Job hunters are not the only ones celebrating a surge in vacancies, following the easing of Covid restrictions. After a predictably difficult lockdown, shares in recruitment consultancy PageGroup closed 42 per cent higher in 2021, as the jobs market continues to defy gloomy economic predictions.
According to a December trading update, full-year operating profits are expected to reach £165m, ahead of previous guidance. The third quarter of 2021 was particularly strong, with gross profit across the group surpassing 2019 levels.
PageGroup’s resurgence coincides with record UK job vacancy figures and a fall in new applications for US unemployment benefits. Indeed, growth in the Americas was particularly impressive compared with 2019, despite this being one of the worst affected regions during the pandemic.
Spotting an opportunity, PageGroup chief executive Steve Ingham offloaded 480,000 shares over the Christmas period, for more than £3m. The price secured by Ingham was 125 per cent higher than April 2020s nadir of 280p.
No reason was given for the disposal, which more than halved Ingham’s holding in PageGroup.
Macroeconomic turmoil — including more Covid restrictions linked to the Omicron variant, supply chain issues and inflation — could yet affect PageGroup’s performance in a number of its markets in 2022. In October, the group also warned of uncertainty around how quickly clients are able to reopen their offices.
The outlook for the labour market is therefore not straightforwardly positive. Moreover, figures published by the Office for National Statistics suggest that the UK’s hiring spree is starting to slacken, with the rate of vacancy growth continuing to slow between September and November 2021.
Commenting on PageGroup’s half-year results in the summer, Ingham said that “at this stage of the recovery, it is not clear whether the improved performance is still the result of pent-up supply and demand, or a sustainable trend”. For now, the jury is still out.
Litigation funder execs buy dip after share price plunge
Litigation finance no longer appears to be the sure-fire bet that some investors thought it first was.
Burford Capital posted a $67.5m loss for the first half of 2021, compared to a profit of $187.9m in the same period a year earlier as it recorded a $79m non-cash accrual charge linked to potential employee asset carry plan benefits.
Investment bank Close Brothers also recently decided it would withdraw from the market after booking impairment charges against Novitas, a funder of legal cases it bought in 2017.
The company said the risk profile of Novitas was “no longer compatible with our long-term strategy and risk appetite”.
Investments are still being made into the sector, though, with both Gateley and Mishcon de Reya agreeing partnerships with funders in September.
Litigation Capital Management is also stepping up activity, having completed a $200m first close of its second fund in October. It is looking to raise a total of $300m, after committing 91 per cent of the capital from its $150m first fund.
Among the cases it agreed to back in 2021 were a claim against Carillion’s former auditors KPMG following the outsourcing group’s collapse in 2018 and one brought against French electricals retailer Darty from a liquidator of the former Comet Group business.
Litigation Capital Management’s share price plunged from 104p to 80p on December 17 after it announced that executive vice-chair Nick Rowles-Davies had been dismissed on gross misconduct charges relating to expense claims. The share price subsequently recovered to close up 52 per cent for 2021 at 100p, with chair Jonathan Moulds and chief executive Patrick Moloney both buying the dip.
Moulds bought 725,000 shares, bringing his holding to 975,000, or 0.82 per cent of the total. Moloney bought 50,000 shares through ATE Holdings, a wholly-owned Australian entity. This increases the size of his stake to 8.56 per cent.