UPDATED: Page Group delivers record quarterly profits but warns over Brexit uncertainty

An EU flag flies in front of the Houses of Parliament in Westminster, London Photo:  Victoria Jones/PA Wire
An EU flag flies in front of the Houses of Parliament in Westminster, London Photo: Victoria Jones/PA Wire
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Recruitment firm Page Group posted record profit in the second quarter, but warned that Brexit and political uncertainty is continuing to hit the UK jobs market.

The company, which has offices in Leeds and Sheffield, saw gross profit rise 7.7 per cent in the period to £182 million, boosted by a strong performance in France, Germany and southern Europe.

But profits at Page’s UK arm, which comprises 20 per cent of the group’s business, slumped 4.5 per cent to £36.6 million. Chief executive Steve Ingham said that client and candidate confidence levels continue “to be impacted by Brexit and political uncertainty”.

The news comes as the Government remains in disarray over which Brexit path to pursue, although Tory hardliners are still pushing a so-called “hard Brexit” where the UK would ditch the EU’s single market, a move that some argue would have a damaging impact on businesses and jobs.

Page Group, formerly known as Michael Page International, added that it could face other potential headwinds in the coming months.

Commenting on the results, Mr Ingham said: “France, having increased fee earner headcount by 19 per cent year-on-year, delivered another excellent quarter, with growth of 23 per cent.

“The UK was down 4.5 per cent, with Easter falling in Q2 (the second quarter) and client and candidate confidence levels continuing to be impacted by Brexit and political uncertainty.

“In our large, high-potential markets, growth in Greater China accelerated, up 11 per cent.

“Excluding Singapore where market conditions remained challenging, South East Asia, delivered growth of 35 per cent.

“In the US, where we increased fee earners by 28 per cent year-on-year, we saw a strong improvement, up 17 per cent.”

Latin America, excluding Brazil, delivered growth of 18 per cent and Germany achieved a record quarter, with an increase of 13 per cent.

Mr Ingham added: “Our focus on investing in these large, high-potential markets, which were collectively up 12 per cent, as well as in businesses experiencing strong growth, resulted in fee earner growth of 178 in Q2 and 276 (+5.9 per cent) on December 2016, up to a new record for the group.

“Total fee earner headcount now stands at 4,987, with total headcount at 6,448.”

The group continued to benefit from positive foreign exchange movements, which in the quarter added around £13m to the gross profit, increasing reported gross profit by 8.3 percentage points to 16.0 per cent.

Mr Ingham continued: “We are pleased with the strong performance across the majority of our regions, bearing in mind the timing of Easter.

“However, there remain a number of uncertainties as we continue through 2017, including the impact of Brexit negotiations and political uncertainty in the UK, elections in Germany and Brazil’s ongoing macro-economic challenges.

“Costs from our headcount investments including in new markets such as the Nikkei market in Japan, our contracting business in Germany and our Page Personnel businesses, continue.

“Our outlook for full year operating profit is in line with current consensus.”

London and the UK regions delivered a similar performance over the first half of the year, according to a Page Group spokesman.

The UK regions performed more strongly than London in the first quarter of 2017, while the reverse was the case in the second quarter, the spokesman added.

Roughly half of Page Group’s fee earners in the UK are based in offices outside London.

The company does not disclose exact numbers for its regional operations, the spokesman said.

Page Group operates three key brands: Page Executive, Michael Page and Page Personnel, supported by additional brands across its business.