Today, and thank you for standing by. Welcome to the Hays preliminary results for the year ending June 30th, 2025, conference call and webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star one one on your telephone keypad. You will hear an automatic message advising your hand is raised. To withdraw a question, please press star one and one again. If you wish to ask a question via the webcast, please use the Q&A box available on the webcast link anytime during live events. Please be advised that this conference is being recorded. I would now like to hand the conference over to our first speaker today, Dirk Hahn, CEO . Please go ahead.
Good morning and welcome, everyone. I'm Dirk Hahn, Chief Executive, and I'm here with our CFO, James Hilton, to present our 2025 prelim results. Let me start with the market context for our 2025 financial year. As we have discussed with many of you before, global recruitment markets were not supportive for the third year in a row, and this length of downturn hasn't been seen before during my 30 years in the business. Why is this? Corporates need stability to invest, but economic and political uncertainty has weighed on business confidence. Candidate confidence is also fragile. During the Great Resignation, some candidates secured employment packages containing a substantially higher salary and the ability to work remotely, but wage inflation is now more modest, and lifestyle considerations have created a hesitancy to switch jobs. This has particularly impacted perm recruitment markets.
Temp and contracting have been more resilient and benefited from powerful workplace megatrends, which guide our five-lever strategy. It is not immune from these cyclical headwinds. From a Hays perspective, our new job inflow has not declined materially, but time to hire has lengthened. In the meantime, we have remained resolutely focused on delivering our five-lever strategy, which is designed to increase our exposure to attractive high-potential markets and scale back where market forces are less supportive. We are controlling the controllables and improving Hays with the overarching goal of building a structurally more resilient, profitable, and growing business. Our presentation today will increase your confidence that we made significant strategic and operational progress in our 2025 financial year, despite challenging markets. Our consultant net fee productivity increase during the year was market-leading. Our enterprise business grew strongly.
We have taken market share, and as James will cover later, we have exceeded our structural cost savings target two years ahead of schedule. Before we examine this in detail, let me briefly run through a high-level overview of our year. Group like-for-like net fees decreased by 11%. Temp and contracting down 7% was more resilient than perm , down 17%. As guided at our June trading update, pre-exceptional operating profit decreased 56% on a like-for-like basis to GBP 45.6 million, impacted by tough conditions in key markets, particularly towards the end of the year in perm. We maintained excellent cost discipline with GBP 65 million per annum structural savings now secured since the start of the last fiscal year. James will provide more detail later in his section. We are not satisfied with the current profitability, but we are pleased with how we have remained highly disciplined in challenging markets.
Driven by improved resource allocation, consultant net fee productivity increased by a sector-leading 5%. Secondly, we delivered strong 8% net fee growth in enterprise solutions. Thirdly, we have improved our business mix through resilience in temp and contracting and by reshaping our country portfolio. Later in the presentation, I will provide examples outlining how we have achieved this, but first, let me examine our divisional performance. I won't provide a detailed narrative because many of these figures have been previously disclosed. In Germany, like-for-like net fees declined by 10%. We took decisive action to protect profitability, and the division has been relatively resilient in a challenging market, contributing GBP 52.1 million operating profit, down 22%. Contracting net fees were resilient. Temp was more challenging because we have greater exposure to the automotive sector and slower client decision-making impacted perm. However, there were bright spots.
Growth was strong in construction and property, driven by infrastructure projects and energy. We continue to realign the business to these growth sectors. Despite this, profit headwinds from economic conditions and fewer working hours more than offset cost efficiency initiatives and disciplined pricing. In the U.K. and Ireland, like-for-like net fees declined by 15%, and the division reported a GBP 5.8 million operating loss. Markets were challenging across the private and public sector, and we experienced the perm step down in Q4. However, driven by our actions to address productivity and costs, we have more actively managed our consultant population and we're pleased to increase net fee productivity by 9% in H2. Secured structural savings in front and back office functions, and finally, reduced our office footprint by 19%, delayed our management structure, and closed Emposo, our statement of works business.
