PageGroup Q3 profits drop as European market remains challenging

(Sharecast News) - PageGroup reported a drop in third-quarter profit on Wednesday as growth in the US and Asia was offset by a more challenging market in Europe. Group gross profit fell 6.7% from the same period a year earlier to £187.8m. EMEA saw a 10.2% decline to £97.8m, while the UK and Asia Pacific saw falls of 14.3% and 1.2% to £22.6m and £31m, respectively. In the Americas, gross profit ticked up 3.5% to £36.4m.

Gross profit in the permanent division was down 6.4% to £133.1m, while the temporary segment saw a 7.5% drop to £54.7m.

The recruitment firm said that while its fee rates remained at high levels, as clients' recruitment budgets have tightened, they have become more risk averse and this has continued to slow the recruitment process, impacting time-to-hire.

It also said that although salary levels remain strong, the level of increases offered to candidates was not as high as in 2022 and early 2023. As a result, the conversion of offers to placements remained "the most significant challenge".

PageGroup said it expects 2025 operating profit to be broadly in line with current market consensus of £21.5m.

Chief executive Nicholas Kirk said: "We continued to experience subdued levels of sentiment and confidence in Europe, particularly in our two largest markets, France and Germany, as well as in the UK. However, we delivered a fourth consecutive quarter of growth in the US, our fourth largest market, and a second consecutive quarter of growth in Asia. Collectively, these two markets represent a quarter of the group.

"We remain committed to our strategy and continue to reallocate resources into the areas of the business where we see the most significant long-term structural opportunities. Concurrently, we continue to ensure headcount in all our markets is aligned to activity levels. Overall, our focus remains to balance near-term productivity with ensuring we are well placed to take advantage of opportunities when market conditions improve."