Michael Page group posts Q2 profits fall
The recruiter blamed weak economic conditions and the Libor-fixing scandal
By CFOWorld staff | CFO UK | Published 15:15, 09 July 12
Hiring in the financial sector is unlikely to improve in the wake of the rate fixing scandal as a lack of confidence in banks and public outrage at bankers mounts, according to recruiter Michael Page International as it said its quarterly profits fell.
Michael Page International on Monday posted a slip in quarterly profit due to the crisis in the euro zone.
Like many recruiters, the recruitment group, which places people in accounting, financial and legal jobs across 35 countries, is battling a slowdown in markets as clients hold off on hiring or moving jobs in light of unstable economic conditions.
The banking sector has been particularly hit and forced to cut staff.
"Banking is tough, no surprise. Let us be real, the headlines over the last few weeks, they do not help," chief Executive Steve Ingham told Reuters on Monday.
A scandal over the rigging of a key interest rate has reignited public anger over the banking sector, which many people blame for sending the economy into a recession from which the country is struggling to emerge.
Such resentment may harden political resolve to tighten regulatory controls on the sector, which could crimp profits.
"I think it is fair to say that the more negative the headlines, the less (banking) recruitment is going on generally," Ingham said.
Michael Page posted a second-quarter gross profit of £138 million, 6.6 percent below what was its second-highest quarter on record in the same period in 2011, but 1.6 percent up on the quieter first quarter of 2012.
Its shares, which have shrunk from a 2012 high of 505 pence set in March, were down 4.5 percent at 348.1 pence by 0922 GMT.
While it expected full-year operating profit to be broadly in line with market estimates, the group said its third quarter was likely to be challenging, as euro-zone issues, austerity measures and high unemployment figures hit customer confidence and combine with its seasonally quieter holiday period.
Last week rival recruiter Robert Walters posted a 3 percent dip in second-quarter gross profit as slow banking markets hit its core Asia Pacific market.
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