Michael Page falls on signs of caution in banking sector

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The Independent Online

Michael Page International chief executive Steve Ingham said yesterday that ambitious professionals were still keen to switch jobs, despite the impact of the credit crunch.

In a trading update, the rec-ruitment company said first-quarter gross profits were up by a third to £145m compared with the previous year.

But despite the upbeat figures, the shares fell 16.25p to 788.75p amid concern about the banking sector and the company's warning it was seeing the first signs of "cautionary behaviour" in some areas, leading it to take a similar stance when hiring its own staff.

Mr Ingham was, however, keen to stress that banking accounts for only 10 per cent of the comp-any's business, and trading in other areas remained strong, he said.

"What drives our business is not so much new jobs, it is people changing jobs. In banking, it is true that people are feeling a little bit more nervous, enough to stay where they are. But the way the professional market looks in other sectors is different. People who are ambitious and unhappy with their current jobs are still willing to look at new opportunities and I would expect that to continue."

Mr Ingham added: "Clearly the economy can get to a point where those people start to batten down the hatches, but it is not happening yet."

Mr Ingham also said growth in the company's international businesses has been strong. In its largest region – Europe, Middle East and Africa – profits increased by 55 per cent, with the company recording "strong demand for talent across all countries and disciplines with the exception of banking". France, the biggest business in the region, saw profit growth of 33 per cent.

In the UK, the increase was just 6.7 per cent. However, Mr Ingham said: "Easter does have an impact and it was unusually early this year. That sounds like a poor excuse, but people who do final interviews, such as finance directors, HR directors and marketing directors, tend to go away at this time and it does have an impact. You will get a better picture of how things are really going at the half year."

Analysts voiced concern about the general slowdown in the banking sector and what they felt was the company's "cautious tone" about the outlook. But they said they still expected the company to meet their forecasts.

Landsbanki said: "The 2008 forecasts still look safe, but the uncertain outlook will put a brake on [share] price recovery.

"The shares have performed well this year, clawing back some 33 per cent of the fall experienced since last July. The expected weakening of demand for banking staff has caused the shares to remain under pressure in spite of the partial recovery, so the statement today should come as no surprise."