Half Yearly Report

RNS Number : 5311L
Michael Page International PLC
13 August 2013
 



13 August 2013

 

 

PageGroup

 

Half Year Results for the Period Ended 30 June 2013

 

 

Michael Page International plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2013.

 

Financial summary (6 months to 30 June 2013)

2013

2012

Change

Change CER*

Revenue

£503.2m

£502.6m

+0.1%

-0.9%

Gross profit

£261.9m

£273.9m

-4.4%

-5.2%

Operating profit before exceptional items †

£32.1m

£36.0m

-10.8%

-11.9%

Profit before tax before exceptional items

£32.0m

£36.1m

-11.3%


Basic earnings per share before exceptional items

7.0p

7.9p

-11.4%

Diluted earnings per share before exceptional items

7.0p

7.8p

-10.3%





Operating profit

£32.1m

£28.2m

+14.1%

Profit before tax

£32.0m

£28.2m

+13.4%

Basic earnings per share

7.0p

6.1p

+14.8%

Diluted earnings per share

7.0p

6.1p

+14.8%





Interim dividend per share

3.25p

3.25p

-

 

*Constant Exchange Rates      Exceptional items in the prior year relate to a regional management restructure

 

Highlights

 

·      Group gross profit  -4.4% year-on-year, the business is profitable in all established markets

·      Signs of improvement in many markets as the period progressed

·      77% of gross profit generated from outside the UK

·      59% of gross profit generated from non Finance and Accounting disciplines

·      Gross profit from permanent placements reduced by 6% (-7%*)

·      Gross profit from temporary placements grew by 2% (+1%*)

·     Continued focus on operational efficiency, with headcount down by 144 (-2.8%) in first half of 2013, primarily in operational support

·      Strong balance sheet with net cash at 30 June 2013 of £47.6m

·      Interim dividend held at 3.25p

 

 

Commenting on the results, Steve Ingham, Chief Executive Officer of PageGroup, said:

 

"PageGroup delivered a robust performance throughout the first half, against a backdrop of challenging market conditions across most of our regions, reporting gross profit of £261.9m, down 4.4% year-on-year. Market conditions also showed signs of improvement during the second quarter of 2013, with a 6.6% increase in gross profit compared to the first quarter.

 

"We have made excellent progress on our key strategic objectives following the management changes last year:

 

·      continued investment in each of our 5 high potential markets: China, South East Asia, Germany, Latin America and the USA;

·      increased focus on consistency and efficiency in our operational support teams;

·      the turnaround of our USA business, where we are up 27%* in gross profit this year; and

·      further discipline diversification.

 

"During the six months to June we saw good performances in a number of regions, most notably in North America. Our offices in Japan, Mexico, Spain and the Middle East also performed particularly well, as did some smaller and newer businesses in Europe, Latin America and Asia. However, in Australia, our business experienced a difficult first half.

 

"As we indicated earlier in the year, we continue to manage our cost base actively, both to take account of market conditions as well as to improve the Group's operating performance. As a result, headcount has reduced by 144 since the start of the year, primarily in operational support staff.

 

"Our focus remains fixed on our long-term growth and profit objectives. We will continue to invest in our key, high-potential markets, to manage our fee earner headcount actively, reflecting market conditions and to seek out efficiencies to drive down the costs of operational support. Combined, these initiatives will deliver long-term profitable growth for our shareholders.

 

"Activity levels remained strong throughout the second quarter, but with difficult conditions likely to continue in several markets and as this is the seasonally quieter summer period in both Continental Europe and the UK, we expect Q3 will be another challenging quarter. The Group is financially strong, with net cash of £47.6m and remains well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be in line with current market estimates**."

 

** Reuters £70.9m

 

 

 

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://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2013.aspx

 

 

 

Enquiries:

PageGroup

01932 264144

Steve Ingham, Chief Executive Officer


Andrew Bracey, Chief Financial Officer




FTI Consulting

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 that are significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

 

GROUP STRATEGY

 

PageGroup's strategy is to expand and diversify the Group by industry sectors, by professional disciplines as well as by geography. This includes the Page Personnel, Michael Page and Page Executive businesses; the clear objective is to be 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 PageGroup 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 primarily profit-share business model is scalable and the small team size also means that we can increase rapidly our headcount to achieve and maintain growth.

