Yahoo Finance PageGroup cuts profit outlook as customer confidence slides
By Radhika Anilkumar
(Reuters) - PageGroup on Wednesday lowered its full-year operating profit forecast, as the global recruiter's productivity took a knock in its fourth quarter, amid a challenging macroeconomic backdrop.
The recruitment industry, which previously benefited from an uptick in demand for staff from economic reopenings, is now seeing signs of a slowdown as sky-high inflation and recession fears push employers to be cautious about hiring plans.
"Looking forward, there remains a high level of global macroeconomic and political uncertainty in majority of our markets," Chief Executive Nicholas Kirk said.
The company, which operates in 37 countries, said its gross profit per fee earner, its gauge of productivity, was down 12% in the quarter as a deterioration in client and customer confidence led to further delays in decision-making by clients and job candidates.
Michael Page, the company's UK business weighed on the region's gross profit performance as clients put off their hiring decisions and candidates became more cautious about accepting offers.
Page's results follow a profit warning from rival Robert Walters, which sent shares of UK recruiters lower on Tuesday.
Page's shares, which fell 7% in the previous session, slumped as much as 5% after the trading update. They rebounded to trade 3.1% higher by 1024 GMT.
“Shares across the entire recruiter sector fell yesterday after Robert Walters' downgraded their guidance. So punishing Page twice for the same news flow didn't seem rational,” Kean Marden, analyst at Jefferies told Reuters.
Rivals Hays and SThree had also flagged slower trading towards the end of last year.
PageGroup's fourth-quarter gross profit in Greater China fell by 41% and there was a slide of 52% in Mainland China amid COVID-19 lockdowns in the region.
The company expects annual operating profit of around 195 million pounds ($237.20 million), down from a previous forecast of 204 million pounds.
($1 = 0.8221 pounds)
(Reporting by Amna Karimi, Sinchita Mitra and Radhika Anilkumar in Bengaluru; editing by Uttaresh.V and Jane Merriman)
