PageGroup reinstates dividend on improved first half trading

“The FTSE 100 dipped modestly on Monday after weak Chinese trade figures and with few other company or economic updates to funnel sentiment in any particular direction,” says AJ Bell financial analyst Danni Hewson.

“Much of the action centred on the M&A arena. Tobacco giant Philip Morris launched a hostile takeover bid of more than £1 billion for inhaler specialist Vectura, a US private equity firm planted the seeds for a bidding war on supermarket Morrisons with a request for extra time to make an offer and a German rival took a stake in takeaways platform Deliveroo.

“The continuing global corporate raid on UK plc suggests overseas parties still see significant untapped value in the London stock market.

“In the commodities markets both gold and oil took a hit overnight – with the precious metal dropping to a five-month low and crude falling on fears that lingering travel restrictions will hit demand.

“Given that much of 2021 has been dominated by mounting concern over the impact over inflation and gold has traditionally offered protection against rising prices, fans of the precious metal will be particularly disappointed by its high single-digit slide in percentage terms year-to-date.”

PageGroup

“Generally recruitment companies offer decent insight into the health of the economy as companies look to hire when times are good.

“So the reinstatement of the first half dividend at PageGroup and a big recovery in revenue and profit reinforces the idea there was a material global rebound in the first six months of 2021.

“The bad news is PageGroup isn’t sounding quite as upbeat about the remainder of the year as the emergence of new covid variants sees restrictions remain in place in several of its markets.

“It is also possible to note a degree of uncertainty about whether recent growth is a short-term effect driven by pent up demand or something more sustainable.

“And there may have been an element of ‘after the Lord Mayor’s Show’ about these results given the company had already flagged the improved trading back in July. Notably profit and revenue is still below levels seen before the pandemic in 2019.

“Another issue facing the staffing companies is a shortage of available candidates to fill vacancies across a range of industries from hospitality to logistics. While this should drive up fees and commissions in the short term it could hit their growth prospects in the longer term.”

These articles are for information purposes only and are not a personal recommendation or advice.