PageGroup’s gross profits boosted by stronger US dollar

PageGroup profits boosted by strengthening US dollar but recruiter warns of waning client confidence

  • The recruitment firm revealed a gross profit of £270.5m in the third quarter
  • Growth was strongest in the EMEA territory, where profits climbed by £24m
  • PageGroup continued to be affected by China’s draconian zero-Covid policy 

PageGroup has recorded another impressive quarterly performance, aided by record earnings in multiple countries and a soaring American dollar.

The recruitment business revealed a gross profit of £270.5million for the three months ending September, a 14 per cent increase at constant currency levels from the equivalent period last year.

Growth was strongest in the EMEA territory, where profits climbed by £24million thanks to record quarters in the Netherlands and Germany, with the latter market buoyed by the tech-focused Michael Page Interim division.

Boom time: Global labour shortages combined with a large volume of voluntary job resignations have provided a massive windfall for the recruitment sector

Robust growth was also reported in the Americas region, helped by double-digit rises in the US and Mexico, while the UK division was bolstered by strong performance in its Page Personnel arm.

PageGroup ended the quarter with gross profits of over £100million in September, the third time it has achieved such a feat, which chief executive Steve Ingham said was partly down to the strengthening US dollar.

Yet he noted a ‘slight softening’ of client confidence during the period, leading to some positions being withdrawn and a slowdown in hiring across some markets.

‘Looking forward, there remains a high level of global macro-economic and political uncertainty, particularly regarding increasing inflation in the majority of our markets,’ Ingham remarked.

The company continued to be badly affected by China’s zero-Covid policy, which has led to considerable economic damage from tens of millions of people in major cities being temporarily confined to their homes.

Compared to an 11 per cent decline in the second quarter, its gross profits in Greater China plunged by 26 per cent between June and September, causing total earnings across the Asia-Pacific region to fall by 3.9 per cent.

Outside of China, trade was impacted by uncertainty resulting from a febrile general election in Brazil and the death of Queen Elizabeth II dampening recruitment activity in the UK.

In spite of these problems, PageGroup has maintained its full-year earnings outlook and intends to pay £100.5million in dividends to investors from this Friday.

Ingham added: ‘Given our highly diversified and adaptable business model, with a cost base that can be adjusted rapidly, we believe we are well-placed to progress towards our vision for the group to be the leading specialist recruiter in each of the markets in which we operate.’

PageGroup shares were up 0.7 per cent to 372.2p by mid-morning on Wednesday, although their value has fallen by around 43 per cent in the past 12 months.

The Surrey-based firm’s trading update comes a day after fellow recruiter Robert Walters also posted sturdy third-quarter results that showed a significant jump in earnings following substantial growth in multiple Asian countries.

Global labour shortages combined with a large volume of voluntary job resignations have led employers to hike salaries to try and attract candidates, providing a massive windfall for the recruitment sector.

Over the coming year, though, this boom faces a strong likelihood of tailing off given the threat of recessions and further interest rate increases across the world.