TIDMPAGE
RNS Number : 9265H
PageGroup plc
09 August 2021
9 August 2021
PageGroup plc
Half Year Results for the Period Ended 30 June 2021
Strong Financial and Operational Performance
PageGroup plc ("PageGroup"), the specialist professional
recruitment company, announces its unaudited half year results for
the period ended 30 June 2021.
Note: Given the magnitude of the impact of COVID-19 in 2020, we
are providing comparisons in constant currencies against 2019, to
ensure the most appropriate representation of current trading.
Comparisons to 2020 are also given in the tables.
Financial summary
(6 months to 30 June Reported CC vs CC vs
2021) 2021 2020 2019 vs. 2020 2020* 2019*
Revenue GBP766.4m GBP655.0m GBP820.5m +17.0% +19.7% -4.2%
---------- ---------- ---------- ---------- ------- --------
Gross profit GBP404.2m GBP300.7m GBP433.5m +34.4% +38.3% -3.7%
---------- ---------- ---------- ---------- ------- --------
Operating profit GBP64.3m GBP0.4m GBP75.6m >100% >100% -12.5%
---------- ---------- ---------- ---------- ------- --------
Profit/(Loss) before
tax GBP63.7m -GBP0.8m GBP74.6m >100%
---------- ---------- ---------- ----------
Basic earnings/(loss)
per share 12.2p -0.5p 16.8p >100%
---------- ---------- ---------- ----------
Diluted earnings/(loss)
per share 12.1p -0.5p 16.8p >100%
---------- ---------- ---------- ----------
Interim dividend per
share 4.70p - 4.30p
---------- ---------- ----------
Special dividend per
share 26.71p - 12.73p
---------- ---------- ----------
H1 Summary
-- Group operating profit of GBP64.3m (H1 2020: GBP0.4m; H1 2019: GBP75.6m)
-- Conversion rate** increased to 15.9% (H1 2020: 0.1%; H1 2019: 17.4%)
-- Gross profit per fee earner up 10.7% on H1 2019 to GBP75.8k
(H1 2020: GBP53.2k, H1 2019: GBP70.7k)
-- Total headcount increased by 381 (5.7%) to 7,075 at the end
of June, but remains down c. 8% on pre COVID-19 levels at the end
of 2019
-- Strong Balance Sheet, with net cash of GBP163.8m (H1 2020: GBP161.7m, H1 2019: GBP81.7m)
-- Returning to dividend policy, interim dividend of 4.70 pence
per share and special dividend of 26.71 pence per share, together
totalling GBP100m
-- Outlook upgraded on 7 July 2021, full year operating profit
expected to be within the range of GBP125m - GBP135m
* in constant currencies
** operating profit as a percentage of gross profit
Commenting, Steve Ingham, Chief Executive Officer, said:
"Throughout the pandemic we have continued to focus on the
protection and wellbeing of our employees, candidates and clients,
whilst progressing strategic investments in our platform to take
advantage of the recovery. The tough and challenging year in 2020
has strengthened our culture, diversity and the values in the
business which are now re-affirmed at the forefront of our
operations. I am immensely proud of the spirit, resilience, and
commitment of all our people. This, I believe, is reflected in our
results.
"Gross profit for the first half was down just 3.7% on H1 2019,
our record year, and we have delivered operating profit of GBP64.3m
in H1 2021, at a conversion rate of 15.9%.
"We remain confident in our strategy of maintaining and
investing in our platform. We continued to invest carefully in
headcount, demonstrated by the c. 400 experienced hires we added in
2020, and around a further 400 in H1 2021, as well as rolling-out
new technology and innovation. Our headcount is currently down c.
8% on the pre-pandemic level at the end of 2019. As a result of the
more favourable trading conditions in H1, as well as this reduction
in our fee earner headcount, our gross profit per fee earner is up
10.7% on H1 2019.
"Due to the uncertain trading conditions caused by COVID-19 last
year, we chose to temporarily suspend our dividend policy and
cancel our 2019 final dividend. Given the improvement in trading
conditions in H1, as well as our strong liquidity position, the
Board has decided to reinstate our dividend policy. As such, we are
announcing today an interim dividend of 4.70 pence per share, an
increase of 9.3% on the 2019 interim dividend. In addition, in line
with our policy of returning surplus capital to shareholders, we
are also pleased to announce a special dividend of 26.71 pence per
share, totalling GBP85m. Taking both dividends together, this
amounts to a cash return to shareholders of GBP100m, payable on 13
October.
"Looking ahead, there continues to be a high degree of global
macro-economic uncertainty as COVID-19 remains a significant issue
and restrictions continue in a number of the Group's markets.
Additionally, at this stage of the recovery, it is not clear
whether the improved performance is still the result of pent-up
supply and demand, or a sustainable trend. However, as stated on 7
July 2021, the strength of our performance in H1, notably in June,
and absent any unexpected events, we expect full year operating
profit to be within the range of GBP125m - GBP135m.
"We are the clear leader in many of our markets, with a highly
experienced senior management team, which, we believe, positions us
well to take advantage of opportunities to grow and improve our
business. We have maintained our focus on driving progress towards
our long-term strategic goals."
INTERIM MANAGEMENT REPORT
GROUP RESULTS
GROSS PROFIT GBPm Growth Rates
% of Group H1 2021 H1 2020 H1 2019 Reported vs. 2020 CC vs 2020 CC vs 2019
----------- -------- -------- -------- ------------------ ----------- -----------
EMEA 51% 203.5 154.5 213.1 +31.7% +33.5% -3.7%
----------- -------- -------- -------- ------------------ ----------- -----------
Asia Pacific 20% 81.8 56.9 81.8 +43.8% +48.6% +3.5%
----------- -------- -------- -------- ------------------ ----------- -----------
Americas 15% 61.3 46.9 69.2 +30.6% +44.2% +1.6%
----------- -------- -------- -------- ------------------ ----------- -----------
UK 14% 57.6 42.4 69.4 +35.9% +35.9% -17.0%
----------- -------- -------- -------- ------------------ ----------- -----------
Total 100% 404.2 300.7 433.5 +34.4% +38.3% -3.7%
----------- -------- -------- -------- ------------------ ----------- -----------
Permanent 77% 311.3 211.8 330.6 +47.0% +51.9% -2.2%
----------- -------- -------- -------- ------------------ ----------- -----------
Temporary 23% 92.9 88.9 102.9 +4.5% +6.0% -8.4%
----------- -------- -------- -------- ------------------ ----------- -----------
The Group's revenue for the six months ended 30 June 2021
increased 17.0% to GBP766.4m (2020: GBP655.0m; 2019: GBP820.5m) and
gross profit increased 34.4% to GBP404.2m (2020: GBP300.7m; 2019:
GBP433.5m). In constant currencies, the Group's revenue increased
19.7% and gross profit increased 38.3%. In constant currencies vs.
