Recruiter Hays sees share price slump after capital hike to cope with Covid-19
The UK-based recruitment company’s shares fell on Thursday after raising £200 million in equity to strengthen its balance sheet amid the coronavirus pandemic.
Hays shares closed 13% lower on Thursday, with the stock plummeting after the recruiter announced it had raised £200 million in equity to cope with the economic impact of Covid-19.
The recruiter raised the additional funds via a new share issue, with the company eager to shore up its balance sheet in expectation of a major reduction in fees due to the global pandemic.
‘The past few weeks have been unlike anything the world has seen in modern times and has severely impacted recruitment markets globally,’ Hays CEO Alistair Cox said in a statement.
‘Today’s equity fundraise is designed to further reinforce our business so that we are strongly placed to build on our market leading positions globally by supporting our clients and capturing additional market share,’ he added.
Hays shares hit lowest level since July 2016
Hays recent stock market decline saw the mid-cap company underperform the broader market, with the FTSE 250 closing 1% lower on Thursday.
Shares in the recruiter have fallen more than 45% since the start of the year, with the stock hitting its lowest level since July 2016.
However, the company still has a long way to go before reaching its record low of 55p a share back in October 2008.
Looking to trade Hays and other UK stocks? Open a live or demo account with IG today.
Hays’ US growth opportunities dwindle amid Covid-19
In the recruiter’s half-year results, Cox said growth had slowed over the first six months of trading due to ’macro uncertainties and reduced business confidence’.
‘Our focus is on cost management; however, we see good growth opportunities in our largest specialism of IT, and in the USA,’ he added.
But with the US in meltdown as it tries to cope with the economic impact of the Covid-19 pandemic, growth opportunities that once were are likely no more.
You can go long or short Hays and other FTSE 250 companies with IG using derivatives like CFDs.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
