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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Pagegroup Plc | LSE:PAGE | London | Ordinary Share | GB0030232317 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-4.60 | -1.01% | 452.00 | 453.60 | 455.80 | 457.20 | 452.80 | 454.80 | 331,371 | 16:35:13 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Employment Agencies | 2.01B | 77.07M | 0.2436 | 18.67 | 1.44B |
TIDMPAGE
RNS Number : 4238I
PageGroup plc
07 August 2023
7 August 2023
Half Year Results for the Period Ended 30 June 2023
PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2023.
Financial summary Change (6 months to 30 June 2023) 2023 2022 Change CC* Revenue GBP1,033.9m GBP977.3m +5.8% +3.6% ------------ ---------- ------- ------- Gross profit GBP526.8m GBP538.9m -2.2% -4.4% ------------ ---------- ------- ------- Operating profit GBP63.9m GBP115.3m -44.6% -47.5% ------------ ---------- ------- ------- Profit before tax GBP63.3m GBP114.5m -44.7% ------------ ---------- ------- Basic earnings per share 13.6p 25.6p -46.9% ------------ ---------- ------- Diluted earnings per share 13.6p 25.5p -46.7% ------------ ---------- ------- Interim dividend per share 5.13p 4.91p ------------ ---------- Special dividend per share 15.87p 26.71p ------------ ----------
H1 Summary
-- Group operating profit of GBP63.9m (H1 2022: GBP115.3m) -- Conversion rate** decreased to 12.1% (H1 2022: 21.4%) -- Gross profit per fee earner down 5.8% on H1 2022 to GBP79.7k (H1 2022: GBP82.8k) -- Total headcount decreased by 448 (5.0%) to 8,572 at the end of June -- Strong Balance Sheet, with net cash of GBP97.9m (H1 2022: GBP136.2m) -- Interim dividend up 4.5% to 5.13 pence per share, totalling GBP16.2m -- Special dividend of 15.87 pence per share, totalling GBP50.0m
-- Outlook unchanged: Full year operating profit expected to be in line with previous guidance
* in constant currencies
** operating profit as a percentage of gross profit
Commenting, Nicholas Kirk, Chief Executive Officer, said:
"The Group delivered a robust H1 performance against a record first half in 2022. EMEA delivered the standout result, delivering record H1 gross profit against a particularly strong comparator across the region. However, tough market conditions continued in Asia, the UK and the US. Overall, Group gross profit declined 4.4% in constant currencies against H1 2022 . We delivered Group operating profit of GBP63.9m at a conversion rate of 12.1%, compared with 21.4% in H1 2022.
"The challenging conditions we saw towards the end of 2022 continued into H1 2023, with lower levels of both candidate and client confidence resulting in delays in decision making and candidates being more reluctant to accept offers. Reflecting the uncertain macro-economic conditions, temporary recruitment outperformed permanent, as clients sought more flexible options. In line with these conditions, we reduced our fee earner headcount by 558 (-8.0%) in the first half, with reductions in all regions. Our total headcount of 8,572 is 448 (-5.0%) lower than at the end of 2022. Productivity, measured as gross profit per fee earner, declined 5.8%, reflecting the reduction in gross profit, although this was partially offset by the decrease in headcount.
"We are announcing today an interim dividend of 5.13 pence per share, an increase of 4.5% over 2022. In addition, in line with our policy of returning surplus capital to shareholders, we are also announcing a special dividend of 15.87 pence per share (2022: 26.71 pence per share) totalling GBP50.0m. Taking these two dividend payments together, this amounts to a cash return to shareholders of GBP66.2m. This is in addition to the 2022 final dividend paid in June of GBP33.9m, resulting in a total return to shareholders in 2023 of GBP100.1m, or 31.76 pence per share.
"Looking forward, there remains a high level of global macro-economic and political uncertainty in the majority of our markets. However, against this backdrop, we continue to see candidate shortages and good levels of vacancies, as well as continued high fee rates. We are also seeing the benefits from our investments in innovation and technology, where Customer Connect is supporting productivity and enhancing customer experience and Page Insights is providing real time data to inform business decisions. We have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions. Given these fundamental strengths, we believe we will continue to perform well despite the uncertainty. At this stage of the year, the Board expects 2023 operating profit to be in line with our previous guidance."
INTERIM MANAGEMENT REPORT
GROUP RESULTS
GROSS PROFIT GBPm Growth rates % of Group H1 2023 H1 2022 Reported CC ----------- -------- -------- --------- ------- EMEA 55% 288.4 266.7 +8.1% +4.3% ----------- -------- -------- --------- ------- Americas 17% 89.1 94.2 -5.5% -8.2% ----------- -------- -------- --------- ------- Asia Pacific 16% 83.4 102.0 -18.3% -17.3% ----------- -------- -------- --------- ------- UK 12% 65.9 76.0 -13.2% -13.2% ----------- -------- -------- --------- ------- Total 100% 526.8 538.9 -2.2% -4.4% ----------- -------- -------- --------- ------- Permanent 74% 392.2 422.1 -7.1% -9.1% ----------- -------- -------- --------- ------- Temporary 26% 134.6 116.8 +15.3% +12.5% ----------- -------- -------- --------- -------
Revenue for the six months ended 30 June 2023 increased 5.8% to GBP1,033.9m (2022: GBP977.3m) and gross profit decreased 2.2% to GBP526.8m (2022: GBP538.9m). In constant currencies, the Group's revenue increased 3.6% and gross profit decreased 4.4%. The Group's revenue mix between permanent and temporary placements was 38:62 (2022: 44:56) and for gross profit was 74:26 (2022: 78:22). Revenue from temporary placements comprises the salaries of those placed, together with the margin charged.