2019, the Group's revenue decreased 4.2%, with gross profit down
3.7%. The Group's revenue mix between permanent and temporary
placements was 41:59 (2020: 33:67; 2019: 41:59) and for gross
profit was 77:23 (2020: 70:30; 2019: 76:24), as the recovery in
2021 has been driven by permanent recruitment.
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 10.7% vs H1 2019 and 46.6% vs H1 2020.
This was due to gross profit being down only 3.7%, but with fee
earner headcount having decreased from 6,035 in H1 2019 to 5,443 in
H1 2021.
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 decreased
5.0% in reported rates compared to 2019 to GBP339.9m (2020:
GBP300.3m; 2019: GBP357.9m), driven by the decrease in headcount.
In constant currency compared to 2019, administrative expenses were
down 1.8% and operating profit decreased 12.5% to GBP64.3m (2020:
GBP0.4m; 2019: GBP75.6m). This was an increase of over 100%
compared to 2020 in both reported rates and constant currency.
The Group's conversion rate, which represents the ratio of
operating profit to gross profit, was 15.9% (2020: 0.1%; 2019:
17.4%) due to the combination of an increase in gross profit and
the reduction in our headcount of c. 8% on pre COVID-19 levels,
offset by tougher trading conditions at the start of the year.
FOREIGN EXCHANGE
Movements in foreign exchange reduced the Group's gross profit
and operating profit by c. GBP12m and c. GBP2m respectively.
OTHER ITEMS
Interest received and interest paid was broadly consistent with
H1 2020. The charge for taxation for the half year was an effective
tax rate of 39.4% (H1 2020: -107.6%, H1 2019: 27.5%).
The effective tax rate for the first half is significantly lower
than the prior year, as the global pandemic materially impacted
trading in H1 2020. Last year, this resulted in changes in deferred
tax asset recognition on losses and other timing differences due to
uncertainty over the availability of future taxable income in
certain territories. The CVAE tax in France, which is linked to
revenue rather than profit, has also had a disproportionate impact
on the rate in 2020.
Basic earnings per share and diluted earnings per share for the
six months ended 30 June 2021 were 12.2p and 12.1p respectively
(2020: basic and diluted loss per share -0.5p; 2019: basic and
diluted earnings per share 16.8p).
CASH FLOW
The Group started the year with net cash of GBP166.0m. In H1,
GBP56.7m was generated from operations due to improved trading
conditions, offset by an increase in the permanent placements'
debtor receivable. Tax paid was GBP2 1.8 m and net capital
expenditure was GBP 10.7 m. During the first half, GBP6.9m was
received from exercises of share options (2020: GBP0.1m) and
GBP10.4m was spent on the purchase of shares into the Employee
Benefit Trust (2020: GBP1.6m, 2019: nil). As a result, the Group
had net cash of GBP163.8m at 30 June 2021, broadly in line with the
prior year of GBP161.7m.
CAPITAL ALLOCATION POLICY
It is the Directors' intention to continue to finance the
activities and development of the Group from retained earnings and
to maintain a strong balance sheet position.
The Group's first use of cash is to satisfy operational and
investment requirements, as well as 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.
Due to the uncertain trading conditions caused by COVID-19 last
year, we chose to temporarily suspend our dividend policy and
cancel our 2019 final dividend. Given the improvement in trading
conditions in H1, as well as our strong liquidity position, the
Board have decided to reinstate our dividend policy. As such, we
are announcing today an interim dividend of 4.70 pence per share,
an increase of 9.3% over the 2019 interim dividend. In addition, in
line with our policy of returning surplus capital to shareholders,
we are also pleased to announce a special dividend of 26.71 pence
per share, totalling GBP85m. Taking both dividends together, this
amounts to a cash return to shareholders of GBP100m, payable on 13
October to shareholders on the register as at 3 September.
GEOGRAPHICAL ANALYSIS ( All growth rates given below are in
constant currency vs. 2019 unless otherwise stated )
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA GBPm Growth rates
(51% of Group in
H1 2021) H1 2021 H1 2020 H1 2019 Reported CC vs. 2020 CC vs. 2019
-------- -------- -------- --------- ------------ ------------
Gross Profit 203.5 154.5 213.1 +31.7% +33.5% -3.7%
-------- -------- -------- --------- ------------ ------------
Operating Profit 35.9 10.6 45.6 >100% >100% -20.0%
-------- -------- -------- --------- ------------ ------------
Conversion Rate
(%) 17.6% 6.8% 21.4%
-------- -------- -------- --------- ------------ ------------
EMEA is the Group's largest region, contributing 51% of Group
first half gross profit. In constant currencies vs. 2019, revenue
was down 3.9% and gross profit was down 3.7%. Against 2020, in
reported rates, revenue in the region increased 15.9% to GBP408.9m
(2020: GBP352.9m) and gross profit increased 31.7% to GBP203.5m
(2020: GBP154.5m). In constant currencies, revenue increased 17.0%
on the first half of 2020 and gross profit increased by 33.5%.
Trading conditions in EMEA started improving towards the end of
March and this improvement continued into the second quarter.
Michael Page grew 9% vs. 2019. However, our more temporary focused
Page Personnel business, was down 19%. France, 14% of the Group and
around a third of the region, was down 15%. Germany, the Group's
third largest market, delivered a record first half and was up 19%.
