Michael Page warns over profits

RECRUITMENT consultants Michael Page warned investors that profits this year will be down. The company, which came to the stock market only last April, also issued a profit warning last year.

Chief executive Terry Benson said: 'We specialise in particular areas of middle management and the market is very tough out there.'

He admitted the first quarter of this year has been particularly difficult and revenues will show no improvement on the £49.9m achieved in the last three months of 2001.

Michael Page confirmed its faith in chairman Lord Wakeham, who was this month forced to step aside as chairman of the Press Complaints Commission while his role as a non-executive director of Enron is being investigated. Wakeham is also quitting the Enron board. He has chaired Michael Page since 1995, works about two days a week and earns £50,000 a year.

'We are completely happy with him. There is no change,' Benson said.

Michael Page was responsible for placing about 25,000 managers last year, half of them in Britain. 'The UK is pretty resilient compared with our offices in New York and the Asia-Pacific region. Europe was also very dull in the second half of last year,' Benson said.

The group is optimistic about the longterm, however. 'We are a very good company. We are great believers at Michael Page that what goes around comes around. We have been here before and it is not nearly as bad as in the early 1990s,' Benson said.

Operating profits fell from £82.5m to £64.1m in 2001 as the business invested in new offices and hired extra staff. The expenses were incurred at the beginning of the year before the recruitment market turned sour.

Profits before tax and exceptional items rose 3.5% to £60m and turnover increased 6.6% to £455m. Earnings per share rose 1% to 10.7p and the dividend is 2.575p.

Staff numbers rose from 2,600 to 2,900 in the first few months of 2001, and new offices were opened worldwide. By the end of the year, the headcount had fallen back to 2,600 again although the company stressed this was due to staff turnover, not compulsory redundancies.

'It would be so easy for us to axe people to boost profits but we've always maintained this is not the right thing to do,' Benson said.