British recruiter PageGroup warns profit will nearly halve this year

By Yadarisa Shabong

(Reuters) -British recruiter PageGroup warned profit would fall by nearly 50% in 2024 due to weaker-than-expected hiring in June and a more cautious view for the second half of the year, sending its shares down as much as 15% on Tuesday.

Recruiters have struggled with declining profits over the last couple of years as employers lay off staff and cut back on hiring, while employees are reluctant to switch jobs and accept offers due to broader economic concerns.

Weak results were seen across its markets, from the U.S. to France, Germany and Britain, China and South East Asia, PageGroup said.

CEO Nicholas Kirk told analysts on Tuesday he was most concerned about France, the group's largest market, as the political uncertainty there was making recruitment activity even worse.

"Coming back after that (election) weekend, we had a number of clients contact us... candidates either wanting to pull out of processes to wait to see what happened, or clients putting interviews on pause and recruitment on pause," Kirk said.

He added that the group has not seen uncertainty recede even after the second round of French elections on Sunday, which thwarted the far right's quest for power but delivered a hung parliament.

Kirk said earlier in a statement that the group had "continued to see challenging market conditions... in Q2 and we experienced a softening in activity levels through the quarter, particularly in terms of new jobs registered and number of interviews."

There have been no immediate signs of improvement, PageGroup said, adding that recruitment budgets have tightened and offers made to candidates were "not as elevated" as they were in 2022 and early 2023.

The company said converting interviews into accepted offers is the most significant area of challenge for the group.

Shares of PageGroup were down 6% by 0913 GMT, having pared earlier losses.

Its London-listed rival Hays, which is set to report quarterly results on Thursday, slipped 3%. European peers Adecco and Randstad also fell about 2% each.

PageGroup now expects full-year 2024 operating profit to be in the region of 60 million pounds. It reported a profit of 118.8 million pounds last year.

Gross profit in the second quarter fell 12% to 224.3 million pounds ($287.2 million), with fees in June down 18% on last year.

($1 = 0.7811 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Janane Venkatraman, Mrigank Dhaniwala and Jan Harvey)