PageGroup PLC on Monday reported a ‘resilient’ performance in its latest quarter, but acknowledged that a lack of client and candidate confidence had hurt its earnings.

The Surrey, England-based recruitment firm said that in the fourth quarter of 2023, gross profit dropped 11% to £237.3 million from £266.9 million the prior year.

PageGroup said in fact that gross profit fell across all regions, most notably by 20% to £28.6 million from £35.7 million in the UK. Asia Pacific gross profit fell 16% to £35.9 million, while Americas profit fell 13% to £40.4 million. For Europe, the Middle East & Africa, profit decreased 6.5% to £132.4 million.

PageGroup explained: ‘The tougher market conditions at the end of Q3 continued into Q4, as low levels of client and candidate confidence continued to delay time to hire, particularly in permanent recruitment.’

The company said that salary levels remained strong, but recruitment has nonetheless slowed as clients tightened their recruitment budgets.

‘We produced a resilient performance in challenging market conditions,’ commented Chief Executive Officer Nicholas Kirk. ‘Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through Q4.

‘However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.’

PageGroup proclaimed a ‘strong’ balance sheet with net cash of approximately £90 million at December 31, albeit down from around £131 million at the same time in 2022.

Looking ahead, PageGroup now expects to report operating profit of between £120 million and £125 million for 2023, ‘slightly below’ its previous forecast of £125 million to £130 million.

‘Looking ahead, macro-economic uncertainty persists,’ CEO Kirk admitted. ‘However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions.

‘Given these fundamental strengths, we believe we will continue to perform well in these challenging markets, and we are confident in our ability to implement our new strategy driving the long-term profitability of the group.’

Early on Monday morning in London, shares in PageGroup were trading 3.2% lower at 441.80 pence.

Copyright 2024 Alliance News Ltd. All Rights Reserved.