Michael Page Share Discussion Threads

[crosswire] 08/1/2008 17:21

Disappointing, expected at least a 10% bounce!!

Well maybe tomorrow...........

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January 8, 2008

Tempus analysis: A turned Page

Shares in Michael Page leapt this morning after it reported record profits for a second quarter in a rowNick Hasell

Today's trading update from Michael Page International does not read like one from a company whose shares have fallen nearly 60 per cent since July. Fourth-quarter gross profits were up an above-forecast 38 per cent to a record £128 million, staff numbers - which tend to track the recruiter's confidence in its underlying markets - broke through the 5,000 barrier for the first time, and the company says that, with the exception of its banking division, which accounts for 10 per cent of earnings, trading has remained strong.

That bullishness lifted the shares 8 per cent this morning but that did little to narrow their longer term underperformance.

The conundrum is that Page is a highly cyclical stock, and now the peak of the cycle has passed, the stockmarket is more comfortable pricing in anticipated macro economic weakness than it is paying heed to the resilience of the company's fourth-quarter numbers.

That is perhaps unfair. Page's shares may have touched 70p at the bottom of the last downturn but it is now a much more diverse business: both geographically - it is no longer reliant on the UK - and sectorally: it has added disciplines less susceptible to downturn.


International growth drives Michael Page
So at 6 times 2008 earnings and a dividend yield of nearly 5 per cent, Page looks heavily oversold. The difficulty is that Page has a limited forward view over its business, meaning sentiment will remain against it until the economic outlook improves.

[mattyd] 08/1/2008 16:56

great results out - but sells still exceed buys today

people really do not like/trust this stock do they :(

[crosswire] 08/1/2008 13:22

Michael Page International "buy," target price reduced

Tuesday, January 08, 2008 4:46:47 AM ET
Panmure Gordon & Co

LONDON, January 8 (newratings.com) - Analysts at Panmure Gordon maintain their "buy" rating on Michael Page International Plc (MPI.ISE). The target price has been reduced from 450p to 390p.

In a research note published this morning, the analysts mention that the company has posted about 38% like-for-like profit growth for 4Q, which indicates that the full year results would be at the bottom-end of the guidance range. Michael Page International has reported robust growth across the world, with only the UK Banking sector facing weakness during the quarter, the analysts say. The downward revision in the target price reflects a change in investor sentiment, Panmure Gordon adds.

[crosswire] 08/1/2008 13:00

Michael Page rides out credit squeeze

By Maggie Urry

Published: January 8 2008 09:17 | Last updated: January 8 2008 09:17

A softening in the recruitment market in banking affected fourth-quarter trading at Michael Page International, but on Tuesday the group nevertheless reported a record gross profit for the quarter and for 2007 as a whole.

Fourth-quarter gross profit rose 37.6 per cent to £128.2m, while the full-year result was up 37.1 per cent to £478.1m.

Ingham, chief executive, said that while there was some weakness in specific banking sectors in the UK and Asia, there was no sign outside the banking sector that economic uncertainty was affecting the group's activity levels.

"I'm not burying my head in the sand – we are very, very mindful of the news," he said. "At the end of the day we are still producing good results."

With continued demand for talent around the globe, he remained confident about prospects.

In common with other recruitment companies, Michael Page has seen its shares fall sharply since the credit squeeze spread last summer, with the shares down from a high of 606p. In early trading on Tuesday the shares were up 10.1 per cent or 25p to 273p.

Mr Ingham said that in the fourth quarter the group's banking business was flat, whereas in the first half of the year it had been up by more than 20 per cent. However, banking represented only 7 per cent of group revenues, and 10 per cent of the UK business.

Even within banking, recruitment of back-office and temporary staff was unaffected, he said, with the weakness confined to high-profile, front-end employees where the biggest fees were earned.

Michael Page slowed the rate of increase of its own staff in the fourth quarter, adding 275 people, an increase of 5.8 per cent, taking the total at the year end to 5,052.

Strong growth continued in the group's largest region of Europe, the Middle East and Africa, with fourth-quarter gross profits up 55. 9 per cent to £57.7m, and a similar percentage rise for the year to £196.5m.

UK gross profit growth slowed in the fourth quarter, up 15.6 per cent to £38.9m, leaving the total for the year up 19.4 per cent at £155.8m.

In the Asia-Pacific region, fourth-quarter gross profits were 30.6 per cent higher at £14.8m and up 27.3 per cent for the year to £57.2m. Gross profits from the Americas rose 81.6 per cent to £10.7m for the final quarter while the annual increase was 78.9 per cent to £38.4m. The group opened an office in Buenos Aires in December, making Argentina its third country in Latin America.

Ian Jermin, analyst at Landsbanki, said the figures were better than he expected while the statement was upbeat. "Such a result and statement does not sit well with the 60 per cent fall in the share price since July and ought to result in a strong bear squeeze this morning," he said.

David O'Brien, of Altium Securities, said that while the figures were good and he was recommending the shares as a "buy", he was shading his profit forecasts to take account of the extra costs from the rising headcount.

Copyright The Financial Times Limited 2008

[rochdae] 08/1/2008 12:39

Crazy valuation! Fraid I sold first thing. Good luck.

[milanilic] 08/1/2008 12:34

Yes good luck mate.
Just to add that Standard Life funds have been adding shares in the last 2 months and they own over 8% now.

