PageGroup's quarterly profit slumps as hiring slows in Europe

Q1 gross profit down 13%

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Shares fall 6%

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Says slow Q4 2023 continued into Q1 2024

April 15 (Reuters) - Staffing company PageGroup reported a nearly 13% drop in first-quarter group gross profit reflecting slow hiring in major markets such as France and Germany on Monday and said job flows deteriorated toward the end of the quarter.

Shares in the company, which operates in 37 countries, fell more than 6% in early trade, with analysts at Jefferies noting weaker-than-expected momentum in every division except Americas.

Global recruiters have flagged persistent challenges due to low confidence among employees and employers.

"Conversion of final interviews to accepted offers is still the most significant challenge," CEO Nicholas Kirk said in a statement.

France and Germany saw a marked slowdown, with gross profit falling 16% in each in the first quarter versus single digit falls in the prior three months.

Analysts at Morgan Stanley last month said they were cautious on the short-term outlook for staffers due to the risk of further deterioration in both temporary and permanent placement volumes in Europe.

Swiss recruiter Adecco in February warned that 2024 had begun with a weak hiring trend.

PageGroup, which helps hire executives, professionals and clerical staff, reported quarterly group gross profit of 219.7 million pounds ($274 million), down 12.8% from a year earlier.

For March alone, it reported an 18% drop, due partly to fewer trading days because of Easter.

"The timing of revenue weakness is unhelpful because March vies with September as Page’s largest profit contributor of the year," analysts at Jefferies wrote in a note.

London-listed recruitment groups Robert Walters and Hays are scheduled to issue quarterly trading updates on Tuesday and Wednesday, respectively.