PageGroup quarterly profit hits record as markets outside UK grow
Recruiter PageGroup (PAGE.L) posted a record quarterly gross profit that beat expectations, helped by growth in markets outside Britain where company and candidate confidence was dampened by uncertainty after the country voted to leave the EU.
PageGroup shares were up 6 percent at 472.31 pence by 0850 GMT, while rival Hays (HAYS.L), which reports results on Thursday, was up 3.8 percent, making those stocks the top two gainers in London's midcap index .FTMC.
Gross profit grew 9.1 percent at constant currency rates to 170.3 million pounds in the three months to March 31, PageGroup said on Wednesday, partly due to the timing of the Easter holiday, which falls in the second quarter this year.
Analysts had on an average expected gross profit growth of 3.3 percent, and Morgan Stanley said the results implied an upgrade of between 6 and 8 percent to its full-year operating profit estimate of 103 million pounds.
The company, which mainly finds candidates to fill permanent rather than temporary roles, posted a slight fall in UK gross profit to 36.4 million pounds, which marked a sequential improvement and the region's strongest performance in a year.
Chief Executive Steve Ingham said UK regional manufacturers and exporters were hiring more engineering and technical people to help keep up with business growth thanks to the pound's slide, but overall the market remained weak.
"We have the same number of jobs going into the second quarter as we did going into the beginning of the year and I don't see that changing until we realise what sort of decisions are being made around Brexit," Ingham told Reuters.
The CEO said the company would increase its headcount in growing markets such as Europe, China and the United States, while its headcount would remain flat in the UK, where London and financial services had remained under pressure.
Smaller recruiter Robert Walters (RWA.L) said on Tuesday London banks were hiring more staff, but Ingham said UK financial services hiring had not improved sequentially as companies remained concerned about their ability to sell to EU clients from UK bases after Brexit.
"We haven't had any (finance) clients confirm to us that they are moving wholesale out of the UK ... but at the moment there's still some caution about hiring the sort of volumes that we perhaps saw this time last year," he said.
(Editing by Louise Heavens and David Holmes)