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(Alliance News) - PageGroup PLC on Tuesday reiterated its annual operating profit guidance despite reporting a 2.6% slide in fourth quarter operating profit amid tough trading conditions and currency headwinds.
The Weybridge, Surrey-based recruitment company said challenging trading conditions experienced during the final quarter of 2019 across majority of its operating regions are anticipated to continue and foreign exchange headwinds will persist, or possibly increase in 2020.
"There are challenges in Europe, Middle East & Asia, including social unrest in France and heightened political tensions, notably in the Middle East. Asia Pacific continues to be impacted by trade tariff uncertainty in Mainland China, the protests in Hong Kong, as well as the fires in Australia," Chief Executive Steve Ingham said.
"In the Americas, the weak Financial Services market in New York, as well as social unrest in Chile are expected to continue to impact the region's results. In the UK, Brexit related uncertainty is expected to be ongoing during 2020," Ingham added.
PageGroup reported gross profit of GBP205.6 million for the fourth quarter of 2019, down from GBP211.0 million a year ago.
The EMEA region saw 0.8% drop, while the Asia Pacific recorded a 8.8% drop in fourth quarter gross profit. Americas saw a 2.2% increase in quarterly gross profit, while profit in the UK fell 4.8% year-on-year.
Adverse foreign exchange movements dented fourth quarter reported gross profit by GBP4.6 million PageGroup said, adding that forex movements had a minimal impact on 2019 gross profit.
At current exchange rates, the company expects forex movements to hurt 2020 reported gross profit by GBP25 million and operating profit by GBP4 million.
The company's fourth quarter fee earner headcount reduced by 54, mainly in greater China and the UK. Operational support headcount decreased by 37 in the quarter.
For 2019, PageGroup predicts gross profit to increase 5.0% year-on-year to GBP856.0 million, a decrease of 89 fee earners and total headcount of 7,698.
The company has retained its annual operating profit estimate at between GBP140 million to GBP150 million. In 2018, operating profit stood at GBP142.5 million.
PageGroup shares in London were trading 0.7% higher at 471.40 pence each on Tuesday morning.
By Tapan Panchal; tapanpanchal@alliancenews.com
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