UPDATE 1-Michael Page Q3 profit up, confident of prospects

(Adds detail, analyst comment, shares)

LONDON, Oct 4 (Reuters) - British recruitment firm Michael Page International Plc (MPI.L: Quote, Profile, Research) reported a 38.5 percent increase in third-quarter gross profit and said it was confident about its prospects, sending its shares higher on Thursday. Michael Page, which specialises in high-margin professional and permanent staffing, reported a record gross profit of 123.4 million pounds ($251.2 million) for the third quarter of 2007, up from the 89.1 million seen in the same period last year.

The company said it had increased its headcount by over 450, or 10.5 percent, and it continued to experience strong demand.

"Notwithstanding the recent developments in specific banking sectors, we continue to experience strong demand for talent around the globe and are confident in the ongoing prospects for Michael Page," Chief Executive Steve Ingham said in a statement.

Shares in the company, which had underperformed the support services sector .FTASX2790 by around 2.5 percent so far this year, were up 4.5 percent at 456.5 pence by 1320 GMT, valuing the group at around 1.49 billion pounds.

"While there are concerns regarding the effect of the credit squeeze on demand for staff in the financial services sector and the potential contagion for the broader economy, Page is seeing no signs of this at the coal face," Landsbanki analyst Ian Jermin said in a note, keeping a "buy" rating on the stock.

Seymour Pierce analyst Kevin Lapwood said there had been fears the credit market problems might have hit recruitment levels and it had awaited the third-quarter figures with some apprehension.

"We need not have worried. Once again the company has exceeded expectations," Lapwood said, raising its price target to 560p from 540p and putting a "buy" rating on the stock. (Additional reporting by Jonathan Cable)