 

The focus of our organic growth in the last eleven years has been to grow in emerging markets, where the outsourcing of recruitment particularly for specialist roles is underdeveloped and where there is limited competition. In many of these markets, we have achieved a market-leading position and intend to embrace fully the opportunity by investing rapidly in headcount and opening in new cities and countries. The investment to take advantage of these opportunities in terms of new headcount, international transfers of management, new office space and start-up losses will limit short-term profitability but should provide a substantial platform for longer term returns.

 

Our intention is always to maintain a strong balance sheet. With uncertainty around the length and depth of economic slowdowns, a strong balance sheet is essential to support the Group through tougher periods and, when conditions improve and the businesses start growing, to fund increased working capital requirements. Any surplus cash is returned to shareholders through dividends and share repurchases. 

 

Last year we made some key management changes with very specific objectives in mind.  The first of the four most significant is that as a more unified business we have absolute clarity on our geographic priorities for investment.  We believe the greatest opportunities for long-term growth are the 5 markets of China, South East Asia, Germany, Latin America and the USA. Our platform across these 5 markets gives us an enviable competitive advantage; with 45 offices and 1,436 headcount, they represent 30% of our total business.  We intend to invest in these markets consistently every year.

 

In part, this investment will be funded by the second key objective that is now possible as a result of the management changes.  We are working to be consistent and therefore more efficient in the operational support that underpins the business. Already this has meant that our operational support headcount has fallen significantly this year. Many of these reductions were made across our European businesses. Although the costs of reducing headcount are high in Europe, we have still made substantial cost savings and these changes will therefore improve conversion rates in the future.

 

The third objective that resulted from the changes was to put a key high potential market, North America, back on track.

 

The fourth is to diversify by discipline, rolling out existing and new disciplines across our office network.

 

While investing in our 5 key high potential markets, we will continue to manage all our other businesses according to the market conditions they experience.  This, we believe, will continue to deliver the best long-term profitable growth opportunity for our shareholders.

 

GROUP RESULTS

 

The Group's revenue for the six months ended 30 June 2013 increased by 0.1% to £503.2m (2012: £502.6m) and gross profit decreased by 4.4% to £261.9m (2012: £273.9m). At constant exchange rates, the Group's revenue decreased by 0.9% and gross profit by 5.2%. Typically, as economic conditions become more uncertain, permanent recruitment activity slows compared to temporary recruitment. This is evidenced in the first half, where the mix of the Group's revenue and gross profit between permanent and temporary placements decreased slightly to 42:58 (2012: 44:56) and 77:23 (2012: 79:21), respectively. The gross margin on temporary placements in the first half of 2013 fell slightly to 20.2% (2012: 20.8%). Pricing has remained relatively stable throughout the first half of 2013, with a stronger pricing environment in rapidly growing markets, being offset by competitive pressures in weaker markets.

 

As 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. With the ongoing uncertainty and lack of market confidence that impacted parts of the Group during the first half of 2013, many of these factors trended negatively, albeit to differing degrees in our different geographic regions, creating an environment where productivity remained at relatively low levels with less gross profit per fee earner able to be generated. The Group's strategy of growing organically, as well as maintaining market presence and a degree of spare capacity, means that the Group is operationally geared, which resulted in a proportionally larger decrease in operating profit than in gross profit. This conversion of gross profit to operating profit was also reduced by the amount of investment being made to facilitate and maintain growth in our newer markets and in markets where we see longer term potential.

 

Our focus remains on improving conversion with a strong focus on operational efficiency. In the first half, headcount was reduced by 144, the vast majority of which were in our operational support functions. As the largest share of this reduction was from our European operations, the one-off costs associated will offset the savings in the first half, with some benefit in the second half, and the full benefit in 2014.

 

With a 5% decrease in gross profit, continued weakness in many of the Group's markets and investment for the future, operating profit from trading activities for the first half of 2013 decreased to £32.1m (2012: £36.0m before exceptional items). The Group's conversion rate of gross profit to operating profit from trading activities is now 12.3% (2012: 13.1% before exceptional items).

 

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

 

Europe, Middle East and Africa (EMEA) is the Group's largest region, contributing 41% of Group gross profit in the first half. Revenue in the region decreased by 2.9% to £205.3m (2012: £211.5m) and gross profit decreased by 9.2% to £107.1m (2012: £117.9m). In constant currency, revenue decreased by 5.8% on the first half of 2012 and gross profit decreased by 11.7%. The 9.2% decrease in gross profit resulted in a 22.2% decrease in operating profit for the first half of 2013 to £10.4m (2012: £13.4m before exceptional items), and a conversion rate of 9.7% (2012: 11.3%).

