PageGroup’s (PAGE) cautious stance on the UK market, in light of ongoing uncertainty around Brexit, cost its share price on results day. The domestic market accounts for around a fifth of group gross profits, and was the only segment not to report bottom-line growth in 2017. Chief executive Steve Ingham said this was largely the result of PageGroup’s focus on higher-salary positions, with activity levels stronger at the lower end of that spectrum. As such, protecting UK margins will remain a key focus this year, which could mean lowering headcount to cut costs.
Thankfully, Europe, the Middle East and Africa – which together account for the lion’s share of group earnings – reported a healthy 15 per cent gross profit improvement. Asia and the Americas also reported higher profits too, which helped keep the conversion rate at the group level moving upward to 16.6 per cent (16.3 per cent in 2016). Although conditions are “challenging” in Brazil, Australia and Singapore, Mr Ingham reckons these markets can bounce back.
Analysts at HSBC expect pre-tax profits of £134m for the year ending December 2018, giving EPS of 31.2p, compared with £119m and 26.6p in 2017.
| PAGEGROUP (PAGE) | ||||
| ORD PRICE: | 495p | MARKET VALUE: | £1.62bn | |
| TOUCH: | 494-495p | 12-MONTH HIGH: | 566p | LOW: 397p |
| DIVIDEND YIELD: | 2.5%* | PE RATIO: | 19 | |
| NET ASSET VALUE: | 83p | NET CASH: | £95.6m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.01 | 64.1 | 13.8 | 10.50 |
| 2014 | 1.05 | 80.4 | 19.3 | 11.00 |
| 2015 | 1.06 | 90.7 | 21.3 | 11.50 |
| 2016 | 1.20 | 100 | 23.1 | 11.98 |
| 2017 | 1.37 | 118 | 26.5 | 12.50 |
| % change | +15 | +18 | +15 | +4 |
| Ex-div: | 17 May | |||
| Payment: | 18 Jun | |||
| *Excludes special dividend of 12.73p a share paid in October 2017 | ||||
