Michael Page pushing higher

The company will announce its first-half results on 13 August, and the first three months proved to be a success. 

London stock exchange
Source: Bloomberg

The recruitment company had a strong start to the financial year, and revealed a 10.9% jump in first-quarter profits, and the full-year forecast was revised higher. The company experienced a slowdown in activity in the run up to the general election in May as firms were cautious about taking on new staff ahead of the vote, but the clear Conservative majority has helped cooperation’s plan for their employment needs.

Michael Page is rapidly expanding in the Far East and the Americas, but Europe is still its biggest contributor to earnings. The region accounts for 40% of the group’s profits. The European division saw profits increase by 12%, and the US operation posted an 11% jump in profit, but China outperformed both and revealed an 18% rise in earnings.  The company’s CEO, Steve Ingham, stated the firm has approximately £100 million in cash, and should the second-half of the year be as strong as the first, shareholders can expect a capital return.

When Michael Pages reveals its first-half results, analysts are expecting revenue of £539 million, and that compares with the second-half revenue of £534 million from last year. The recruitment agency will announces its full-year results in April 2016, and traders are anticipating revenue of £1.09 billion and adjusted net income of £63 million. These expectations equate to a 3.8% rise in revenue and a 12.5% jump in adjusted net income.

Investment banks are very bullish on Michael Page, and out of the 20 ratings, 11 are buys, eight are holds, and one is a sell. The average target price is £5.88, which is 6.3% above the current price. Equity analysts are also bullish on Hays, and out of the 21 recommendations, 15 are buys, five are holds, and one is a sell.

Michael Page’s share price has been trading higher since 2008, and the resistance in £5.70 is the target, and a move through it will bring £6 into play. If the stock runs into resistance, the £5.10 area will provide support.

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