PageGroup gross profits tumble as UK sees tough end to 2020

Recruitment firm PageGroup has seen gross profits tumble by a fifth for the end of 2020 as its UK business was knocked hard by the pandemic and Brexit worries.

The group reported a 20.2% constant currency fall in gross profits to £165.5 million across the business in the fourth quarter, led by declines in the UK.

UK net fees tumbled by more than a third – 34.2% – to £21 million as its performance was impacted by regional coronavirus lockdowns at the end of 2020 and uncertainty around the year-end Brexit deal deadline.

The company said this marked an improvement on the 47.9% tumble across its UK business in the third quarter, but it still meant a full-year drop of 40.1% to £81 million.

Group-wide gross profits fell 28.2% in 2020 on a constant currency basis to £609.7 million despite an improving picture from month to month in the fourth quarter.

It said declines in group gross profit improved to 18.2% in December, while a number of markets such as mainland China and Japan notched up growth in the last month of the year.

The figures come after rival Robert Walters said on Tuesday it had also seen “signs of improvement” during the fourth quarter, particularly in Asia Pacific.

But it too suffered a steep drop in net fees, down by a quarter at the end of 2020, as the pandemic hammered the recruitment market.

Steve Ingham, chief executive of PageGroup, cheered the resolution of a Brexit deal in the UK, but said caution remained over the year ahead.

He said: “As we enter 2021, there remains a high degree of global macro-economic uncertainty in many of our markets, as Covid-19 remains a significant global issue and lockdowns have returned in a number of the group’s markets.

“However, in the UK we are encouraged that the Brexit deal has provided a degree of clarity.”

The UK, which accounts for 13% of the overall group, saw the biggest impact on temporary recruitment – down 37% against a 33% fall for permanent jobs.

Its UK headcount remained little changed since the third quarter, down by seven at 1,175 at the end of December.

But over the year, the group axed 15% of its fee earner jobs worldwide, with the headcount 882 lower after taking account of around 400 experienced hires.

The update showed that while the UK was the worst performing region in the fourth quarter, Asia Pacific was the least impacted, with gross profits falling 10.2%, while there was an 18.6% drop across Europe, the Middle East and Africa, and a 23.2% decline in the Americas.