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Michael Page profit down 49 percent

Source: Reuters - Mon 17th Aug 2009

Recruitment company Michael Page reported a 49 percent drop in first-half profit on Monday but said the rate of decline had slowed in Britain, boosting hopes the UK is beginning to emerge from recession.

Britain's second-largest recruiter, which specialises in placing professional staff, posted a pretax profit of 43.2 million pounds ($71.5 million) for the six months to the end of June on revenue 27 percent lower at 364.7 million pounds.

"In the UK we made roughly the same gross profit in the second quarter as we did in the first quarter (28.9 million pounds), which is obviously a sign of stabilisation" Chief Executive Steve Ingham told Reuters in an interview.

"It's too early to call the end of the recession, but confidence has improved, and people seem to want to move jobs more now than they did before."

Michael Page shares, which have risen by a quarter in the last three months, outperforming the support services sector Q.FTASX2790 by 50 percent, were down 1.2 percent at 315.80 pence by 9:35 a.m., valuing the group at 1 billion pounds.

The company, which typically places clients in middle and senior management positions, held its interim dividend at 2.88 pence but said it expected the third quarter to be challenging due to the seasonally quieter summer period.

"The rates of decline in some markets are stabilising but conditions will remain tough going into Q3 with no signs of green shoots emerging" said Panmure analyst Paul Jones.

Recruitment companies have suffered in recent months as firms across the world have cut staff to save costs during the economic downturn. 

Michael Page has itself axed about a third of its staff, or around 1,200 employees, over the past year.

In the UK, which represents around a third of Michael Page's earnings, first-half profit fell 40.3 percent to 57 million pounds due to weakness across all disciplines and locations.


The unemployment rate rose to 7.8 percent in the three months to June, its highest since 1996, official figures showed last week.

Unemployment is likely to break through the 10 percent mark before long in the euro zone, after climbing to a 10 year high of 9.4 percent in June, while the U.S. also expects unemployment to hit 10 percent this year.

Adecco, the world's largest staffing group, last week said it had yet to see a recovery in Europe and the U.S. as second-quarter revenue slipped 31 percent.

British rival Hays, whose third-quarter earnings fell 40 percent, reports full-year results on September 3.

In the Asia Pacific region Michael Page's first-half profit fell 46.7 percent and dropped 36.6 percent in Europe, the Middle East and Africa, while it slid 34.6 percent in the Americas.

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