plan and

pension arrangements. In forming its remuneration policy the Committee has given full consideration to Section B of the best practice

provisions annexed to the Stock Exchange Listing Rules.

Share Options

The Company operates three executive share option plans: the Hays plc 1989 Executive Share Option Scheme which has now ceased to make

grants, the Hays plc 1995 Executive Share Option Scheme which is unapproved for Inland Revenue purposes and the Hays plc 1996

Company Share Option Plan which is an Inland Revenue approved scheme. In addition, participation in the Hays plc Savings-Related Share

Option Scheme is encouraged by the Company.

The schemes are designed to allow participation in the business and to encourage long term retention of key staff. Information on share

options is shown in note 19 to the financial statements.

Long Term Incentives

On 19 November 1996 an Extraordinary General Meeting of the Company approved the creation of a Performance Share Scheme (the

‘Scheme’) available to Directors and a limited number of senior executives. The Scheme excludes any Director or employee who held shares

at the time of the management buyout of the Company in 1987, or at the time of its flotation in 1989.

The Scheme is a long term incentive plan the key attributes of which are:

(i) participants have to make a significant financial investment at the outset;

(ii) in normal circumstances it will be five years before the participants can realise any gain;

(iii) the performance measures align participants’ and shareholders’ interests.

Corporate governance HAYS plc 29


Long Term Incentives continued

Under the Scheme participants will only receive shares in the Company provided demanding performance targets have been achieved. For

the participant to receive shares with a greater value than his original investment the targets require growth in earnings per share (‘EPS’) of

the Company over five years to be more than 2% per annum in excess of the growth in EPS of the median company in the FTSE 100 group

excluding those in the oil and financial sectors (‘the Median’) at the start of each year. The EPS figure will be the fully diluted EPS calculated

on the basis of ‘headline earnings’ using the Institute of Investment Management and Research guidelines. The number of shares receivable

will be in direct relationship to the increase in the Company’s EPS in the five years following the payment made by the participant. However,

if the minimum performance target is not met, or if the minimum performance target is met but the growth in EPS of the Company over a

five year period does not exceed the change in the Retail Prices Index over the same period by at least 2% per annum then only a nominal

number of shares may be acquired by the participant. The maximum number of shares can only be achieved when EPS growth is compound,

10% per annum above the Median for the five year period. We are confident that these performance targets will ensure an emphasis upon

achieving long term sustained earnings growth and continued retention of key management.

The Scheme is in line with current best practice as recommended by the Greenbury Report.

Participants in the Scheme will be eligible to receive grants of options under the Hays plc 1995 Executive Share Option Scheme and the Hays

plc 1996 Company Share Option Plan. The Remuneration Committee is satisfied that all three schemes form part of a well considered plan

for the remuneration of senior executives. In making grants of options or issuing invitations to participate in the Scheme, the Remuneration

Committee will have regard to the extent of an individual’s existing participation in these schemes.

The Company also operates a Restricted Share Plan under which no awards to Directors were made during the year.

Service Contracts

All executive Directors have service contracts terminable by the Company on not more than two years notice. The Remuneration Committee

considers this to be in accordance with market practice, and necessary to attract and retain executives of the appropriate calibre.

Messrs Lawson, Stammers and Taylor do not have service contracts.

Directors’ Remuneration

Information on the remuneration of Directors is shown in note 5 to the financial statements.

Corporate governanceHAYS plc30


The Directors are obliged under UK company law to prepare financial statements for each financial year and to present them annually to the

Company’s members in Annual General Meeting.

The financial statements, of which the form and content is prescribed by the Companies Act 1985, must give a true and fair view of the

state of affairs of the Company and the Group at the end of the financial year, and the profit for that period; they must also comply with

applicable accounting standards.

The Directors are responsible for the adoption of suitable accounting policies and their consistent use in the financial statements, supported

where necessary by reasonable and prudent judgements.

The Directors confirm that the above requirements have been complied with in the financial statements.

In addition, the Directors are responsible for maintaining adequate accounting records and sufficient internal controls to safeguard the

assets of the Group and to prevent and detect fraud or any other irregularities.

GOING CONCERNThe accounts have been prepared on the going concern basis since the Directors are satisfied that the Company has adequate resources to

continue in operational existence for the foreseeable future.

INTERNAL CONTROLThe Directors are responsible for the Group’s system of internal financial control. Such a system can provide only reasonable and not

absolute assurance against misstatement or loss.

The Group has an established internal financial control framework which is continually reviewed and updated taking into account the

changing nature of the Group’s operations. The Board has reviewed the effectiveness of the internal financial control framework for the

period covered by these financial statements.

Clear lines of authority exist between subsidiary companies and the Group’s executive management. As far as possible subsidiary companies

are given autonomy, whilst operating within this established internal control environment. Local management review their operations for

key risks and allocate resources to minimise such risks. The Group has a comprehensive system for reporting financial performance to the

Board which includes but is not limited to:

• A comprehensive budgeting system – including detailed reviews at all levels of the operation and formal reviews and approvals of the

annual budget by the Directors.

• Monthly actual reporting – for all operations on an accurate and timely basis reporting against budget, prior year and the latest forecast

including detailed explanation of any major variances.

• Investment reviews – the Group has clearly defined guidelines for capital expenditure and investment appraisal. These include annual

budgets, detailed appraisal and review procedures, levels of authority and due diligence requirements when businesses are being

acquired. Any disposal of a company needs formal Board approval.

In addition the Group has detailed Policies and Procedures Manuals with which its operations must comply. Above all the most significant

internal control factor is the continuing improvement in the quality and integrity of personnel within our Group to not only improve overall

performance but also to ensure that the Group’s assets (tangible and intangible) are safeguarded.

Statement of Directors’ responsibilities HAYS plc 31


REVIEW REPORT OF HAYS PLC BY DELOITTE & TOUCHE ON CORPORATE GOVERNANCE MATTERSIn addition to and separate from our audit of the financial statements, we have reviewed the Directors’ statements on pages 29 to 31 on the

Company’s compliance with the paragraphs of the Code of Best Practice specified for our review by the London Stock Exchange and their

adoption of the going concern basis in preparing the financial statements. The objective of our review is to draw attention to non-

compliance with Listing Rules 12.43(j) and 12.43(v). We have also reviewed the statement of compliance with Section A of the Best Practice

Provisions on remuneration committees and the report of the Remuneration Committee to the shareholders set out on pages 29 to 30 to the

extent that they provide the disclosures specified by the Listing Rules.

BASIS OF OPINIONWe carried out our review in accordance with guidance issued by the Auditing Practices Board. That guidance does not require us to perform

the additional work necessary to, and we do not, express any opinion on the effectiveness of either the Group’s system of internal financial

control or its corporate governance procedures or on the appropriateness of the bases used in determining Directors’ remuneration or on the

ability of the Group to continue in operational existence.

OPINIONWith respect to the Directors’ statements on internal financial control and going concern on page 31, in our opinion the Directors have

provided the disclosures required by the Listing Rules referred to above and such statements are not inconsistent with the information of

which we are aware from our audit work on the financial statements.

Based on enquiry of certain Directors and officers of the Company, and examination of relevant documents, in our opinion the Directors’

statement on page 29 appropriately reflects the Company’s compliance with the other paragraphs of the Code specified for our review by

Listing Rule 12.43(j). Also on this basis, in our opinion the Directors’ statement of compliance with Section A of the Best Practice Provisions

on remuneration committees and the report of the Remuneration Committee appropriately provide the disclosures specified by the Listing

Rules and are not inconsistent with the information of which we have become aware from our audit work on the financial statements.

DELOITTE & TOUCHE Hill House

Chartered Accountants and Registered Auditors 1 Little New Street

14 September 1998 London EC4A 3TR

Auditors’ report on corporate governance mattersHAYS plc32


AUDITORS’ REPORT TO THE MEMBERS OF HAYS PLCWe have audited the financial statements on pages 34 to 57 which have been prepared under the accounting policies set out on pages 39

and 40.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORSAs described on page 31 the Company’s Directors are responsible for the preparation of financial statements. It is our responsibility to form

an independent opinion, based on our audit, on those statements and to report our opinion to you.

BASIS OF OPINIONWe conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on

a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant

estimates and judgements made by the Directors in the preparation of the financial statements, and of whether the accounting policies are

appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide

us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused

by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in

the financial statements.

OPINIONIn our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 30 June 1998

and of the profit of the Group for the year then ended and have been properly prepared in accordance with the Companies Act 1985.

