Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
PageGroup warns on profits, cuts staff as firms delay hirings
(Sharecast News) - Recruitment specialist PageGroup said 2023 full year operating profit was expected to be slightly below previous guidance as risk-averse employers delayed hiring decisions globally.
Full year operating profit was now expected to be slightly below previous guidance of £120m - £125m. The company also axed 224 jobs, or 3.7% of its fee-earning roles, to cut costs.
Fourth-quarter group gross profit fell 8.9% to £237.7m year on year. Trading conditions in Asia, the UK or the US saw no improvement, while trading conditions deteriorated in Europe, the company said in a trading update on Monday.
"We experienced a slower end to the quarter as customer uncertainty was compounded by the proximity to year end salary reviews and bonuses, which combined to make trading particularly challenging," PageGroup said.
The news follows sector peer Hays last week downgrading its profit forecast as the global jobs markets stagnated, while Robert Walters also made job cuts.
"Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through Q4. However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence," said chief executive Nicholas Kirk.
Gross profits from temporary hiring rose 5.2% over the fourth quarter, compared with a 13.9% decline for gross profits from permanent appointments.
"How times change. In August, PageGroup handed out a £50m special dividend," said AJ Bell investment director Russ Mould.
"Add this to a trading alert from Hays and a slow, downward leakage in profit estimates at Robert Walters and the jobs market may be finally showing some weakness, some two years after the first round of central bank rate hikes."
"This may help to justify the rate cuts for which financial markets are now baying, but if they come because of a hard economic landing, rather than the widely anticipated soft one, the picture may not be as rosy as the fourth quarter's broad stock market rally might imply."
Mould said the earnings miss "feels as if it will be relatively small, given chief executive Nicholas Kirk's acknowledgement that operating profit for 2023 is now expected to slightly undershoot the company's prior guidance of £120m to £125m".
"It looks as if consensus estimates had already slipped to £119m, a near-40% drop from the £196m recorded in 2022."
Reporting by Frank Prenesti for Sharecast.com
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.