After preparing us for the bad news last month (see Tough times persist for Michael Page UK), recruitment player Michael Page has shown just how difficult things are now in the UK market. Revenue in the first half to 30 June was down 10.4% to £146m, and gross profit fell 6.5% to £61.7m. Operating profit before exceptionals meanwhile was down 17.2% to £8.6m (5.9% margin vs. 6.4% last time).
Banking is yet again the main cause behind the slump, down 50% on the year, although apparently more technical disciplines continued to grow. UK headcount has also been trimmed by 12% since its peak in Q311.
Group wide, profitability has really taken a hammering, with operating profit down 38%, against a flat revenue performance. Michael Page has been investing heavily in emerging markets to fuel growth, opening offices in Casablanca, Cape Town, Macaé (Rio de Janeiro), Suzhou and Taipei during the half. But there have also been some regional management restructuring costs.
It is Asia Pacific where Michael Page is experiencing growth – this market grew 23.3% during the half, and now represents 21% of the group’s gross profit. Like rival Hays (see here), Michael Page is also seeing strong growth in Germany, which was up 25% year on year, although from a low base – the region only makes up 16% of the EMEA business (or c£34m). EMEA is MP’s largest territory, and ony grew 0.9%.
As MP now faces the seasonally quieter summer period in Europe and the UK, it is expecting a challenging second half. It will need demand in APAC to continue and its newly opened offices to deliver the goods quickly if it hopes to counteract this ongoing weakness in Europe and the UK, and hit its H2 expectations.