With economic conditions still tough, recruiter Michael Page (MPI) suffered a productivity fall from its fee earners - staff who win business - resulting in lower gross margins and a poorer conversion rate of net fee income (NFI) to operating profit. Indeed, half-year group NFI fell 4.4 per cent and underlying operating profit tumbled 11.9 per cent to £32.1m.
In the Europe, Middle East and Africa unit - responsible for 41 per cent of group NFI - there was a 9.2 per cent fall in NFI. Trading in the UK was flat, but the Australian business was hit by a downturn in the mining and commodities sector - so NFI there fell 20 per cent. In contrast, the Asian operations grew NFI by 8 per cent - new offices in Kuala Lumpur and Taipei are progressing well, although conditions in China have become tougher since last year. But North America was the group's star performer, with NFI there jumping 23 per cent as the US economic recovery gathered pace. But weakness in Latin America did mean that the Americas unit overall grew NFI by just 4.5 per cent.
Management has responded to the tough conditions by culling 144 jobs among its operational support staff. Analysts at Deutsche Bank expect EPS of 15.1p (from 14.2p in 2012).
| MICHAEL PAGE INTERNATIONAL (MPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 451p | MARKET VALUE: | £1.39bn | |
| TOUCH: | 450-451p | 12-MONTH HIGH: | 477p | LOW: 344p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 64p* | NET CASH: | £47.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 503 | 28.2 | 6.10 | 3.25 |
| 2013 | 503 | 32.0 | 7.00 | 3.25 |
| % change | - | +13 | +15 | - |
Ex-div: 4 Sep Payment: 4 Oct *Includes intangible assets of £44.6m, or 14p a share | ||||
