8th Aug 2022 17:44
(Alliance News) - PageGroup PLC reported a jump in interim profit, but shares fell after flagging a "slight slowing" in some of its markets.
Shares in PageGroup closed down 6.1% at 424.13 pence in London on Monday.
For the six months to June 30, pretax profit jumped 80% to GBP114.5 million from GBP63.7 million last year. Revenue climbed 28% to GBP977.3 million from GBP766.4 million.
The Weybridge, Surrey-based recruiter recorded a double-digit profit rise from all regions, with EMEA remaining the largest, contributing 50% of group gross profit. Compared to the same period in 2021, gross profit in the region climbed 31% to GBP266.7 million from GBP203.5 million, through an improvement in trading conditions.
Meanwhile, the Americas saw the fastest rate of growth, with gross profit increasing by 54% to GBP94.2 million from GBP61.3 million.
PageGroup explained that it continues to benefit from favourable trading conditions, including wage inflation and increased fee rates, resulting from the high demand and short supply of candidates. Further, it said that the hiring process is shorter than pre-pandemic, with video interviewing cutting recruitment time.
Broker Davy said there were no surprises in the results, but consensus will likely "drift down" in the second half as shares discount a significant slowdown.
Looking ahead, PageGroup said that outlook is unchanged, expecting full year operating profit to be in line with company-compiled consensus of GBP206 million, up from GBP168.5 million in 2021.
Chief Executive Officer Steve Ingram said: "Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world."
"In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking key performance indicators," Ingham added.
Davy said some slower decision making in July "is hardly a surprise".
"The key consideration is not so much the severity of any downturn but the longevity (as proven by the Covid period), especially considering the highly net cash position of the group and its strong free cash flow characteristics," said Davy.
PageGroup's growth still looks "at least robust" into the third quarter, the broker added, retaining its Outperform rating.
By Lucy Heming; [email protected] and Sophie Rose; [email protected]
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