Company Announcements

Half-year Report

Source: RNS
RNS Number : 1647V
PageGroup plc
08 August 2022
 

 PageGroup_c

 

8 August 2022

Half Year Results for the Period Ended 30 June 2022

 

Record Financial and Operational Performance

 

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2022.

 

Financial summary

(6 months to 30 June 2022)

2022

2021

Change

Change CC*

Revenue

£977.3m

£766.4m

+27.5%

+28.1%

Gross profit

£538.9m

£404.2m

+33.3%

+33.3%

Operating profit

£115.3m

£64.3m

+79.3%

+79.4%

Profit before tax

£114.5m

£63.7m

+79.8%


Basic earnings per share

25.6p

12.2p

>100%


Diluted earnings per share

25.5p

12.1p

>100%







Interim dividend per share

4.91p

4.70p



Special dividend per share

26.71p

26.71p



 

H1 Summary

·       Group operating profit of £115.3m (H1 2021: £64.3m)

·       Conversion rate** increased to 21.4% (H1 2021: 15.9%)

·       Gross profit per fee earner up 9.2% on H1 2021 to £82.8k (H1 2021: £75.8k)

·       Total headcount increased by 830 (10.6%) to 8,668 at the end of June

·       Strong Balance Sheet, with net cash of £136.2m (H1 2021: £163.8m)

·       Interim dividend up 4.5% to 4.91 pence per share, totalling £15.6m

·       Special dividend of 26.71 pence per share, totalling £84.9m

·       Outlook unchanged: Full year operating profit expected to be in line with company compiled consensus of £206m

 

* in constant currencies

** operating profit as a percentage of gross profit

 

Commenting, Steve Ingham, Chief Executive Officer, said:

 

"We achieved a strong H1 performance across our geographies, disciplines and brands, and delivered Group operating profit up nearly 80% and an underlying conversion rate*** of 22.1%.  This was particularly pleasing given that 2021 had been a record year for gross profit and operating profit.

 

"This performance was achieved despite the backdrop of macro-economic and geo-political uncertainty as well as continued COVID-19 restrictions in certain markets. We believe that our strategy of maintaining and investing in our platform throughout the pandemic by investing in experienced hires and focusing on technology and innovation, has been key to us achieving these outstanding results.

 

"Gross profit per fee earner, our measure of productivity, reached a new record level, up 9% on H1 2021. The Group continued to benefit from favourable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates, in addition to a shorter time to hire facilitated by video interviewing and investments in new systems.

 

*** Underlying conversion rate is an alternative performance measure, calculated as conversion rate (as defined above) excluding the one-off expense of certain software licenses previously capitalised of c. £4m.

"We continued to invest in headcount, adding 652 fee earners (10.7%) during the first half of the year. The largest headcount investments were made in the markets where we saw the strongest growth and with the highest growth potential, including Germany, the US and India. This investment has driven record performances in four of our five large, high potential markets and both of our high potential disciplines. Our operational support staff headcount increased by 178 (10.1%) and our fee earner to support staff ratio remained at 78:22. The implementation of our global operating system, Customer Connect, was completed in H1, with the final roll outs in France and Latin America.

 

"We are announcing today an interim dividend of 4.91 pence per share, an increase of 4.5% over 2021. In addition, in line with our policy of returning surplus capital to shareholders, we are also announcing a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

 

"Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world. In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking KPIs. However, at this point, our expectations for 2022 full year operating profit remain in line with the company compiled consensus of £206m."

 

 

INTERIM MANAGEMENT REPORT

 

GROUP RESULTS

 

GROSS PROFIT

 

£m

Growth rates

 

% of Group

H1 2022

H1 2021

Reported

CC

EMEA

50%

266.7

203.5

+31.0%

+34.9%

Asia Pacific

19%

102.0

81.8

+24.8%

+21.9%

Americas

17%

94.2

61.3

+53.7%

+44.1%

UK

14%

76.0

57.6

+31.9%

+31.9%

Total

100%

538.9

404.2

+33.3%

+33.3%







Permanent

78%

422.1

311.3

+35.6%

+35.0%

Temporary

22%

116.8

92.9

+25.7%

+27.5%

 

Revenue for the six months ended 30 June 2022 increased 27.5% to £977.3m (2021: £766.4m) and gross profit increased 33.3% to £538.9m (2021: £404.2m). In constant currencies, the Group's revenue increased 28.1% and gross profit increased 33.3%. The Group's revenue mix between permanent and temporary placements was 44:56 (2021: 41:59) and for gross profit was 78:22 (2021: 77:23). Revenue from temporary placements comprises the salaries of those placed, together with the margin charged.

 

Fee earner productivity increased by 9.2% vs H1 2021 due to video interviewing reducing time to hire, wage inflation and improvements in fee rates from candidate shortages, alongside the strategic decisions and investments made by the Group in recent years. This contributed to the strong business performance, with gross profit increasing 33.3%, whilst fee earner headcount has increased 23.7% from 5,443 in H1 2021 to 6,734 in H1 2022.