 

Market conditions remained challenging across the region, but showed signs of improvement through the second quarter. 10 of our countries in this region grew in constant currency compared to the first half of 2012, including Spain, Portugal, Turkey, Sweden, Poland, Russia and the UAE. Trading conditions in our Northern European businesses continued to remain challenging, with economic uncertainty further impacting market confidence.

 

Our larger and predominantly permanent recruitment businesses in France and Germany, representing 49% of the region, continued to be impacted by the wider Eurozone issues, but in the circumstances performed well, showing improvement as the first half progressed. Reflecting these trading conditions, headcount across the region decreased by 159 (8%) in the first half of 2013 to 1,881 at the end of June 2013 (2,040 at 31 December 2012), the majority of which were in operational support.

 

UNITED KINGDOM

 

In the UK, representing 23% of the Group's gross profit in the first half, both revenue at £146.1m (2012: £146.0m), and gross profit at £61.4m (2012: £61.7m) were broadly flat, while operating profit was up 11.2% at £9.6m (2012: £8.6m before exceptional items).

 

Market conditions remained tough but stable throughout the first half of 2013, against which we delivered a robust performance. We continued to capitalise on our discipline diversification and depth of management experience, with our Logistics, Procurement & Supply Chain, Buying & Merchandising, Digital and Public Sector businesses delivering the strongest performances. Overall, operating profit increased by 11%, with the conversion rate up at 15.6% (2012: 14.0%). Headcount in the UK was up 2% during the first half of 2013 to 1,256 at the end of June 2013 (1,237 at 31 December 2012), and we are well positioned to take advantage of any recovery.

 

ASIA PACIFIC

 

In Asia Pacific, representing 21% of the Group's gross profit in the first half, revenue increased by 1.2% to a record £95.7m (2012: £94.6m) and gross profit decreased by 4.5% to £54.3m (2012: £56.9m). In constant currency, revenue increased by 1.6% and gross profit decreased by 4.4%. Operating profit fell by 30.4% to £9.6m (2012: £13.8m), resulting in a decrease in the conversion rate to 17.7% (2012: 24.3%).

 

In Australia, our largest business in the region, gross profit was down 20% in constant currency as we continued to be impacted by the downturn in the mining and commodities sector. Market conditions here, particularly in Western Australia, remain difficult but stable. In Asia, comprising 13% of the Group and 61% of the Asia Pacific region, we had a record first half in many of our businesses and, although trading conditions in China have become tougher since last year, activity levels remain strong. Gross profit in Asia grew 8% in constant currency, with our newer businesses in Kuala Lumpur and Taipei also progressing well. Headcount across the region increased by 40 (4%) in the first half of 2013 to 1,076 at the end of June 2013 (1,036 at 31 December 2012) and, assuming market conditions remain strong, we expect that further headcount will be added during the second half of 2013.

 

THE AMERICAS

 

In the Americas, representing 15% of the Group's gross profit in the first half, revenue increased by 11.2% to £56.2m (2012: £50.6m) and gross profit increased by 4.5% to £39.1m (2012: £37.4m). In constant currency, revenue increased by 12.3% and gross profit increased by 5.9%. Operating profit increased significantly to £2.5m (2012: £0.2m), with a conversion rate of 6.4% (2012: 0.5%).

 

In North America, our businesses performed extremely well, particularly in the USA, with gross profit up by 23% in constant currency. Market sentiment is improving in North America and this, along with last year's changes to the top level management and investment to strengthen the teams across the region, has driven improvements in both the conversion rate and operating profit.

 

In Latin America, gross profit was down 2% year-on-year in constant currency. In Brazil, where we are the clear market leader, we saw signs of improvement as the first half progressed. With the exception of Argentina, where trading remains difficult, our other businesses in Latin America grew strongly, with record gross profit performances in both Mexico and Colombia.

 

Our new operating software was successfully piloted in our Boston office in May. The roll-out will begin in the rest of North America before being extended across the wider Group.

 

Headcount across the region decreased by 44 (6%) in the first half of 2013 to 742 at the end of June 2013 (786 at 31 December 2012). However, with increasingly stronger quarters, improving economies in North America and Brazil, as well as a stronger management team, we feel increasingly optimistic about the outlook for this region.

