PageGroup reports increase in first half profits but cautious on outlook

Recruitment firm PageGroup on Thursday reported a 16% increase in first half pre-tax profits as revenues rose on the back of strong growth in Continental Europe and Latin America.

Pre-tax profit edged up to £46.9m in the six months to 30 June from £40.4m in the same period a year earlier.

Revenues gained 8.6% with the strongest growth in the European, Middle East and Africa (EMEA) division. The revenue mix between permanent and temporary placements was 40:60, compared to 42:58 last year.

Gross profit and operating profit benefitted from favourable foreign exchange rates, rising 3.6% to £299.2m and 12.1% to £47.1m respectively.

The company raised its interim dividend 4.2% to 3.75p.

"We saw good performances in Continental Europe and Latin America (ex-Brazil), which combined now account for around 45% of the group,” said chief executive Steve Ingham.

“However, the challenging market conditions in several of our larger markets, including Greater China, the UK and Brazil, continued.”

EMEA, contributing 43% of group gross profit, saw revenue rise 19.2% to £254.3m and gross profit gain 18.3% to £129.1m, bolstered by robust performances in France and Germany.

In the UK, representing 25% of group gross profit, revenue increased 1.6% to £166.7m but gross profit decreased 1.3% to £74.8m due to uncertainty deterring hiring in the lead up to the EU Referendum on 23 June.

In Asia Pacific, comprising 19% of group gross profit, revenue decreased 0.5% to £97.6m but gross profit increased 0.9% to £56.5m.

In the Americas, which accounts for 13% of group gross profit, revenue grew 4.5% to £57.3m while gross profit decreased 3.4% to £38.8m.

"We are pleased with our first half performance, but remain mindful of ongoing macro-economic uncertainty in the UK and elsewhere as we start the second half of the year,” said Ingham.

“However, we will continue to focus on driving profitable growth, as we did in the first half, whilst remaining able to respond quickly to any changes in market conditions."

Shares fell 0.34% to 349.20p at 0909 BST.