Michael Page sees some stabilisation

LONDON (Reuters) - Michael Page (MPI.L), the country's second-largest recruiter, said it had seen a stabilisation in some markets but did not expect a firm recovery until next year.

"It (recovery) won't be before the fourth quarter and I suspect it could well be into next year some time," chief executive Steve Ingham told Reuters in an interview.

Michael Page, which specialises in placing professional staff, said conditions generally had continued to weaken in the second quarter but the rate of decline had slowed in Britain, which accounts just over a third of its profit.

"I wouldn't say anything is green (shoots) out there but there's some stabilisation which is reassuring," Ingham said.

The company has axed about a third of its staff over the past year to cut costs in response to market conditions. About 1,800 employees have gone.

Ingham said, in the last quarter, the rate of decline in staff numbers had slowed to about 10 percent, however.

"That headcount fall is slowing, reflecting the stabilisation we've seen both in the UK and Asia Pacific."

Michael Page shares, which have risen 6 percent since the start of the year, in line with the support services sector Q.FTASX2790, were up 3.4 percent to 233.25 pence at 1040 GMT.

Ingham anticipated a challenging third quarter as the company entered what is traditionally a quiet summer period.

Adecco (ADEN.VX), the world's biggest staffing company, reported an 83 percent drop in first-quarter net profit in May. British rival Hays (HAYS.L) was due to update on second quarter trading on Thursday.

The number of Britons claiming jobless benefit rose less than expected in May but the rise was still enough to push the unemployment rate to its highest in more than a decade, according to official data.

Michael Page, which typically places clients in middle and senior management positions, said second-quarter gross profit declined 45 percent to 83.8 million pounds .

Second-quarter operating profit from trading activities was similar to the first quarter, in the region of 3 million pounds.

Gross profit from permanent placings, which accounted for 69 percent of total profit, fell 52 percent, with gross profit from the temporary market, declining by 20 percent.

Ingham said Michael Page should see stronger growth than competitors when the market does pick up because of its focus on the permanent market.

"The benefit of being more temp-orientated is that it's more resilient in a downturn when people are more comfortable taking a temp than a perm. As soon as the market turns, permanent grows significantly faster.

"You'll see us growing typically by around 30 percent which is what our track record shows over the decades while the temp operators will grow far slower."

KPC Peel Hunt analyst Henry Carver reiterated his 'buy' recommendation on the stock.

"Trading continues to deteriorate, but there are signs that in some places the rate of decline is slowing. Michael Page has the brand, experience, scale and diversification to emerge from the recession with strength," he said.

(Reporting by Matt Scuffham; Editing by Dan Lalor)