PageGroup (PAGE:LSE) announced revenue declined 9.8% in constant currency in the half year ending 30 June 2024 to £898.0 million. 

Group profit also came under pressure with a drop of 12.4% in gross profit (in constant currency) and 53.7% in operating profit (in constant currency and excluding the impact of hyperinflation in Argentina).

“The Group experienced challenging market conditions across all regions in [the first half], with a softening in activity levels towards the end of the period, particularly in terms of new jobs registered and number of interviews undertaken,” PageGroup CEO Nicholas Kirk said. “The conversion of interviews to accepted offers continues to be a significant area of challenge, as candidate and client confidence remains subdued, reflecting the macro-economic uncertainty in the majority of our markets. Permanent recruitment continues to be impacted more than temporary, as clients seek more flexible options and permanent candidates remain reluctant to move jobs.

“While we saw a slower end to [the first half], having taken action to reduce headcount throughout last year, our intention is to broadly hold fee earners at existing levels to ensure we are well placed to take advantage of opportunities as sentiment and confidence improve.”

The company’s revenue mix between permanent and temporary placements was 36:64 compared with 38:62 in the 2023 period and for gross profit was 73:27 (2023: 74:26).

In total, administrative expenses in the first half decreased 10.2% in reported rates to £415.7 million (2023: £462.9 million), driven largely by the lower average headcount in the first half of 2024 compared to the year-ago period. In constant currencies, excluding the impact of hyperinflation in Argentina, administrative expenses were down 6.7%.

The following figures are all in constant currencies.

In EMEA, the group’s largest region, revenue decreased 11.5% to £501.4 million in the first half of 2023 and gross profit decreased by 11.4%. The organisation saw a more resilient performance within temporary recruitment, indicative of the current uncertainty within the market. France, 14% of the company’s gross profit, was down 15% against a record comparator in 2023. Germany, the group’s second largest market, declined 12%, with technology-focused Interim business the most resilient. Elsewhere in Europe, PageGroup experienced tough market conditions in all countries. A better performance was to be found in The Middle East and Africa, which grew 11%, a record for the first half.

In the Americas, revenue increased by 2.0% to £139.1 million but gross profit was down 6.1%. Excluding Argentina due to hyperinflation, revenue and gross profit declined by 11.9%. North America declined 17% against 2023, due to the US, where uncertainty around market conditions continued to affect both candidate and client confidence. Latin America delivered growth of 10%. However, excluding Argentina, the region declined 4%. Mexico declined 11% due to its high dependency on the US. Brazil grew 10%, with a particularly strong performance in temporary recruitment. The remaining countries in Latin America declined 6%, collectively.

In Asia Pacific, revenue decreased 17.4% to £116.6 million in the first half and gross profit decreased 17.8%. Gross profit in Greater China declined 23%, with no sign of improvement. Mainland China and Hong Kong were down 22% and 26%, respectively. South East Asia declined 7% with Singapore down 6%. The other five countries in the region declined 8%, collectively. India grew 10% and delivered a record half against a very strong comparator. Japan declined 17% and Australia declined 35%, with ongoing challenging conditions in all states.

In the UK, first-half revenue decreased 7.6% compared to 2023 to £140.9 million and gross profit declined 18.5%. PageGroup continues to see clients deferring hiring decisions and candidates cautious about accepting offers.

Looking ahead, PageGroup has forecasted a full-year operating profit of £60 million, missing analysts’ expectations of £68.6 million.

“We continue to see the benefits of our investments in innovation and technology,” Kirk said. “Customer Connect is supporting productivity and enhancing customer experience, Page Insights is providing real time data to inform business decisions for both Page and our customers, and we continue to work with our partners to deploy AI and automation tools into our working environment. Given the Group’s fundamental strengths, we believe we will continue to perform well despite the challenging environment, and we are confident in our ability to implement our strategy driving the long-term profitability of the Group.”

Share Price

PageGroup shares last traded at £398.40, down 8.2% on the day and 21% below its 52-week high of £502.50, set on 14 December 2023. The company has a market cap of £1.3 billion.