Michael Page warns of Brexit risk to business confidence

(Refiles to clarify currency effects in final paragraph)

By Li-mei Hoang

LONDON, Jan 12 (Reuters) - Michael Page, one of the world's leading recruitment firms, warned that a British exit from Europe would lead to uncertainty that could damage growth after seeing a slowdown in its domestic business.

The company, which mainly finds candidates to fill permanent positions, said on Tuesday it was not making contingency plans for a possible exit from the European Union but feared disruption to the recruitment market.

Prime Minister David Cameron has promised a referendum by the end of 2017 on whether Britain should stay in the EU, whose policies in favour of the free movement of labour have allowed thousands of workers to come to Britain from less EU affluent countries such as Poland.

"I am concerned about the disruption, because it causes uncertainty and uncertainty means that people are unprepared to make decisions," Chief Executive Steve Ingham told Reuters.

"It (Other OTC: ITGL - news) 's not good for a candidate thinking about moving job, and it's not good for a client and that's more a concern."

The company had already noted a slowdown in growth in Britain in the fourth quarter as clients got cold feet about making decisions on hiring staff.

The British business, which accounts for 27 percent of the group, posted a 2.1 percent rise in gross profit of 36.2 million pounds ($52.6 million) in the last three months of 2015.

"We would hope that the slowing in the Q4 is not a sign of things to come and that 2016 will still be a positive year for the UK as well," said Ingham.

Shares (Berlin: DI6.BE - news) in the company fell to their lowest level in a nearly year, and were 8.1 percent lower at 410 pence by 1027 GMT.

"Reflecting comments from elsewhere in the sector, we are not surprised to see the recent slowdown in the UK," said Panmure Gordon analyst Adrian Kearsey in a note.

Rival Hays, which will report its second quarter results on Wednesday, posted a slowdown in UK net fees in October, prompting some analysts to cut earnings forecasts.

Michael Page, which operates in 35 countries, said it had seen strong demand from continental Europe and the United States, which helped offset continued weakness in Australia, Brazil and the Middle East.

Gross profit rose 9.2 percent in 2015, based on constant exchange rates. However, currency effects trimmed the reported figure to 555.9 million pounds, a 4.3 percent increase. ($1 = 0.6885 pounds) (Editing by Paul Sandle and Keith Weir)