Half Yearly Report

RNS Number : 0910R

Michael Page International PLC

16 August 2010

 



 

 

16 August 2010

 

MICHAEL PAGE INTERNATIONAL PLC

Half Year Results for the Period Ended 30 June 2010

Michael Page International plc ("Michael Page"), the specialist professional recruitment company, announces its half year results for the period ended 

30 June 2010.

Financial summary (6 months to 30 June 2010 )	2010	2009	Change	Change CER*
Revenue	£393.5m	£364.7m	+8%	+6%
Gross profit	£209.6m	£178.8m	+17%	+15%
Operating profit before NRI †	£32.5m	£5.6m	+479%	+450%
Profit before tax before NRI	£33.0m	£6.2m	+436%
Basic earnings per share before NRI	6.6p	0.5p	+1,220%
Diluted earnings per share before NRI	6.5p	0.5p	+1,200%
Operating profit	£49.6m	£32.2m	+54%
Profit before tax	£61.4m	£43.2m	+42%
Basic earnings per share	13.1p	8.8p	+49%
Diluted earnings per share	12.8p	8.7p	+47%
Interim dividend per share	2.88p	2.88p	-%

*Constant Exchange Rates      † Non-recurring Items (see note 4)

Highlights

·      Strong first half benefiting from geographic and discipline diversification

·      Improved productivity and utilisation of spare capacity driving profit recovery

·      Asia Pacific, Latin America and newer developing countries growing at 43%* year-on-year

·      All regions growing sequentially in first half of 2010

·      71% of gross profit generated from outside the UK

·      53% of gross profit generated from non Finance and Accounting disciplines

·      Roll-out of Page Personnel continues with 5 new countries, now in 17 countries

·      Gross profit from permanent placements growing at 31% (28%*)

·      Share repurchases of £61.8m during the first half of 2010

·      Strong balance sheet with net cash at 30 June 2010 of £65.7m (2009: £99.2m)

·      Interim dividend maintained at 2.88p

Current trading and outlook

·      Well positioned in underdeveloped markets

·      Numerous opportunities for growth

·      Group headcount at 30 June 2010 3,860, up by 311 since start of year

·      Continuation of recent trends in trading throughout July

·      Mindful of risks to recovery, quick to react when necessary

Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said:

"We delivered a strong performance in the first half of 2010, driven largely by greater permanent recruitment activity as confidence levels improved, leading to higher rates of job churn.  While we are now entering the seasonally quieter holiday period, we have seen a continuation of these trends in the Group's performance during July.

"We are benefiting from our investment in diversifying the Group internationally, with over 70% of our gross profit in the first half derived from areas outside of the UK and more than 50% of our gross profit generated from non-Finance and Accounting disciplines. Over 40% of our fee earners are located in developing recruitment markets, where prospects for long-term growth are strong. We have market-leading positions in specialist recruitment in Asia and Latin America and are particularly optimistic about the opportunities available to us in these regions, where we will continue to invest in additional headcount. In the UK, Continental Europe and North America, we have experienced improvements in job flow in virtually all markets.

"It is the nature of our business that visibility is short and the general level of business confidence and economic activity may be threatened by fiscal consolidation in the UK and Europe, however, we remain quick to react to changing market conditions.  Having maintained our presence in all our markets, the strength of our geographic discipline and industry sector diversification, combined with our operational gearing, means that our profitability is much improved over last year."

Analyst meeting

The company will be presenting to a meeting of analysts at 9.00am today.  The presentation and a recording of the meeting will be available on the company's website later on today at http://investors.michaelpage.co.uk/presentations

Enquiries:

Michael Page International plc	01932 264144
Steve Ingham, Chief Executive
Stephen Puckett, Finance Director
Financial Dynamics	020 7269 7291
Richard Mountain/Susanne Yule

INTERIM MANAGEMENT REPORT

To the members of Michael Page International plc

Cautionary Statement

This Interim Management Report ("IMR") 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 IMR should not be relied on by any other party or for any other purpose. This IMR 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 IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

STRATEGY

The Group's strategy is to expand and diversify the business by industry sectors, by professional disciplines, by geography and by level of focus be it Page Personnel, Michael Page or Michael Page Executive Search, with the objective of being the leading specialist recruitment consultancy in each of our chosen markets. As recruitment activity is dependent upon economic cycles, by being more diverse, the dependency on individual businesses or markets is reduced, making the overall Group more resilient. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries with a consistent team and meritocratic culture.

Our organic growth is achieved by drawing upon the skills and experiences of proven Michael Page management, ensuring we have the best and most experienced, home-grown talent in each key role. When we invest in a new business, we do so only with a long-term objective and in the knowledge that at some point there will be periods when economic activity slows. While it is difficult to predict accurately when these slowdowns will occur and how severe they will be, it has been our practice in the past and our intention in the future to maintain our presence in our chosen markets, but with close control over our cost base.

Our team-based structure and profit share business model is scalable. The small team size also means that we can rapidly increase our headcount to achieve growth. When market conditions tighten, these teams then reduce in size largely through natural attrition. Consequently, our cost base will be reduced in a slowdown, but having invested years in training and developing our highly capable management resources, our objective is to retain this expertise within the Group. By following this course of action, we typically gain market share during downturns and position our businesses for leading rates of growth when economic conditions improve.

Pursuing this approach does mean that in an economic downturn our profitability declines as, in addition to the lower productivity levels that come with a slowdown, we also carry spare capacity. However, when market conditions improve, the Group's profitability recovers quickly as spare capacity is utilised. Adopting this strategy of toughing-out economic slowdowns also drives our financing strategy and balance sheet position. In slowdowns, the business continues to produce strong cash flows, as working capital requirements reduce. With uncertainty around the length and depth of economic slowdowns, a strong balance sheet is essential to support the businesses through tougher periods and, when conditions improve and the businesses start growing, to fund increased working capital requirements. 