 

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 businesses in 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 affect the conversion rates in any one reporting period. Generally, in years when economic conditions are benign, revenue and gross profit grow. Operating profit grows 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 the 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 that 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, causing revenue to decline quickly 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, but these are treated as a component of our normal operating expenses and do not incur significant restructuring charges. However, as greater reductions become necessary, such charges may be incurred.

 

As economic conditions begin to improve, the confidence levels of both candidates and clients also improves and the rate at which people change jobs starts to increase. This increase in activity is serviced from the spare capacity we maintain during a downturn and therefore profits have the potential to increase rapidly. As different markets recover and grow at different rates, we invest in infrastructure and additional headcount in some markets to maintain their growth, while carrying some spare capacity in others. Where possible, we redeploy resources to match market conditions. The Group's conversion rate for the period was 12.3% (2012: 13.1%), which reflects the ongoing difficult market conditions seen through the first half of 2013. The movement in the conversion rates of the four regions and the levels of conversion now being achieved reflects the market conditions in those regions, the levels of investment in each region and the levels of spare capacity still available to be utilised.

 

Administrative expenses in the year decreased by 3.4% to £229.8m (2012: £237.8m). Administrative expenses included £5.0m of share-based payment charges (2012: £7.9m) in respect of the Group's deferred annual bonus scheme, long-term incentive plan and share option schemes.

 

TAXATION AND EARNINGS PER SHARE

 

The charge for taxation is based on the expected effective annual tax rate of 33.0% (2012: 33.5%) on profit before taxation. Excluding French Professional taxes, the effective rate would be 29.8%.

 

Basic and diluted earnings per share for the six months ended 30 June 2013 were both 7.0p (2012: 6.1p).

 

CASH FLOW

 

The Group started the year with net cash of £61.4m. In the first half we generated £17.3m from operations after funding an increase in working capital of £27.1m, primarily due to the timing of bonus payments for 2012. Tax paid was £12.3m and net capital expenditure was £6.6m, with net interest paid of £0.1m. During the first half, £7.9m was received from the exercise of share options and dividends of £20.8m were paid to shareholders. After favourable currency movements of £0.8m, the Group had net cash of £47.6m at 30 June 2013.

 

INTANGIBLE ASSETS

 

In May, we commenced operating our new software in Boston in the USA, and will now roll it out across the business. Accordingly, we began the amortisation of this intangible asset in 2013.  The full year charge is expected to be c. £5.4m, with £1.4m of this in the first half.



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. The Board remains confident of the Group's longer term prospects and has therefore decided to maintain the interim dividend at 3.25p (2012: 3.25p) per share. The interim dividend will be paid on 4 October 2013 to shareholders on the register at 6 September 2013.

 

No shares were repurchased into the employee benefit trust or cancelled during the first half.

 

CURRENT TRADING AND OUTLOOK

 

Overall, we had an improved second quarter and a robust first half.

 

It is a clear priority that we continue to manage the cost base to reflect market conditions, while investing to create a platform for greater growth when markets improve. We believe strongly that we have the balance right and we remain profitable in all established markets.

 

Activity levels remained strong throughout the second quarter, but with difficult conditions likely to continue in several markets and as this is the seasonally quieter summer period in both Continental Europe and the UK, we expect Q3 will be another challenging quarter. The Group is financially strong, with net cash of £47.6m and we remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be in line with current market estimates**.

 

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 2013

H1 2012

Definition, method of calculation and analysis

Gross margin

52.0%

54.5%

Gross profit as a percentage of revenue. Gross margin has decreased, largely as a result of the mix of permanent and temporary placements. In tougher trading conditions, there tends to be a swing to lower margin temporary placements. Source: Condensed consolidated income statement in the financial statements.

Conversion (before exceptional items)

12.3%

13.1%

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 declined compared to last year, reflecting the impact of the economic uncertainty on demand for the Group's services, lower productivity and the investment in maintaining market presence and carrying spare capacity. Source: Condensed consolidated income statement in the financial statements.

Productivity (gross profit per fee earner)

£72.0k

£72.5k

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 speed of change in the numbers and the experience of fee earners, the impact of pricing and the general conditions of the recruitment market. Productivity has remained broadly flat, with the small decrease a result of the general worsening of market conditions compared to the first half last year. Source: Internal data.