Fee earner productivity decreased by 5.8% vs H1 2022 due to reduced levels of candidate and client confidence resulting in an increase in time to hire, as well as some reluctance to accept offers, limiting the number of placements per fee earner.
The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 77% 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 9.3% in reported rates to GBP462.9m (2022: GBP423.6m), driven largely by the higher average headcount in H1 2023 compared to H1 2022 and inflation. In constant currencies, administrative expenses were up 7.3% and operating profit decreased by 47.5% to GBP63.9m (2022: GBP115.3m), a decrease of 44.6% at reported rates. The Group's conversion rate, which represents the ratio of operating profit to gross profit, was 12.1% (2022: 21.4%) driven by the more challenging trading conditions in 2023, combined with higher costs.
OTHER ITEMS
Net interest expense of GBP0.5m was broadly consistent with H1 2022 (GBP0.8m). The effective tax rate for the first half was 31.9% (H1 2022: 28.8%), with the increase on the prior year due to the change in the UK tax rate from 19% to 25% from April 2023.
For the six months ended 30 June 2023, basic earnings per share and diluted earnings per share were both 13.6p, representing a decrease of 47% on 2022 (2022: basic earnings per share 25.6p; diluted earnings per share 25.5p).
CASH FLOW
The Group started the year with net cash of GBP131.5m. In H1, GBP83.7m was generated from operations due to H1 Operating Profit as well a net outflow of working capital due to the stronger performance in temporary recruitment. Tax paid was GBP27.3m and net capital expenditure was GBP11.3m. During the first half, GBP0.8m was received from exercises of share options (2022: GBP0.3m), GBP 17.5m was spent on the purchase of shares into the Employee Benefit Trust (2022: GBP14.8m) and dividends of GBP33.9m were paid to shareholders (2022: GBP32.7m). As a result, the Group had net cash of GBP97.9m at 30 June 2023 (30 June 2022: GBP136.2m).
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 5.13 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 15.87 pence per share (2022: 26.71 pence per share) totalling GBP50.0m. Taking these two dividend payments together, this amounts to a cash return to shareholders of GBP66.2m. This is in addition to the 2022 final dividend paid in June of GBP33.9m, meaning a total of GBP100.1m, or 31.76 pence per share, returned to shareholders in 2023.
The special dividend will be paid, as in previous years, at the same time as the interim dividend on 13 October 2023 to shareholders on the register as at 1 September 2023.
During the first half, the Group made purchases of GBP 17.5m of shares into the Employee Benefit Trust to hedge its exposure under the Group's share plans (2022: GBP14.8m).
GEOGRAPHICAL ANALYSIS ( All growth rates given below are in constant currency vs. H1 2022 unless otherwise stated )
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA GBPm Growth rates (55 % of Group in H1 2023) H1 2023 H1 2022 Reported CC -------- -------- --------- ------- Revenue 580.5 523.0 +11.0% +6.9% -------- -------- --------- ------- Gross Profit 288.4 266.7 +8.1% +4.3% -------- -------- --------- ------- Operating Profit 47.8 65.3 -26.8% -29.8% -------- -------- --------- ------- Conversion Rate (%) 16.6% 24.5% -------- -------- --------- -------
EMEA is the Group's largest region, contributing 55% of Group first half gross profit. Against 2022, in reported rates, revenue in the region increased 11.0% to GBP580.5m (2022: GBP523.0m) and gross profit increased 8.1% to GBP288.4m (2022: GBP266.7m). In constant currencies, revenue increased 6.9% on the first half of 2022 and gross profit increased by 4.3%.
The region was our strongest performing in H1 2023, delivering record gross profit against a particularly tough comparator. Against 2022, gross profit in Michael Page grew 3%, whilst our more temporary focused Page Personnel business was up 6%. France, 14% of Group gross profit and around a quarter of the region, delivered record gross profit against a very tough comparator, up 2% on 2022. Germany, the Group's second largest market, also delivered a record first half, up 9%. This was driven by strong performances from both our Page Personnel and our Technology focused Interim businesses, which grew 21% and 22%, respectively. Southern Europe grew 3%, with Italy down 1% and Spain up 1%. Benelux was up 4% for the first half, with the Netherlands down 1% whilst Belgium grew 15%. The Middle East and Africa grew 20%, a record H1, driven largely by a record performance in the UAE.
