PageGroup (GB:PAGE) reported its third-quarter trading update for 2022, with profits rocketing up by 14% to £270.5 million.
But the company also warned of a ‘slight softening in client confidence’ in various regions, leading to reducedhiring. The job market is especially weak in the UK as economic headwinds have made companies cautious of new hiring.
The profits were supported by strong growth in the EMEA region, followed by record performance in nine countries. The strengthening of the dollar also added to the company’s earnings.
In the other regions, China saw a 26% decline in profits due to the extended lockdowns amid the zero-COVID policy. Overall, the profits for the Asia Pacific were down by almost 4%.
The company also stated that temporary jobs have surpassed permanent roles as more and more companies look for flexibility in hiring. Profits increased by 20% in temporary hiring versus 12% in permanent hiring.
Despite the cautious outlook, the company remains on track for the full-year operating profits to be in line with expectations of £204 million.
PageGroup shares were down by 0.99% in yesterday’s trade. The stock has fallen by almost 38% this year to date.
PageGroup share price forecast
According to TipRanks’ analyst consensus, PageGroup stock has a Moderate Buy rating, based on two Buy and one Hold recommendation.
The PAGE price target is 696.6p, with an upside potential of 87.7%. The analyst price targets range from a low of 610p to a high of 780p.
Conclusion
Recruitment firms were enjoying a boom period after the recovery of the pandemic. However, now they have landed in the middle of an economic slowdown that is beginning to impact the jobs market.
PageGroup believes that it is well positioned, with its diversified businesses and adjusting costs, to navigate smoothly towards higher revenue growth.
