TIDMPAGE
RNS Number : 1251O
PageGroup plc
06 October 2021
6 October 2021
PageGroup plc
STRONG PERFORMANCE, CONTINUED INVESTMENT, PROFIT GUIDANCE
INCREASED
Q3 Highlights
-- Group gross profit of GBP228.1m, +65.4% vs. 2020 (+12.9% vs. 2019)
-- Improvement in the exit rate, exiting September at +26% vs. 2019
-- Gross profit per fee earner up 21% on Q3 2019
-- Large, High Potential markets (40% of Group) +27% vs. 2019
-- EMEA +9.9%: France -8%; Germany +33% all vs. 2019
-- Asia Pacific +20.4 %: Greater China +21%; SE Asia +29%; Japan +36%; India +72% all vs. 2019
-- Americas +24.6%: US +28%; Latin America +22% all vs. 2019
-- UK +1.3%: Michael Page +6%; Page Personnel -13% all vs. 2019
-- Increase in fee earner headcount of 329 to 5,772 (Q3 2019: 6,081)
-- Strong cash position, net cash of c. GBP195m (Q2 2021: c. GBP164m, Q3 2020: c. GBP152m)
-- Interim and special dividends of GBP100.2m to be paid on 13 October 2021
Outlook
-- Full year operating profit expected to be in the region of GBP155m
Note: Given the magnitude of the impact of COVID-19 in 2020, we
are also providing comparisons in constant currencies against 2019,
to ensure the most appropriate representation of current
trading.
Q3 Gross Profit Analysis
Gross Profit (GBPm) Growth Rates (%)
Year-on-year % of Group 2021 2020 2019 Reported Constant vs. 2020 Constant
vs. 2020 vs. 2019
----------- ------- ------- ------ ---------- ------------------ ----------
EMEA 46% 105.9 76.5 101.6 +38.3% +45.8% +9.9%
----------- ------- ------- ------ ---------- ------------------ ----------
Asia Pacific 22% 48.9 30.3 44.1 +61.8% +68.2% +20.4%
----------- ------- ------- ------ ---------- ------------------ ----------
Americas 17% 39.1 19.1 37.3 +104.2% +113.4% +24.6%
----------- ------- ------- ------ ---------- ------------------ ----------
UK 15% 34.2 17.6 33.8 +94.3% +94.3% +1.3%
----------- ------- ------- ------ ---------- ------------------ ----------
Total 100% 228.1 143.5 216.8 +58.9% +65.4% +12.9%
----------- ------- ------- ------ ---------- ------------------ ----------
Steve Ingham, Chief Executive Officer, PageGroup, said:
"I am pleased to report that the improvement in results we saw
in Q2 continued into Q3, with the Group reporting growth of 65.4%
vs. 2020 and 12.9% vs. 2019. Given the magnitude of the impact of
COVID-19 on 2020, we are continuing to compare our results to 2019,
our record gross profit year.
"We exited the quarter strongly with September up 26% on 2019
compared with July and August, up 4% and 9% vs. 2019 respectively.
This noticeable improvement and record performance in Q3 was seen
throughout the Group and was achieved despite the backdrop of
continued restrictions or lockdowns in many of our markets.
"We believe our strategy of maintaining and investing in our
platform throughout cycles is helping us to achieve these results.
Our investments include: hiring around 1,000 experienced fee
earners since Q2 2020; rolling out new technologies globally such
as Customer Connect, our new salesforce-based CRM system; new
innovations such as our Page Insights data intelligence tool; as
well as Diversity & Inclusion and strategic engagement tools to
ensure our culture resonates, and is attractive to our people and
potential new employees.
"Reflecting the continued improvement in trading conditions in
Q3, we added a net 329 fee earners in the quarter, which makes a
net 627 this year. We have added c. 600 experienced hires so far in
2021, which complements the c. 400 experienced hires we added in
the second half of 2020. Our fee earner headcount is now currently
down just 4% on the pre-pandemic level at the end of 2019.
"We are the clear leader in many of our markets, with a highly
experienced senior management team, which we retained in 2020, and
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.
"Looking ahead, 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 the Group's markets.
Additionally, there is further uncertainty regarding the pace of
client's offices reopening, challenges in global supply chains and
the inflation outlook. However, the strength of our performance in
Q3, and notably in September, has further increased confidence in
our outlook for the year and therefore, subject to no other
unexpected events, we now expect full year operating profit to be
in the region of GBP155m."
