As per the usual format, I'll take you through the operating review, and then I'll hand over to Paul. He can take us through the detailed financials and the current trading, then I'll come back up to give you an update on our strategy. Just jogging back 12 months, we started FY 2019 with double-digit growth across the majority of our markets. We'd already increased capacity to meet increasing demand back then. As such, our head count started the year up 10%. However, as we all know, as the economic backdrop started to cool across most regions, that started around September 2018, and it became slightly harder month by month as the year went by. I'd characterize it as clients began to kind of tap the brakes in terms of their own investment spending.
They started to think first about cost control, and then later on towards the end of the year, more cost reductions. They did that for the first time in a number of years. When that happens, it tends to lead to a period where our own profit growth is lower than our fee growth until our head count growth starts to move closer to the lower levels of net fee growth. Given that backdrop, we focused very much on consultant productivity and cost control in order to protect our own short-term profitability, whilst at the same time, maintaining our strategic investments in key markets such as Germany, China, North America, as well as in the technology sector.
If I turn to our overall results, as you can see from the top right-hand corner here, net fees increased 6% to a record GBP 1.13 billion, with pre-exceptional operating profits of GBP 248.8 million and EPS of GBP 0.1192, both up 4%. On a constant currency basis, operating profit was GBP 252 million. Cash generation was excellent. That allowed us to lift the full year core dividend by 4% to GBP 0.0397. We propose our third successive special dividend of GBP 79.7 million. That brings the total dividends that we've already paid or proposed to pay in the first two years of our five-year plan to over GBP 265 million. Our strategy, as you know, has been consistent for many years now.
The three most important things to us remain maximizing our financial performance, building our future business, which means further expansion and diversification, and thirdly, being world-class in terms of efficiency, both in terms of our conversion rate as well as in terms of cash generation. Looking at FY 2019, particularly considering the changes in the macro conditions during the course of the year, again, I think we've delivered on all three. Profits, as I've mentioned, were up 4%. We had record total net fees. 19 of our 33 countries delivered their own individual fee record. 80% of our profits were generated from outside the U.K., again, I think that's a clear sign of the benefits of our international diversification strategy. We opened eight new offices around the world. We significantly expanded many others right across Europe, Asia, and the Americas.
The U.K. market was obviously impacted by political uncertainty, the strong control on costs that the U.K. team held, it helped drive 4% profit growth as well as a modest increase in conversion rate. We did restructure a number of our European countries in order to maximize their own profitability, particularly against the more challenging backdrop. While group head count was up versus prior year, we did reduce overall group head count by around 200 heads in the last six months. At the same time, however, we continued to aggressively invest in markets such as the technology sector globally, where conditions were very favorable indeed, we delivered rapid growth there.
To support our consultants, we continued to build their productivity enhancing systems, as many as you saw at our technology seminar just recently here in London, we introduced several advanced tools for our consultants during the course of the year. All of those tools designed to help the consultants become more effective in their jobs, as well as harness the power of the data that we now hold in the business. The conversion rate remained sector-leading, 22%, although it did decrease 70 basis points. That was due mainly to the slower conditions in Europe and Australia, as well as the investments that we made in key markets, and I'll come back to those in a little while. Finally, in terms of cash, we ended the year with record net cash of GBP 129.7 million in the bank.
Stepping back, I'd clearly like to have seen a couple of percentage points more growth this year, in the context of a world that's been dealing with a trade war between China and the U.S., with political and economic uncertainty in many of our markets, we did move quickly to defend our profits while continuing to invest selectively for our future growth. I think that's a solid performance. Let me give you a little bit more detail on each division. I'll start in Australia and New Zealand as usual. Fees were up 4%, profits were flat year-on-year, this was against both tough growth comparatives as net fees were up 14% in FY 2018, if you remember. Temp growth was good, up 7%, while perm fell 4%.
We again hit record numbers of temp workers in June 2019, over 22,000 temps and contractors out on assignment at that time. After a run of 19 consecutive quarters of growth, I think it's maybe not surprising that the Australian business slowed, and it went slightly negative in our fourth quarter as the hiatus around the general election played out. Australian net fees were up 5% year on year, and we continued to trade at near all-time record levels. State by state, New South Wales and Queensland both grew 7%. Western Australia, however, was tougher. At the specialism level, Construction & Property, that's our largest specialism in Australia, it declined 7% in the year. We had, however, expected C&P to be weak, so we managed our costs accordingly. On the other side, I'm delighted that we had other specialisms such as IT, which grew 21%.
They really picked up the baton of the slowing in Construction & Property. We also saw good progress in areas such as office support and HR, which were up 6% and 9% respectively. Australian headcount was up 1%. We did temper investment as the year progressed. Under the bonnet of the business, we saw quite a differentiation of investment by area. For example, we put a lot of additional capacity into markets like IT and digital technology. We've increased headcount in that area by around 50% in the last two years alone. Conversely, Construction & Property headcount has declined 14% since that market peaked last year, and we focused on productivity in that sector.
If we look at the economy today in Australia, there continues to be a tough market in construction, but with two recent interest rate cuts by the RBA, maybe that's now pointing to a stability in the residential market. At the same time, we continue to see very good conditions indeed in IT, and we continue to invest aggressively in that space. Finally, just a word on New Zealand. New Zealand has been a tough business for us for the last couple of years. Fees declined 17%, and that impact alone reduced our ANZ fee growth by around 1%. We did make management changes in New Zealand a year ago. The new team are in place. They're doing all of the right things.
I'm down there soon to see it for myself, and we're seeing encouraging early signs, and I fully expect New Zealand to return to growth very soon. Turning now to Germany, our biggest business, where we've delivered another good performance despite weakening market conditions and tough growth comparators. Net fees were up 9%, operating profit was up 7%, and both fees and profits were at record levels. This was despite our continuing investment in people, office expansion, and the back-office infrastructure project. The flex business, which is 84% of our German fees, was up 8%, and within this, contracting grew 3% and temps by 19%. The perm business had another strong year, up 16%. By sector, IT remains our largest specialism. That grew 9%. The second largest is engineering. That was up 6%.