This was driven by a standout performance from our Technology
focused Interim business, up 47%. Southern Europe grew 3%, with
Italy flat and Spain up 4%. Benelux declined 11%, however Belgium
delivered a record performance, up 3%. Middle East and Africa
declined 10%.
Operating profit for H1 was GBP35.9m (2020: GBP10.6m; 2019:
GBP45.6m) with a conversion rate of 17.6% (2020: 6.8%; 2019:
21.4%). Profitability improved significantly on 2020 due to the
improvement in trading conditions. We remain below 2019 operating
profit and conversion rate, primarily due to the slower recovery in
France, our largest country in the region. Headcount across the
region increased by 164 (5.5%) in the first half, to 3,143 at the
end of June 2021 (2,979 at 31 December 2020).
ASIA PACIFIC
Asia Pacific GBPm Growth rates
(20% of Group in
H1 2021) H1 2021 H1 2020 H1 2019 Reported CC vs. 2020 CC vs. 2019
-------- -------- -------- --------- ------------ ------------
Gross Profit 81.8 56.9 81.8 +43.8% +48.6% +3.5%
-------- -------- -------- --------- ------------ ------------
Operating Profit 15.3 -3.6 8.8 >100% >100% +81.2%
-------- -------- -------- --------- ------------ ------------
Conversion Rate
(%) 18.8% -6.3% 10.8%
-------- -------- -------- --------- ------------ ------------
In Asia Pacific, representing 20% of Group first half gross
profit, revenue declined 1.9% vs. 2019 in constant currency.
However gross profit was up 3.5%, a record first half. Against
2020, revenue increased 22.7% in reported rates to GBP129.2m (2020:
GBP105.3m) and gross profit increased 43.8% to GBP81.8m (2020:
GBP56.9m). In constant currency against 2020, revenue increased
24.8% in the first half and gross profit increased by 48.6%.
In Mainland China, where nearly all of our people are back in
the office, we delivered a record first half, up 23% and exited
June strongly, up 46%. Hong Kong, where trading conditions remain
challenging, was down 25%. Overall, Greater China grew 3% for the
first half. South East Asia, one of our Large High Potential
markets, delivered a record performance, up 21%. Singapore was down
1%, although exited June strongly, up 22%. The other five countries
in the region grew 44%, collectively. Japan delivered a record
first half, growing 10%, largely driven by a strong performance
from our contracting business. India, despite being one of the
worst affected countries by COVID-19, delivered a record
performance up 39%. Overall for the first half, Australia was down
15%, although we saw an improvement in June, exiting down just
2%.
Operating profit increased to GBP15.3m (2020: -3.6m; 2019:
GBP8.8m) and our conversion rate increased to 18.8% (2020: -6.3%;
2019: 10.8%). Asia Pacific has been our strongest performing
region, which, combined with a large reduction in headcount, has
driven a significant improvement in profitability compared to 2019.
Headcount across the region increased by 153 in the first half
(11.0%) to 1,538 at the end of June 2021 (1,385 at 31 December
2020).
THE AMERICAS
Americas GBPm Growth rates
(15% of Group in
H1 2021) H1 2021 H1 2020 H1 2019 Reported CC vs. 2020 CC vs. 2019
-------- -------- -------- --------- ------------ ------------
Gross Profit 61.3 46.9 69.2 +30.6% +44.2% +1.6%
-------- -------- -------- --------- ------------ ------------
Operating Profit 8.8 -4.9 8.7 >100% >100% +8.6%
-------- -------- -------- --------- ------------ ------------
Conversion Rate
(%) 14.3% -10.5% 12.5%
-------- -------- -------- --------- ------------ ------------
In the Americas, representing 15% of Group first half gross
profit, despite being one of the worst COVID-19 affected regions,
revenue increased by 18.6% and gross profit increased 1.6% vs. 2019
in constant currencies. Against 2020, revenue increased 30.4% in
reported rates to GBP102.6m (2020: GBP78.7m), while gross profit
increased 30.6% to GBP61.3m (2020: GBP46.9m). In constant
currencies against 2020, revenue increased by 44.6% and gross
profit increased by 44.2%.
North America was flat overall, with the US up 2%, a record
first half. Whilst conditions remain challenging in our largest
discipline, Property & Construction, we have seen strong growth
in other areas, such as Technology. The US was up 19% in June.
For the first half, Latin America was up 5%, a record first
half, with Brazil up 18%. Mexico, our largest country in the
region, was down 10%, but exited June +3%. Elsewhere in Latin
America, our other five countries in the region grew 11%,
collectively.
Operating profit was GBP8.8m (2020: -GBP4.9m; 2019: GBP8.7m),
with a conversion rate of 14.3% (2020: -10.5%; 2019: 12.5%).
Trading conditions improved significantly in the first half
throughout the region, which means the conversion rate is now
higher than in 2019. Headcount in the Americas was up 30 (2.6%) in
the period, to 1,185 at the end of June 2021 (1,155 at 31 December
2020).
UNITED KINGDOM
UK GBPm Growth rate
(14% of Group in
H1 2021) H1 2021 H1 2020 H1 2019 vs. 2020 vs. 2019
-------- -------- -------- --------- ---------
Gross Profit 57.6 42.4 69.4 +35.9% -17.0%
-------- -------- -------- --------- ---------
Operating Profit 4.3 -1.7 12.5 >100% -65.4%
-------- -------- -------- --------- ---------
Conversion Rate (%) 7.5% -3.9% 18.0%
-------- -------- -------- --------- ---------
In the UK, representing 14% of Group first half gross profit,
revenue decreased 20.1% vs. 2019 to GBP125.7m (2020: GBP118.1m;
2019: GBP157.4m) and gross profit declined 17.0% to GBP57.6m (2020:
GBP42.4m; 2019: GBP69.4m).
Our Michael Page business was down 12%, whereas our more
Temporary focused Page Personnel business was down 30%. We saw a
sequential improvement throughout the first half as lockdowns
eased, exiting June down just 2%, with our Michael Page business up
7% on June 2019.