Productivity for the first half was down 4.3% on the record levels achieved in H1 2022, with total headcount up 220 (5.8%) versus Q2 2022. H1 operating profit was GBP47.8m (2022: GBP65.3m) with a conversion rate of 16.6% (2022: 24.5%). Profitability decreased on 2022 due the reduction in productivity, combined with the higher cost base. Headcount across the region decreased by 50 (1.2%) in the first half, to 4,035 at the end of June 2023 (4,085 at 31 December 2022).
THE AMERICAS
Americas GBPm Growth rates (17% of Group in H1 2023) H1 2023 H1 2022 Reported CC -------- -------- --------- ------- Revenue 151.0 137.3 +10.0% +8.3% -------- -------- --------- ------- Gross Profit 89.1 94.2 -5.5% -8.2% -------- -------- --------- ------- Operating Profit 5.9 13.8 -57.1% -70.9% -------- -------- --------- ------- Conversion Rate (%) 6.7% 14.7% -------- -------- --------- -------
In the Americas, representing 17% of Group first half gross profit, revenue increased 10.0% in reported rates against 2022, to GBP151.0m (2022: GBP137.3m), while gross profit declined 5.5% to GBP89.1m (2022: GBP94.2m). In constant currencies against 2022, revenue increased by 8.3% and gross profit declined 8.2%.
North America declined against 2022, a record comparator, with the US down 16%. Conditions remained tough throughout the first half, as uncertainty around market conditions impacted candidate and client confidence, and we experienced a higher level of candidate buybacks.
Latin America delivered growth of 4%. Mexico, our largest country in the region, declined 6% and Brazil declined 11%. Elsewhere in Latin America, our other five countries in the region grew 24%, collectively, with Argentina, Colombia and Panama all delivering record first halves.
For the region overall, productivity in H1 decreased 3.6% compared with H1 2022, with North America down 9% and Latin America up 7%. Operating profit was GBP5.9m (2022: GBP13.8m), with a conversion rate of 6.7% (2022: 14.7%). Our conversion rate was down on H1 2022, due to the lower productivity and higher cost base. Headcount across the region decreased by 190 (11.3%) in H1, to 1,500 at the end of June 2023 (1,690 at 31 December 2022).
ASIA PACIFIC
Asia Pacific GBPm Growth rates (16% of Group in H1 2023) H1 2023 H1 2022 Reported CC -------- -------- --------- ------- Revenue 149.8 159.3 -6.0% -4.7% -------- -------- --------- ------- Gross Profit 83.4 102.0 -18.3% -17.3% -------- -------- --------- ------- Operating Profit 4.5 20.9 -78.7% -75.9% -------- -------- --------- ------- Conversion Rate (%) 5.3% 20.5% -------- -------- --------- -------
In Asia Pacific, representing 16% of Group first half gross profit, revenue decreased 6.0% in reported rates to GBP149.8m (2022: GBP159.3m) and gross profit decreased 18.3% to GBP83.4m (2022: GBP102.0m), against 2022. In constant currencies, revenue decreased 4.7% in H1 and gross profit decreased 17.3%.
Gross profit in Greater China declined 37%. In Mainland China, gross profit was down 42% on 2022, due to the slower than anticipated recovery following the lifting of COVID restrictions during H1. Hong Kong declined 28%. South East Asia declined 18%, with Singapore down 22%, whilst the other five countries in the region declined 17%, collectively. India grew 3% and delivered a record H1, against a very strong comparator. Overall, for the first half, Japan declined 3% and Australia declined 2%.
First half productivity was down 13.6% on 2022, due to the continued challenging trading conditions across the region. We delivered GBP4.5m of operating profit (2022: GBP20.9m) at a conversion rate of 5.3% (2022: 20.5%), significantly behind the comparative period due to the much tougher trading conditions. Headcount across the region decreased by 111 in the first half (6.0%) to 1,731 at the end of June 2023 (1,842 at 31 December 2022).
UNITED KINGDOM
UK GBPm Growth rate (12% of Group in H1 2023) H1 2023 H1 2022 -------- -------- ------------ Revenue 152.5 157.7 -3.2% -------- -------- ------------ Gross Profit 65.9 76.0 -13.2% -------- -------- ------------ Operating Profit 5.7 15.3 -62.9% -------- -------- ------------ Conversion Rate (%) 8.6% 20.1% -------- -------- ------------
In the UK, representing 12% of Group first half gross profit, revenue decreased 3.2% vs. 2022 to GBP152.5m (2022: GBP157.7m) and gross profit declined 13.2% to GBP65.9m (2022: GBP76.0m).
Gross profit in our Michael Page business was down 17% in the first half. Page Personnel, which operates at lower salary levels with a higher degree of temporary recruitment, was down 5%.
First half productivity was down 8.5% on the prior year, with H1 2022 being at record levels. Operating profit was GBP5.7m (2022: GBP15.3m) and our conversion rate was 8.6% (2022: 20.1%). This weaker conversion rate was due primarily to the more challenging trading conditions, combined with a higher cost base than in the prior year. Headcount was down 97 (6.9%) during the first half to 1,307 at the end of June 2023 (1,404 at 31 December 2022).