 

The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 78% 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 24.6% in reported rates compared to 2021, to £423.6m (2021: £339.9m), driven largely by the increase in headcount. In constant currencies, administrative expenses were up 24.5% and operating profit increased by 79.4% to £115.3m (2021: £64.3m), an increase of 79.3% at reported rates.

 

In the first half, the Group incurred costs of c. £4m relating to the one-off expense of software licenses previously capitalised. We currently expect an additional one-off cost of c. £3m in H2 relating to the consolidation of our London offices.

 

The Group's conversion rate, which represents the ratio of operating profit to gross profit, was 21.4% (2021: 15.9%) driven by the strong business performance across all regions, as well as Q1 of the prior year still being impacted by COVID-19 as well as the repayment of £3.4m of furlough monies to HMRC. Excluding the one-off expense of software licenses previously capitalised, as mentioned above, the Group's underlying H1 2022 conversion rate was 22.1%.

 

OTHER ITEMS

 

Net interest expense of £0.8m was broadly consistent with H1 2021. The effective tax rate for the first half was 28.8% (H1 2021: 39.4%), which is in line with the 2021 full year effective tax rate of 29.0%.

 

For the six months ended 30 June 2022, basic earnings per share and diluted earnings per share were 25.6p and 25.5p, respectively, representing growth of more than 100% on 2021 (2021: basic earnings per share 12.2p; diluted earnings per share 12.1p).

 

CASH FLOW

 

The Group started the year with net cash of £154.0m. In H1, £92.5m was generated from operations due to strong trading conditions, offset by an increase in debtors across both permanent and temporary recruitment. Tax paid was £30.0m and net capital expenditure was £18.9m. During the first half, £0.3m was received from exercises of share options (2021: £6.9m), £14.8m was spent on the purchase of shares into the Employee Benefit Trust (2021: £10.4m) and dividends of £32.7m were paid to shareholders. As a result, the Group had net cash of £136.2m at 30 June 2022, compared with the prior year of £163.8m.

 

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.

 

The Board has announced an interim dividend of 4.91 pence per share, an increase of 4.5% over last year. In addition, in line with our policy of returning surplus capital to shareholders, the Group is pleased to announce today a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

 

The special dividend will be paid, as in previous years, at the same time as the interim dividend on 14 October 2022 to shareholders on the register as at 2 September 2022.

 

During the first half, the Group made purchases of £14.8m of shares into the Employee Benefit Trust to hedge its exposure under the Group's share plans (2021: £10.4m).

 

GEOGRAPHICAL ANALYSIS (All growth rates given below are in constant currency vs. H1 2021 unless otherwise stated)

 

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

 

EMEA

£m

Growth rates

(50% of Group in H1 2022)

H1 2022

H1 2021

Reported

CC

Gross Profit

266.7

203.5

+31.0%

+34.9%

Operating Profit

65.3

35.9

+82.0%

+87.8%

Conversion Rate (%)

24.5%

17.6%



 

EMEA is the Group's largest region, contributing 50% of Group first half gross profit. Against 2021, in reported rates, revenue in the region increased 27.9% to £523.0m (2021: £408.9m) and gross profit increased 31.0% to £266.7m (2021: £203.5m). In constant currencies, revenue increased 31.6% on the first half of 2021 and gross profit increased by 34.9%.

 

The improvement in trading conditions seen through 2021 continued in H1 2022, and the region delivered a record first half. Against 2021, Michael Page grew 39%, whilst our more temporary focused Page Personnel business was up 28%. France, 13% of the Group and around a quarter of the region, delivered record gross profit, up 25% on 2021. Germany, the Group's third largest market, also delivered a record first half, up 43%. This was driven by a standout performance from our Technology focused Interim business, which grew 51%. Southern Europe grew 40%, with Italy up 32% and Spain up 40%. Benelux was up 42% for the first half, with the Netherlands up 45% and Belgium up 36%. The Middle East and Africa grew 21%.

 

Productivity for the first half was up 11.5% on 2021, to a new record level. H1 operating profit was £65.3m (2021: £35.9m) with a conversion rate of 24.5% (2021: 17.6%). Profitability improved significantly on 2021 due to the improvement in trading conditions, with Q1 2021 still being impacted by COVID-19 restrictions. Headcount across the region increased by 368 (10.7%) in the first half, to 3,815 at the end of June 2022 (3,447 at 31 December 2021).

 

ASIA PACIFIC

 

Asia Pacific

£m

Growth rates

(19% of Group in H1 2022)

H1 2022

H1 2021

Reported

CC

Gross Profit

102.0

81.8

+24.8%

+21.9%

Operating Profit

20.9

15.3

+36.5%

+33.6%

Conversion Rate (%)

20.5%

18.8%



 

In Asia Pacific, representing 19% of Group first half gross profit, revenue increased 23.3% in reported rates to £159.3m (2021: £129.2m) and gross profit increased 24.8% to £102.0m (2021: £81.8m), against 2021. In constant currencies, revenue increased 21.1% in the first half and gross profit increased by 21.9%.