GROUP RESULTS

As economic conditions improved during the first half of 2010, the Group produced a strong performance, growing revenue and substantially increasing profitability. The Group's revenue for the six months ended 30 June 2010 increased by 7.9% to £393.5m (2009: £364.7m) and gross profit increased by 17.2% to £209.6m (2009: £178.8m). At constant exchange rates, the Group's revenue increased by 6.3% and gross profit by 15.1%. In the first half, the mix of the Group's revenue and gross profit between permanent and temporary placements was 43:57 (2009: 36:64) and 78:22 (2009: 70:30) respectively. As expected when economic conditions improve, permanent recruitment is recovering faster, with temporary recruitment only starting to grow sequentially in the second quarter of 2010. This movement in the mix towards permanent is compounded by our faster growing regions being predominantly permanent rather than temporary recruitment in the specialist sectors. The gross margin on temporary placements in the first half of 2010 has decreased to 20.7% (2009: 23.2%), largely as a consequence of pressure on pricing, but as we started to see gross profit stabilise in the first half of 2010, we have also seen gross margin on temporary placements stabilise as well.

In reaction to the extremely difficult market conditions caused by the global financial crisis, the Group lowered its cost base during both 2008 and 2009 by reducing headcount and, while ensuring we maintained our presence in all geographies, we also consolidated some of our smaller offices where we had more than one in a city. As market conditions in each of the geographic regions in which we operate stabilised and then started to improve, the increased activity levels were first serviced by utilising spare capacity. As spare capacity, which is not easily moved between disciplines or locations is used up and new investments are made for future growth, an additional 311 staff were added in the first half of 2010. Headcount at 30 June 2010 was 3,860 operating from 135 offices in 28 countries.

New investments in the first half of 2010 included the launch of Page Personnel in Hong Kong, Mexico, Russia, Singapore and the USA.

When the demand for recruitment services increases, the number of positions to be filled rises, candidate shortages begin to emerge, the time-to-hire period starts to reduce and there is less pressure on pricing. All of these factors trended positively in the first half, creating an environment for increased productivity and the generation of more gross profit per fee earner. The Group's strategy of only growing organically using home-grown talent, maintaining market presence and maintaining spare capacity means that the Group is highly operationally geared. This was reflected in the near six-fold increase in operating profit, before non-recurring items, from £5.6m in the first half of 2009 to £32.5m in the first half of 2010 and the Group's conversion rate of operating profit from gross profit increasing to 15.5% (2009: 3.1%).

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

Europe, Middle East and Africa (EMEA) is the Group's largest region, contributing 44% of Group gross profit. Revenue in the region decreased by 2.3% to £161.3m (2009: £165.2m), but gross profit increased by 6.4% to £91.3m (2009: £85.8m) due to increased activity, primarily in permanent placements. In constant currency, revenue was flat on the first half of 2009, but gross profit increased by 8.6%. The increase in gross profit, combined with a lower cost base, resulted in an operating profit for the first half of 2010 of £9.6m (2009: loss of £1.5m).

In all countries in the region, market conditions have gradually improved throughout the first half apart from in the Netherlands, which appears to be one of the last economies to start to recover. Whilst headcount was reduced across the region in 2009, we maintained the platform of businesses and held spare capacity in the larger more established countries.  As this spare capacity is utilised and the newer and smaller countries invest for growth, headcount has increased by 73 across the region in the first half of 2010.

UNITED KINGDOM

In the UK, representing 29% of the Group's gross profit, revenue increased by 3.6% to £142.8m (2009: £137.8m), gross profit increased by 7.3% to £61.2m (2009: £57.0m) and operating profit increased by 58.5% to £9.6m (2009: £6.1m).

In the UK, market conditions stabilised in the latter part of 2009 and there is growing evidence of a gradual recovery in the first half of 2010. This recovery first became evident in our Financial Services, Sales and Retail disciplines and now virtually all disciplines are showing an improving trend. Headcount across the UK has remained largely flat over the last 12 months and stands at 1,218 at the end of June 2010 (1,220 at 30 June 2009), with the increased productivity from fee earners being the main driver of the increase in operating profit.

ASIA PACIFIC

In Asia Pacific, now representing 15% of the Group's gross profit, revenue increased by 48.4% to £53.5m (2009: £36.1m) and gross profit increased by 62.5% to £31.2m (2009: £19.2m). In constant currency, revenue increased by 28.7%, gross profit by 45.3% and operating profit by 310.5%. Operating profit rose to £9.5m (2009: £2.0m), with the high operational gearing and productivity increases driving the conversion rate to over 30% (2009: 11%).

In Australia, our largest business in the region, market conditions began to improve in the latter part of 2009, with quarterly gross profits growing sequentially from the fourth quarter of 2009 and for the first half of 2010 increasing by 26% in constant currency. In Asia, where the business is almost entirely permanent placements, activity levels are recovering the fastest, with gross profits 73% higher in constant currency. At the end of June we had 501 staff in the region, an increase of 98 (24%) since the start of the year and assuming market conditions continue to strengthen, further headcount will be added during the second half of 2010.

THE AMERICAS

In the Americas, representing 12% of the Group's gross profit, revenue increased by 39.9% to £35.8m (2009: £25.6m) and gross profit increased by 54.5% to £25.9m (2009: £16.8m). In constant currency, revenue increased by 29.8% and gross profit by 40.2%. The increased gross profit, through utilisation of surplus capacity, produced an operating profit of £3.8m (2009: loss of £1.0m).

In North America, while market conditions remained challenging, there is evidence of a steadily improving level of recruitment activity, with gross profit growing in the first half of 2010 by 29%. In Latin America, where gross profits grew in the first half of 2010 by 50% in constant currency, the impact of the global slowdown was sudden, but the market is recovering quickly and we are again investing for further growth. In Brazil, a business that we established in 2000, we are the clear market leader, with the newer businesses in Mexico and Argentina also continuing to develop well. We now have 496 staff in the region, an increase of 101 (26%) since the start of the year.