Operating profit was GBP4.3m (2020: -GBP1.7m; 2019: GBP12.5m)
and our conversion rate was 7.5% (2020: -3.9%; 2019: 18.0%). This
was after the furlough repayment of GBP3.4m to HMRC and excluding
this one-off item, our conversion rate was 13.3%. Headcount was up
by 34 (2.9%) during the first half to 1,209 at the end of June 2021
(1,175 at 31 December 2019).
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 2021: Trading conditions continued
to improve throughout the first half of 2021 which
resulted in gross profit declining just -3.7% vs.
H1 2019 in constant currencies. Against H1 2020 this
represented an increase of +34.4% at reported rates
and +38.3% in constant currencies
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 2021: Geographies: the percentage
outside the UK was broadly in line with 2020 at 85.7%
(H1 2020: 85.9%; H1 2019: 84.0%), but remains up on
2019, largely as a result of the UK being impacted
more severely by COVID-19.
Disciplines: the percentage outside of Accounting
and Financial Services increased to 67.8% (H1 2020:
64.9%; H1 2019: 65.3%), due to stronger growth in
our other disciplines such as Technology, Healthcare
& Life Sciences and Digital.
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 2021: 77% of our gross profit
was generated from permanent placements, above the
70% in 2020 and 76% in 2019. The recovery seen in
H1 2021 has been driven by permanent recruitment,
with conditions more challenging in temporary, particularly
at lower salary levels.
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 2021: Gross profit per fee
earner of GBP75.8k was up 10.7% vs. 2019 and up 46.6%
vs. 2020 in constant currencies. The improvement was
driven by a decrease in fee earner headcount from
6,035 in H1 2019 to 5,443 in H1 2021, as well as the
overall improvement in trading conditions.
Relevant strategic objective: Organic growth
--------------------------------------------------------------
Conversion rate How measured: Operating profit (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 2021: Operating profit as
a percentage of gross profit increased to 15.9% compared
to the prior year (H1 2020: 0.1%; H1 2019: 17.4%)
as a result of improvements in trading conditions,
as well as our headcount being down c. 8% on pre COVID-19
levels, offset by tougher trading conditions at the
start of the year.
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 2021: Earnings per share (EPS)
in H1 2021 was 12.2p, a significant increase on the
EPS in 2020 of -0.5p but still below 2019 EPS of 16.8p.
The increase on 2020 is driven by the significant
increase in profits as trading conditions have continued
to recover, as well as our lower fee earner headcount.
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 2021: The ratio was 77:23
(H1 2020: 77:23; H1 2019: 78:22). In line with our
strategy of maintaining and investing in our platform,
we have added a further c. 400 experienced fee earners
in the first half of this year. These, plus those
who have joined from outside recruitment, net of attrition,
mean that we have added 298 fee earners in the first
half of 2021. Our operational support headcount rose
by 83 in H1, and, as such, our ratio of fee earners
to operational support staff was maintained at 77:23.
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 2021: Net fee earner headcount
increased by 298 in H1 2021, resulting in 5,443 fee
earners at the end of June. We have continued to invest
in those disciplines where we have seen the strongest
growth, such as Technology, Contracting, Healthcare
& Life Sciences and Digital.
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 2021: Net cash at 30 June
2021 was GBP163.8m (H1 2020: GBP161.7m; H1 2019: GBP81.7m).
The closing cash position is broadly in line with
2020, with increased profitability offset by an increase
in the permanent placements debtor receivable. GBP6.9m
was received from exercises of share options (H1 2020:
GBP0.1m) and GBP10.4m was spent on the purchase of
shares into the Employee Benefit Trust (H1 2020: GBP1.6m,
H1 2019: nil).
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 2020 on pages 41 to
48.
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 and UK business utilise the notional cash pool
and the Asia Pacific subsidiaries operate the interest enhancement
facility. The structures facilitate interest compensation for 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, expiring in 2023, with a total drawable amount of
GBP30m. Neither of these facilities were in use as at 30 June.
These facilities are used on an ad hoc basis to fund any major
Group GBP cash outflows.
In May 2019 PageGroup entered into a GBP30m revolving credit
facility (RCF) with BBVA. To ensure the RCF remains compliant with
regulations (specifically Libor transition), we have amended the
original terms and at the same time took the opportunity to enhance
other terms, providing further strength and resilience to the
Group. The revised terms are:
-- Incorporation of Libor transition clauses
-- Executed the first of two right of extensions, meaning the RCF now expires in May 2023
-- Linked the BBVA RCF to sustainable finance KPI's and
-- Reduced the covenants and half year reporting requirements.
The Group has also successfully transitioned 100% of our cash
investments into ESG (sustainable) Money Market funds, further
enhancing our sustainability vision.
In line with the Group's investment policy, excess cash is
invested in a range of products; including call accounts, money
market deposits and money market funds. The Group actively monitors
its counterparty exposure to protect its capital investments and
reduce risk. Accordingly, the Group opened two additional money
market funds, both of which hold an AAA rating.
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 that 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.
ESG
The Group is committed to become carbon net zero within five
years. We are now securing over fifty percent of our global energy
from renewable sources and we look forward to working with our
remaining landlords and energy suppliers to transition the
remaining offices to renewable energy. We have also increased our
reporting capability and we have engaged with the Carbon Disclosure
Project (CDP) for the first time this year.
The Group is announcing today our commitment to change over one
million lives within ten years, by giving back to society using our
skills as a recruiter. We will do this by working with people in
need through charities, community groups, schools and every day as
a recruiter, hosting webinars and placing people in the next stages
of their careers. Our social impact work is integral to who we are,
and to the communities in which we operate. This work re-enforces
our commitment to the United Nationals Sustainable Development
Goals: to increase gender equality; provide decent work and
economic growth; and reduce inequalities within society.
To further re-enforce our commitment to sustainability, we
recently renegotiated our debt financing with BBVA, linking our
revolving credit facility to environmental and social
sustainability KPIs. We are also launching today our inaugural
sustainability report, a copy of which can be downloaded on our
website.
GOING CONCERN
The Board has undertaken a review of the Group's forecasts and
associated risks and sensitivities, considering the expected impact
of COVID-19 on trading in the period from the date of approval of
the interim financial statements to August 2022 (review
period).
