Recruitment firm’s shares hit after a sorry tale of turmoil

Michael Page, one of Britain’s biggest white‑collar jobs firms, saw its shares hit yesterday when it gave warning that continuing turmoil in financial markets had hit recruitment in its key banking sector.

The warning came in the wake of major job cut announcements at British banks, including 30,000 at HSBC, 1,400 at Barclays and 15,000 at Lloyds.

Michael Page, which makes 10 per cent of its gross profit from banking recruitment, said hiring in the sector had notably slowed amid the eurozone sovereign debt crisis and rollercoaster stock markets.

Steve Ingham, group chief executive, said: “Since this turmoil has arisen in the past few weeks these announcements have meant that a lot of our banking clients have just held their breath and slowed down on recruitment and therefore our growth has slowed a little.”

Banks are also waiting to see the outcome of the Independent Commission on Banking’s final report in September, which is tipped to recommend a ring-fence between retail and investment banks, severely limiting cross‑subsidies.

Analysts say this could also have an impact on investment banking recruitment as the banks’ cost of capital is likely to rise as a result.

Michael Page, which also finds jobs for professionals in accounting and legal services, revealed that, despite the banking slowdown, its pre‑tax profits rose 38 per cent to £45.5 million in the first six months of 2011.

This was well down on City consensus expectations for a profit of £51.5m. Revenues rose 26 per cent to £502m.

The company’s shares closed down 8.1 per cent, or 32.4p, at 368p yesterday, after at one stage being 13 per cent off.

Shares in Michael Page had already fallen 25 per cent in the past four weeks following a report from fellow recruiter Hays that talked of a weak UK market, with the financial services sector slowing down.