NON-RECURRING ITEMS (NRI)

In 2003, the Group submitted an initial claim to Her Majesty's Revenue and Customs (HMRC) for overpaid VAT which was rejected. The Group appealed and subsequently filed amended claims for £26.5m, net of fees, covering the period from 1980 to 2004. In March 2009, the Group filed amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT covering the same period.

In June 2009, the Group received a payment from HMRC of £26.5m, net of fees, as part settlement of these claims and in July 2009 received £10.5m, net of fees, of statutory interest. As a result, the principal and interest amounts were recognised in the prior year June 2009 half year results, with the interest receivable being recorded within working capital in the cash flow statement.

On 25 September 2009, the Group received a letter from HMRC which stated that, 'HMRC have reviewed the recent payment and are now of the view that the claim in whole or in part should not have been paid'.

A number of discussions and meetings with HMRC followed and on 5 March 2010, the Group announced that an agreement had been reached in principle, subject to legal contract, for the Group to retain £28.5m (net of fees). However, given the background to the initial receipt, the subsequent review and reversal of HMRC's position, together with the remaining uncertainty pending formal contractual agreement, the Group reversed out the amounts originally recorded in the 2009 half year results and as such did not recognise any amount in the income statement, nor any interest received in the cash flow statement, for the full year.

On 30 April 2010, a formal agreement was signed with HMRC. As a result, of the £50.0m originally received from HMRC, the Group retained £38.1m and returned £11.9m in May 2010. Accordingly, after fees, the Group has recognised £28.5m as non-recurring income in its 2010 income statement, of which £17.1m is in respect of refunded VAT and is included in operating profit and £11.4m is in respect of interest and is included in financial income.

In respect of the amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT there have been no discussions or meetings with HMRC and the Group are continuing to pursue this further claim. None of this additional claim has been recognised.

TAXATION AND EARNINGS PER SHARE

The charge for taxation is based on the expected effective annual tax rate of 32.5% (2009: 34.5%) on profit before taxation. The expected effective annual tax rate on profit before tax and before NRI is 36.4% (2009: 73.2%).

After NRI, basic and diluted earnings per share for the six months ended 30 June 2010 were 13.1p (2009: 8.8p) and 12.8p (2009: 8.7p) respectively. Before NRI, basic and diluted earnings per share for the six months ended 30 June 2010 were 6.6p (2009: 0.5p) and 6.5p (2009: 0.5p) respectively.

CASH FLOW

The Group started the year with net cash of £137.2m. In the first half, we generated £14.5m from operations after NRI, after an increase in working capital of £15.9m, reflecting increased activity and cash outflows relating to the VAT claim of £12.6m. Tax paid was £5.3m and net capital expenditure was £4.5m, with net interest received of £0.5m. During the first half, £61.8m was spent repurchasing shares into the employee benefit trust to satisfy employee share schemes and dividends of £16.1m were paid. The Group had net cash of £65.7m at 30 June 2010.

DIVIDENDS AND SHARE REPURCHASES

It is the Board's intention to pay dividends at a level that it believes is sustainable throughout economic cycles and to continue to use share repurchases to return surplus cash to shareholders. Reflecting the Group's first half performance and the Board's confidence in the longer term prospects for the Group, it has decided to maintain the interim dividend at 2.88p per share. The interim dividend will be paid on 8 October 2010 to shareholders on the register at 10 September 2010.

In the first half, the Group's employee benefit trust purchased 15m shares for £61.8m to satisfy employee share plan awards.

KEY PERFORMANCE INDICATORS

Financial and non-financial key performance indicators (KPIs) used by the Board to monitor progress are listed in the table below. The source of data and calculation methods year-on-year are on a consistent basis.

KPI	H1 2010	H1 2009	Definition, method of calculation and analysis
Gross margin	53.3%	49.0%	Gross profit as a percentage of revenue. Gross margin has increased largely as a result of the mix of permanent and temporary placements. In improving trading conditions, there tends to be a swing to higher margin permanent placements. Source: Condensed consolidated income statement in the financial statements.
Conversion before NRI	15.5%	3.1%	Operating profit as a percentage of gross profit showing the Group's effectiveness at controlling the costs and expenses associated with its normal business operations and the level of investment for future growth. Conversion has increased compared to last year reflecting the improvement in productivity and the utilisation of a proportion of the spare capacity created during the downturn. Source: Condensed consolidated income statement in the financial statements.
Productivity (gross profit per fee earner)	£80.5k	£57.6k	Represents productivity of fee earners and is calculated by dividing the gross profit for the period by the average number of fee earners and directors. The higher the number, the higher their productivity. Productivity is a function of the numbers and experience of fee earners, the impact of pricing and the general conditions of the recruitment market. The increase in productivity this period is as a result of the experienced consultants remaining in the business after the downturn and a general improvement in market conditions. Source: Internal data.
Fee earner : support staff ratio	71:29	71:29	Represents the balance between operational and non-operational staff. The balance in the period reflects the need to continue to provide the infrastructure to maintain market presence. Source: Internal data.
Debtor days (30 June)	47	51	Represents the length of time before the Group receives payments from its debtors. Calculated by comparing how many days' billings it takes to cover the debtor balance. The decrease in the period reflects a continued increased focus on cash collections and improvements in economic conditions. Source: Internal data.

The movements in KPIs are in line with expectations.

OPERATING PROFIT AND CONVERSION RATES

As a result of the Group's organic long-term growth strategy, tight control on costs and profit-based bonuses, we have a business model that is operationally geared. The majority of our cost base, around 75%, relates to our staff, with the other main components being property and information technology costs. With a strategy of organic growth, the Group incurs start-up costs and operating losses as investments are made to grow existing and new businesses, open new offices and launch new countries. Furthermore, significant increases in headcount mean that it takes time to train staff before they become fully productive. These characteristics of our growth strategy and the levels of investment impact on the conversion rates in any one reporting period.