The Group had GBP163.8m of cash as at 30 June 2021, with no debt
except for IFRS 16 lease liabilities of GBP91.0m. Debt facilities
relevant to the review period comprise a committed GBP30m BBVA RCF
(May 2023 maturity), an uncommitted UK trade debtor discounting
facility (up to GBP50m depending on debtor levels) and an
uncommitted GBP20m UK bank overdraft facility.
Throughout the first half of the year, the activity levels
picked up in most of the Group's markets and the cost control and
cash preservation methods used in 2020 were not repeated. However,
due to the pandemic there remains reductions in travel and
entertaining expenses. There continues to be a high degree of
global macro-economic uncertainty, as COVID-19 remains a
significant issue and restrictions remain in a number of countries
across the Group.
However, given the analysis performed, there are no plausible
downside scenarios that would cause an issue. As a result, given
the strength of performance in H1, the level of cash in the
business and Group's borrowing facilities, the geographical and
discipline diversification, limited concentration risk, as well as
the ability to manage the cost base, the Board has concluded that
the Group has adequate resources to continue in operational
existence for the period through to August 2022.
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 2021 6 August 2021
PageGroup will host a conference call, with on-line slide
presentation, for analysts and investors at 9.00am on 9 August
2021, the details of which are below.
Link:
https://www.investis-live.com/pagegroup/60eea0d40ed69a0a004ac932/plas
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 54 14 22 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
9 August 2021 at:
http://www.page.com/investors/investor-library.aspx
Enquiries:
PageGroup +44 (0)20 3077 8425
Steve Ingham, Chief Executive Officer
Kelvin Stagg, Chief Financial Officer
FTI Consulting +44 (0)20 3727 1340
Richard Mountain / Susanne Yule
This announcement contains inside information for the purposes
of article 7 of EU Regulation 596/2014 and Article 7 of Onshore
Regulation (EU) 596/2014 as it forms part of domestic law by virtue
of the EUWA. The person responsible for making this announcement on
behalf of PageGroup is Kelvin Stagg, Chief Financial Officer.
INDEPENT REVIEW REPORT TO PAGEGROUP PLC
Conclusion
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 2021 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.
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 2021 is not prepared, in all material respects, in accordance
with UK adopted International Accounting Standard 34 and the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with 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. 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.
As disclosed in note 2, the annual financial statements of the
Group will be prepared in accordance with UK adopted IFRSs. The
condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with UK adopted
International Accounting Standard 34, "Interim Financial
Reporting".
Responsibilities of 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.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, is based on procedures that are less extensive than
audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
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.
Ernst & Young LLP
London
6 August 2021
Condensed Consolidated Income Statement
For the six months ended 30 June 2021
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue 3 766,412 654,989 1,304,791
Cost of sales (362,228) (354,282) (694,542)
Gross profit 3 404,184 300,707 610,249
Administrative expenses (339,855) (300,344) (593,221)
---------- ---------- ------------
Operating profit 3 64,329 363 17,028
Financial income 4 194 85 588
Financial expenses 4 (850) (1,199) (2,072)
Profit/(Loss) before tax 3 63,673 (751) 15,544
Income tax expense 5 (25,062) (809) (21,286)
---------- ---------- ------------
Profit/(Loss) for the period 38,611 (1,560) (5,742)
---------- ---------- ------------
Attributable to:
Owners of the parent 38,611 (1,560) (5,742)
---------- ---------- ------------
Earnings per share
Basic earnings per share (pence) 8 12.2 (0.5) (1.8)
Diluted earnings per share (pence) 8 12.1 (0.5) (1.8)
---------- ---------- ------------
The above results all relate to continuing operations
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit/(Loss) for the period 38,611 (1,560) (5,742)
Other comprehensive income/(loss) for
the period
Items that may subsequently be reclassified
to profit and loss:
Currency translation differences (7,221) 12,752 5,945
Total comprehensive income for the period 31,390 11,192 203
---------- ---------- ------------
Attributable to:
Owners of the parent 31,390 11,192 203
---------- ---------- ------------
Condensed Consolidated Balance Sheet
As at 30 June 2021
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 9 23,294 29,966 26,401
Right-of-use assets 83,795 110,774 95,414
Intangible assets - Goodwill and
other intangible 2,082 2,062 2,097
- Computer software 43,522 39,381 39,708
Deferred tax assets 17,927 24,405 17,688
Other receivables 10 11,374 15,037 13,169
181,994 221,625 194,477
---------- ---------- ------------
Current assets
Trade and other receivables 10 305,700 266,759 252,476
Current tax receivable 23,761 26,810 16,889
Cash and cash equivalents 12 163,758 161,651 165,987
493,219 455,220 435,352
---------- ---------- ------------
Total assets 3 675,213 676,845 629,829
---------- ---------- ------------
Current liabilities
Trade and other payables 11 (200,352) (188,631) (184,022)
Lease liabilities (30,157) (37,097) (32,711)
Current tax payable (18,724) (16,905) (12,365)
(249,233) (242,633) (229,098)
---------- ---------- ------------
Net current assets 243,986 212,587 206,254
---------- ---------- ------------
Non-current liabilities
Other payables 11 (12,977) (10,410) (12,483)
Deferred tax liabilities (5,953) (3,962) (1,589)
Lease liabilities (60,875) (83,880) (70,758)
(79,805) (98,252) (84,830)
---------- ---------- ------------
Total liabilities 3 (329,038) (340,885) (313,928)
---------- ---------- ------------
Net assets 346,175 335,960 315,901
---------- ---------- ------------
Capital and reserves
Called-up share capital 3,286 3,287 3,286
Share premium 99,564 99,564 99,564
Capital redemption reserve 932 932 932
Reserve for shares held in the
employee benefit trust (52,683) (43,016) (55,498)
Currency translation reserve 18,099 32,127 25,320