We are pleased that the division returned to modest profitability in H2 and is now better positioned for our new divisional CEO to further apply our five-lever strategy going forward. In ANZ, like-for-like net fees declined by 13%, and the division reported a GBP 3.6 million operating profit. Our management team has increased accountability and alignment to a performance-based culture, so consultant net fee productivity improved by 8% year-on-year to its highest level since 2022. We increased market share despite challenging market conditions. In the second half, we intensified our initiatives to target high-skilled roles and in-demand job categories and moved up the value chain in temps and contracting with a pricing mix up 5%. Finally, in the rest of the world, like-for-like net fees declined by 8%, and following a difficult second half, the division moved to a GBP 4.3 million operating loss from a GBP 19.2 million profit last year.
The U.S. delivered a strong performance. Net fee productivity increased by 38%, driving a return to net fee growth and profitability from a loss-making position in the prior year. In LATAM, we closed our businesses in Chile and Colombia and refocused on Brazil and Mexico. In addition, India achieved all-time record net fees. Asia was broadly stable overall, with profit down modestly. However, activity in EMEA slowed through the year, particularly in Northern Europe, and the region delivered a GBP 6.9 million operating loss. In response, we took decisive action, including in France, where we addressed productivity and costs, changed local management, and closed offices. We expect an improved EMEA performance in FY 2026. I will update later how we have delivered significant strategic and operational progress in challenging markets, but before then, I will hand over to James to run through our financials in more detail.
Thank you, Dirk, and good morning, everyone. Summarizing our financial performance. On a like-for-like basis, net fees decreased by 11% to GBP 972 million, with pre-exceptional operating profit down 56% to GBP 45.6 million. Our strong cash performance drove cash from operations of GBP 128.3 million, up 14% year-on-year, and we finished the year with a GBP 37 million cash position. Moving on to the income statement, turnover decreased by 4%, with net fees down 11%. The difference between reported and like-for-like growth rates was primarily the strengthening of sterling versus the euro, and overall FX movements decreased net fees and operating profits by GBP 23.1 million and GBP 2.4 million, respectively. The higher decline in net fees relative to turnover was due to the more resilient performance in temp and contracting versus perm, in part due to a strong performance in our enterprise solutions MSP business.
Pre-exceptional earnings per share was GBP 0.0131, a 67% decrease versus prior year, driven by a 57% lower reported operating profit, a higher net finance charge, and a higher effective tax rate. Moving on to the performances of perm and temp. Perm fees decreased by 17% and slowed through the year, notably in the fourth quarter. Volumes declined by 20% as weaker client and candidate confidence drove lower conversion of activity to placement. As with prior years, this was partially offset by growth in our average perm fee, up 3%, albeit with wage inflation slowing in most markets. Temp and contracting fees decreased by 7% year-on-year and showed greater resilience in the majority of our markets. We continued to make good progress in building scale around the world in temp and contracting, and importantly, we delivered year-on-year net fee growth in five of our eight focus countries.
Temp volumes declined by 6%, with a further 2% or circa GBP 14 million fee impact from lower average hours worked per contractor in Germany, as we saw continued client-driven cost control measures impacting demand. We saw an increase of 1% in our average placement fee, driven by improved specialism and geographical mix, partially offset by a 20 basis point reduction in the underlying temp margin. Over the next couple of slides, we have set out the decisive actions taken to manage costs and protect profits, structurally improving the group's cost base and better positioning the business for the long term. As explained on the previous slide, we saw a significant reduction in net fees as conditions remain challenging across the majority of our markets. Our response has been decisive, with our operating costs reduced by 6% or GBP 61 million year-on-year.
Payroll costs decreased by GBP 62.1 million from the actions taken to reduce consultant and back office headcounts in the year, which decreased by 14% and 15% respectively. Commission and bonus payments decreased in line with fees and profit performance, and partially offsetting this, our average 3% group pay rise in July 2024 increased payroll costs by GBP 15.5 million. Our other overhead costs increased by GBP 1 million. We delivered property savings of GBP 5.6 million as we closed 29 offices in the year as part of our operational restructurings. These were offset by cost increases in insurance and computer-related costs driven by cyber and infrastructure, together with broader cost inflation. We have taken decisive action to structurally improve the group's cost base across back office and operations, delivering sustainable cost benefits. Our back office efficiency programs delivered GBP 16 million in annual savings by completing our Americas finance and global technology transformations.
