October 10, 2018 / 6:28 AM / in 11 days

PageGroup expects to beat 2018 forecasts after first UK growth since Brexit vote

(Reuters) - Recruitment firm PageGroup’s (PAGE.L) full-year operating profit should beat market expectations, the company said on Wednesday, on the back of strong hiring across its overseas operations and a return to growth in its UK business in the third quarter.

PageGroup, which places employees in 25 sectors from banking and financial services to oil and gas, said gross profit from Europe, the Middle East and Africa - its largest market - jumped more than 19 percent in the quarter.

UK profits rose about 1 percent, rebounding for the first time since Britain voted to leave the European Union in 2016.

Brexit uncertainties have caused jitters across the jobs market. PageGroup, which competes with SThree (STHR.L), Robert Walters (RWA.L) and Hays (HAYS.L), said growth in Britain had come despite Brexit and political anxiety hurting confidence.

“If you are a recruitment consultant in the UK, you are delighted with a positive figure,” Chief Executive Officer Steve Ingham told Reuters.

“Our strongest disciplines have been property and construction, technology, and our finance discipline,” he said.

PageGroup shares were up 2.1 percent at 556.5 pence by 0818 GMT, after rising more than 5 percent in early trade.

The Surrey-based company, which operates in 36 countries and generates about a fifth of its gross profit in Britain, had said in 2017 that weakness in Britain could last two years.

PageGroup, which was set up above a launderette in London in 1976 and helps hire executives, professionals and clerical staff, saw strong growth in the UK in Page Personell, its clerical hiring unit.

“I don’t think there is such a risk to moving jobs at the lower salary levels,” Ingham said, adding that most of these were temporary hires.

“Property and construction within Page Personell has done particularly well, so have the finance disciplines,” he added.

PageGroup echoed rival Robert Walters’ comments that companies are not moving jobs out of the country ahead of Brexit.

“We’re not seeing a large number of jobs moving to Europe. We’re not really seeing, beyond the talk, any significant move yet,” Ingham said. “I think it is more likely to change once we have clarity on what Brexit means.”

Ingham said senior staff were reluctant to switch jobs because of uncertainty over Brexit, and companies in Britain, while filling vacant positions, were holding back on creating new jobs.

PageGroup said group gross profit rose 17.2 percent to 207.7 million pounds in the third quarter, up from 177.2 million pounds a year earlier.

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Gopakumar Warrier, Bernard Orr and Jan Harvey

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