It's not surprising that the weakness in the global automotive industry impacted us, and our engineering growth slowed from 10% in the first half to 2% in the second. The newer specialisms in Germany did very well. They're now in aggregate around a third of the German business, and Accountancy and Finance was up 16%, Sales and Marketing up 17%, and Legal up by a superb 44%. We took the opportunity to open two new offices in the year, and we materially expanded our space in three others, and we invested in additional headcount. Headcount was up 6%. Finally, as we set out almost a couple of years ago now at our 2017 Investor Day, we are the market leader in Germany by a long way ahead of the competition, and we continue to see a once-in-a-lifetime opportunity to build a truly massive business there.
I think the long-term structural opportunity in Germany is immense despite the current tougher economy that we're facing today. Moving now to the U.K. and Ireland, and given the market backdrop, I think the team there delivered a good result. Fees were up 2%, and through strong cost control, profits were up 4%. Political uncertainty continued, as we know, and the market dipped slightly in our fourth quarter. Despite this, remember, employment in the U.K. remains at record levels. There remain significant skill shortages across industries, and there are signs of wage inflation, all of which are helpful to us. Our market-leading public sector business performed very well. It was up 11%. The private sector, which is about three-quarters of our net fees, it was tougher. That was down 1%. Perms was flat, and the larger temp business was up 4%.
Looking by region, the South West and Wales won the prize again, grew 14%. Northern Ireland, I think deserves a mention. They were up 7%. Scotland was tougher. Fees in Scotland fell 9%. Here in London, I know we're always a little focused on London, our largest region was up 2%. By industry sector, net fees in IT were up 11%. The largest U.K. specialisms of A&F and Construction & Property were both up 3% and 1% respectively. However, the education business, which is an important business for us here in Britain, remained very tough. We kept average headcount broadly flat. We remained focused on productivity. Finally, the rest of the world division, if you remember, this comprises 28 separate countries. We group them into three sub-regions. Overall, net fee growth of 8% was good.
We did see a slowing of growth in parts of Europe, and that coupled with property investment, meant that our conversion rate fell by 70 basis points. In the first sub-region, we have 17 countries in Europe outside Germany, 10 of which had a record year. Italy and Spain were the standouts again, growing 20% and 14% respectively. On the other hand, however, Belgium was tough. Belgium was down 6%, and growth in France slowed to 4% and decelerated throughout the course of the year. As a result, our profits in EMEA, outside Germany, declined 4% year-on-year. The management teams around the region acted quickly on their costs, and we restructured several of these businesses to protect our profits as well as rightsize and position them better to cope with the currently more challenging conditions. Across the world in Asia, we had another strong performance.
Fees were up 15% to a new record. Profit growth, however, was below fee growth, due partly to a slower Q3 in Japan, as well as several property expansions, as we do need more space to accommodate our future growth across Asia. China's now become our largest Asian business. It's our fifth-largest in the world. It grew by an excellent 22%, including Hong Kong alone, which was up 32%. I personally see China becoming a far more important part of our group in the long run, and I'll return to that in my strategy section in a few minutes. Finishing up in the Americas, net fees were up by a strong 10%. Canada was the standout performer last year. Fees were up 18%. The United States grew 7%, and that includes our Construction & Property business there, which was up 27%.
As you know, our U.S. strategy is to build scale, we also put major investment into our relatively new Accountancy & Finance business, combining experienced consultants transferred from around the world together with local talent that we recruited locally to build that team. Despite all of these investments, we still grew our overall Americas profit by nearly GBP 2 million. Across the whole of the Rest of the World division, our headcount was up 6%, with more capacity going into each of those sub-regions, as you can see at the bottom of the slide. Finally, I will end this section with our usual traffic light assessment of our performance versus our long-term aspirations.
As you know, our 2022 plan aims to significantly grow our profits to between GBP 300 million and GBP 450 million, based on the macro conditions remaining as they were in November 2017 when we first presented this plan. I think everybody in the room would agree that around the world, the economies have become significantly tougher since that time. We have a slower world economy, and we have a delayed Brexit. As such, I think it will still take us slightly longer to achieve the midpoint of that range, but I do believe that we will get there. Looking at the top left, ANZ remains green. Fee growth in the first two years of the plan is annualizing at 9%, and that's in line with the top end of our targeted range. We're by far the market leader in Australia, so we're used to managing the Australian cycle.
With three years to go, we're only just below the low point of our ANZ profit range already. Top right, Germany. I said at our half-year results that if Germany delivered a combination of strong net fee growth and rising conversion margins, we'd return it to a green light. The fee performance last year was good, particularly given the slowdown in the automotive sector. We've not yet delivered positive operational leverage. While our long-term ambitions remain as strong as ever in Germany, particularly given the wonderful opportunities, we do need to see higher GDP growth for us to get back to our more historic levels of fee growth. I firmly believe that we can double our German profits from the 2017 levels, but as I suggested back in February, it may take us a year or so longer to get there.
Because of that, I'm leaving it on amber. Bottom left, the U.K. and Ireland is already well within our five-year plan range and is outperforming the market. That itself should justify a green light. However, I'm very conscious of the broader uncertainty that's created by Brexit, it would seem unusual to move to a green light before we see the eventual outcome of that. Again, we'll leave the U.K. on amber for now. Finally, bottom right. Within Rest of the World, I'm very happy indeed with our Asian performance. We've had some standout performances elsewhere, particularly Canada, as I've mentioned. However, we did see a slower year in parts of Western Europe, the slowdown there meant that our profit performance was somewhat softer than I would have liked.
We also had a weaker second half in Japan and the United States, although I'm pleased to say that recent trends in both of those markets, far more encouraging, and I expect them both to accelerate now. Given the excellent progress that we made in the prior year in the Rest of the World Division, we're still on track in terms of our five-year plan, and our profit is already not far off the bottom of the range with three years still to go. Until we see a little more momentum in Europe, I'll give it an amber for now. Overall, the group's long-term ambitions, they remain undiminished. The weakening backdrop does mean that we may take a little bit longer to reach the midpoint, but again, we will still get there.
