Foreign exchange helps lift PageGroup as some markets soften

Specialist professional recruitment company PageGroup announced its full year results for the year to 31 December on Wednesday, with revenue rising 12.3% to £1.2bn, or 3.6% at constant exchange rates.

The FTSE 250 firm’s gross profit improved 11.7% to £621m, or 3% at constant currencies, while operating profit was up at £101m - growth of 12.1%, or 1.4% at constant exchange rates.

Profit before tax rose 10.3% during the year to £100m.

Basic earnings per share were ahead 8.5% at 23.1p, while diluted earnings per share rose 9.5%, also to 23.1p.

The board confirmed a total dividend per share of 11.98p, excluding the special dividend, which was a 4.2% improvement on 2015.

Including the special dividend, total dividends dropped to 18.44p from 27.5p in the prior year.

“PageGroup delivered an increase of 3.0% in gross profit and 1.4% in operating profit in constant currencies in 2016 and we achieved a record result from our large, high potential markets,” said chief executive officer Steve Ingham.

“The group's conversion rate increased slightly to 16.3% from 16.2%, due to improved business performance and operational efficiencies offsetting the challenging economic conditions encountered in some of our larger markets.

“In 2016, foreign exchange impacted our results positively, with gross profit benefiting by £48m and operating profit by £10m.”

Ingham said fee earner headcount grew 227, or +5.1%, to end the year at a record level for the group.

With its continued focus on operational efficiencies, he said the company maintained its record fee earner-to-operational support staff ratio of 77:23.

“We completed the roll-out of our new operating system, PRS, and also the European finance transition into our Shared Service Centre in Barcelona, both of which will improve future productivity and efficiency.

“Our businesses in Continental Europe, Australasia and Latin America, excluding Brazil, all performed well.

“In the UK, client and candidate confidence levels were impacted by the EU referendum result, with activity levels reduced.”

Ingham said market conditions were also challenging in several of PageGroup’s other larger markets, particularly Brazil, and Financial Services, notably in New York.

“Despite the challenges in a number of our larger markets, such as the UK, Brazil and China, the unpredictable nature of the current cycle and our limited visibility, we will continue to focus on driving profitable growth, whilst remaining able to respond quickly to any changes in market conditions.

“We will update the market on our 2017 performance in 4 weeks' time on 12 April.”