Retained earnings 276,977 243,066 242,297
Total equity 346,175 335,960 315,901
---------- ---------- ------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2021
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 2020 3,286 99,507 932 (47,662) 19,375 248,949 324,387
---------- -------- ----------- ----------- ------------ --------- ---------
Currency
translation
differences - - - - 12,752 - 12,752
---------- -------- ----------- ----------- ------------ --------- ---------
Net income
recognised
directly in equity - - - - 12,752 - 12,752
Loss for the six
months ended 30
June
2020 - - - - - (1,560) (1,560)
Total comprehensive
income/(expense)
for the period - - - - 12,752 (1,560) 11,192
---------- -------- ----------- ----------- ------------ --------- ---------
Purchase of shares
held in the
employee
benefit trust - - - (1,609) - - (1,609)
Exercise of share
plans 1 57 - - - - 58
Transfer from
reserve for shares
held
in the employee
benefit trust - - - 6,255 - (6,255) -
Credit in respect
of share schemes - - - - - 1,932 1,932
1 57 - 4,646 - (4,323) 381
---------- -------- ----------- ----------- ------------ --------- ---------
Balance at 30 June
2020 3,287 99,564 932 (43,016) 32,127 243,066 335,960
---------- -------- ----------- ----------- ------------ --------- ---------
Currency
translation
differences - - - - (6,807) - (6,807)
---------- -------- ----------- ----------- ------------ --------- ---------
Net expense
recognised
directly in
equity - - - - (6,807) - (6,807)
Loss for the six
months ended 31
December
2020 - - - - - (4,182) (4,182)
Total comprehensive
expense for the
period - - - - (6,807) (4,182) (10,989)
---------- -------- ----------- ----------- ------------ --------- ---------
Purchase of shares
held in employee
benefit trust - - - (12,760) - - (12,760)
Exercise of share
plans (1) - - - - 330 329
Transfer from
reserve for shares
held
in the employee
benefit trust - - - 278 - (278) -
Credit in respect
of share schemes - - - - - 3,343 3,343
Credit in respect
of tax on share
schemes - - - - - 18 18
(1) - - (12,482) - 3,413 (9,070)
---------- -------- ----------- ----------- ------------ --------- ---------
Balance at 31
December 2020 3,286 99,564 932 (55,498) 25,320 242,297 315,901
---------- -------- ----------- ----------- ------------ --------- ---------
Balance at 1 January 2021 3,286 99,564 932 (55,498) 25,320 242,297 315,901
------ ------- ---- --------- -------- --------- ---------
Currency translation differences - - - - (7,221) - (7,221)
------ ------- ---- --------- -------- --------- ---------
Net expense recognised directly in
equity - - - - (7,221) - (7,221)
Profit for the six months ended 30
June
2021 - - - - - 38,611 38,611
------ ------- ---- --------- -------- --------- ---------
Total comprehensive (expense)/income
for the period - - - - (7,221) 38,611 31,390
------ ------- ---- --------- -------- --------- ---------
Purchase of shares held in employee
benefit trust - - - (10,369) - - (10,369)
Exercise of share plans - - - - - 6,938 6,938
Transfer from reserve for shares held
in the employee benefit trust - - - 13,184 - (13,184) -
Credit in respect of share schemes - - - - - 2,447 2,447
Debit in respect of tax on share
schemes - - - - - (132) (132)
- - - 2,815 - (3,931) (1,116)
------ ------- ---- --------- -------- --------- ---------
Balance at 30 June 2021 3,286 99,564 932 (52,683) 18,099 276,977 346,175
------ ------- ---- --------- -------- --------- ---------
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2021
30 June 30 June 31 December
2021 2020 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Note
Profit/(Loss) before tax 63,673 (751) 15,544
Depreciation and amortisation charges 26,238 30,086 61,782
Loss on sale of property, plant
and equipment, and computer software 21 120 262
Share scheme charges 2,447 1,932 5,275
Net finance costs 656 1,114 1,484
---------- ---------- ------------
Operating cash flow before changes
in working capital 93,035 32,501 84,347
(Increase)/Decrease in receivables (59,840) 113,411 124,370
Increase/(Decrease) in payables 23,519 (40,335) (39,760)
---------- ---------- ------------
Cash generated from operations 56,714 105,577 168,957
Income tax paid (21,830) (20,183) (31,747)
---------- ---------- ------------
Net cash from operating activities 34,884 85,394 137,210
---------- ---------- ------------
Cash flows from investing activities
Purchases of property, plant and
equipment (2,688) (2,474) (4,892)
Purchases and capitalisation of
intangible assets (8,923) (8,526) (17,770)
Proceeds from the sale of property,
plant and equipment, and computer
software 906 434 918
Interest received 194 85 588
---------- ---------- ------------
Net cash used in investing activities (10,511) (10,481) (21,156)
---------- ---------- ------------
Cash flows from financing activities
Interest paid (183) (290) (413)
Lease liability repayment (18,719) (18,034) (39,234)
Issue of own shares for the exercise
of options 6,938 58 387
Purchase of shares into the employee
benefit trust (10,369) (1,609) (14,369)
Net cash used in financing activities (22,333) (19,875) (53,629)
---------- ---------- ------------
Net increase in cash and cash equivalents 2,040 55,038 62,425
Cash and cash equivalents at the
beginning of the period 165,987 97,832 97,832
Exchange (loss)/gain on cash and
cash equivalents (4,269) 8,781 5,730
Cash and cash equivalents at the
end of the period 12 163,758 161,651 165,987
---------- ---------- ------------
Notes to the condensed set of interim results
For the six months ended 30 June 2021
1. General information
The information for the year ended 31 December 2020 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 2021 were authorised for
issue in accordance with a resolution of the directors on 6 August
2021.
2. Accounting policies
Basis of preparation
The unaudited interim condensed consolidated financial
statements for the six months ended 30 June 2021 have been prepared
in accordance with UK adopted International Accounting Standard 34
'Interim financial reporting' and with the Disclosure Guidance and
Transparency Rules of the United Kingdom's 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 2020, were approved by the directors
on 2 March 2021. The interim condensed consolidated financial
statements should be read in conjunction with the Annual Report and
Accounts for the year ended 31 December 2020, which have been
prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No.1606/2002 as it applies in the European
Union.