KEY PERFORMANCE INDICATORS ("KPIs")
We measure our progress against our strategic objectives using the following key performance indicators:
KPI Definition, method of calculation and analysis Gross profit How measured: Gross profit represents revenue less growth cost of sales and consists of the total placement fees of permanent candidates, the margin earned on the placement of temporary candidates and the margin on advertising income, i.e. it represents net fee income. The measure used is the increase or decrease in gross profit as a percentage of the prior year gross profit. Why it's important: The growth of gross profit relative to the previous year is an indicator of the growth in net fees of the business as a whole. It demonstrates whether we are in line with our strategy to grow the business. How we performed in H1 2023: Trading conditions continued to be challenging through the first half of 2023 which resulted in a decline in gross profit of -2.2% vs. H1 2022 in reported rates and -4.4% in constant currencies. Relevant strategic objective: Organic growth -------------------------------------------------------------- Gross profit How measured: Total gross profit from a) geographic diversification regions outside the UK; and b) disciplines outside of Accounting and Financial Services, each expressed as a percentage of total gross profit. Why it's important: These percentages give an indication of how the business has diversified its revenue streams away from its historic concentrations in the UK and from the Accounting and Financial Services discipline. How we performed in H1 2023: Geographies: the percentage outside the UK increased to 87.5% (H1 2022: 85.9%), due to the strong H1 gross profit growth in EMEA, whilst all other regions were in decline. Disciplines: the percentage outside of Accounting and Financial Services was broadly in line with H1 2022 at 68.2% (H1 2022: 68.8%). Relevant strategic objective: Diversification -------------------------------------------------------------- Ratio of gross How measured: Gross profit from each type of placement profits generated expressed as a percentage of total gross profit. from permanent and temporary Why it's important: This ratio helps us to understand placements where we are in the economic cycle, since the temporary market tends to be more resilient when the economy is weak. However, in several of our core strategic markets, working in a temporary role or as a contractor or interim employee is not currently normal practice, for example in Mainland China. How we performed in H1 2023: 74% of our gross profit was generated from permanent placements, below the 78% in 2022. Permanent recruitment declined 9.1% in constant currencies against 2022, whilst temporary recruitment, grew 12.5%. This reflects the current economic climate, with clients looking for more flexibility in their hiring decisions. Relevant strategic objective: Organic growth -------------------------------------------------------------- Gross profit How measured: Gross profit for the year divided by per fee earner the average number of fee earners in the year. Why it's important: This is a key indicator of productivity. How we performed in H1 2023: Gross profit per fee earner of GBP79.7k was down 5.8% vs. 2022 in constant currencies. Although we continued to see the benefits of video interviewing reducing time to hire, combined with the data and technology investments made by the Group in recent years, trading conditions were significantly more challenging than in H1 2022. 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 2023: Operating profit as a percentage of gross profit decreased to 12.1% compared to the prior year (H1 2022: 21.4%), driven by the reduced productivity and higher cost base. Relevant strategic objective: Sustainable growth -------------------------------------------------------------- Basic earnings How measured: Profit for the year attributable to per share the Group's equity shareholders, divided by the weighted average number of shares in issue during the year. Why it's important: This measures the overall profitability of the Group. How we performed in H1 2023: Earnings per share (EPS) in H1 2023 was 13.6p, a decrease of 46.9% on the 2022 EPS of 25.6p. The decline is due to the lower profit for the period, driven by the more adverse trading conditions. Relevant strategic objective: Build for the long-term, organic growth -------------------------------------------------------------- Fee-earner headcount How measured: Number of fee-earners and directors growth involved in revenue-generating activities at the period end, expressed as the percentage change compared to the prior year. Why it's important: Growth in fee-earners is a guide to our confidence in the business and macro-economic outlook, as it reflects expectations as to the level of future demand above the existing capacity within the business. How we performed in H1 2023: Net fee earner headcount decreased by 558 (8.0%) in H1 2023, resulting in 6,385 fee earners at the end of June. We have reduced our fee earner headcount in all regions, in response to the more challenging trading conditions. 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 2023: Net cash at 30 June 2023 was GBP97.9m (H1 2022: GBP136.2m). The 2023 balance is after the payment of the 2022 final dividend of GBP33.9m and the purchase of shares into the Employee Benefit Trust of GBP17.5m (H1 2022: GBP14.8m). 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 2022 on pages 56 to 64.
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 December 2027, with a total drawable amount of GBP80m. Neither of these facilities were in use as at 30 June 2023. 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 continue to evolve alongside our business. In April 2023, we published our third sustainability report, highlighting the progress we've made on our four Sustainability goals over the course of 2022. This includes:
-- Changing 135,000 lives in 2022 -- Increasing our proportion of women in leadership roles to 43% -- Decreasing our scope 1 & 2 emissions by 30% vs 2021 -- Increasing net fees from our sustainability business by 120% vs 2021
H1 2023 has delivered continued and strong progress against all key targets. We have also committed to set a Science-based Target and are working on our submission to the Science-based Target Initiative.
We are now well on our way to reaching our sustainability goals, as we strive to support the transition to a more equitable and greener society. 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 2024 (review period).
