Recruiters offer a little ray of hope for second half

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Trading updates from recruitment specialists Robert Walters and PageGroup reveal just how tough the second quarter of 2020 has been for jobseekers. Robert Walters’ gross profit fell 33% year-on-year and Page’s net fee income by 47%, on a constant currency basis. Both firms also saw a fall in headcount at their own businesses. However, both companies do offer a glimmer of hope for the second half.

Source: Company accounts. Figures on a constant currency basis.

Robert Walters’ results are no worse than expected and management believes the company is on track to meet forecasts for the year, especially as most of the group’s offices are now open again.

Meanwhile, Page notes improved candidate and interview activity, helped by how its offices are gradually reopening. In addition, June was clearly a better (or less bad) month than April in many nations, notably Germany, France and China, where the rate of decline in business levels eased.

However, Page’s numbers do also reveal a lack of improvement in several key countries, notably America, Japan, India, Hong Kong and also the UK.

Gross profit here in Britain fell 62% year-on-year in the April-to-June period and June was also down by exactly that amount.

Source: Company accounts. Figures on a constant currency basis.

It is also noticeable how the UK is lagging Page and Robert Walters’ international activity, a trend that has unfortunately been noticeable since 2016, so while Chancellor Sunak did his best yesterday with the relatively limited amount of cash available owing to the national debt, there remains the danger that the UK’s unemployment rate could rise quickly from 1.3 million, or 3.9% of the workforce.

Source: Company accounts. Figures on a constant currency basis.

The shares are up because the figures are no worse than a low set of expectations and both firms have net cash positions on their balance sheets. Unlike a lot of other companies they were therefore prepared for tougher times, in the knowledge that the job market can turn very quickly, and their robust finances should mean they will be well placed to benefit when this cycle hits bottom and hopefully starts to turn for the better.

These articles are for information purposes only and are not a personal recommendation or advice.

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Written by:
Russ Mould

Russ Mould has 28 years' experience of the capital markets. He started at Scottish Equitable in 1991 as a fund manager and in 1993 he joined SG Warburg, now part of UBS investment bank, where he worked as equity analyst covering the technology sector for 12 years. Russ joined Shares in November 2005 as technology correspondent and became Editor of the magazine in July 2008. Following the acquisition of Shares' parent company, MSM Media by AJ Bell Group, he was appointed AJ Bell’s Investment Director in summer 2013.