Fall in permanent hiring hits Michael Page profits

Recruitment specialist Michael Page has reported a 13.4 per cent increase in pre-tax profits and a 14.8 per cent boost to basic earnings per share in the first half of the year (release).

Profits before tax rose to £32.0m from £28.2m in the same period the year before. Basic earnings per share increased to 7.0p from 6.1p.

However, group gross profits fell by 4.4 per cent year-on-year despite profitability in all established markets. This was driven primarily be a six per cent fall in gross profit from permanent placements, more than offsetting two per cent growth from temporary placements.

The recruiter had warned of “difficult conditions” and the expectation of a challenging third quarter in its interim management statement last month, so these results shouldn’t come as a surprise to investors.

There also appears to be a trend away from UK finance recruiting, with 77 per cent of gross profits generated outside of the UK and 59 per cent from non finance and accounting discipline.

As part of its efficiency drive, headcount was cut by 2.8 per cent in the period, primarily in operational support.