Seymour Pierce has upgraded its rating for recruitment firm Hays from 'hold' to 'buy', after the group's first-quarter results came in ahead of expectations.

The firm posted a 1% decline in like-for-like net fee income (NFI) in the three months to September 30th, better than the 2% fall Seymour Pierce had forecast and the 4% drop expected by consensus.

"Hays is clearly outperforming Michael Page which reported a 6.5% decline in NFI over the same period," said analyst Caroline de La Soujeole.

While weakness is reporting in Australia, New Zealand and Queensland, Seymour Pierce says that comparatives should get easier and management is guiding towards a stable second quarter.

"This is an encouraging update from Hays. Guidance is for a similar outturn in 2Q12. It is still early days so we leave our FY13 (year end June) forecasts unchanged, expecting adjusted pre-tax profit of £117.9m, down 4% year on year."

De La Soujeole said: "We believe Hays has a more resilient business model compared to Michael Page given its more balanced temp/perm exposure."

Shares were up 5.52% at 79.35p in mid-morning trade.

BC

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