Generally, in years when economic conditions are benign, revenue and gross profit grow, with operating profit growing at a faster rate due to a combination of higher productivity, stronger pricing and greater utilisation of infrastructure. In order to grow, we need to increase our headcount and ensure that we have infrastructure to house and support them. When economic conditions weaken and recruitment activity slows, these factors work in reverse and are compounded by a shortening of earnings visibility.

The majority of our permanent placement activity is undertaken on a contingent basis, which means on those assignments we only generate revenue when a candidate is successfully placed in a role. Our short-term visibility on these earnings is provided by the number of assignments we are working on, the number of candidates we have at interview and the stage they are at in the interview process. The average time to complete a placement, from taking on an assignment to successfully placing a candidate, tends to lengthen in a downturn, reducing productivity and the risk of the candidate being rejected or the assignment being cancelled increases, thereby further reducing our earnings visibility.

In a downturn, activity levels can slow quickly and revenue can decline even faster due to the contingent nature of a large proportion of our placements. The main opportunity for reducing our own cost base is headcount, but these reductions tend to lag the declines in revenue due to the shortening visibility. The majority of the initial reductions in our headcount occur through natural attrition, without incurring significant restructuring charges. However, as greater reductions become necessary, such charges may be incurred, but these are treated as a component of our normal operating expenses.

As economic conditions begin to improve, confidence levels of both candidates and clients also increases and the churn rate of people moving jobs starts to increase. This increase in activity is serviced from the spare capacity we maintained during the downturn and therefore profits can increase rapidly. The Group's conversion rate before NRI for the period is 15.5% (2009: 3.1%). The movement in the conversion rates of the four regions and the levels of conversion now being achieved reflects the pace of recovery in those regions and the levels of spare capacity still available to be utilised.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate the Group's business while maintaining a strong balance sheet position. When there is a generally benign economic outlook, this equates to maintaining the Group's net cash/debt position within a relatively narrow band, with cash generated in excess of these requirements being used to buy back the Group's shares. In an economic downturn a more cautious funding position is adopted, with the Group being managed in a net cash position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Euro-zone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts.

The Group has an undrawn £50m, three-year multi-currency, committed revolving credit facility with Deutsche Bank that expires in June 2012.

The main operational currencies of the Group are Sterling, Euro and Australian Dollar. The Group does not have material transactional currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting currencies, it may use foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. It is the Group's policy not to seek to designate these derivatives as hedges.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Company's strategy are subject to a number of risks. The following section comprises a summary of what the Group believes are the main risks that could potentially impact the Group's operating and financial performance.

People

The resignation of key individuals and the inability to recruit talented people with the right skill-sets could adversely affect the Group's results. This is further compounded by the Group's organic growth strategy and its policy of not externally hiring senior operational positions. Mitigation of this risk is achieved by succession planning, training of staff, competitive pay structures linked to the Group's results and career progression.

Macro economic environment

Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board looks to reduce the Group's cyclical risk by expanding geographically, by increasing the number of disciplines, by building part-qualified and clerical businesses and by continuing to build the temporary business.

A substantial portion of the Group's gross profit arises from fees which are contingent upon the successful placement of a candidate in a position. If a client cancels the assignment at any stage in the process, the Group receives no remuneration. As a consequence, the Group's visibility of gross profits is generally quite short and tends to reduce further during periods of economic downturn.

Competition

The degree of competition varies in each of the Group's main regions. In the UK, Australia and North America, the recruitment market is well developed, highly competitive and fragmented. The characteristics of a developed market are greater competition for clients and candidates, as well as pricing pressure. In EMEA, Latin America and Asia, the recruitment market is generally less developed, with a large proportion of all recruitment being carried out by companies' internal resources, rather than through recruitment specialists. This is changing rapidly due to changes in legislation, increasing job mobility and the difficulty internal resources face in sourcing suitably qualified candidates and managing compliance.

If the Group does not continue to compete in its markets effectively, by hiring new staff, opening and expanding offices and continuing the discipline roll-outs, there is a risk that competitors may beat us to key strategic opportunities, which may result in lost business and a reduction in market share. This risk is mitigated by meetings of the Main Board, Executive Board and Regional and Country Management Boards where Group strategy is continually reviewed and decisions made over the allocation of the Group's resources, principally people.

Technology

The Group is reliant on a number of technology systems to provide services to clients and candidates. These systems are dependent on a number of important suppliers that provide the technology infrastructure and disaster recovery solutions. The performance of these suppliers are continually monitored to ensure business critical services are available and maintained as far as practically possible. Due to the rapid advancement of technology, there is a risk that systems could become outdated with the potential to affect efficiency and have an impact on revenue and client service. This risk is mitigated by regular reviews of the Group's technology strategy to ensure that it supports the overall Group strategy. The Group has invested in a new generation of technology systems, which will begin to be implemented in our operating businesses from later this year. The systems implementation risks are being managed by staged roll-outs, generally increasing the size and complexity of the businesses transitioning to the new systems.

Legal

The Group operates in a large number of jurisdictions which have varying regulatory environments. As the employment laws are changed and harmonised in certain geographies, they bring with them new risks and opportunities. The temporary market is heavily regulated, and changes in legislation, which have the effect of increasing the cost or restricting the flexibility of movement of temporary workers, could, other things being equal, have a detrimental effect on the Group's financial performance. The Group takes its obligations and responsibilities seriously and ensures that its policies, systems and procedures are continually upgraded to reflect best practice and to comply with the legal requirements in all of the markets in which it operates. In order to reduce the legal and compliance risks, fee earners and support staff receive regular training and updates of changes in legal and compliance requirements.

