FINANCIALS: Michael Page gross profits drop in all regions

Recruiter Michael Page International’s Q3 gross profit dropped quarter-on-quarter in all four operating regions, in line with the expectations of a challenging second half of 2012, according to chief executive Steve Ingham

Mon, 8 Oct 2012

Recruiter Michael Page International’s Q3 gross profit dropped quarter-on-quarter in all four operating regions, in line with the expectations of a challenging second half of 2012, according to chief executive Steve Ingham.

Only the Asia-Pacific region showed growth over the year, as group gross profit in the period was £126.5m, down 7.6% when adjusted for constant currency on Q2 2012 and 6.5% on Q3 2011.

Regional breakdown (all changes expressed at constant currency):

• EMEA gross profit £49m, down 13.1% on Q2, 7.2% on the year

• Asia-Pacific gross profit £30.2m, down 2.7% on Q2, up 2.6% on the year

• UK gross profit £29.5m, down 5.2% on Q2, 10.9% on the year

• Americas gross profit £17.8m, down 2.7% on Q2, 10.3% on the year

The company’s permanent division, which represents 77% of its business, saw gross profit drop by 9.7% on the quarter and 8.4% on the year, while marginal growth (0.1% and 0.4% respectively) was seen in the temporary business. Its finance and accounting discipline, which makes up 43% of the group, was hit most significantly, with a 12.4% dip in gross profits at constant currency, compared to much more modest declines of less than 3% in the other three disciplines.

The group’s headcount was 5,255 at the end of Q3, down by 31 since the start of 2012.

Ingham comments: “As we stated in our July update and August half year results, we were anticipating a challenging second half given the seasonally quieter summer period, the tough year-on-year comparables and the ongoing backdrop of economic uncertainty.

“It remains key for us to manage our cost base, principally headcount, to reflect market conditions. To that end, we reduced headcount in the EMEA, Americas and UK regions, excluding the annual graduate intake in the UK. In Asia-Pacific our headcount was broadly flat. As usual, the headcount reduction was achieved principally through natural attrition.

“In most regions activity levels improved towards the end of Q3, however, we do anticipate another challenging fourth quarter, with economic conditions and market confidence likely to remain poor for the foreseeable future.”

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