 

Greater China overall grew 4%. In Mainland China, gross profit was flat on 2021, with the country being heavily impacted in H1 2022 by COVID-19 lockdowns and restrictions, particularly in Q2. Hong Kong, which was also impacted by COVID restrictions, grew 11% in H1. South East Asia, one of our Large High Potential markets, delivered a record performance, up 42%. Singapore was up 24%, whilst the other five countries in the region grew 54%, collectively. India delivered a record first half, up 61%, with strong growth across all offices. Japan also delivered a record, growing 29%, with particularly strong performances from both our contracting business and the Technology discipline. Overall, for the first half, Australia grew 23%.

 

First half productivity was down slightly, by 1.1% on 2021, due to the tougher trading conditions in Greater China. Operating profit increased to £20.9m (2021: £15.3m) and our conversion rate increased to 20.5% (2021: 18.8%). Despite the impact of COVID-19 lockdowns on Greater China in H1 2022, the business performance remained strong and the conversion rate was only marginally behind full year 2021 of 21.8%. Headcount across the region increased by 133 in the first half (7.8%) to 1,842 at the end of June 2022 (1,709 at 31 December 2021).

 

THE AMERICAS

 

Americas

£m

Growth rates

(17% of Group in H1 2022)

H1 2022

H1 2021

Reported

CC

Gross Profit

94.2

61.3

+53.7%

+44.1%

Operating Profit

13.8

8.8

+57.2%

+39.9%

Conversion Rate (%)

14.7%

14.3%



 

In the Americas, representing 17% of Group first half gross profit, revenue increased 33.8% in reported rates against 2021, to £137.3m (2021: £102.6m), while gross profit increased 53.7% to £94.2m (2021: £61.3m). In constant currencies against 2021, revenue increased by 26.3% and gross profit increased by 44.1%.

 

North America delivered a record first half, with the US up 43%. Property and Construction, our largest discipline in the US, delivered growth of 53%, albeit against a weak comparator as H1 2021 was still recovering from pre-pandemic levels. The US also saw strong growth in Technology and Healthcare & Life Sciences.

 

For the first half, Latin America delivered a record performance, up 45%. Mexico, our largest country in the region, grew 47% and Brazil grew 38%. Elsewhere in Latin America, our other five countries in the region together grew 49%.

 

Productivity in H1 increased 10.6% compared with H1 2021, with increases across both North America and Latin America. Operating profit was £13.8m (2021: £8.8m), with a conversion rate of 14.7% (2021: 14.3%). Trading conditions were strong in the first half throughout the region, due primarily to the increase in productivity. Our conversion rate was up marginally on H1 2021, with the productivity improvements largely offset by a significant investment in headcount, up 252 (18.3%) in H1, to 1,633 at the end of June 2022 (1,381 at 31 December 2021).

 

UNITED KINGDOM

 

UK

£m

Growth rate

(14% of Group in H1 2022)

H1 2022

H1 2021

 

Gross Profit

76.0

57.6

+31.9%

Operating Profit

15.3

4.3

>100%

Conversion Rate (%)

20.1%

7.5%


 

In the UK, representing 14% of Group first half gross profit, revenue increased 25.4% vs. 2021 to £157.7m (2021: £125.7m) and gross profit increased 31.9% to £76.0m (2021: £57.6m).

 

Our Michael Page business was up 24% in the first half. Page Personnel, which operates at lower salary levels and had been slower to recover from the pandemic, was up 62% and delivered a record month in June.

 

First half productivity increased significantly, up 16.8% on 2021. Operating profit was £15.3m (2021: £4.3m) and our conversion rate was 20.1% (2021: 7.5%). This significant improvement was partially due to the one-off furlough repayment of £3.4m to HMRC made in H1 2021. Excluding this one-off item, the prior year conversion rate was 13.3%. The remaining increase was due to the improved trading conditions. Headcount was up by 77 (5.9%) during the first half to 1,378 at the end of June 2022 (1,301 at 31 December 2021).

 

 

KEY PERFORMANCE INDICATORS ("KPIs")

 

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

 

KPI

Definition, method of calculation and analysis

Gross profit growth

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

 

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

 

How we performed in H1 2022: Trading conditions continued to be strong throughout the first half of 2022 which resulted in record gross profit, increasing +33.3% vs. H1 2021 in both reported rates and constant currencies.

 

Relevant strategic objective: Organic growth

Gross profit diversification

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

 

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

 

How we performed in H1 2022: Geographies: the percentage outside the UK was broadly in line with 2021 at 85.9% (H1 2021: 85.7%).

 

Disciplines: the percentage outside of Accounting and Financial Services increased to 68.8% (H1 2021: 67.8%), due to stronger growth in our other disciplines such as Technology, Healthcare & Life Sciences and Digital.

