2023 proved to be a year of economic uncertainty, PageGroup plc reported. That macroeconomic uncertainty — and its impact on candidate and client sentiment — continued into January and February.

Still, the UK-based staffing firm reported revenue increased by 1.1% in constant currency for the full year ended Dec. 31, 2023, to a total of £2.01 billion (US$2.56 billion). However, gross margin narrowed.

“We produced a resilient performance in 2023 in challenging market conditions,” CEO Nicholas Kirk said in a press release.

“Despite the year-on-year decline in gross profit and operating profit, we saw good activity levels through most of the year, albeit the conversion of final interviews to accepted offers and therefore gross profit became increasingly challenging due to ongoing lower levels of candidate and client confidence,” Kirk said.

PageGroup saw a slower end to 2023 because of macro uncertainty impacting candidate and client sentiment, which has continued into January and February, he noted.

Growth was in the company’s temporary staffing business, where revenue rose 9.8% year over year to £127 billion (US$1.62 billion). Perm placement revenue fell 11.2% to £738.6 million (US$940.2 million). 

The company also reported the number of fee-earner internal staff fell by 15.7% year over year to 7,859.

The group’s revenue and gross profit mix between permanent and temporary placements were 37:63 (2022: 42:58) and 73:27 (2022: 77:23), respectively. This is reflective of the tougher trading conditions during the year, particularly within permanent recruitment, whereas temporary was more resilient.                                 

Gross profit in permanent was down 10.9% in constant currency, while gross profit in temporary was up 8.9% in constant currency.

The 39.4% constant currency fall in operating profit excluded the impact of hyperinflation in Argentina, the group noted.

Kirk added, “In response to the tougher trading conditions, we managed our headcount down from its peak at the end of Q3 2022. Overall for 2023, our fee earner headcount was down 1,092, or 15.7%, and we now have a total headcount of 7,859 (2022: 9,020). As a result of this action on headcount, gross profit per fee earner, our measure of productivity, was flat on 2022 and remains at record levels.”

All growth rates stated below are for gross profit and in constant currency at prior year rates unless otherwise stated.

The group said its results in EMEA were resilient despite trading conditions that became tougher as the year progressed. France, the group’s largest market, was flat, despite tougher trading conditions in Michael Page, down 2%, whereas Page Personnel was more resilient, up 1% due to the higher degree of temporary recruitment.

Germany, the second-largest market, grew 4% for the year against a tough comparator in 2022, with the standout performance in the technology-focused Interim business, up 15%. Elsewhere in the region, Benelux and Southern Europe both declined 1%. The Middle East and Africa grew 12%.

The group experienced tough market conditions in Asia Pacific during 2023, particularly within Greater China, where gross profit declined 29% with Mainland China down 31% and Hong Kong down 23%. While Covid-19 restrictions were eased, the recovery was slower than anticipated. This also impacted trading in Southeast Asia, which was down 16%, with Singapore down 18%. India delivered the standout result and a record year, up 6% on 2022. Japan was down 2% on 2022. Conditions were also tough in Australia, which was down 10% on 2022.

In North America, gross profit decreased 20%, with tough market conditions throughout the year. The US declined 20% due to tough trading conditions impacting candidate and client confidence, particularly within technology and financial services. Over 90% of the gross profit in the US is permanent recruitment, where conditions have been much tougher during 2023.

Latin America grew 8%, although this was partially due to the hyperinflationary environment in Argentina. Excluding Argentina, the region grew 3% for the year. Brazil was up 2%, whereas Mexico was down 6% and the other four countries increased 13%, collectively.

In the UK, Michael Page declined 19%.

Kirk added, “Looking ahead, macro-economic uncertainty persists. However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions. We are also seeing the benefits from our investments in innovation and technology.”

Kirk added that the group believes it will continue to perform well in the current challenging markets, and “we are confident in our ability to implement our new strategy driving the long-term profitability of the group.”

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Share price

Shares in PageGroup closed up 1.14% today in London to £462.40 (US$588.20). They were 7.98% below their 52-week high.