BUSINESS LIVE: PageGroup profits slip; Crest Nicholson costs rise; Audioboom returns to growth

PageGroup profits are set to come in below expectations as the recruitment firm continues to suffer from a global hiring slowdown.

The FTSE 250 group saw gross profits slide 8.9 per cent year-on-year to £237.3million in the fourth quarter, as UK revenues slumped almost 20 per cent to £28.6million.

Crest Nicholson has cut its annual profit outlook for the third time in six months as costs associated with its Brightwells Yard regeneration scheme in Farnham continue to climb.

The Surrey-based housebuilder also told shareholders on Monday it is set to recognise an unexpected legal claim worth £13million after a 2021 fire damaged a low rise apartment scheme built by the group.

Crest Nicholson now expects full-year adjusted profit before tax to be £41 million, down from the previous forecast of £45million to £50million.

Susannah Streeter, head of money and markets, Hargreaves Lansdown:

‘The focus is being trained on tense geopolitics, economic malaise and the impact of artificial intelligence on nations around the globe as leaders gather at the World Economic Forum in Davos.

‘Amid the uncertain economic outlook, the FTSE 100 is set to struggle for a sense of direction. It managed to gain small ground in early trade, before losing ground, with energy giants helped by the recent uplift in oil prices. Activity is expected to be lighter, given that exchanges in the US are largely closed for Martin Luther King Day.

‘Despite some more optimistic outlooks from small business leaders in the UK, there are fresh signs that employers are becoming more reluctant to hire staff.

‘Data from Hargreaves Lansdown’s Savings and Resilience Barometer shows that income inequality is continuing to grow as cost-of-living pressures swirl with poorer households continuing to see finances sideswiped.’

A start-up bank backed by Lord Mandelson has tapped investors for £25m after widening annual losses.

The Bank of London raised the cash last November after being granted a banking licence. City regulators first approved the lender last February after it raised £24.5m in the first three months of 2023.

Richard Hunter, head of markets at Interactive Investor:

‘UK markets…[are] undecided in opening trade in the absence of any major news and with the likelihood of a lighter trading day given the closure of Wall Street later. A broker upgrade lifted Sainsbury shares after last week’s partially disappointing update, while the banks showed some signs of life despite the lack of a concrete read across from those which reported in the States on Friday.

The fourth quarter reporting season is yet to get into full swing in the UK as yet and in terms of economic releases there are readings on the unemployment and inflation rates to come this week, as well as a retail sales reading which should provide further colour on trading over the festive period. In the meantime, the main indices have been unable to build any momentum so far this year, with the FTSE100 down by 1.3% and the FTSE250 already languishing by 2.3%.’

Anthony Codling, head of European housing and building materials at RBC Capital Markets:

‘Further challenges for Crest as its legacy sites continue to negatively impact the Group’s financial performance, and it releases yet another unscheduled trading update this morning.

‘The latest cost review has identified additional costs which will reduce profits once again. It has been a tough year for Crest and unfortunately for the Group and its investors the bad news continues.

‘In our view if today’s trading update leads to further share price weakness it increases the chances that Crest may be viewed as an attractive acquisition for another housebuilder. Crest’s full year FY2023 results are scheduled for release next week, on 23 January.’

The public is losing trust in the pace of technological change amid the rise of artificial intelligence (AI), according to a global poll.

A survey of 32,000 people by public affairs firm Edelman has found that twice as many people believe that innovation ‘is being poorly managed’ as took a positive view.

And people in Britain were among the most sceptical of the 28 countries polled.

Podcast producer Audioboom returned to profit growth in the fourth quarter as the firm scored new commercial partnerships and enjoyed an improvement in the advertising market.

The group posted underlying revenue of approximately $19.2million for the quarter, up 37 per cent on the previous three months and up 5 per cent year-on-year.

Audioboom anticipates record revenue in 2024, with operational improvements and a return to adjusted earnings profitability

‘I’m pleased to report a successful final quarter of 2023, with the business returning to growth mode. Our Q4 revenue of over US$19 million is the highest since Q2 2022 and reflects the improvements we have made in the business across the year.

‘The focus on expanding and diversifying our customer base through the launch of our brand sales unit has resulted in new commercial partnerships with leading advertising agencies.

‘Our drive to optimise advertising inventory on the platform has led to a sharp increase in the number of ad slots we create per episode, with a subsequent one billion ad impressions being made available for sale to our customers in October.

‘These operational improvements have positioned us to capture maximum value from advertisers in 2024.’

Crest Nicholson has cut its annual profit forecast for the third time in six months, with the housebuilder citing higher costs related to certain legacy sites and an exceptional charge of £13million on a legal claim.

The company now expects full-year adjusted profit before tax of £41million, compared with the £45million to £50million range previously expected.

After a tough 2023 amid high inflation and elevated interest rates, Britain’s housing market is set for a boost as home loan rates start to fall back. However, broader economic worries could temper any recovery.

‘Although it is too early to gauge customer behaviour, we have been encouraged by an increase in customer interest levels and inquiries this calendar year,’ Crest Nicholson said in a statement.

Last week, peers Persimmon and Taylor Wimpey were cautiously optimistic about near-term prospects and tight-lipped on their profit outlook and build targets for this year.

Meanwhile, Vistry struck a more optimistic tone than its sector peers.

Recruitment slumped to a decade low in December and is expected to fall further this year.

Research showed hiring intentions among business leaders tumbled to the lowest level since August 2013 last month.

Unemployment is expected to grow and job vacancies fall over the next year, according to analysis by accountancy firm BDO. But bosses remain more optimistic about 2024 than last year.

PageGroup has trimmed its annual profit forecast, with the recruitment firm citing persistently longer hiring time and weak demand for permanent hiring amid low candidate and client confidence.

Group gross profits were down 8.9 per cent year-on-year to £237.3million in the fourth quarter with UK recenues slumping almost 20 per cent.

‘We produced a resilient performance in challenging market conditions. Despite the year-on-year decline in gross profit, we are still seeing good activity levels, albeit we did see a deterioration in job flow through Q4. However, these activity levels are not all converting into gross profit due to ongoing lower levels of candidate and client confidence.

‘Looking ahead, macro-economic uncertainty persists. However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions.

‘Given these fundamental strengths, we believe we will continue to perform well in these challenging markets, and we are confident in our ability to implement our new strategy driving the long-term profitability of the Group.

‘We are also seeing the benefits from our investments in innovation and technology, where Customer Connect is supporting productivity and enhancing customer experience, and Page Insights is providing real time data to inform business decisions.’