I'll now hand over to Paul to give us a deeper look into our financial performance as well as an overview of our current trading. Paul?
Thank you, Alistair, and good morning, everyone. Before I start the highlights of the financial review, unless otherwise stated, when I refer to operating profit, EPS, and dividend cover, I'll be presenting numbers before exceptional costs of GBP 15.1 million, which I'll cover in more detail shortly. Firstly, to summarize what has been a solid year's performance despite weakening macroeconomic conditions in many markets.
As you can see on the slide, net fees increased by 6% on a like-for-like basis, and we delivered GBP 248.8 million operating profit, with solid profit performances by our international businesses against a backdrop of slowing growth and good cost control in the U.K. As a result, EPS increased by 4%, and we've proposed a 4% increase in the full-year core dividend to GBP 0.0397 per share, as well as a special dividend of GBP 0.0543 per share for a total proposed dividend payout of GBP 138 million, which is up 7%. In macroeconomic conditions that are increasingly more challenging through the year, these results are a testament to our ability to drive growth in more supportive markets such as Asia, Americas, while focusing on cost control in more weaker markets such as Europe and the U.K., and thus maximizing the group's profit performance.
This, allied to our highly cash generative business model and strong financial position, means we're rewarding our shareholders with strong dividend returns, which represent a yield of almost 7% at the current share price. Coming on to the more detailed income statement. On an actual basis, net fees increased by 5% and operating profit by 2%. On a like-for-like basis of organic growth at constant currency, net fees were up by 6% and operating profit by 4%. The difference between the headline and like-for-like growth rates is primarily the result of the depreciation in the average rate of exchange between the Australian dollar or sterling . Overall, as we've put on the bottom of the slide, FX decreased net fees and operating profit by GBP 8.8 million and GBP 3.4 million respectively. I'll come back to FX slightly later.
As Alistair stated earlier, we entered FY 2019 with strong growth across our international businesses, as is clearly showed on this slide, with rest of the world at 23%, Germany at 14%, and ANZ at 13%. As economic conditions started to weaken sharply last summer, we've seen our clients across the world move initially to reduce investment spend, then to across-the-board cost control. Finally, in Q4, we saw many clients move to focus on cost reduction. As our clients' confidence has reduced and decision making has slowed, we've also swiftly changed our approach to managing the business. Whilst at the end of FY 2018 and the initial part of FY 2019, we were focused on investment to capitalize on the many growth opportunities around the world.
Since September, we've moved to a more surgical investment approach, still attacking those parts of the market that are growing, such as IT, while simultaneously tightening cost control in those parts of the business that have become more difficult. Therefore, we reduced our overall consultant headcount by 200 in the second half. Additionally, in the second half, we performed a comprehensive review of our cost base across our European businesses and right-sized our management teams for the current market conditions. We've recognized an exceptional charge of GBP 6.8 million, and this results in GBP 5 million of annualized cost savings. One of Hays' strengths that we've covered several times over the years is our experienced and nimble management team that we have around the world. We'll continue to seek out growth where possible, but also drive good cost control where appropriate.
We've seen it all before, and we'll deal with it appropriately, planning for the long term and executing for the shorter term. Alistair's already covered regional trading in detail, so I'll just cover a few technical issues. Germany saw good growth in net fees and profits. Adjusting for the one additional working day, underlying net fee growth was 9% and profit growth was 6%. The shortfall of profit growth to fee growth reflects a slow market and our continued investment strategy with investment in two new offices and expansion in three others at a cost of GBP 2 million and a further GBP 2 million on the completion of our upgrade of our front office systems, scaling them for future growth.
In the U.K., where markets were relatively stable until Q4, profit growth exceeded net fee growth with a 3% increase in consultant productivity and good cost control driving leverage. In the rest of the world, whilst we delivered a good fee performance, profit growth was much lower than net fee growth, and this is primarily due to the slowdown in fee growth in Europe and also the investment in new and expanded offices in Asia, U.S., and Europe, which cost GBP 3 million. Moving on to look at the performances of our perm and temp business. Our perm business, which comprised 43% of net fees, grew by 7%, driven by a 4% increase in volume and a 3% increase in our average perm fee. The increase in average perm fee was driven by underlying wage inflation and a positive mix effect from our excellent perm business in Germany.
We estimate that global wage inflation increased to 2%-3% overall, with, of course, pockets of greater inflation in certain skill short markets. Our temp business, which comprised 57% of group net fees, increased by 6%. This comprised a volume increase of 6%, a 3% increase in mix, primarily from Germany, partially offset by a decrease in underlying temp margins down 50 basis points in Australia and the U.K. Moving on to exchange. As usual, we provide details of our P&L sensitivity to changes in key exchange rates. The Australian dollar, and even more so the euro, represent meaningful FX translation sensitivities to the group, as we set out on the slide.
As sterling has weakened over the last few months, if current exchange rates hold for the remainder of the year, the impact on FY 2019 full-year reporting operating profit will be GBP 5 million positive, which is GBP 2 million more than when we did the Q4 IMS. As we said before, the group does not undertake any P&L hedging arrangements. Moving on to conversion rate. Our group conversion rate for the year decreased by 70 basis points to 22%. The primary reason for the reduction was a material decline in client confidence and thus activity levels across the year, as I showed on my earlier graph. With that backdrop, and despite the cost reduction measures which I explained earlier, there's always a lag between changes in market conditions to taking action and then profit protection.
In addition, in FY 2018, we reached full capacity in a number of our major offices around the world, and the additional space we've taken in Asia, Europe, and the U.S.A., and opening eight new offices, increased our overall property costs by GBP 5 million in FY 2019, as we previously guided. This was offset by lower senior management incentive payments of GBP 10 million and GBP 2 million of cost savings in FY 2019 related to the exceptional restructuring charges. Therefore, the overall group drop through in FY 2019 was a low 13%. Moving on to interest and tax. The net finance charge for the year reduced to GBP 2.5 million, driven primarily by a GBP 1.6 million reduction in the IAS 19 pension charge.
