Hays reports a  10% drop in net fee income on a like for like basis for the quarter ending 31 December 2008 compared to the same quarter in 2007.

In a trading statement, the company says this reflected “deteriorating market conditions” in most of the countries in which it operates.

Net fee income was down 22% in the UK , and 9% in Asia Pacific. However, it was 42% higher in Continental Europe and the rest of the world.

Net fee income for the company’s permanent business declined by 23% (LFL). However, temporary net fee income increased by 4%.

Paul Venables, Hays’ finance director, told a conference call that “demand for permanent placements continues to fall at an increasing rate in the UK and Australia” and had recently fallen in a number of other countries. However, temporary placements had been “more resilient”.

Hays’ public sector business grew by 10% and now represents 30% of its business.

Venables says the company had reduced headcount by just over 500 staff during the quarter and that staff numbers were now 20% down on a year ago.

Alistair Cox, chief executive of Hays, says: “Over the last year, we have reacted rapidly to deteriorating market conditions by adjusting the cost base, focusing on cash generation, maximising opportunities in both the temporary and permanent placement markets and redirecting resources to increase marketshare in the more defensive sectors.

“The experience of our management teams around the world and the strength of our balance sheet positions us well to deal with these market conditions.”

Net Fee Income is calculated on a like for like basis (ie after adjusting for currency fluctuations)