PageGroup alerts over annual earnings amid tough jobs market

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Andrew Feinberg

White House Correspondent

Recruitment giant PageGroup has warned over annual earnings and revealed further cuts to its workforce after activity in the global jobs market weakened.

The group said that gross profits fell 12% on a constant currency basis to £224.3 million in the three months to the end of June and worsened through the quarter.

It ended June with an 18% plunge in group gross profits.

PageGroup cautioned that it expects full-year operating profit of around £60 million – nearly half the £118.8 million reported in 2023 and far short of the £90.4 million pencilled in by most analysts.

The firm said the profit alert comes in response to “weaker than expected trading in June, recent increased geopolitical and macro-economic uncertainty and consequently a more cautious view for the second half”.

Shares in the FTSE 250 listed group dropped 5%, sending the stock down to its lowest level since last autumn.

The company said it cut the number of fee earners by another 2.7%, or 153, to 5,598 in the second quarter, with its European operations taking the brunt of the reductions.

Its non-operations workforce fell by 2.4%, or 49, in the quarter.

PageGroup shed more than 1,000 fee earner roles in 2023 but said it would look to “broadly hold” numbers at current levels “to ensure we are well placed to take advantage of opportunities as sentiment and confidence improve”.

Nicholas Kirk, chief executive of PageGroup, said: “We continued to see challenging market conditions throughout the group in the second quarter and we experienced a softening in activity levels through the quarter, particularly in terms of new jobs registered and number of interviews.

“The conversion of interviews to accepted offers is the most 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.”

Jobs markets have faltered worldwide since the start of 2023 as weaker economic conditions have hit recruitment.

Its latest update showed that gross profits in the UK – which accounts for 12% of the group – dropped 17.4% to £26.8 million.

This marked a slight improvement on the 19.2% drop seen in the first three months of 2024 but was still one of the worst performances across its global operations.

On UK trading, PageGroup said: “We continued to see clients deferring hiring decisions and candidates cautious about accepting offers.”

The update showed that gross profits dropped 12.3% across Europe, Middle East and Africa, 13.5% in the Americas and 23.7% in Asia Pacific.