Looking forward, we expect net finance charge to increase to GBP 10 million in FY 2020, driven by a GBP 2.5 million increase in the IAS 19 pension charge due to lower accounting surplus and discount rate, and GBP 5 million with the implementation of IFRS 16 on leases, which I'll cover later. Importantly, these increases are non-cash. Turning to tax, our effective tax rate decreased to 29.5%, driven by the geographic mix of profits and certain other items, and we expect tax rate to remain at 29.5% for FY 2020. On EPS, basic earnings per share was GBP 0.1192, a 4% increase versus prior year, reflecting the group's higher operating profit, lower interest charge, and lower effective tax rate. During the year, we incurred an exceptional charge of GBP 15.1 million, which comprises of two items.
Firstly, as mentioned in the interim results, following the landmark legal judgment against Lloyds Banking Group in October 2018 on the equalization of guaranteed minimum pensions, or GMP, for men and women in the U.K. defined benefit pension plan, we've recognized an exceptional charge of GBP 8.3 million, which represents 1.2% of scheme liabilities. This is a non-cash item. Secondly, as explained earlier, we incurred a non-recurring restructuring cost of GBP 6.8 million, primarily in our European businesses, as we right-sized our management teams for the current market conditions. This will deliver annualized savings of GBP 5 million, of which GBP 2 million was achieved in FY 2019 and additional GBP 3 million in FY 2020. The cash outflow was GBP 2.9 million in FY 2019 and will be GBP 3.9 million in FY 2020.
On this slide, we've pulled together both the impact of the implementation of IFRS 16 and all other forward P&L guidance we're giving in FY 2020. IFRS 16 for leases will become effective for Hays from FY 2020. In line with most companies, we've decided to use the modified retrospective approach with no restatement of prior years. In the prelim announcement, we have set out the impact on balance sheet with group assets and liabilities increasing by between GBP 240 million and GBP 245 million. In column one, we set out the impact on our P&L, where operating lease charges will be replaced by depreciation and finance costs. We estimate the overall impact of adopting IFRS 16 in FY 2020 will increase operating profit by GBP 2 million, increase net finance costs by GBP 5 million, for a net reduction of PBT of GBP 3 million.
Perhaps the most important part of this is, one, it's non-cash, and it also has no impact on either our banking covenants or our special dividend policy. The additional P&L guidance we're giving for FY 2020 is as follows. Firstly, as outlined at the Q4 IMS analyst call, property costs will increase a further GBP 5 million in FY 2020, being the result of decisions taken in FY 2018 and early 2019 for additional space to ensure future growth. We expect minimal increase in property costs beyond this over the next few years. Secondly, as also stated at Q4 IMS, there'll be additional GBP 5 million of depreciation costs relating to IT investment and new office fit-out. Finally, as I've already explained, we've given guidance on IAS 19 pension charge and the further cost savings we have from restructuring charges.
Overall, these items reduce operating profit by GBP 5 million, increase net finance cost by GBP 7.5 million, and thus decrease PBT by GBP 12.5 million. Overall, the net cash impact of these items is minimal. On this slide, we summarize the key components of our cash flow. The chart on the left-hand side details the sources of cash flow, starting with operating profit of GBP 248.8 million. We add back non-cash items of GBP 27.4 million, predominantly fixed asset depreciation and amortization, and also share-based payments. We then deduct a GBP 13.2 million outflow in respect of working capital, which is much lower than recent years, reflecting both the continued strong working capital management and lower growth in our temp and contracting business in Q4. This leaves an operating cash flow of GBP 263 million, a strong underlying conversion of profit into cash of 106%.
From this, we paid tax of GBP 75.5 million, net interest of GBP 2.7 million, leading to free cash flow of GBP 184.8 million. On the right-hand side, we detail how we've used the cash generated. The main items were dividend payments of GBP 129.1 million, which reflects last year's final dividend of GBP 40 million and special dividend of GBP 72.9 million, both paid in November 2018, plus the interim dividend of GBP 16.2 million.
We also have CapEx of GBP 33 million, and pension deficit payments of GBP 15.7 million. In FY 2020, we expect CapEx to be GBP 30 million. As a result of the strong cash performance, we ended the year with net cash of GBP 129.7 million, and in November 2018, we extended our GBP 210 million bank facility to November 2023. On this slide, we compare the balance sheet as at June 2019 with the prior year.
Two noteworthy movements are, one, the reduction in the IAS 19 pension accounting surplus to GBP 19.7 million from GBP 75.9 million, which is primarily due to the decrease in discount rate and increase in inflation rates, partially offset by an increase in asset value and company contributions. Secondly, the increase in working capital, which I've already explained. We covered the August 2018 pension scheme buy-in at last year's prelims, and during the year, the 2018 triennial valuation was completed and quantified actuarial deficit at GBP 44 million. There is no change to our deficit recovery payments, which will continue to increase at 3% per annum as we continue to move forwards to our strategy of full buyout of the scheme within the next five years. Moving on to dividends.
Our priorities for free cash flow remain unchanged, namely, to fund the group's investment and development, maintain a strong balance sheet, and deliver a core dividend at a level which is sustainable, progressive, and appropriate. In line with our dividend policy outlined in the middle box of the slide, the board proposes to increase the full-year core dividend by 4% to GBP 0.0286 per share, resulting in increase to the full-year core dividend also by 4% to GBP 0.0397 per share. As such, a full-year core dividend will be covered three times by earnings. Additionally, in line with the policy on uses of excess cash flow outlined in the bottom box, and recognizing the highly cash generative nature of our business model, the board recommends the payment of a special dividend of GBP 79.7 million, equivalent to GBP 0.0543 per share at 9%.
Therefore, total FY 2019 dividends increased to a record level of GBP 138 million. In summary, against a backdrop of increasingly difficult macroeconomic conditions, which have reduced business confidence and investment, we've delivered a solid set of results. Through the year, our focus shifted from investing in numerous growth opportunities in the first half of the year to more selective investment and tight cost control as the market slowed in the second half of the year, again demonstrating our agility to move fast to maximize our profitability. Our ability to turn this profits into cash means that we've converted 106% of profits into cash, have a strong financial position, and are recommending record dividends of GBP 0.094 at almost 7% yield on our current share price.
