UK recruiter PageGroup beats second-quarter profit view, boosting shares
PageGroup Outperforms Expectations Amid Challenging Recruitment Market
By Prerna Bedi
July 13 (Reuters) - PageGroup beat second-quarter gross profit forecasts on Monday, boosting its shares as stronger hiring in the Americas and Asia offset a continuing slowdown in Europe and Britain.
The recruitment sector has been under pressure, especially in Europe, where weak economic growth has dented hiring, forcing recruiters to save cash while economic uncertainties and the fallout from the U.S.-Israeli war with Iran add to challenges.
Performance Highlights and Regional Trends
PageGroup said its efforts to rein in expenses were delivering results and that several markets in the Americas and Asia-Pacific were improving.
"Whilst we have seen improvement and signs of a normalisation in trading in a number of our markets, there remains a high degree of uncertainty in the outlook for the rest of the year," CEO Nicholas Kirk said in a statement.
Shares in the British company were up 12.8% at 1010 GMT. Rivals Robert Walters and Hays were up 9% and 5%, respectively, adding to gains from Friday after Hays raised its outlook.
Americas and Asia-Pacific Drive Growth
'BETTER THAN FEARED'
PageGroup, which focuses on white-collar recruitment, reported gross profit of £197.6 million ($264.6 million) for the quarter ended June 30, down 0.2% from a year earlier at constant currencies but above a company-provided analyst consensus of £186.8 million.
RBC Capital Markets analyst Karl Green said about 50% of PageGroup's markets had returned to growth, with trends in Europe "much better than feared".
Europe, Middle East and Africa Performance
Gross profit at PageGroup's Europe, Middle East and Africa business, its largest, fell 4.8%. UK profit was down 5.3%.
"The (UK) market remains tough but stable, with pockets of optimism beginning to appear in Page Executive, Interim and Technology," the company said, referring to its executive, contract and technology industry hiring businesses.
Operational Improvements and Outlook
On a call with analysts, Kirk said PageGroup had seen an improvement in offers being converted to placements, including in the U.S. construction industry, where four out of five job offers were ending up in completed hires.
Cost-Saving Measures and Future Expectations
PageGroup expects 2026 operating profit to be in line with analysts' consensus estimate of £28 million. It added that cost-saving measures had delivered annualised savings of about £40 million.
($1 = 0.7474 pounds)
(Reporting by Prerna Bedi and Nithyashree R B in Bengaluru. Editing by Ronojoy Mazumdar and Mark Potter)