Global staffing firm PageGroup plc in a trading statement reported gross profit for the second quarter fell 47.6% year over year in constant currency to £63.2 million (US $77.9 million). Gross profit fell 55% in its Americas region as all the group’s regions were impacted by the Covid-19 pandemic during the quarter.
Gross profit fell 46% in the Michael Page brand in constant currency, with Page Personnel down 51.0% in the second quarter.
Gross profit by geography
| (£ millions) | Q2 2020 | Q2 2019 | % change constant currency | Q2 2020 (US$ millions) |
| EMEA | £62.3 | £108.9 | -42.9% | $81.7 |
| Asia Pacific | £25.6 | £43.7 | -41.7% | $33.6 |
| Americas | £16.0 | £37.0 | -55.0% | $21.0 |
| United Kingdom | £13.5 | £35.1 | -61.5% | $17.7 |
In the US, gross profit fell 49% in the quarter, with trading conditions particularly tough in the group’s largest discipline, property and construction. In Latin America, conditions deteriorated sharply with gross profit down 63%. Gross profit in Brazil was down 60% and Mexico, the largest country in the region, was down 63%.
In Europe, Middle East and Africa, the company reported deterioration in trading conditions at the end of March continued into the second quarter, but conditions improved as the quarter progressed.
In Mainland China, where all the group’s consultants returned to office-based working in April, the group saw improvements as the second quarter progressed. The group exited the quarter in June down by 17%. However, Hong Kong declined 62%, impacted significantly by both Covid-19 and increased social unrest.
In the UK, growth slowed by 60% in April and remained broadly flat throughout the quarter. The impact of Covid-19 had a similar impact on both Michael Page and Page Personnel, with declines of 60% and 65% respectively. Overall for the quarter, permanent recruitment was down 74% with temporary down 32%.
PageGroup also reported it achieved previously announced plans to reduce its cost base in the second quarter by about 20% to 25% compared to March through a mixture of voluntary salary cuts, reduced working weeks, government assistance schemes, reduced travel, and reduced client and candidate entertaining.
Headcount fell by 132 in the first quarter, by 255 in April, and then a further 326 in May and June combined. Fee earner headcount fell by 531 in the second quarter, mainly in the UK and the Americas.
“PageGroup has a deep core of engaged and motivated employees and we will continue to support them and look to add expertise over the coming months and years,” said PageGroup CEO Steve Ingham. “We know the future remains unpredictable, but we believe now is the right time to start reinvesting in our flexible and highly diversified business model. Having weathered a particularly challenging Q2, we now look forward to driving improved activity and gross profit through the second half.”
The group added that it is gradually opening its offices and bringing back staff from furlough and returning all staff to full pay.
Looking ahead, with Covid-19 continuing to impact the majority of the group’s markets around the world, PageGroup said it is too early to estimate the impact on the group’s operations and, as such, any financial guidance for current and future years remains suspended.
Share price and market cap
Shares in PageGroup closed down 2.64% to £369.20 (US$464.14) today in London; the company had a market cap of £1.25 billion (US$1.57 billion).