In conclusion, these results continue to demonstrate both the significant diversification we've achieved in our business over the last decade or so with our non-U.K. business now representing over 80% of group profits, a highly cash generative business model, and our strong, experienced management teams around the world. Turning to current trading. In Australia, market activity continues to be broadly stable sequentially at high overall levels, albeit slightly below FY 2019. In Germany, economic conditions and market activity levels are weakening with reduced business confidence and slower client investment decisions, particularly in the engineering and automotive sectors. Here in the U.K., market activity has recently softened with signs that continued economic uncertainty is impacting business confidence in the private sector. In the rest of the world, conditions remain good across Asia, more mixed in the Americas, and the EMEA ex-Germany is broadly stable.
With that, I'll hand you back to Alistair, who will update you on our strategic priorities and progress before taking any questions.
Thanks, Paul. I've already addressed our progress versus the 2022 plan. For the next few minutes, I just want to talk about some of our other strategic initiatives that are going on around Hays. As you know, you've seen this slide before, we follow four key themes in terms of how we run our business, each of these themes being interrelated, they create a cycle of investment, growth, diversification, distribution, then further reinvestment. Again, I think we've made good progress on each of these areas over the last 12 months. We hit record fees. 19 of our countries hit their own individual fee records. We ended the year with record cash despite GBP 20 million of higher dividend payments year-on-year.
As I mentioned earlier, in the first two years of our 2022 plan, we've either paid or proposed to pay over GBP 265 million in total dividends. We've also made good progress in terms of rolling out our newer specialisms into key markets. For example, our German legal specialism was up 44%, and in Canada, our IT flex business grew by a third, helped by transferring some of our talent and know-how from our very successful German business. I think these are all examples of what I would call relatively low-risk growth because our brand is already well-known in these markets, and we can leverage existing fixed infrastructure, whether it be office space, websites, or in-country management teams. It's a key part of our strategic plan to steadily infill these specialisms across all of our regions.
Over on the right-hand boxes, we continue to initiate and grow partnerships with some of the biggest technology companies in the world, as well as launching tools designed to improve our own consultants' effectiveness in filling jobs. I think we'd all in this room recognize that the digital transformation of almost every single business and organization in the world today is accelerating. To win that race, you need a very strong technology and data strategy. In our recruitment industry, winning the race actually means filling more jobs. To do that, I think you need three things. Number one, you need connections with the right people. Number two, you need to be able to determine their approachability for any given role at any point in time. Thirdly, you need to execute that contract very efficiently.
You need to do all of that at a pace and at a scale that humans alone simply could not do. Many of you attended our technology seminar back in the Cheapside office in June. You'll have heard our Chief Technology Officer, Steve Weston, talk about the three phases of the Hays technology development, and he made the very good and clear point that there are no shortcuts to building a truly data-enabled business. Way back when, 2008 to 2012, in our foundation phase, we built an internet-enabled internal system, which we called OneTouch, and that remains at the heart of our technology strategy today. Having built that, we then moved on to our connections phase, and that culminated in the launch of what we call our Find & Engage model.
That phase saw us collaborate in a way that is still unique in our industry with some of the largest career platforms in the world, people such as SEEK or XING or LinkedIn. At the same time, we took Google's search algorithm, and we fully incorporated it into our own architecture, and that remains the engine that is powering our candidate searches globally today. We're now entering a third phase, where data science underpins what we now call our Power Recruitment Platform. That's a platform where deep insights can be gleaned from the sheer massive amounts of data that our business now holds. As we start this new phase, I personally think that there's huge potential from blending this new science with the human skills and the expertise of our 8,000 expert consultants worldwide to fill even more jobs and to take further market share.
As we demonstrated at the seminar, to make a perfect match of person with job, we need access to the very best talent pools possible in each skill set, in every single geography. We then need to build a trusted relationship with every single person in that talent pool so we know the exact right role for them at any point in time, and then we can engage with them again at the right time. I think the sheer breadth and depth of those talent pools, together with the real-time updating of them, it is simply not possible with a typical internal client HR team. Remember, we are talking here about millions of people. Nor is it feasible for any or many of our traditional competitors to do so either.
We have now built an ecosystem which allows us to accumulate, through multiple channels, signals from our clients and our candidates at a scale which was simply unimaginable just five years ago. This system literally gathers millions of data points, new data points, every single day across all our channels and via some of the largest players in the world. That combination of downloads, of likes, of click-throughs, of shares, of searches, of job applications, they're all captured in the system, and that helps us to build a real-time picture of our clients' and our candidates' needs and interests every single day. However, even the biggest pools of data are simply worthless if you cannot engage and use them properly to discover new insights.
To do that, we've incorporated now over 80 different algorithms into our system, each one aimed at turning that data into valuable insights for our consultants. These analytics are all machine learning based, so they're continually being fine-tuned as more and more data passes through them. We've now merged those into our consultant toolkit, which is designed to drive better service both for our clients as well as our candidates, ultimately enabling us to win that recruitment race against internal HR teams as well as our traditional competitors, and thereby drive our fees. I think one of the key aspects to building an engaged relationship with an individual is via relevant content as well as career advice. Online career-related content is now a major differentiator for us. We've built a huge pool of such content.
We add more to it every single day, and that puts us well ahead of the competition in terms of our marketing capabilities and our expertise. For example, in the last 12 months alone, we passed over 3 million followers on LinkedIn. We were awarded the best LinkedIn company page for the second year running. Our global blog content has generated 3 million page views already, and we had over 6.5 million video views over the last year alone. Our aim with all of this, remember, is to become the trusted and lifelong partner to tens of thousands of organizations and literally millions of people worldwide.
