Michael Page warns of continued tough conditions

The firm said the jobs market showed signs of improvement during the second quarter, but the current period will be “challenging” as recruitment activity eases during the summer.

Page posted a pre-tax profit of £32.1 million for the six months to 30 June, down from £36.1m a year ago, but in line with City forecasts. Overall revenues were broadly flat at £503.2m. In Europe, the Middle East and Africa – its largest division with 41 per cent of its gross profit – revenues fell 2.9 per cent to £205.3m.

The group enjoyed a sharp turnaround in the Americas, where operating profits surged to £2.5m from just £200,000 a year earlier. Growth was driven by strong progress in the US, where a recovery in the world’s biggest economy lifted gross profits 23 per cent, but difficult conditions in Argentina meant growth at its Latin American business was limited to 2 per cent.

Chief executive Steve Ingham said: “With difficult conditions likely to continue in several markets, and as this is the seasonally quieter summer period in both continental Europe and the UK, we expect the third quarter will be another challenging quarter.”

The group axed 144 of its global workforce during the first half of the year, leaving it with 4,950 staff. However, it increased staffing numbers in the UK by 2 per cent to 1,256 and said it was “well positioned to take advantage of any recovery”.

Ingham said the UK division, which accounts for almost a quarter of Page’s gross profits, delivered flat revenues of £146.1m and had put in a

“robust” performance in the face of tough market conditions.

He added: “The group is fin-ancially strong, with net cash of £47.6m, and we remain well-placed to take advantage of any recovery in the markets in which we operate.

“At this time, we expect our full-year operating profit from trading activities to be in line with current market estimates.”

Investec analyst Gideon Adler said the recruiter had sounded a “cautious” note over the outlook for the third quarter, but he expects the group to benefit from a pick-up in some markets, such as Australia, which should help it deliver a full-year operating profit of about £70.8m.

However, gross profits in Australia tumbled by 20 per cent as the country’s mining and commodities sector suffered a downturn in the wake of China’s slowing growth. That drove a 30.4 per cent slide in operating profits at the group’s Asia Pacific division to £9.6m.

Adler said Investec was keeping its “hold” rating on Page’s shares, adding: “We continue to see better value elsewhere in the sector at this stage in the cycle.”

The interim dividend, to be paid on 4 October, was held at 3.25p a share.