Recruiter PageGroup delivers record quarter as tight labor market increases wages and competition for talent
- The Surrey-based company reported second-quarter gross profit of £280.9m
- PageGroup also ended the quarter with gross profit exceeding £100m in June
- Lockdown laws have particularly affected the company’s profits in China
Recruitment firm PageGroup posted its best-ever quarterly result as it benefited from a job market characterized by rising wages and labor shortages.
The Surrey-based company reported gross profit of £280.9m in the three months ended June, up 27.8 per cent on the same period last year, amid record sales in 25 countries .
That includes Germany and the US, two of five markets the company calls “large, high-potential,” with growth in the latter territory fueling strong demand at its offices in Boston, Chicago and Houston.
Bounceback: Robert Walters and PageGroup see strong recovery in Asia Pacific
It also ended a record-breaking quarter in June, the second time a headhunter has posted monthly gross profits in excess of £100m.
Chief executive Steve Ingham said the impressive result was achieved “despite macroeconomic and geopolitical uncertainty” and continued Covid-19 restrictions in some markets.
Lockdown laws have particularly hit the firm’s bottom line in mainland China, where the government’s strict zero-spread policy for COVID-19 has forced tens of millions of residents in major cities to stay at home.
Due to strict social distancing and quarantine rules in Hong Kong, PageGroup’s gross profit in Greater China fell 11 percent.
In contrast, the company’s UK profits rose 22.6 per cent to £39.1m thanks to a record quarter at its Page Personnel division, which recovered less quickly from the Covid-19 pandemic.
Following strong performances in other major markets such as Latin America and Southeast Asia, the firm’s gross profit for the first half of 2022 increased by exactly a third year-on-year from £404.2m to £539m.
Competition: Staffing firms have benefited greatly from labor shortages and higher levels of voluntary redundancies, leading to increased competition for talent
As a result, PageGroup continues to expect operating profit this year to be in line with the current consensus forecast of £205m.
Ingham said: “Looking ahead, we are acutely aware of the heightened degree of macroeconomic and political uncertainty that exists around the world, particularly in relation to rising inflation in most of the markets in which we operate.
“We regularly monitor all key business performance indicators, but to date we have not seen any significant changes other than normal seasonal variations.”
PageGroup’s trading update reflects similar information from UK headhunting giant Robert Walters, which last week revealed it had also delivered its best-ever quarterly result.
London-listed Robert Walters reported strong growth across all forms of recruitment, whether permanent, temporary or contract, amid strong demand for new talent.
Both companies have faced labor shortages accelerated by the Covid-19 pandemic, as well as higher levels of voluntary layoffs, which have combined to lead businesses to raise wages to try to attract employees.
The PageGroup boss also attributes the group’s recent results to investments in new technology, including the global Customer Connect operating system, and video interviews that allow people to be hired more quickly.
PageGroup shares rose 0.8 percent to 433.4 pence late on Wednesday morning, although their value has fallen more than 30 percent in the past six months.