* Pagegroup issues second profit warning this year
* Robert Walters' UK profit slides 11%
* Trade war and Brexit keep companies on edge
* Hong Kong protests and slowing German economy also weigh
* Shares fall across recruitment sector
By Uday Sampath Kumar and Yadarisa Shabong
Oct 8 (Reuters) - Britain's PageGroup and Robert
Walters warned on Tuesday that profit will be hit by a
global recruitment squeeze as continuing geopolitical issues
such as Brexit and the U.S.-China trade conflict dent economies.
Shares in Robert Walters, which has a presence in more than
30 countries, fell by 10.4% while larger PageGroup plunged
nearly 13% to its lowest in nearly three years.
The deepening crisis over when, how or if Britain leaves the
European Union has hit every sector of the UK economy, with many
businesses calling a halt to hiring until they have a clearer
picture of what a divorce deal will look like.
Demand for new staff at British companies in September
increased at the weakest rate in almost eight years, a survey
showed on Tuesday.
Companies presented with a negative backdrop will think hard
about their spending, and that includes staff costs, said AJ
bell investment director Russ Mould.
“The first step in a bleak situation is normally to hold off
replacing staff who have moved on to another job. The second
step is to make actual job cuts, and it feels like we may be
seeing the first small signs of that, given talk of HSBC
slashing 10,000 positions," Mould said.
Robert Walters said its gross profit in the UK fell 11% in
the third quarter, while PageGroup's second profit warning of
the year followed a 4.1% drop in quarterly earnings in its home
market.
The news pushed shares of other recruitment companies lower,
with Hays, Sthree and Swiss-listed Adecco
Group all down in early trade.
DARK CLOUDS
Fears of a global recession has been a particularly dark
cloud hanging over the recruitment industry as the protracted
U.S.-China trade war and a weakening German economy keep
companies on edge.
The flagging Chinese economy is also having a ripple affect
on hiring in countries such as Australia as its export-focused
commodities sector goes through a slowdown, Robert Walters
finance chief Alan Bannatyne told Reuters.
PageGroup and Robert Walters said business in Hong Kong is
also being hurt by the continuing violent protests by
pro-democracy activists.
"Looking ahead, the deterioration in trading conditions seen
during Q3 across the majority of our regions is anticipated to
continue," PageGroup said.
The company forecast 2019 operating profit in a range of
between 140 million pounds ($172.2 million) and 150 million
pounds, down from previous guidance of 156.5 million to 168
million pounds.
Robert Walters said it expects annual profit in line with
the last year and that it has cut its global headcount by 2% to
4,258.
Bannatyne did say he expects business in the UK to bounce
back when Brexit developments give companies and candidates some
clarity about the future.
Prime Minister Boris Johnson has promised to take Britain
out of the European Union by Oct. 31 come what may, despite
parliament passing a law ordering him to seek a delay if he
cannot secure a new transition deal.
($1 = 0.8132 pounds)
(Reporting by Uday Sampath and Yadarisa Shabong in Bengaluru
Editing by David Goodman)