DELOITTE & TOUCHE Hill House

Chartered Accountants and Registered Auditors 1 Little New Street

14 September 1998 London EC4A 3TR

Auditors’ report on financial statements HAYS plc 33


(In £’s million) Note 1998 1997 Increase

TURNOVER 1

Continuing operations 1,327.8 1,091.0

Acquisitions 191.3 –

Discontinued operations 30.0 38.8————–————————— ————–—————————

1,549.1 1,129.8————–————————— ————–————————— ————–————————— ————–—————————

PROFIT FROM OPERATIONS 1

Continuing operations 194.8 160.9

Acquisitions 14.0 –

Discontinued operations 1.8 2.4————–————————— ————–—————————

210.6 163.3

EXCEPTIONAL OPERATING COSTS

Continuing operations (2.6) (7.5)

Acquisitions (3.9) –————–————————— ————–—————————

3 (6.5) (7.5)————–————————— ————–—————————

OPERATING PROFIT 204.1 155.8

Exceptional item – profit on disposal of businesses 3 2.6 –

Net interest payable 4 (9.4) (8.0)————–————————— ————–—————————

PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 197.3 147.8

PROFIT BEFORE TAXATION AND EXCEPTIONAL ITEMS 201.2 155.3 +30%

Tax on profit on ordinary activities 7 (56.2) (43.4)————–————————— ————–—————————

Profit on ordinary activities after taxation 141.1 104.4

Equity minority interests (0.5) (1.1)————–————————— ————–—————————

PROFIT FOR THE FINANCIAL YEAR 140.6 103.3

Dividends 8 (45.6) (39.3)————–————————— ————–—————————

Transferred to reserves 20 95.0 64.0————–————————— ————–————————— ————–————————— ————–—————————

EARNINGS PER ORDINARY SHARE BEFORE EXCEPTIONAL ITEMS 9 33.9p 26.3p +29%

EARNINGS PER ORDINARY SHARE AFTER EXCEPTIONAL ITEMS 9 33.3p 24.9p

NET DIVIDEND PER SHARE 8 10.7p 9.3p +15%————–————————— ————–————————— ————–————————— ————–—————————

Consolidated profit and loss accountfor the year ended 30 June 1998

HAYS plc34


(In £’s million) Note 1998 1997

FIXED ASSETS

Tangible assets 10 441.5 340.0

Investments 11 24.1 20.7————–————————— ————–—————————

465.6 360.7————–————————— ————–—————————

CURRENT ASSETS

Stocks 12 23.2 21.9

Debtors 13 318.0 209.5

Cash at bank and in hand 94.0 86.1————–————————— ————–—————————

435.2 317.5————–————————— ————–—————————

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Borrowings 14 (17.6) (25.6)

Other creditors 15 (432.1) (333.4)————–————————— ————–—————————

(449.7) (359.0)————–————————— ————–—————————

NET CURRENT LIABILITIES (14.5) (41.5)————–————————— ————–—————————

TOTAL ASSETS LESS CURRENT LIABILITIES 451.1 319.2

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Borrowings 14 (190.3) (98.7)

Other creditors 15 (44.9) (17.3)

PROVISIONS FOR LIABILITIES AND CHARGES 17 (14.5) (11.5)————–————————— ————–—————————

201.4 191.7————–————————— ————–————————— ————–————————— ————–—————————

CAPITAL AND RESERVES

Called up share capital 18 4.3 4.2

Share premium account 20 349.1 290.6

Revaluation reserve 20 23.0 23.4

Other reserves 20 (17.5) (15.8)

Profit and loss account 20 357.1 305.1————–————————— ————–—————————

716.0 607.5

Goodwill reserve 20 (515.6) (416.8)————–————————— ————–—————————

EQUITY SHAREHOLDERS’ INTERESTS 200.4 190.7

EQUITY MINORITY INTERESTS 1.0 1.0————–————————— ————–—————————

201.4 191.7————–————————— ————–————————— ————–————————— ————–—————————

These accounts were approved by the Board of Directors on 14 September 1998.

Signed on behalf of the Board of Directors

R E FROST D C TIBBLE

Consolidated balance sheetat 30 June 1998

HAYS plc 35



FIXED ASSETS

Tangible assets 10 1.5 1.0

Investments 11 256.8 303.3————–————————— ————–—————————

258.3 304.3————–————————— ————–—————————

CURRENT ASSETS

Debtors 13 1,160.1 1,031.3

Cash at bank and in hand 5.2 –————–————————— ————–—————————

1,165.3 1,031.3————–————————— ————–—————————

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Borrowings 14 (41.4) (159.1)

Other creditors 15 (380.0) (325.1)————–————————— ————–—————————

(421.4) (484.2)————–————————— ————–—————————

NET CURRENT ASSETS 743.9 547.1————–————————— ————–—————————

TOTAL ASSETS LESS CURRENT LIABILITIES 1,002.2 851.4

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Borrowings 14 (164.9) (6.2)————–————————— ————–—————————

837.3 845.2————–————————— ————–————————— ————–————————— ————–—————————

CAPITAL AND RESERVES

Called up share capital 18 4.3 4.2

Share premium account 20 349.1 290.6

Profit and loss account 20 491.7 559.3

Other reserves 20 (7.8) (8.9)————–————————— ————–—————————

EQUITY SHAREHOLDERS’ INTERESTS 837.3 845.2————–————————— ————–————————— ————–————————— ————–—————————

These accounts were approved by the Board of Directors on 14 September 1998.

Signed on behalf of the Board of Directors

R E FROST D C TIBBLE

Company balance sheetat 30 June 1998

HAYS plc36



CASH INFLOW FROM OPERATING ACTIVITIES 23 210.6 213.7————–————————— ————–—————————

Returns on Investments and Servicing of Finance

Interest received 2.5 1.4

Interest paid (9.8) (8.7)

Interest element of finance lease rentals (2.1) (1.2)

Dividends paid to minorities (0.1) (0.4)————–————————— ————–—————————

Net Cash Outflow from Returns on Investment and Servicing of Finance (9.5) (8.9)————–————————— ————–—————————

Taxation (50.3) (40.9)————–————————— ————–—————————

Capital Expenditure and Financial Investment

Purchase of tangible fixed assets (79.8) (56.7)

Sale of tangible fixed assets 23.0 6.5————–————————— ————–—————————

Net Cash Outflow for Capital Expenditure and Financial Investment (56.8) (50.2)————–————————— ————–—————————

NET CASH INFLOW BEFORE ACQUISITIONS AND DISPOSALS 94.0 113.7

Acquisitions and Disposals

Purchase of subsidiary undertakings 21 (142.5) (37.9)

Sale of businesses 18.8 –

Net cash acquired/disposed 21 6.9 0.9

Amounts paid in respect of prior years’ acquisitions (2.0) (0.1)————–————————— ————–—————————

Net Cash Outflow for Acquisitions and Disposals (118.8) (37.1)————–————————— ————–—————————

Equity Dividends Paid (41.1) (35.3)————–————————— ————–—————————

NET CASH (OUTFLOW)/INFLOW BEFORE FINANCING (65.9) 41.3

Financing

Issue of ordinary share capital 15.2 15.8

Purchase of own shares (4.4) (3.1)

Increase/(decrease) in long term borrowings 69.8 (44.3)

Decrease in short term borrowings (1.2) (1.0)

Capital element of finance lease rentals (6.3) (2.6)————–————————— ————–—————————

Net Cash Inflow/(Outflow) from Financing 73.1 (35.2)————–————————— ————–—————————

INCREASE IN CASH IN THE PERIOD 7.2 6.1————–————————— ————–————————— ————–————————— ————–—————————

Increase in cash in the period 7.2 6.1

Cash (inflow)/outflow from (increase)/decrease in debt and lease financing (62.3) 47.9————–————————— ————–—————————

Change in net debt resulting from cash flows (55.1) 54.0

Borrowings acquired with subsidiary 21 (40.6) (72.3)

New finance leases – (0.5)

Exchange adjustments (0.5) 8.1————–————————— ————–—————————

MOVEMENT IN NET DEBT IN THE PERIOD (96.2) (10.7)

OPENING NET DEBT (49.4) (38.7)————–————————— ————–—————————

CLOSING NET DEBT 24 (145.6) (49.4)————–————————— ————–————————— ————–————————— ————–—————————

Consolidated cash flow statementfor the year ended 30 June 1998

HAYS plc 37


(In £’s million) 1998 1997

Profit for the financial year 140.6 103.3

Currency translation differences on foreign currency net investments (1.7) (14.2)————–————————— ————–—————————

Total recognised gains and losses relating to the year 138.9 89.1————–————————— ————–————————— ————–————————— ————–—————————

There is no material difference between the results as disclosed in the profit and loss account and the results on an unmodified historical

cost basis. Accordingly, a note of the historical cost profits and losses for the year is not given.

Statement of total recognised gains and lossesfor the year ended 30 June 1998

HAYS plc38

(In £’s million) 1998 1997

Profit for the financial year 140.6 103.3

Dividends (45.6) (39.3)————–————————— ————–—————————

95.0 64.0

Other recognised gains and losses relating to the year (1.7) (14.2)

New share capital subscribed 15.2 15.9

Goodwill written off (net) (98.8) (91.5)————–————————— ————–—————————

Net increase/(decrease) in shareholders’ interests 9.7 (25.8)

Opening equity shareholders’ interests 190.7 216.5————–————————— ————–—————————

Closing equity shareholders’ interests 200.4 190.7————–————————— ————–————————— ————–————————— ————–—————————

Reconciliation of movements in equity shareholders’ interestsfor the year ended 30 June 1998


The particular accounting policies adopted are described below. Comparative figures have also been amended, where appropriate, for minor

changes in presentation.

A. ACCOUNTING CONVENTIONThe financial statements have been prepared in accordance with applicable accounting standards using the historical cost convention

as modified by the revaluation of certain freehold and long and short leasehold properties.

B. CONSOLIDATIONThe financial statements consolidate the accounts of Hays plc and all of its subsidiary undertakings (‘subsidiaries’). The results of

subsidiaries acquired during the year are included from the effective date of acquisition. The results of subsidiaries sold are included

up to the effective date of disposal.

C. INVESTMENTS(i) Subsidiary undertakings

Shares in subsidiaries are valued at cost less provision for permanent diminution in value.

(ii) Associated undertakings

Investments in associated undertakings (‘associated companies’) are stated at the amount of the Group’s share of net assets. The

consolidated profit and loss account includes the Group’s share of associated companies’ profits after taxation.

(iii) Other investments

Investments held as fixed assets are shown at cost less provision for permanent diminution in value.

D. FOREIGN CURRENCIESThe assets and liabilities of foreign subsidiaries denominated in foreign currencies are translated into sterling at the rates ruling at the

year end. Profits and losses of foreign subsidiaries are translated into sterling at average rates of exchange.

The differences arising from the retranslation of the opening balance sheets and retained earnings of foreign subsidiaries at the year

end rate are dealt with through reserves, as are differences on long term foreign currency borrowings used to finance overseas

investment. Other translation differences are dealt with in the profit and loss account.

