PageGroup reports steeper profit decline in second quarter

Recruiter PageGroup reported a steeper rate of profit decline in the second quarter, with particular weakness in the EMEA and UK divisions.

For the full year, the board said it still expects to hit market forecasts for operating profit, though subdued levels of client and candidate confidence are continuing to impact decision making.

Group gross profits fell by 13.1% year-on-year in the three months to 30 June to £194.8m, following an 11.7% decline in the second quarter. That resulted in an 12.3% drop over the first half as a whole, compared with last year, to £389.3m.

Gross profits in the EMEA division, PageGroup's largest region, were down 17.8% at £102.9m in the second quarter, with the company reporting a "slight deterioration in activity levels and trading in Continental Europe", particularly in its two largest markets, France and Germany.

However, the company saw some improvement in activity, trading and customer confidence in Asia and the US, where gross profits grew 0.6% and 14% in the second quarter, respectively.

"We delivered a resilient performance despite ongoing market and tariff related uncertainty, with mixed results across the Group," said chief executive Nicholas Kirk.

"The conversion of accepted offers to placements remained the most significant area of challenge, as ongoing macro-economic uncertainty continued to impact confidence, which extended time-to-hire. Permanent recruitment continued to be impacted more than temporary, as clients sought flexible options and permanent candidates remained reluctant to move jobs."

After not giving forward-looking guidance in its first-quarter update in April, owing to tariff-related uncertainty, PageGroup said it currently expected full-year operating profit to be broadly in line with market consensus estimates of around £22m.