The Group had GBP97.9m of cash as at 30 June 2023, with no debt except for IFRS 16 lease liabilities of GBP103.6m. Debt facilities relevant to the review period comprise a committed GBP80m RCF maturing December 2027, an uncommitted UK trade debtor discounting facility (up to GBP50m depending on debtor levels) and an uncommitted GBP20m UK bank overdraft facility. None of these facilities were in use as at 30 June 2023.
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 liquidity issue. Having considered the Group's forecasts, the level of cash resources available to the business and the Group's borrowing facilities, the Group's geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, the Board has concluded that the Group and therefore the Company has adequate resource to continue in operation existence for the period through to August 2024.
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,
Nicholas Kirk Kelvin Stagg Chief Executive Officer Chief Financial Officer 4 August 2023 4 August 2023
PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 8.30am on 7 August 2023, the details of which are below.
Link:
https://www.investis-live.com/pagegroup/64b938709b8a600d00c5206e/paau
Please use the following dial-in number to join the conference:
United Kingdom (Local) 020 4587 0498 All other locations +44 20 4587 0498
Please quote participant access code 51 80 95 to gain access to the call.
A presentation and recording to accompany the call will be posted on the PageGroup website during the course of the morning of 7 August 2023 at:
https://www.page.com/presentations/year/2023
Enquiries:
PageGroup +44 (0)20 3077 8425 Nicholas Kirk, Chief Executive Officer Kelvin Stagg, Chief Financial Officer FTI Consulting +44 (0)20 3727 1340 Richard Mountain / Susanne Yule
INDEPENT REVIEW REPORT TO PAGEGROUP PLC
Conclusion
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2023 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 2023 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" (ISRE) 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
4th August 2023
Condensed Consolidated Income Statement
For the six months ended 30 June 2023
Six months ended Year ended 30 June 30 June 31 December 2023 2022 2022 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 Revenue 3 1,033,886 977,257 1,990,287 Cost of sales (507,095) (438,354) (913,993) Gross profit 3 526,791 538,903 1,076,294 Administrative expenses (462,934) (423,586) (880,215) ---------- ---------- ------------ Operating profit 3 63,857 115,317 196,079 Financial income 4 829 392 1,104 Financial expenses 4 (1,378) (1,212) (2,817) Profit before tax 3 63,308 114,497 194,366 Income tax expense 5 (20,176) (33,000) (55,354) ---------- ---------- ------------ Profit for the period 43,132 81,497 139,012 ---------- ---------- ------------ Attributable to: Owners of the parent 43,132 81,497 139,012 ---------- ---------- ------------ Earnings per share Basic earnings per share (pence) 8 13.6 25.6 43.7 Diluted earnings per share (pence) 8 13.6 25.5 43.5 ---------- ---------- ------------
The above results all relate to continuing operations
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023
Six months ended Year ended 30 June 30 June 31 December 2023 2022 2022 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Profit for the period 43,132 81,497 139,012 Other comprehensive (loss)/income for the period Items that may subsequently be reclassified to profit and loss: Currency translation differences (13,997) 10,968 15,441 Total comprehensive income for the period 29,135 92,465 154,453 ---------- ---------- ------------ Attributable to: Owners of the parent 29,135 92,465 154,453 ---------- ---------- ------------
Condensed Consolidated Balance Sheet
As at 30 June 2023
30 June 30 June 31 December 2023 2022 2022 Unaudited Unaudited Audited Note GBP'000 GBP'000 GBP'000 Non-current assets Property, plant and equipment 9 37,665 33,251 36,123 Right-of-use assets 93,395 93,188 100,996 Intangible assets - Goodwill and other intangible 1,859 2,036 1,955 - Computer software 33,880 42,740 38,045 Deferred tax assets 20,421 19,941 18,641 Other receivables 10 12,890 12,989 13,224 200,110 204,145 208,984 ---------- ---------- ------------ Current assets Trade and other receivables 10 411,725 441,274 437,247 Current tax receivable 21,095 22,048 17,233 Cash and cash equivalents 13 97,939 136,227 131,480 530,759 599,549 585,960 ---------- ---------- ------------ Total assets 3 730,869 803,694 794,944 ---------- ---------- ------------ Current liabilities Trade and other payables 11 (258,308) (256,958) (289,108) Provisions 12 (3,737) (2,236) (2,772) Lease liabilities (32,984) (29,746) (31,268) Current tax payable (15,457) (32,785) (18,050) (310,486) (321,725) (341,198) ---------- ---------- ------------ Net current assets 220,273 277,824 244,762 ---------- ---------- ------------ Non-current liabilities Other payables 11 (8,455) (13,883) (14,951) Lease liabilities (70,643) (71,878) (78,564) Deferred tax liabilities (2,619) (1,475) (1,345) Provisions 12 (4,812) (7,443) (6,683) (86,529) (94,679) (101,543) ---------- ---------- ------------ Total liabilities 3 (397,015) (416,404) (442,741) ---------- ---------- ------------ Net assets 333,854 387,290 352,203 ---------- ---------- ------------ 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 (73,123) (56,875) (56,626) Currency translation reserve 18,341 27,865 32,338 Retained earnings 284,854 312,518 272,709 Total equity 333,854 387,290 352,203 ---------- ---------- ------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