E. GOODWILLGoodwill arising on the acquisition of subsidiaries and associated companies is written off directly to reserves in the year of acquisition.

F. DEFERRED TAXATIONDeferred taxation is provided on all timing differences which are expected to reverse in the foreseeable future at the rate of tax which

it is anticipated will apply.

G. STOCKS AND WORK IN PROGRESSStocks and work in progress are valued at the lower of cost, inclusive of appropriate overheads, and estimated net realisable value.

Accounting policies HAYS plc 39


H. TANGIBLE FIXED ASSETS AND DEPRECIATIONTangible fixed assets are shown at cost as modified by the revaluation of certain freehold and long and short leasehold properties.

Depreciation is provided on a straight line basis over the anticipated useful working lives of the assets, after they have been brought

into use, at the following rates:

Freehold land – No depreciation is provided

Freehold buildings – At rates varying between 2% and 10%

Leasehold properties – The book value is written off over the unexpired period of the lease

Plant and machinery – At rates varying between 5% and 33%

Fixtures and fittings – At rates varying between 10% and 25%

Government grants are credited to deferred income when received and are released to the profit and loss account over the expected

useful economic lives of the assets concerned.

I. LEASED ASSETSFinance leases

Certain items of plant and machinery and certain freehold properties financed by leasing agreements giving rights approximating to

ownership, are included in the balance sheet as fixed assets at cost less accumulated depreciation. The capital element of future rentals

is treated as a liability. The interest element is charged to the profit and loss account over the period of the finance leases in proportion

to the balance of capital repayments outstanding.

Operating leases

Leasing rentals in respect of operating leases are charged to the profit and loss account in the period in which the leasing expenditure

is incurred.

J. TURNOVERTurnover represents the amounts receivable for services provided and goods sold excluding trade discounts, value added tax and similar

sales related taxes, apportioned over the period to which they relate.

Certain distribution contracts oblige the Group to purchase goods from third parties and sell them on to the customer at cost. As the

Group is rewarded for the distribution service provided, and as the sale and purchase of the goods have no impact on the operating

profit, the amounts invoiced on to customers and charged by suppliers for the sale and purchase of these goods are excluded from

turnover and cost of sales. Stocks, debtors and creditors relating to such transactions are included in the consolidated balance sheet.

K. PENSION COSTSDefined retirement benefits for employees are funded by contributions from the Group companies and employees. Payments are made

in accordance with periodic calculations by consulting actuaries and are charged against the profits of the year in such a way that the

pension cost is a substantially level percentage of current and expected future pensionable payroll.

Accounting policiesHAYS plc40


1. SEGMENTAL INFORMATION

(In £’s million) 1998 1998 1998 1997 1997 1997Total Operating Operating Total Operating Operating

turnover profit net assets turnover profit net assets

BY BUSINESS SECTOR

Distribution 792.2 73.1 341.7 577.5 59.5 223.9

Commercial 265.4 63.1 82.2 207.4 51.0 72.7

Personnel 491.5 74.4 39.5 344.9 52.8 29.6————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,549.1 210.6 463.4 1,129.8 163.3 326.2

Exceptional operating costs – (6.5) – – (7.5) –————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,549.1 204.1 463.4 1,129.8 155.8 326.2————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

BY GEOGRAPHICAL AREA

United Kingdom 1,074.5 170.7 256.2 837.1 136.2 203.3

Other EC 404.4 33.1 199.8 227.1 21.7 116.3

Rest of the World 70.2 6.8 7.4 65.6 5.4 6.6————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,549.1 210.6 463.4 1,129.8 163.3 326.2

Exceptional operating costs – (6.5) – – (7.5) –————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,549.1 204.1 463.4 1,129.8 155.8 326.2————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Turnover excludes sales of £104.6 million (1997 – £407.1 million) where the Group is obliged under certain distribution contracts to

purchase goods on customers’ behalf and sell them on at cost. During the year the terms of one such major contract were renegotiated

to relieve the Group of this requirement.

There is no material difference between the geographical split of the Group’s turnover by area of origin and area of destination.

Operating net assets are net assets excluding interest bearing assets/liabilities, tax and dividend balances.

2. OPERATING PROFIT

(In £’s million) Note 1998 1998 1998 1998 1997Continuing Acquisitions Discontinued Total Totaloperations operations

Operating profit is after charging/(crediting):

Raw materials, consumables and goods

purchased for resale 126.6 4.1 1.3 132.0 125.8

Other external charges 608.6 97.4 11.6 717.6 501.3

Staff costs 6 315.2 52.8 9.9 377.9 273.2

Depreciation 37.0 7.0 1.0 45.0 31.4

Hire of plant and machinery

Operating lease rentals 11.2 7.6 2.3 21.1 9.0

Other rentals 22.0 0.3 0.1 22.4 14.6

Other operating lease rentals

(including land and buildings) 26.8 8.2 2.0 37.0 23.0

Changes in stocks, and other operating income (13.8) (0.1) – (13.9) (11.3)

Share of profits of associated companies (0.6) – – (0.6) (0.5)

Exceptional operating costs 3 2.6 3.9 – 6.5 7.5————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,135.6 181.2 28.2 1,345.0 974.0————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Auditors’ remuneration amounted to £1.0 million (1997 – £0.9 million) in respect of audit services and £0.6 million (1997 – £1.5

million) in respect of non-audit services.

Notes to the accounts HAYS plc 41


3. EXCEPTIONAL ITEMS

(In £’s million) 1998 1997

EXCEPTIONAL OPERATING COSTS

Rationalisation and restructuring costs on the acquisition of new businesses (3.9) (4.9)

Loss on disposal of surplus property (1.2) –

Cost of integration of smaller European operations (1.4) –

Costs of unsuccessful approach for Christian Salvesen plc – (2.6)

OTHER EXCEPTIONAL ITEMS

Profit on the sale of the parcels business of Hays Express 4.4 –

Loss on disposal of non-core businesses (1.8) –————–————————— ————–—————————

(3.9) (7.5)————–————————— ————–————————— ————–————————— ————–—————————

Exceptional items resulted in a cash inflow of £18.4 million in the period (1997 – outflow of £3.6 million).

4. NET INTEREST PAYABLE

(In £’s million) 1998 1997

INTEREST PAYABLE AND SIMILAR CHARGES

Bank overdrafts and other loans (9.8) (8.2)

Finance charges payable under finance leases (2.1) (1.2)————–————————— ————–—————————

(11.9) (9.4)

INTEREST RECEIVABLE AND SIMILAR INCOME 2.5 1.4————–————————— ————–—————————

(9.4) (8.0)————–————————— ————–————————— ————–————————— ————–—————————

5. DIRECTORS’ EMOLUMENTS

(In £’000s) 1998 1997

Executive Directors 1,975 2,000

Non-executive Directors 40 36————–————————— ————–—————————

2,015 2,036

Cost of contributions to funded and unfunded pension schemes 857 898————–————————— ————–—————————

2,872 2,934————–————————— ————–————————— ————–————————— ————–—————————

Notes to the accountsHAYS plc42


5. DIRECTORS’ EMOLUMENTS continued

Emoluments

The emoluments of the Directors (excluding pension costs and restricted share awards) including the highest paid Director are shown below:

(In £’000s) 1998 1998 1998 1998 1997Salary Benefits Performance Total Total

in kind payments emoluments emoluments

R E Frost 250 25 94 369 438

J R Cole 220 23 31 274 159

M E Aldridge (resigned 31.3.98) 131 10 30 171 235

M Biden (resigned 31.5.97) – – – – 176

D Matthewman (retired 31.7.98) 150 10 13 173 181

J A Napier (resigned 15.9.98) 325 37 77 439 362

D C Tibble 200 14 48 262 224

D R Waxman (appointed 10.3.98) 62 3 – 65 –

G J Williams 180 10 32 222 225

L J Stammers 20 – – 20 18

C S Taylor 20 – – 20 18————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

1,558 132 325 2,015 2,036————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

On termination of Mr M E Aldridge’s employment on 31 March 1998, he was paid the sum of £270,000 in satisfaction of his

entitlement under his service agreement.

The remuneration of the executive Directors and the structure of and awards under the performance payment scheme are decided by

the Remuneration Committee whose report appears on page 29. The executive Directors’ performance payments are based on Group

earnings per share growth and specific business profit targets for the prior year. Taxable benefits include car benefits and medical

expenses insurance. None of the Directors waived fees during the year. All executive Directors have service contracts of two years

duration. The non-executive Directors do not have service contracts.

Mr K P Charlton and Mr X F E Urbain were appointed to the Board on 14 July 1998. For completeness their entitlements under the

Executive Option Schemes, Savings Related Option Scheme and Long Term Incentive Plan are included in the tables below based on

their interests at their date of appointment.

Directors’ Pension Entitlement

The following Directors are members of the Hays Pension Scheme. Details of their benefits accruing under the scheme, including

unapproved benefits provided to capped Directors, are set out below:

Years of Accrued Increase in Cashservice pension at accrued equivalent of

30 June 1998 pension the increase(£’000 pa) in 1998 in accrued

(£’000 pa) pension(£’000)

J R Cole 1.8 12.8 7.7 104.8

M E Aldridge (as at 31.3.98) 5.0 30.5 1.7 19.5

D Matthewman 27.2 105.3 1.7 28.1

J A Napier 7.0 77.7 18.7 282.3

D C Tibble 6.0 41.2 10.1 106.5

D R Waxman 0.3 2.1 2.1 27.8

G J Williams 14.0 116.8 9.9 146.7




The amounts shown in the above table represent the annual pension payable at contractual retirement date (normally age 60), or

immediately for Directors over that age based on the Director’s service to the end of the year and current pensionable salary. The

increase in accrued pension during the year excludes any increase for inflation. Directors are not required to contribute to the scheme.

They have the option to pay Voluntary Contributions but any resulting benefits are excluded from the above table.

