Investing.com — Shares of PageGroup ( LON: ) fell over 4% on Monday, following the company’s fourth quarter trading update.
“Market conditions remained challenging in the fourth quarter and while most markets were sequentially stable, we experienced further deterioration in Europe, particularly in our two largest markets, France and Germany,” said Nicholas Kirk, CEO of PageGroup in a statement.
In the last quarter of 2024, PageGroup recorded a gross profit of £196.7m, a 13% decline in constant currencies compared to the same period in 2023.
In France and Germany, gross profit fell by 17% and 23%, respectively. Other regions, such as Asia Pacific and the United Kingdom, also reported double-digit declines, further exacerbating the overall decline.
“The picture in the fourth quarter was as expected weak and, in line with weaker macro KPIs, PAGE marks France and Germany (just over 1/4 of group fees combined) as deteriorating through the quarter, although we note a return to positivity in the US post-election which may or may not portend a more sustained pick-up in activity,” RBC Capital Markets analysts said in a note.
Permanent employment, which accounts for 70% of the group’s business, recorded a 16.8% year-on-year decline, while fixed-term employment decreased by 14.2%.
Despite persistently high salary levels, the company noted that extended hiring processes and reduced conversion rates from interviews to job offers had a negative impact on performance.
Fee rates remained high, but tighter market conditions contributed to clients’ growing risk aversion, further lengthening the time it took to hire.
The trading update also revealed a reduction in headcount of 130 earners, representing a 2.4% decrease, primarily in Europe and the UK.
“Looking ahead, a high degree of macroeconomic and geopolitical uncertainty remains in most of our markets, particularly in France and Germany,” Kirk added.
Looking ahead, the company expressed cautious optimism, citing investments in artificial intelligence and technology that will enhance user experiences and boost productivity. PageGroup, however, said market uncertainties are likely to persist, limiting growth prospects.
“We would expect FY25 consensus EBIT to move closer to our recently downgraded estimate as trading remains difficult in the short term, but we still see an attractive medium-term opportunity for more patient investors,” RBC added.
