Regulatory Story
Go to market news section View chart   Print
RNS
PageGroup plc   -  PAGE   

Half-year Report

Released 07:00 07-Aug-2019

RNS Number : 1602I
PageGroup plc
07 August 2019
 

 

 

7 August 2019

Half Year Results for the Period Ended 30 June 2019

 

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2019.

 

Financial summary

(6 months to 30 June 2019)

2019

2018

Change

Change

CC*

Revenue

£820.5m

£751.6m

+9.2%

+9.5%

Gross profit

£433.5m

£396.0m

+9.5%

+9.5%

Operating profit

£75.6m

£67.2m

+12.5%

+11.4%

Profit before tax

£74.6m

£67.2m

+10.9%


Basic earnings per share

16.8p

15.5p

+8.4%


Diluted earnings per share

16.8p

15.4p

+9.1%







Interim dividend per share

4.30p

4.10p

+4.9%


Special dividend per share

12.73p

12.73p

 

 

 

HIGHLIGHTS

·       Group operating profit increased +11.4%* to £75.6m, +12.5% in reported rates

·       Increase in fee earner productivity of 2.2%**

·       Conversion rate*** increased to 17.4% (H1 2018: 17.0%)

·       Reduction of 81 (-1.3%) fee earners in H1 2019

·       Strong Balance Sheet with net cash of £81.7m (H1 2018: £87.0m)

·       Interim dividend up 4.9% to 4.30 pence per share, totalling £13.9m

·       Special dividend of 12.73 pence per share, totalling £41.0m

 

 

* in constant currency at prior year rates

** gross profit per fee earner

*** operating profit as a percentage of gross profit

 

 

Commenting, Kelvin Stagg, Chief Financial Officer, said:

 

"PageGroup delivered an increase of 9.5%* in gross profit and 11.4%* in operating profit in the first half of 2019, with fee earner productivity increasing 2.2% and the Group's conversion rate rising from 17.0% to 17.4%. This reflects our continued focus on productivity and conversion.

 

"Fee earner headcount fell by 81 (-1.3%) in the first half, to 6,035, mainly in markets where conditions were more challenging, such as Greater China and the UK. We continued to invest in markets where we saw the greatest growth, such as the US and India. We completed the implementation of our new Global Finance System, with roll-outs in Latin America and Europe during the first half. Our operational support staff headcount increased by 72 (4.3%), the majority of which were temporary, to support these roll-outs.

 

"We are announcing today an interim dividend of 4.30 pence per share, an increase of 4.9% over last year. In addition, in line with our policy of returning surplus capital to shareholders, we are also pleased to announce a special dividend of 12.73 pence per share (2018: 12.73 pence per share) totalling £41.0m, a fifth consecutive year of special dividends. Taking both dividend payments together, this amounts to a cash return to shareholders of £54.9m, payable on 9 October. Together with the 2018 final dividend paid in June of £29.0m, this represents a total of £83.9m returned to shareholders in 2019, or 26.03 pence per share.

 

"We are pleased with our first half performance, however we remain mindful of challenging macro-economic conditions seen in a number of our regions. We will continue to focus on driving profitable growth, while continuing our strategic investments towards our Vision of 10,000 headcount, £1bn of gross profit and £200m - £250m of operating profit."

 

 

 

PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 8.30am on 7 August 2019, the details of which are below.

 

Link:

 

https://www.investis-live.com/pagegroup/5d35b72e9add6d1100148e3b/usas 

 

Please use the following dial-in number to join the conference:

 

United Kingdom (Local)

020 3936 2999

All other locations

+44 20 3936 2999

 

Please quote participant access code 41 06 07 to gain access to the call.

 

A presentation and recording to accompany the call will be posted on the PageGroup website during the course of the morning of 7 August 2019 at:

 

http://www.page.com/investors/investor-library.aspx

 

Enquiries:

 

PageGroup

+44 (0)20 3077 8425

Kelvin Stagg, Chief Financial Officer

Jeremy Tatham, Group Financial Controller






FTI Consulting

+44 (0)20 3727 1340

Richard Mountain / Susanne Yule


 

 

 



 

INTERIM MANAGEMENT REPORT

 

GROUP RESULTS

 

GROSS PROFIT


£m

Growth Rates


% of Group

H1 2019

H1 2018

Reported

CC

EMEA

49%

213.1

194.9

+9.3%

+10.2%

Asia Pacific

19%

81.8

74.1

+10.4%

+9.0%

UK

16%

69.4

69.7

-0.3%

-0.3%

Americas

16%

69.2

57.3

+20.7%

+19.6%

Total

100%

433.5

396.0

+9.5%

+9.5%







Permanent

76%

330.6

304.2

+8.7%

+8.5%

Temporary

24%

102.9

91.8

+12.1%

+12.8%

 

The Group's revenue for the six months ended 30 June 2019 increased 9.2% to £820.5m (2018: £751.6m) and gross profit increased 9.5% to £433.5m (2018: £396.0m). In constant currencies, the Group's revenue and gross profit both increased by 9.5%. The Group's revenue mix between permanent and temporary placements was 41:59 (2018: 41:59) and for gross profit was 76:24 (2018: 77:23).

 

Revenue from temporary placements comprises the salaries of those placed, together with the margin charged. Overall, pricing has remained relatively stable across all regions. Fee earner productivity increased by 2.2%, reflecting our continued focus on productivity and conversion, following our COO office appointment last year.

 

Fee earner headcount fell by 81 (-1.3%) in the first half, to 6,035, mainly in markets where conditions were more challenging, such as Greater China and the UK. We continued to invest in markets where we saw the greatest growth, such as the US and India. We completed the implementation of our new Global Finance System, with roll-outs in Latin America and Europe during the first half. Our operational support staff headcount increased by 72 (4.3%), the majority of which were temporary, to support these roll-outs. Total headcount at the end of the first half was 7,763.

 

The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 79% of first half costs were employee related, including salaries, bonuses, share-based long-term incentives, and training and relocation costs.

 

In total, administrative expenses in the first half increased 8.9% to £357.9m (2018: £328.8m), driven by increases in headcount relative to H1 2018. In constant currency administrative expenses were up 9.1% and operating profit increased 11.4% to £75.6m (2018: £67.2m), an increase of 12.5% at reported rates.