Mr R E Frost accrued no benefit during the year. The cost of topping up death benefit cover for a guaranteed period after retirement

was £34,000.

Options

The following are the options over ordinary shares of 1p each held by executive Directors.

Executive options SAYE options

At Granted Exercised At Average Period of At At1 July 30 June exercise exercise 1 July 30 June1997 1998 price 1997 1998

R E Frost 708,105 39,001 550,870 196,236 4.74 1995-2007 – –

J R Cole 37,175 34,321 – 71,496 5.87 1999-2007 3,911 3,911

K P Charlton 15,335 14,625 – 29,960 5.88 1999-2007 – 1,256

D Matthewman 296,162 23,400 – 319,562 2.84 1994-2007 – –

J A Napier 450,888 50,702 322,495 179,095 4.91 1996-2007 – –

D C Tibble 125,697 31,201 – 156,898 4.27 1996-2007 9,850 12,072

X F E Urbain – – – – – – – –

D R Waxman 55,619 19,890 – 75,509 4.80 1997-2007 2,555 2,555

G J Williams 434,936 28,081 352,038 110,979 4.84 1995-2007 12,668 –

All executive options have been granted at the then ruling market share price, without discount, and are performance related being

only exercisable if earnings per share growth is greater than the growth in the retail price index in the three year period prior to

exercise.

The options under the Hays plc Savings-Related Share Option Scheme are exercisable at prices ranging from 184p to 776p per share

and the normal exercise dates are between 1 June 1998 and 1 December 2003. The market price as at 30 June 1998 was 1005p per

share. During the year the shares have traded in the range 563p to 1132p.

The market price at the date of exercise of Mr R E Frost’s and Mr G J Williams’ share options was 729p and the average exercise prices

were 200p and 192p respectively. The market price at the date of exercise of Mr J A Napier’s share options was 722p and the average

exercise price was 273p.

Long Term Incentive Plan

On 23 May 1997 the Company invited sixteen senior executives, including the Directors named below, to participate in the

Performance Share Scheme approved by the shareholders at an Extraordinary General Meeting held on 19 November 1996.

An explanation of the scheme is included in the report of the Remuneration Committee.

The maximum number of shares receivable by Directors are:

1998 1997

J R Cole 64,161 64,161

K P Charlton 35,288 35,288

J A Napier 121,905 121,905

D C Tibble 57,744 57,744

D R Waxman 49,724 49,724




Restricted Share Awards

Included in the details of shares of the Company in the Directors’ Report are restricted gift shares granted to certain Directors and held

in trust for a specified period of time. These have been granted to encourage long term retention of these Directors and the recipients

are entitled to vote and receive dividends. However, restrictions remain on these shares to the dates indicated and the interest is

normally lost if the executive leaves employment during that time. During the year restrictions were lifted on 20,000 shares held by

Mr D C Tibble. The market value at the date the restrictions were lifted was 739.5p. At 30 June 1998 Mr D C Tibble held a further

30,000 restricted shares for which restrictions lift on 9 October 1998.

6. STAFF COSTS

(In £’s million) 1998 1997

Wages and salaries 322.0 231.3

Social security costs 46.7 33.4

Other pension costs 9.2 8.5————–————————— ————–—————————

377.9 273.2————–————————— ————–————————— ————–————————— ————–—————————

Average number of persons employed

Number 1998 1997

Distribution 10,712 7,174

Commercial 4,298 3,200

Personnel 2,489 1,701————–————————— ————–—————————

17,499 12,075————–————————— ————–————————— ————–————————— ————–—————————

Pension Schemes

The Group operates a number of pension schemes for employees and executive Directors. The assets of each funded scheme are held

in separate trustee administered funds. The most significant scheme, Hays Pension Scheme, is of the defined benefit type. The cost of

the benefits of other Group pension schemes is not material in the context of the Group results.

Pension costs for Hays Pension Scheme in the year were £7.9 million (1997 – £7.4 million). The scheme’s independent actuaries,

William M Mercer Limited, assessed Hays Pension Scheme as at 30 June 1996 using the projected unit method to ascertain its cost to

the Group. The principal assumption is that the average long term rate of return earned by the scheme would be 2% per annum higher

than the rate of salary inflation, 4% per annum higher than the rate of increase of present and future pensions, and 4.5% higher than

the rate of increase of equity dividends.

At the date of the latest actuarial valuation, the market value of the assets of Hays Pension Scheme was £107.9 million and the

actuarial value of the assets was sufficient to cover 101% of the benefits that had accrued to members, after allowing for expected

future increases in earnings.

The 1997 Finance Act removed the ability of pension schemes to reclaim tax credits on UK equity dividends. This change came into

effect on 2 July 1997. Taking into account the overall financial experience of the Hays Pension Scheme the actuary has advised that it

is not necessary to make any change to the ongoing pension cost in the short term. A full actuarial valuation is due to be carried out

as at 30 June 1999 at which time the full impact on the pension cost will be assessed.



7. TAX ON PROFIT ON ORDINARY ACTIVITIES

(In £’s million) 1998 1997

United Kingdom corporation tax at 31% (1997 – 32.5%) for the year 57.7 41.2

Double taxation relief (1.9) –————–————————— ————–—————————

55.8 41.2

Overseas taxation 5.5 3.8

Deferred taxation (5.2) (1.8)

Associated companies – corporation tax 0.1 0.2————–————————— ————–—————————

56.2 43.4————–————————— ————–————————— ————–————————— ————–—————————

The taxation effect of the exceptional items is a credit of £1.6 million (1997 – £1.6 million).

8. DIVIDENDS

(In £’s million) 1998 1997

Interim – 3.45p (1997 – 3.0p) per Ordinary Share 14.4 12.7

Final proposed – 7.25p (1997 – 6.3p) per Ordinary Share 31.2 26.6————–————————— ————–—————————

45.6 39.3————–————————— ————–————————— ————–————————— ————–—————————

9. EARNINGS PER SHAREThe calculation of earnings per share is based on earnings from ordinary activities after taxation and minority interests of £140.6

million and 421,625,000 shares (1997 – £103.3 million and 414,853,000 shares). To enable comparisons with previous periods

earnings per share has also been calculated on a pre exceptional basis using earnings of £142.9 million (1997 – £109.2 million).



10. TANGIBLE FIXED ASSETS

(In £’s million) Freehold Leasehold Leasehold Plant and Fixtures Assets in Totalproperties properties properties machinery and course of

long short fittings construction

THE GROUP

COST OR VALUATION

At 1 July 1997 229.3 10.6 13.7 252.6 27.8 0.9 534.9

Exchange adjustments (4.5) (0.6) (0.1) (5.8) (1.0) – (12.0)

Additions

Subsidiaries acquired 47.3 24.3 0.2 60.9 7.4 0.3 140.4

Capital expenditure 16.0 0.1 5.3 49.2 3.9 5.3 79.8

Disposals

Subsidiaries sold – – (1.6) (2.9) (0.6) – (5.1)

Disposals (12.3) (0.5) (0.1) (44.2) (2.0) – (59.1)

Reclassification 0.9 – – – – (0.9) –————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 276.7 33.9 17.4 309.8 35.5 5.6 678.9————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

ACCUMULATED DEPRECIATION

At 1 July 1997 33.1 2.1 4.9 138.2 16.6 – 194.9

Exchange adjustments (0.5) – – (4.0) (0.9) – (5.4)

Relating to assets of

subsidiaries acquired 2.0 0.1 0.1 34.0 4.6 – 40.8

Provision for the year 7.3 0.6 1.3 32.5 3.3 – 45.0

Relating to assets of

subsidiaries sold – – (0.5) (1.4) (0.4) – (2.3)

Disposals (0.9) – (0.1) (32.9) (1.7) – (35.6)————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 41.0 2.8 5.7 166.4 21.5 – 237.4————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

NET BOOK VALUE

At 30 June 1998 235.7 31.1 11.7 143.4 14.0 5.6 441.5————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1997 196.2 8.5 8.8 114.4 11.2 0.9 340.0————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Comparable amounts

determined according to the

historical cost convention:

Cost 249.2 30.1 16.5

Accumulated depreciation (33.9) (2.3) (5.5)————–————————— ————–————————— ————–—————————

NET BOOK VALUE

At 30 June 1998 215.3 27.8 11.0————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1997 175.4 5.1 8.1————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Freehold properties include land at cost or valuation of £48.7 million (1997 – £48.9 million) which is not depreciated. Freehold

properties, plant and machinery and fixtures and fittings include cost of £47.8 million (1997 – £30.7 million) and aggregate

depreciation of £9.5 million (1997 – £10.3 million) in respect of assets held under finance leases and hire purchase contracts. The

depreciation charge for the year includes £2.8 million (1997 – £1.9 million) in respect of these assets.

Freehold, long leasehold and short leasehold land and buildings comprising certain of the major properties were revalued on 30 June

1989 at £62.6, £9.8 and £3.2 million respectively. As at 30 June 1993 revaluations were reduced by £9.7 million.



10. TANGIBLE FIXED ASSETS continued

(In £’s million) Leasehold Plant Fixtures Totalproperties and and

short machinery fittings

THE COMPANY

COST

At 1 July 1997 0.4 1.4 0.5 2.3Additions 0.1 0.8 – 0.9Transfer from subsidiary companies – 0.4 – 0.4Disposals – (0.6) – (0.6)

————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 0.5 2.0 0.5 3.0————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

ACCUMULATED DEPRECIATION

At 1 July 1997 0.2 0.8 0.3 1.3Provision for the year – 0.3 – 0.3Transfer from subsidiary companies – 0.2 – 0.2Disposals – (0.3) – (0.3)

————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 0.2 1.0 0.3 1.5————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

NET BOOK VALUE

At 30 June 1998 0.3 1.0 0.2 1.5————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1997 0.2 0.6 0.2 1.0————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Commitments

(In £’s million) Group Group1998 1997

Capital expenditure – authorised and contracted for 20.6 13.8————–————————— ————–————————— ————–————————— ————–—————————

11. INVESTMENTS

(In £’s million) Associated Own Other Totalcompanies shares investments

THE GROUP

At 1 July 1997 2.4 17.8 0.5 20.7

Exchange adjustments – – – –

Additions – 4.4 – 4.4

Subsidiaries acquired (see note 21) (0.9) – 0.1 (0.8)

Share of profits of associated companies 0.5 – – 0.5

Dividends receivable (0.7) – – (0.7)————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 1.3 22.2 0.6 24.1————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

The Group’s share of retained profits of associated companies at 30 June 1998 is £0.4 million (1997 – £0.9 million).