Fee earner : support staff ratio

72:28

71:29

Represents the balance between operational and non-operational staff. The balance in the period reflects the relative reduction in support staff, as a result of ongoing operational efficiencies across the Group, against the movement in the number of fee earners. Source: Internal data.

Debtor days (30 June)

48

49

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 the continued focus on cash collections and a greater proportion of temporary business, with the average debtor days being lower for the temporary business compared to the permanent business. Source: Internal data.

                                                                                                  

The movements in KPIs are in line with expectations.

 

PRINCIPAL RISKS AND UNCERTAINTIES

 

The management of the business and the execution of the Group's strategy are subject to a number of risks. The following section comprises a summary of the main risks PageGroup believes 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 and development of staff, competitive pay structures and share plans linked to the Group's results and career progression.

 

Macroeconomic environment

 

Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board look to reduce the Group's cyclical risk by diversifying the business by expanding geographically, increasing the number of disciplines, building part qualified and clerical businesses and continuing to build the temporary business. A substantial portion of the Group's gross profit arises from fees that 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 reduces 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 the majority of 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 due to changes in legislation, increasing job mobility and the difficulty internal resources face in sourcing suitably qualified candidates and managing increasing levels of 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 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 is 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. 

Legal

 

The Group operates in a large number of jurisdictions that have varying legal and compliance regulations. The Group takes its responsibilities seriously and ensures that its policies, systems and procedures are continually updated to reflect best practice and to comply with the legal requirements in all 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 significant 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 liquidity as well as credit exposure, management of currency risk and business and operational continuity.

 

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. In a generally benign economic environment this equates to maintaining the Group's net cash/debt position within a relatively narrow band, with cash generated in excess of operational and investment requirements being returned to shareholders. In a period of economic uncertainty, a more cautious funding position will be 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 Eurozone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts. The Group has an Invoice Financing facility with HSBC Bank, the availability of which is limited to the level of UK trade receivable available for financing. This facility is subject to conventional banking covenants.

 

The main functional currencies of the Group are Sterling, Euro, Australian Dollar and Brazilian Real. 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 short-dated 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.

 

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.

 

 

 

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

 

By order of the Board,

 

 

 

 

Steve Ingham                                 Andrew Bracey

Chief Executive Officer                    Chief Financial Officer

 

13 August 2013                             13 August 2013

 

 

 

 

INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

 

Introduction

 

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 2013 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 guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our 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 enquiries, 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 2013 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.

 

 

Ernst & Young LLP

London

13 August 2013

 

 

 

 

Condensed Consolidated Income Statement

Six months ended 30 June 2013

                                                                                   




 

Six months ended


 

Year ended




30 June


30 June


31 December




2013


2012


2012




Unaudited


Unaudited


Audited


Note


£'000


£'000


£'000









Revenue

3


503,248


502,629


989,882

Cost of sales



(241,308)


(228,774)


(463,013)

Gross profit

3


261,940


273,855


526,869

Administrative expenses



(229,820)


(237,848)


(461,748)

Operating profit before exceptional items

3


32,120


36,007


65,121

Exceptional items

4


-


(7,845)


(7,834)

Operating profit after exceptional items

3


32,120


28,162


57,287

Financial income

5


251


423


907

Financial expenses

5


(350)


(342)


(1,191)

Profit before tax

3


32,021


28,243


57,003

Income tax expense

6


(10,567)


(9,475)


(20,806)

Profit for the period



21,454


18,768


36,197

























 

Attributable to:

Owners of the parent



 

 

21,454


 

 

18,768


 

 

36,197









Earnings per share








Basic earnings per share (pence)

9


7.0


6.1


11.9

Diluted earnings per share (pence)

9


7.0


6.1


11.7

 

 

The above results all relate to continuing operations.