 

Relevant strategic objective: Diversification

Ratio of gross profits generated from permanent and temporary placements

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

 

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

 

How we performed in H1 2022: 78% of our gross profit was generated from permanent placements, above the 77% in 2021. Double-digit growth was delivered across both permanent and temporary recruitment, although permanent recruitment growth was stronger, up 35.0%, compared with temporary recruitment, up 27.5%, in constant currencies against 2021.

 

Relevant strategic objective: Organic growth

Gross profit per fee earner

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

 

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

 

How we performed in H1 2022: Gross profit per fee earner of £82.8k was up 9.2% vs. 2021 in constant currencies. The improvement was driven by the strong trading conditions, combined with video interviewing reducing time to hire, wage inflation and improvements in fee rates from candidate shortages, alongside the strategic decisions and investments made by the Group in recent years.

 

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 2022: Operating profit as a percentage of gross profit increased to 21.4% compared to the prior year (H1 2021: 15.9%), driven by the increased productivity, demonstrating the operational gearing in the business. The comparative was also affected by weaker trading results in Q1, due to COVID-19 continuing to impact many of the Group's markets and the repayment of £3.4m of furlough to HMRC.

 

Relevant strategic objective: Sustainable growth

Basic earnings per share

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

 

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

 

How we performed in H1 2022: Earnings per share (EPS) in H1 2022 was 25.6p, a significant increase of over 100% on the 2021 EPS of 12.2p. The increase is driven by the improved trading conditions.

 

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

Fee-earner: operational support staff headcount ratio

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

 

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

 

How we performed in H1 2022: The ratio was 78:22 (H1 2021: 77:23). In line with our strategy of maintaining and investing in our platform, we have added a total of 652 fee earners in the first half of 2022. Our operational support headcount rose by 178 in H1, and, as such, our ratio of fee earners to operational support staff was maintained at the year-end ratio of 78:22.

 

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 2022: Net cash at 30 June 2022 was £136.2m (H1 2021: £163.8m). The 2022 balance is after the payment of the 2021 final dividend of £32.7m. £0.3m was received from exercises of share options (H1 2021: £6.9m) and £14.8m was spent on the purchase of shares into the Employee Benefit Trust (H1 2021: £10.4m).

 

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 2021 on pages 51 to 60.

 

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.


The Group 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 May 2024, with a total drawable amount of £30m. Neither of these facilities were in use as at 30 June 2022. These facilities are used on an ad hoc basis to fund any major Group sterling 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's 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

 

Our ESG strategy drives purposeful impact today and will expand as our businesses grow in the future. In April 2022, we published our second sustainability report outlining progress towards our ten-year sustainability vision, which includes ambitious targets. H1 2022 has delivered continued and strong progress against all key targets.

 

From a social perspective, we continue to make progress towards our target of changing over a million lives within ten years. The number of lives changed each year continues to increase, through growing candidate placements along with the expansion of PageGroup's social impact programmes such as webinars, CV and interview writing workshops with charities.

From an environmental perspective, carbon emissions are likely to increase year-on-year as our regular business activities, including travel, return following the impacts of COVID-19. However, we remain focused on reducing our emissions compared to pre-COVID levels and reaching operational net zero by 2026. We are retaining the lessons learnt during the pandemic, such as conducting meetings and interviews virtually where appropriate. We continue to transition our offices to renewable energy, provide electric options for company cars and reduce waste.

 

For further information on our sustainability efforts, please refer to https://www.page.com/sustainability.

 

GOING CONCERN

 

The Board has undertaken a review of the Group's forecasts and associated risks and sensitivities, in the period from the date of approval of the interim financial statements to August 2023 (review period).

 

The Group had £136.2m of cash as at 30 June 2022, with no debt except for IFRS 16 lease liabilities of £101.6m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2024 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m UK bank overdraft facility.

 

Despite the macroeconomic and political uncertainty that currently exists and its inherent risk and impact on the business, based on the analysis performed there are no plausible downside scenarios that the Board believes would cause a significant uncertainty over going concern. 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 2023.

 

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

Bourne Business Park

200 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2NX

 

By order of the Board,

 

 

Steve Ingham

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer

5 August 2022

5 August 2022

 

PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 9.00am on 8 August 2022, the details of which are below.

Link:

https://www.investis-live.com/pagegroup/62d6a3b8299ad30e00dd0fe1/pgir

 

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 50 35 42 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 8 August 2022 at:

 

https://www.page.com/presentations/year/2022

 

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

 


 

 

INDEPENDENT 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 2022 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 13. 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 2022 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) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. 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 are prepared in accordance with UK adopted international accounting standards. 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".

 

Conclusions Relating to Going Concern

 

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

 

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

 

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.

