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Michael Page International plc (MPI:LSE), the specialist professional recruitment company, announces today a 33% fall in revenues for the first 6 months of the year ended 30 June 2009 based on constant exchange rates (CER). Gross profits were down by 45% on CER.
30% of gross profits were generated from temporary placements. 68% of gross profits were generated outside the UK. The interim dividend was maintained at 2.88p.
Europe, Middle East and Africa (EMEA) is the Group's largest region, contributing 48% of Group gross profit. Revenue in the region decreased by 24.1% to 165.2m Pounds (2008: 217.8m Pounds) and gross profit decreased by 36.6% to 85.8m Pounds (2008: 135.4m Pounds). In constant currency, revenue fell by 34.8% and gross profit by 45.6%. The rapid reduction in gross profit, coupled with 8 out of the 17 countries in the region being start-ups in the last 4 years, resulted in an operating loss of 1.5m Pounds (2008: profit of 40.0m Pounds).
In the UK, representing 32% of the Group's gross profit, revenue decreased by 27.0% to 137.8m Pounds (2008: 188.8m Pounds), gross profit decreased by 40.3% to 57.0m Pounds (2008: 95.6m Pounds) and operating profit decreased to 6.1m Pounds (2008: 28.4m Pounds).
In the UK, market conditions were weak throughout the period across all disciplines and locations. In reaction to the lower activity levels, during the first half, staff numbers decreased by 420 (26%), to 1,220 at the end of June. The UK economy started to slow earlier than in Continental Europe and there are increasing signs that the rate of decline is slowing and, in some disciplines, we are experiencing a degree of stabilisation. In some locations and disciplines we are not anticipating further headcount reductions and some teams are selectively hiring in order to increase the rate of gain in market share.
Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said "while market conditions generally continued to weaken during the first half, the rate of decline in the UK, our largest country, and the Asia Pacific region has slowed, and gross profit in these regions in the second quarter, was at a level similar to that of the first quarter. We anticipate a challenging third quarter as we enter into the seasonally quieter summer period, both in Continental Europe, which was later into the downturn, and in the UK.
"We continue to adjust our headcount in response to market conditions, retaining our more experienced and stronger people. In the last twelve months we have reduced headcount by a third, largely through natural attrition, and with a lower cost base we have remained profitable in the first half of 2009. We remain confident that, with our strong balance sheet, leading brand and experienced management team, we can maintain our market presence, continue to gain market share and are well positioned for growth when economic conditions improve."
"In the majority of the countries in this region, the effects of the global economic slowdown were felt later than in the UK and USA. Market conditions continued to weaken throughout the period and while maintaining market presence, our businesses have reacted by reducing headcount since the beginning of the year by 475 (22%), taking the region's headcount to 1,680 at the end of June 2009."
Michael Page International plc specializes in the areas of accounting, tax and treasury, banking and financial services, consultancy, strategy and change, engineering and manufacturing, healthcare, human resources, information technology (IT) and technology, legal, marketing, oil and gas, procurement and supply chain, property and construction, retail and hospitality, sales and secretarialAs of December 31, 2008, the Company had 163 offices in 28 countries worldwide.