Shares in recruitment firms PageGroup (PAGE) and Robert Walters (RWA) jumped sharply after both firms raised their full year earnings guidance following stronger than expected current trading.

PageGroup shares climbed as much as 6% in early trading after the company posted a 94% increase in second quarter net fee income and lifted its full year operating profit forecast by more than a third.

Fees were 2% above 2019’s record level during the quarter, and as much as 11% above pre-pandemic levels by the end of June, with 17 of the group’s business areas hitting record numbers including four of its five large, high potential markets.

Stand-out markets were Asia Pacific which posted a 10.5% increase against 2019, Germany which posted a 26% increase and the US which registered an 8% increase.

The UK business saw a strong recovery in fees compared with last year, but was still down 9% on 2019’s level as the Page Personnel business, which recruits for many health trusts and NHS bodies, saw a drop of 24% in fees during the quarter.

Despite it only being June, chief executive Steve Ingham was bullish on the group’s prospects: ‘Notwithstanding the early stage in the year, the strength of our performance in H1, and notably in June, has further increased confidence in our outlook for the year. Subject to other unexpected events, we now expect full year operating profit to be within the range of £125m - £135m.’

That compares guidance of between £90 million and £100 million at the time of the first quarter update and represents an upgrade of more than 35%. By mid-morning, PageGroup shares had settled up 3% at 593p.

Meanwhile, shares in smaller rival Robert Walters raced up almost 10% to 797p in early trading as it posted a 31% increase in second quarter net fee income and said full year profit would be ‘significantly ahead of market expectations’.

Like PageGroup, the firm said trading momentum ‘continued to accelerate through the second quarter with the group's performance in June particularly strong’.

Therefore, profits are expected to significantly higher than the firm thought, despite having already raised its guidance in June, although it gave no concrete numbers.

Stand-out markets were Asia-Pacific, which saw a 48% rise in net fee income during the quarter, Europe which saw a 26% increase and areas such as the Americas and South Africa which registered a combined 20% increase in fees.

Once again, the UK was a laggard but fees were still 9% higher than the year-ago period. The firm didn’t give any comparisons with 2019.

Robert Walters shares settled up 6% at 772p.

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Issue Date: 07 Jul 2021