City Comment: Seven days, two different pictures
20 April 2012
A week of contrast for Hays and Michael Page, both in terms of analysts’ estimates and share price performance, with Hays emerging the happier after the release of Q1 trading updates.
Fri, 20 Apr 2012 | by Kean Marden, head of business services equity research, Jefferies International
A week of contrast for Hays and Michael Page, both in terms of analysts’ estimates and share price performance, with Hays emerging the happier after the release of Q1 trading updates.
Net fee growth at Hays unexpectedly accelerated to 10% in the January to March quarter – above our 6% estimate and the 8% rate reported for the final quarter of 2011. Europe/ROW was the star division driven by a sharp acceleration in Brazil, maintained momentum in Germany and strong contributions from Russia and Eastern Europe. Management noted that profits would be towards the top of the range of analysts’ forecasts and we upgraded our 2013 earnings estimate by an impressive 17%.Michael Page’s net fee growth wasn’t actually much different from Hays but the shares suffered as analysts calculated a mere +4% rate for March. Normally this couldn’t happen as Michael Page refuse to disclose monthly trading data on the basis that their consultants are remunerated quarterly. However, in their preliminary results they broke with tradition and highlighted an acceleration in growth from 8% in December to 10% in January/February.
There have been a few tentative hints during recent updates that the prolonged decline in financial services hiring may be starting to bottom out, and that activity in Hong Kong and Singapore may pick up during the summer. If you work in perm or temp recruitment in the banking & finance sector I would be interested in your opinion ([email protected]).
Michael Page’s trading statement was the final public performance from Steve Puckett, who announced his intention to step down at the end of last year. These events typically include warm words for the departing executive, but not in this instance. I’m not for one minute suggesting that this is an acrimonious departure – Michael Page isn’t a sentimental organisation – but merely wanted to note that from an investor’s perspective, Steve’s accomplishments are well worth highlighting. Michael Page is a great success story and investors have been well rewarded for their loyalty.
Personally, I don’t find The Apprentice as entertaining as it was five years ago but I am following Ricky Martin, Matchtech recruitment consultant and part-time wrestler, with interest this year. A few more memorable quotes last night – “witness the fitness” comes top of the tree – but from a business perspective I thought he was desperately unlucky to end up on the losing team.
Kean Marden, head of business services equity research, Jefferies International
A week of contrast for Hays and Michael Page, both in terms of analysts’ estimates and share price performance, with Hays emerging the happier after the release of Q1 trading updates.
Net fee growth at Hays unexpectedly accelerated to 10% in the January to March quarter – above our 6% estimate and the 8% rate reported for the final quarter of 2011. Europe/ROW was the star division driven by a sharp acceleration in Brazil, maintained momentum in Germany and strong contributions from Russia and Eastern Europe. Management noted that profits would be towards the top of the range of analysts’ forecasts and we upgraded our 2013 earnings estimate by an impressive 17%.Michael Page’s net fee growth wasn’t actually much different from Hays but the shares suffered as analysts calculated a mere +4% rate for March. Normally this couldn’t happen as Michael Page refuse to disclose monthly trading data on the basis that their consultants are remunerated quarterly. However, in their preliminary results they broke with tradition and highlighted an acceleration in growth from 8% in December to 10% in January/February.
There have been a few tentative hints during recent updates that the prolonged decline in financial services hiring may be starting to bottom out, and that activity in Hong Kong and Singapore may pick up during the summer. If you work in perm or temp recruitment in the banking & finance sector I would be interested in your opinion ([email protected]).
Michael Page’s trading statement was the final public performance from Steve Puckett, who announced his intention to step down at the end of last year. These events typically include warm words for the departing executive, but not in this instance. I’m not for one minute suggesting that this is an acrimonious departure – Michael Page isn’t a sentimental organisation – but merely wanted to note that from an investor’s perspective, Steve’s accomplishments are well worth highlighting. Michael Page is a great success story and investors have been well rewarded for their loyalty.
Personally, I don’t find The Apprentice as entertaining as it was five years ago but I am following Ricky Martin, Matchtech recruitment consultant and part-time wrestler, with interest this year. A few more memorable quotes last night – “witness the fitness” comes top of the tree – but from a business perspective I thought he was desperately unlucky to end up on the losing team.
Kean Marden, head of business services equity research, Jefferies International