Reserve for shares held in Called-up Capital the Currency share Share redemption employee translation Retained Total benefit capital premium reserve trust reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 January 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 the 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 ---------- -------- ----------- --------- ------------ ---------- ---------- Currency translation differences - - - - 4,473 - 4,473 ---------- -------- ----------- --------- ------------ ---------- ---------- Net income recognised directly in equity - - - - 4,473 - 4,473 Profit for the six months ended 31 December 2022 - - - - - 57,515 57,515 Total comprehensive income for the period - - - - 4,473 57,515 61,988 ---------- -------- ----------- --------- ------------ ---------- ---------- Purchase of shares held in the employee benefit trust - - - (1) - - (1) Exercise of share plans - - - - - 171 171 Reserve transfer when shares held in the employee benefit trust vest - - - 250 - (250) - Credit in respect of share schemes - - - - - 3,067 3,067 Credit in respect of tax on share schemes - - - - - 195 195 Dividends - - - - - (100,507) (100,507) - - - 249 - (97,324) (97,075) ---------- -------- ----------- --------- ------------ ---------- ---------- Balance at 31 December 2022 3,286 99,564 932 (56,626) 32,338 272,709 352,203 ---------- -------- ----------- --------- ------------ ---------- ---------- Balance at 1 January 2023 3,286 99,564 932 (56,626) 32,338 272,709 352,203 ---------- -------- ----------- --------- ------------ ---------- ---------- Currency translation differences - - - - (13,997) - (13,997) ---------- -------- ----------- --------- ------------ ---------- ---------- Net expense recognised directly in equity - - - - (13,997) - (13,997) Profit for the six months ended 30 June 2023 - - - - - 43,132 43,132 ---------- -------- ----------- --------- ------------ ---------- ---------- Total comprehensive (expense)/income for the period - - - - (13,997) 43,132 29,135 ---------- -------- ----------- --------- ------------ ---------- ---------- Purchase of shares held in employee benefit trust - - - (17,529) - - (17,529) Exercise of share plans - - - - - 759 759 Reserve transfer when shares held in the employee benefit trust vest - - - 1,032 - (1,032) - Credit in respect of share schemes - - - - - 2,462 2,462 Credit in respect of tax on share schemes - - - - - 713 713 Dividends - - - - - (33,889) (33,889) - - - (16,497) - (30,987) (47,484) ---------- -------- ----------- --------- ------------ ---------- ---------- Balance at 30 June 2023 3,286 99,564 932 (73,123) 18,341 284,854 333,854 ---------- -------- ----------- --------- ------------ ---------- ----------
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2023
30 June 30 June 31 December 2023 2022 2022 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Note Profit before tax 63,308 114,497 194,366 Depreciation, amortisation charges and expense of computer software 31,913 33,519 60,592 Loss on sale of property, plant and equipment 144 43 4,398 Share scheme charges 2,468 2,923 5,989 Net finance costs 549 820 1,713 ---------- ---------- ------------ Operating cash flow before changes in working capital 98,382 151,802 267,058 Decrease/(increase) in receivables 13,375 (71,612) (61,509) (Decrease)/increase in payables (28,045) 12,309 40,821 ---------- ---------- ------------ Cash generated from operations 83,712 92,499 246,370 Income tax paid (27,337) (30,023) (61,598) ---------- ---------- ------------ Net cash from operating activities 56,375 62,476 184,772 ---------- ---------- ------------ Cash flows from investing activities Purchases of property, plant and equipment (9,530) (12,723) (21,982) Purchases and capitalisation of intangible assets (1,848) (6,558) (9,693) Proceeds from the sale of property, plant and equipment, and computer software 85 336 2,080 Interest received 829 392 1,104 ---------- ---------- ------------ Net cash used in investing activities (10,464) (18,553) (28,491) ---------- ---------- ------------ Cash flows from financing activities Dividends paid (33,889) (32,740) (133,247) Interest paid (266) (527) (1,213) Lease liability repayment (18,779) (17,047) (35,896) Issue of own shares for the exercise of options 759 276 447 Purchase of shares into the employee
benefit trust (17,529) (14,837) (14,838) Net cash used in financing activities (69,704) (64,875) (184,747) ---------- ---------- ------------ Net decrease in cash and cash equivalents (23,793) (20,952) (28,466) Cash and cash equivalents at the beginning of the period 131,480 153,983 153,983 Exchange (loss)/gain on cash and cash equivalents (9,748) 3,196 5,963 Cash and cash equivalents at the end of the period 13 97,939 136,227 131,480 ---------- ---------- ------------
Notes to the condensed set of interim results
For the six months ended 30 June 2023
1. General information
The information for the year ended 31 December 2022 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 2023 were authorised for issue in accordance with a resolution of the directors on 4 August 2023.
