An investment in a recruiter is essentially an affirmation of wider confidence in the economy. When people are confident in the economy – and by extension the job market – they are more likely to seek out new roles, thereby generating fees for recruiters. A quick look at PageGroup’s (PAGE) latest results will tell you the world seems a confident place despite the tub-thumping over trade wars. Net fees – the leading measure of performance for recruiters – was up 14 per cent in constant currency to £369m, with permanent job placements accounting for over three-quarters of the total.
Growth was broad based, with management singling out only those areas where there was uncertainty, namely, the UK, Catalonia and Latin America, where confidence has been respectively dampened by Brexit effects, the Catalan independence movement, and a proliferation of elections, culminating in Brazil. Of these, only Brexit has been significant enough to reduce profits, with the UK down 4.6 per cent.
Investors will be wary of the potential impact to the business if a trade war between the US and China escalates, but the regional plaudits for the half year go to Europe, the Middle East and Africa (EMEA), which saw a 20.3 per cent increase in profitability – the broader region accounts for around half of total gross profit (net fees).
Analysts at Panmure Gordon are forecasting adjusted pre tax profits of £136m for 2018, giving EPS of 31.2p (from £118m and 27p in 2017).
| PAGEGROUP (PAGE) | ||||
| ORD PRICE: | 608p | MARKET VALUE: | £1.99bn | |
| TOUCH: | 607-608p | 12-MONTH HIGH: | 617p | LOW: 418p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 93p | NET CASH: | £87m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 673 | 56.9 | 13.1 | 3.90 |
| 2018 | 752 | 67.2 | 15.5 | 4.10 † |
| % change | +12 | +18 | +18 | +5 |
| Ex-div: | 6 Sep | |||
| Payment: | 10 Oct | |||
| †Does not include a special dividend of 12.73p | ||||