In addition, we've made significant progress with our Germany, EMEA, and APAC finance transformation programs, which would drive a further benefit in FY 2026. We delivered GBP 90 million annual savings through restructuring operations in Germany, U.K. and Ireland, France, Czech Republic, and LATAM. We closed or merged 29 offices, and as we announced at our Q3 results, we closed our operations in Chile and Colombia. Last August, we set ourselves a target of delivering GBP 30 million per annum in structural cost savings by FY 2027. Not only have we surpassed this target, but have achieved this two years early. Combined with the circa GBP 30 million per annum structural cost saves we reported in FY 2024, our actions have structurally lowered our costs by GBP 65 million per annum since the start of the last fiscal year.
However, we have more to do, and we have set ourselves the new ambition of delivering a further GBP 45 million per annum of structural cost savings by FY 2029, through the completion of our global finance program, optimizing our technology model, restructuring other global support functions, and optimizing our operations globally. During the year, we incurred an exceptional cost of GBP 30.7 million, which comprised two parts. As described on the previous slide, we incurred a GBP 17.7 million charge relating to the restructuring of operations in Germany, U.K. and Ireland, France, and Czech Republic. We restructured our back office functions, closed several business lines, and delayed management levels. We closed 16 offices in the U.K. and four offices in France, and also closed our operations in Chile and Colombia. These restructuring exercises led to the redundancy of a number of employees, including senior management and back office positions.
We also incurred a GBP 13 million exceptional charge in relation to the multi-year technology transformation and finance transformation programs, comprising both staff costs and third-party costs. Due to the ongoing nature of our restructuring and transformation programs, we expect to incur further exceptional restructuring costs in FY 2026, as we expect to make significant progress towards our GBP 45 million per annum structural cost saving ambition. Moving on to interest and tax, our net finance charge for the year increased to GBP 13.4 million, driven by a GBP 3.3 million increase in net bank interest payable due to higher average drawings on the group's revolving credit facility. We expect the net finance charge of FY 2026 to be circa GBP 12 million, slightly below FY 2025 due to the impact of the defined benefit pension buy-in and lower utilization of our revolving credit facility, driven by working capital improvements.
Our pre-exceptional effective tax rate increased by 270 basis points to 35.1%. The higher ETR was driven by the geographic mix of profits, together with the impact of tax losses in some country operations in H2 and the associated impact on deferred tax asset recognition. On a post-exceptional basis, the effective tax rate was 620%, in which a GBP 4.1 million tax credit in respect of exceptional items was offset by a GBP 2.1 million tax charge arising from the derecognition of a deferred tax asset following the defined benefit pension buy-in. Based on our latest view of profit, we expect the group's ETR for FY 2026 to be circa 38%, consistent with the ETR from H2 FY 2025. At the current level of profits, the ETR remains sensitive both to the geographic mix of profit and also to the adjustments and deferred tax asset recognitions.
We would expect the ETR to reduce as profits rebuild over time. We delivered a strong cash performance in the year, with cash from operations of GBP 128.3 million, up 14%. This represented a conversion of pre-exceptional operating profits into cash from operations of 281%. Our working capital inflow was GBP 58.1 million, driven by a reduction in temp fees and placements, partially offset by an increase in our debtor days to 37 days due to the greater resilience in our enterprise business clients, which have longer payment terms than the group average. We paid tax of GBP 12.9 million and net interest of GBP 7.3 million. The cash impact of exceptional restructuring charges was GBP 29.9 million. Overall, this led to free cash flow of GBP 78.2 million.
On the right-hand side, we detail how we used the cash generated, and the main items were the payment of GBP 47.8 million of core dividends, CapEx of GBP 22.7 million, and pension deficit payments of GBP 23.1 million, which included the final payments of the full buy-in completed in December. We expect capital expenditure to increase to circa GBP 35 million in FY 2026, driven by increased spending on our tech infrastructure and data and AI programs. Despite the slight increase in debtor days, we ended the year with cash of GBP 37 million. Although DSOs increased by one day year-on-year, they remain below pre-pandemic levels, and our age debt profile remains strong. Bad debt write-offs are in line with FY 2024 and remain at historically low levels.