 

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

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 statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are 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) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. 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

5 August 2022

 

 

Condensed Consolidated Income Statement

For the six months ended 30 June 2022

 




Six months ended

Year ended

 



30 June

 

30 June

 

31 December

 



2022

 

2021

 

2021

 



Unaudited

 

Unaudited

 

Audited

 

Note

 

£'000

 

£'000

 

£'000

 



 

 




Revenue

3


977,257

 

766,412


1,643,740

Cost of sales



(438,354)

 

(362,228)


(766,020)

Gross profit

3


538,903

 

404,184


877,720

Administrative expenses



(423,586)

 

(339,855)


(709,210)

Operating profit

3


115,317

 

64,329


168,510

Financial income

4


392

 

194


290

Financial expenses

4


(1,212)

 

(850)


(2,155)

Profit before tax

3


114,497

 

63,673


166,645

Income tax expense

5


(33,000)

 

(25,062)


(48,289)

Profit for the period



81,497

 

38,611


118,356









Attributable to:








Owners of the parent



81,497

 

38,611


118,356









Earnings per share



 

 




Basic earnings per share (pence)

8


25.6

 

12.2


37.2

Diluted earnings per share (pence)

8


25.5

 

12.1


37.0

 

The above results all relate to continuing operations

 

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2022

 



Six months ended

Year ended

 


30 June

 

30 June

 

31 December

 


2022

 

2021

 

2021

 


Unaudited

 

Unaudited

 

Audited

 


£'000

 

£'000

 

£'000

 




 



Profit for the period


81,497

 

38,611


118,356








Other comprehensive income/(loss) for the period

 






Items that may subsequently be reclassified to profit and loss:














Currency translation differences


10,968

 

(7,221)


(8,423)



 

 




Total comprehensive income for the period


92,465

 

31,390


109,933



 

 




Attributable to:


 

 




Owners of the parent


92,465

 

31,390


109,933

 

 

Condensed Consolidated Balance Sheet

As at 30 June 2022




30 June

 

Re-presented

30 June

 

31 December

 



2022

 

2021

 

2021

 



Unaudited

 

Unaudited

 

Audited

 

Note

 

£'000

 

£'000

 

£'000

Non-current assets

 


 

 




Property, plant and equipment

9


33,251

 

23,294


24,836

Right-of-use assets



93,188

 

83,795


94,956

Intangible assets - Goodwill and other intangible



2,036

 

2,082


2,065

                            - Computer software



42,740

 

43,522


47,100

Deferred tax assets



19,941

 

17,927


19,659

Other receivables

10


12,989

 

11,374


12,849




204,145

 

181,994


201,465

Current assets

 


 

 




Trade and other receivables

10


441,274

 

305,700


355,797

Current tax receivable



22,048

 

23,761


13,214

Cash and cash equivalents

13


136,227

 

163,758


153,983




599,549

 

493,219


522,994




 

 




Total assets

3


803,694

 

675,213


724,459




 

 




Current liabilities

 


 

 




Trade and other payables

11


(256,958)

 

(197,704)


(230,382)

Provisions

12


(2,236)

 

(2,412)


(6,755)

Lease liabilities



(29,746)

 

(30,157)


(30,125)

Current tax payable



(32,785)

 

(18,724)


(22,241)




(321,725)

 

(248,997)


(289,503)




 

 




Net current assets

 


277,824

 

244,222


233,491




 

 




Non-current liabilities

 


 

 




Other payables

11


(13,883)

 

(6,332)


(18,332)

Lease liabilities



(71,878)

 

(60,875)


(72,215)

Deferred tax liabilities



(1,475)

 

(5,953)


(354)

Provisions

12


(7,443)

 

(6,881)


(3,950)




(94,679)

 

(80,041)


(94,851)

Total liabilities

3


(416,404)

 

(329,038)


(384,354)




 

 




Net assets

 


387,290

 

346,175


340,105

 

 


 

 




Capital and reserves

 


 

 




Called-up share capital



3,286

 

3,286


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



(56,875)

 

(52,683)


(47,338)

Currency translation reserve



27,865

 

18,099


16,897

Retained earnings



312,518

 

276,977


266,764

Total equity

 


387,290

 

346,175


340,105

 

The Balance Sheet has been re-presented to provide separate disclosure for provisions within current and non-current liabilities which were previously disclosed within accruals. Further information is disclosed in Note 2.


Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2022

 





Reserve








for shares





Called-up


Capital

held in the

Currency




share

Share

redemption

employee

translation

Retained

Total

 

capital

premium

reserve

benefit trust

reserve

earnings

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance at 1 January 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 the employee benefit trust

-

-

-

(10,369)

-

-

(10,369)

Exercise of share plans

-

-

-

-

-

6,938

6,938

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

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

 

 

 

 

 

 

 

 

Currency translation differences

-

-

-

-

(1,202)

-

(1,202)

Net expense recognised directly in equity

-

-

-

-

(1,202)

-

(1,202)

Profit for the six months ended 31 December 2021

-

-

-

-

-

79,745

79,745

Total comprehensive (expense)/income for the period

-

-

-

-

(1,202)

79,745

78,543

Exercise of share plans

-

-

-

-

-

9,493

9,493

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

5,345

-

(5,345)

-

Credit in respect of share schemes

-

-

-

-

-

4,605

4,605

Credit in respect of tax on share schemes

-

-

-

-

-

1,519

1,519

Dividends

-

-

-

-

-

(100,230)

(100,230)


-

-

-

5,345

-

(89,958)

