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UK – Michael Page expects challenging Q4 after profits slump

08 October 2012

Specialist recruiter Michael Page International (MPI:LSE) has seen tough market conditions in the third quarter with gross profit falling by -11.3% to £126.5 million year-on-year, the firm reported on Monday.  

Gross profit generated from its key finance and accounting sectors was down -16.8% year-on-year. The permanent recruitment market proved tough as gross profit in the quarter was £97.9 million, a -13.2% decrease from a year ago. Group gross profit from temporary recruitment also dropped by -4.5% to £28.6 million.   

The staffing company reported a sharp -16% fall in gross profit across Europe, Middle East and Africa (EMEA), its largest region. Continued economic uncertainty impacted market confidence across continental Europe, with many countries seeing a decline.

In France and the Netherlands, third-quarter gross profit fell -9% at constant currency, while Spain and Italy saw a -22% decline year-on-year. In Germany, gross profit rose +6% when compared to the same time last year.

In all other EMEA countries (Austria, Belgium, Ireland, Luxembourg, Morocco, Poland, Portugal, Qatar, Russia, South Africa, Sweden, Switzerland, Turkey, U.A.E.) gross profit declined by -4% in the quarter.  

In its domestic market the United Kingdom, gross profit was down -10.9% to £29.5 million and the firm said that trading conditions remained tough, with activity levels impacted negatively by the Olympics.

From Asia Pacific the firm derives around a quarter of its gross profit, which increased +3.2% to £30.2 million year-on-year. But in Australia and New Zealand, third-quarter gross profit was -6% below Q3 2011 results while in Asia, gross profit was up +11%.  Market conditions in China became more challenging, the firm said, while business was performing well in Tokyo, Singapore, Malaysia and India.

In the Americas, gross profit was £17.8 million seeing a decrease of -18.9% over the £22.0 million recorded in the third quarter of 2011. In Latin America, gross profit was down -13% year-on-year while in North America gross profit was -3% below Q3 2011.

“As we stated in our July update and August half year results, we were anticipating a challenging second half given the seasonally quieter summer period, the tough year-on-year comparables and the ongoing backdrop of economic uncertainty,” said chief executive Steve Ingham.

“The third quarter did indeed prove to be challenging across all our regions. It remains key for us to manage our cost base, principally headcount, to reflect market conditions. 

“In most regions activity levels improved towards the end of Q3, however, we do anticipate another challenging fourth quarter, with economic conditions and market confidence likely to remain poor for the foreseeable future. Reflecting these challenging conditions, we expect our full year operating profit to be slightly below current analyst expectations.”

Michael Page is the 23rdlargest staffing company in the world, according to research by Staffing Industry Analysts.

The share price dropped by -4.2% this morning to 349.90 pence, down -3.8% from a year ago and 11.75% above the 52-week low of 313.10 pence seen in December 2011. The firm has a market value of £1.11 billion. 


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