- FTSE 250 recruiter cuts more jobs as clients put off hiring decisions
- PageGroup warns that it sees “no immediate signs of improvement” in its markets
PageGroup warned it does not expect any immediate improvement in performance as the recruiter cut profit expectations after sales suffered further in the first half.
The Surrey-based company was forced to accelerate job losses in the second quarter as performance weakened further across all its key global markets, with PageGroup citing “tight” recruitment budgets and a “risk-averse” client base.
And in the UK, where PageGroup has experienced “headcount reductions”, performance was particularly weak: “clients postponed hiring decisions and candidates were cautious about accepting offers”.
PageGroup now expects to post an operating profit of around £60m by 2024, up from £118.8m last year.
FTSE 250 Index Listing PageGroup Actions fell more than 11 percent to 375 pence in early trading, raising losses for 2024 to around 21 percent.
“Uncertain macroeconomic conditions,” PageGroup said, led to a 9.8 percent drop in global temporary hires in the three months to June 30, while permanent hires fell 12.8 percent.
Permanent hiring in the UK fell by 16 per cent over the period, but was more resilient than temporary hiring, where hires plummeted by 21 per cent.
This follows a survey by the Institute of Directors which showed UK economic optimism had fallen to a four-month low in June, with bosses particularly pessimistic about hiring plans for the year ahead.
PageGroup said: ‘We continue to see difficult market conditions across most of the Group’s markets with no immediate signs of improvement.
‘As clients’ hiring budgets have tightened, they have become more risk-averse, which has slowed down the hiring process.
‘While salary levels remain solid, offers made to candidates were not as high as in 2022 and early 2023.’
PageGroup posted second-quarter gross profit of £224.3m, down 12 per cent on the same period last year in constant currency.
In the UK, where the company makes 12 per cent of its gross profits, profits fell 17.4 per cent year-on-year to £26.8m, after a 19.2 per cent drop in the first quarter.
Currency movements also cost PageGroup £7.9m during the period.
As a result, its first-half profit fell 12.4 percent to £444.2 million, while UK earnings fell 18.5 percent to £53.7 million.
PageGroup now expects to post an operating profit of around £60m by 2024, up from £118.8m last year.
The company told investors it cut another 153 jobs during the period, up from 100 in the previous three months, putting PageGroup on track to have lost nearly 1,500 positions since its headcount peaked at 7,071 at the end of 2022.
Boss Nicholas Kirk said: ‘While we saw a slower end to the quarter, having taken steps to reduce headcount over the past year, our intention is to maintain headcount at existing levels to ensure we are well positioned to take advantage of opportunities as sentiment and confidence improves.
“We have a highly diversified and adaptable business model, a highly experienced management team, a strong balance sheet and our cost base is under continuous review.”