Also the dividend will be progressively increased as planned and any surplus cash will be returned to shareholders via buybacks.

[mattyd] 08/1/2008 12:13

i agree - this should be in excess of £6 in theory

i bought in at the beginning of October after the last trading announcement, at 435p. it went up to 466p the next day and i was well chuffed. its gone horribly wrong since then.

good luck

[milanilic] 08/1/2008 11:32

I bought at the beginning of November 2007, which wasn't a brilliant timing but I feel confident with my investment after this trading update. I think they've been pulled down for the fear of recession in the US and UK. Saying that the US and Canada only contribute around £20m out of £478m of gross profit. As I said in the previous post the CEO is in fact optimistic about Americas since they only have a very small market share there. The UK is of more concern but again in the 4q trading webcast the CEO was confident they can do well under the current conditions.

The star is Europe and in my view they'll keep on doing well there especially since the pound is anticipated to depreciate more with respect to the euro.

It's also been mentioned they'd open a new office in Beijing and that they have sorted out the problems they had in Australia, where they're showing very good growth now.

We also shouldn't forget the directors bought substantially on 21/11/2007

Charles-Henri Dumon 280.00p 170,000 £475,999.99
Stephen Puckett 280.00p 170,000 £475,999.99
Stephen Ingham 280.00p 170,000 £475,999.99

[mattyd] 08/1/2008 10:56

thanks for that milanilic

strange that this has been pulled down with all the banks when thats just a small part of their business.

how long have you been a holder, if you are?

[milanilic] 08/1/2008 10:31

It looks great so far :-)

The European growth is fantastic 55.9% to £57.7m! France grew 35% (33% of EMEA profit), Holland grew 17% (27% of EMEA profit), Germany grew 63% (13% of EMEA profit), Spain grew 42% (10% of EMEA profit), and so on.

The UK is very good. 15.6% growth. The analysts on the conference call expressed some concern about the banking sector, but the CEO's reply was on the lines that most staff recruitment in this sector covered by Michael Page is for the back office and temp staff, and he didn't see a big slowdown coming in this area. Other areas very good growth such as Marketing, Sales and Retail 21%, Legal Tech, HR & Secretarial 24% and Eng & Man, Proc & Supply Chain, Prop & Con 54%.

Very good growth in Asia Pacific 26%.

Excellent growth in Americas where MPI is still very small (US & Canada 77%, Brazil & Mexico 88%). Despite the credit crunch, the CEO sounded very optimistic for this market.

[bornagaintrader] 08/1/2008 08:20

Excellent results was due a bounce anyway . now with the results this should head north . I'm in and hope for a good profit here

[minho] 08/1/2008 08:03

Opention cant buy for a few mins? another con.

[mattyd] 08/1/2008 07:42

agreed BBD - superb results. record profits again! a bounce is well overdue.

i'm taking nothing for granted though. the words 'weakness in the banking sector' and 'Uncertainties' appear which could give the scumbags in the market an excuse to mark it down again

hope not though ;)

[bigbigdave] 08/1/2008 07:32

Most impressive figures indeed. Time for a bounce methinks.

[rochdae] 07/1/2008 16:46

Well, in for a few at the close. Think the figures will be v good. Short-term play as usual in these markets though.

[volvo] 07/1/2008 16:44

mattyd did come back late on didn't it.

Think the results will look good but in these markets anything can happen.

All they can do is deliver the figures.

[mattyd] 07/1/2008 16:32

was that a late rally i see?

could be good news tomorrow.

[volvo] 07/1/2008 12:59

The markets by the display today says this is going down tommorrow.

Looking cheap today and nicely diverse.

Like the French division which is supposedly doing a very good trade.

[mattyd] 07/1/2008 10:32

broker comments look quite good
current target
07-Jan-08 Evolution Securities Buy 0.000p 350.00p - Reiteration
04-Jan-08 Seymour Pierce Buy 252.25p 490.00p - Reiteration

[adamkeats19] 07/1/2008 10:03

what broker comment?

[dr darkstar] 07/1/2008 09:55

It would seem that the broker comment hasn't helped here!

[wildchild] 04/1/2008 23:18

Not a shareholder here but I've been watching recently with a view to buying ever since the Directors bought. I'll be buying if the price is below 250p on monday, on the hope that nothing bad will be in the results. Good luck everyone.

[mattyd] 04/1/2008 11:08

good to see theres a bit more life on this board. wish i could say the same for MPI :(

i'm fairly sure that the results will be good on tuesday - not enough to take it back to 600p though!

[cockneyrebel] 03/1/2008 19:35

yep, Gordy Brown worries me warning of market turmoil this year - wonder if that's what the market has priced in. My portfolio has been nearly all cash for months, only playing with my pension but for every winner I have at least two losers offsetting it - up hill struggle.

Director buying is astonishing - it's relentless, higher than I've ever seen in the 8 years I've been doing this for a living, higher than the March 03 low by a mile. Either us or the market is badly wrong imo.

CR

[jeffian] 03/1/2008 19:09

Yes, it's a really odd one isn't it CR? Tonight's news ended "the market's up 62.7" but that's the FTSE 100. The 250 is down 110! If you took out miners and oil stocks, the rest is being crucified! If there isn't to be a recession, there's some great bargains out there but I'm slightly worried we're talking ourselves into one.

Regards, Ian