2. Accounting policies
Basis of preparation
The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2023 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 2022, were approved by the directors on 9 March 2023. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2022, which have been prepared in accordance with UK-adopted international accounting standards ("IFRSs").
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 2024 (review period).
The Group had GBP97.9m of cash as at 30 June 2023, with no debt except for IFRS 16 lease liabilities of GBP103.6m. Debt facilities relevant to the review period comprise a committed GBP80m RCF maturing December 2027, an uncommitted UK trade debtor discounting facility (up to GBP50m depending on debtor levels) and an uncommitted GBP20m UK bank overdraft facility. None of these facilities were in use as at 30 June 2023.
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 liquidity issue. Having considered the Group's forecasts, the level of cash resources available to the business and the Group's borrowing facilities, the Group's geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, the Board has concluded that the Group and therefore the Company has adequate resource to continue in operation existence for the period through to August 2024.
New accounting standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2022. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
The IASB published on 23 May 2023 International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12) which was adopted by the UKEB on 19th July 2023. Page Group has applied the mandatory temporary exception to the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules to our FY23 Interim reporting.
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 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 EMEA 580,539 522,981 1,069,346 288,400 266,683 538,488 Asia Pacific 149,842 159,329 318,359 83,416 102,046 195,276 Americas 150,971 137,302 282,942 89,047 94,188 193,397 United Kingdom 152,534 157,645 319,640 65,928 75,986 149,133 1,033,886 977,257 1,990,287 526,791 538,903 1,076,294 ---------- -------- ------------ ------------ ----------- ------------ Operating Profit --------------------------------------- Six months ended Year ended 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 EMEA 47,818 65,283 122,079 Asia Pacific 4,458 20,952 35,244 Americas 5,927 13,822 17,885 United Kingdom 5,654 15,260 20,871 ------------ ----------- ------------ Operating profit 63,857 115,317 196,079 Financial expense (549) (820) (1,713) Profit before tax 63,308 114,497 194,366 ------------ ----------- ------------
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 30 June June 31 December 30 June 30 June 31 December 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 EMEA 320,385 315,833 338,251 249,084 210,853 248,585 Asia Pacific 108,769 142,008 128,299 62,871 64,930 69,995 Americas 109,488 115,299 116,647 51,310 47,642 60,635 United Kingdom 171,132 208,506 194,514 18,293 60,194 45,476 ------------ ------------ -------------- -------- -------- ---------------- Segment assets/liabilities 709,774 781,646 777,711 381,558 383,619 424,691 Income tax 21,095 22,048 17,233 15,457 32,785 18,050
730,869 803,694 794,944 397,015 416,404 442,741 ------------ ------------ -------------- -------- -------- ---------------- Property, Plant & Equipment Intangible Assets ----------------------------------------------- -------------------------------------- Six months ended Year ended Six months ended Year ended 30 30 June June 31 December 30 June 30 June 31 December 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 EMEA 15,092 12,730 14,072 2,122 2,197 2,296 Asia Pacific 5,041 6,383 6,194 58 172 110 Americas 6,899 7,542 7,378 4 6 5 United Kingdom 10,633 6,596 8,479 33,555 42,401 37,589 37,665 33,251 36,123 35,739 44,776 40,000 ------------ ------------ -------------- -------- -------- ---------------- Right-of-use Assets Lease Liabilities ------------------------------------- --------------------------------------- Six months ended Year ended Six months ended Year ended 30 30 June June 31 December 30 June 30 June 31 December 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 EMEA 60,292 52,621 61,760 66,967 56,130 65,136 Asia Pacific 15,110 16,493 17,415 15,715 17,509 20,042 Americas 10,026 10,072 11,950 12,676 12,943 14,434 United Kingdom 7,967 14,002 9,871 8,269 15,042 10,220 93,395 93,188 100,996 103,627 101,624 109,832 --------- -------- -------------- -------- -------- ------------
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 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Permanent 395,569 426,975 832,014 392,202 422,133 826,321 Temporary 638,317 550,282 1,158,273 134,589 116,770 249,973 1,033,886 977,257 1,990,287 526,791 538,903 1,076,294 ------------ --------- ------------ --------- -------- ------------ (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 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 EMEA 199,879 192,132 380,002 380,660 330,849 689,344 Asia Pacific 70,690 89,854 170,029 79,152 69,475 148,330 Americas 78,073 84,974 170,970 72,898 52,328 111,972 United Kingdom 46,927 60,015 111,013 105,607 97,630 208,627 395,569 426,975 832,014 638,317 550,282 1,158,273 -------- -------- -------------- -------- -------- ------------
