Recruiters PageGroup and Robert Walters hit after jobs market warnings

Recruiters PageGroup and Robert Walters saw shares tumble after laying bare the impact of Brexit and global political uncertainty on the jobs market.

PageGroup shares fell 7%, having opened as much as 15% lower after warning over annual earnings as profit growth slowed amid “heightened political and macro-economic challenges”.

The firm reported a 2.1% rise in gross profit in the third quarter to £216.7 million, down sharply from the 7.4% growth seen in the previous three months.

Shares in fellow recruiter Robert Walters were also 7% lower after it cautioned that annual pre-tax profits are expected to flatline, blaming Brexit and political uncertainty elsewhere globally.

It revealed that UK gross profits tumbled 11% to £24.8 million in the three months to September 30, hit by weak confidence among employers and candidates as Brexit takes its toll.

Robert Walters – chief executive and founder of the eponymous firm – told the PA news agency the woes in the jobs market did not necessarily signal that the UK is on the cusp of recession.

He said the UK economy is “treading water”.

“Whenever there’s some sort of downturn, people sit on their hands and don’t make decisions, if you’re a client or a candidate.

“That’s not good for our business – we rely on people to move jobs.”

Robert Walters has also been hit by the Hong Kong anti-government protests, which has left its operation in the territory nursing “double-digit” declines in net fees.

And the US-China trade war has also dented the employment market, though a better performance globally is helping offset the UK woes.

Group net fees lifted 2% in the third quarter on a constant currency basis.

PageGroup’s alert also revealed the impact of the “heightened political and macro-economic challenges” as it said 2019 operating profit is now expected to be in the range of £140 million to £150 million.

Chief executive Steve Ingham said: “We saw increasingly challenging trading conditions in many of our larger markets, including Greater China, the UK and France.

“Looking ahead, the deterioration in trading conditions seen during the third quarter across the majority of our regions is anticipated to continue.

“In the UK, heightened Brexit-related uncertainty is expected to remain as we approach and go beyond 31 October.”