To achieve that, we'll continue to produce our thought leadership pieces, things such as the Hays Skills Index, which comes out next month, our diversity and inclusion work, our salary guides, because we know that all of those are incredibly useful to our market. We're also now starting to introduce services across what we've internally called our Worker Services Platform to help temps, freelancers, and contractors with some of the essential areas that a permanent employer would typically provide but which are not traditionally available to non-perm staff. The aim, again, with the Worker Services Platform, is to foster partnership, loyalty, and ultimately repeat business with each of our talent pools. In time, I can see that in the white collar professional markets that we operate in, particularly in the flex roles, moving more towards a kind of career as a service type model.
If I'm correct in that assumption, we're in a unique position to use our scale, our insights, and our existing leadership position in this area to pull further away from the traditional pack. Changing tack for a moment, you've seen this slide many times of our geographies. We're obviously highly focused on our core profit drivers on the left-hand side. They together represent something like 70% of our net fees, but we've also made some excellent progress and have excellent prospects in several other markets too. Today I want to spend some time highlighting the success that we've had in our fifth largest business, that is China. I said back in February that we'd recently promoted China to box 3. It now sits at the top of that box as the largest profit contributor there.
Let me give you a little bit more background to our growth story. Back in 2010, we had 70 consultants in China across three offices, Hong Kong, Shanghai, Beijing. We produced around GBP 5 million of net fees, and we converted 12% of these into operating profit. Since then, we've had compound growth of 23% in net fees to GBP 34 million. We've added three new offices in Shenzhen, Guangzhou and Suzhou. We've doubled our consultant productivity, and at the same time, we've tripled our headcount. As we've built scale, our conversion rate has quadrupled, and in the last two years, our operating profit has increased fourfold. You can see why I'm delighted with the story so far, but there's still a lot more to aim for. For example, we still have more consultants in our single Paris office than we do in the whole of China.
We made 3,500 placements in China last year. That's 4% of our total group perm placements. It is the world's second largest economy and the world's most populous country. We're also building a business which is not just working with multinational companies, but also with some of the most progressive and largest local organizations. Our own staff profile is changing too. The number of Chinese managers in our business has almost tripled since 2015. Now, building in China is a long game. We are building a business which would increasingly make a difference to us in terms of group profitability. We now have the foundations in place which can take China into box 2 on our prioritized slide, and in time, even challenge to be in box 1.
Finally, to wrap up, despite the macro slowdown in some of our markets, I think we've still delivered a strong year financially, operationally, as well as strategically. We've managed the balance of investment for long-term with growing our profits and collecting cash in the short term, seeking to get that balance right and not being deflected away from our strategy. Remember, we are operating at close to peak levels. We are more diversified and technology-enabled than ever before, our investment in our people means that we've got the strongest management throughout the business globally that we've ever had.
We're also hugely cash generative. Since we started paying special dividends three years ago now, we've delivered nearly GBP 750 million in total group operating profit, and over GBP 370 million of this has either been paid or proposed to be paid as dividends to shareholders, and I intend for a lot more to come. We may be today dealing with some uncertain economic headlines, but as a management team, we have been here before. We know what to do to navigate through all sorts of market conditions. With that, Paul and I will be delighted to take your questions. We are being recorded, so if you could use the microphone and just press the button until the little red light comes on.
Say your name and organization.
Hello.
Bilal, do you want to start? See if you can work the technology.
Good morning, Bilal Aziz from UBS. Two questions from me, please. Paul, you mentioned the fee rates and your temp margin down 50 basis points related to ANZ and U.K. Can you perhaps talk about what you're seeing in Germany with regards to the fee rates as the demand for temp gradually starts to fade? Separately, can you give a bit more detail on the restructuring, which countries specifically that has and which functions that's been related to? Whether or not you think this 5 million cost saving is sustainable beyond 2020. Thank you.
On the German part, so far we've had no reduction. If anything, it might be five or 10 basis points, but it's hardly anything across the patch. What we've just seen is a reduction in investment. No change in that so far. I think the reason we had the decrease in Australia, which was the largest part of it, I just think with brutal conditions in the Construction & Property market, and understandably, we want to protect our market position, and you have to accept a bit of a squeeze in tough times. On the restructuring, I guess three points. It's primarily Northern Europe, so it's France, Belgium, Netherlands, and some in Germany, but the largest part is in the first part of that, slightly smaller in Germany. It's in management roles.
Like a lot of organizations where we've been growing very strongly for five to six years, it's quite easy to move somebody sideways, perhaps from a sales role into a client development or whatever, general management role. What we've done, it felt time when we got through November and December to have a look at all the positions that we had across Europe, decide what we needed for a more tougher world, and we made that adjustment. We did a slew of that in Q3 and a bit more in Q4, I do think it's sustainable because we're certainly setting ourselves up now for a more right-sized cost base for the next few years. If you remember, when we came out of the last downturn, we had a massive improvement in leverage.
Part of that is clearly then leveraging off the management base that you have. Who's next?
Paul Checketts, sir, the front.
Morning, it's Paul Checketts from Barclays Capital. Can I ask a few, please? First, would you just elaborate a bit more on what you are seeing in Germany and the U.K.? Maybe give us a more precise sense of specialisms, what's holding up, what's weak. Secondly, when you make comments on EMEA and Australia being stable or broadly stable, I presume you mean that's quarterly net fees in local currency. How would you expect growth there to evolve over the next quarters, given the comps are actually getting a bit easier? The last one, Paul, can I just ask about CapEx? It was slightly higher than I think what you previously guided on 2019, and guidance for 2020 is a bit above where I've got it anyway. What's the investment precisely on at the moment?
Looking further out, is GBP 30 million really the number we should have in on an ongoing basis as you see things at the minute?
Yeah, maybe I'll deal with that first one, then Paul, you can pick the other two up. Germany and U.K. specialisms, I think a global phenomenon, Paul, and Germany and the U.K. both benefit from this, is the growth in the digital and technology space. We've been investing globally, aggressively in that for a number of years now, and it's now our biggest specialism around the world. It's almost a quarter of our total net fees. Last year it grew by about 11% globally. By country, Australia was up 21%. It's our second biggest business in Australia after Construction & Property. The U.K. was up 11% and it's our third biggest business now in the U.K. I'd fully expect that we still see strong growth rates in the technology space globally. I see no reason why that would slow down.
