PageGroup profit increases but Brexit uncertainty weighs on UK

PageGroup has posted double-digit profit growth but said uncertainty surrounding Britain’s departure from the European Union has weighed on the employment market.

Shares were down more than 5% in early trade on Monday at 440.8p.

The recruitment firm’s gross profit increased 15% to a record £815 million for 2018 compared with the previous year but profit for the UK arm declined 1.7% to £138.4 million.

Foreign exchange headwinds wiped off around £10 million from full-year gross profit.

PageGroup said the UK delivered marginal growth of just 2.1% in the final quarter, despite uncertainty surrounding Brexit hitting candidate and client confidence.

The Page Personnel business, which represents a quarter of the UK division, grew 12%, but the company said its Michael Page business, which is focused on more senior roles, was hit by Brexit uncertainty and saw profit fall 1%.

For Europe, the Middle East and Africa, the company’s biggest region, profit increased 19% to £394.2 million, Asia Pacific grew 18% to £161.3 million and the Americas rose 20% to £121.1 million.

The company increased its headcount by 561 people in the first three quarters of the year, with new recruits slowing in the final quarter.

Chief executive Steve Ingham said the company is “mindful of the heightened geopolitical and macro-economic uncertainty, which has the potential to impact client and candidate confidence”.

He said: “We will continue to focus on driving profitable growth, while continuing our strategic investments towards our vision of 10,000 headcount, £1 billion of gross profit and £200 million to £250 million of operating profit.

“Our flexible and diversified business model ensures that we are able to respond quickly to changes in market conditions.

“We are pleased with the group’s performance and expect 2018 operating profit to be in line with consensus.”

According to a company-compiled consensus, analysts expect PageGroup to post operating profit of £141.8 million for 2018.