Shares in Hays slumped after the company said it was suffering from disappointing demand in certain areas, notably the public sector.

Hays was making a trading statement to coincide with the end of its financial year on 30 June. It set out data showing that the business had continued to grow since it reported its first-half results in February, but the investment community had been expecting faster growth.

Finance director Paul Venables said growth was ³lower in the fourth quarter than in the third.² In a conference call for analysts, Venables said accounting and finance, construction and property and IT divisions had seen single-digit growth.

However, legal, human resources, banking and sales and marketing were maintaining higher growth.

He added: ³Public sector demand growth had slowed.² Analyst Mark Shepperd at UBS said the growth was ³disappointing². He added:

³We believe this is a company-specific issue rather than a downturn in the industry².

The firm¹s shares dropped 8.9% on the day of the announcement, wiping about £190m off is market value. Hays is the second-biggest company tracked on Recruiter¹s list of shares on page 11. Only Capita, for which recruitment is just one activity, is bigger.

Total net fees for Hays in the second half of the financial year are expected to be approximately 14% ahead of the same period last year. It said both temporary and permanent placement fees are ahead of the same period last year. In the UK & Ireland, net fees are likely to be about 7% up.

Meanwhile, Hays has used £336m of surplus cash to buy back shares since last year.

The company will announce its full-year results on 5 September.