 

The Group views its conversion rate, which represents the ratio of operating profit to gross profit, as a key metric for the business. This conversion rate is affected by macro-economic conditions, the level of investment, particularly in fee earners and the degree of spare capacity within the business. The Group's conversion rate of 17.4% (2018:17.0%) was an improvement on H1 2018, driven by a strong performance in EMEA, partially offset by more challenging trading conditions in Asia Pacific.

 

 

FOREIGN EXCHANGE

 

Movements in foreign exchange had a negligible impact on the Group's results. Overall, foreign exchange movements impacted the Group's gross profit and operating profit by less than £1m.

 

 

IFRS 16 - LEASES AND OTHER ITEMS

 

The Group is reporting under the new accounting standard, IFRS 16 Leases, for the first time. Under IFRS 16, the straight line rental expense for the first half of £20.4m has been replaced with a depreciation charge in respect of the right of use assets of £19.6m. This has resulted in an increase to EBITDA of £20.4m and an increase to EBIT of £0.8m. An interest charge in respect of the lease liabilities of £1.1m has also been recognised resulting in a decrease in profit before tax of £0.3m.

 

Underlying interest received and interest paid was consistent with 2018. The charge for taxation at the half year was 27.5% (2018: 26.5%). It is based on the full year forecast tax rate, allowing for prior year items arising from tax returns in the half year to 30 June.

 

Basic earnings per share for the six months ended 30 June 2019 was 16.8p, an increase of 8.4% and diluted earnings per share was also 16.8p, an increase of 9.1% (2018: basic earnings per share 15.5p; diluted earnings per share 15.4p).

 

CASH FLOW

 

The Group started the year with net cash of £97.7m. In the first half, £63.2m was generated from operations after funding an increase in working capital of £45.8m, mainly due to growth in our temporary and contracting business, which has a higher working capital requirement. Tax paid was £20.8m and net capital expenditure was £13.4m. During the first half, £3.5m was received from exercises of share options (2018: £19.1m). No shares were purchased in the Employee Benefit Trust to hedge exposures under share-based awards (2018: £9.9m) and dividends of £29.0m were paid to shareholders. As a result, the Group had net cash of £81.7m at 30 June 2019 (30 June 2018: £87.0m).

 

DIVIDENDS AND SHARE REPURCHASES

 

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate while maintaining a strong balance sheet position.

 

The Group's first use of cash is to satisfy operational and investment requirements, as well to hedge its liabilities under the Group's share plans. The level of cash required for this purpose will vary depending upon the revenue mix of geographies, permanent and temporary recruitment, and point in the economic cycle.

 

Our second use of cash is to make returns to shareholders by way of an ordinary dividend. Our policy is to grow the ordinary dividend over the course of the economic cycle in a way that we believe we can sustain the level of ordinary dividend payment during downturns, as well as increasing it during more prosperous times.

 

Cash generated in excess of these first two priorities will be returned to shareholders through supplementary returns, using special dividends and/or share buybacks.

 

The Board has announced an interim dividend of 4.30 pence per share, an increase of 4.9% over last year. In addition, in line with its policy of returning surplus capital to shareholders, the Group is pleased to announce today a special dividend of 12.73 pence per share or £41.0m (2018: 12.73 pence per share), making it a fifth consecutive year of special dividends. Taking both dividend payments together, this amounts to a cash return to shareholders of £54.9m. Together with the 2018 final dividend paid in June of £29.0m, this represents a total of £83.9m returned to shareholders in 2019.

 

This special dividend will be paid, as in previous years, at the same time as the interim dividend on 9 October 2019 to shareholders on the register as at 6 September 2019.

 

During the first half, no purchases of shares into the Employee Benefit Trust to hedge exposures under share-based awards were made (2018: £9.9m).

 

 

 

All growth rates given below are in constant currency unless otherwise stated.

 

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

 

EMEA

 £m

Growth rates

(49% of Group in H1 2019)

H1 2019

H1 2018

Reported

CC

Gross Profit

213.1

194.9

+9.3%

+10.2%

Operating Profit

45.6

40.9

+11.4%

+12.2%

Conversion Rate (%)

21.4%

21.0%



 

 

EMEA is the Group's largest region, contributing 49% of Group first half gross profit. In reported rates, revenue in the region increased by 9.7% to £427.7m (2018: £389.7m) and gross profit increased 9.3% to £213.1m (2018: £194.9m). In constant currency, revenue increased 10.6% on the first half of 2018 and gross profit increased by 10.2%.

 

The EMEA region performed strongly, with Michael Page and Page Personnel growing gross profit 9% and 11%, respectively. France, which now represents around a third of the region and 16% of the Group, grew gross profit by 7%. In Germany, one of our Large, High Potential markets, we grew 24%, with a standout performance from our Technology focused Interim business, which was up 37%. Southern Europe grew 9%, with Italy up 12% and Spain up 6%, however conditions became more challenging as the second quarter drew to a close. Benelux grew 12%, with Belgium and the Netherlands up 13% and 12% respectively. The Middle East and Africa grew 7%, driven mainly by growth in the UAE of 11%.

 

The 11.4% increase in operating profit for the first half of 2019 to £45.6m (2018: £40.9m) and improvement in the conversion rate to 21.4% (2019: 21.0%) was driven by a combination of improved fee earner productivity and generally favourable macro-economic conditions. Headcount across the region was broadly flat in the first half at 3,316 at the end of June 2019 (3,299 at 31 December 2018).

 

ASIA PACIFIC

 

Asia Pacific

 £m

Growth rates

(19% of Group in H1 2019)

H1 2019

H1 2018

Reported

CC

Gross Profit

81.8

74.1

+10.4%

+9.0%

Operating Profit

8.8

9.0

-1.6%

-4.8%

Conversion Rate (%)

10.8%

12.1%



 

In Asia Pacific, representing 19% of Group first half gross profit, revenue increased 7.5% in reported rates to £135.0m (2018: £125.6m), and gross profit increased 10.4% to £81.8m (2018: £74.1m). In constant currency, revenue increased 6.7% in the first half and gross profit increased by 9.0%.

