RECRUITMENT specialist Michael Page International reported a fall in annual profits and said it expects the first three months of 2013 to be “another challenging quarter”.
The firm, which has a Liverpool financial and legal recruitment office in the business district’s Edmund Street, issued a trading update for the full year, and fourth quarter, today.
It showed full year gross profits of £526.8m, which is a 1.5% decrease of £26.9m at constant currency rates.
Full year operating profits, before exceptional items, are expected to be in the region of £65m, compared with £86m in 2011.
However, the group said it maintains a strong balance sheet with net cash of £59m at the end of 2012, compared with £58.2m the previous year.
Its headcount of 5,099 had dropped by 187 during the year.
All its geographical regions – the company has 164 offices in 34 countries – showed declines in fourth quarter gross profits, apart from the Asia Pacific market which managed an 8.9% increase to £27.9m. The UK suffered a 2.2% decline to £30.2m.
Chief executive Steve Ingham said today: “As anticipated in our October update, economic conditions and market confidence remained poor and trading continued to be challenging across all our regions.”
He added: “Activity levels remained robust throughout the quarter, however, we do anticipate quarter one to be another challenging quarter.”
Analysts Paul Jones and Mike Allen at Liverpool stockbroker Panmure Gordon maintained their ‘sell’ recommendation on Michael Page’s shares after today’s update.
They said: “A pre close update from Michael Page is largely as anticipated in the light of the recent caution expressed elsewhere by other recruiters, with headcount reductions and an expectation that difficult trading is likely to continue into Q1.
“While this update does little to change expectations of current forecasts, it reiterates the possibility of further contraction across the sector in 2013, and further reductions in forecast as the year progresses.
“We remain sellers from a valuation point of view, albeit that Michael Page remains the best of a difficult sector.”