A combination of cybersecurity, the advent of data science, artificial intelligence, new programming languages coming out. Every country in the world is doing something in this space to either protect their systems or to develop new systems. It's rampant growth, really. I'd expect that under the covers of any business, we may be shuffling resources around. If you look at Australia last year, relatively flat, slight modest growth. Under the covers, quite a sharp decline in Construction & Property, down 7% in our biggest specialism, which is about a fifth of the Australian business. 21% growth in IT, which has now become our second biggest business in Australia. A lot of activity going on under the bonnet of what might look like a modest growth business. I think that's set to continue.
That's one of the benefits of having a diversified platform by industry as well as by geography. If somewhere is becoming more difficult, somewhere else will be doing quite well, and I would place a big bet on the technology sector worldwide for some years to come, simply because the world is run by technology, and there's simply not enough people that understand how it works. If we can find people for our organizations, we can always find them a job.
I guess the question moved on to what are the weaknesses being in those two parts? In the U.K., that's just across the patch. Its public sector continues to be good growth, and we've really seen a greater weakness across many of our clients across the U.K. I wouldn't call out a sector there. I just think it's a general malaise. On Germany, without a doubt, it's starting out of the automotive sector, where a lot of you will have seen a number of announcements that a number of our clients have made. I think in Germany, why we brought it out is, one, clearly we've still got a month's trading to go this quarter.
I think what we've seen is a number of clients have moved from the slow investment, then you stop investment, then you move to cost control. We've now seen a number of clients moving to cost reduction, of which the automotive sector is the strongest. That really impacts us in engineering and across the manufacturing base, you'll see that when you see the Q3 results. Moving on to two of the more stronger areas. I guess if I take them separately, what we're trying to get over in Australia is, one, we're at record all-time levels. Secondly, we might be two or three percentage points below that, at the moment, that is holding sequentially.
We have quite a beautiful, boringly predictable business that is spinning off a large amount of fees and a good amount of profitability, and we're not seeing any weakness in that. I wanted to be really clear today that that business is there. We might be 3% down in the next quarter. You're right, we will start to get into easier comparatives. Of course, part of that will be what's happening in the rest of the world. On EMEA, again, I'm trying to get over the outside of Germany, that business is stable today. Why I say that is September is by far the longest, largest quarter. It's the biggest per month that we have in a year across Europe. For those of you who remember a year ago, we had some sensitivity there.
What is good so far is that July and August have been good months for us. Therefore, that guidance we were trying to give is, of course, the U.K. and Germany down a few percentage points, and then Australia similar, and then at the moment, the rest of the world might be one or two percentage points up. Overall, that graph, which took working days, adjusted growth, and went from eight to five to one, where we've got another quarter of kind of similar decrease overall. CapEx. What's different now between three, four, five years ago is, of course, the whole area of cybersecurity. You've not just got the normal investments that you do to expand your business.
All of the tools that Alistair talked about, in the end, cost money. On addition to that, like many businesses, we've invested a large amount, both in the capital side of cybersecurity and office securities, but then also in our IT team, which clearly go through the P&L. I think last year could be the peak. Personally, if I got it wrong last year.
You say that every year, Paul.
Well, no. I went GBP 30 million last year, and I'm not surprised. That's the nice thing here. Think of it this way around. We've got a great business. It's a sizable business. We're going to continue to focus on growth areas and doing the right thing, and therefore, if we need to spend a bit more CapEx, we will do that. I think on looking at some of the cyber part of it, I actually think we're whilst we'll continue to have to invest. I think GBP 30 million running next year, the year after, maybe then moving to GBP 25 million is probably a decent path.
We're in a fortunate position that we can invest in whatever we want to invest in, Paul. I feel no constraints in terms of an ability to invest. Obviously, there's a huge amount of spare cash in the business as a result, after all that investment, hence we give it back to the shareholders.
Next question. I know there were a couple of hands earlier on which I missed, so I do apologize. Excellent.
Ian.
Ian.
We've got a microphone.
Now, this is going to be a good test for you here.
Thanks. I had two, if I may. Could you provide an example of some of the worker services that you mentioned earlier, things that are typically provided to perm candidates, that you were thinking of providing in contract and temp? Secondly, I had a discussion with a few clients on this topic this morning, so your insight would be appreciated. Can you repeat the exercise that you conducted in Europe anywhere else across the organization? Maybe not now, but potentially in the future.
Okay. Well, let me kick off with the Worker Services Platform. A large part of our strategy is to build bigger non-perm businesses around the world because whereas Germany is a big non-perm business, the States is a big non-perm business, many of our other businesses around the world have traditionally been perm only until recent years. We see being able to operate equally effectively in perm and non-perm is a huge part of what the market requires from a recruiter. However, for obvious reasons, in the non-perm world, there are various benefits that may not be so easily gathered by a contractor or a freelancer versus if they were in a permanent employment situation. We feel as though there's an opportunity to actually enhance the service we deliver to those individuals to help them get what they would otherwise be looking for or find it more easily.
A classic is training. In today's world, longer careers, continual change in skill sets that are required, digitization, et cetera. I'm not just talking about technology people, but the impact of technology on everybody's job and how you do it. That means during the course of a typical career, you probably have to get quite fundamentally re-skilled multiple times. Very different to in the past where you become an engineer or a doctor or whatever, and that was probably kind of it for 20, 30 years. Multiple times now you'll have to go through training. I think that there's a wonderful opportunity to provide access to that sort of benefit to people who will be looking to continually upskill. This is not saying that we're going to become a training company.
This is saying that through our relationships with these talented people who want to improve their own skill set so they can then go for a bigger, better, more highly paid, more senior job, they would need skills like the following. We have so much data now, Ian, that said, okay, you are one of these. People like you can become one of those, and this is the training path that they need to go through. Here is ready-made access for you to consume that training through a Hays platform. That means us working with multiple partners who will provide that training. Obviously, there's a commercial aspect to it as well. The real reason we're doing this is so that we can build a trusted, lifelong relationship with that individual.