 

Conditions in Asia Pacific in the first half were challenging due to the trade tariff uncertainty in Greater China, which overall grew gross profit 3%. South East Asia, another of the Group's Large, High Potential markets grew 9%. However, we saw more challenging conditions in Singapore during the second quarter, impacted by contagion from trade tariff uncertainty. Elsewhere in the region we saw standout performances from India and Japan, which grew 50% and 22% respectively. Australia was up 8%, driven by our Page Personnel business. 

 

Reflecting these more challenging conditions in the region, particularly in Greater China, alongside our year on year investment in fee earners in South East Asia, India and Japan, our conversion rate fell from 12.1% to 10.8%. Headcount across the region increased by 28 (1.6%) to 1,737 at the end of June 2019 (1,709 at 31 December 2018), with investments in India and Japan offset by a reduction in our fee earner headcount in Greater China.

 

UNITED KINGDOM

 

UK

 £m

Growth rate

(16% of Group in H1 2019)

H1 2019

H1 2018


Gross Profit

69.4

69.7

-0.3%

Operating Profit

12.5

10.5

+19.6%

Conversion Rate (%)

18.0%

15.0%


 

In the UK, representing 16% of Group first half gross profit, revenue increased 1.5% to £157.4m (2018: £155.0m), but gross profit declined 0.3% to £69.4m (2018: £69.7m), with Brexit related uncertainty continuing to impact decision-making from clients and candidates at the more senior levels of the market. Page Personnel, which has a higher proportion of temporary recruitment, grew 9%, while Michael Page, which is focused on more senior candidates, declined 3%.

 

Operating profit increased by 19.6% to £12.5m (2018: £10.5m), with the conversion rate increasing to 18.0% (2018: 15.0%). Given the more challenging trading conditions, we reduced our fee earner headcount to increase our focus on productivity and therefore improve our conversion rate. As we have highlighted previously, the UK takes a higher proportion of the Group's share scheme charges, as the majority of the Group's senior management are based in the UK. The charge for H1 2019 was less than H1 2018, which contributed to the conversion rate improvement.

 

Headcount decreased by 68 (4.7%) during the first half of 2019 to 1,368 at the end of June 2019 (1,436 at 31 December 2018).

 

THE AMERICAS

 

Americas

 £m

Growth rates

(16% of Group in H1 2019)

H1 2019

H1 2018

Reported

CC

Gross Profit

69.2

57.3

+20.7%

+19.6%

Operating Profit

8.7

6.8

+26.8%

+15.7%

Conversion Rate (%)

12.5%

11.9%



 

In the Americas, representing 16% of Group first half gross profit, revenue increased 23.6% in reported rates to £100.5m (2018: £81.3m), while gross profit increased 20.7% to £69.2m (2018: £57.3m). In constant currency, revenue increased by 23.4% and gross profit increased by 19.6%.

 

North America grew gross profit 20% overall, with growth of 23% in the US offset by an 8% decline in Canada. In the US, we saw particularly strong performances from our offices outside of New York, with notable results from our offices in Boston, Chicago, Houston and Los Angeles.

 

In Latin America, we increased fee earner headcount by 10% year-on-year and grew gross profit 19%. This investment was spread across the region, including the four countries outside of Brazil and Mexico, being Argentina, Chile, Colombia and Peru, where we now have a total headcount of over 300 and grew 14%, collectively. Elsewhere, Mexico, our largest business in Latin America, grew 31% and Brazil grew 14%.

 

Headcount in the Americas was up 14 (1.1%) in the first half, to 1,342 at the end of June 2019 (1,328 at 31 December 2018). Operating profit increased by 26.8% to £8.7m (2018: £6.8m), with an increase in the conversion rate to 12.5% (2018: 11.9%), due primarily to the increase in productivity.

 

 



 

KEY PERFORMANCE INDICATORS ("KPIs")

 

We measure our progress against our strategic objectives using the following key performance indicators:

 

KPI

Definition, method of calculation and analysis



Gross profit growth

How measured: Gross profit represents revenue less cost of sales and consists of the total placement fees of permanent candidates, the margin earned on the placement of temporary candidates and the margin on advertising income, i.e. it represents net fee income. The measure used is the increase or decrease in gross profit as a percentage of the prior year gross profit.

 

Why it's important: The growth of gross profit relative to the previous year is an indicator of the growth in net fees of the business as a whole. It demonstrates whether we are in line with our strategy to grow the business.

 

How we performed in H1 2019: With strong growth in many of our markets, gross profit in H1 2019 increased by 9.5% in both constant currency and at reported rates (H1 2018: 14.2% in constant currency, 12.5% in reported rates).

 

Relevant strategic objective: Organic growth

Gross profit diversification

How measured: Total gross profit from a) geographic regions outside the UK; and b) disciplines outside of Accounting and Financial Services, each expressed as a percentage of total gross profit.

 

Why it's important: These percentages give an indication of how the business has diversified its revenue streams away from its historic concentrations in the UK and from the Accounting and Financial Services discipline.

 

How we performed in H1 2019: Geographies: the percentage outside the UK increased to 84.0% from 82.4% in 2018, demonstrating further diversification. This increase reflected the strength of growth outside the UK, as well as the continued weakness of Sterling. 

Disciplines: the percentage outside of Accounting and Financial Services was broadly flat at 65.3% (2018: 65.5%), with Accounting and Financial Services growth of 10.4%, compared to 9.0% elsewhere.

 

Relevant strategic objective: Diversification

Ratio of gross profits generated from permanent and temporary placements

How measured: Gross profit from each type of placement expressed as a percentage of total gross profit.

 

Why it's important: This ratio helps us to understand where we are in the economic cycle, since the temporary market tends to be more resilient when the economy is weak. However, in several of our core strategic markets, working in a temporary role or as a contractor or interim employee is not currently normal practice, for example Mainland China.

 

How we performed in H1 2019: 76% of our gross profit was generated from permanent placements, marginally below the 77% in 2018.

 

Relevant strategic objective: Organic growth

Gross profit per fee earner

How measured: Gross profit for the year divided by the average number of fee earners in the year.

 

Why it's important: This is a key indicator of productivity.

 

How we performed in H1 2019: Gross profit per fee earner was £70.7k in H1 2019 compared to £69.2k in H1 2018, an increase of 2.2%. This is in line with an increased focus on productivity and conversion, following our COO office appointment last year.

 

Relevant strategic objective: Organic growth

Conversion rate

How measured: Operating profit before interest and taxation (EBIT) as a percentage of gross profit.

