(Adds CEO comment, background, shares)
March 8 British recruitment firm PageGroup Plc
reported a 12.2 percent rise in 2016 operating profit,
but said it expected earnings to fall this year due to a
slowdown in the domestic hiring market as the UK prepares to
leave the European Union.
Chief Executive Steve Ingham warned that the uncertainties
stemming from Brexit could linger on for a while.
"(Brexit) is going to take a long time and frankly nothing
really much has changed so far since the decision and probably
nothing much will change for a year or two," he told Reuters.
In contrast, larger rival Hays Plc contended last
month that markets had stabilised and there was a gradual
British staffing companies have benefited from growth in
their international businesses, but an uncertain domestic market
has weighed on their profits.
Recruiters such as PageGroup, Hays, Robert Walters Plc
and SThree Plc are often seen as a gauge of the
economy because people tend to switch jobs more frequently when
confidence levels rise.
A company-compiled consensus forecast earnings before
interest and tax of 98.4 million pounds this year, below the 101
million pounds it earned last year.
The company, which mainly finds candidates to fill permanent
positions, said operating profit for 2016 rose to 101 million
pounds from 90.1 million pounds, a year earlier.
PageGroup, which derives nearly a fourth of its profit from
the UK, said gross profit from its UK business fell 3.5 percent
to 146.3 million pounds ($178.24 million) in the year ended Dec.
However, gross profit from the company's European business
rose 25.3 percent to 271.9 million pounds, indicating that the
rest of the continent was shielded from a Brexit fallout.
"Our businesses in Continental Europe, Australasia and Latin
America, excluding Brazil, all performed well," Ingham said in a
The company also raised its dividend by 4.2 percent to 11.98
pence, but it was below brokerage Liberum's expectation of 12.08
PageGroup shares were little changed in morning trading at
($1 = 0.8208 pounds)
(Reporting by Arathy S Nair and Esha Vaish in Bengaluru;
Editing by Amrutha Gayathri and Sunil Nair)