During the year, we signed a new five-year RCF facility at an increased level of GBP 240 million, with an option to extend by a further two years and at the same pricing as the previous deal. On this slide, we compare the balance sheet of June 2025 with prior year. The most significant movement was the reduction of the defined benefit accounting surplus following the completion of the final scheme buy-in. The scheme's liabilities are now fully insured, removing all future risk and volatility from the group's balance sheet. Company pension contributions in the year were GBP 23.1 million, which comprised GBP 8.4 million in respect of normal pension deficit contributions and GBP 12.6 million related to the full pension buy-in.
In addition, we incurred GBP 2.1 million post-buy-in admin costs, and we anticipate a circa further GBP 4 million post-buy-in expenses and true costs through to the final scheme buyout, which is expected to be in the next 12 months. The buy-in will drive significant free cash flow benefit for the group from FY 2026, having removed the deficit contribution requirement previously costing circa GBP 18 million per annum cash funding. While our business model remains highly cash generative with a strong balance sheet, faced with a second consecutive year where our core dividend cover would be below our 2x-3x target range, together with an uncertain trading outlook, the board has proposed a reduction in the final dividend payment that more appropriately aligns to the group's current level of profitability and affordability.
The final dividend proposed of GBP 0.0029 per share is calculated on a 3x FY 2025 pre-exceptional earnings cover and applying our historic 1/3, 2/3 interim versus final split. This brings the full year dividend to GBP 0.0124 per share, and we expect to be at the higher end of the 2x-3x cover range going forwards. The group maintains a clear capital allocation framework and priorities for the use of the group's cash flow going forward. These are to fund the group's investment and development requirements, to maintain a strong balance sheet, to fund a core dividend that is affordable and appropriate, and return surplus cash to shareholders through a combination of special dividends and share buybacks. We have, however, removed our GBP 100 million cash buffer to provide greater flexibility as our cash position rebuilds over the longer term.
These declined by 11%, with challenging markets continuing to persist, although we saw clear evidence of strategic delivery through the year. Volumes declined in both temp and perm, although temp remains significantly more resilient. However, we have acted decisively both to manage costs and protect profits, but also to better position the business going forward. Our structural cost reduction programs surpassed our initial GBP 30 million per annum target delivered two years early, but we have more to do, and our new and additional GBP 45 million per annum cost save target will materially improve the group's cost base over the long term. We continue to maintain a strong balance sheet underpinned by our strong levels of cash conversion, and we signed a new five-year RCF facility in the year. The full pension buy-in significantly de-risked our balance sheet and will drive material long-term free cash flow benefit for the group.
Finally, we have rebased the dividend and revised our capital allocation policy to provide greater balance sheet flexibility going forward. This will ensure we maintain a strong balance sheet, fund our long-term growth initiatives, and generate attractive returns to shareholders. Despite the difficult trading environment, I am confident our actions have better positioned Hays to benefit from the market recovery when it comes. Turning to current trading and guidance, July and August to date have been in line with our expectations, with no significant change to trading momentum from Q4 in either temp or perm. September is our largest trading month of the quarter, and it is currently too early to assess trends. At a group level, there are no material working day effects in either H1, 202 6, or in the full year.
Given our ongoing focus on driving consultant productivity, we expect overall group consultant headcount will remain broadly stable in Q1. We will also continue to deliver on our structural efficiency programs, which will further reduce our cost base period through FY 2026. Overall, our current capacity has significant scope to deliver material net fee and profit growth when our key markets recover. I'd now like to hand back to Dirk to cover strategy.
Thank you, James. Our strategy is built upon five levers and is designed to build a structurally more resilient, profitable, and growing business underpinned by our culture and talented colleagues worldwide. We will increase our exposure to the most in-demand job categories, growing industries and end markets, higher skilled and higher paid roles, temp and contracting, and large enterprise clients.