(84,613)


 

 

 

 

 

 

 

Balance at 31 December 2021

3,286

99,564

932

(47,338)

16,897

266,764

340,105

 

 

 

 

 

 

 

 

Balance at 1 January 2022

3,286

99,564

932

(47,338)

16,897

266,764

340,105

 

Currency translation differences

-

-

-

-

10,968

-

10,968

 

Net income recognised directly in equity

-

-

-

-

10,968

-

10,968

 

Profit for the six months ended 30 June 2022

-

-

-

-

-

81,497

81,497

 

Total comprehensive income for the period

-

-

-

-

10,968

81,497

92,465

 

Purchase of shares held in employee benefit trust

-

-

-

(14,837)

-

-

(14,837)

 

Exercise of share plans

-

-

-

-

-

276

276

 

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

5,300

-

(5,300)

-

 

Credit in respect of share schemes

-

-

-

-

-

2,922

2,922

 

Debit in respect of tax on share schemes

-

-

-

-

-

(901)

(901)

 

Dividends

-

-

-

-

-

(32,740)

(32,740)

 


-

-

-

(9,537)

-

(35,743)

(45,280)

 


 







 

Balance at 30 June 2022

3,286

99,564

932

(56,875)

27,865

312,518

387,290

 











 

 


Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2022

 




30 June

 

30 June

 

31 December




2022

 

2021

 

2021




Unaudited

 

Unaudited

 

Audited




£'000

 

£'000

 

£'000


Note

 

 

 

 

 





 

 

 

 

 

Profit before tax

 


114,497

 

63,673


166,645

Depreciation, amortisation charges and expense of computer software



33,519

 

26,238


53,728

Loss/(profit) on sale of property, plant and equipment



43

 

21


(59)

Share scheme charges



2,923

 

2,447


7,052

Net finance costs



820

 

656


1,864

Operating cash flow before changes in working capital

 


151,802

 

93,035


229,230

Increase in receivables



(71,612)

 

(59,840)


(115,318)

Increase in payables



12,309

 

23,519


72,372

Cash generated from operations

 


92,499

 

56,714


186,284

Income tax paid



(30,023)

 

(21,830)


(37,046)

Net cash from operating activities

 


62,476

 

34,884


149,238









Cash flows from investing activities

 







Purchases of property, plant and equipment



(12,723)

 

(2,688)


(10,233)

Purchases and capitalisation of intangible assets



(6,558)

 

(8,923)


(18,130)

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



336

 

906


2,629

Interest received



392

 

194


290

Net cash used in investing activities

 


(18,553)

 

(10,511)


(25,444)









Cash flows from financing activities

 







Dividends paid



(32,740)

 

-


(100,230)

Interest paid



(527)

 

(183)


(841)

Lease liability repayment



(17,047)

 

(18,719)


(37,026)

Issue of own shares for the exercise of options



276

 

6,938


16,431

Purchase of shares into the employee benefit trust



(14,837)

 

(10,369)


(10,369)

Net cash used in financing activities

 


(64,875)

 

(22,333)


(132,035)









Net (decrease)/increase in cash and cash equivalents

 


(20,952)

 

2,040


(8,241)

Cash and cash equivalents at the beginning of the period

 


153,983

 

165,987


165,987

Exchange gain/(loss) on cash and cash equivalents



3,196

 

(4,269)


(3,763)

Cash and cash equivalents at the end of the period

13


136,227

 

163,758


153,983

 

 

Notes to the condensed set of interim results

For the six months ended 30 June 2022

 

1.         General information

 

The information for the year ended 31 December 2021 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 2022 were authorised for issue in accordance with a resolution of the directors on 5 August 2022.

 

2.         Accounting policies

 

Basis of preparation

 

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2022 have been prepared in accordance with UK adopted 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 2021, were approved by the directors on 3 March 2022.  The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2021, which have been prepared in accordance with UK-adopted international accounting standards ("IFRSs").

 

It is the Directors' view that provisions are sufficiently material to be separately disclosed within the balance sheet, where in previous years these were disclosed within accruals. Accordingly, comparatives have been represented on a consistent basis.  No third balance sheet is presented because the representation at the beginning of the comparative period is not considered material. There is no impact on the income statement, cashflow or net assets in the balance sheet as a result of this representation.

 

As a result, the balance sheet for June 2021 includes provisions of £9.3m and an associated reduction in accruals.

 

Refer to Note 12 for disclosures in accordance with IAS 37.

 

Going concern

The Board has undertaken a review of the Group's forecasts and associated risks and sensitivities, in the period from the date of approval of the interim financial statements to August 2023 (review period).

The Group had £136.2m of cash as at 30 June 2022, with no debt except for IFRS 16 lease liabilities of £101.6m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2024 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m UK bank overdraft facility.

Despite the macroeconomic and political uncertainty that currently exists and its inherent risk and impact on the business, based on 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 2023.

