ii view: no surprises at PageGroup as Iran war mars outlook

First-quarter trading update to 31 March

• Gross profit down 4.9% to £187 million
• Net debt of £7 million, down from net cash of £54 million a year ago

Chief executive Nicholas Kirk said: “The Group produced another resilient performance despite a backdrop of heightened geopolitical and macroeconomic uncertainty. 

“We continue to focus on controlling the controllables, invest in innovation and technology, and remain confident in the execution of our strategy. We have a highly diversified and adaptable business model, a strong balance sheet and a cost base that is under continuous review.”

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

ii round-up:

PageGroup (LSE:PAGE) today detailed profits matching City forecasts, although with the global recruiter pointing to an uncertain outlook given increased geopolitical and macroeconomic risks following the war in the Middle East. 

First-quarter currency adjusted profit fell 4.9% from a year ago, similar to the prior fourth quarter, again hindered by tough conditions in the UK and Europe but helped by positive trends across the Americas and Asia Pacific.

Shares in the FTSE 250 company remained little changed in UK trading having about halved over the last year. That’s similar to fellow recruiter Hays (LSE:HAS). The FTSE 250 index is up by almost a fifth over that time.

Page helps companies across more than 20 sectors, including accountancy, technology and engineering, to hire staff via its brands Page Executive, Page Personnel and Michael Page.

Currency-adjusted gross profit for its biggest EMEA region (Europe, Middle East and Africa), making 54% of group-wide profits, fell 9.2% to £100.4 million. That was led by a 14% retreat in France and a 7% fall in Germany. UK-related profits, generating a tenth of all profits, fell 11.4% to £20.9%. 

More encouragingly, currency-adjusted profits for the Americas, accounting for 19% of profits, rose 1.1% to £36.5 million. A 1% improvement was made in the US. 

Currency-adjusted Asia Pacific profits, generating 16% of profits, rose 9.3% to £29.2 million, fuelled by double-digit gains across China, Japan and India.

Management underlined its strategy to reallocate resources to growth regions, flagging more than 100 new fee-earning recruiters across the Americas and Asia Pacific and the loss of 80 across the UK and EMEA. 

Group net debt of £7 million compared to net cash held of £54 million in the first quarter of 2025. A second-quarter 2026 update is likely in mid-July. 

ii view:

Started in 1976 and headquartered in Weybridge, Surrey, Page is today focused on the recruitment of specialist, generally white-collar staff. Permanent job hires accounted for most of the profits during this latest quarter at 72%, with temporary placements making up the balance of 28%. 

For investors, the artificial intelligence (AI) revolution may mean fewer jobs are required in the future. Stretched government finances for key markets France, Germany and the UK are likely to see the tax burden staying high, overshadowing corporate and candidate confidence going forward. Net debt of £7 million for this latest quarter contrasts with net cash of £54 million held a year ago, while a previous cut in the dividend at larger rival Hays could set a trend for the wider sector. 

• The Income Investor: a FTSE 100 dividend play after 21% fall
• 10 hottest ISA shares, funds and trusts: week ended 10 April 2026
• Stockwatch: why I’m upgrading this mid-cap share to buy

More favourably, an adjustment of fee-earning personnel towards growth-trend regions is being made. A wider adjustment of the management structure and support staff is expected to see annualised cost savings of £15 million from 2026 onwards. Diversity of both underlying client industries and geographical regions exists, while even a possible halving of the dividend payment would still leave it on a yield of around 3%. 

For now, management actions combined with growth across regions accounting for just over a third of all profits provide hope. That said, more cautious investors are likely to want to wait for evidence of wider profit recovery before taking any interest.

Positives: 

• Business sector and geographical diversity
• Flexible cost base

Negatives:

• Economic outlook uncertainty
• Currency moves can hinder

The average rating of stock market analysts:

Hold