Our strategy is not one-size-fits-all, and we will tailor each region and country to its market and customer needs. We will build scale in high-performing and high-potential markets and will scale back where forces are less supportive. When markets recover, we will use our golden rule to maintain a disciplined approach to consultant headcount investment. Despite challenging markets, we made substantial progress during the year. Consultant net fee productivity increased by 5%. Enterprise net fees grew by 8%. Net fees in temp and contracting were more resilient than perm and grew strongly in several focus countries. As James just outlined, our structural cost savings are progressing very well. Let's examine these first three in more detail over the next few slides. Consultant net fee productivity increased by 5% in the year, by 6% in H2, and our growth has been sector-leading over this period.
If we adjust for our seasonally acquired second quarter, productivity has increased now for seven consecutive quarters. Let me provide you with a few examples why. In the US, net fee productivity increased by 38% in FY 2025, and the country moved back to profitability from losses in the prior year. After an extensive review, our management team closed business units and offices where we lacked critical mass and now have a highly focused core. We were not satisfied with our first half performance in the U.K. and Ireland and took decisive actions to improve productivity and operational efficiency. Encouragingly, consultant net fee productivity increased by 9% year-on-year in H2, and this drove a return to profitability in the second half. Technology and enterprise solutions were positive highlights, with productivity up double digits, driven mainly by temp and contracting.
In Germany, following reallocation of consultants to more attractive business lines and selective exits, our net fee productivity growth accelerated to 8% year-on-year in Q4. I believe our market-leading productivity increase is proof that we are on the right track and are building a structurally improved Hays. I reminded you earlier that our five levers include the commitment to increase our exposure to large enterprise clients. Our enterprise solutions business works with many of the largest companies in the world, often in multiple countries and specialisms. We provide recruitment and other HR services to blue-chip government and large organizations, often delivered under more complex and structured agreements such as MSP. Enterprise delivered a strong performance in the year with 8% net fee growth. Our positive momentum was supported by three factors. Firstly, we grew within existing clients, driven by headcount investment, higher fill rates, and geographic expansion.
Secondly, we secured new clients, including first-generation outsourcing opportunities and strategic wins from competitors. Our win rate has significantly improved over the last two years, driven by a growing reputation for excellent client service and enhancements to our deal qualification discipline under a new global sales process. Thirdly, underpinned by our high service quality, we retained key contracts. Two years ago, a new global sales process introduced a more diligent approach to deal qualification, speed, and consistency. As a result, our bid pipeline has become more focused, containing fewer but larger opportunities, with average deal value doubling over the last year. Our win rate percentage has improved from one in five in FY 2024 to one in three in FY 2025. Our C-suite engagement is rising as we become a more strategic partner to our clients. We enter the new year with encouraging momentum and a substantial bid pipeline.
We intended to improve our net fee mix over time by increasing our exposure to high-performing markets with the most attractive long-term structural growth opportunities in our core markets of temp, contracting, and perm. Temp and contracting net fees were relatively resilient through the year, and the contribution to group net fees increased to 62% from 59% in FY 2024, whereas perm markets became increasingly challenging in most of our major countries. Temp and contracting net fees declined by 7% in our 2025 financial year. Net fee growth was positive in five of our eight focus countries, including notably strong performances in Spain, Poland, and Italy. For example, Italy grew by 29% as our business line prioritization and resource allocation initiatives generated attractive returns. Poland grew by 19% due to strong handling of large contracting accounts and an HR MSP offering.
Spain grew by 16%, driven by a large new client win. We continue to forensically analyze our business lines to focus on those with the most attractive productivity and long-term growth opportunities. During the year, we exited business lines and closed operations in Chile and Colombia. I believe that changing business mix through our five-lever strategy and in combination with the golden rule is the foundation of our future success. Despite market headwinds over the year, we believe we have the right strategy and intent to relentlessly focus on execution to reposition and reshape our business. Firstly, we will continue to grow our business with high potential and high-performing business lines. We will scale back or exit business lines with slow performance and potential and are further reviewing our country portfolio.
