My introductory observations regarding economic and equity market performance are similar in tone to previous columns. News flow surrounding Greece, Spanish banks and the broader Eurozone economy remains negative but much of the doom and gloom has already been anticipated by the stock market. 

The FTSE 100 index (which aggregates the shares prices of the largest 100 companies listed on the London Stock Exchange) again increased by 2% over the past fortnight and has now rallied by 7% since its year to date low at the end of May.

Despite some volatility around their quarterly trading updates, the share prices of Hays and Michael Page have pretty much matched the overall equity market over this period. 

Main outperformers in the recruitment sector include Adecco (+9% following an announcement from the company that it would buy back up to €400m of its shares as management believe the price is too low), SThree (+7%) and Randstad (+6%). Conversely, the main laggards include Healthcare Locums (-10%), Robert Walters (-8% after brokers downgraded their profit forecasts by 10-20% after a Q2 trading update) and Harvey Nash (-8%).

In the past week Hays, Michael Page and Robert Walters have all updated investors on second quarter trading. In general, net fee growth disappointed but rigorous cost control limited the impact on profitability.

What have we learned from these updates? Firstly, that June was a very challenging month in the UK in part due to Jubilee celebrations. This was particularly unhelpful for Michael Page as June is normally its biggest revenue month of the year. 

Secondly, that the public sector perm replacement cycle is starting to recover after two years of dormancy. Hays’ reported +6% net fee growth in its UK public sector unit last quarter, the first positive figure since 2009.

Elsewhere, SThree held an analyst and investor seminar in June which provided Lance Fisher and Alex Farrell with a platform to showcase the group’s proprietary technology platform and the IT Job Board. Interestingly, SThree also use their data to provide signals to management whether to add or remove consultants.

Finally, on 10 June Peter Searle and Steve Ingham were part of a 30 strong team of CEO’s who participated in the Sport Relief Triathlon Challenge and raised over £250k in the process. Does anyone know the final positions? To date, Peter claims to have beaten Roger Black and Steve has been very quiet.