Michael Page hit by slowdown, but Europe turnover rises

But the recruiter, which returned to a public listing on the London Stock Exchange in April last year, said it remained committed to long-term plans for organic growth.

In the UK, described in the report as the &quotmore resilient market&quot, operating profit fell 27.2% from the first half of 2001 to 14.7m (€24m) in the second half. The &quotdifficult trading conditions&quot identified in the interim report deteriorated further, and headcount was reduced by 272.

The investment made early in the year in new offices and the hiring of more staff added substantially to the firm's cost base. But since June 30, 2001 the pre-bonus monthly cost base had been reduced by 9% to 1.2m, the company said. It said its staff costs represented about 70% of total administrative costs.

While the UK provided some 122.8m of revenue, Continental Europe was not far behind with 91.6m. The US market was weak all year, while Asia Pacific offered a &quotdifficult and frustrating year.&quot

Michael Page's businesses operating in France, the Netherlands, Germany, Italy, Spain, Portugal and Switzerland together increased turnover by 11.9% to 154.3m. Terry Benson, chief executive, said the increase was mainly due to the growth, particularly in France, of Page Interim, the temporary recruitment business.

France remained the second largest geographical market after the UK. Offices in Spain, Portugal and Switzerland all achieved increased revenues, while newly opened offices in Munich and Rome increased revenues as well as profits and &quotoffer the group excellent long-term opportunities,&quot according to Benson.

Michael Page said it had been assessing the Scandinavian market for some time, and in January this year it opened an office in Stockholm. In the last year it has also opened offices in Rotterdam and in Aix-en-Provence in France.

The recruitment firm remains bullish on its prospects in Europe despite a drop of almost 71% in its operating profit for the area from 17.4m in the first half of 2001 to 5.1m in the second half. It says it remains focused on its core competency of specialist recruitment and intends to enter new geographic markets while paying close attention to cost.

But Michael Page warns that with hiring activity levels remaining weak, especially on the Continent, revenue expectations for the first quarter of 2002 are no better than the 49.9m achieved in the fourth quarter of 2001.

In 2001 the company's share price ranged from a low of 96.5p to a high of 233.5p, ending the year at 156p. On April 12, following the results announcement, it remained down 0.27% on the previous close at 185.5p.