Secondly, we exceeded our structural cost-saving target two years ahead of schedule and have now set ourselves the ambition of delivering a further GBP 45 million by FY 2029, bringing total annual saving to GBP 80 million. These savings will be partially reinvested in our technology programs. Which brings me to our final area of focus. We will continue to invest in our technology estate to harness the power of data and AI. This will provide the following benefits: improved net fee productivity as we provide our consultants with best-in-class tools and reduce administrative burden. Secondly, improved automation efficiency in our back office. Finally, more powerful and personalized data and insights, enhancing our exceptional service to clients and candidates. Our investments will provide our consultants with the best tools and drive our superior client and candidate experience. This is key for our future.
As I mentioned earlier, I believe that delivering on our strategy will result in a structurally more profitable, resilient, and growing business. It will also drive the return to prior peak profitability. Here are a few examples of how. Firstly, consultant productivity. A key long-term focus for management is growing consultant net fee productivity above inflation. The strongest driver of our sector-leading momentum in FY 2025 was a more forensic analysis of our business lines to reallocate consultants to those with most attractive productivity. We will continue to optimize our headcount allocation and delivery models going forward. In addition, we will reshape our business to focus on higher skilled, higher paid roles and the most in-demand future job categories. Our data and AI investments will also support productivity growth. These factors will increase net fees with a potentially high drop-through to operating profit. Secondly, operational efficiency.
As we mentioned earlier, we exited the year with GBP 35 million per annum cost savings and have set ourselves the ambition of delivering a further GBP 45 million by FY 2029. Finally, cyclical recovery. For nearly three years, activity has been relatively high with job inflow per consultant broadly in line with 2019 levels. Our consultants remain busy and have worked extremely hard. Lengthening time to hire has created a material drag on the average number of placements per consultant and our profitability. We don't control the cycle, but eventually, client and candidate confidence will improve and the economy will recover. When it does, we will deliver a healthy drop-through to operating profit. To close, markets remain challenging in our 2025 financial year, and the board and I are very grateful for the deep commitment shown by all our colleagues through the period.
We are not assuming that the market becomes more supportive in FY 2026. Therefore, we remain decisive and continue to focus on controlling the controllables. We are not satisfied with current levels of profitability and intent to relentlessly focus on execution to reposition and reshape our business. We have the right strategy in place, and our FY 2025 results provide evidence that we are making significant strategic and operational progress. I will now hand you back to the administrator, and we are happy to take your questions.
Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one, one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star one and one again. Alternatively, you can submit your questions via the webcast. We are going to take our first question. The question comes to the line of Andy Grobler from BNP Paribas. Your line is open. Please ask your question.
Hi. Good morning, everybody. Just a couple from me, if I may. Firstly, CapEx spend is going up for fiscal 2026. You talked about some IT projects within that. Can you talk to whether this is a kind of a one-year jump or whether this is a kind of a new level of expected CapEx for the next three to five years? Secondly, Dirk, you were discussing that job flow is good, but conversion is weaker. Can you give any metrics around that in terms of how many of those deals are going all the way through to placements now versus where we were in 2019 and maybe the longer-term averages? Just to get a sense of what the opportunity set is as markets normalize through time. Thank you very much.
Andy, perhaps if I pick up the first question on CapEx and cover that one first, I'll hand over to Dirk for the second one. Clearly, we had slightly lower CapEx than we guided this financial year. I think we were guiding about GBP 25 million, and we did GBP 22 million, so slightly behind. The step up next year is driven by two parts. One is technology investment in our infrastructure environment. We're migrating the business over to Windows 11, and also a lot of work on our migration from our data center to the cloud. That is more one-off in nature. The other part of our increased CapEx this financial year is being driven by investment in our programs around data and AI, which we see as the start of a multi-year program, and I expect that to carry on at a higher level over the next number of years.
Each one is looked at through a clear return on investment lens, and that's how we're looking at the opportunity for us in this area because I think there are significant opportunities. There's a lot of foundation work needed, particularly around data structure and making sure that that's fully agentic ready, and that's our key focus right now. There's quite a bit of foundation work required in that, obviously the ROI on use cases of AI deployment come later off the back of that. I do expect it to continue for several years. About GBP 10 million of CapEx this year is infrastructure related, which is much more one-off in nature.
