Widespread uncertainty and instability threatened to capsize PageGroup (PAGE) in the first half of 2016. But the specialist recruiter's focus on growing markets and tight grip on costs propelled constant-currency operating profit up 12 per cent to £47.1m.
The rebranded Michael Page International grew comparable sales and gross profit by more than a tenth in the crucial EMEA region. Its Page Personnel brand performed strongly in continental Europe, offsetting the impact of regional tensions in the Middle East. However, gross profit fell in the UK as referendum uncertainty and flagging interest in permanent, better-paid staff outweighed solid demand for lower-wage workers. Management cut domestic headcount by 3 per cent in response. Asia Pacific gross profit also fell, as economic worries in Hong Kong outweighed strong growth in India, Malaysia and elsewhere. And weak economic backdrops in Brazil and Canada took their toll on the Americas segment.
Greater productivity, cost savings and better trading in some markets meant PageGroup converted 15.7 per cent of gross profit into operating income, up from 14.3 per cent. It also returned to its record ratio of 77 fee earners for every 23 operational support staff. Broker Stifel expects adjusted pre-tax profit of £88m, giving EPS of 19.9p (from £90.7m and 21.1p in 2015).
| PAGEGROUP (PAGE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 343.3p | MARKET VALUE: | £1.12bn | |
| TOUCH: | 342.8-343.3p | 12-MONTH HIGH: | 537p | LOW: 156p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 72p | NET CASH: | £73.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p)† |
|---|---|---|---|---|
| 2015 | 530 | 40.4 | 9.1 | 3.60 |
| 2016 | 576 | 46.9 | 10.8 | 3.75 |
| % change | +9 | +16 | +19 | +4 |
Ex-div: 8 Sep Payment: 12 Oct †Excludes special dividends of 16p a share in 2015 and 6.46p in 2016 | ||||