Headcount
In 2020 we reduced our fee earner headcount by 882, primarily
those on performance reviews or those with very limited experience
in recruitment. This was net of adding c. 400 experienced fee
earners in 2020. We have subsequently added a further c. 600 in the
first three quarters of this year. These, plus those who have
joined from outside recruitment, net of attrition, mean that we
have added 627 fee earners in the first three quarters of 2021. Our
operational support headcount rose by 74 in Q3, and, as such, our
ratio of fee earners to operational support staff was maintained at
77:23. Overall, the Group had 5,772 fee earners and a total
headcount of 7,478, compared to 6,081 and 7,789 in Q3 2019
respectively.
Productivity
As a result of the more favourable trading conditions in Q3, as
well as the lower fee earner headcount, our gross profit per fee
earner was up 21% on Q3 2019.
Geographical Analysis (unless otherwise stated all growth rates
are in constant currency and vs. 2019)
EMEA Gross Profit (GBPm) Growth Rates
(46% of Group) 2021 2020 2019 Reported Constant Constant
vs. 2020 vs. 2020 vs. 2019
-------- ------- ------- ------------ ------------ ------------
Q3 105.9 76.5 101.6 +38.3% +45.8% +9.9%
-------- ------- ------- ------------ ------------ ------------
Unless otherwise stated, all growth rates are for the quarter in constant
currency and vs. 2019
* France (12% of Group) -8%
o Page Personnel -16%
o Michael Page +8%
* Germany (11% of Group) +33%
* Benelux +4%
o Belgium +8%
o Netherlands +3%
* Southern Europe +20%
o Italy +14%
o Spain +22%
* Middle East and Africa, +15%
* September +16.9%
Headcount at 30 September 2021: 3,272 (30 September 2019: 3,344)
In Europe, Middle East and Africa, the improvement in trading
conditions we experienced at the end of Q2 continued into Q3, which
was up 9.9% overall against Q3 2019 and we exited in September
+16.9%. France declined 8%, an improvement on the decline of 11% in
Q2, with September showing further improvement, exiting the quarter
up 5%. Conditions continued to be tougher in Page Personnel, which
represents around 60% percent of France and was down 16%, compared
to growth of 8% in Michael Page. Germany, the Group's third largest
market, delivered another record quarter, up 33%, with September up
39%. Growth was strongest in our Technology focused Interim
business, up 57% for the quarter. Benelux was up 4% overall, with
Belgium up 8% and the Netherlands up 3%. Southern Europe grew 20%
with Italy and Spain up 14% and 22%, respectively, with September
stronger, up 21% and 33%. The Middle East and Africa was up 15%
with the UAE up 26%. In line with the improved trading conditions,
our fee earner headcount increased by 98 mainly in France, Germany
and Spain.
Asia Pacific Gross Profit (GBPm) Growth Rates
(22% of Group) 2021 2020 2019 Reported Constant Constant
vs. 2020 vs. 2020 vs. 2019
------- ------- ------- ------------ ------------ ------------
Q3 48.9 30.3 44.1 +61.8% +68.2% +20.4%
------- ------- ------- ------------ ------------ ------------
Unless otherwise stated, all growth rates are for the quarter in constant
currency and vs. 2019
* Asia (17% of Group) +29%
* Greater China (8% of Group and 49% of Asia) +21%
o Mainland China +34%
o Hong Kong +1%
* South East Asia +29%
o Singapore +15%
* Japan +36%
* India +72%
* Australia -3%
* September +36.4%
Headcount at 30 September 2021: 1,625 (30 September 2019: 1,711)
In Asia Pacific, gross profit for Q3 was up 20.4% to GBP48.9m, a
second consecutive record quarter and exited in September +36.4%.
Mainland China was up 34% for the quarter and exited September
strongly, up 45%. Hong Kong, where trading conditions remained
challenging, was up 1%, a significant improvement on the decline of
16% in Q2 and exited in September up 10%. Overall, Greater China
grew 21% for the quarter. The other Large, High Potential market in
the region, South East Asia, delivered another record quarter, up
29%. Singapore was up 15%, exiting the quarter in September +49%
with the other 5 countries in the region growing 41% for the
quarter, collectively. Japan grew 36%, a record quarter and a
significant improvement from growth of 17% in Q2, exiting in
September up 56%. India also delivered a record quarter, growing
72% and exiting in September up over 100%. Australia declined 3%
for the quarter, although we saw an improvement in September,
exiting up 7%. Our fee earner headcount in the region increased by
80 in the quarter, mainly in Australia and Mainland China.
