Call it the Icarus factor. Shares in international recruitment consultant Michael Page – now rebranded Page Group – tend to trade on luxury company-style multiples. Small wonder, then, that a disappointing business update for the first quarter of 2013 caused them to slide on Tuesday. News of an underlying 7 per cent fall in gross profits, year on year, in the first three months was coupled with a warning of challenges ahead. The shares had fallen 5 per cent by the close and are now 17 per cent below their March highs.

Trading-wise, business trends for Page are not all bad. Concealed within the overall profits fall were brighter spots such as North America and Asia, both of which saw good year on year improvements. But those markets account for under a fifth of the group in profit terms. The big problems came in France, Germany and Australia, which amount to almost 30 per cent. The last of these has been hit by miners’ cost-cutting; the former two by Europe’s woes. Germany, where first-quarter gross profit fell 27 per cent year on year, is a young market for Page and has suffered additionally from a lack of temporary recruitment personnel. This is now being sorted out.

But the rating is unforgiving. Even now, the shares trade on 23 times consensus earnings for 2013, and 19 times the 2014 estimate. The median multiple since listing has been 17 times, according to Deutsche Bank. While Page talks gamely about long-term potential in markets ranging from China to the US, it is at least arguable that the juddery economic conditions will tilt matters in favour of temporary recruitment, rather than permanent, in the short term. The latter is Page’s strength, accounting for four-fifths of profits. Page’s balance sheet is strong with £56m net cash. It also managed to cut headcount from support staff, rather than fee-earners, in the first quarter. Even so, the shares look pricey.

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