Slowing UK job market causes decline in PageGroup earnings

PageGroup Reports Significant Profit Drop in First Half, Announces Cost Cuts

Recruitment giant PageGroup has reported a sharp drop in first-half profits, with the UK, which generates 12% of the group's gross profit, suffering a 13.4% decline to £46.6 million. The FTSE 250 firm saw its operating profit tumble to £2.1 million in the six months to 30 June.

The group's UK and Ireland division experienced a significant decline in both revenue and profit, with notable weakness also observed in their operations in France. Activity levels in Continental Europe experienced a slight deterioration towards the end of the period, particularly in France and Germany, resulting in a £7 million operating loss for the division.

To combat these challenges, PageGroup has pledged to press ahead with cost cuts and aims to achieve annualized savings of £15 million from 2026 through a simplified management structure and efficiency drives. The company has already been reducing headcount, with UK fee earners down nearly eight percent in the half.

Despite the uncertain outlook due to the unpredictable economic environment, the group is confident in its highly diversified and adaptable business model. The low client and candidate confidence in the UK has stretched out the time it takes to fill roles, but PageGroup remains optimistic about the future.

In a move to maintain investor confidence, an interim dividend of 5.36p per share was declared, unchanged from last year. The group's performance in the first half was resilient, with stripping out one-offs, underlying profit coming in at roughly £15 million.

PageGroup booked around £13 million of restructuring charges, and net cash fell to £10.8 million from £57.2 million a year ago, due to lower profitability and dividend payments. Forecasts for the full year remain firm, with the full year operating profit forecast remaining broadly in line with market consensus of around £22 million. No significant changes were made to the forecasts for the full year.

The group has a strong balance sheet and its cost base is under continuous review. PageGroup's management remains committed to delivering sustainable growth and shareholder value in the long term.