Going concern
The Board has undertaken a review of the Group's forecasts and
associated risks and sensitivities, considering the expected impact
of COVID-19 on trading in the period from the date of approval of
the interim financial statements to August 2022 (review
period).
The Group had GBP163.8m of cash as at 30 June 2021, with no debt
except for IFRS 16 lease liabilities of GBP91.0m. Debt facilities
relevant to the review period comprise a committed GBP30m BBVA RCF
(May 2023 maturity), an uncommitted UK trade debtor discounting
facility (up to GBP50m depending on debtor levels) and an
uncommitted GBP20m UK bank overdraft facility.
Throughout the first half of the year, the activity levels
picked up in most of the Group's markets and the cost control and
cash preservation methods used in 2020 were not repeated. However,
due to the pandemic there remains reductions in travel and
entertaining expenses. There continues to be a high degree of
global macro-economic uncertainty, as COVID-19 remains a
significant issue and restrictions remain in a number of countries
across the Group.
However, given the analysis performed, there are no plausible
downside scenarios that would cause an issue. As a result, given
the strength of performance in H1, the level of cash in the
business and Group's borrowing facilities, the geographical and
discipline diversification, limited concentration risk, as well as
the ability to manage the cost base, the Board has concluded that
the Group has adequate resources to continue in operational
existence for the period through to August 2022.
New accounting standards, interpretations and amendments adopted
by the Group
The Group has not adopted or early adopted any standard,
interpretation or amendment that has been issued but is not yet
effective. The same accounting policies and methods of computation
as were followed in the most recent annual financial statements
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
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
EMEA 408,874 352,888 717,294 203,531 154,540 319,360
Asia Pacific 129,170 105,263 215,959 81,762 56,852 121,113
Americas 102,647 78,716 154,257 61,285 46,926 88,791
United Kingdom 125,721 118,122 217,281 57,606 42,389 80,985
766,412 654,989 1,304,791 404,184 300,707 610,249
--------- -------- ------------ --------- -------- ------------
Operating Profit
---------------------------------
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
EMEA 35,862 10,565 30,605
Asia Pacific 15,347 (3,596) 3,789
Americas 8,793 (4,946) (7,021)
United Kingdom 4,327 (1,660) (10,345)
Operating profit 64,329 363 17,028
Financial expense (656) (1,114) (1,484)
Profit/(Loss)
before tax 63,673 (751) 15,544
--------- -------- ------------
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, 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
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
EMEA 231,607 233,400 230,350 159,076 184,243 163,961
Asia Pacific 113,690 109,775 111,090 50,776 46,976 54,899
Americas 78,928 94,012 80,662 39,615 45,164 41,071
United Kingdom 227,227 212,848 190,838 60,847 47,597 41,632
-------- -------- -------------- -------- -------- ----------------
Segment assets/liabilities 651,452 650,035 612,940 310,314 323,980 301,563
Income tax 23,761 26,810 16,889 18,724 16,905 12,365
675,213 676,845 629,829 329,038 340,885 313,928
-------- -------- -------------- -------- -------- ----------------
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
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
EMEA 9,186 12,409 10,810 2,399 2,862 2,666
Asia Pacific 3,954 4,851 4,451 274 431 371
Americas 5,504 7,115 6,052 2 184 120
United Kingdom 4,650 5,591 5,088 42,929 37,966 38,648
23,294 29,966 26,401 45,604 41,443 41,805
-------- -------- -------------- -------- -------- ----------------
Right-of-use Assets Lease Liabilities
------------------------------------- ---------------------------------------
Six months ended Year ended Six months ended Year ended
30 June 30 June 31 December 30 June 30 June 31 December
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
EMEA 42,211 60,538 47,941 44,841 63,699 51,070
Asia Pacific 12,904 10,291 13,924 13,583 11,222 14,532
Americas 12,637 18,533 14,862 15,369 21,557 17,590
United Kingdom 16,043 21,412 18,687 17,239 24,499 20,277
83,795 110,774 95,414 91,032 120,977 103,469
--------- -------- -------------- -------- -------- ------------
The below analyses in notes (c) and (d) relates to the
requirement of IFRS 15 to disclose disaggregated revenue
streams.
(c) 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
2021 2020 2020 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Permanent 315,079 213,525 441,467 311,320 211,805 436,689
Temporary 451,333 441,464 863,324 92,864 88,902 173,560
766,412 654,989 1,304,791 404,184 300,707 610,249
--------- -------- ------------ --------- -------- ------------
(d) Revenue generated from permanent and temporary placements by reportable segment
Permanent Temporary
------------------------------------ ---------------------------------------
Six months ended Year ended Six months ended Year ended
30 June 30 June 31 December 30 June 30 June 31 December
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
EMEA 144,845 101,395 213,209 264,029 251,493 504,085
Asia Pacific 71,891 47,049 102,044 57,279 58,214 113,915
Americas 54,912 39,483 74,620 47,735 39,233 79,637
United Kingdom 43,431 25,598 51,594 82,290 92,524 165,687
315,079 213,525 441,467 451,333 441,464 863,324
-------- -------- -------------- -------- -------- ------------
The below analyses in notes (e) revenue and gross profit by
discipline (being the professions of candidates placed) and (f)
revenue and gross profit by strategic market have been included as
additional disclosure over and above the requirements of IFRS 8
"Operating Segments".
(e) 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
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Accounting
and Financial
Services 289,822 266,783 528,202 130,208 105,528 212,243
Legal, Technology,
HR, Secretarial
and Other 230,847 188,805 374,406 117,411 81,087 166,249
Engineering,
Property &
Construction,
Procurement
& Supply Chain 165,156 134,933 273,771 96,869 70,181 141,829
Marketing,
Sales and Retail 80,587 64,468 128,412 59,696 43,911 89,928
766,412 654,989 1,304,791 404,184 300,707 610,249
--------- -------- ------------ --------- -------- ------------
(f) 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
2021 2020 2020 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Large, Proven
markets 411,453 371,589 728,736 190,996 142,322 289,202
Large, High
Potential markets 251,418 194,297 397,166 149,387 107,483 218,196
Small and Medium,
High Margin
markets 103,541 89,103 178,889 63,801 50,902 102,851
766,412 654,989 1,304,791 404,184 300,707 610,249
--------- -------- ------------ --------- -------- ------------
4. Financial income / (expenses)
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Financial income
Bank interest receivable 194 85 588
-------- -------- ---------------
Financial expenses
Bank interest payable (183) (290) (413)
Interest on lease liabilities (667) (909) (1,659)
(850) (1,199) (2,072)
-------- -------- ---------------
5. Taxation
Taxation for the six-month period is charged at GBP25.1m or
39.4% (six months ended 30 June 2020: -107.6%; year ended 31
December 2020: -136.9%), representing the best estimate of the
average annual effective tax rate expected for the full year
together with known prior year adjustments applied to the pre-tax
income for the six-month period.
