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Investing.com -- PageGroup reported a decline in third-quarter profit, with stronger performances in the U.S. and parts of Asia unable to offset softer conditions in Europe.
Net fees came in at £187.8 million, representing a 6.7% like-for-like (LFL) decline, both broadly in line with consensus.
The company said trading remained resilient in the U.S. and core Asian markets, though macro headwinds continued to weigh on several European regions. Gross profit from permanent placements fell 6.4% to £133.1 million, while temporary placements recorded a 7.5% decline to £54.7 million.
For the full year 2025, the company expects EBIT to be broadly aligned with the market consensus of £21.5 million, supported by cost control and potential for a net fee growth inflection in 2026.
RBC Capital Markets analysts said their earnings estimates for fiscal 2025 (FY25) "are essentially unchanged,” but they lowered FY26 projections by around 10% to reflect a more cautious stance on conversion margins.
The bank maintained its Outperform rating but lowered its price target to 370p.
"We still look for EBIT to more than double in FY26 as restructuring costs fall away and benefits flow, but with the market outlook still challenged and PAGE determined not to cut into the muscle of the business, we shave 50bps off our assumed conversion margin," analyst Karl Green wrote.
RBC now forecasts FY25 year-end net cash at £40 million, citing a higher assumed working capital outflow as the temporary staffing book holds up.
Looking at valuation, Green pointed out that PageGroup trades on a 2026 estimated EV/net fee multiple of 0.9 times, “towards the bottom end of its historical range,” which he believes offers an attractive entry point for longer-term investors.
Green added that while the current P/E multiple looks elevated due to cyclical earnings pressure, it is expected to drop sharply in the outer years to around 10 times 2027 estimates as profits recover.