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UK – Michael Page expects “challenging” Q1

15 January 2013

Staffing firm Michael Page (MPI:LSE) expects the first quarter of the New Year to remain “challenging”, following news that gross profit dropped year-on-year by -3.6% (in constant currency) to £126.5 million in the three months to December 2012, the company reported on Tuesday.

Chief executive, Steve Ingham, said that economic conditions and market confidence remained poor and trading continued to be challenging across major staffing markets. Adjusting cost levels therefore remained key, he said.

“The geographic balance of our businesses helped insulate the Group from these challenges, particularly within Europe. Regionally, Asia delivered the strongest performance, with Q4 gross profit at constant currency up 19%. Our offices in Japan and Greater China performed particularly well,” said Mr Ingham.

Legal, technology, HR, secretarial and healthcare were the strongest disciplines and saw good performances in the Americas and Asia Pacific.

Group gross profit from temporary recruitment in the quarter was £29.9 million, up +3.5% (in constant currencies) when compared to a year ago. But the permanent recruitment business suffered and saw gross profit fall -5.6% to £96.6 million (in constant currency) from a year earlier.

In the company’s largest region, Europe, Middle East and Africa (EMEA), market conditions were tough. Gross profit fell by -10.9% to £51.4 million (in constant currency) year-on-year.

The German business, which mainly specialises in permanent recruitment, saw a difficult quarter. “The indecision caused by economic uncertainty is driving clients' preference towards contractors or temps [in Germany],” said the staffing firm. Elsewhere in the region, trading shaped up with strong performances seen in Austria, Luxembourg, Poland, Russia, Sweden and Turkey.

In the United Kingdom, gross profit fell by -2.2% to £30.2 million although the technology, digital, energy and compliance disciplines enjoyed healthy growth.

Gross profit in Asia Pacific was up +10.1% (in constant currency) to £27.9 million despite a slowdown in the Australian staffing market. “Our businesses in Japan and Greater China remain resilient, performing strongly, with our newer businesses in Malaysia and India progressing well,” the firm said.

When the news hit the stock market early this morning, the company’s share price dropped by -0.4% to 402.80 pence, up +6.6% from a year ago and +19.4% above the 52-week low of 337.50 pence seen in July 2012. The firm has a market value of £1.22 billion.

Michael Page is among the 25-largest staffing companies in the world, according to Staffing Industry Analysts’ research. 

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