Page sees UK market dry up as growth slows to a crawl

Recruitment firm Michael Page International saw UK profit growth nearly grind to a halt as public and banking sector work dried up.

Michael Page, which employs over 1,400 people in the UK, said gross profits in the UK rose 0.3 per cent to £33.1m in its third quarter, against growth of 48 per cent in the Americas and 44 per cent in Asia-Pacific.

The UK, which makes up 23 per cent of total profits, has seen a “restrained” public sector as the Government rolls out its tough package of spending cuts, while the firm previously warned hiring freezes and market turbulence had hit its banking arm.

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The group’s headcount, which covers 32 countries, was 5,350 on September 30, up 229 from June 30, while total group gross profits rose 22 per cent to £142.7m.

Michael Page has offices across the UK including Leeds, Sheffield, Cardiff, Bristol and Nottingham.

Page’s banking business, which focuses on London, New York, Tokyo and Hong Kong, and accounts for 10 per cent of the group’s gross profit, grew 10 per cent in the quarter, compared to 28 per cent growth the previous year.

Britain’s biggest banks – including Lloyds Banking Group, HSBC, Barclays and Royal Bank of Scotland – announced over the summer plans for job losses as conditions in both retail and investment markets became more difficult.

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Meanwhile, fears over a global recession led to turmoil on the markets, with the banking sector being one of the biggest losers. Elsewhere, Michael Page announced that Sir Adrian Montague will retire as chairman on December 31 after 10 years on the board and Robin Buchanan, an independent non-executive director, will succeed him.

Chief executive Steve Ingham said: “In the UK, with challenging market conditions and a restrained public sector, gross profits were flat.”

Michael Page, like its competitor Hays, is being helped by emerging markets, such as Latin America, up 60 per cent, and Asia, up 42 per cent, although growth in both had slowed from the first half.

Europe, Middle East and Africa saw gross profits grow 31 per cent to £112.8m, while Asia Pacific grew 44 per cent to £29.2m.

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The Americas was the best performer, surging 48 per cent to £22.1m.

Michael Page said it continued to invest in the business with new offices in San Francisco, Mumbai, Geneva, Mexico City and Campinas, Brazil.

Shares in Michael Page fell five per cent following yesterday’s update and have dropped 30 per cent since June.

However, Robert Morton, an analyst at Investec Securities, said Michael Page had a case for long term recovery and growth.

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He said: “The short term outlook will clearly be affected by the recent global financial turmoil which is likely to slow corporate hiring and increase candidate caution but we believe the longer term recovery and structural growth investment case remains intact.”

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