The recruitment firm said its group gross profits fell 17.2% to £196.7m in the final quarter of 2024 – down 13% with currency movements stripped out
Recruitment giant PageGroup has issued a profit warning, pointing towards the lower end of market forecasts, while identifying further job cuts as the European jobs sector takes another hit.
The firm has reported a significant drop in its group gross profits, which fell by 17.2% to £196.7m for the final quarter of 2024. When you remove fluctuations in currency, the decrease stands at 13%.
The UK and the wider European, Middle East and Africa (EMEA) division, which represents over half of its earnings, saw profits plunge by 19.1%, with that figure reaching 13.6% specifically in the UK for the same timeframe.
Year-on-year comparison revealed a 15.8% reduction in EMEA profits and a 16.3% decline in the UK. Additionally, PageGroup has slimmed down its workforce, reducing fee-earning roles by 2.4%, a cut of 130 positions, ending the quarter with 5,370 staff members.
Nevertheless, the company managed to add 49 back-office roles internationally. In an effort to reduce costs, the company shut down its shared service centres in Slough and Singapore, relocating operations to Barcelona, Buenos Aires, and Kuala Lumpur.
These closures resulted in one-time costs of £5m for the group. Consequently, PageGroup has adjusted its full-year earning projections to the lower spectrum of £49m to £58.5m as estimated by analysts.
Nicholas Kirk, chief executive of PageGroup, said “Market conditions remained challenging in the fourth quarter and whilst most markets were sequentially stable, we experienced a further worsening in Europe, particularly in our two largest markets, France and Germany.”
The greatest challenge remains converting job interviews into accepted offers, as economic uncertainty affects the confidence of both candidates and clients, leading to longer hiring times. Regarding the company’s job cuts, he stated: “We continue to review our fee earner headcount, making progress on our strategy by reallocating resources into the areas of the business where we see the most significant long-term structural opportunities.”
He warned that significant economic and geopolitical uncertainty persists in most of their markets, particularly in France and Germany.
The company’s shares dropped 4% in Monday morning trading. Russ Mould, investment director at AJ Bell, commented: “The trimming of profit guidance on soft conditions in Europe reflects an environment where firms are increasingly reluctant to hire because they are feeling unsure about the future. Given the uncertainty, it is hard to see where an improvement might come from in the short term.”
