Certainty returns to market but questions mark Bracey exit - City Comment
31 October 2013
I’ve just returned to London after half-term week in Bath and Exeter. With no access to share price data, it’s difficult to precisely assess how recruiter shares have performed this month but, in general, the mood seems to have remained positive and a series of small daily increases have edged the FTSE100 index of leading London companies to a five-month high.
Thu, 31 Oct 2013 | By Kean Marden, head of business services equity research,
Jefferies InternationalI’ve just returned to London after half-term week in Bath and Exeter. With no access to share price data, it’s difficult to precisely assess how recruiter shares have performed this month but, in general, the mood seems to have remained positive and a series of small daily increases have edged the FTSE100 index of leading London companies to a five-month high.
Throughout the current results season the trend has been one of gentle upward drift and the lack of distraction from sharp share price movements has allowed me to devote my full attention to Orchard Pig cider and Oggy Oggy pasties.
Last week, we published a research note that updated our view about the outlook for recruiter share prices. As economic uncertainty subsides, investment horizons are lengthening and investors are once again trying to determine the peak profitability of recruitment agencies.
It’s a good time to exchange views with shareholders as although the global economy has clearly improved several factors dwell on their minds. Firstly, many stockbrokers have issued buy recommendations this autumn. This is not normally an encouraging sign for a sector that has tended to reward the contrarian investor over the past five years.
Secondly, we have known about Europe’s economic recovery for months as recruiters started telling us that Europe had bottomed out at the start of 2013 and highlighted an increasing body of evidence throughout the summer that pointed to recovery, even in peripheral economies. Finally, many shares have almost returned to their all-time highs relative to equity indices.
The other main topic of debate with investors this month concerned the unexpected resignation of the finance director at PageGroup (formerly Michael Page International).
Andrew Bracey only joined the group 18 months ago and, as executive directors rarely part company with their employer two business days before a trading update, his departure was particularly notable.
I won’t repeat investors’ attempts to rationalise this development here because in truth no one has a privileged insight. In a frank interview with chief executive officer Steve Ingham in The Times, on the scheduled conference call with analysts and in one-to-one conversations with us, a consistent message has been conveyed – his departure was not connected to trading and there had been no breakdown in the personal relationship between senior management.
Jefferies InternationalI’ve just returned to London after half-term week in Bath and Exeter. With no access to share price data, it’s difficult to precisely assess how recruiter shares have performed this month but, in general, the mood seems to have remained positive and a series of small daily increases have edged the FTSE100 index of leading London companies to a five-month high.
Throughout the current results season the trend has been one of gentle upward drift and the lack of distraction from sharp share price movements has allowed me to devote my full attention to Orchard Pig cider and Oggy Oggy pasties.
Last week, we published a research note that updated our view about the outlook for recruiter share prices. As economic uncertainty subsides, investment horizons are lengthening and investors are once again trying to determine the peak profitability of recruitment agencies.
It’s a good time to exchange views with shareholders as although the global economy has clearly improved several factors dwell on their minds. Firstly, many stockbrokers have issued buy recommendations this autumn. This is not normally an encouraging sign for a sector that has tended to reward the contrarian investor over the past five years.
Secondly, we have known about Europe’s economic recovery for months as recruiters started telling us that Europe had bottomed out at the start of 2013 and highlighted an increasing body of evidence throughout the summer that pointed to recovery, even in peripheral economies. Finally, many shares have almost returned to their all-time highs relative to equity indices.
The other main topic of debate with investors this month concerned the unexpected resignation of the finance director at PageGroup (formerly Michael Page International).
Andrew Bracey only joined the group 18 months ago and, as executive directors rarely part company with their employer two business days before a trading update, his departure was particularly notable.
I won’t repeat investors’ attempts to rationalise this development here because in truth no one has a privileged insight. In a frank interview with chief executive officer Steve Ingham in The Times, on the scheduled conference call with analysts and in one-to-one conversations with us, a consistent message has been conveyed – his departure was not connected to trading and there had been no breakdown in the personal relationship between senior management.
- Click for more City Comment from our recruitment sector experts.
