PageGroup sees record gross profit in Q2
Pagegroup
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16:40 08/10/24
Recruitment firm PageGroup saw record gross profit in its second quarter, it reported on Tuesday, with the figure rising by 7.7% after the period was impacted by the timing of Easter.
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The FTSE 250 firm saw serious growth in its Europe, Middle East and Africa segment, up 13.2%, with France rising 23%, Germany up 13% and Southern Europe 11% firmer.
A weakened post-referendum UK was down 4.5%, with other divisions performing equally disappointingly - Michael Page was off 5% and Page Personnel fell 2%.
In the Asia Pacific region growth was 6.8%, with Asia contributing 10% but Australia slipping 1%, while the company saw its strongest growth in the Americas.
There, total growth was 13.8%, with the US up 17%, Brazil improving 2% and the rest of Latin America rising 18%.
Technical disciplines were the fastest growing sector, the board added, at 19.3%.
PageGroup had record headcount at period end of 6,448, after adding 138 fee earners in the second quarter, compared to 98 in the first.
The board also spoke of its ‘strong’ balance sheet, with net cash of £87m compared to £74m.
“The group delivered record gross profit, with growth of 7.7% in constant currencies, despite the impact of Easter, which this year fell in Q2 versus Q1 in 2016,” said chief executive Steve Ingham.
“As reported in our last trading update, this inflated our Q1 growth rate of 9.1% and had the reverse impact this quarter. H1 gross profit grew 8.3%.”
Ingham said France, having increased its fee earner headcount by 19% year-on-year, delivered another “excellent” quarter, with growth of 23%.
“The UK was down 4.5%, with Easter falling in Q2 and client and candidate confidence levels continuing to be impacted by Brexit and political uncertainty.
“In our large, high-potential markets, growth in Greater China accelerated, up 11%
“Excluding Singapore where market conditions remained challenging, South East Asia, delivered growth of 35%.”
In the US, where Ingham said the company had increased fee earners by 28% year-on-year, Page reportedly saw a “strong” improvement, up 17%.
Latin America, excluding Brazil, delivered growth of 18%, and Germany achieved a record quarter, up 13%.
“Our focus on investing in these large, high-potential markets, which were collectively up 12%, as well as in businesses experiencing strong growth, resulted in fee earner growth of 178 in Q2 and 276 (+5.9%) on December 2016, up to a new record for the group,” Ingham said.
“Total fee earner headcount now stands at 4,987, with total headcount at 6,448.”
Ingham explained how the group continued to benefit from positive foreign exchange movements, which in the quarter added £13m to gross profit, increasing reported gross profit by 8.3 percentage points to 16.0%.
“We are pleased with the strong performance across the majority of our regions, bearing in mind the timing of Easter.
“However, there remain a number of uncertainties as we continue through 2017, including the impact of Brexit negotiations and political uncertainty in the UK, elections in Germany and Brazil's ongoing macroeconomic challenges.
“Costs from our headcount investments including in new markets such as the Nikkei market in Japan, our contracting business in Germany and our Page Personnel businesses, continue.”
Performance levels had improved since the start of the year, Ingham noted, which had been reflected in consensus expectations moving up 13% since March 2017.
“Our outlook for full year operating profit is in line with current consensus.
“Looking ahead, we will continue to focus on driving profitable growth, while being able to respond quickly to any changes in market conditions.”