Financial

The Group has a risk management process to assess risks and places emphasis on maintaining adequate financial and management controls. The risk management process is viewed as a dynamic part of operations and is assessed globally on an annual basis.  The Group has developed a framework to manage risk and respond to the global financial crisis, with emphasis upon credit exposure, management of currency risk and business and operational continuity.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the significant uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future being a period of at least 12 months.

CURRENT TRADING AND FUTURE PROSPECTS

We delivered a strong performance in the first half of 2010, driven largely by greater permanent recruitment activity as confidence levels improve, leading to higher rates of job churn.  While we are now entering the seasonally quieter holiday period, we have seen a continuation of these trends in the Group's performance during July.

We are benefiting from our investment in diversifying the Group internationally, with over 70% of our gross profit now derived from areas outside of the UK and more than 50% of our gross profit generated from non-Finance and Accounting disciplines. Over 40% of our fee earners are located in developing recruitment markets, where prospects for long-term growth are strong. We have market-leading positions in specialist recruitment in Asia and Latin America and are particularly optimistic about the opportunities available to us in these regions, where we will continue to invest in additional headcount. In the UK, Continental Europe and North America, we have experienced improvements in job flow in virtually all markets.

It is the nature of our business that visibility is short and the general level of business confidence and economic activity may be threatened by fiscal consolidation in the UK and Europe, however, we are quick to react to changing market conditions.  Having maintained our presence in all our markets, the strength of our geographic discipline and industry sector diversification, combined with our operational gearing, means that our profitability is much improved over last year.

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

By order of the Board,

Steve Ingham                           Stephen Puckett

Chief Executive                       Group Finance Director

16 August 2010                      16 August 2010

INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 14. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom

16 August 2010

Condensed Consolidated Income Statement

Six months ended 30 June 2010

                                                                                                                                  Six months ended                              Year ended

				30 June		30 June		31 December
				2010		2009		2009
		Note		£'000		£'000		£'000
Revenue		3		393,515		364,688		716,722
Cost of sales				(183,961)		(185,877)		(365,028)
Gross profit		3		209,554		178,811		351,694
Administrative expenses				(177,034)		(173,192)		(331,491)
Operating profit before non-recurring items		3		32,520		5,619		20,203
Other income - non-recurring items		4		17,125		26,544		-
Operating profit		3		49,645		32,163		20,203
Financial income		5		744		1,383		2,027
Financial income - non-recurring items		5		11,335		10,516		-
Financial expenses		5		(290)		(846)		(1,162)
Profit before tax				61,434		43,216		21,068
Income tax expense		6		(11,997)		(4,506)		(8,638)
Income tax expense - non-recurring items		4		(7,969)		(10,404)		-
Profit for the period				41,468		28,306		12,430
Attributable to: Owners of the parent				41,468		28,306		12,430
Earnings per share
Basic earnings per share (pence)		9		13.1		8.8		3.9
Diluted earnings per share (pence)		9		12.8		8.7		3.8

The above results all relate to continuing operations.

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2010

			Six months ended				Year ended
				30 June		30 June		31 December
				2010		2009		2009
				£'000		£'000		£'000
Profit for the period				41,468		28,306		12,430
Other comprehensive income for the period
Currency translation differences				(747)		(14,788)		(11,978)
Total comprehensive income for the period				40,721		13,518		452
Attributable to:
Owners of the parent				40,721		13,518		452

Condensed Consolidated Balance Sheet

At 30 June 2010

		Note		30 June 2010 £'000		30 June 2009 £'000		31 December 2009 £'000
Non-current assets
Property, plant and equipment		3		27,795		33,978		31,432
Intangible assets - Goodwill				1,539		1,539		1,539
- Computer software				21,125		14,739		18,512
Deferred tax assets				11,136		9,207		10,179
Other receivables		11		2,745		1,462		2,021
				64,340		60,925		63,683
Current assets
Trade and other receivables		11		152,301		150,482		133,402
Current tax receivable				14,143		3,234		14,174
Cash and cash equivalents		14		67,177		99,243		137,228
				233,621		252,959		284,804
Total assets		3		297,961		313,884		348,487
Current liabilities
Trade and other payables		12		(106,325)		(89,787)		(142,750)
Bank overdrafts		14		(1,503)		-		(43)
Current tax payable				(18,695)		(10,671)		(5,470)
				(126,523)		(100,458)		(148,263)
Net current assets				107,098		152,501		136,541
Non-current liabilities
Other payables		12		(2,267)		(2,284)		(2,881)
Deferred tax liabilities				(324)		(210)		(327)
				(2,591)		(2,494)		(3,208)
Total liabilities		3		(129,114)		(102,952)		(151,471)
Net assets				168,847		210,932		197,016
Capital and reserves
Called-up share capital				3,240		3,225		3,234
Share premium				52,986		49,709		51,589
Capital redemption reserve				838		838		838
Reserve for shares held in the employee benefit trust				(75,952)		(19,437)		(19,409)
Currency translation reserve				32,654		30,591		33,401
Retained earnings				155,081		146,006		127,363
Total equity				168,847		210,932		197,016

