(Corrects last paragraph to read 'first-quarter', not third
* Sees year operating profit slightly below expectations
* Q3 gross profit down 11 pct
* EMEA down 16 pct, with Italy and Spain down 22 pct
* Shares fall 1.4 percent
By Christine Murray
LONDON Oct 8 British recruiter Michael Page
International issued a profit warning on Monday, blaming
a sharp deterioration in euro zone markets as the region's debt
crisis increasingly weighs on the real economy.
The warning raises the spectre of further bad news from the
17-country euro area, where unemployment is already running at
11.4 percent of the working population, as staffing firms are
viewed by analysts as indicators of future economic trends.
"Everybody expected that EMEA (Europe, Middle East, Africa)
would turn down, that's not in dispute. What we're seeing in
Michael Page is that it appears to be turning down ahead of
everybody else," said Shore Capital analyst David O'Brien.
Smaller rival Robert Walters last week posted a 1
percent rise in third-quarter gross profit.
Michael Page, which makes just under 40 percent of earnings
from the EMEA region, said on Monday group gross profit dropped
11 percent year-on-year to 126.5 million pounds ($204.8
million)in the three months ended September.
That included a 16 percent fall in the EMEA region, which
excludes Britain, and drops of 22 percent in both Italy and
Spain, the biggest countries engulfed in the debt crisis.
The euro zone has endured around three years of financial
turmoil, and while markets have recently been reassured by the
European Central Bank's pledge to buy government bonds, there
are few signs of economic growth picking up.
"You only have to look at the headlines around Europe to see
that it's not exactly a happy place," Michael Page Chief
Executive Steve Ingham told Reuters, saying a lack of confidence
in the region was impacting companies' willingness to invest in
new projects such as factories and laboratories.
"I don't panic as a result of us being down by what I regard
as a small amount in the quarter," he added.
Michael Page, which makes over 40 percent of its profit from
the finance and accounting industries, said it expected
full-year operating profit to be slightly below analysts current
forecasts, which are pitched around 67.7 million pounds.
At 1035 GMT, the company's shares, which have fallen around
23 percent over the past six months, were down 1.4 percent at
359.9 pence, valuing it at about 1.1 billion pounds.
More than three quarters of Michael Page's profit derives
from placing people in permanent jobs, which, compared with the
temporary market, is more affected by uncertainty as companies
put off making longer term decisions.
Ingham said the group was making gradual headway in the
temporary market, but emphasised its rise was a recent,
"In much of our world there is no such thing as a temporary
professional person," he said.
"In China, which is a very big part of our business, and in
Brazil and India, we don't do any temps," he added.
The group saw an 11 percent fall in third-quarter profit in
Britain, which accounts for almost a quarter of the group total.
Robert Walters posted an 8 percent rise in the same country,
largely buoyed by its outsourcing recruitment business, a model
that Ingham eschews.
"There are no margins in it," he said. "You have to look at
the overall result of those that do it and those that don't and
I have to say I think I prefer our margins and our profits."
A survey published on Monday showed temporary job placements
in Britain rose at the fastest pace in 14 months in September,
after the country's jobless rate dropped in August by the
largest amount in two years.
Hays, the largest recruiter listed on Britain's
benchmark FTSE-100 index, reports on its first-quarter
performance on Tuesday.
($1 = 0.6176 British pounds)
(Reporting by Christine Murray; Editing by Rosalba O'Brien and