Reed Executive takes axe to payout

SHAREHOLDERS in Reed Executive were the latest victims of the collapse in the recruitment market as the company revealed a halving in profits in the first half of the year and a cut in the dividend.

With chief executive James Reed admitting that things are not getting any better, the shares dived to a 12-month low, off 21p at 103 1/2p.

'We see no material change to the current market conditions,' he said. 'The third-quarter performance to date is not significantly different to the previous two quarters. Consequently we do not expect a substantial improvement in the business environment this year and our full-year performance will reflect this.'

The company reported six month pre-tax profits of £4.1m, down 54%, while the interim dividend is being lopped from 3p to 2p.

While there may not be many posts being advertised in the market, Reed is refusing to cast his own staff as jobhunters. 'We decided that we would not sacrifice long- term investment for short-term profit and we have sought to maintain headcount where appropriate,' he said.

Reed also revealed it is appointing Sir Michael Bichard as a non-executive. It is the first corporate role for the former Permanent Secretary at the Department for Education and Employment, who lost out in a Whitehall turf war after the last General Election.

He has since been busying himself as head of the arts and fashion college, the London Institute.