 

New accounting standards, interpretations and amendments adopted by the Group

 

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

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

 

2022

 

2021

 

2021

 

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 












EMEA

522,981

 

408,874


869,574


266,683

 

203,531


431,960

Asia Pacific

159,329

 

129,170


282,008


102,046

 

81,762


179,296

Americas

137,302

 

102,647


220,671


94,188

 

61,285


138,520

United Kingdom

157,645

 

125,721


271,487


75,986

 

57,606


127,944


977,257

 

766,412


1,643,740


538,903

 

404,184


877,720
































 








Operating Profit

 







Six months ended

Year ended

 







30 June

 

30 June

 

31 December

 







2022

 

2021

 

2021

 







£'000


£'000

 

£'000

EMEA







65,283


35,862


93,435








 





Asia Pacific







20,952


15,347


39,004








 

 




Americas







13,822


8,793


19,163








 





United Kingdom







15,260


4,327


16,908








 





Operating profit







115,317


64,329


168,510

Financial expense







(820)


(656)


(1,865)

Profit before tax







114,497


63,673


166,645

 

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. Intangible Assets include 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


31 December

 

2022

 

2021

 

2021

 

 

2021

 

2021

 

£'000

 

£'000

 

£'000

 

£'000


£'000

 

£'000

 












EMEA

315,833


231,607


285,573


210,853


159,076


201,748













Asia Pacific

142,008


113,690


132,995


64,930


50,776


64,405



 


 

 



 




Americas

115,299

 

78,928

 

94,581


47,642

 

39,615


43,789



 


 

 



 




United Kingdom

208,506

 

227,227

 

198,096


60,194

 

60,847


52,171

Segment assets/liabilities

781,646

 

651,452


711,245


383,619

 

310,314


362,113

Income tax

22,048

 

23,761

 

13,214


32,785

 

18,724


22,241



 


 

 



 





803,694

 

675,213


724,459


416,404

 

329,038


384,354














 

 

 


Property, Plant & Equipment

 

Intangible Assets

 

Six months ended

 

Year ended

 

Six months ended

Year ended

 

30 June

 

30 June

 

31 December

 

 

30 June

 

31 December

 

2022

 

2021

 

2021

 

 

2021

 

2021

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 











EMEA

12,730


9,186


10,571


2,197

 

2,399


2,247

Asia Pacific

6,383


3,954


4,318


172

 

274


279



 










Americas

7,542

 

5,504


5,325


6

 

2


-



 










United Kingdom

6,596


4,650


4,622


42,401

 

42,929


46,639


33,251

 

23,294


24,836


44,776

 

45,604


49,165















 

 


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

 

2022

 

2021

 

2021

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

£'000

 

£'000

 

£'000

 











EMEA

52,621


42,211


54,413

56,130

 

44,841


57,143

Asia Pacific

16,493


12,904


16,132

17,509

 

13,583


17,154

Americas

10,072

 

12,637


10,692

12,943

 

15,369


13,432



 









United Kingdom

14,002


16,043


13,719

15,042

 

17,239


14,611


93,188

 

83,795


94,956

101,624

 

91,032


102,340













 

 

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

 

2022

 

2021

 

2021

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

£'000

 

£'000

 

£'000

 











Permanent

426,975

 

315,079


682,233

422,133

 

311,320


676,099

Temporary

550,282

 

451,333


961,507

116,770

 

92,864


201,621













977,257

 

766,412


1,643,740

538,903

 

404,184


877,720

 

(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

 

2022

 

2021

 

2021

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

£'000

 

£'000

 

£'000

 











EMEA

192,132


144,845


303,762

330,849

 

264,029


565,812

Asia Pacific

89,854


71,891


158,329

69,475

 

57,279


123,679

Americas

84,974

 

54,912


123,545

52,328

 

47,735


97,126

United Kingdom

60,015


43,431


96,597

97,630

 

82,290


174,890


426,975

 

315,079


682,233

550,282

 

451,333


961,507













 

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

 

2022

 

2021

 

2021

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

£'000

 

£'000

 

£'000

 











Accounting and Financial Services

354,229

 

289,822


609,012

168,391

 

130,208


281,549












Legal, Technology, HR, Secretarial and Other

321,332

 

230,847


511,466

167,871

 

117,411


260,819












Engineering, Property & Construction, Procurement & Supply Chain

199,154

 

165,156


349,770

126,735

 

96,869


207,200












Marketing, Sales and Retail

102,542

 

80,587


173,492

75,906

 

59,696


128,152


 

 




 

 





977,257

 

766,412


1,643,740

538,903

 

404,184


877,720

 

(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

 

2022

 

2021

 

2021

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

£'000

 

£'000

 

£'000

 











Large, Proven markets

505,917

 

411,453


867,634

245,429

 

190,996


406,618












Large, High Potential markets

334,214

 

251,418


551,547

208,007

 

149,387


332,539












Small and Medium, High Margin markets

137,126

 

103,541


224,559

85,467

 

63,801


138,563













977,257

 

766,412


1,643,740

538,903

 

404,184


877,720

 

4.         Financial income / (expenses)

 


Six months ended

Year ended

 

