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Introduction & Market Context
PageGroup (LSE:PAGE) reported a 10.5% decline in gross profit for Q2 2025, as revealed in the company’s latest trading update presentation on July 10, 2025. The global recruitment firm’s performance reflects ongoing market uncertainty and challenging conditions, particularly in Continental Europe. The company’s stock closed at 234.4, down 0.26%, and is currently trading near its 52-week low of 217.8, indicating continued investor caution about the recruitment sector.
The presentation highlighted the company’s resilience despite ongoing market and tariff-related uncertainty, with gross profit reaching £194.8 million for Q2 2025, down from £224.2 million in the same period last year. This performance comes as PageGroup continues to navigate varying regional market conditions, with notable improvements in the US and Asia contrasting with deteriorating conditions in Europe.
Quarterly Performance Highlights
PageGroup’s Q2 2025 results showed a 10.5% decline in constant currency gross profit compared to Q2 2024, with H1 2025 gross profit down 9.7% to £389.3 million. The company reported a significant reduction in net cash position to approximately £10 million, compared to £57 million in Q2 2024.
As shown in the following key financial highlights:
The company reduced its total fee earner headcount by 2.5% to 5,163 in Q2 2025, down from 5,296 in Q1 2025, while total headcount decreased by 2.7% to 7,034. These reductions were primarily concentrated in Europe and the UK, reflecting the challenging market conditions in these regions.
The following chart illustrates the headcount reductions across different categories:
Productivity, measured as gross profit per fee earner, was down 3% compared to Q2 2024. The company cited tough trading conditions, with the conversion of accepted offers to placements remaining the most significant challenge. Despite these difficulties, PageGroup maintained high fee rates.
Regional Performance Analysis
PageGroup’s performance varied significantly across regions, with EMEA experiencing the most substantial decline while the Americas and Asia Pacific showed signs of improvement.
The following breakdown illustrates the regional disparities in Q2 gross profit:
EMEA, which accounts for 53% of the group’s gross profit, saw a 17.1% decline in constant currency to £102.9 million. France and Germany, representing 13% and 12% of the Group respectively, experienced significant drops of 20% and 21%. The company noted that market conditions in Continental Europe were worsening.
The regional performance in EMEA is further detailed in this breakdown:
In contrast, the Americas region, accounting for 19% of the group’s gross profit, showed a 2.9% increase in constant currency (excluding the impact of hyperinflation in Argentina) to £37.7 million. The US market, representing 11% of the Group, grew by 14%, marking the third consecutive quarter of growth.
The Americas performance is illustrated in the following chart:
Asia Pacific, which contributes 16% of the group’s gross profit, showed modest growth of 0.6% in constant currency to £31.2 million. The company noted early signs of improvement in trading and customer confidence in Asia, with the region growing by 4%, while Greater China declined by 5%.
The UK continued to face challenges, with gross profit declining by 14.3% to £23.0 million, reflecting ongoing subdued levels of client and candidate confidence. The UK operation reduced its fee earner headcount by 16.6% compared to Q2 2024.
Strategic Initiatives
PageGroup emphasized its highly adaptable and diversified business model as key to navigating the current challenging environment. The company is continuing to reallocate resources to areas with the most significant long-term structural opportunities, while implementing strategic headcount reductions to manage costs.
The reduction in fee earner headcount varied by region, with EMEA seeing the largest decrease of 94 fee earners in Q2, while the UK reduced by 56. The Americas and Asia Pacific regions saw slight increases of 12 and 5 fee earners respectively, reflecting the company’s strategic focus on growing markets.
According to the earnings call transcript, PageGroup plans to continue reducing headcount by 120-150 per quarter, with a focus on balancing near-term productivity with positioning for future opportunities.
The company’s summary of key points highlights its strategic approach:
Forward-Looking Statements
PageGroup expects its 2025 full-year operating profit to be broadly in line with the current consensus of £22 million. The company aims to increase its net cash position to £60-70 million by year-end, up significantly from the current £10 million.
The presentation indicated that temporary recruitment is outperforming permanent recruitment, with declines of 8.2% and 11.3% respectively, suggesting a shift in market dynamics that the company is adapting to.
Despite the challenging conditions, PageGroup’s diversified business model, spanning from generalist staffing to executive search, provides resilience. The company’s long-term growth strategy is illustrated in its historical expansion:
The company’s CFO, Kelvin Stagg, emphasized that PageGroup delivered a resilient performance despite ongoing market uncertainty, highlighting the company’s adaptability. According to the earnings call transcript, CEO Nicholas Kirk noted strong performance in the Page Executive business, which is aiming to reach $200 million in gross profit by 2030.
As PageGroup navigates varying market conditions across regions, it continues to focus on strategic adjustments to position itself for recovery when market conditions improve, while maintaining its dividend yield of 7.3% to reward patient investors.
Full presentation:
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