PageGroup (PAGE: LSE) today reported group gross profit decreased by 13% on a constant currency basis to £196.7 million during the fourth quarter of 2024. PageGroup cited ongoing challenging market conditions across the group, further worsening in Europe.

In its Q4 trading update, PageGroup also cited continued subdued levels of client and candidate confidence which impacted decision-making.

On a reported basis, gross profit fell by 17.2%.

Fee earner headcount fell by 130 (-2.4%) to 5,370 (Q3 2024: 5,500). This was mainly in Europe and the UK. Non-operations headcount increased by 49 (2.5%) in Q4. This increase was due to the double running of circa 65 heads as the company transitioned its shared services centre from Singapore to Kuala Lumpur. 

Foreign exchange movements hurt the group’s results in Q4, decreasing Q4 reported gross profit by 4.2%, or £9.8 million.

In a press release, Nicholas Kirk of PageGroup said, “Market conditions remained challenging in Q4, and whilst most markets were sequentially stable, we experienced a further worsening in Europe, particularly in our two largest markets, France and Germany. The conversion of interviews to accepted offers remains the most significant area of challenge as the ongoing macroeconomic uncertainty continues to impact candidate and client confidence, also extending the time to hire.”

Kirk continued, “We continue to review our fee earner headcount, making progress on our strategy by reallocating resources into the areas of the business where we see the most significant long-term structural opportunities as well as ensuring it remains aligned to activity levels we are seeing in each of our markets. We drove further efficiencies in the organisation through the closure of our shared service centres in the UK and Singapore, with the transition of activities into Barcelona, Buenos Aires and Kuala Lumpur. Overall, our focus remains to balance near-term productivity with ensuring we remain well placed to take advantage of opportunities when market conditions improve.”

PageGroup also said it expects 2024 full-year operating profit, after one-off costs of circa £5 million relating to the closure of its shared service centres in the UK and Singapore, to be towards the lower end of the current market consensus range of £49 million - £58.5 million.

Gross profit

PageGroup noted that the constant currency percentage decline in the Americas did not include Argentina due to hyperinflation.

Geographical Analysis

Unless stated otherwise, all growth rates are vs. 2023 and in constant currency.

In Europe, Middle East and Africa, gross profit declined 15.9% to £107.5 million. The challenging conditions and reduction in activity levels that the group experienced in Q3 worsened in Q4, with lower levels of candidate and client confidence.

France, the group’s largest market, declined 17%. Temporary recruitment, down 12%, outperformed permanent, down 21%.

Germany, the second largest market, saw challenging market conditions, down 23%. The company saw tough conditions in all brands, with a deterioration in client and candidate confidence impacting both permanent and temporary recruitment. Elsewhere in Europe, market conditions remained challenging in all countries.

In the Middle East and Africa, gross profit was down 8%. In response to ongoing challenging market conditions, PageGroup reduced its fee earner headcount by 116 in Q4, mainly in France and Germany.

In the Americas, the company posted a gross profit of £35.4 million, down 5.5% excluding Argentina due to hyperinflation.

The US grew 3%, an improvement on the decline of 11% in Q3. PageGroup saw an increase in activity levels and trading during the quarter, particularly in engineering, accounting and financial services.

In Latin America, excluding Argentina, gross profit declined by 14%. Mexico, the group’s largest country in the region, declined 4%, an improvement on the 15% decline in Q3. Brazil was down 12%, albeit against a tough comparator due to a one-off release in the prior year. Excluding this item, Brazil grew 1%. Elsewhere in Latin America, the remaining countries declined by 24% collectively. Overall fee earner headcount decreased by 8.

In Asia Pacific, gross profit for Q4 declined 14.6% against 2023 to £29.5 million. Greater China declined 23%, broadly in line with Q3, with Mainland China and Hong Kong down 26% and 19%, respectively.

Southeast Asia declined 4%, with Singapore down 3%. India declined 7%, albeit against a tough comparator, and Japan declined 6%. Australia declined 25%, with ongoing challenging conditions across all states. Fee earner headcount in the region increased by 17, mainly in Japan. The group’s non-operations headcount increased by 74 in Q4, due to the double running of circa 65 heads as PageGroup transitioned its SSC (Share Services Centre) from Singapore to Kuala Lumpur.

In the UK, gross profit for Q4 declined 13.6% against 2023 to £24.3 million, in line with Q3. The conversion of interviews to accepted offers remains a significant area of challenge, with ongoing subdued levels of client and candidate confidence also impacting decision-making and increasing time to hire. Reflecting the continued challenging trading conditions, fee earner headcount in the region reduced by 23.

Kirk said, “Looking ahead, a high degree of macro-economic and geopolitical uncertainty remains across the majority of our markets, notably in France and Germany. However, we have a diversified and adaptable business model, a highly experienced management team, a strong balance sheet, and our cost base is under continuous review.”

“We continue to see the benefits of our investments in innovation and technology,” Kirk added.

“Given the group’s fundamental strengths and despite the challenging environment, we are confident in our ability to implement our strategy, driving the long-term profitability of the group,” Kirk continued.

PageGroup will issue its full-year results on 6 March 2025.

Pagegroup set a new 52-week low during today’s trading session when it reached £293.40. Over this period, the share price is down 34.42%. Shares last traded at £298.40, down 4.17% on the day. The company has a market cap of £1.02 billion.

(This article, along with its headline and subheading, was revised on 13 January 2024. A previous version incorrectly referred to it as a profit warning.)