London-listed recruiters PageGroup PLC (LON:PAGE) and Robert Walters PLC (LON:RWA) have seen gross profits plunge in the second quarter of the year as the coronavirus pandemic slammed the brakes on hiring activity around the world.
For the quarter ended June 30, FTSE 250 PageGroup reported a gross profit of £118.3mln, down 47.4% year-on-year, led by a particularly sharp decline in profits from the UK of 61.5% to £13.5mln.
READ: PageGroup, Robert Walters post profit drop as coronavirus bites recruiters
In terms of employment type, the biggest decline was in gross profits from permanent job recruitment, which fell 54.4% to £78.4mln while temporary jobs dropped 24.2% to £39.9mln.
While PageGroup said while activity levels in several of its markets had “started to pick up” during the quarter, it said it is “too early to estimate” the impact of the coronavirus on its operations and said its guidance remained suspended.
The company also said it had cut another 531 jobs in the quarter, having previously sacked 132 employees in the first quarter, many of which were inexperienced new joiners.
“Whilst it is always regrettable to let any people go, we have chosen not to make wholesale changes and to retain our proven fee earners”, said PageGroup chief executive Steve Ingham.
“We know the future remains unpredictable, but we believe now is the right time to start reinvesting in our flexible and highly diversified business model. Having weathered a particularly challenging Q2, we now look forward to driving improved activity and gross profit through the second half”, he added.
33% slump at Robert Walters
The situation was similarly bleak for Robert Walters, which reported that for the quarter ended June 30 gross profit has slumped 33% year-on-year to £71.1mln.
The company’s Asia-Pacific business, its largest segment, saw gross profits fall 34% to £29.4mln, while the Europe division dropped 31% to £19.2mln and the UK declined 34% to £16.5mln.
Robert Walters also said it had cut its headcount by 5% in the period to 3,734 employees, adding that a majority of its offices were now open at reduced capacities.
Chief executive Robert Walters said that the company’s forward visibility “remains limited” due to the volatile nature of pandemic, however, he said current trading was “in line with market consensus for the full year”.
“I remain confident that we will emerge from this period of uncertainty with increased market share and very well placed to benefit from operational gearing to quickly take advantage of the inevitable market opportunities", the CEO added.
Shares in PageGroup were up 0.5% at 381.2p in early deals on Thursday, while Robert Walters rose 3.3% to 409p.