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 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Accounting and Financial Services 367,273 354,229 720,783 167,433 168,391 343,659 Legal, Technology, HR, Secretarial and Other 352,448 321,332 667,543 162,281 167,871 334,772 Engineering, Property & Construction, Procurement & Supply Chain 217,835 199,154 400,959 127,689 126,735 251,686 Marketing, Sales and Retail 96,330 102,542 201,002 69,388 75,906 146,177 1,033,886 977,257 1,990,287 526,791 538,903 1,076,294 ---------- -------- ------------ --------- -------- ------------ (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 2023 2022 2022 2023 2022 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Large, Proven markets 524,692 505,917 1,015,599 241,961 245,429 483,627 Large, High Potential markets 359,314 334,214 688,925 194,274 208,007 417,296 Small and Medium, High Margin markets 149,880 137,126 285,763 90,556 85,467 175,371 1,033,886 977,257 1,990,287 526,791 538,903 1,076,294 ---------- -------- ------------ --------- -------- ------------ 4. Financial income / (expenses) Six months ended Year ended 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 Financial income Bank interest receivable 829 392 1,104 --------- -------- ------------ Financial expenses Bank interest payable (266) (527) (1,213) Interest on lease liabilities (1,112) (685) (1,604) (1,378) (1,212) (2,817) --------- -------- ------------ 5. Income tax expense
Taxation for the six month period is charged at 31.9% (six months ended 30 June 2022: 28.8%; year ended 31 December 2022: 28.5%), 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 2023 2022 2022 GBP'000 GBP'000 GBP'000 Amounts recognised as distributions to equity holders in the period: Final dividend for the year ended 31 December 2022 of 10.76p per ordinary share (2021: 10.30p) 33,889 32,740 32,740 Interim dividend for the period ended 30 June 2022 of 4.91p per ordinary share (2021: 4.70p) - - 15,607 Special dividend for the year ended 31 December 2022 of 26.71p per ordinary share (2021: 0p) - - 84,900 33,889 32,740 133,247
--------- -------- -------------- Amounts proposed as distributions to equity holders in the period: Proposed interim dividend for the period ended 30 June 2023 of 5.13p per ordinary share (2022: 4.91p) 16,161 15,607 --------- -------- -------------- Proposed special dividend for the year ended 31 December 2023 of 15.87p per ordinary share (2022: 26.71p) 50,000 84,900 --------- -------- -------------- Proposed final dividend for the year ended 31 December 2022 of 10.76p per ordinary share - - 34,207 --------- -------- --------------
The proposed interim and special dividends have not been approved by the Board at 30 June 2023 and therefore have not been included as a liability. The comparative interim and special dividends at 30 June 2022 were also not recognised as a liability in the prior period.
The proposed interim dividend of 5.13p (2022: 4.91p) per ordinary share and special dividend of 15.87p (2022: 26.71p) per ordinary share will be paid on 13 October 2023 to shareholders on the register at the close of business on 1 September 2023.
7. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of GBP2.6m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2022: GBP2.1m, 31 December 2022 : GBP6.0m).
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 2023 2022 2022 Earnings for basic and diluted earnings per share (GBP'000) 43,132 81,497 139,012 --------- -------- ------------ Number of shares Weighted average number of shares used for basic earnings per share ('000) 316,436 318,473 318,166 Dilution effect of share plans ('000) 1,494 843 1,204 Diluted weighted average number of shares used for diluted earnings per share ('000) 317,930 319,316 319,370 --------- -------- ------------ Basic earnings per share (pence) 13.6 25.6 43.7 Diluted earnings per share (pence) 13.6 25.5 43.5
The above results all relate to continuing operations.
9. Property, plant and equipment
Acquisitions
During the period ended 30 June 2023 the Group acquired property, plant and equipment with a cost of GBP9.5 m (30 June 2022: GBP12.7m).
10. Trade and other receivables 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 Current Trade receivables 272,047 306,557 320,794 Less allowance for expected credit losses (12,429) (12,361) (12,960) --------- --------- ------------ Net trade receivables 259,618 294,196 307,834 Other receivables 7,149 4,658 21,535 Accrued income (net of revenue reversals) 112,278 112,994 88,951 Prepayments 32,680 29,426 18,927 411,725 441,274 437,247 --------- --------- ------------ Non-current Other receivables 12,890 12,989 13,224 --------- --------- ------------ 11. Trade and other payables 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 Current Trade payables 3,192 5,023 11,101 Other tax and social security 50,593 45,368 61,079 Other payables 17,676 35,847 36,629 Accruals 186,847 170,720 180,299 258,308 256,958 289,108 -------- -------- ------------ Non-current Accruals 8,455 13,883 14,529 Other tax and social security - - 422 8,455 13,883 14,951 -------- -------- ------------ 12. Provisions 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 Dilapidations 6,528 7,212 7,128 NI on share schemes 694 954 844 Other 1,327 1,513 1,483 8,549 9,679 9,455 -------- -------- ------------ Current 3,737 2,236 2,772 Non-Current 4,812 7,443 6,683 8,549 9,679 9,455 -------- -------- ------------ 13. Cash and cash equivalents 30 June 30 June 31 December 2023 2022 2022 GBP'000 GBP'000 GBP'000 Cash at bank and in hand 97,939 136,227 131,480 Short-term deposits - - - -------- -------- ------------ Cash and cash equivalents 97,939 136,227 131,480 Cash and cash equivalents in the statement of cash flows 97,939 136,227 131,480 -------- -------- ------------
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
N Kirk K Stagg Chief Executive Officer Chief Financial Officer
4 August 2023
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/2023
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IR NKQBQFBKDKFK
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