PageGroup posts best growth in seven years as some market concerns linger

PageGroup posted its second quarter and first half trading update on Wednesday, reporting second quarter gross profit growth of 16.0% at constant currency to £208.2m - a record figure.

The FTSE 250 firm said its ‘large, high potential markets’, which make up 33% of the group, grew by 24%.

On a regional basis, the Europe Middle East and Africa area was ahead 18.6%, led by France at 15% and Germany at 25%; while Asia Pacific grew 18.4%, highlighted by growth in Greater China at 18% South East Asia at 18%, and Australia at 10%.

PageGroup launched in Vietnam during the period - its fifth country in South East Asia.

The UK geographic, which makes up 17% of the group, was down 1.9%, with the board noting that market sentiment remained “cautious”.

It reported its strongest growth in the Americas, which was ahead 29.2%, led by the US at 27%, Latin America at 32%, and Brazil at 23%.

It also said its technical disciplines speciality was its fastest growing, with growth at 26.4%.

PageGroup reported a record headcount at 7,457 - a rise of 136 fee earners in the second quarter on top of the 183 added in the first quarter, with 10 support staff also added.

The firm reported a “strong” balance sheet, with net cash of around £85m - down from £91m in the first quarter and £89m a year ago.

Its board said 2018 operating profit was now expected to be slightly ahead of consensus in current market forecasts.

“This is the first time the group has generated more than £200m in a quarter and is the highest quarterly growth rate for seven years,” said chief executive officer Steve Ingham.

“Our ‘large, high potential’ markets grew 24% collectively, with all five delivering record quarters.”

Ingham noted that adverse foreign exchange movements impacted its reported performance, decreasing gross profit by around £3m in in the second quarter.

“We are pleased with the Group's strong performance in the first half.

“However, there remain challenges in a number of our markets, including Brexit in the UK, trading in Catalonia and forthcoming elections in Latin America.”

He said the company would continue to focus on driving profitable growth as it progressed towards its vision of 10,000 headcount, £1bn of gross profit and between £200m and £250m of operating profit, while being able to respond rapidly to changes in market conditions.

“In 2018 we now expect operating profit to be slightly ahead of the consensus of current market forecasts.”