Michael Page (LSE:PAGE) shares fell to a nine-week low on Tuesday despite the recruitment group reporting its first quarterly increase in gross profit since late 2022, as continued weakness in European markets weighed on the outlook.
The shares declined 1.8% to 190.47 pence, their lowest level since 7 August, while the FTSE 250 advanced 0.5%. In Frankfurt, the company’s shares dropped 8.1% to €2.26.
Michael Page reported third-quarter gross profit of £190.5 million, an increase of 1.5% in constant currencies compared with the previous year. The result exceeded company-compiled analyst expectations of £187.9 million and marked the first quarterly increase since the fourth quarter of 2022.
Growth in the Americas and Asia Pacific helped offset weaker recruitment activity across Europe, where economic uncertainty continued to affect hiring decisions.
Gross profit in Europe, the Middle East and Africa declined 3.8% in constant currencies. Within the region, the UK recorded a 5.5% decrease, while France and Germany reported declines of 11% and 7%, respectively.
The company described recruitment conditions in France, Northern Europe and the UK as challenging but stable, with employers continuing to exercise caution over hiring commitments.
Despite the improvement in group gross profit, Michael Page maintained its full-year operating profit expectations at approximately £29 million, in line with company-compiled analyst consensus.
The unchanged forecast reflects the continued differences in performance across the group’s international markets, with growth in some regions yet to translate into a higher annual profit outlook.
Michael Page also reported improved productivity during the quarter, with gross profit per fee earner increasing 6% year on year.
The company reduced its fee-earner workforce by 63 employees during the period, bringing the total to 4,851. Management said the adjustment reflected its continuing efforts to align staffing levels with recruitment activity.
The group’s Page Executive division, which specialises in senior management and executive recruitment, delivered 15% growth during the quarter.
The increase contrasted with weaker performance in several European markets and contributed to the group’s return to overall gross profit growth.
Chief Executive Nicholas Kirk indicated that recruitment conditions were improving and becoming more normalised in a number of markets, although uncertainty remained a significant factor affecting the business.
The company continues to operate in an environment where corporate recruitment decisions are influenced by economic conditions, business confidence and employers’ willingness to commit to additional staffing.
Michael Page’s third-quarter performance showed an improvement in trading compared with the prolonged period of declining gross profit that began after 2022.
However, the recovery remained uneven, with continued contractions in the UK, France and Germany offsetting some of the growth achieved elsewhere.
The company’s decision to maintain its full-year operating profit forecast suggests management remains cautious about the pace at which improving recruitment activity will contribute to earnings.
For the remainder of the financial year, Michael Page will continue to focus on managing costs, maintaining fee-earner productivity and responding to changes in recruitment demand across its international operations.
The group’s latest trading update indicates a return to modest gross profit growth, while the share price decline reflects investor caution over persistent European weakness and the absence of an upgrade to annual profit expectations.
About Michael Page
Michael Page is an international specialist recruitment company operating as part of PageGroup, providing permanent, temporary and contract recruitment services across a range of professional sectors.
The business serves employers and jobseekers in Europe, the Middle East, Africa, the Americas and Asia Pacific, with recruitment activities covering finance, technology, engineering, sales, marketing and other professional disciplines.
Its operations include Page Executive, which specialises in senior management and executive-level appointments.
The company is listed on the London Stock Exchange under the ticker LSE:PAGE and is a constituent of the FTSE 250 index.
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