 

Why it's important: This demonstrates the Group's effectiveness at controlling the costs and expenses associated with its normal business operations. It will be impacted by the level of productivity and the level of investment for future growth.

 

How we performed in H1 2019: Operating profit as a percentage of gross profit increased to 17.4% in 2019, up from 17.0% in the prior year, driven by a strong performance in EMEA, offset by more challenging trading conditions in Asia Pacific.

 

Relevant strategic objective: Build for the long-term

Basic earnings per share

How measured: Profit for the year attributable to the Group's equity shareholders, divided by the weighted average number of shares in issue during the year.

 

Why it's important: This measures the overall profitability of the Group.

 

How we performed in H1 2019: Earnings per share (EPS) in H1 2019 was 16.8p, an 8.4% improvement on the EPS in 2018 of 15.5p.

 

Relevant strategic objective: Build for the long-term, organic growth

Fee-earner: operational support staff headcount ratio

How measured: The percentage of fee-earners compared to operational support staff at the period-end, expressed as a ratio.

 

Why it's important: This reflects the operational efficiency in the business in terms of our ability to grow the revenue-generating platform at a faster rate than the staff needed to support this growth.

 

How we performed in H1 2019: The ratio was in line with H1 2018 at 78:22, but down on the year end ratio of 79:21. We reduced our fee earner headcount by 81 in the first half of 2019, in response to more challenging market conditions in markets such as France, Greater China and the UK. Our operational support headcount increased by 72, these additions were mainly temporary in nature to support the implementation of our new Global Finance System.

 

Relevant strategic objective: Sustainable growth

Fee-earner headcount growth

How measured: Number of fee-earners and directors involved in revenue-generating activities at the period end, expressed as the percentage change compared to the prior year.

 

Why it's important: Growth in fee-earners is a guide to our confidence in the business and macro-economic outlook, as it reflects expectations as to the level of future demand above the existing capacity within the business.

 

How we performed in H1 2019: We reduced our fee earner headcount by 81 in H1 2019 (H1 2018: 319 increase). Fee earner headcount fell in markets where we saw more challenging conditions, such as France, Greater China and the UK, but we continued to invest in markets where we saw the greatest growth such as the US and India.

 

Relevant strategic objective: Sustainable growth

Net cash

How measured: Cash and short-term deposits less bank overdrafts and loans.

 

Why it's important: The level of net cash is a key measure of our success in managing our working capital and determines our ability to reinvest in the business and to return cash to shareholders.

 

How we performed in H1 2019: Net cash at 30 June 2019 was £81.7m (H1 2018: £87.0m). This was as a result of £3.5m received in H1 2019 as a result of the exercise of share options, compared to £19.1m in H1 2018. No share purchases were made into the Employee Benefit Trust in H1 2019 (H1 2018 £9.9m). The balance was principally driven by movements in working capital.  

 

Relevant strategic objective: Build for the long-term

 

The source of data and calculation methods year-on-year are on a consistent basis. The movements in KPIs are in line with expectations. Disclosure for GHG emissions and People KPIs is provided annually.

 

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The management of the business and the execution of the Group's strategy are subject to a number of risks. The main risks that PageGroup believes could potentially impact the Group's operating and financial performance for the remainder of the financial year remain those as set out in the Annual Report and Accounts for the year ending 31 December 2018 on pages 31 to 35.

 

There have been no changes to these risk categories in the first half to 30 June 2019. However, there remains a degree of uncertainty in the UK as a result of Brexit, Greater China due to trade tariff uncertainty and slower economies in parts of continental Europe.

 

We have a proven track record of being able to manage our headcount and costs effectively throughout the economic cycle and it should be noted that the UK is now only 16% of the Group, but a more resilient market due to its size and maturity. Whilst some of our other markets are also more challenging, we expect them to remain positive. In light of these mixed trading conditions, we will continue to focus on activity levels, adjusting headcount during the second half to react to market conditions. As always, we remain focused on driving profitable growth, whilst remaining able to respond quickly and effectively to any changes in market conditions.

 

 

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

 

The Group operates multi-currency cash concentration and notional cash pools, and an interest enhancement facility. The Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in the cash concentration arrangement, the Group Treasury subsidiary retains the notional cash pool and the Asia Pacific subsidiaries operate the interest enhancement facility. The structures facilitate interest compensation of cash whilst supporting working capital requirements.


PageGroup maintains a Confidential Invoice Facility with HSBC whereby the Group has the option to discount receivables in order to advance cash. The Group also has a Revolving Credit Facility with BBVA, with a total drawable amount of £30m. Neither of these facilities were in use as at 30 June. These facilities are only used on an ad hoc basis to fund any major Group GBP cash outflows.

 

The main functional currencies of the Group are Sterling, Euro, Chinese Renminbi, US Dollar, Singapore Dollar, Hong Kong Dollar and Australian Dollar. The Group does not have material transactional currency exposures. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. The Group policy is not to hedge translation exposures.

 

In certain cases, where the Group gives or receives short-term loans to and from other Group companies, which differ from the Group's reporting currency, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. The Group had entered into hedges to cover its investment in foreign entities in the US and Canada.

 

 

GOING CONCERN

 

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least 12 months from the date of this announcement.

 

 

CAUTIONARY STATEMENT

 

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

 

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to PageGroup plc and its subsidiary undertakings when viewed as a whole.

