TIDMPAGE
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 2019 2018 Change Change
(6 months to 30 June 2019) CC*
Revenue GBP820.5m GBP751.6m +9.2% +9.5%
---------- ---------- ------- -------
Gross profit GBP433.5m GBP396.0m +9.5% +9.5%
---------- ---------- ------- -------
Operating profit GBP75.6m GBP67.2m +12.5% +11.4%
---------- ---------- ------- -------
Profit before tax GBP74.6m GBP67.2m +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 GBP75.6m, +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 GBP81.7m (H1 2018: GBP87.0m)
-- Interim dividend up 4.9% to 4.30 pence per share, totalling GBP13.9m
-- Special dividend of 12.73 pence per share, totalling GBP41.0m
* 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 GBP41.0m, a fifth
consecutive year of special dividends. Taking both dividend
payments together, this amounts to a cash return to shareholders of
GBP54.9m, payable on 9 October. Together with the 2018 final
dividend paid in June of GBP29.0m, this represents a total of
GBP83.9m 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, GBP1bn of gross profit and
GBP200m - GBP250m 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 GBPm 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 GBP820.5m (2018: GBP751.6m) and gross profit
increased 9.5% to GBP433.5m (2018: GBP396.0m). 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 GBP357.9m (2018: GBP328.8m), 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
GBP75.6m (2018: GBP67.2m), 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 GBP1m.
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 GBP20.4m has been replaced
with a depreciation charge in respect of the right of use assets of
GBP19.6m. This has resulted in an increase to EBITDA of GBP20.4m
and an increase to EBIT of GBP0.8m. An interest charge in respect
of the lease liabilities of GBP1.1m has also been recognised
resulting in a decrease in profit before tax of GBP0.3m.
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 GBP97.7m. In the
first half, GBP63.2m was generated from operations after funding an
increase in working capital of GBP45.8m, mainly due to growth in
our temporary and contracting business, which has a higher working
capital requirement. Tax paid was GBP20.8m and net capital
expenditure was GBP13.4m. During the first half, GBP3.5m was
received from exercises of share options (2018: GBP19.1m). No
shares were purchased in the Employee Benefit Trust to hedge
exposures under share-based awards (2018: GBP9.9m) and dividends of
GBP29.0m were paid to shareholders. As a result, the Group had net
cash of GBP81.7m at 30 June 2019 (30 June 2018: GBP87.0m).
DIVIDS 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 GBP41.0m (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 GBP54.9m. Together with the 2018 final dividend
paid in June of GBP29.0m, this represents a total of GBP83.9m
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: GBP9.9m).
All growth rates given below are in constant currency unless
otherwise stated.
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA GBPm Growth rates
(49% of Group in H1 H1 2019 H1 2018 Reported CC
2019)
-------- -------- --------- -------
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 GBP427.7m (2018: GBP389.7m) and gross profit
increased 9.3% to GBP213.1m (2018: GBP194.9m). 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 GBP45.6m (2018: GBP40.9m) 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 GBPm 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 GBP135.0m
(2018: GBP125.6m), and gross profit increased 10.4% to GBP81.8m
(2018: GBP74.1m). 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 GBPm 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 GBP157.4m (2018: GBP155.0m), but gross
profit declined 0.3% to GBP69.4m (2018: GBP69.7m), 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 GBP12.5m (2018:
GBP10.5m), 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 GBPm 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 GBP100.5m
(2018: GBP81.3m), while gross profit increased 20.7% to GBP69.2m
(2018: GBP57.3m). 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 GBP8.7m (2018: GBP6.8m),
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 How measured: Gross profit represents revenue less
growth 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 How measured: Total gross profit from a) geographic
diversification 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 How measured: Gross profit from each type of placement
profits generated expressed as a percentage of total gross profit.
from permanent
and temporary Why it's important: This ratio helps us to understand
placements 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 How measured: Gross profit for the year divided by
per fee earner 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 GBP70.7k in H1 2019 compared to GBP69.2k
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 How measured: Profit for the year attributable to
per share 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 How measured: The percentage of fee-earners compared
support staff to operational support staff at the period-end, expressed
headcount ratio 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 How measured: Number of fee-earners and directors
growth 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 GBP81.7m (H1 2018: GBP87.0m). This was as a result
of GBP3.5m received in H1 2019 as a result of the
exercise of share options, compared to GBP19.1m in
H1 2018. No share purchases were made into the Employee
Benefit Trust in H1 2019 (H1 2018 GBP9.9m). 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 GBP30m. 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
INDEPENT 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 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 GBP'000 GBP'000 GBP'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
held in
Called-up Capital the Currency
share Share redemption employee translation Retained Total
benefit
capital premium reserve trust reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 GBP'000 GBP'000 GBP'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
GBP'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 GBP131.5m
right of use asset recognised on transition related to Property
leases for offices rented (GBP115.0m), Motor Vehicles of (GBP15.9m)
and Other Assets of (GBP0.6m). 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 GBP'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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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. GBP4,000). 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
--------------------------------- ---------------------------------
Year
Six months ended Year ended Six months ended ended
30 June 30 June 31 December 30 June 30 June 31 December
2019 2018 2018 2019 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
Australia and
Asia Pacific New Zealand 54,930 55,273 112,930 20,128 19,407 40,592
Asia 80,059 70,336 153,794 61,669 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
---------------------------------
Year
Six months ended ended
30 June 30 June 31 December
2019 2018 2018
GBP'000 GBP'000 GBP'000
EMEA 45,594 40,945 85,586
United Kingdom 12,497 10,453 13,392
Australia and
Asia Pacific 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
--------------------------------- ---------------------------------
Year Year
Six months ended ended Six months ended ended
30 30
30 June June 31 December 30 June June 31 December
2019 2018 2018 2019 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 Australia and New
Pacific 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
--------------------------------- ---------------------------------
Year Year
Six months ended ended Six months ended ended
30 30
30 June June 31 December 30 June June 31 December
2019 2018 2018 2019 2018 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 Australia and New
Pacific 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
GBP'000 GBP'000
EMEA 73,940 77,019
United Kingdom 22,130 24,221
Australia and
Asia Pacific 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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP4.1m has been recognised for share options and other share-based
payment arrangements (including social charges) (30 June 2018:
GBP4.8m, 31 December 2018: GBP8.4m).
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 (GBP'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 GBP5.3m (30 June 2018:
GBP6.8m, 31 December 2018: GBP15.7m).
Right-of-use assets of GBP131.5m 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
GBP129.5m 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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 GBP30m. 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
(END) Dow Jones Newswires
August 07, 2019 02:00 ET (06:00 GMT)
Pagegroup (LSE:PAGE)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Pagegroup (LSE:PAGE)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
