* Q2 gross profit 138 mln pounds, down 6.6 pct
* H1 gross profit 274 mln pounds, down 0.4 pct
* Expects challenging Q3 as Europe's holiday season starts
* Sees H1 and year operating profit in line with estimates
* Shares down 4.5 percent
By Neil Maidment
LONDON, July 9 Outrage aimed at some of
Britain's scandal-hit banks is likely to prolong painful
financial job market conditions, recruiter Michael Page
International Plc said after posting a slip in quarterly
profit due to the crisis in the euro zone.
Like many recruiters, the British group, which places people
in accounting, financial and legal jobs across 35 countries, is
battling a slowdown in markets as clients hold off on hiring or
moving jobs in light of unstable economic conditions.
The banking sector has been particularly hit and forced to
"Banking is tough, no surprise. Let us be real, the
headlines over the last few weeks, they do not help," Chief
Executive Steve Ingham told Reuters on Monday.
A scandal over the rigging of a key interest rate has
reignited public anger in Britain over the banking sector, which
many people blame for sending the economy into a recession from
which the country is struggling to emerge.
Such resentment may harden political resolve to tighten
regulatory controls on the sector, which could crimp profits.
"I think it is fair to say that the more negative the
headlines, the less (banking) recruitment is going on
generally," Ingham said.
Michael Page posted a second-quarter gross profit of 138
million pounds ($214 million), 6.6 percent below what was its
second-highest quarter on record in the same period in 2011, but
1.6 percent up on the quieter first quarter of 2012.
Its shares, which have shrunk from a 2012 high of 505 pence
set in March, were down 4.5 percent at 348.1 pence by 0922 GMT.
While it expected full-year operating profit to be broadly
in line with market estimates, the group said its third quarter
was likely to be challenging, as euro-zone issues, austerity
measures and high unemployment figures hit customer confidence
and combine with its seasonally quieter holiday period.
In its largest region, Europe, Middle East and Africa,
second-quarter gross profit fell 10 percent on last year, with
the UK down 9 percent and Asia Pacific the only region to grow
against 2011 comparators.
"Geographically, it .. reflects what we are hearing in the
economic news - tougher in southern Europe particularly, clearly
not improving in the UK, but elsewhere in Asia Pacific things
still relatively strong," Ingham said.
Trading conditions in banking, which represents 8 percent of
group gross profit compared with 11 percent a year ago, would
remain challenging, the group said, adding it would continue
investing in newer markets to soften its impact.
Overall gross profit growth in its finance and accounting
division, which accounts for 42 percent of the group, fell by
almost 13 percent in the second quarter.
"We are trying to make sure that if we have to take the pain
in a particular sector we've got other sectors that are growing
to replace them," said Ingham, pointing to 10 percent gross
profit growth in its engineering and procurement division.
Analysts at Panmure Gordon kept a "sell" rating on the
stock. "While the result for the second-quarter is ... admirable
given he macro (economy) backdrop, the lack of visibility and
caution regarding the third quarter leaves us still negative
regarding short-term trading for both Michael Page and the
recruitment market in general," a note read.
In a Reuters interview last month, Michael Page said
high-growth Asian and Latin American markets would help it ride
out tough European conditions, adding it also wanted to increase
its presence in Africa's booming resource regions.
Last week rival recruiter Robert Walters posted a 3
percent dip in second-quarter gross profit as slow banking
markets hit its core Asia Pacific market.