Michael Page's operationally geared business ensures that following the recruitment firm's profit figures is more akin to a day at Thorpe Park than the office. In fact, the rollercoasters just down the road from Michael Page's HQ probably don't have such steep climbs. Because, having witnessed operating profits decrease an eye-watering 86 per cent in 2009, first-half figures soared 54 per cent to £49.6m. Take out one-off items and operating profits increased dramatically from £5.6m to £32.5m, as spare capacity was filled and productivity per 'fee earner' increased from £57,600 to £80,500.
Chief executive Steve Ingham explained that the business is now recovering robustly in every geography, but says the areas where the group has least competition are where "we are growing fastest and we believe we are very well-positioned". He is referring to the Asia Pacific and Americas regions, which saw revenues increase 48.4 per cent and 39.9 per cent, respectively, as the mix of permanent to temporary placements improved. Diversification has certainly helped operating profit figures. The group now earns 71 per cent of fee income (revenue minus cost of sales) from outside the UK, and has 40 per cent of its client-facing fee earners based overseas. What's more, just 47 per cent of fee income now comes from the traditionally important accounting and finance professions.
Having slashed staff dramatically in 2008 and 2009, these encouraging developments mean the group is hiring again. After going from a headcount peak of approximately 5,600 to 3,600 at the bottom of the cycle, 311 staff have now been added, predominantly in the Asia Pacific and Latin America regions. And despite recent economic pessimism, the group has seen "no indication of a so-called double dip". August is naturally quiet for the group, but Mr Ingham said: "Nothing I saw in July made me think September would not be a good month."
Net cash fell in the period from £137m at the year-end, after an increase in working capital was offset by share buy-backs and the payment of dividends. Meanwhile, KBC Peel Hunt now anticipates upgrading 2010 forecasts by 5-10 per cent from adjusted pre-tax profits of £63.5m and EPS of 13.3p.
Michael Page | ||||
|---|---|---|---|---|
| ORD PRICE: | 372p | MARKET VALUE: | £1.15bn | |
| TOUCH: | 372-373p | 12-MONTH HIGH: | 462p | LOW: 300p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 55p | NET CASH: | £65.7m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 365 | 43.2 | 8.8 | 2.88 |
| 2010 | 394 | 61.4 | 13.1 | 2.88 |
| % change | +8 | +42 | +49 | |
Ex-div:08 Sep Payment:08 Oct | ||||
