PAGEGROUP PLC 
By LONDON (Reuters) - British recruiter PageGroup (>> Michael Page International plc) posted a 7 percent drop in first-quarter profit as recession-hit businesses in the euro zone held back from hiring permanent staff, and said it saw little sign of improvement in the months ahead.
The firm, formerly Michael Page International, makes about 40 percent of its profit in the Europe, Middle East and Africa (EMEA) region, and less than a quarter of its business involves temporary jobs, which tend to fare better in a tough economy.
"Without any significant change in economies around the world I can't predict or foresee specific changes happening in our business in the next three months," Chief Executive Steve Ingham said on Tuesday.
"It is very, very difficult to predict where we're going to be at the end of June," he added.
Shares in PageGroup were down 7.7 percent by 0830 GMT to 367 pence, a four-month low. Shares in rival recruiter Hays were also down 2.1 percent to 97 pence.
PageGroup, which specialises in professional areas such as accounting and finance, made gross profit of 127 million pounds in the three months ended March, down 6.7 percent year-on-year, but up 0.2 percent on the fourth quarter.
Shore Capital said analysts' forecasts had ranged from 126 million to 133.8 million pounds.
PageGroup said profit in its largest EMEA region fell 13.8 percent year-on-year, while in France - where its business is the market leader - profit fell 17 percent.
This was partly down to the firm's focus on permanent recruitment there, which Ingham said suffers in continental Europe because of tougher labour laws that make it difficult to fire workers.
"Hiring a permanent person is a much bigger decision in Europe than it is in the UK," he said.
Rival Hays, Britain's largest recruiter by market value, said on Thursday its full-year earnings would be at the top end of analysts' forecasts after seeing the first pick up in its British business in around two years.
Around 60 percent of Hays' business comes from placing people in temporary jobs, compared with 23 percent for PageGroup.
"With Page's high levels of exposure to the permanent market and lack of exposure to some of the structural drivers that are helping others making it, in our view, the least attractive of the recruitment companies," Investec analyst Sebastien Jantet said.
Despite macroeconomic weakness across Europe, the firm reported some improvement in the south of the region, particularly in Spain.
Ingham said PageGroup had benefited from holding firm while competitors downsized or exited Spain.
Despite the fall in profits at PageGroup, Ingham said the firm was still hiring local people in growing markets to earn fees, with headcount cuts focused on its back-office operations.
Ingham also said the firm may open some new offices in its growth areas in Asia or the Americas.
(Reporting By Christine Murray; Editing by Rhys Jones and Mark Potter)
By Christine Murray
