Q1 2013 Interim Management Statement

Released : 16/04/2013

RNS Number : 4082C
Michael Page International PLC
16 April 2013
 



16 April 2013

 

FIRST QUARTER 2013 INTERIM MANAGEMENT STATEMENT

 

 

 

Q1 GROSS PROFIT ANALYSIS



Reported

Constant

 

Year-on-year gross profit

% of Group Q1

Q1 2013

Q1 2012

%

%

EMEA

41%

£52.0m

£60.3m

-13.8%

-15.1%

UK

24%

£30.2m

£30.6m

-1.2%

-1.2%

Asia Pacific

20%

£26.1m

£26.3m

-0.7%

-0.3%

Americas

15%

£18.5m

£18.7m

-1.4%

+2.2%

Total

100%

£126.8m

£135.9m

-6.7%

-6.7%







Permanent

77%

£98.3m

£106.5m

-7.7%

-7.6%

Temporary

23%

£28.5m

£29.4m

-3.1%

-3.6%

 

 

Commenting, Steve Ingham, Chief Executive said:

 

"The Group reported gross profit of £127m, up 0.2% on the fourth quarter, although down 6.7% year-on-year against a strong comparative performance. This robust result was achieved despite continuing tough economic conditions and weak market confidence across all our regions.

 

"We saw good performances in some of our regions, with Asia and North America delivering the strongest gross profit performances up 14% and 16% respectively year-on-year in constant currency. Our offices in Greater China, Japan, Mexico, the Middle East, and the USA performed particularly well, as did some of our smaller, newer businesses in Europe, Latin America and Asia. However, our businesses in France and Germany, where we operate predominantly in permanent recruitment, experienced another challenging quarter, down 17% and 27% respectively against strong comparables year-on-year in constant currency.

 

"Activity levels remained strong in the quarter, but with difficult trading conditions continuing in several markets, we anticipate Q2 to be a challenging quarter.  We continue to actively adjust our cost base, both to take account of market conditions and also to improve the Group's operating performance. As a result total headcount reduced by 57 to 5,042 from the year end 2012. This was driven by a reduction in operational support of 64, offset by a small net increase in fee earners.

 

"Overall, we have had a robust first quarter.  However, to target our long-term growth and profit opportunities, we have continued to invest in our key growth markets of China, South East Asia, Latin America, Germany and, now, North America.  We are also actively managing our operating cost base.  Combined, these two will deliver long-term profitable growth to our shareholders."

 

 

 

Enquiries:

 

PageGroup

01932 264144

Steve Ingham, Chief Executive Officer


Andrew Bracey, Chief Financial Officer




FTI Consulting

020 7269 7291

Richard Mountain / Susanne Yule


 

 

The company will host a conference call and presentation for analysts and investors at 8.30am today. The live presentation can be viewed by following the link:

 

http://www1.axisto.co.uk/webcasting/investis/pagegroup/first-quarter-ims-2013/ 

 

 

Please use the following dial-in numbers to join the conference:

 

0208 817 9301

Audience London Local

0845 634 0041

Audience UK Lo Call

0800 634 5205

Audience UK Freephone

Confirmation Number:

10403889

 

 

The presentation and recording of the call will be available on the company's website later today at:

 

http://www.pagegroup.co.uk/investors/reports-and-presentations/presentations-and-webcasts/2013.aspx

 

 

The Group will issue its second quarter and half year trading update on 16 July 2013.

 

 

Group Trading Update

 

Michael Page International plc ("PageGroup"), reports first quarter gross profit of £126.8m, +0.2% (-2.8%1) on Q4 2012 and -6.7% (-6.7%1) on Q1 2012 (£135.9m). Headcount reduced by 57 (-1.1%) in the quarter to 5,042 at the end of March 2013.

 

1 Denotes where overseas results denominated in foreign currencies have been translated at constant rates of exchange for constant currency illustrative purposes.

 

Perm/Temp mix

Group gross profit from permanent recruitment in the first quarter was £98.3m, +2.0% (-1.2%1) on Q4 2012 and -7.7% (-7.6%1) on the £106.5m in Q1 2012. Group gross profit from temporary recruitment in the first quarter was £28.5m, -5.5% (-8.2%1) on Q4 2012 and -3.1% (-3.6%1) on the £29.4m in Q1 2012.

 

The perm/temp gross profit ratio in the first quarter was 77:23 (Q4 2012: 76:24, Q1 2012: 78:22).

 

Discipline analysis



Reported

Constant

 

Year-on-year gross profit

% of Group Q1

Q1 2013

Q1 2012

%

%

Finance & Accounting

42%

£53.2m

£57.1m

-6.9%

-7.0%

Legal, Technology, HR, Secretarial, Healthcare

20%

£25.4m

£27.3m

-7.0%

-6.7%

Engineering, Property & Construction, Procurement & Supply Chain

20%

£25.2m

£26.8m

-5.9%

-5.9%

Marketing, Sales & Retail

18%

£23.0m

£24.7m

-6.9%

-7.1%

Total

100%

£126.8m

£135.9m

-6.7%

-6.7%

 

Our diversification by discipline specialism continues as we launch new businesses in all regions as well as grow in markets like China where we are less dependent on Finance and Accounting. The challenging market conditions impacted broadly all disciplines to a similar degree, with Retail, Procurement and Supply Chain, and Legal producing the best performances.

