PageGroup plc reported tough market conditions continued into the fourth quarter. Low levels of client and candidate confidence delayed time to hire, particularly in permanent recruitment, the company said. Salary offers are not as elevated as in 2022. Still, the UK-based global staffing firm reported good activity levels. Shortages of highly skilled candidates also remain.

“Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through [the fourth quarter],” CEO Nicholas Kirk said. “However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.”

Overall, gross profit fell 6.1% year over year in constant currency to £237.3 million (US$302.1 million).

The decline in gross profit was concentrated in perm, where gross profit fell 13.9% year over year. Temporary staffing gross profit rose 5.2% in the fourth quarter

Looking ahead, macroeconomic uncertainty persists, Kirk said. However, the company’s business model, balance sheet and adjustable cost base will drive performance.

“Given these fundamental strengths, we believe we will continue to perform well in these challenging markets, and we are confident in our ability to implement our new strategy driving the long-term profitability of the group,” he said.

Operating profit for the full year is expected to be slightly below guidance of between £120 million (US$152.8 million) and £125 million (US$159.1 million) after a previously announced restructuring charge of approximately £5 million (US$6.4 million).

The company also shed 224 of its fee-earning roles and 57 back-office jobs in the final three months of 2023, with reductions made across all its regions worldwide. Overall, the group had 5,851 fee earners and a total headcount of 7,859.

Unless otherwise stated, all growth rates below are in constant currency and compared on a year-over-year basis.

Americas

In the Americas, PageGroup delivered gross profit of £40.4 million (US$51.4 million), down 8.0% against the fourth quarter of 2022. Gross profit in the US fell 24%. Conditions remained challenging, with uncertainty affecting both candidate and client confidence. Conditions were particularly tough within accounting and financial services, while its property and construction segment was more resilient.

In Latin America, gross profit grew 18%, despite political and macroeconomic uncertainty across the region. This was also partially due to hyperinflation in Argentina following the recent election; excluding this, the growth rate was 11%. Mexico, the largest country in the region, saw gross profit fall 6%, broadly in line with the third quarter, whereas Brazil was up 20%. Elsewhere in Latin America, the remaining countries grew 22%, collectively.

Overall fee-earner headcount in the Americas decreased by 35, mainly in Latin America, as the group held on to its more experienced fee-earner headcount in the US.

EMEA

In Europe, Middle East and Africa, gross profit declined 6.1% to £132.4 million (US$168.5 million). This was a weaker performance than the annual decline of 1.3% in the third quarter.

France declined 5%, with continued weakness in candidate and client confidence, particularly within Michael Page. Reflecting the uncertainty in the market, temporary recruitment (+10%) was more resilient than permanent (-15%). Germany declined 6%, with tougher conditions within permanent recruitment in Michael Page. The technology-focused interim business continued to show resilience, up 7%. Elsewhere in the region, the tougher conditions the group experienced at the end of the third quarter continued into the fourth quarter, with the majority of countries declining year over year. PageGroup reduced its fee-earner headcount by 84 in the fourth quarter, which was broadly in line with the reductions in the previous two quarters.

Asia Pacific

In Asia Pacific, gross profit for the fourth quarter was down 10.3% against 2022 to £35.9 million (US$45.7 million). Greater China declined 8%, with mainland China flat. Hong Kong declined 12% for the quarter. Southeast Asia declined 14%, broadly in line with the third quarter, with Singapore, which continues to be impacted by uncertainty related to China, down 14%. India delivered the standout performance, up 16%. Japan declined 7%, a deterioration on the growth of 4% in the third quarter. Australia was down 24% for the quarter, with uncertainty from both clients and candidates. The fee-earner headcount in the region decreased by 54, mostly in Australia and Japan, as the group said it held on to its more experienced fee-earner headcount in China.

UK

In the UK, gross profit for the fourth quarter declined 19.9% against 2022 to £28.6 million (US$36.4 million). This was broadly in line with the third quarter, and PageGroup continued to see clients deferring hiring decisions and candidates becoming increasingly cautious about accepting offers. Reflecting the continued challenging trading conditions, fee-earner headcount reduced by 50 in the fourth quarter and is now 20% lower than the fourth quarter of 2022.

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Share price

PageGroup closed at £455.00 (US$579.42) today in London; shares were 9.45% below their 52-week high.