Shares in mid-cap recruiter PageGroup PLC (LSE:PAGE) have moved steadily lower as a result of a grim financial outlook.
Its 12% second-quarter earnings nosedive was largely telegraphed and came as little shock to the market, but the recruiter’s expectations of profits halving by year-end caused a stir.
In a trading update, PageGroup said profits from its UK segment fell over 17% in the quarter, a worse result than the 6.6% dip in the Americas and 10.2% dip in the EMEA region.
But all is not ghastly in the UK, according to AJ Bell’s investment director Russ Mould.
He said: “China looks to be a source of additional weakness, but at least the UK is showing a slower rate of decline and it can be argued these figures probably reflect budget decisions taken several months back, given the lengthy lead times involved in headcount changes by employers.
“The picture, therefore, may not be quite so bleak as it seems.”
Comparing previous quarterly figures attests to these green shoots of stabilisation - profits declined between 19% and 20% in the previous three reporting periods, making the second quarter, by some metrics, the best in a year.
Albeit, this was “against a soft base for comparison”, said Mould.
Unfortunately for PageGroup, China “was the one area where the rate of decline in activity accelerated”.
Shares were 5.4% down at 400p at the time of writing.