15th Jan 2024 09:31
(Alliance News) - The latest update from London-listed recruiters confirms the weakening of the jobs market in the UK, with PageGroup PLC trimming annual guidance on Monday.
The Surrey, England-based recruitment firm said that in the fourth quarter of 2023, gross profit dropped 11% to GBP237.3 million from GBP266.9 million the prior year.
PageGroup said in fact that gross profit fell across all regions, most notably by 20% to GBP28.6 million from GBP35.7 million in the UK. Asia Pacific gross profit fell 16% to GBP35.9 million, while Americas profit fell 13% to GBP40.4 million. For Europe, the Middle East & Africa, profit decreased 6.5% to GBP132.4 million.
The recruiter put the blame on low levels of client and candidate confidence which caused hiring delays, notably in permanent recruitment.
Looking ahead, PageGroup now expects to report operating profit of between GBP120 million and GBP125 million for 2023, "slightly below" its previous forecast of GBP125 million to GBP130 million.
CEO Nicholas Kirk commented: "Looking ahead, macro-economic uncertainty persists... However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions."
Shares in PageGroup fell 2.2% to 446.20 pence each in London on Monday morning.
PageGroup itself reduced its headcount by around 3.7% in the fourth quarter, cutting 224 fee earner jobs, and 57 non-operations jobs. This followed similar headcount reductions in the previous four quarters, it noted.
"The recruiter is putting a brave face on a difficult jobs market, but it's clearly a real struggle as employers around the world turn cautious amid the uncertain economic climate," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Also on Monday, accounting and business advisory firm BDO said UK hiring has slumped to a new decade low and is expected to worsen amid shrinking job vacancies, according to its latest report.
HL's Streeter continued: "Recruitment budgets are dwindling so managers are taking a lot longer to go through the hiring process, particularly when it comes to permanent staff. The situation has worsened in European markets, and there has been no improvement either across Asia, the US or the UK."
"Page is also having to deal with a talent shortfall, with a lack of skills flagged among pools of workers, while good potential candidates desire high fees to move," she added.
Page's update adds to a weak picture of the wider recruitment sector, following updates from Hays PLC and Robert Walters PLC.
Fellow FTSE 250-listing Hays spooked investors with a profit warning last week, noting a hit from a slowdown in December, expecting near-term conditions to remain "challenging". Meanwhile, Robert Walters said it would deliver on profit expectations, but cut its headcount 9% annually and reported a double-digit drop in net fee income in the fourth quarter amid macro-economic challenges.
Neil Shah, Director at Edison Group commented: "The global hiring market has slowed down considerably as we've entered 2024, with high interest rates and general macroeconomic uncertainty making themselves felt... PageGroup has, unfortunately, not been able to buck the general trend."
By Elizabeth Winter, Alliance News deputy news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
PageGroupHaysRobert Walters