 

 

 

 

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

 

By order of the Board,

 

 

 

 

Steve Ingham

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer



6 August 2019

6 August 2019

 

 



INDEPENDENT REVIEW REPORT TO PAGEGROUP PLC

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related notes 1 to 12. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

 

Ernst & Young LLP

London

6 August 2019

Condensed Consolidated Income Statement

For the six months ended 30 June 2019

 




Six months ended

Year ended




30 June


30 June


31 December




2019


2018


2018




Unaudited


Unaudited


Audited


Note


£'000


£'000


£'000









Revenue

3


820,515


751,580


1,549,941

Cost of sales



(386,978)


(355,561)


(735,039)

Gross profit

3


433,537


396,019


814,902

Administrative expenses



(357,927)


(328,795)


(672,439)

Operating profit

3


75,610


67,224


142,463

Financial income

4


208


182


631

Financial expenses

4


(1,234)


(176)


(819)

Profit before tax

3


74,584


67,230


142,275

Income tax expense

5


(20,511)


(17,818)


(38,572)

Profit for the period



54,073


49,412


103,703









Attributable to:








Owners of the parent



54,073


49,412


103,703









Earnings per share








Basic earnings per share (pence)

8


16.8


15.5


32.5

Diluted earnings per share (pence)

8


16.8


15.4


32.4

 

The above results all relate to continuing operations

 

 

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2019

 


Six months ended

Year ended


30 June


30 June


31 December


2019


2018


2018


Unaudited


Unaudited


Audited


£'000


£'000


£'000







Profit for the period

54,073


49,412


103,703







Other comprehensive income/(loss) for the period






Items that may subsequently be reclassified to profit and loss:












Currency translation differences

2,208


(525)


4,359

Gain/(Loss) on hedging instruments

283


(612)


(988)







Total comprehensive income for the period

56,564


48,275


107,074







Attributable to:






Owners of the parent

56,564


48,275


107,074



 

Condensed Consolidated Balance Sheet

As at 30 June 2019

 




30 June


30 June


31 December




2019


2018


2018




Unaudited


Unaudited


Audited


Note


£'000


£'000


£'000

Non-current assets








Property, plant and equipment

9


35,505


31,868


35,564

Right-of-use assets



129,541


-


-

Intangible assets - Goodwill and other intangible



2,047


1,681


2,019

                            - Computer software



34,474


31,697


31,377

Deferred tax assets



21,045


17,100


17,487

Other receivables

10


14,439


11,680


12,746




237,051


94,026


99,193

Current assets








Trade and other receivables

10


378,767


335,033


349,111

Current tax receivable



18,138


15,617


17,206

Cash and cash equivalents

12


81,704


87,048


97,673




478,609


437,698


463,990









Total assets

3


715,660


531,724


563,183









Current liabilities








Trade and other payables

11


(193,020)


(187,625)


(204,353)

Lease liabilities



(33,159)


-


-

Current tax payable



(18,549)


(21,695)


(20,145)




(244,728)


(209,320)


(224,498)









Net current assets



233,881


228,378


239,492









Non-current liabilities








Other payables

11


(10,604)


(16,702)


(19,474)

Deferred tax liabilities



(3,892)


(1,339)


(630)

Lease liabilities



(105,331)


-


-




(119,827)


(18,041)


(20,104)

















Total liabilities

3


(364,555)


(227,361)


(244,602)









Net assets



351,105


304,363


318,581









Capital and reserves








Called-up share capital



3,285


3,279


3,284

Share premium



99,206


96,676


98,502

Capital redemption reserve



932


932


932

Reserve for shares held in the employee benefit trust



(41,225)


(53,427)


(50,673)

Currency translation reserve



36,425


29,333


34,217

Retained earnings



252,482


227,570


232,319

Total equity



351,105


304,363


318,581


Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2019

 











Reserve

















for shares










Called-up




Capital



held in the


Currency








share


Share


redemption



employee


translation


Retained


Total




capital


premium


reserve



benefit trust


reserve


earnings


equity




£'000


£'000


£'000



£'000


£'000


£'000


£'000


















Balance at 1 January 2018



3,268


92,677


932



(58,931)


29,858


202,253


270,057

Currency translation differences



-


-


-



-


(525)


-


(525)

Net expense recognised directly in equity



-


-


-



-


(525)


-


(525)

Loss on hedging instruments



-


-


-



-


-


(612)


(612)

Profit for the six months ended 30 June 2018


-


-


-



-


-


49,412


49,412

Total comprehensive (loss)/income for the period


-


-


-



-


(525)


48,800


48,275

Purchase of shares held in employee benefit trust


-


-


-



(9,898)


-




(9,898)

Exercise of share plans



11


3,999


-



-


-


15,116


19,126

Reserve transfer when shares held in the employee benefit trust vest

-


-


-



15,402


-


(15,402)


-

Credit in respect of share schemes



-


-


-



-


-


3,684


3,684

Credit in respect of tax on share schemes



-


-


-



-


-


552


552

Dividends



-


-


-



-


-


(27,433)


(27,433)




11


3,999


-



5,504


-


(23,483)


(13,969)



































Balance at 30 June 2018



3,279


96,676


932



(53,427)


29,333


227,570


304,363


















Currency translation differences



-


-


-



-


4,884


-


4,884

Net income recognised directly in equity



-


-


-



-


4,884


-


4,884

Loss on hedging instruments



-


-


-



-


-


(376)


(376)

Profit for the six months ended 31 December 2018


-


-


-



-


-


54,291


54,291

Total comprehensive income for the period


-


-


-



-


4,884


53,915


58,799

Purchase of shares held in employee benefit trust


-


-


-



(1,669)


-


-


(1,669)

Exercise of share plans



5


1,826


-



-


-


5,956


7,787

Reserve transfer when shares held in the employee benefit trust vest

-


-


-



4,423


-


(4,423)


-

Credit in respect of share schemes



-


-


-



-


-


3,364


3,364

Debit in respect of tax on share schemes



-


-


-



-


-


(184)


(184)

Dividends



-


-


-



-


-


(53,879)


(53,879)




5


1,826


-



2,754


-


(49,166)


(44,581)

 

 

 

 

 

 

 

Balance at 31 December 2018



3,284


98,502


932



(50,673)


34,217


232,319


318,581

Loss on adoption of IFRS 16 - (note 2)



-


-


-



-


-


(2,140)


(2,140)

Balance at 1 January 2019 (restated)



3,284


98,502


932



(50,673)


34,217


230,179


316,441

Currency translation differences



-


-


-



-


2,208


-


2,208

Net income recognised directly in equity



-


-


-



-


2,208


-


2,208

Profit on hedging instruments



-


-


-



-


-


283


283

Profit for the six months ended 30 June 2019


-


-


-



-


-


54,073


54,073

Total comprehensive income for the period


-


-


-



-


2,208


54,356


56,564

Exercise of share plans



1


704


-



-


-


2,833


3,538

Reserve transfer when shares held in the employee benefit trust vest

-


-


-



9,448


-


(9,448)


-

Credit in respect of share schemes



-


-


-



-


-


3,477


3,477

Credit in respect of tax on share schemes



-


-


-



-


-


63


63

Dividends



-


-


-



-


-


(28,978)