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2010

	Called-up share capital £'000	Share premium £'000	Capital redemption reserve £'000	Reserve for  shares held in the employee benefit trust £'000	Currency translation reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 1 January 2009	3,220	48,856	838	(21,078)	45,379	133,449	210,664
Currency translation differences	-	-	-	-	(14,788)	-	(14,788)
Net expense recognised directly in equity	-	-	-	-	(14,788)	-	(14,788)
Profit for the six months ended 30 June 2009	-	-	-	-	-	28,306	28,306
Total comprehensive (loss)/income for the period	-	-	-	-	(14,788)	28,306	13,518
Purchase of shares held in the employee benefit trust	-	-	-	(1,903)	-	-	(1,903)
Issue of share capital	5	853	-	-	-	-	858
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	3,544	-	(3,544)	-
Credit in respect of share schemes	-	-	-	-	-	4,282	4,282
Dividends	-	-	-	-	-	(16,487)	(16,487)
	5	853	-	1,641	-	(15,749)	(13,250)
Balance at 30 June 2009	3,225	49,709	838	(19,437)	30,591	146,006	210,932
Currency translation differences	-	-	-	-	2,810	-	2,810
Net income recognised directly in equity	-	-	-	-	2,810	-	2,810
Loss for the six months ended 31 December 2009	-	-	-	-	-	(15,876)	(15,876)
Total comprehensive income/(loss) for the period	-	-	-	-	2,810	(15,876)	(13,066)
Issue of share capital	9	1,880	-	-	-	-	1,889
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	28	-	(28)	-
Credit in respect of share schemes	-	-	-	-	-	4,209	4,209
Credit in respect of tax on share schemes	-	-	-	-	-	2,418	2,418
Dividends	-	-	-	-	-	(9,366)	(9,366)
	9	1,880	-	28	-	(2,767)	(850)
Balance at 31 December 2009 and 1 January 2010	3,234	51,589	838	(19,409)	33,401	127,363	197,016
Currency translation differences	-	-	-	-	(747)	-	(747)
Net expense recognised directly in equity	-	-	-	-	(747)	-	(747)
Profit for the six months ended 30 June 2010	-	-	-	-	-	41,468	41,468
Total comprehensive (loss)/income for the period	-	-	-	-	(747)	41,468	40,721
Purchase of shares held in employee benefit trust	-	-	-	(61,757)	-	-	(61,757)
Issue of share capital	6	1,397	-	-	-	-	1,403
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	5,214	-	(5,214)	-
Credit in respect of share schemes	-	-	-	-	-	5,216	5,216
Credit in respect of tax on share schemes	-	-	-	-	-	2,314	2,314
Dividends	-	-	-	-	-	(16,066)	(16,066)
	6	1,397	-	(56,543)	-	(13,750)	(68,890)
Balance at 30 June 2010	3,240	52,986	838	(75,952)	32,654	155,081	168,847

Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2010

			Six months ended				Year ended
	Note		30 June  2010 £'000		30 June 2009 £'000		31 December 2009 £'000
Cash generated from underlying operations	13		27,073		28,737		73,759
Net cash (paid) / received in respect of VAT claim	4		(12,558)		26,544		41,018
Cash generated from operations	13		14,515		55,281		114,777
Income tax paid			(5,326)		(20,136)		(28,196)
Net cash from operating activities			9,189		35,145		86,581
Cash flows from investing activities
Purchases of property, plant and equipment			(2,556)		(3,292)		(5,757)
Purchases of computer software			(3,297)		(3,279)		(7,645)
Proceeds from the sale of property, plant and equipment, and computer software			1,338		700		2,061
Interest received			744		1,383		2,027
Net cash used in investing activities			(3,771)		(4,488)		(9,314)
Cash flows from financing activities
Dividends paid			(16,066)		(16,487)		(25,853)
Interest paid			(290)		(846)		(1,160)
Issue of own shares for the exercise of options			1,403		858		2,747
Purchase of shares into the employee benefit trust			(61,757)		(1,903)		(1,903)
Net cash used in financing activities			(76,710)		(18,378)		(26,169)
Net (decrease)/increase in cash and cash equivalents			(71,292)		12,279		51,098
Cash and cash equivalents at the beginning of the period			137,185		94,283		94,283
Exchange loss on cash and cash equivalents			(219)		(7,319)		(8,196)
Cash and cash equivalents at the end of the period	14		65,674		99,243		137,185

Notes to the condensed set of interim financial statements

Six months ended 30 June 2010

1.             General information

The information for the year ended 31 December 2009 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2.             Accounting policies

Basis of preparation

The annual financial statements of Michael Page International plc are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities. 

The directors believe the Group is well placed to manage its business risks successfully, despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

Changes in accounting policy

The same accounting policies, presentations and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except as described below.

In the current financial year, the Group has adopted International Financial Reporting Standard 3 "Business Combinations" (revised 2008) and International Accounting Standard 27 "Consolidated and Separate Financial Statements" (revised 2008). The adoption of these standards has not resulted in any significant changes for the Group.

3.             Segment reporting

All revenues disclosed are derived from external customers

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment without allocation of central administration costs including certain recharges. This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.

a)             Revenue, gross profit and operating profit by reportable segment

		Revenue							Gross Profit
		Six months ended					Year ended 31 December 2009 £'000		Six months ended				Year ended 31 December 2009 £'000
			30 June 2010 £'000		30 June 2009 £'000				30 June      2010 £'000		30 June 2009 £'000
EMEA			161,343		165,221		311,070		91,314		85,829		163,729
United Kingdom			142,807		137,790		274,599		61,168		57,026		110,784
Asia Pacific	Australia and New Zealand		37,979		27,038		59,108		17,316		11,242		23,881
	Other		15,540		9,020		20,301		13,850		7,942		18,329
	Total		53,519		36,058		79,409		31,166		19,184		42,210
Americas			35,846		25,619		51,644		25,906		16,772		34,971
			393,515		364,688		716,722		209,554		178,811		351,694

			Operating Profit
			Six months ended				Year ended 31 December 2009 £'000
			30 June 2010 £'000		30 June 2009 £'000
EMEA			9,628		(1,533)		1,055
United Kingdom			9,623		6,073		11,275
Asia Pacific	Australia and New Zealand		4,787		1,128		4,287
	Other		4,716		909		3,798
	Total		9,503		2,037		8,085
Americas			3,766		(958)		(212)
Operating profit before non-recurring items			32,520		5,619		20,203
Non-recurring items (note 4)			17,125		26,544		-
Operating profit after non-recurring items			49,645		32,163		20,203

The above analysis by destination is not materially different to analysis by origin.