11. INVESTMENTS continued

(In £’s million) Own Shares in Totalshares subsidiaries

THE COMPANY

At 1 July 1997 17.8 285.5 303.3

Additions:

Subsidiaries acquired – 0.3 0.3

Other 4.4 – 4.4

Disposals – Inter Group transfer of dormant subsidiaries – (51.2) (51.2)————–————————— ————–————————— ————–—————————

At 30 June 1998 22.2 234.6 256.8————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

The Company operates an employee share option plan whereby an employee trust acquires shares in the Company for the benefit of

Group employees. Dividends in respect of these shares have not been waived. The number of shares held at 30 June 1998 is 4,783,266

(1997 – 4,250,923). The trust has options to acquire a further 2,000,000 shares in the market at an average strike price of 538p.

Details of the principal subsidiaries are shown in note 26.

12. STOCKS

(In £’s million) 1998 1997

Finished goods and goods for resale 15.6 15.8

Work in progress 0.5 0.2

Raw materials and consumables 7.1 5.9————–————————— ————–—————————

23.2 21.9————–————————— ————–————————— ————–————————— ————–—————————

13. DEBTORS

(In £’s million) Group Group Company Company1998 1997 1998 1997

Trade debtors 250.9 158.2 – –

Amounts owed by subsidiaries – – 1,150.1 1,023.1

Amounts owed by associated companies 1.3 0.7 – –

Other debtors 34.6 23.9 9.0 6.8

Prepayments and accrued income 31.2 26.7 1.0 1.4————–————————— ————–————————— ————–————————— ————–—————————

318.0 209.5 1,160.1 1,031.3————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Amounts falling due after more than one year included in the above are:


Included in other debtors:

Advance Corporation Tax recoverable 7.8 3.3 7.8 6.6

Other 1.7 1.2 1.2 –————–————————— ————–————————— ————–————————— ————–—————————

9.5 4.5 9.0 6.6————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————



14. BORROWINGS


Loan notes 4.7 2.3 1.2 1.2

Bank borrowings – secured 7.1 7.3 – –

– unsecured 193.0 113.5 164.9 81.2

Overdrafts 2.7 0.7 40.2 82.9

Other loans 0.4 0.5 – –————–————————— ————–————————— ————–————————— ————–—————————

207.9 124.3 206.3 165.3————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Loans obligations are repayable as follows:

Over five years 3.4 1.6 – –

Over two years and under five years 185.1 82.8 164.9 5.9

Over one year and under two years 1.8 14.3 – 0.3————–————————— ————–————————— ————–————————— ————–—————————

Total over one year 190.3 98.7 164.9 6.2

Under one year 17.6 25.6 41.4 159.1————–————————— ————–————————— ————–————————— ————–—————————

TOTAL BORROWINGS 207.9 124.3 206.3 165.3————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

The aggregate of borrowings which have repayments due after more than five years was £3.4 million (1997 – £3.7 million) and relate

to loan notes issued on the acquisition of subsidiaries.

The majority of the loan notes are payable on demand and bear interest at money market deposit rates.

The secured bank loans are secured on certain properties and other fixed assets.

15. OTHER CREDITORS


AMOUNTS FALLING DUE WITHIN ONE YEAR

Trade creditors 111.2 100.1 0.4 0.8

Amounts owed to subsidiaries – – 329.8 282.1

Taxation 127.2 90.4 14.7 13.2

Social security 13.7 9.0 – –

Other creditors 50.4 38.2 – –

Finance lease obligations 4.3 2.2 – –

Acquisition liabilities 6.6 2.1 1.1 –

Dividends payable 31.2 26.6 31.2 26.6

Accruals and deferred income 87.5 64.8 2.8 2.4————–————————— ————–————————— ————–————————— ————–—————————

432.1 333.4 380.0 325.1————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Finance lease obligations 27.4 9.0

Acquisition liabilities 15.0 4.0

Other creditors 0.3 1.6

Accruals and deferred income 2.2 2.7————–————————— ————–—————————

44.9 17.3————–————————— ————–————————— ————–————————— ————–—————————

Accruals and deferred income include an amount of £0.8 million (1997 – £0.9 million) which is due after more than five years.



16. LEASE COMMITMENTS

(In £’s million) 1998 1997

A. Finance leases

Net obligations are payable as follows:

Within one year 4.3 2.2

Over one year and under two years 3.5 1.9

Between two and five years 7.6 3.4

After five years 16.3 3.7————–————————— ————–—————————

31.7 11.2————–————————— ————–————————— ————–————————— ————–—————————

The finance leases relate to freehold properties, plant and machinery and fixtures and fittings. They are secured by retention of title

to the relevant assets and bear interest at market rates.

B. Operating Leases

At 30 June 1998 the Group and the Company were committed to making the following payments in the year to 30 June 1999 in

respect of operating leases.

(In £’s million) Group Group Companyland and other land andbuildings buildings

Leases which expire:

Within one year 4.2 3.7 –

Within two to five years 12.0 12.8 –

After five years 15.6 1.6 0.3————–————————— ————–————————— ————–—————————

31.8 18.1 0.3————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

17. PROVISIONS FOR LIABILITIES AND CHARGES

(In £’s million) Pensions Deferred Other Totaltaxation

At 1 July 1997 2.9 2.4 6.2 11.5

Exchange adjustments (0.1) – (0.2) (0.3)

Acquisitions – 0.2 3.6 3.8

Charged/(credited) to profit & loss account (0.4) (5.2) 5.2 (0.4)

Utilised – – (3.4) (3.4)

Movement in Advance Corporation Tax offset against deferred tax – 3.3 – 3.3————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 2.4 0.7 11.4 14.5————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Other provisions consist of rationalisation, reorganisation and closure costs.



17. PROVISIONS FOR LIABILITIES AND CHARGES continued

(In £’s million) 1998 1998 1997 1997Provided Unprovided Provided Unprovided

DEFERRED TAXATION

Accelerated tax allowances – 27.1 5.1 19.9

Surplus on revaluation – 2.1 – 3.6

Gain deferred by rollover – 2.7 – 1.7

Other timing differences 0.7 (9.6) 0.6 (8.8)————–————————— ————–————————— ————–————————— ————–—————————

0.7 22.3 5.7 16.4

Advanced Corporation Tax offset – – (3.3) –————–————————— ————–————————— ————–————————— ————–—————————

0.7 22.3 2.4 16.4————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Provision has not been made for taxation that would arise in the event of certain overseas subsidiaries and associated companies

distributing the balance of their reserves.

18. CALLED UP SHARE CAPITALAuthorised Share Capital

(In £’s million) 1998 1998 1997 1997number number

000’s 000’s

Ordinary Shares of 1p each 8,890,894 88.9 8,890,894 88.9————–————————— ————–—————————

88.9 88.9————–————————— ————–————————— ————–————————— ————–—————————

Called Up Share Capital

(In £’s million) Share Sharecapital capital

number000’s

Allotted and fully paid Ordinary Shares of 1p each

At 1 July 1997 418,186 4.2

Shares allotted 9,872 0.1————–————————— ————–—————————

At 30 June 1998 428,058 4.3————–————————— ————–————————— ————–————————— ————–—————————

During the year the Company established a Qualifying Employee Share Ownership Trust (‘Quest’) to operate in connection with the

Company’s Savings-Related Share Option Scheme. The Quest will deliver shares to employees on receipt of the option price.

Subsidiaries in the Group have contributed the difference between the market value of the shares and the option price to make them

more accountable for the cost of granting options.

The Quest shares are included within investment in own shares (note 11) at a nil valuation. Dividends in respect of these shares have been

waived. A total of 3,691,041 new ordinary shares were allotted for use by the Quest resulting in £43.4 million of reserves being capitalised

(note 20). In addition 352,045 new ordinary shares were allotted to the Quest on receipt of option exercise monies from employees.