(28,978)




1


704


-



9,448


-


(32,053)


(21,900)


















Balance at 30 June 2019



3,285


99,206


932



(41,225)


36,425


252,482


351,105

 


Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2019

 






30 June


30 June


31 December






2019


2018


2018






Unaudited


Unaudited


Audited




Note


£'000


£'000


£'000











Profit before tax



74,584


67,230


142,275

Depreciation and amortisation charges



29,890


9,486


19,661

Loss on sale of property, plant and equipment, and computer software



100


39


281

Share scheme charges



3,477


3,684


7,043

Net finance costs/(income)



1,026


(6)


181

Operating cash flow before changes in working capital



109,077


80,433


169,441

Increase in receivables



(32,968)


(38,688)


(49,278)

(Decrease)/increase in payables



(12,864)


(1,255)


11,534

Cash generated from operations



63,245


40,490


131,697

Income tax paid



(20,763)


(19,747)


(41,001)

Net cash from operating activities



42,482


20,743


90,696











Cash flows from investing activities








Purchases of property, plant and equipment



(5,326)


(6,841)


(15,668)

Purchases of intangible assets



(8,431)


(4,022)


(9,944)

Proceeds from the sale of property, plant and equipment, and computer software


317


83


1,204

Interest received



208


182


631

Net cash used in investing activities



(13,232)


(10,598)


(23,777)











Cash flows from financing activities








Dividends paid



(28,978)


(27,433)


(81,312)

Interest paid



(172)


(174)


(818)

Lease liability principal repayment



(20,662)


-


-

Issue of own shares for the exercise of options



3,538


19,126


26,913

Purchase of shares into the employee benefit trust



-


(9,898)


(11,567)

Net cash used in financing activities



(46,274)


(18,379)


(66,784)











Net (decrease)/increase in cash and cash equivalents



(17,024)


(8,234)


135

Cash and cash equivalents at the beginning of the period



97,673


95,605


95,605

Exchange gain/(loss) on cash and cash equivalents



1,055


(323)


(1,933)

Cash and cash equivalents at the end of the period

12


81,704


87,048


97,673

 



 

Notes to the condensed set of interim results

For the six months ended 30 June 2019

 

1.         General information

 

The information for the year ended 31 December 2018 does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

 

The unaudited interim condensed consolidated financial statements of PageGroup plc and its subsidiaries (collectively, the Group) for the six months ended 30 June 2019 were authorised for issue in accordance with a resolution of the directors on 6 August 2019.

 

2.         Accounting policies

 

Basis of preparation

 

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2019 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

 

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements. The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2018, were approved by the directors on 5 March 2019. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2018, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

 

During the period the Group adopted 'IFRS 16 - Leases' with an explanation of the impact on these financial statements provided below. The Group also adopted IFRIC Interpretation 23 - Uncertainty over Income Tax Treatment. All other accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2018.

 

Going concern

 

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.

 

The directors believe the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

 

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

 

New accounting standards, interpretations and amendments adopted by the Group

 

As at 1 January 2019 the Group adopted the new accounting standard IFRS 16 - Leases. The impact this has had on these financial statements is detailed below.

 

The Group also adopted IFRIC Interpretation 23 - Uncertainty over Income Tax Treatment. The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of IAS 12 Income Taxes. The adoption of IFRIC 23 did not have a material impact on the Group's results.

 

The Group applies judgement in identifying uncertainties over income tax treatments. Since the Group operates in a complex multinational environment, it assessed whether the Interpretation had an impact on its consolidated financial statements. The Company's and the subsidiaries' tax filings in different jurisdictions include deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

 

a) Adoption of IFRS 16 Leases

IFRS 16 was issued in January 2016 and it replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under IAS 17. A lessee can choose to apply the standard using either a full retrospective approach or a modified retrospective approach.

 

The Group adopted IFRS 16 using the modified retrospective method of adoption, with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively, with the cumulative effect of initially applying the standard recognised at the date of initial application. The Group elected to use the practical expedient on transition allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. The Group also elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option ('short-term leases'), and lease contracts for which the underlying asset is of low value ('low-value assets').

 

The adoption under the Modified Retrospective approach is a combination of both the Modified (a) and Modified (b) method, depending on the specific lease. The application of the two methods is set out below:

 

·      Modified (a) method - an adjustment to reserves is made on transition. The lease liability is calculated on a retrospective basis and a discount rate at the date of initial application has to be used. A full restatement of comparatives is not necessary.

·      Modified (b) method - an adjustment to reserves is made on transition. The present value of the future lease payments is equal to the lease liability. A full restatement of comparatives is not necessary.

 

Impact on the Condensed Consolidated Statement of Financial Position (increase/(decrease)) as at 1 January 2019

 


£'000



Right-of-use assets

131,462

Prepayments

(2,204)

Total Assets

129,258



Liabilities


Lease liabilities

(140,519)

Deferred income

9,121

Total Liabilities

(131,398)



Equity

(2,140)

 

b) Nature of the effect of adoption of IFRS 16

The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The £131.5m right of use asset recognised on transition related to Property leases for offices rented (£115.0m), Motor Vehicles of (£15.9m) and Other Assets of (£0.6m). The right-of-use assets for most leases were recognised based on the carrying amount as if the standard had always been applied, apart from the use of the incremental borrowing rate at the date of initial application. The right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognised. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

 

c) Amounts recognised in the Condensed Consolidated Statement of Financial Position and Condensed Consolidated Income Statement

Set out below, are the carrying amounts of the Group's right-of-use assets and lease liabilities and the movements during the period:

 

Condensed Consolidated Income Statement

 

£'000



Depreciation expense (included in Administrative expenses)

(19,561)

Rental expenses (included in Administrative expenses)

20,386

Operating profit

825



Finance costs

(1,062)



Profit before tax

(237)

 

Condensed Consolidated Statement of Financial Position


Right-of-use Assets


Lease Liabilities

 


Property

Motor Vehicles

Other Assets

Total


Total



£'000

£'000

£'000

£'000


£'000

 








 

As at 1 January 2019

115,031

15,870

561

131,462


(140,519)

 

Additions

13,844

3,166

717

17,727


(17,658)

 

Disposals

-

(67)

(20)

(87)


87

 

Depreciation expense

(14,289)

(4,985)

(287)

(19,561)


-

 

Interest expense

-

-

-

-


(1,062)

 

Payments

-

-

-

-


20,662

 

As at 30 June 2019

114,586

13,984

971

129,541


(138,490)

 

 

d) Summary of new accounting policies

Set out below are the new accounting policies of the Group upon adoption of IFRS 16, which have been applied from the date of initial application:

 

·      Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

 

·      Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

 

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

 

·      Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of property, motor vehicles and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below $5,000 or c. £4,000). Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term.