The analysis below is of the carrying amount of reportable segment assets and liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software and goodwill.

Non-recurring items (NRI) items relate wholly to the United Kingdom.

		Total Assets							Total Liabilities
							31 December 2009 £'000						31 December 2009 £'000
			30 June 2010 £'000		30 June 2009 £'000				30 June      2010 £'000		30 June 2009 £'000
EMEA			125,655		121,891		117,863		52,016		51,306		49,504
United Kingdom			88,770		121,826		161,653		41,692		30,417		83,341
Asia Pacific	Australia and New Zealand		22,669		20,009		18,025		7,853		5,819		6,622
	Other		18,904		13,658		13,025		3,124		1,187		2,322
	Total		41,573		33,667		31,050		10,977		7,006		8,944
Americas			27,820		22,750		23,747		5,734		3,552		4,212
Segment assets/liabilities			283,818		300,134		334,313		110,419		92,281		146,001
Income tax			14,143		3,234		14,174		18,695		10,671		5,470
Non-recurring items (note 4)			-		10,516		-		-		-		-
			297,961		313,884		348,487		129,114		102,952		151,471

b)             Segment assets and liabilities and non-current assets by reportable segment

		Property, Plant & Equipment						Intangible Assets
						31 December 2009 £'000						31 December 2009 £'000
		30 June 2010 £'000		30 June 2009 £'000				30 June      2010 £'000		30 June 2009 £'000
EMEA		10,755		14,043		13,016		899		1,201		1,166
United Kingdom		8,919		11,166		9,985		20,791		14,132		17,933
Asia Pacific	Australia and New Zealand	2,042		2,496		2,411		204		313		258
	Other	622		850		708		346		191		310
	Total	2,664		3,346		3,119		550		504		568
Americas		5,457		5,423		5,312		424		441		384
		27,795		33,978		31,432		22,664		16,278		20,051

The below analysis in notes (c) revenue and gross profit by discipline (being the professions of candidates placed) and (d) revenue and gross profit generated from permanent and temporary placements, have been included as additional disclosure over and above the requirements of IFRS 8 "Operating Segments".

c)             Revenue and gross profit by discipline

	Revenue							Gross Profit
	Six months ended					Year ended 31 December 2009 £'000		Six months ended				Year ended 31 December 2009 £'000
		30 June 2010 £'000		30June 2009 £'000				30 June      2010 £'000		30 June 2009 £'000
Finance and Accounting		214,440		210,218		408,951		99,167		90,529		175,743
Marketing, Sales and Retail		53,252		45,454		91,811		39,696		29,858		61,404
Legal, Technology, HR, Secretarial and Other		73,391		63,968		125,199		38,527		31,247		61,217
Engineering, Property & Construction, Procurement & Supply Chain		52,432		45,048		90,761		32,164		27,177		53,330
		393,515		364,688		716,722		209,554		178,811		351,694

d)             Revenue and gross profit generated from permanent and temporary placements

	Revenue							Gross Profit
	Six months ended					Year ended 31 December 2009 £'000		Six months ended				Year ended 31 December 2009 £'000
		30 June 2010 £'000		30 June 2009 £'000				30 June      2010 £'000		30 June 2009 £'000
Permanent		169,127		130,283		260,161		163,006		124,374		249,387
Temporary		224,388		234,405		456,561		46,548		54,437		102,307
		393,515		364,688		716,722		209,554		178,811		351,694

4.             Non-recurring items (NRI)

In 2003, the Group submitted an initial claim to Her Majesty's Revenue and Customs (HMRC) for overpaid VAT which was rejected. The Group appealed and subsequently filed amended claims for £26.5m, net of fees, covering the period from 1980 to 2004. In March 2009, the Group filed amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT covering the same period.

In June 2009, the Group received a payment from HMRC of £26.5m, net of fees, as part settlement of these claims and in July 2009 received £10.5m, net of fees, of statutory interest. As a result, the principal and interest amounts were recognised in the prior year June 2009 half year results, with the interest receivable being recorded within working capital in the cash flow statement.

On 25 September 2009, the Group received a letter from HMRC which stated that, 'HMRC have reviewed the recent payment and are now of the view that the claim in whole or in part should not have been paid'.

A number of discussions and meetings with HMRC followed and on 5 March 2010, the Group announced that an agreement had been reached in principle, subject to legal contract, for the Group to retain £28.5m (net of fees). However, given the background to the initial receipt, the subsequent review and reversal of HMRC's position, together with the remaining uncertainty pending formal contractual agreement, the Group reversed out the amounts originally recorded in the 2009 half year results and as such did not recognise any amount in the income statement, nor any interest received in the cash flow statement, for the full year.

On 30 April 2010, a formal agreement was signed with HMRC. As a result, of the £50.0m originally received from HMRC, the Group retained £38.1m and returned £11.9m in May 2010. Accordingly, after fees, the Group has recognised £28.5m as non-recurring income in its 2010 income statement, of which £17.1m is in respect of refunded VAT and is included in operating profit and £11.4m is in respect of interest and is included in financial income.

In respect of the amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT there have been no discussions or meetings with HMRC and the Group are continuing to pursue this further claim. None of this additional claim has been recognised.

Taxation of £8.0m on non-recurring items, net of fees, has been provided representing an effective tax rate of 28.0%.

5.             Finance income/(expenses)

		Six months ended				Year ended 31 December 2009 £'000
		30 June 2010 £'000		30 June 2009 £'000
Finance income
Bank interest receivable		744		1,383		2,027
Interest on non-recurring items (note 4)		11,335		10,516		-
		12,079		11,899		2,027
Finance expenses
Bank interest payable		(290)		(846)		(1,162)

 6.             Tax

Taxation for the six month period is charged at 32.5% (six months ended 30 June 2009: 34.5%; year ended 31 December 2009: 41.0%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.