19. SHARE OPTIONSAt 30 June 1998 the following options had been granted and remained outstanding in respect of the Company’s Ordinary Shares of 1p

each under the Company’s share option schemes:

Number of Amount of Subscription Dateshares shares price normally

£ exercisable

The Hays plc 1989 Executive Share Option Scheme: 17,700 177 105p 1992-1999

160,000 1,600 164p 1994-2001

298,000 2,980 184p 1995-2002

9,691 97 227p 1996-2003

1,314,087 13,141 252p 1996-2003

108,488 1,085 296p 1997-2004

1,401,153 14,011 277p 1997-2004

456,182 4,562 339p 1998-2005————–——————————— ————–———————————

3,765,301 37,653————–——————————— ————–———————————

The Hays plc 1995 Executive Share Option Scheme: 2,535,439 25,354 358p 1998-2005

1,759,072 17,591 538p 1999-2006

1,683,724 16,837 641p 2000-2007

6,266 63 703.5p 2000-2007————–——————————— ————–———————————

5,984,501 59,845————–——————————— ————–———————————

The Hays plc 1996 Company Share Option Plan: 680,989 6,810 538p 1999-2006

5,005 50 524p 2000-2007

785,452 7,854 641p 2000-2007

4,264 43 703.5p 2000-2007————–——————————— ————–———————————

1,475,710 14,757————–——————————— ————–———————————

The Hays plc Savings–Related Share Option Scheme: 593,339 5,933 111p 1998-1999

296,666 2,967 148p 1997-1999

221,540 2,215 184p 1998-2000

538,155 5,382 242p 1999-2001

810,866 8,109 226p 2000-2002

1,121,633 11,216 350p 1999-2004

969,133 9,691 441p 2000-2004

1,272,990 12,730 776p 2001-2005————–——————————— ————–———————————

5,824,322 58,243————–——————————— ————–———————————

17,049,834 170,498————–——————————— ————–——————————— ————–——————————— ————–———————————



20. RESERVES

(In £’s million) Share Revaluation Other Profit and Goodwillpremium reserve reserves loss account reserve

THE GROUP

At 1 July 1997 290.6 23.4 (15.8) 305.1 (416.8)

Translation differences in respect of foreign subsidiaries – – (1.7) – –

Transfer of additional depreciation on revalued assets – (0.4) – 0.4 –

Capitalised on allotment of Quest shares (note 18) 43.4 – – (43.4) –

Shares allotted on the exercise of options 15.1 – – – –

Transferred from profit and loss account – – – 95.0 –

Goodwill written off in year (note 21) – – – – (98.8)————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 1998 349.1 23.0 (17.5) 357.1 (515.6)————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

The consolidated goodwill reserve represents the excess of the consideration for the operations acquired by the Group over the fair

value of the assets acquired. The goodwill has been written off to reserves and is maintained as a separate negative reserve. The

goodwill written off in the year is stated net of amounts attributed to businesses disposed (£5.9 million).

(In £’s million) Share Profit and Otherpremium loss account reserves

THE COMPANY

At 1 July 1997 290.6 559.3 (8.9)

Foreign exchange gains and losses – – 1.1

Quest shares allotted 43.4 (0.2) –

Shares allotted on the exercise of options 15.1 – –

Transferred from profit and loss account – (67.4) –————–————————— ————–————————— ————–—————————

At 30 June 1998 349.1 491.7 (7.8)————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

As permitted by Section 230 of the Companies Act 1985 the profit and loss account of the Company is not presented as part of these

financial statements. The consolidated profit for the financial year includes a loss of £21.8 million (1997 – loss of £7.6 million) which

is dealt with in the accounts of Hays plc.

21. ACQUISITIONS AND DISPOSALSThe following major acquisitions were completed in the year:

Date of Acquisition

Paperstream Ltd and Total Mailing Services Ltd 2 July 1997

France Distribution System SA and Mayne Nickless Netherlands BV 19 August 1997

Ionics (UK) Ltd (assets only) 17 October 1997

TTN Geodata Services AS 30 October 1997

DEI Group Limited 3 November 1997

Securicor Omega Office Services Ltd 16 January 1998

Hays Sodibelco Srl 20 March 1998

Oil Data Inc 31 March 1998

Delta Express SA 15 May 1998

FoodCargo BV 29 May 1998

Read Carroll Ltd 29 May 1998

Alpha TT SA, Arec Srl and Quasar Srl 25 June 1998

In addition the Group completed three transactions where the individual consideration was less than £2 million.



21. ACQUISITIONS AND DISPOSALS continued

The assets acquired, together with the relative fair value adjustments are set out below:

(In £’s million) Book Fair value Fair value 1998 1997values at adjustments adjustments Fair values Fair values

acquisition revaluations accounting acquired acquiredpolicies

Tangible fixed assets 121.3 (15.5) (6.2) 99.6 15.5

Stock 2.8 – (1.4) 1.4 1.1

Debtors 63.8 – (3.7) 60.1 21.1

Cash 8.4 – – 8.4 0.9

Creditors and provisions (77.4) – 7.7 (69.7) (21.3)

Loans and finance leases (40.8) – 0.2 (40.6) (72.3)

Equity minority interest (0.1) – – (0.1) –————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Net assets acquired 78.0 (15.5) (3.4) 59.1 (55.0)————–————————— ————–————————— ————–—————————————–————————— ————–————————— ————–—————————

Less: Share of net assets recognised in associate company (0.9) –

Less: Share of minority interests acquired 0.3 4.4

Goodwill (note 20) 104.7 91.5————–————————— ————–—————————

163.2 40.9————–————————— ————–————————— ————–————————— ————–—————————

Consideration

Cash 142.5 37.9

Loan notes issued 3.1 –

Deferred consideration recognised 17.6 3.0————–————————— ————–—————————

163.2 40.9————–————————— ————–————————— ————–————————— ————–—————————

During the year, the Group disposed of its dry cargo and tanker fleets for a consideration of £6.7 million and, in a separate transaction,

Crescent Shipping Ltd and Crescent Ship Management Ltd for a consideration of £3.0 million.

In addition, the Group disposed of its Hays Express parcels business for a cash consideration of £16.7 million. The net assets at

completion were £4.0 million.

Other disposals in the year resulted in a loss of £0.7 million and cash disposed of £1.5 million.

22. CONTINGENT LIABILITIES


Bank and other guarantees – – 46.9 49.8

Deferred acquisition payments 1.0 3.1 – –————–————————— ————–————————— ————–————————— ————–—————————

1.0 3.1 46.9 49.8————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

Performance bonds and other guarantees given in the normal course of business are not included above.

The acquisition agreement for Alpha TT SA, Arec Srl and Quasar Srl allows for deferred consideration of up to £4.0 million

(FF 40 million) to be paid in the next two years. At the date of these accounts £3.0 million has been accrued and £1.0 million recorded

as a contingent liability.



23. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES

(In £’s million) 1998 1997

Total operating profit 204.1 155.8

Depreciation 45.0 31.4

Share of profit of associated companies (0.6) (0.5)

Dividends received from associated companies 0.7 –

Profit on sale of fixed assets (1.3) (1.5)

(Increase)/Decrease in debtors (52.9) 2.3

(Increase)/Decrease in stocks (0.3) 0.1

Increase in creditors 15.9 26.1————–————————— ————–—————————

Net cash inflow from operating activities 210.6 213.7————–————————— ————–————————— ————–————————— ————–—————————

24. MOVEMENT IN NET DEBT

(In £’s million) 1998 1998 1998 1997 1997 1997Cash Debt Net debt Cash Debt Net debt

At 1 July 85.4 (134.8) (49.4) 84.4 (123.1) (38.7)

Foreign exchange movement (1.3) 0.8 (0.5) (5.1) 13.2 8.1

Movement during year 7.2 – 7.2 6.1 – 6.1

Borrowings repaid – 29.6 29.6 – 80.1 80.1

Borrowings raised – (91.9) (91.9) – (32.7) (32.7)

Borrowings acquired – (40.6) (40.6) – (72.3) (72.3)————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

At 30 June 91.3 (236.9) (145.6) 85.4 (134.8) (49.4)————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–————————— ————–—————————

25. RELATED PARTIESAt the date of his appointment, Mr X F E Urbain held, and continues to hold, 1.4% of the share capital of Hays France SA.

During the period the Group entered into various trading transactions with its associated companies. These included sales of £4.2 million

and purchases of goods and services to the value of £0.5 million. At the balance sheet date, the Group had debtors of £1.4 million and

creditors of £0.5 million in respect of these transactions. The associated companies are Water Treatment Solutions Ltd, Busy Logistics

GmbH, Mordhorst & Holdmann Mobeltransport GmbH, AC Automotive Cargo GmbH, Secure Environmental Services Ltd, Logistique

Distribution sous Froid SARL, Logistique du Froid du Bordelais SARL, Nienburger Spedition & Service GmbH and Transports Distribution

Produits Frais SARL.



26. PRINCIPAL SUBSIDIARIESHolding Companies

✽ Hays Holdings Ltd

✽ Hays Overseas Holdings Ltd

Hays France S.A. (France) (98%)

Hays Overseas Holdings GmbH (Germany)

Hays USA Holdings, Inc (USA)

Hays Holdings BV (Holland)

Distribution (specialised distribution activities)

✽ Hays Distribution Services Ltd (distribution, warehousing and home delivery services for retailers and manufacturers plus multi-user

storage and distribution).

Hays Logistique France SA (distribution and warehousing services in France for retailers and manufacturers).

Hays – E Mordhorst Beteiligungs GmbH (Germany) (distribution and warehousing services in Germany for manufacturers).

Hays Chemicals Ltd (bulk and packaged chemical distribution).

Commercial (office support services/mail and express services)

Hays Commercial Services Limited.

Personnel (specialist staff recruitment agencies)

Hays Personnel Services (Holdings) Ltd.

At 30 June 1998 Hays plc (and/or a subsidiary or subsidiaries in aggregate) owned 100% of each class of the issued shares of the

companies except where indicated. Shares in companies marked with an asterisk (*) were owned directly by Hays plc and in companies

not so marked were owned by a subsidiary or subsidiaries of Hays plc.

Companies are registered and operate in England and Wales unless otherwise indicated.

The list of companies includes holding companies and those which had a material effect on the consolidated results to 30 June 1998.

Information on the other companies in the Group will be included in the next annual return.



(In £’s million) 1994 1995 1996 1997 1998

Turnover 631.9 808.4 966.0 1,129.8 1,549.1

Operating Profit (pre exceptional items) 92.8 116.1 139.0 163.3 210.6

Profit before Tax 87.8 110.3 132.0 147.8 197.3

Interest Cover 18 x 20 x 20 x 19 x 22 x

Dividend (pence per share) 6.1 7.0 8.1 9.3 10.7

Dividend Growth (percent) 15% 15% 16% 15% 15%

EPS (pence per share) (pre exceptional items) 14.7 18.7 22.3 26.3 33.9

EPS Growth (percent) 28% 27% 19% 18% 29%

Capital and Reserves 429.8 481.3 541.8 607.5 716.0

Goodwill Reserve (303.4) (308.8) (325.3) (416.8) (515.6)

Equity Shareholders’ Interests 126.4 172.5 216.5 190.7 200.4

Net Debt (58.0) (56.0) (38.7) (49.4) (145.6)

Gross Investment* 492.7 543.2 586.1 657.9 862.6

Return on Gross Investment 19% 21% 24% 25% 24%

Market Capitalisation at Year End 1,053.0 1,280.0 1,860.0 2,387.0 4,302.1

*Gross investment includes Capital and Reserves, Net Debt and Minority Interests.

