Michael Page says profits slide, will buy back shares

Profits for the six months ended June 30 were 18m, just ahead of analysts' expectations but more than 50% down from 38.2m in the same period last year.

The company said its share buy-back, to take place over the next 12 months, would create a more efficient capital structure. Its share price, which had fallen more than 20% since the start of the year, rose by more than 11% in London after its announcement.

Terry Benson, CEO, said: "We are continuing to manage the business on the basis that conditions will remain challenging, but stable for the remainder of this year."

Revenue from finance and accounting recruitment was 22% lower than in the first half of 2001, and reflected the weakness of the banking and TMT sectors, the company said.

In the UK operating profit amounted to 10.3m, but was just 4.4m in continental Europe, where all Michael Page operations "experienced extremely difficult conditions in the last six months."

The permanent recruitment business in France was particularly hard hit. But the company said it remained committed to "sensible and well-structured plans to further develop our European network."

In the first half, new offices were opened in Rotterdam, Stockholm and Brussels. The temporary recruitment business, Page Interim, has now been extended to Germany and the Netherlands.

The challenging market conditions referred to by Benson had a greater effect on permanent rather than temporary recruitment.

Staff numbers have fallen from 2,657 at the start of the year to 2,440 by the end of June, mostly through natural attrition, the company said.

Last year Michael Page gave three profit warnings, reflecting the difficult conditions in the recruitment market.