6. Dividends
Six months ended Year ended
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Amounts recognised as distributions to equity
holders in the year:
Final dividend for the year ended 31 December
2020 of 0p per ordinary share (2019: 0p) - - -
Interim dividend for the year ended 30 June
2020 of 0p per ordinary share (2019: 4.30p) - - -
Special dividend for the year ended 31 December
2020 of 0p per ordinary share (2019: 12.73p) - - -
- - -
--------- -------- --------------
Amounts proposed as distributions to equity
holders in the year:
Proposed interim dividend for the period
ended 30 June 2021 of 4.70p per ordinary
share (2020: 0p) 14,957 - -
--------- -------- --------------
Proposed special dividend for the year ended
31 December 2021 of 26.71p per ordinary share
(2020: 0p) 85,000 - -
--------- -------- --------------
The proposed final dividend for 2019 of 9.40p per ordinary
share, or GBP30.2m, which was due for payment in June 2020, was
cancelled as a result of the ongoing uncertainty as a result of the
COVID-19 pandemic.
The proposed interim and special dividends have not been
approved by the Board at 30 June 2021 and therefore have not been
included as a liability.
The proposed interim dividend of 4.70p (2020: nil; 2019: 4.30p)
per ordinary share and special dividend of 26.71p (2020: nil; 2019:
12.73p) per ordinary share will be paid on 13 October 2021 to
shareholders on the register at the close of business on 3
September 2021.
7. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of
GBP3.4m has been recognised for share options and other share-based
payment arrangements (including social charges) (30 June 2020:
GBP1.4m; 31 December 2020: GBP4.3m).
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 2021 2020 2020
Earnings for basic and diluted earnings per
share (GBP'000) 38,611 (1,560) (5,742)
--------- -------- ------------
Number of shares
Weighted average number of shares used for
basic earnings per share ('000) 317,383 320,650 319,664
Dilution effect of share plans ('000) 859 1,096 925
Diluted weighted average number of shares
used for diluted earnings per share ('000) 318,242 321,746 320,589
--------- -------- ------------
Basic earnings per share (pence) 12.2 (0.5) (1.8)
Diluted earnings per share (pence) 12.1 (0.5) (1.8)
The above results all relate to continuing operations.
9. Property, plant and equipment
Acquisitions
During the period ended 30 June 2021 the Group acquired
property, plant and equipment with a cost of GBP2.7m (30 June 2020:
GBP2.5m, 31 December 2020: GBP4.9m).
10. Trade and other receivables
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Current
Trade receivables 217,500 203,711 197,195
Less allowance for expected credit losses
and revenue reversals (9,930) (13,561) (11,061)
-------- --------- ------------
Net trade receivables 207,570 190,150 186,134
Other receivables 3,720 20,012 4,393
Accrued income 77,449 36,789 51,282
Prepayments 16,961 19,808 10,667
305,700 266,759 252,476
-------- --------- ------------
Non-current
Other receivables 11,374 15,037 13,169
-------- --------- ------------
11. Trade and other payables
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Current
Trade payables 3,949 6,317 3,993
Other tax and social security 29,954 63,214 44,890
Other payables 45,385 23,259 35,664
Accruals 121,064 95,841 99,475
200,352 188,631 184,022
-------- -------- ------------
Non-current
Accruals 11,466 9,574 11,836
Other tax and social security 1,511 836 647
12,977 10,410 12,483
-------- -------- ------------
12. Cash and cash equivalents
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Cash at bank and in hand 79,550 86,651 108,849
Short-term deposits 84,208 75,000 57,138
-------- -------- ------------
Cash and cash equivalents 163,758 161,651 165,987
Cash and cash equivalents in the statement
of cash flows 163,758 161,651 165,987
-------- -------- ------------
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 and UK business utilise the notional cash pool
and the Asia Pacific subsidiaries operate the interest enhancement
facility. The structures facilitate interest compensation for 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, expiring in 2023, with a total drawable amount of
GBP30m. Neither of these facilities were in use as at 30 June.
These facilities are used on an ad hoc basis to fund any major
Group GBP cash outflows.
In May 2019 PageGroup entered into a GBP30m revolving credit
facility (RCF) with BBVA. To ensure the RCF remains compliant with
regulations (specifically Libor transition), we have amended the
original terms and at the same time took the opportunity to enhance
other terms, providing further strength and resilience to the
Group. The revised terms are:
-- Incorporation of Libor transition clauses
-- Executed the first of two right of extensions, meaning the RCF now expires in May 2023
-- Linked the BBVA RCF to sustainable finance KPI's and
-- Reduced the covenants and half year reporting requirements.
The Group has also successfully transitioned 100% of our cash
investments into ESG (sustainable) Money Market funds, further
enhancing our sustainability vision.
In line with the Group's investment policy, excess cash is
invested in a range of products; including call accounts, money
market deposits and money market funds. The Group actively monitors
its counterparty exposure to protect its capital investments and
reduce risk. Accordingly, the Group opened two additional money
market funds, both of which hold an AAA rating.
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 that 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.
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 UK adopted 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 2021
Copies of the condensed interim financial statements are now
available and can be downloaded from the Company's website
https://www.page.com/presentations/year/2021
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END
IR DKFBKOBKDQFK
(END) Dow Jones Newswires
August 09, 2021 02:00 ET (06:00 GMT)
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