PageGroup, a UK-based staffing firm, reported today that second-quarter gross profit fell by 6.5% on a constant currency basis. The company said the decrease was against a record comparative period.

On a reported basis, gross profit decreased by 6.2% in in the second quarter.

PageGroup highlighted a stronger performance in temporary recruitment (up 11.1% in constant currency) compared to a decrease of 11.4% in permanent recruitment.

“The group delivered a good result in the quarter, especially given the particularly tough Q2 2022 comparator, which is the group’s record quarter,” CEO Nicholas Kirk said in a press release. “EMEA performed strongly; however, tough market conditions affected the performances in Asia, the UK and the US. Overall, Group gross profit declined 6.5% in constant currencies against Q2 2022.”

Kirk continued, “The challenging conditions we saw towards the end of 2022 and in Q1 2023 continued into Q2, with lower levels of both candidate and client confidence resulting in delays in decision making and candidates being more reluctant to accept offers. Reflecting the uncertain macroeconomic conditions, temporary recruitment outperformed permanent, as clients sought more flexible options.”

All growth rates mentioned below are in constant currency and compared to 2019 unless otherwise noted.

In the Americas, gross profit was £46.3 million (US$58.5 million), down 8.8% year over year. In the US, gross profit declined 16%, in line with the reduction the group experienced in the first quarter of this year. The conditions it saw in first quarter continued into the second, with uncertainty around market conditions affecting both candidate and client confidence.

In Latin America, gross profit grew 3%, a new record quarter, despite macroeconomic uncertainty across the region. Mexico, the largest country in the region, was down 7%, compared to a decline of 4% in the first quarter, and Brazil was down 9%, an improvement on the decline of 13% in the first quarter. However, elsewhere in Latin America, the group’s remaining countries grew 23%, collectively.

In Europe, Middle East and Africa, gross profit grew 1.4% to £142.3 million. EMEA was the strongest performing region, delivering growth against the second quarter of 2022, which was a particularly tough comparator across the region.

France, the largest market in the group, was flat for the quarter. The company said it saw stronger performances from Page Personnel and within temporary recruitment, both of which are indicative of the current uncertainty in the market. Germany, now the group’s second largest market, saw growth of 6% for the quarter.

The Middle East and Africa delivered a record quarter, up 19%, driven by strong performances in the UAE and South Africa. Having reduced fee earners by 37 in Q1 2023, PageGroup reduced its fee earner headcount further in second, down 79 for the region overall.

In Asia Pacific, gross profit for the second quarter was down 17.2% against 2022 to £42.4 million (US$53.5 million). Permanent recruitment across the region declined 19%, whilst temporary recruitment declined 5%, reflecting the continued uncertain market conditions. Greater China declined 32%, with Mainland China down 37%. While Covid-19 restrictions have been lifted, business remained challenging with the recovery continuing to be slower than anticipated.

Hong Kong declined 19% for the quarter. The other large, high potential geographic market in the region, Southeast Asia, declined 22%, due mainly to Singapore, which was impacted by the slowdown in Greater China as well as a tough comparator. Meanwhile, India was up 5% year over year, whereas Japan declined 10%. Australia declined 4%, despite a strong performance in the technology discipline. Fee earner headcount in the region decreased by 57, mainly in Greater China.

In the UK, gross profit for Q2 2023 declined 17.0% against 2022 to £32.5 million (US$41.0 million), following the decline of 9.4% in the first quarter. PageGroup continued to see clients deferring hiring decisions and candidates cautious about accepting offers.

“Looking forward, there remains a high level of global macroeconomic and political uncertainty in the majority of our markets,” Kirk said. “However, against this backdrop, we continue to see candidate shortages and good levels of vacancies as well as continued high fee rates.”

Share price and market cap

Shares in PageGroup closed up 3.12% today in London to £436.40 (US$563.00); they were 12.98% below their 52-week low, according to FT.com. The company had a market cap of £1.39 billion (US$1.79 billion).