Citing challenging macroeconomic conditions, PageGroup (PAGE) has warned that 2019 operating profit will be towards the lower end of market forecasts, at £161.1m. Despite a record second quarter that saw gross profit increase by 7.9 per cent to £225m, the group has trimmed its fee earner headcount by 122.
Accounting for almost half of group gross profits, Europe, the Middle East and Africa (EMEA) grew 9 per cent at constant currencies to £109m. Trading may have remained positive in France, Italy and Spain, but it was more muted owing to weaker economic growth and market sentiment. Similarly, although Asia Pacific gross profit rose by 4.7 per cent on a constant-currency basis, the largest market, Greater China, contracted by 1 per cent in the face of ongoing trade hostilities and social unrest in Hong Kong. Brexit-related uncertainty continues to hamper candidate and client confidence, driving UK gross profit down by 2.4 per cent to £35m.
Fellow recruiter Robert Walters (RWA) is also feeling the squeeze – net fee income (NFI) growth dropped to single digits in the second quarter. As seems to be the norm, continued political turmoil saw UK NFI decline by 8 per cent, although there were “pockets of buoyancy” across financial services, technology and the regions. Faring a little better than PageGroup, recovery in France following the ‘gilets jaunes’ demonstrations produced NFI growth in excess of 15 per cent, with continental Europe up 13 per cent at constant currencies.
