Recruiter Michael Page (MPI) has expanded well beyond its UK roots. That has got Page into markets with great potential such as China and the US. But it's also brought exposure to foreign-exchange fluctuations. "Like most international companies over the past year, we have been impacted significantly by currency movements," says chief financial officer Kelvin Stagg.
Page's half-year gross profit - a key profit measure for recruiters, comprising placement fees for permanent jobs and the margin earned on temporary jobs - rose 8 per cent year on year to £264m. But the stronger pound took that down to less than 1 per cent on a reported basis.
Nevertheless, Page took that tiny increase and managed to magnify it into an 11 per cent rise in operating profit to £35.7m, thanks to cost savings and improving end markets. China, the UK and the US are performing strongly, although the recruiter is not quite seeing a global job market recovery yet, with Brazil and France still described as challenging.
Management says that as long as current economic trends continue it should meet full-year expectations, although further currency movements remain the wildcard.
UBS expects adjusted EPS of 17.3p for the full year (14.9p in 2013), rising to 24.4p in 2015.
| MICHAEL PAGE INTERNATIONAL (MPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 438p | MARKET VALUE: | £1.4bn | |
| TOUCH: | 437-438p | 12-MONTH HIGH: | 512p | LOW: 417p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 58p* | NET CASH: | £42.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 503 | 32.0 | 7.0 | 3.25 |
| 2014 | 512 | 35.6 | 7.6 | 3.42 |
| % change | +2 | +11 | +9 | +5 |
Ex-div: 3 Sep Payment: 3 Oct *Includes intangible assets of £41m, or 13p a share | ||||