I take the second question, Andy. You asked the job flow and what comes into placement. We have 25% less placements at the moment, 25% less drop-through. On the other hand, we are improving our pricing and moving up the food chain. We cover a bit of this drop of 25%.
Okay, thank you.
Thank you. Now we're going to take our next question. The question comes to the line of Karl Green from RBC Capital Markets. Your line is open. Please ask your question.
Thank you very much. Good morning to all of you. Firstly, just on the comment that you're expecting an improved performance in EMEA through fiscal 2026, could you just give the sense as to how quickly you would expect to see it moving back into profitability? Is it likely to be back into profitability for the whole of the fiscal second half, or is it going to be more a kind of run rate as we go and exit into fiscal 2027? My second question, just following up on Andy's question just before, just thinking about that step up in CapEx and thinking about IT-related expenditures being generally shorter-lived assets. Can you just indicate what you'd expect to see in terms of a step up in depreciation and amortization over the next couple of years?
It's obviously not going to be one big hit, but just in terms of it ramping up, what the sort of run rates could look like, please.
Karl, perhaps if I just pick up that as an obvious follow-on from the first question from Andy. Obviously, we will be seeing an increase in depreciation over time as we amortize those. Our typical policy is somewhere between five and seven years, depending on the nature of the project. We will see a step up in depreciation, which will follow that CapEx over time. That's how it works. You can't really avoid that, unfortunately.
Yeah, and to your first question, EMEA, how fast is the recovery? I think we have a good business in Europe, especially if it comes to Southern Europe and Eastern Europe. Our main challenge last year was mainly France. We have a high exposure on junior perm, and therefore, we are not happy with the performance in France. We took the decision to change management, and therefore, we are at the moment reorganizing France. You know France is an expensive country when it comes to people decisions and changing structures and so on. We are working on that. It's hard to say how fast we really can turn this, but we are expecting that we are in FY 2026 come back in France to profitability.
Thank you.
Thank you. Now we're going to take our next question. The question comes to the line of Sanjay Vidyarthi from Panmure Liberum. Your line is open. Please ask your question.
Morning. Question on cash, please. I think there's probably a beat in terms of the FY 2025 result. I just wanted to check if there's any timing benefits there, and then think about the various stepping stones for FY 2026, where you've talked about higher CapEx. There'll be more in terms of restructuring costs offset by lower dividend costs. Overall, would you expect cash to be lower by the year-end or by the end of FY 2026 than it was at FY 2025?
Thanks, Sanjay. I'll pick that one up. We had a decent cash performance, to be fair, this financial year, and you can see that in the working capital inflow. Clearly, volumes were down in the temp and contracting business, which was a part of that. We also did a pretty decent job on cash as well. We had GBP 37 million in the bank at the end of the financial year. I think looking forward to next year, we've had a conversation around the CapEx and the guidance we've given there. Restructuring costs, we do expect to make progress next year, significant progress towards our longer-term ambitions, and that will incur some one-off costs as well. Perhaps as a good rule of thumb, if you look at this financial year, we've incurred about GBP 30 million or so of cash on the restructuring charges incurred, which drove a GBP 35 million annual saving.
We've set an ambition for GBP 45 million over the next four years. I do expect to make significant progress towards that next year, and to a certain extent, that will be front-end loaded, and therefore, we'll have some cash impact of that as well. We've rebased the dividend. I'll come back to that because there's one other important feature within cash flow, which is the pension. The full buy-in that we did in December takes away we've been putting in around GBP 18 million, just over GBP 18 million a year of free cash flow into the pension deficit contribution over many years. That now falls away, which creates a material tailwind for us on cash, which is important for us.
I think that's really not only de-risked the balance sheet and therefore taken away the potential risk of extra funding because of demographic changes or whatever it is within the pension scheme, but it actually creates a significant cash benefit as well, which is part of the equation. On the dividend, we've rebased the dividend, as you've seen in the statement. The final dividend for us next year, which will be payable in November, is about GBP 4.6 million, and there'll be an expectation for an interim dividend to follow, which will be payable in April along the same lines. Hopefully, I mean, it's difficult to sort of say landing cash on a sixpence in our business, given that we're typically collecting about GBP 130 million, GBP 150 million of cash a week.