 

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2013

 




 

 

Six months ended


 

 

Year ended




30 June


30 June


31 December




2013


2012


2012




Unaudited


Unaudited


Audited




£'000


£'000


£'000









Profit for the period



21,454


18,768


36,197









Other comprehensive income/(loss) for the period








Items that may subsequently be reclassified to profit and loss:

Currency translation differences



 

 

2,567


 

 

(3,815)


 

 

(5,171)









Total comprehensive income for the period



24,021


14,953


31,026









Attributable to:








Owners of the parent



24,021


14,953


31,026



Condensed Consolidated Balance Sheet

At 30 June 2013

 



 

 

 

Note


30 June

2013

Unaudited

£'000


30 June

2012

Unaudited

£'000


31 December

2012

Audited

£'000

Non-current assets









Property, plant and equipment


10


27,503


31,685


28,913

Intangible assets  - Goodwill and other intangible




2,036


1,950


2,091

                             - Computer software




42,613


42,198


42,006

Deferred tax assets




9,908


8,548


9,192

Other receivables


11


3,827


5,209


3,310





85,887


89,590


85,512










Current assets









Trade and other receivables


11


198,944


201,558


182,507

Current tax receivable




6,970


3,981


6,970

Cash and cash equivalents


14


53,981


57,443


70,769





259,895


262,982


260,246










Total assets


3


345,782


352,572


345,758










Current liabilities









Trade and other payables


12


(127,043)


(142,673)


(138,733)

Bank overdrafts


14


(6,366)


(25,031)


(9,396)

Current tax payable




(11,107)


(2,581)


(12,612)





(144,516)


(170,285)


(160,741)










Net current assets




115,379


92,697


99,505










Non-current liabilities









Other payables


12


(3,074)


(2,622)


(2,779)

Deferred tax liabilities




(851)


(233)


(850)





(3,925)


(2,855)


(3,629)










Total liabilities


3


(148,441)


(173,140)


(164,370)










Net assets




197,341


179,432


181,388










Capital and reserves









Called-up share capital




3,194


3,173


3,178

Share premium




66,138


58,470


60,221

Capital redemption reserve




932


932


932

Reserve for shares held in the employee benefit trust


(51,907)


(57,277)


(62,071)

Currency translation reserve




27,682


26,471


25,115

Retained earnings




151,302


147,663


154,013

Total equity




197,341


179,432


181,388

 

 



Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2013

 

 


 

 

 

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 2012

3,167

57,215

932

(65,652)

30,286

154,650

180,598

Currency translation differences

-

-

-

-

(3,815)

-

(3,815)

Net expense recognised directly in equity

-

-

-

-

(3,815)

-

(3,815)

Profit for the six months ended 30 June 2012

-

-

-

-

-

18,768

18,768

Total comprehensive (loss)/income for the period

-

-

-

-

(3,815)

18,768

14,953

Purchase of shares held in employee benefit trust

-

-

-

(9,388)

-

-

(9,388)

Exercise of share plans

6

1,255

-

-

-

4,271

5,532

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

17,763

-

(17,763)

-

Credit in respect of share schemes

-

-

-

-

-

7,461

7,461

Credit in respect of tax on share schemes

-

-

-

-

-

1,054

1,054

Dividends

-

-

-

-

-

(20,778)

(20,778)


6

1,255

-

8,375

-

(25,755)

(16,119)









Balance at 30 June 2012

3,173

58,470

932

(57,277)

26,471

147,663

179,432









Currency translation differences

-

-

-

-

(1,356)

-

(1,356)

Net expense recognised directly in equity

-

-

-

-

(1,356)

-

(1,356)

Profit for the six months ended 31 December 2012

-

-

-

-

-

17,429

17,429

Purchases of shares held in employee benefit trust

-

-

-

(8,564)

-

-

(8,564)

Exercise of share plans

5

1,751

-

-

-

528

2,284

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

3,770

-

(3,770)

-

Credit in respect of share schemes

-

-

-

-

-

4,382

4,382

Debit in respect of tax on share schemes






(2,363)

(2,363)

Dividends

-

-

-

-

-

(9,856)

(9,856)


5

1,751

-

(4,794)

-

(11,079)

(14,117)









Balance at 31 December 2012 and 1 January 2013

3,178

60,221

932

(62,071)

25,115

154,013

181,388









Currency translation differences

-

-

-

-

2,567

-

2,567

Net income recognised directly in equity

-

-

-

-

2,567

-

2,567

Profit for the six months ended 30 June 2013

 -

-

 -

-

-

21,454

21,454

Total comprehensive income for the period

-

-

-

-

2,567

21,454

24,021

Exercise of share plans

16

5,917

-

-

-

2,012

7,945

Reserve transfer when shares held in the employee benefit trust vest

-

-

-

10,164

-

(10,164)

-

Credit in respect of share schemes

-

-

-

-

-

4,117

4,117

Credit in respect of tax on share schemes

-

-

-

-

-

668

668

Dividends

-

-

-

-

-

(20,798)

