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World – Michael Page reports declining profits

16 July 2013

Specialist recruiter Michael Page (MPS: LSE) released its half year results showing declines in temporary contract numbers and falling permanent recruitment, when compared with the same period last year. Half year recruitment for both permanent and temporary contracts fell, -6.6% and -0.1% respectively, compared with H1 2012.

Total gross profit for H1 2013 fell from GBP 273.9 million (USD 413.4 million) to GBP 262 million (USD 395.4 million), year-on-year. Gross profit for temporary employment rose during H1 2013, despite the decline in recruitment numbers, from GBP 58.2 million (USD 87.8 million) to GBP 58.9 million (USD 88.9 million), year-on-year.

The Americas was the only region to record increased gross profit during the first half of 2013. Revenue rose +4.6%; from GBP 37.4 million (USD 56.4 million) in H1 2012 to GBP 39.1 million (USD 59 million) in H1 2013. Declines were recorded across the other three main sectors; UK (-0.4%), Asia-Pacific (-4.5%), and EMEA (-9.1%) during the same period.

“Overall PageGroup delivered a robust performance throughout the second quarter, against a backdrop of challenging market conditions across most of our regions, reporting gross profit of £135.3 million, up +6.6% on the first quarter, and down only -2% year-on-year,” said Steve Ingham, CEO of PageGroup.

Gross profit fell in PageGroup’s largest region, EMEA, by -4.4% during Q2 2013. This equates to a drop from GBP 57.6 million (USD 86.9 million) during Q2 2012 to GBP 55.1 million (USD 83.1 million) in Q2 2013. EMEA represents 41% of PageGroup’s total gross profit.

Asia-Pacific also experience a decline in profits year-on-year, falling -7.7% from GBP 30.6 million (USD 46.1 million) to GBP 28.2 million (USD 42.5 million) between Q2 2012 and Q2 2013. Asia-Pacific accounted for 21% of total gross profits during Q2 2013.

Profits rose in both the UK and the Americas during Q2 2013. The UK rose +0.3% from GBP 31.1 million (USD 46.9 million) to GBP 31.2 million (USD 47 million) from Q2 2012, representing 23% of total gross profits during Q2 2013. The Americas provided the biggest percentage increase of +10.7% but only represented 15% of total gross profit. From Q2 2012; gross profit rose from GBP 18.7 million (USD 28.2 million) to GBP 20.7 million (USD 31.2 million) in Q2 2013.   

 “Activity levels remained strong throughout the quarter, but with difficult conditions likely to continue in several markets, we expect Q3 will be another challenging quarter. As we indicated earlier in the year we continue to actively manage our cost base, both to take account of market conditions as well as improve the Group’s operating performance.” added Mr Ingham.

The firm’s share price rose +1.7% in early trading to 437 pence, an increase of +29.2% from a year ago. Based on its stock price, the company has a current market value of GBP 1.35 billion (USD 2.03 billion).

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