Michael Page slumps on weak banking sector

Recruitment firm Michael Page fell sharply on the FTSE 250 on Wednesday as it struggled with weak demand from the depressed banking sector and poor performance in its UK market during the first quarter.

Gross profit in the first three months of 2012 was up 6.9%, or 7.7% on a constant currency basis, to £136.0m from £127.3m in 2011.

The UK, which accounts for 23% of revenue, saw gross profit slide 3.7% to £30.6m from £31.7m but Europe, Middle East and Africa (EMEA), the largest part of the business (44% of revenues, saw gross profit rise 7.4% (10.1% on a constant currency basis) to £60.3m from £56.2m the year before.

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The Asia Pacific region's (19% of group revenues) gross profit of £26.3m was up 23.0% (17.8%) on the £21.4m in the first quarter of 2011.

In the Americas (14% of group revenues), gross profit of £18.8m was up 4.6% (8.2%*) on the £18.0m the year before.

Net cash at the end of March was in the region of £63m, up from £58.2m at the end of 2011.

"Markets continue to be weak and visibility remains limited," said Michael Page's Chief Executive, Steve Ingham. Nevertheless, he added: "Operationally, our successful strategy of diversification, both by geography and business discipline, positions us well to benefit from our ongoing investment in those markets which we expect to deliver growth over the long-term".

Investors, however, want their jam today. Michael Page was down 4.4% at 11:30 at 434p per share. Over the last 12 months the stock has fallen 17%.

BS