Echoing the words he used in the January trading update (see here), Steve Bingham, CEO of UK-headquartered international recruitment firm PageGroup (the ‘soft-rebranded’ Michael Page International) presaged “another challenging year” in 2013, after revenues dropped back below the billion pound mark.
Headline revenues in 2012 fell by 3% to £990m, though this represented fractional growth at constant exchange rates. Gross margins trimmed a point to 53.2%, but operating margins fell from 8.4% in 2011 to 5.8%, not helped by a near-£8m charge to remove an entire level of (very expensive) management mainly in continental Europe, PageGroup’s largest region (41% revenues and GP).
UK revenues fell by 9% to £296m, but GP fell by less, so gross margins ticked up a point to 41%. PageGroup is less exposed to the UK financial services sector than many peers (c. 4% of UK GP), and growth in technical disciplines (including technology) helped offset the decline in other sectors. Indeed technology was a relatively resilient sector for larger peer Hays (see Hays UK back to black).
The message from all the recruitment firms reflects a general lack of confidence in industry to hire permanent staff. In the current economic climate it’s hard to see this changing for the foreseeable future.