 

·      Significant judgement in determining the lease term of contracts with renewal options

The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

 

The Group has the option, under some of its leases, to lease the assets for additional terms of one to ten years. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy).

 



 

3.         Segment reporting

 

All revenues disclosed are derived from external customers.

 

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment including allocation of central administration costs. This is the measure reported to the Group's Board, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance.

 

(a)        Revenue, gross profit and operating profit by reportable segment

 




Revenue


Gross Profit

 




Six months ended


Year ended


Six months ended

Year ended

 




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000















EMEA


427,657


389,685


797,427


213,145


194,976


394,337















United Kingdom

157,413


155,027


313,525


69,415


69,657


138,392















Asia Pacific

Australia and New Zealand

54,930


55,273


112,930


20,128


19,407


40,592



Asia

80,059


70,336


153,794



54,676


120,566



Total

134,989


125,609


266,724


81,797


74,083


161,158















Americas


100,456


81,259


172,265


69,180


57,303


121,015


















820,515


751,580


1,549,941


433,537


396,019


814,902




















































Operating Profit

 


































Six months ended

Year ended

 










30 June


30 June


31 December










2019


2018


2018










£'000


£'000


£'000















EMEA








45,594


40,945


85,586















United Kingdom







12,497


10,453


13,392















Asia Pacific

Australia and New Zealand







1,499


1,467


4,291



Asia







7,340


7,515


22,474



Total







8,839


8,982


26,765















Americas








8,680


6,844


16,720















Operating profit







75,610


67,224


142,463

Financial (expense)/income







(1,026)


6


(188)

Profit before tax







74,584


67,230


142,275

 

The above analysis by destination is not materially different to analysis by origin.

 

The analysis below is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude current income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, right-of-use assets, goodwill and other intangibles.

 



 

(b)        Segment assets, liabilities and non-current assets by reportable segment

 




Total Assets


Total Liabilities

 




Six months ended


Year ended


Six months ended

Year ended

 




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000















EMEA


317,334


244,044


246,687


196,619


124,352


131,948















United Kingdom

146,316


112,813


121,058


51,210


35,335


40,398















Asia Pacific

Australia and New Zealand

34,928


24,646


29,719


14,990


10,432


11,059



Asia

98,065


72,152


85,501


29,972


14,072


18,744



Total

132,993


96,798


115,220


44,962


24,504


29,803















Americas


100,879


62,452


63,012


53,215


21,475


22,308

Segment assets/liabilities

697,522


516,107


545,977


346,006


205,666


224,457















Income tax


18,138


15,617


17,206


18,549


21,695


20,145


















715,660


531,724


563,183


364,555


227,361


244,602














































Property, Plant & Equipment


Intangible Assets

 




Six months ended


Year ended


Six months ended

Year ended

 




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000















EMEA


14,147


12,489


13,654


2,920


3,316


3,171















United Kingdom

6,136


6,466


6,254


32,957


29,786


29,554















Asia Pacific

Australia and New Zealand

1,675


1,323


1,557


243


1


274



Asia

5,088


5,250


5,604


257


26


207



Total

6,763


6,573


7,161


500


27


481















Americas


8,459


6,340


8,495


144


249


190




35,505


31,868


35,564


36,521


33,378


33,396

 

The below tables are the right-of-use assets and corresponding lease liabilities recognised following the adoption of IFRS 16 - Leases accounting standard:-

 




Right-of-use Assets


Lease Liabilities










30 June


30 June




2019


2019




£'000


£'000







EMEA


73,940


77,019







United Kingdom

22,130


24,221







Asia Pacific

Australia and New Zealand

3,742


4,093



Asia

11,087


11,664



Total

14,829


15,757







Americas


18,642


21,493




129,541


138,490

 

The below analyses in notes (c) revenue and gross profit by discipline (being the professions of candidates placed), (d) revenue and gross profit generated from permanent and temporary placements and (e) revenue and gross profit by strategic market have been included as additional disclosure over and above the requirements of IFRS 8 "Operating Segments".

 



 

(c)        Revenue and gross profit by discipline

 




Revenue


Gross Profit




Six months ended


Year ended


Six months ended

Year ended




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000





























Accounting and Financial Services

327,707


294,679


609,131


150,428


136,711


282,653















Legal, Technology, HR, Secretarial and Other

217,130


193,604


402,321


107,373


94,448


196,773















Engineering, Property & Construction, Procurement & Supply Chain

182,102


166,932


345,654


105,355


94,746


194,562















Marketing, Sales and Retail

93,576


96,365


192,835


70,381


70,114


140,914


















820,515


751,580


1,549,941


433,537


396,019


814,902

 

 

(d)        Revenue and gross profit generated from permanent and temporary placements

 




Revenue


Gross Profit




Six months ended


Year ended


Six months ended

Year ended




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000















Permanent

333,978


308,948


629,136


330,650


304,202


621,746















Temporary

486,537


442,632


920,805


102,887


91,817


193,156


















820,515


751,580


1,549,941


433,537


396,019


814,902

 

 

(e)        Revenue and gross profit by strategic market

 




Revenue


Gross Profit




Six months ended


Year ended


Six months ended

Year ended




30 June


30 June


31 December


30 June


30 June


31 December




2019


2018


2018


2019


2018


2018




£'000


£'000


£'000


£'000


£'000


£'000















Large, Proven markets

481,814


459,324


935,800


218,724


208,869


419,102















Large, High Potential markets

233,552


194,396


414,245


148,062


126,266


270,311















Small and Medium, High Margin markets

105,149


97,860


199,896


66,751


60,884


125,489


















820,515


751,580


1,549,941


433,537


396,019


814,902

 

 

 



 

4.         Financial income / (expenses)

 


Six months ended

Year ended


30 June


30 June


31 December


2019


2018


2018


£'000


£'000


£'000

Financial income






Bank interest receivable

208


182


631







Financial expenses






Bank interest payable

(172)


(176)


(598)

Interest on discounting of French construction participation tax

-


-


(221)

Interest on lease liabilities

(1,062)


-


-


(1,234)


(176)


(819)

 

 

5.         Taxation

 

Taxation for the six month period is charged at 27.5% (six months ended 30 June 2018: 26.5%; year ended 31 December 2018: 27.1%). It is based on the full year forecast tax rate, allowing for prior year items arising from tax returns in the half year to 30 June.