There is always a bit of volatility, but our clear ambition is to maintain a strong balance sheet, and that means a net cash balance sheet going forward. We do have some plans in place to continue to optimize working capital performance. Some of our improvement this year was driven by our work that we do on our unbilled. That is the time that we actually spend to invoice. You will have seen that our DSOs went up slightly, and that's been driven by enterprise client mix increasing. Actually, we've done some really good work on our unbilled, which is our speed to invoice, which meant that the sooner we issue the invoice, the sooner we can collect the cash. I was really pleased on the work we've done there, but we've got some more work to do, and I expect to see further improvements in that.
Okay, that's great. Thank you very much.
Thank you. Dear participants, as a reminder, if you wish to ask a question over the phone, please press star one, one on your telephone keypad and wait for your name to be announced. Alternatively, you can submit your questions via the webcast. Now we're going to take our next question. The question comes from the line of Simon van Oppen from Kepler Cheuvreux. Your line is open. Please ask your question.
Good morning, gentlemen, and thank you for taking my question. I have a question on the cost-saving program. Could you touch a little bit more on the GBP 45 million cost-saving program? Where do you see room to generate more cost savings? Do you expect this to be more front-end or back-end loaded? On your temp and contracting business in five of your eight focus countries that posted solid growth in this year, do you plan to add capacity here, or are you satisfied with your current levels of consultant headcount in these regions? Thank you.
Simon, perhaps if I pick up the first question on costs, and then I'll hand over to Dirk to talk through the plan on the temp and contracting in focus countries. We've clearly made a lot of progress this year on our structural cost program, which we set ourselves an ambition to do GBP 35 million of structural saves over three years. GBP 30 million over three years, and we've done GBP 35 million in one. I think that's been pleasing in some respects to make good progress on that. However, we've got more to do, and therefore, we've set out a further ambition to deliver savings over the next four years in structural areas. These are savings that we see as savings that we will make over the longer term.
They are not cyclical in nature, i.e., we don't consider the headcount reductions in, say, consultant numbers to be structural in nature because at some point, we will be putting those headcount back in. These are things we expect to deliver for the long term. In terms of phasing on that, I think it's slightly in answer to the previous question. I said I expect to make significant progress towards that in the next 12 months. Why do I say that? Actually, some of the plans are in flight today and are a continuation of some of the programs that are already up and running. The finance transformation program that we've made good progress on this year, there are still parts of that program in flight, which I expect to convert through the next 12 months. We should make good progress there.
We've got further optimization to do in the technology program. We did the outsource of significant parts of our technology function in December, but there's still some more optimization to do there. There are other areas of back office that we're looking at as well. We've made good progress on some of the operational areas of cost saves through the year, but we've got some other places that we have in mind as well. I think we'll make good progress on that in the next 12 months. Dirk, if I hand over to you.
I take then your other question in terms of the contracting business and the headcount investment, right? As you're aware, we are constantly investing and changing our business mix because one of our five levers of our strategy is the contracting business. Therefore, we try to invest in areas where we see good productivity. For instance, that's what we've done in the last two years, and especially in the last financial year. For instance, in Poland, we reduced the headcount dramatically by 20 headcount in perm and added headcount in contracting. That's what we are doing, not just in terms of contracting perm. We are constantly changing our business mix in the areas where we see the future of the skill sets. You're right. We keep the headcount more or less flat at the moment. We are happy with the consultant headcount for Q1.
For sure, we are shifting within countries the headcount.
That's very helpful. Thank you very much.
Thank you. The speakers don't have further questions for today. I would now like to hand the conference over to Dirk Hahn for any closing remarks.
Okay. Thank you, guys. James and I would like to thank you again for joining us this morning. We look forward to speaking to you next at our Q1 results on the 10th of October. Should anyone have any follow-up questions, James, Kean, and Rob will be available for the rest of today. We look forward to seeing investors over the next couple of weeks. Thank you.
This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.