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PageGroup shares drop as it issues cautious outlook about UK jobs market

PageGroup reported a 9.8% increase in total gross profit at constant exchange rates to £711.6mln for 2017
UK recruitment business was hit by economic uncertainty last year

Recruitment firm PageGroup PLC (LON:PAGE) shares fell as it said it remains cautious about several markets, particularly the UK where Brexit uncertainty has hurt business confidence.

The company’s UK business, which operates under the brands of Michael Page, Page Personnel, Page Executive and Page Outsourcing, saw gross profit decline 3.8% to £146.3mln in 2017.

READ: PageGroup shares lifted by RBC Capital upgrade after quarterly earnings beat forecasts

However, growth in its overseas businesses helped the group deliver a 9.8% increase in total gross profit at constant exchange rates to £711.6mln.  

The star performer was its European, Middle East and Africa division, which achieved a 15% jump in gross profit to £332.3mln, accounting for 47% of the total.

Group revenue at constant currencies increased 9.8% to £1.37bn.

PageGroup said its total headcount increased by 930 in year to a record 7,029, including a 786 rise in fee earners and a 144 gain in support staff. The fee earner to operational support staff ratio improved to a record level of 78:22.

Challenges in UK jobs market remain

But the company said the UK would continue to face challenges in 2018.

“We remain cautious in several markets as we progress through the year: primarily in the UK, where we will focus on protecting margins,” said Steve Ingham, chief executive of PageGroup.

“We will, as always, continue to focus on driving profitable growth while being able to respond quickly to changes in market conditions.”

Ingham also said he remains cautious about Australia, where the company has invested in headcount and a new office in Canberra, and about Brazil, which “remains challenging” despite a stronger performance in the fourth quarter.

Shares dropped 5.4% to 495.20p in morning trade. 

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