Five year summaryHAYS plc58


NOTICE IS HEREBY GIVEN that the eleventh Annual General Meeting of Hays plc will be held at The Electric Theatre, Onslow Street,

Guildford, Surrey GU1 4SZ at 12 noon on 12 November 1998 for the following purposes:

ORDINARY BUSINESSResolution No 1

To receive and adopt the Accounts for the year ended 30 June 1998 and the reports of the Directors and auditors thereon.

Resolution No 2

To declare a final dividend for the year ended 30 June 1998 which, if approved, will be paid on 30 November 1998 to shareholders on the

register at the close of business on 30 October 1998.

To re-elect the following directors who having been appointed since the last Annual General Meeting, will retire in accordance with the

Company’s Articles of Association and, being eligible, offer themselves for re-election:

Resolution No 3

Mr K P Charlton

Resolution No 4

Mr R A Lawson

Resolution No 5

Mr X F E Urbain

Resolution No 6

Mr D R Waxman

To re-elect the following Directors who retire from the Board by rotation:

Resolution No 7

Mr J R Cole

Resolution No 8

Mr C S Taylor

Resolution No 9

Mr G J Williams

Resolution No 10

To reappoint Messrs Deloitte & Touche as auditors of the Company until the conclusion of the next Annual General Meeting and to

authorise the Directors to agree their remuneration.

SPECIAL BUSINESSResolution No 11

Ordinary Resolution

THAT the authority conferred on the directors by Article 7.1 of the Company’s Articles of Association be renewed for a period expiring at

the conclusion of the next Annual General Meeting of the Company after the date on which this resolution is passed and for that period the

section 80 amount shall be £1,427,237.

Notice of meeting HAYS plc 59


Resolution No 12

Special Resolution

THAT subject to the passing of resolution 11 above the power conferred on the directors by Article 7.2 of the Company’s Articles of

Association be renewed for a period expiring at the conclusion of the next Annual General Meeting of the Company after the date on which

this resolution is passed or 12 February 2000, whichever is earlier and for that period the section 89 amount is £214,085.

Resolution No 13

Special Resolution

THAT the Company be and is hereby generally and unconditionally authorised to make market purchases (within the meaning of Section 163

of the Companies Act 1985 (as amended)) of Ordinary Shares of 1p each in the capital of the Company (‘Ordinary Shares’) provided that:-

(a) the maximum number of Ordinary Shares hereby authorised to be purchased is 42,000,000,

(b) the minimum price which may be paid for each Ordinary Share is 1p,

(c) the maximum price which may be paid for each Ordinary Share is an amount equal to 105 per cent of the average of the middle market

quotations for an Ordinary Share as derived from the London Stock Exchange Daily Official List for the five business days immediately

preceding the day on which the Ordinary Share is purchased,

(d) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company or 31 December 1999,

whichever is earlier (except in relation to the purchase of Ordinary Shares the contract for which was concluded before such date and

which would or might be executed wholly or partly after such date), unless such authority is renewed prior to such time.

Words and expressions defined in or for the purposes of the Companies Act 1985 shall bear the same meaning herein.

Hays House

Millmead

Guildford

Surrey

GU2 5HJ

8 October 1998

By order of the Board

S J CHARNOCK

Secretary

Notes

1 A member entitled to attend and vote is entitled to appoint one or more proxies to attend and on a poll vote instead of him or her.

A proxy need not be a member of the Company.

A form of proxy is enclosed which you are invited to complete and return. Completion and return of the proxy form in accordance with

the instructions thereon will not prevent you from attending and voting at the meeting, instead of your proxy, if you wish to do so.

2 The register of interests of Directors (and their families) together with copies of the Directors’ service contracts will be available for

inspection at the registered office of the Company on weekdays (Saturdays and public holidays excepted) during usual business hours

from the date of this notice until the date of the Annual General Meeting and will, on the day of the Annual General Meeting, be

available for inspection at the place of the meeting from 11.45am until the conclusion of the meeting.

3 At the date of the Annual General Meeting the service contracts of K P Charlton, X F E Urbain, D R Waxman, J R Cole and G J Williams

will have a period of 2 years unexpired.

Notice of meetingHAYS plc60


DistributionHAYS LOGISTICS INTERNATIONALHays Supply Chain and Hays DSIA

Hays Supply Chain is an international business with the capability to design and implement customised total retail supply chain solutions

supported by unique software tried and tested by both retailers and manufacturers. Hays DSIA provides total facilities management of

supply chain solutions and links with customers’ own systems such as SAP. Already well established in France, Hays Supply Chain and Hays

DSIA are now operational in the UK working for Shell and will soon be providing solutions internationally.

HAYS LOGISTICS UKCombines logistics services across a wide range of business sectors and product groups throughout the UK and the Republic of Ireland.

Consumer

In the consumer sector, Hays Logistics provides a full range of supply chain management services for retailers and manufacturers. The new

Shell and BP contracts also make Hays Logistics the major logistics provider to petrol forecourt shops in the UK.

In the electronics sector Hays Logistics offers multi-national customers a one-stop logistics solution including warehousing, systems and

a technical repair service.

Automotive & Industrial

In the automotive and industrial sector, Hays Logistics operates a full sequencing service for Vauxhall and JIT deliveries to Ford Motors.

The service also includes added value and sub-assembly operations.

Retail Support

Retail Support Services provides specialist warehousing, refurbishment, installation and distribution of non-saleable items. The recently

opened Dove Valley facility of over 250,000 sq ft services a wide range of retail customers and their suppliers.

Home Services

Provides a range of services, such as premium quality delivery for high value goods to homes and commercial premises.

HAYS LOGISTIQUE FRANCEComprises the businesses previously trading as FDS and Hays Fril, whose operational units are currently being integrated into one entity.

Hays Logistique France provides major food and non food manufacturers and retailers with a wide range of chilled and ambient logistics

services from a network of 60 strategically placed depots, with a capacity totalling over 8 million sq ft.

The business focus in France is on the management of retail supply chains. By integrating our systems, assets and management expertise we

are able to provide total solutions suited to each individual customer’s need. Services include distribution, transportation, warehouse

management, systems solutions and value added services such as co-packing and crate management for a wide range of customers and

product groups.

HAYS LOGISTICS ITALYWith our new subsidiary Hays Sodibelco, acquired in 1998, Hays now has a leading position in Northern Italy providing a wide range of

logistics services both for retailers and manufacturers dealing in chilled, frozen, and ambient temperature ranges.

The acquisition of Hays Sodibelco in Italy is a very important step for Hays and is expected to be followed by further developments in other

southern European countries.

HAYS LOGISTICS GERMANYMainly comprises two businesses, Hays Mordhorst and Hays Daufenbach, which are currently being integrated to offer a combined service.

With nationwide networks Hays Mordhorst and Hays Daufenbach provide logistics services for manufacturers and retailers including the

automotive, electronics, chemicals, DIY and beverages sectors.

The business focus in Germany is on the provision of specialist spare parts logistics on a European level for automotive and electronics

customers including time critical distribution and warehouse management.

The German businesses also function as a gateway to eastern Europe with significant developments currently in Poland and the Czech Republic.

Company details HAYS plc 61


Distribution continued

HAYS LOGISTICS BENELUXWith operations in the Netherlands and Belgium, Hays Bijsterbosch and the business formerly known as Van der Heijden complete the range

of logistics services offered in Europe.

Hays Bijsterbosch specialises in crate management, providing major retailers and manufacturers with an environmentally efficient crate and

pallet recycling service. It also operates chilled distribution facilities throughout the Netherlands, as well as a service in Germany for

exporters of chilled goods to France, the UK and the Netherlands.

The market leader in ambient logistics in the Netherlands and Belgium, Hays Logistics Benelux offers distribution and warehousing services

primarily for major food manufacturers, based on a network of warehouses totalling 2 million sq ft.

HAYS LOGISTICS USAThrough our subsidiary Hays Home Delivery Services Inc. we provide a premium quality delivery service involving specialist handling and

installation of furniture and other high value goods to homes and commercial premises within the USA.

HAYS CHEMICALSHays Chemicals provides quality organic and inorganic chemicals safely and on time by maintaining stringent operating standards for

packaging and distribution and has invested heavily in laboratory test facilities. Hays Chemicals is the leading independent distributor of

packaged chemicals and a major distributor of bulk chemicals in the UK.

Hays Chemical Distribution

Hays Chemical Distribution is the appointed distributor for many of Europe’s leading chemical manufacturers including BP, DuPont, ICI,

Procter & Gamble, Shell and Dow Chemicals. All depots have been individually accredited with BS5750.

Hays Process Chemicals

Hays Process Chemicals operates three sites producing a range of chlor-alkalis and sulphur based acids. Its customers are found throughout

British industry.

Hays Sulphur

This BS5750 accredited business is active in the grinding and production of sulphur utilised by a wide range of industries such as tyre

manufacturing.

Water Treatment Solutions

This joint venture with Elf Atochem, a major French chemicals company, produces flocculents and polyaluminium chloride for the water

industry.

Hays Distillation Services

Having recently bought out our joint venture partners, Hays Distillation Services now has sole ownership of this environmentally beneficial

process, applying the latest technology to recovering high grade solvents used in fine chemical production.

