Stockbroker tips from ShareCast

Broker snap: Michael Page outlook statement eyed

There'll be plenty of nerves ahead of final results from Michael Page on Friday as investors wait to see if the white collar recruiter did better than Hays in the last six months of 2009.

Hays slumped last week when it said half-year profit plunged to £3.4m from £100.8m in 2008 and fell 70% to £30.4m, excluding the £27m OFT fine that is currently under appeal.

It also reported business in the UK remains "challenging" and that its performance there is expected to be "broadly similar" in the second half.

Michael Page is more focused on the better performing overseas markets and less on the public sector, so Charles Stanley expects news of an improving outlook.

"We believe Michael Page is among the best placed of the staffers to achieve considerable earnings growth over the next cycle," it said. "With the potential of the group in our view still not fully priced in, we anticipate further positive share price performance as the cycle matures."

But risks surrounding a delay to the recovery remain a concern. "Given the precarious state of the UK economy, and its still significant contribution to Page's gross profit (39%), the risk is that bearish tones on the UK outlook outweighs positive overseas developments," says the broker.

Still, Charles Stanley maintains its 'buy' stance and 510p target price.

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