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Summary
- UK-based recruitment company Hays Plc reported that London’s technology sector recruitment has risen above pre-pandemic levels.
- The UK government expects recent surge in technology company listings to drive the economic recovery.
UK-based recruitment company Hays Plc (LON:HAS) reported that London’s technology sector recruitment was higher than the pre-pandemic levels, thus presenting an important opportunity for the country’s economic recovery. The recruitment rose due to investments in technology, life sciences and the green economy sectors driving new skillset requirements.
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Recent market listings boost demand
The news comes after technology industry network, Tech Nation’s chairman Stephen Kelly regarded 2021 as the golden year for UK tech due to multiple reasons. Several technology firms announced recent listings and upcoming IPO plans following a rise in demand during the pandemic.
- Online greeting card company Moonpig (LON:MOON) recently made its stock market debut at £1.2 billion.
- Wine delivery company Virgin Wines announced plans of floating on the LSE’s sub-market the AIM All-Share Index, for an estimated valuation of £100 million.
- Food delivery company Deliveroo is expected to announce its IPO plans on 8 March.
- Internet-based auction company Auction Technology Group is set to float an IPO at an estimated valuation of £600 million on 23 February.
- Cyber security firm Darktrace is also expected to list on the stock market. The sector’s hiring increased by 9 per cent to 50,000 employees in 2020 despite the pandemic.
The government announced it is reviewing stock market listing rules to back founders in holding a golden share, in order to protect firms against hostile takeovers. The UK government hopes the recent surge in technology IPOs will be one of the key areas in unlocking the door to Britain’s fiscal recovery. A golden share holds 51 per cent of voting rights in a company, providing the shareholder with veto power to any changes to be made in a company.
Earnings results
The British recruitment firm reported its profits before tax fell by 78 per cent from the previous year to £21.1 million in H1 2020. The company had reported a profit before tax of £95.6 million in H1 2019. The company attributed the lower earnings due to the covid-19 pandemic affecting its net fees and turnover.
The company’s turnover in the first half of 2020 was at £2.76 billion, lower than its turnover of £3.10 billion in the same period last year. Additionally, its net fees fell by 24 per cent on a year-on-year basis to £422.8 million in the first half of the fiscal year.
The company said business activity in the start of the year was slower, however it had since reached similar levels to its pre-Christmas period by the first week of February this year.
Stock market reaction
Hays (LON:HAS) shares closed at GBX 153.30, down by 2.97 per cent as of 18 February, comparatively the FTSE 250 index shares were at GBX 20,933.87, down by 1.02 per cent for the same period.
Recently listed tech firm Moonpig’s (LON:MOON) stock price closed at GBX 457.00, up by 5.20 per cent on 18 February.
