Michael Page profit pledge lifts shares

Michael Page, the recruitment agency, said yesterday its full-year profits would be "materially above" market forecasts, thanks to strong demand for accountants.

Terry Benson, the chief executive, said growth was being experienced in its four key geographic areas: the UK, the Americas, Continental Europe and Asia Pacific. "Assuming no significant change in market conditions, we anticipate that full-year profits will be materially above current consensus market expectations," he said.

The company, which specialises in placing accounting and finance staff, has been helped by new international reporting standards for British and European companies, IFRS. Companies have been recruiting heavily to cope with the implementation of the new regulations.

The introduction of Sarbanes-Oxley laws in the US, which require companies to produce more detailed accounts and internal audit trails, has also increased demand. In a trading update ahead of its first-half results, it said in the UK, first-half revenues were up more than 18 per cent on the previous quarter.

Michael Page's burgeoning US division saw the strongest area of growth, with revenues growing nearly 72 per cent in the first half compared with the same period last year. Its operations in the US are still very small, but the company is now pushing hard to expand its business there.

Continental Europe, which has been suffering an economic slump for some years, is also now seeing strong signs of growth. Revenues were up 37 per cent in the first half to £40m. Asia Pacific saw revenues grow 31 per cent to £19m.

Across the group, revenues in the second quarter were up more than 30 per cent to £68m, and revenues for the first half were up nearly 27 per cent compared to the first half of 2004. Shares in Michael Page rose 13 per cent during the day to close at 26.25p, giving it a market capitalisation of £779.2m.

Analysts were upgrading their forecasts for the group by about 15 per cent.

David O'Brien, an analyst at Altium Securities, said, "These results highlight the strength of the Michael Page brand, strength in financial services and banking, and rewards the decision to keep its offices in Europe open during difficult times when many competitors closed theirs."

The company was hit hard in the aftermath of the 11 September 2001 attacks - the ensuing global downturn led to difficulties for a number of recruitment companies.

But as global economies recover, recruitment activity picks up. The strong numbers from Michael Page yesterday gave a boost to the recruitment sector, with analysts expecting strong performances from the likes of Hays and Robert Walters.