Americas Gross Profit (GBPm) Growth Rates
(17% of Group) 2021 2020 2019 Reported Constant Constant
vs. 2020 vs. 2020 vs. 2019
------- ------- ------ ----------- ----------- -----------
Q3 39.1 19.1 37.3 +104.2% +113.4% +24.6%
------- ------- ------ ----------- ----------- -----------
Unless otherwise stated, all growth rates are for the quarter in
constant currency and vs. 2019
* North America (11% of Group) +26%
o US +28%
* Latin America (6% of Group) +22%
o Mexico +18%
o Brazil +27%
* September +52.5%
Headcount at 30 September 2021: 1,313 (30 September 2019: 1,366)
In the Americas, despite being one of the worst COVID-19
affected regions, gross profit for Q3 was up 24.6%, a record
quarter and exited in September up 52.5%. In the US, where the
improvements in trading conditions we saw at the end of Q2
continued, we grew 28%, a second consecutive record quarter and
exited September strongly, up 61%, with strong growth in all
offices, though most significantly in Boston and Chicago. In Latin
America, gross profit grew 22%, a record quarter, up from growth of
11% in Q2. Mexico, our largest country in the region, was up 18%, a
record quarter and exited September strongly, up 38%. Brazil was up
27% for the quarter, in line with Q2, exiting September up 36%.
Elsewhere in Latin America, the remaining countries grew 23% for
the quarter, collectively, with second consecutive record quarters
for Argentina, Colombia and Panama. We increased our fee earner
headcount by 100 across the region in the quarter, mainly in the US
and Mexico.
UK Gross Profit (GBPm) Growth Rate Growth Rate
(15% of Group) 2021 2020 2019 vs. 2020 vs. 2019
-------- ------ ------ -------------- --------------
Q3 34.2 17.6 33.8 +94.3% +1.3%
-------- ------ ------ -------------- --------------
Unless otherwise stated, all growth rates are for the quarter in
constant currency and vs. 2019
* Michael Page +6%
* Page Personnel -13%
* September +15.1%
Headcount at 30 September 2021: 1,268 (30 September 2019: 1,368)
In the UK, gross profit grew 1.3% in the quarter, a significant
improvement from a decline of 9.0% in Q2. Our more permanent
focussed Michael Page business (+6% in Q3) was more resilient than
our Temporary focussed Page Personnel business (-13% in Q3). The
UK's performance improved in September, exiting the quarter
strongly, up 15%. Our fee earner headcount increased by 51 in the
quarter.
Financial Position
Save for the effects of Q3 trading detailed above and the
forthcoming payments of the 2021 interim and special dividends of
GBP100.2m to be paid on 13 October 2021, there have been no other
significant changes in the financial position of the Group since
the publication of the results for half year ended 30 June 2021.
Net cash at 30 September 2021 was in the region of GBP195m (Q2
2021: c. GBP164m, Q3 2020: c. GBP152m)
Shares
At 30 September 2021 there were 328,618,774 Ordinary shares in
issue, of which 10,865,302 were held by the Employee Benefit Trust
(EBT). The rights to receive dividends and to exercise voting
rights have been waived by the EBT over 9,386,513 shares and
consequently these shares should be excluded when calculating
earnings per share. The total number of voting rights in the
Company is 328,618,774.
Cautionary Statement
This Third Quarter 2021 Trading Update 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 Trading Update should not be relied on by any other
party or for any other purpose. This Trading Update 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 Trading Update 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 Trading
Update has been prepared for the Group as a whole and therefore
gives greater emphasis to those matters that are significant to
PageGroup and its subsidiary undertakings when viewed as a
whole.
The Group will issue its Fourth Quarter Trading Update on 12
January 2022.
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.
Enquiries:
PageGroup +44 (0)20 3077 8172
Steve Ingham, Chief Executive Officer
Kelvin Stagg, Chief Financial Officer
FTI Consulting +44 (0)20 3727 1340
Richard Mountain / Susanne Yule
The Company will host a conference call and presentation for
analysts and investors at 9:00am today. The live presentation can
be viewed by following the link:
https://www.investis-live.com/pagegroup/61407a716fca3113003828a8/vmsl
Please use the following dial-in numbers to join the
conference:
United Kingdom (Local) 020 3936 2999
All other locations +44 20 3936 2999
Please quote participant access code 91 05 52 to gain access to
the call.
A presentation and recording to accompany the call will be
posted on the Company's website during the course of the morning of
6 October 2021 at:
https://www.page.com/presentations/year/2021
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END
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