Michael Page International has echoed the positive comments yesterday of fellow recruitment group Hays, and reported a strong second half performance.
Profits rose 33% in the three months compared to this time last year, and the company said it had seen greater permanent recruitment activity as confidence improved. It also benefited from its strategy of diversifying overseas, with 70% of its profit now coming from outside the UK. It warned - not surprisingly - that confidence and economic activity in the UK and Europe could be hit by the current austerity plans, but said it believed it was able to respond to changing market conditions quickly.
Its shares, strong yesterday after the Hays figures, are up another 8p to 393.8p. Graham Brown at Evolution Securities said:
We are upgrading our recommendation to buy from add following the recent share price weakness (down 9% over the past three months) combined with better than expected trading performance.
Investec was also positive, issuing a buy note and lifting its target price from 480p to 550p:
Today's second quarter update shows that the pace of recovery has picked up in the quarter, with all four regions well ahead of the previous year and showing good sequential growth over the previous quarter. As expected, this growth is being driven by the permanent operation and regionally by the international businesses. We are raising our forecasts and target price on the back of today's update and reiterate our buy recommendation in what we regard as a well-managed business with strong recovery prospects.
And Panmure Gordon:
A positive update, with further sequential profit progress in the second quarter and further evidence of both sustainable recovery and improving market positions for Page. In a similar vein to Hays, this recovery is being lead by permanent rather than temporary (which was down in the second quarter), with faster growth coming from overseas territories and the benefits of overseas investment plans now coming through. After recent weakness, we switch our recommendation back to buy (from hold) on an unchanged target price of 430p.