30 June

 

30 June

 

31 December

 

 

2022

 

2021

 

2021

 

 

£'000

 

£'000

 

£'000

 

Financial income






 

Bank interest receivable

392

 

194


290

 







 

Financial expenses






 

Bank interest payable

(527)

 

(183)


(841)

 

Interest on lease liabilities

(685)

 

(667)


(1,314)

 


(1,212)

 

(850)


(2,155)

 









 

5.         Income tax expense

 

Taxation for the six month period is charged at 28.8% (six months ended 30 June 2021: 39.4%; year ended 31 December 2021: 29.0%), 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


2022

 

2021

 

2021


£'000

 

£'000

 

£'000

Amounts recognised as distributions to equity holders in the period:

 





Final dividend for the year ended 31 December 2021 of 10.30p per ordinary share (2020: 0p)

32,740

 

-


-

Interim dividend for the period ended 30 June 2021 of 0p per ordinary share (2020: 4.70p)

-

 

-


14,998

Special dividend for the year ended 31 December 2021 of 0p per ordinary share (2020: 26.71p)

-

 

-


85,232


32,740

 

-


100,230


 





Amounts proposed as distributions to equity holders in the period:

 






 





Proposed interim dividend for the period ended 30 June 2022 of 4.91p per ordinary share (2021: 4.70p)

15,607

 

14,957

 

-


 

 


 

 

Proposed special dividend for the year ended 31 December 2022 of 26.71p per ordinary share (2021: 26.71p)

84,900

 

85,000

 

-

Proposed final dividend for the year ended 31 December 2021 of 10.30p per ordinary share

-

 

-

 

32,912

 

The proposed interim and special dividends have not been approved by the Board at 30 June 2022 and therefore have not been included as a liability. The comparative interim and special dividends at 30 June 2021 were also not recognised as a liability in the prior period.

 

The proposed interim dividend of 4.91p (2021: 4.70p) per ordinary share and special dividend of 26.71p (2021: 26.71p) per ordinary share will be paid on 14 October 2022 to shareholders on the register at the close of business on 2 September 2022.

 

7.         Share-based payments

 

In accordance with IFRS 2 "Share-based Payment", a charge of £2.1m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2021: £3.4m, 31 December 2021: £7.8m).

 

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

2022

 

2021

2021

 





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

81,497

 

38,611

118,356






Number of shares

 




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

318,473


317,383

318,237

Dilution effect of share plans ('000)

843


859

1,232

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

319,316

 

318,242

319,469






 

 

 



Basic earnings per share (pence)

25.6

 

12.2

37.2

Diluted earnings per share (pence)

25.5

 

12.1

37.0

 

The above results all relate to continuing operations.

 

9.         Property, plant and equipment

 

Acquisitions

During the period ended 30 June 2022 the Group acquired property, plant and equipment with a cost of £12.7m (30 June 2021: £2.7m).

 

10.        Trade and other receivables

 

 

30 June

 

30 June

 

31 December

 

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

Current

 





Trade receivables

306,557

 

217,500


265,727

Less allowance for expected credit losses and revenue reversals

(12,361)


(9,930)


(11,086)

Net trade receivables

294,196

 

207,570


254,641

Other receivables

4,658

 

3,720


7,018

Accrued income

112,994

 

77,449


81,186

Prepayments

29,426

 

16,961


12,952


441,274

 

305,700


355,797

Non-current

 





Other receivables

12,989

 

11,374


12,849

 

11.        Trade and other payables

 

 

30 June

 

Re-presented

30 June

 

31 December

 

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

Current

 





Trade payables

5,023

 

3,949


5,908

Other tax and social security

45,368

 

29,406


46,946

Other payables

35,847

 

44,357


34,698

Accruals

170,720

 

119,992


142,830


256,958

 

197,704


230,382

Non-current

 





Accruals

13,883

 

6,332


16,310

Other tax and social security

-

 

-


2,022


13,883

 

6,332


18,332

 

12.        Provisions

 

 

30 June

 

30 June

 

31 December

 

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

 

 





Dilapidations

7,212

 

6,206


6,967

NI on share schemes

954

 

2,059


2,343

Other

1,513

 

1,028


1,395


9,679

 

9,293


10,705

 

 





Current

2,236

 

2,412


6,755

Non-Current

7,443

 

6,881


3,950


9,679

 

9,293


10,705

 

13.        Cash and cash equivalents

 

 

30 June

 

30 June

 

31 December

 

2022

 

2021

 

2021

 

£'000

 

£'000

 

£'000

 

 

 




Cash at bank and in hand

136,227

 

79,550


153,983

Short-term deposits

-

 

84,208


-

Cash and cash equivalents

136,227

 

163,758


153,983

Cash and cash equivalents in the statement of cash flows

136,227

 

163,758


153,983

 

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 facilities in order to advance cash on its receivables. The facility is used only ad hoc in case the Group needs to fund any major GBP cash outflow.

 

 

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

 

5 August 2022

 

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/2022

 

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END
 
 
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