By Neil Maidment
LONDON (Reuters) – Michael Page (MPI.L) is to go ahead with plans to enter more emerging markets where the British recruitment company sees long-term growth opportunities, it said when reporting growth slowed further in the fourth quarter.
Michael Page said Wednesday that, while being mindful of a tough global economy that has rapidly stunted growth levels over the course of 2011, it would open offices in three new countries, Columbia, Morocco and Taiwan, this year.
The company, which places people in accounting, financial and legal jobs and issued a profit warning in December, said fourth-quarter gross profit rose 13.4 percent to 136 million pounds, down from growth of 30 percent and 22 percent in its second and third quarters.
Chief executive Steve Ingham told Reuters: “I cannot deny the fact that throughout the year it has become more challenging but it is not all doom and gloom and that is the key.”
The permanent jobs market, which makes up 78 percent of Michael Page’s gross profit, has been hit hardest as firms avoided taking on fixed costs during the euro zone sovereign debt crisis and as potential jobseekers stayed put rather than risk moving.
“This is not like 2009. It is not crashing. In 2008, things were getting trickier toward the end … and by the first quarter of 2009 we were in negative territory in most of our geographies,” Ingham said. “We are not in that position. We are in positive territory in all of our geographies.”
Michael Page shares were up 4.0 percent at 1035 GMT, one of the biggest gainers among London’s top 350 stocks (.FTLC).
Its EMEA market, which makes up 45 percent of group fees, was up 15.3 percent, down from 30.8 percent in the third quarter. Growth in the Americas and Asia Pacific slowed in the period to 18.6 percent and 23.3 percent, respectively, from 48 percent and 44 percent in the third quarter. Full-year gross profit rose by 25 percent to 554 million pounds.
It saw marginal growth in Britain, where banking and public sector markets have been hit hard, also affecting rivals Hays (HAYS.L) and Robert Walters (RWA.L) which have both recently sounded cautious tones on prospects for 2012.
The company said it expected to post a 2011 pretax profit of around 85 million pounds.
That was just below the forecast from Panmure Gordon, where analyst retained a sell rating: “The macro background remains tough at best, with all indications suggesting a very difficult H1 for recruiters regardless of reach, office numbers or brand name,” they said in a note.
“What we don’t know as yet with visibility diminishing and an economic storm developing is exactly how high the waves are coming over the side of the boat.”
Michael Page, which moved into three new countries in 2011 and opened 17 new offices, said it would continue to invest in fast growing markets like China and Latin America but be more prudent in regions like southern Europe and Britain, where it has reduced headcount for the past three quarters.
($1 = 0.6457 pound)
(Editing by Sarah Young)
13113