From time to time, we'll put them in a new job, but during the journey when they're not actively looking for a new job, we can still help them in the belief that when the time comes for that new job, then we're the port of call that they'll turn to. Repeat business. We spend a lot of time and money finding people, and if we only ever place them once, my challenge to the business is how can we have a repeat business and place that person multiple times in their career, not just as a one-off transaction. When you start to open your mind to what might individuals, particularly in the flex world, be keen on that they might not otherwise have access to because they're not in permanent employment, things like professional insurance, professional indemnity insurance might be an angle.
There'll be all sorts of benefits that you could provide them. Again, not us providing, but us giving access through a simple-to-use consumable platform that in some way keeps them in our ecosystem so we can keep that relationship going. Because if we know what they're looking for, we know what they're training, we know what they're consuming, we can do a better job at finding the next thing that they would really thrive at. That's the name of the game.
If I take the second one, which I think was you've just done a restructuring in Europe and taken some cost out, can you do that? Is that repeatable in other regions? I think there's a very different situation between perhaps a quite immature structural growth opportunity where you've been investing large amounts over a period of time, and Europe has been a classic example of that, versus somewhere like the U.K. or Australia, for example. The U.K. and Australia are phenomenally efficient machines. We don't have a large amount of spare resource there because Outside of sectors such as IT, we don't have areas for structural growth. It's all about where are we in the cycle and maximizing the growth we can give. Those businesses are very efficient.
You really saw a very good example of that in the U.K. as we recovered over the last five, six, seven years. We had such a large drop there. The ability to do really large cost reduction exercise there in management levels is much more minimal. Paul, in the rest of the world, there are places like Asia, which we are determined to invest and strengthen management for the longer term, which we are likely to protect across the period. Some of the other ones, you have a greater opportunity to just simply say, "Look, we need these resources to continue to grow the business and strengthen it." Some of the other ones were a little bit more discretionary, nice-to-haves. Could there be a similar sort of size that we've had here overall? Yes. Could it be four or five times the size?
No, that's not the position we're in. Remember, one of the things that we did really well in the last couple of downturns that we've faced is make sure we're also doing some subtle investments so that when we do come out of whatever downturn we have, we can accelerate, drive profit growth, and outperform the competition. That is the balance you're trying to get right. For us in Europe, when you go from 20% growth in a lot of countries down to 2% or 0%, then it's quite easy to have a proper look at that. I don't expect to see a number of other of those exercises.
Yeah. I think we've probably got some questions on the webcast, so let's not forget those as well, David.
We've got Tom.
We've got Tom first.
Blast from the past . Good to have you back.
Welcome back, Tom.
Yeah, good morning, thank you. Just three questions, please. Just firstly on Germany, you mentioned there's, I think, 31% from the new specialisms. What's the sort of level of conversion rate on that compared to overall in Germany, please? Just on the special dividend, returning cash to shareholders, could you run through at which point, if at all, you'd consider the other means of returning cash to shareholders versus a special dividend, please? What sort of scenario that would be? Then just on your temp gross margin, the 15% odd, what percentage of actual fees and revenues is that now applied to or applicable to? You've obviously got a number of other things, I think, going into the net fees number, but that's just a proportion of your temp net fees, please. Thank you.
Maybe I'll deal with the first couple, and then Paul, if you want to pick up on the margin. I don't see any real difference in the conversion rate in the German specialisms. As you rightly said, about a third of our business is newer specialisms that we weren't doing in Germany not many years ago. We've kind of created that from nothing, and it's already a very big part of the business and is continuing to thrive. In terms of specials versus alternative means, we talked a lot with our shareholders as we were designing the policy, which has been in place for a number of years now. I think we've been very consistent with what we wanted to do.
Even when we were not in a position to do specials, we talked about we can see the cash generation profile of this business and where we're going to end up, and this is what we're minded to do. We built that strategy in consultation with our key shareholders. That remains the case today. As and when we may consider alternative ways, and we will consider alternative ways. We're not fixed in concrete. As the world changes, we reserve the flexibility to adapt. Again, we'll consult with shareholders about we're in a different circumstance now, what's the best way forward? We do reserve the right to do something different. Remember, even though we're hugely cash generative, our shareholders have got a lot more firepower in their wallets than we do.
If we came to a point where we said this is the right thing to do for shareholders in terms of a buyback, for example, then we would certainly consider it. It's not on the table at the moment, but at some point in the future, if the share price gets to a level and our outlook gets to a point and our shareholders understand the rationale and support it, then we would consider doing that at that time. Paul.
It feels like one of those higher mathematical questions, but trying to keep it simple. 50% of our overall business is in the temp space. If you gross that up to turnover, you're talking more than 90% of turnover is temp related. If you look at that pie of temp, then 90% of that temp payroll, so that temp turnover would be relevant to these fees. There's two areas that aren't relevant are, first of all, pass-through revenues which go to other agencies. We have a large MSP business, and by the nature of that, whilst we fill about 97%, 98% of all the jobs we get, you will win new business every year, and associated with that, you're always going to bring across a number of other agencies.
For example, this year we had one large banking win in Australia, and we had three in the U.K. Also when you've got large clients, they will also say that they have a number of temping contractors, longer term contractors that they have found themselves, and will we payroll them for that? You'll receive a payroll fee, and we exclude that then in determining the underlying calculation.
Just to follow the comments on Germany, is the new specialisms, do they have the same split of temp, perm, and contracting? Or is there a different bias?
If you take Finance, it's heavily temp and contracting based. If you take Legal, that's a bit more in the perm space. Look, if we allocated every single cost out and relevant management and everything else, our IT specialism has the highest conversion rate, Engineering has the second highest. Even in the smaller specialisms, all of them have conversion rates in excess of 25%, which is pretty good when some of those have only been going five or six years. In the end, we want every single additional transaction we can have because we'll make a large margin on the incremental transactions.
Thank you very much.
Maybe was there anybody on the webcast?
No.
Okay. Any other questions in the room? No? Okay. Well, thank you for your time this morning. Thank you for listening, and Q1 IMS shortly.