Michael Page sees drag on profits from Europe’s economic misery

The group, which employs more than 5,000 people, said its businesses in France and Germany suffered another challenging quarter, with gross profits down 17 per cent and 27 per cent respectively in the first three months of the year.

Trading conditions were also difficult in the UK but Page said the performance in property and construction, engineering, digital and public sector businesses kept the decline in profit to 1.2 per cent on a year earlier at £30.2m. Overall, profits for the quarter were 6.7 per cent lower than a year ago at £126.8m, short of City’s hopes for a figure of around £130m.

Shares fell 6 per cent in the wake of the first quarter update.

Chief executive Steve Ingham described the quarter as “robust” and said he was encouraged by growth in key markets in Asia and North America.

However, he is braced for this quarter to be challenging, with difficult trading conditions likely to continue in several mar- kets.

The company reduced its headcount by 57 to 5,042 in the last quarter and will continue to review costs.

Panmure Gordon said: “Page remains a strong brand name and financially robust, though the outlook for 2013 now looks weaker than anticipated and greater efforts will now need to be made to monitor and adjust the cost base accordingly.”

Shore Capital upgraded its recommendation to buy, from hold, following the downward movement in share price and no change in estimates.

The stockbroker said Page’s bias towards permanent staff should benefit profitability as its markets recover.