 

Geographical analysis

 

Q1 GROSS PROFIT ANALYSIS

 

EMEA Gross Profit

(41% of Group in Q1 2013)



 

Growth rates




Reported

Constant

Q1 2013 vs. Q1 2012

£52.0m

£60.3m

-13.8%

-15.1%

Q1 2013 vs. Q4 2012

£52.0m

£51.4m

+1.1%

-3.8%

Headcount at 31 March 2013: 1,964, (31 December 2012: 2,040)

Gross profit at constant currency:

·   France (14% of the Group) -9% on Q4 2012 and -17% on Q1 2012

·   Germany (6% of the Group) -4% on Q4 2012 and -27% on Q1 2012

 

 

In our largest region, Europe, Middle East and Africa (EMEA), representing 41% of Group gross profit, market conditions remained challenging throughout the first quarter. Sequentially, we saw a small increase in gross profit at reported rates of +1.1%. However, our larger businesses of France and Germany, where we operate predominantly in permanent recruitment, experienced another challenging quarter. Good performances were seen from our businesses in Rest of Africa, Russia, Sweden, Turkey and the UAE, with some improvement seen in Southern Europe, particularly in Spain. Reflecting the tough economic conditions, headcount across the region reduced during the quarter by 76, or 3.7%.

 

 

UK Gross Profit

(24% of Group in Q1 2013)



 

Growth rates





Q1 2013 vs. Q1 2012

£30.2m

£30.6m

-1.2%

Q1 2013 vs. Q4 2012

£30.2m

£30.2m

-0.1%

Headcount at 31 March 2013: 1,261 (31 December 2012: 1,237)

 

Our continued diversification and the depth of management experience continues to underpin our robust performance in the UK, in what are difficult market conditions. This region now represents 24% of PageGroup's gross profit, with the strongest performances seen from our Property & Construction, Engineering, Digital, Energy and Public Sector businesses. Headcount in the UK increased during the quarter by 24, or 1.9%.

 

 

Asia Pacific Gross Profit

(20% of Group in Q1 2013)



 

Growth rates




Reported

Constant

Q1 2013 vs. Q1 2012

£26.1m

£26.3m

-0.7%

-0.3%

Q1 2013 vs. Q4 2012

£26.1m

£27.9m

-6.3%

-8.0%

Headcount at 31 March 2013: 1,071 (31 December 2012: 1,036)

Gross profit at constant currency:

·   Asia (12% of the Group) -5% on Q4 2012 and +14% on Q1 2012

·   Australia and New Zealand (8% of the Group) -13% on Q4 2012 and -16% on Q1 2012

 

During the first quarter in our Asia Pacific region, representing 20% of Group gross profit, market conditions in Australia became significantly more challenging, due to a slowdown in the Mining and Resources sector. Our businesses in Japan and Greater China remained resilient, performing strongly, with our newer businesses in Kuala Lumpur and Taipei recording record results. Headcount across the region increased during the quarter by 35, or 3.4%, as we continue to invest in our market-leading position.

 

Americas Gross Profit

(15% of Group in Q1 2013)



 

Growth rates




Reported

Constant

Q1 2013 vs. Q1 2012

£18.5m

£18.7m

-1.4%

+2.2%

Q1 2013 vs. Q4 2012

£18.5m

£17.0m

+8.7%

+3.5%

Headcount at 31 March 2013: 746 (31 December 2012: 786)

Gross profit at constant currency:

·   Latin America (10% of the Group) -1% on Q4 2012 and -4% on Q1 2012

·   North America (5% of the Group) +12% on Q4 2012 and +16% on Q1 2012

 

In the Americas, representing 15% of Group gross profit, we grew gross profit +8.7% sequentially in reported rates and +3.5% in constant currency. Brazil continued to be impacted by the slowdown in the economy and exchange rates, with year-on-year growth rates at constant rates of exchange some 9% higher than on a reported basis. While our business in Argentina also slowed, our other businesses in Latin America grew strongly. In North America, market conditions are showing some improvement and our recent management changes are starting to show a positive impact, with gross profit +12% on Q4 2012 and +16% on Q1 2012. Headcount across the Americas decreased during the quarter by 40, or 5.1%.

 

 

Headcount

Total headcount was reduced by 57 to 5,042 from year end 2012. Headcount in operational support was reduced by 64, partially offset by an increase in fee earners of 7.

 

Share repurchases

No share repurchases were made during the first quarter. During the quarter, the Group granted 4.5m share options and 1.4m options were exercised and satisfied through newly issued shares. At 31 March 2013 there were approximately 319.1m shares in issue, of which 12.4m are held by the Employee Benefit Trust upon which dividends and voting rights are waived. Accordingly, 306.7m shares receive dividends and hold voting rights.

 

Financial Position

Save for the effects of trading in the first quarter described above, there have been no other significant changes in the financial position of the Group since the publication of the results for the year ended 31 December 2012.

 

Net cash at 31 March 2013 is in the region of £56m (31 December 2012: £61.4m).

 

The proposed final dividend for 2012 of 6.75p per share is due to be paid on 21 June 2013.

 

The Group will issue its second quarter and half year trading update on 16 July 2013.

 

Cautionary statement

This First Quarter 2013 Interim Management Statement ("IMS") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMS should not be relied on by any other party or for any other purpose. This IMS contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

 

This IMS has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to PageGroup and its subsidiary undertakings when viewed as a whole.

 

 


This information is provided by RNS
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