Source - LSE Regulatory
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 2021)

2021

2020

2019

Reported vs. 2020

CC vs 2020*

CC vs 2019*

Revenue

£766.4m

£655.0m

£820.5m

+17.0%

+19.7%

-4.2%

Gross profit

£404.2m

£300.7m

£433.5m

+34.4%

+38.3%

-3.7%

Operating profit

£64.3m

£0.4m

£75.6m

>100%

>100%

-12.5%

Profit/(Loss) before tax

£63.7m

-£0.8m

£74.6m

>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 £64.3m (H1 2020: £0.4m; H1 2019: £75.6m)

·       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 £75.8k (H1 2020: £53.2k, H1 2019: £70.7k)

·       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 £163.8m (H1 2020: £161.7m, H1 2019: £81.7m)

·       Returning to dividend policy, interim dividend of 4.70 pence per share and special dividend of 26.71 pence per share, together totalling £100m

·       Outlook upgraded on 7 July 2021, full year operating profit expected to be within the range of £125m - £135m

 

* 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 £64.3m 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 £85m. Taking both dividends together, this amounts to a cash return to shareholders of £100m, 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 £125m - £135m.

 

"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


£m

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 £766.4m (2020: £655.0m; 2019: £820.5m) and gross profit increased 34.4% to £404.2m (2020: £300.7m; 2019: £433.5m). 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 £339.9m (2020: £300.3m; 2019: £357.9m), 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 £64.3m (2020: £0.4m; 2019: £75.6m). 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. £12m and c. £2m 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 £166.0m. In H1, £56.7m was generated from operations due to improved trading conditions, offset by an increase in the permanent placements' debtor receivable. Tax paid was £21.8m and net capital expenditure was £10.7m. During the first half, £6.9m was received from exercises of share options (2020: £0.1m) and £10.4m was spent on the purchase of shares into the Employee Benefit Trust (2020: £1.6m, 2019: nil). As a result, the Group had net cash of £163.8m at 30 June 2021, broadly in line with the prior year of £161.7m.

 

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 £85m. Taking both dividends together, this amounts to a cash return to shareholders of £100m, 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

 £m

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 £408.9m (2020: £352.9m) and gross profit increased 31.7% to £203.5m (2020: £154.5m). 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 £35.9m (2020: £10.6m; 2019: £45.6m) 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

 £m

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 £129.2m (2020: £105.3m) and gross profit increased 43.8% to £81.8m (2020: £56.9m). 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 £15.3m (2020: -3.6m; 2019: £8.8m) 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

 £m

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 £102.6m (2020: £78.7m), while gross profit increased 30.6% to £61.3m (2020: £46.9m). 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 £8.8m (2020: -£4.9m; 2019: £8.7m), 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

 £m

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 £125.7m (2020: £118.1m; 2019: £157.4m) and gross profit declined 17.0% to £57.6m (2020: £42.4m; 2019: £69.4m).

 

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 £4.3m (2020: -£1.7m; 2019: £12.5m) and our conversion rate was 7.5% (2020: -3.9%; 2019: 18.0%). This was after the furlough repayment of £3.4m 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 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 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 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 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 profits generated from permanent and temporary placements

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

 

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

 

How we performed in H1 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 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 2021: Gross profit per fee earner of £75.8k 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 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 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 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 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 growth

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

 

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

 

How we performed in H1 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 £163.8m (H1 2020: £161.7m; H1 2019: £81.7m). The closing cash position is broadly in line with 2020, with increased profitability offset by an increase in the permanent placements debtor receivable. £6.9m was received from exercises of share options (H1 2020: £0.1m) and £10.4m was spent on the purchase of shares into the Employee Benefit Trust (H1 2020: £1.6m, 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 £30m. 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 £30m 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 £163.8m of cash as at 30 June 2021, with no debt except for IFRS 16 lease liabilities of £91.0m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2023 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m 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.

 

 

 

 

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 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


£'000


£'000


£'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



£'000


£'000


£'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


£'000


£'000


£'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








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 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




£'000


£'000


£'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 £163.8m of cash as at 30 June 2021, with no debt except for IFRS 16 lease liabilities of £91.0m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2023 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m 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


£'000


£'000


£'000


£'000


£'000


£'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








£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000

£'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


£'000


£'000


£'000


£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000


£'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


£'000


£'000


£'000


£'000


£'000


£'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

 


£'000


£'000


£'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 £25.1m 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


£'000


£'000


£'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 £30.2m, 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 £3.4m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2020: £1.4m; 31 December 2020: £4.3m).

 

 

 

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 (£'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 £2.7m (30 June 2020: £2.5m, 31 December 2020: £4.9m).

 

 

10.        Trade and other receivables

 





30 June


30 June


31 December


2021


2020


2020


£'000


£'000


£'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


£'000


£'000


£'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


£'000


£'000


£'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 £30m. 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 £30m 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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