(20,798)


16

5,917

-

10,164

-

(24,165)

(8,068)









Balance at 30 June 2013

3,194

66,138

932

(51,907)

27,682

151,302

197,341

 



Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2013

 

 




Six months ended


Year ended


 

 

 

Note


30 June  2013

Unaudited

£'000

 


 30 June  2012

Unaudited

£'000

 


31 December

2012

Audited

£'000

Cash generated from underlying operations

13


17,325


35,320


94,471

Exceptional items

4


               -


      (7,845)


            (7,834)

Cash generated from operations



17,325


27,475


86,637

Income tax paid



(12,331)


(17,532)


(24,371)

Net cash from operating activities



4,994


9,943


62,266









Cash flows from investing activities








Purchases of property, plant and equipment



(4,325)


(4,627)


(7,919)

Purchases of intangible assets



(2,582)


(5,013)


(9,012)

Proceeds from the sale of property, plant and equipment, and computer software


310


35


449

Interest received



251


423


907

Net cash used in investing activities



(6,346)


(9,182)


(15,575)









Cash flows from financing activities








Dividends paid



(20,798)


(20,778)


(30,634)

Interest paid



(364)


(344)


(1,218)

Issue of own shares for the exercise of options



7,945


5,532


7,816

Purchase of shares into the employee benefit trust



-


(9,388)


(17,952)

Net cash used in financing activities



(13,217)


(24,978)


(41,988)

















Net (decrease)/increase  in cash and cash equivalents



(14,569)


(24,217)


4,703

Cash and cash equivalents at the beginning of the period



61,373


58,168


58,168

Exchange gain/(loss) on cash and cash equivalents



811


(1,539)


(1,498)

Cash and cash equivalents at the end of the period

14


47,615


32,412


61,373

 

 

 

Notes to the condensed set of interim financial statements

Six months ended 30 June 2013

 

 

1.         General information

 

The information for the year ended 31 December 2012 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 unaudited interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Services Authority.  

 

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements.  The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2012, were approved by the directors on 5 March 2013.  The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') 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.

 

 

New accounting standards, interpretations and amendments

 

 

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ending 31 December 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

           

None of the new standards and interpretations adopted had a material impact on the consolidated financial statements of the Group other than as described below:                                                                             

 

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1                                                                                                                                  

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Group's financial position or performance.

                                                                       

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.                                                                                                                                   

 

 

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 including allocation of central administration cost. This is the measure reported to the Group's Chief Executive Officer 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

2012

Audited

£'000


Six months ended

Year ended

31 December

2012

Audited

£'000




30 June

2013

Unaudited £'000


30 June

2012

Unaudited £'000



30 June

    2013

Unaudited £'000


30 June

2012

Unaudited £'000
















EMEA



205,250


211,458


403,223


107,137


117,934


218,382















United Kingdom


146,050


146,012


295,876


61,414


61,687


121,408















Asia Pacific

Australia and New Zealand


57,054


59,711


119,344


21,400


26,343


51,677


Other


38,672


34,888


72,853


32,907


30,508


63,177


Total


95,726


94,599


192,197


54,307


56,851


114,854





























Americas



56,222


50,560


98,586


39,082


37,383


72,225














503,248


502,629


989,882


261,940


273,855


526,869

 

 

  

 




Operating Profit




Six months ended


Year ended




30 June

2013

Unaudited

£'000


30 June

2012

Unaudited £'000


31 December

2012

Audited

£'000









EMEA



10,408


13,385


22,070









United Kingdom



9,579


8,614


15,771









Asia Pacific

Australia and New Zealand


3,367


7,679


14,164


Other


6,248


6,131


14,803


Total


9,615


13,810


28,967









Americas



2,518


198


(1,687)









Operating profit

32,120


36,007


65,121

Exceptional items (note 4)

-


(7,845)


(7,834)

Operating profit after exceptional items

32,120


28,162


57,287

Financial (expense)/ income

(99)


81


(284)

Profit before tax

32,021


28,243


57,003

 

 

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, goodwill and other intangible.