 

6.         Dividends

 


Six months ended

Year ended


30 June


30 June


31 December


2019


2018


2018


£'000


£'000


£'000

Amounts recognised as distributions to equity holders in the year:






Final dividend for the year ended 31 December 2018 of 9.00p per ordinary share (2017: 8.60p)

28,978


27,433


27,433

Interim dividend for the year ended 30 June 2018 of 4.10p per ordinary share (2017: 3.90p)

-


-


13,117

Special dividend for the year ended 31 December 2018 of 12.73p per ordinary share (2017: 12.73p)

-


-


40,762


28,978


27,433


81,312







Amounts proposed as distributions to equity holders in the year:












Proposed interim dividend for the period ended 30 June 2019 of 4.30p per ordinary share (2018: 4.10p)

13,853


13,078


-







Proposed special dividend for the year ended 31 December 2019 of 12.73p per ordinary share (2018: 12.73p)

41,011


40,606


-







Proposed final dividend for the year ended 31 December 2018 of 9.00p per ordinary share

-


-


29,171

 

The proposed interim and special dividends have not been approved by the Board at 30 June 2019 and therefore have not been included as a liability. The comparative interim and special dividends at 30 June 2018 were also not recognised as a liability in the prior period.

 

The proposed interim dividend of 4.30p (2018: 4.10p) per ordinary share and special dividend of 12.73p (2018: 12.73p) per ordinary share will be paid on 9 October 2019 to shareholders on the register at the close of business on 6 September 2019.

 

 

7.         Share-based payments

 

In accordance with IFRS 2 "Share-based Payments", a charge of £4.1m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2018: £4.8m, 31 December 2018: £8.4m).

 



 

8.         Earnings per ordinary share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 


Six months ended

Year ended


30 June


30 June


31 December

Earnings

2019


2018


2018







Earnings for basic and diluted earnings per share (£'000)

54,073


49,412


103,703







Number of shares






Weighted average number of shares used for basic earnings per share ('000)

321,031


317,795


318,877

Dilution effect of share plans ('000)

638


2,227


1,627

Diluted weighted average number of shares used for diluted earnings per share ('000)

321,669


320,022


320,504







Basic earnings per share (pence)

16.8


15.5


32.5

Diluted earnings per share (pence)

16.8


15.4


32.4

 

The above results all relate to continuing operations.

 

 

9.         Property, plant and equipment

 

Acquisitions and Disposals

During the period ended 30 June 2019 the Group acquired property, plant and equipment with a cost of £5.3m (30 June 2018: £6.8m, 31 December 2018: £15.7m).

 

Right-of-use assets of £131.5m were recognised as at 1 January 2019 following the adoption of the new IFRS 16 - Lease accounting standard. As at 30 June 2019 this had marginally decreased to £129.5m due to depreciation of these assets, partially offset by new leases taken out in the period.

 

 

10.        Trade and other receivables

 


Six months ended

Year ended


30 June


30 June


31 December


2019


2018


2018


£'000


£'000


£'000

Current






Trade receivables

301,114


277,016


297,380

Less allowance for expected credit losses and revenue reversals

(10,596)


(7,923)


(9,174)

Net trade receivables

290,518


269,093


288,206

Other receivables

7,978


8,579


3,814

Accrued income

62,108


40,612


44,430

Prepayments

18,163


16,749


12,661


378,767


335,033


349,111

Non-current






Other Receivables

14,439


11,680


12,746

 

 



 

11.        Trade and other payables

 


Six months ended

Year ended


30 June


30 June


31 December


2019


2018


2018


£'000


£'000


£'000

Current






Trade payables

3,135


2,571


6,594

Other tax and social security

63,101


50,142


58,186

Lease liabilities

33,159


-


-

Other payables

31,443


28,125


26,870

Accruals

94,919


104,966


111,040

Deferred income

422


1,821


1,663


226,179


187,625


204,353

Non-current






Deferred income

9,149


15,173


18,453

Other tax and social security

1,455


1,529


1,021

Lease liabilities

105,331


-


-


115,935


16,702


19,474

 

 

12.        Cash and cash equivalents

 


Six months ended


Year ended


30 June


30 June


31 December


2019


2018


2018


£'000


£'000


£'000







 Cash at bank and in hand

81,704


86,543


97,626

 Short-term deposits

-


505


47

 Cash and cash equivalents

81,704


87,048


97,673

 Cash and cash equivalents in the statement of cash flows

81,704


87,048


97,673

 

The Group operates multi-currency cash concentration and notional cash pools, and an interest enhancement facility. The Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in the cash concentration arrangement, the Group Treasury subsidiary retains the notional cash pool and the Asia Pacific subsidiaries operate the interest enhancement facility. The structures facilitate interest compensation of cash whilst supporting working capital requirements.

 

PageGroup maintains a Confidential Invoice Facility with HSBC whereby the Group has the option to discount receivables in order to advance cash. The Group also has a Revolving Credit Facility with BBVA, with a total drawable amount of £30m. Neither of these facilities were in use as at 30 June. These facilities are only used on an ad hoc basis to fund any major Group GBP cash outflows.

 



 

RESPONSIBILITY STATEMENT

 

 

The Directors confirm that to the best of their knowledge:-

 

a)   the condensed set of interim financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting"

 

b)   the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

c)   the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

 

 

 

On behalf of the Board

 

 

S Ingham

K Stagg

Chief Executive Officer

Chief Financial Officer

 

6 August 2019

 

 

Copies of the condensed interim financial statements are now available and can be downloaded from the Company's website

 

http://www.page.com/investors/investor-library.aspx

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR EAXPKEAXNEFF
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Half-year Report - RNS