Company detailsHAYS plc62


CommercialHAYS MAIL AND EXPRESS SERVICESHays DX

Offers a range of mail, express and related services under the umbrella brand of Hays DX.

Document Exchange Service

Established in 1975, the Document Exchange Service from Hays DX, known as ‘the DX’, provides overnight, pre-9 am, business to business

mail and related delivery services. Operating mainly within nine business sectors, DX members enjoy all the benefits of a faster, cheaper and

more reliable delivery service compared to traditional alternatives.

Throughout the UK, Ireland, France and Belgium over one million items are delivered overnight, every working day on behalf of more than

35,000 members. Items are distributed via a national network of 3,500 document exchanges.

The DX is recognised as the market leading mail service within the legal sector and is increasingly successful within the Retail Finance,

Financial Services, Property & Construction, Government, Utilities and Health sectors.

Specialist Courier Service

The Specialist Courier service from Hays DX (previously the ICS group of companies, acquired by Hays in 1996), provides nationwide,

overnight, pre-9 am, door to door courier services. The Specialist Courier service focuses only on specific business sectors and, from its

original insurance niche, is now recognised as market leader in the optical and travel sectors. Around 260 million items are carried every year

to over 125,000 businesses, including the TaxPost contract with the Inland Revenue.

International Mail

Through its delivery networks and volume discounts with Royal Mail International and other postal administrations, Hays DX is able to offer

customers a competitively priced, faster and more reliable international mail service.

Express Circulation

Express Circulation provides time-sensitive delivery services to City institutions requiring analysts’ reports to be on their customers’ desks by

7.30 am next day. It also provides the express distribution of business magazines within the Greater London and Home Counties area.

Management Services

Established in 1994 under the name of Hays Workflow, Management Services from Hays DX provides mail management and reprographics

services. It was substantially strengthened by the integration of PSG and ICS Logistics acquired in 1996. The fully integrated operation now

provides a comprehensive range of field and office support service’s including mail, document, supplies and transaction process

management services, for many leading UK companies served by other businesses within the Mail and Express Services sector.

Hays Secure Destruction

Secure Destruction from Hays DX, a joint venture company, provides security certified destruction of confidential waste for financial services

and government offices.

Hays Partspeed

Provides a specialist spares distribution service to electronic and computer engineers and a wide range of other technicians, who require

spares and supplies at short notice. Field based personnel receive their urgent packages at any one of 300 locations by 8.30 am the

following day – guaranteed. A unique ‘returns service’ is also available.

Hays Apollo Despatch

Specialises in the same-day, highly secure delivery of urgent documents and small parcels. Using a dedicated fleet of motorcycles and vans

fitted with the latest communications equipment, scheduled through advanced IT tracking and control systems, the company operates from

an expanding network of 19 branches nationwide.





Commercial continued

HAYS CUSTOMER SOLUTIONSHays Customer Solutions is a call centre facility operated by an experienced management team offering a complete outsourced solution. It

handles out-bound and in-bound calls for businesses requiring the freedom and flexibility of a call centre without the heavy capital

investment and management time required. Hays Customer Solutions also has the expertise to handle the back office activities invariably

linked with call handling giving further outsourcing benefits to customers.

HAYS INFORMATION MANAGEMENTHays Information Management is a market leader in archive storage and records management in Europe. Core services range from secure

offsite storage and retrieval and magnetic media back-up data storage to online data retrieval systems. Hays Information Management

provides services to customers in the commercial, energy, public and healthcare sectors and employs 950 personnel throughout the UK, the

USA, Germany, Belgium, the Netherlands and Norway. The business operates from over 40 sites, housing 41 million cubic feet of storage

capacity servicing nearly 4,500 customers.

Commercial Division

The UK market leader in the provision of nationwide document and retrieval solutions to a variety of commercial and professional

organisations. Our customers’ vital assets can be accessed by remote terminals or delivered by more traditional methods. Other technical

innovations complementing core services include bar-coded live file management and tracking, scan-on-demand, fax-back services and

inspection rooms.

Magnetic Media Division

The UK number one provider of computerised, bar-coded retrieval and storage for all forms of magnetic media, including computer, audio

and visual tapes. Purpose built offsite data-centres incorporate the most up to date atmospheric control, security, fire detection and

suppression systems operating 24 hours a day, 365 days a year.

Energy Division

The world’s leading provider of data and information management services to the oil and gas exploration and production industry. These

services include RSO, a unique cataloguing and remote search and order system, for critical exploration and production data. The significant

acquisition of TTN Geodata (Norway) and Oil Data (USA) supplemented by an exciting Global Alliance agreement with the leading oil

industry exploration services company PGS, places this division at the forefront of exploration and production data management.

Public Sector

This division offers highly sophisticated file management services to the public sector and is the undisputed market leader, with prestigious

contracts including those with British Coal, the Department for Trade and Industry, the Department for Education and Employment and the

Crown Prosecution Service.

Healthcare Division

The healthcare market is recognised as a major growth sector, one in which Hays Information Management has been very successful. Current

services comprise data storage, bar-coding, live file tracking, x-ray cataloguing and retrieval, consultancy services and a new electronic

patient record management system.

HAYS RENTACRATEThe market leader in container hire to offices, retailers and the removals industry, Hays Rentacrate has over 400,000 crates on hire at any

one time. The company also advises on and supplies ancillary equipment and develops new products in response to demand.

Commercial continued

HAYS CLINICAL SUPPORT SERVICESProvides hospitals with a complete range of services including the washing, disinfecting, checking, packing and sterilising of clinical

operation packs.

HAYS PAPERSTREAMProvides invoicing, payment processing and direct mail services to a wide range of business customers including those in the utilities,

telecommunications and cable television sectors. Paperstream also offers clients a full sales ledger management service.

HAYS DEIProvides document management, imaging and data capture services to Government departments and customers in the financial services,

banking and logistics sectors. The most up to date telecommunications technology links together Hays DEI facilities in the UK, India and

Sri Lanka, enabling Hays DEI to offer clients a full business process outsourcing facility.

PersonnelHAYS ACCOUNTANCY PERSONNELOperates from 125 locations across the UK and the Republic of Ireland, providing permanent and temporary staff to clients requiring

accounting support staff through to Finance Directors in industry and commerce and trainee chartered accountants through to partners in

public practice. It offers the UK’s largest networked database of in excess of a quarter of a million candidates, accessible from any Hays

Accountancy Personnel office. Specialist divisions, such as Hays Public Sector, Hays Taxation Personnel and Hays City, ensure that every area

of the financial recruitment market is covered by a specialist team. Hays Accountancy Personnel publishes a twice yearly authoritative guide

to salaries and benefits, the ‘Guide to Salaries in Accountancy’ and also organises a number of annual career fairs enabling qualified and

part qualified accountants to meet with representatives from leading employers.

HAYS ACCOUNTANCY PERSONNEL – AUSTRALIAMirrors the UK service. Operating from 14 offices including those in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth it also

provides candidates for executive and banking appointments.

HAYS BANKING PERSONNELThe City’s leading specialist recruiter for financial institutions, supplying permanent and temporary operations and support staff. Further

strengthening its reputation is Hays Investment Personnel, dedicated to the recruitment of operations staff for integrated securities houses.

HAYS RECRUITMENTProvides on-site recruitment solutions for the rapidly expanding call centre industry. Our service provides clients with fully trained and

experienced staff to handle the demanding workloads of any call centre, from a small 10 seat facility to the largest manned by over 1,000

people.

HAYS MONTROSEThe largest supplier of staff to the construction and property sectors with 22 offices in the UK and the Republic of Ireland. Exclusive

recruitment agreements with key organisations such as the Chartered Institute of Building and the Chartered Institution of Building Services

Engineers illustrate the integrity and respect that Hays Montrose is accorded within this field.



Personnel continued

HAYS INTER-SELECTIONThe market-leading specialist consultancy with 11 offices throughout the UK, offering services to the insurance and financial services

sectors. It provides innovative and pioneering recruitment solutions for its blue chip customer base.

HAYS RICHARD OWENA provider of flexible recruitment services to the legal profession, with expertise in private practice and in-house recruitment of partners,

newly admitted solicitors, in-house counsel, company secretaries and legal executives.

HAYS ITProvides computing and electronics personnel to clients at the leading edge of information technology, including those involved in

financial/commercial systems development and telecommunications. Hays IT has 8 offices across the UK and also provides services to a

European customer base from its office located in The Hague.

HAYS READ CARROLLRecruits marketing personnel across the UK, sourcing specialists as well as more general sales and marketing professionals.

HAYS ALPHAOperates from Paris and specialises in the recruitment of banking, insurance and finance personnel throughout France.

HAYS EXECUTIVEProvides a senior management search and selection service. Targeted searches and advertising are used to identify high quality candidates

across a range of disciplines and sectors in commerce, industry, the professions and the public sector.

HAYS INTERNATIONALProvides key personnel at professional and managerial levels across all business sectors worldwide on both a permanent and interim

management basis. With offices in London, Hamburg, The Hague, Paris and Prague, a team of specialist multilingual consultants recruits for

local and global organisations, from blue chip multinationals in key western European centres of commerce and industry, through to the

satellite offices of the world’s largest accountancy firms and to enterprising, growing companies in eastern and central Europe.



A MERCHANT CORPORATE DESIGN productionDesigned by MAGEE & COMPANY

Photography by PAUL VENNING

Portraits by JIM FORREST

Printed by CTD

Hays House, MillmeadGuildford, Surrey GU2 5HJ

01483 302203

“A Solid Performance...”

“Meeting the Demand...”

“Investingfor Growth...”

“Committedto Service...”

“Sharing inour future...”

Documents

“Strength through People”files.investis.com/hays/docs/ar_1998-06-30.pdf · 2009. 1. 7. · Hays • 1/10/98 • Proof 6-1: Review Hays provides business-to-business services 24