Michael Page chief defends flotation document

Michael Page International, the recruitment company that is the subject of an investigation by the Financial Services Authority, came out fighting yesterday, saying it was confident there was no case to answer.

The FSA is looking at whether Michael Page made misleading statements to potential investors in its prospectus for its stock market flotation in March. The City watchdog is also examining whether the company has kept investors properly informed of price-sensitive information.

Terry Benson, Michael Page's chief executive, said yesterday: "I am extremely comfortable with the information given back in March. The entire world has changed since the first quarter of the year."

Mr Benson also denied that it should have warned the market sooner of a downturn in its fortunes. Michael Page issued a profits warning at the end of June having reassured markets in May that its business was on track. "We began to see softening in IT and telecoms in May in the UK. But other sectors like retail, legal and accounting were strong," he said. "We only saw the downturn in June, particularly in France."

He added that recruitment companies could see business evaporate at short notice. "Companies can change their minds [about recruitment projects] overnight, either cancelling or deferring them."

However, one institutional investor said: "What would be interesting is the timing of the internal board discussions on how the business was trading and the evolution of the budgets as time passed by."

The comments came as Michael Page reported half-year operating profits of £42.1m for the six months to 30 June, in line with the June warning. The group pointed to weakening demand in all recruitment markets and issued a cautious statement regarding the second half.

The group's July figures showed 7 per cent revenue growth over the same month last year.

The shares closed 9.5p higher at 137p. This compares with 175p at the time of the float.