PageGroup warns on profits as Brexit uncertainty takes toll

PageGroup on Tuesday warned annual operating profits would be lower than expected as Brexit and the ongoing US-China trade war put the brakes on staff recruitment.

The company said it now expected full year operating profit to be between £140m - £150m, down from previous estimates it would be in the lower end of £156.5m - £168m.

Third quarter gross profit rose 4% year-on-year increase to £216.7m driven by Germany, India, and Latin America, as well as a strong performance in the US.

Gross profit grew by 17% in the US and 7% in Europe but declined by 4% in both the UK and Asia Pacific region, which fell to £33.8m and £44.1m respectively as US trade tariffs impacted China and Brexit-related uncertainty hit candidate and client confidence.

Chief executive Steve Ingham said the deterioration in conditions seen in the third quarter was anticipated to continue in the coming months.

"In the UK, heightened Brexit-related uncertainty is expected to remain as we approach and go beyond 31 October. With worsening macro-economic indicators in Continental Europe, particularly in Germany, and in the US, there are signs that growth in these markets may slow. In Greater China, confidence in Mainland China continues to be affected by trade tariff uncertainty and the social unrest in Hong Kong is increasing," he said.

PageGroup shares were down 11.11% at 371.20p at 0805 BST.

(Writing by Frank Prenesti; Editing by Michele Maatouk)