PageGroup Profit Dips as European Headwinds Persist

PageGroup (LON: PAGE) reported a 6.7% decline in gross profit for the third quarter of 2025, signaling ongoing challenges in key European markets.

Despite growth in the US and Asia, the overall performance reflects subdued client and candidate confidence amid economic uncertainty.

Group gross profit reached £187.8 million, down from £201.6 million in Q3 2024. The company expects full-year 2025 operating profit to align with the market consensus of £21.5 million.

Net cash stood at approximately £38 million, a notable increase from £11 million in Q2 2025 but significantly lower than the £93 million reported in Q3 2024.

The interim dividend of £16.7 million was paid on October 10, 2025. PageGroup's cost reduction program remains on track, projected to deliver annualised savings of £15 million starting in 2026, which should help to strengthen the balance sheet going forward.

Driver Breakdown:

• Regional Disparity: Europe remains challenging, particularly in France and Germany, while the US and Asia show growth.
• Headcount Reduction: Fee earner headcount decreased by 120 (-2.3%) to 5,043, primarily in Europe, aligning resources with activity levels.
• Productivity Gains: Gross profit per fee earner increased by 1% compared to Q3 2024, highlighting efficiency improvements.

CEO Nicholas Kirk acknowledged the difficulties in Europe, stating, “We continued to experience subdued levels of sentiment and confidence in Europe, particularly in our two largest markets, France and Germany, as well as in the UK. However, we delivered a fourth consecutive quarter of growth in the US, our fourth largest market, and a second consecutive quarter of growth in Asia.”

Kirk also reinforced the company's strategic commitment, stating they “remain committed to our strategy and continue to reallocate resources into the areas of the business where we see the most significant long-term structural opportunities.”

Geographical Performance:

• EMEA: Q3 Gross profit declined by 10.2% to £97.8 million, with Germany and France experiencing significant downturns (-11% and -16%, respectively).
• Americas: Gross profit rose by 3.5% to £36.4 million, driven by a 10% increase in the US, offsetting declines in Latin America.
• Asia Pacific: Gross profit decreased by 1.2% to £31.0 million, with growth in South East Asia (+5%) partially mitigating declines in Greater China (-7%).
• UK: Gross profit fell by 14.3% to £22.6 million, reflecting cautious client and candidate behavior.

Perm vs Temp: Gross profit from permanent recruitment decreased 6.4% in constant currencies to £133.1m. Gross profit from temporary recruitment decreased 7.5% in constant currencies to £54.7m.