PageGroup warns ‘no signs of improvement’ as profits fall

PageGroup has warned there are “no signs of improvement” in the group’s immediate fortunes as it revealed another substantial drop in profits.

Recruitment firms have seen a significant slowdown in trade this year as heightened economic uncertainty discourages more businesses from hiring.

PageGroup reported that its gross profits fell 13.5 percent in constant currency to £201.4 million in the three months to September, following weaker trading across all regions and a disappointing result in the traditionally month September key.

In the Europe, Middle East and Africa market, which provides more than half of its revenue, PageGroup’s gross profits fell 15.1 percent to £106.3 million.

Operations were hurt by low permanent hiring volumes and poor results in its largest European markets: Germany, France and the Netherlands.

Meanwhile, profits plunged 31 percent in Australia and a quarter in Greater China, where sluggish consumer spending and a crisis-plagued property sector have slowed the country’s economic growth.

And profits fell 13.5 per cent to £26.2 million in the UK as clients continued to defer hiring decisions and candidates became cautious about accepting offers.

PageGroup’s results reflect its first half performance when its gross profits fell 12.4 per cent to £444.1 million due to difficult conditions across all regions. Pre-tax profits also more than halved to £27.7m.

He told investors: ‘We continue to see difficult market conditions in most of the Group’s markets with no signs of improvement.

“As clients’ hiring budgets have tightened, they have become more risk-averse, which has continued to slow the hiring process and impact time to hire.”

PageGroup’s business update comes three days after fellow recruiter Hays revealed its first-quarter net fees were 14 percent lower on a comparable basis.

The FTSE 250 company said operations in Germany were affected by “increased exposure” to the country’s auto industry, which has suffered from weaker domestic demand and increased competition from Chinese carmakers.

Like PageGroup, Hays anticipates that market conditions will remain challenging in the near term.

Russ Mould, investment director at AJ Bell, said a British Chamber of Commerce survey published today shows the proportion of businesses looking to hire new staff has fallen to its lowest level in three years.

He further said: ‘PageGroup’s struggles across its global footprint suggest this trend is being replicated in other parts of the world.

“The company’s weak performance in September is particularly disappointing, as this is normally a month in which recruiters see a recovery after the traditionally quieter summer period.”

page group actions They fell 1.8 per cent to 363.6 pence on Monday morning, taking their losses to around 25 per cent since the start of the year.