 7.             Dividends

	Six months ended				Year ended 31 December 2009 £'000
	30 June 2010 £'000		30 June 2009 £'000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2009 of 5.12p per ordinary share (2008: 5.12p)	16,066		16,487		16,487
Interim dividend for the period ended 30 June 2009 of 2.88p per ordinary share	-		-		9,366
	16,066		16,487		25,853
Amounts proposed as distributions to equity holders in the period:
Proposed interim dividend for period ended 30 June 2010 of 2.88p per ordinary share (2009: 2.88p)	8,900		9,274		-
Proposed final dividend for the year ended 31 December 2009 of 5.12p per ordinary share	-		-		16,535

The proposed interim dividend had not been approved by the Board at 30 June 2010 and therefore has not been included as a liability. The comparative interim dividend at 30 June 2009 was also not recognised as a liability in the prior period.

The proposed interim dividend of 2.88 pence (2009: 2.88 pence) per ordinary share will be paid on 8 October 2010 to shareholders on the register at the close of business on 10 September 2010.

8.             Share-based payments

In accordance with IFRS 2 "Share-based Payment", a charge of £2.0m has been recognised for share options (including social charges) (30 June 2009: £0.6m, 31 December 2009: £1.9m), and £3.3m has been recognised for other share-based payment arrangements (including social charges) (30 June 2009: £3.9m, 31 December 2009: £8.7m).

During the period, options over 11,467,500 shares were granted at an average exercise price of £3.82p and 665,826 share options were exercised, which has led to an increase in share capital of £6,000 and an increase in share premium of £1.4m.

9.             Earnings per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

	Six months ended				Year ended 31 December 2009
Earnings	30 June 2010		30 June 2009
Earnings for basic and diluted earnings per share (£'000)	41,468		28,306		12,430
Non-recurring items (NRI) (£'000) (note 4)	(20,491)		(26,656)		-
Earnings for basic and diluted earnings per share before NRI (£'000)	20,977		1,650		12,430
Number of shares
Weighted average number of shares used for basic earnings per share ('000)	316,596		321,455		321,643
Dilution effect of share plans ('000)	7,490		3,974		7,412
Diluted weighted average number of shares used for diluted earnings per share ('000)	324,086		325,429		329,055
Basic earnings per share (pence)	13.1		8.8		3.9
Diluted earnings per share (pence)	12.8		8.7		3.8
Basic earnings per share before NRI (pence)	6.6		0.5		3.9
Diluted earnings per share before NRI (pence)	6.5		0.5		3.8

The above results all relate to continuing operations.

10.           Property, plant and equipment

Acquisitions and disposals

During the six months ended 30 June 2010 the Group acquired property, plant and equipment with a cost of £2.6m (30 June 2009: £3.3m, 31 December 2009: £5.8m).

Property, plant and equipment with a carrying amount of £1.4m were disposed of during the six months ended 30 June 2010 (30 June 2009: £0.9m, 31 December 2009: £2.4m), resulting in a loss on disposal of £42k (30 June 2009: loss of £0.2m, 31 December 2009: loss of £0.4m).

11.           Trade and other receivables

	30 June 2010          £'000		30 June 2009 £'000		31 December 2009 £'000
Current
Trade receivables	122,737		111,042		100,197
Other receivables	3,552		16,877		13,102
Prepayments and accrued income	26,012		22,563		20,103
	152,301		150,482		133,402
Non-current
Prepayments and accrued income	2,745		1,462		2,021

 12.           Trade and other payables

		30 June 2010          £'000		30 June 2009 £'000		31 December 2009 £'000
Current
Trade payables		3,505		5,864		7,304
Other tax and social security		32,670		28,056		75,262
Other payables		19,355		17,496		18,583
Accruals		49,476		38,152		40,223
Deferred income		1,319		219		1,378
		106,325		89,787		142,750
Non-current
Deferred income		1,972		2,131		2,334
Other tax and social security		295		153		547
		2,267		2,284		2,881

 13.           Cash flows from operating activities

		Six months ended				Year ended 31 December 2009 £'000
		30 June 2010 £'000		30 June 2009 £'000
Profit before tax		61,434		43,216		21,068
Non-recurring income		(17,125)		(26,544)		-
Profit before tax and non-recurring income		44,309		16,672		21,068
Depreciation and amortisation charges		5,212		5,696		11,268
Loss on sale of property, plant and equipment, and computer software		42		160		383
Share scheme charges		5,216		4,085		8,491
Net finance income - including NRI		(11,787)		(11,052)		(865)
Operating cash flow before changes in working capital and NRI		42,992		15,561		40,345
(Increase)/decrease in receivables		(32,175)		51,087		70,911
Increase/(decrease) in payables		16,256		(37,911)		(37,497)
Cash generated from underlying operations		27,073		28,737		73,759
Decrease/(increase) in VAT related receivables		8,972		-		(8,972)
(Decrease)/increase in VAT related payables		(49,990)		-		49,990
Non-recurring income		28,460		26,544		-
Cash generated from operations		14,515		55,281		114,777

 14.           Cash and cash equivalents

		30 June 2010 £'000		30 June 2009 £'000		31 December 2009 £'000
Cash at bank and in hand		57,562		91,442		127,293
Short-term deposits		9,615		7,801		9,935
Cash and cash equivalents		67,177		99,243		137,228
Bank overdrafts		(1,503)		-		(43)
Cash and cash equivalents in the statement of cash flows		65,674		99,243		137,185

                Responsibility statement:

                The Directors confirm that, to the best of their knowledge:-

a)     the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

b)     the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c)     the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

On behalf of the Board

S Ingham                                                                                                 S Puckett

Chief Executive                                                                                       Group Finance Director

                16 August 2010

                Copies of the Interim Report and Accounts are now available and can be downloaded from the Company's website

                http://investors.michaelpage.co.uk/annual_reports

 

END

 

 

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