PageGroup cuts profit target amid hiring caution

Recruiter PageGroup has lowered its profit forecast as rocketing inflation and the prospect of a lengthy recession have seen firms become cautious about hiring plans.

The company told investors it witnessed a slowdown towards the end of 2022.

It said it is therefore due to post an operating profit of £195 million for last year, downgrading its previous projection of £204 million.

It comes a week after rival Robert Walters warned over its profits due to the difficult jobs market.

PageGroup said the weakness at the end of the period meant gross profit per fee, its preferred measure, slipped by 12% in the fourth quarter of 2022 compared with the same period a year earlier.

Nicholas Kirk, chief executive officer of the firm, said: “As the quarter progressed, conditions became increasingly challenging and we saw a reduction in both candidate and client confidence, leading to further delays in decision-making, as well as candidates being more reluctant to accept offers.”

The firm stressed that the recent slowdown came after a record year, as the firm benefited from high vacancy levels following the pandemic.

Total revenues grew by 22.6% to £1.07 billion in 2022 compared with the previous year, with 7.9% growth in final quarter.

Mr Kirk added: “Looking forward, there remains a high level of global macro-economic and political uncertainty in the majority of our markets.

“However, against this backdrop, we continue to see candidate shortages and good levels of vacancies.

“Given our highly diversified and adaptable business model, with a cost base that can be adjusted rapidly and a strong balance sheet, we believe we are well-positioned to weather the uncertainty and continue to make strong shareholder returns.”

Shares in PageGroup were 3.6% higher in early trading.