 

 

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




Total Assets


Total Liabilities




Six months ended


Year ended


Six months ended


Year ended




30 June

2013

Unaudited £'000


30 June

2012

Unaudited £'000


31 December

2012

Audited

£'000


30 June

    2013

Unaudited £'000


30 June

2012

Unaudited £'000


31 December

2012

Audited

£'000















EMEA



123,641


128,955


125,560


69,775


71,666


70,596















United Kingdom



111,848


109,454


104,392


34,928


64,518


48,414















Asia Pacific

Australia and New Zealand


24,086


29,313


26,842


12,146


14,768


11,809


Other


39,774


38,572


43,159


9,364


8,660


9,182


Total


63,860


67,885


70,001


21,510


23,428


20,991





























Americas



39,463


42,297


38,835


11,121


10,947


11,757















Segment assets/liabilities


338,812


348,591


388,788


137,334


170,559


151,758















Income tax



6,970


3,981


6,970


11,107


2,581


12,612


















345,782


352,572


345,758


148,441


173,140


164,370

 

 

 



 

 

Property, Plant & Equipment


 

 

Intangible Assets


Six months ended


Year ended

31 December

2012

Audited

£'000


Six months ended


Year ended

31 December

2012

Audited £'000



30 June

2013

Unaudited £'000


30 June

2012

Unaudited £'000



30 June

    2013

Unaudited £'000


30 June

2012

Unaudited £'000















EMEA



9,678


9,034


460


600


495














United Kingdom


7,253


8,904


7,968


43,365


42,760


42,712














Asia Pacific

Australia and New Zealand       

1,345


1,639


1,454


107


129


100


Other

2,620


2,814


2,599


154


66


116


Total

3,965


4,453


4,053


261


195


216














Americas



8,650


7,858


563


593


674
















27,503


31,685


28,913


44,649


44,148


44,097

 

 

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

2012

Audited

£'000


Six months ended


Year ended

31 December

2012

Audited

£'000



30 June

2013

Unaudited £'000


30 June

2012

Unaudited £'000



30 June

    2013

Unaudited £'000


30 June

2012

Unaudited £'000















Finance and Accounting


232,308


237,895


465,378


107,367


114,661


220,561














Legal, Technology, HR, Secretarial and Other


115,722


109,551


219,980


53,982


55,076


106,422














Engineering, Property & Construction, Procurement & Supply Chain


90,258


90,703


177,883


52,024


53,905


102,817














Marketing,

Sales and Retail


64,960


64,480


126,641


48,567


50,213


97,069
















503,248


502,629


989,882


261,940


273,855


526,869

 

  

 

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

 


Revenue


Gross Profit


Six months ended


Year ended

31 December

2012

Audited

£'000


Six months ended


Year ended

31 December

2012

Audited

£'000



30 June

2013

Unaudited £'000


30 June

2012

Unaudited £'000



30 June

    2013

Unaudited £'000


30 June

2012

Unaudited £'000















Permanent


208,919


222,601


422,005


202,604


215,687


409,660














Temporary


294,329


280,028


567,877


59,336


58,168


117,209
















503,248


502,629


989,882


261,940


273,855


526,869

 

  

 

4.         Exceptional items

 

The exceptional item in the prior period refers to a restructuring cost taken by the Group in the first half of 2012 relating to changes in management structure where an entire layer of management was removed. The costs represented direct expenditure necessarily incurred by the restructuring. The expenditure did not include any ongoing costs of the Group.

 

 

5.         Financial income/(expenses)

 



Six months ended


Year ended

31 December

2012

Audited

£'000



30 June

  2013

Unaudited

 £'000


30 June

2012

Unaudited

£'000


Financial income







Bank interest receivable


251


423


907















Financial expenses







Bank interest payable


(350)


(342)


(1,191)

 

 

6.         Taxation

 

Taxation for the six month period is charged at 33.0% (six months ended 30 June 2012: 33.5%; year ended 31 December 2012: 36.5%), 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

2012

Audited

£'000


30 June

2013

Unaudited

£'000


30 June

2012

Unaudited

£'000








Amounts recognised as distributions to equity holders in the period:






Final dividend for the year 31 December 2012 of 6.75p per ordinary share (2011: 6.75p)

20,798


20,778


20,778

Interim dividend for the period ended 30 June 2012 of 3.25p per ordinary share

-


-


9,856


20,798


20,778


30,634







Amounts proposed as distributions to equity holders in the period:






Proposed interim dividend for period ended 30 June 2013 of 3.25p   per ordinary share (2012: 3.25p)

10,016


9,924


-

Proposed final dividend for the year ended 31 December 2012 of 6.75p per ordinary share

-


-


20,503

 

 

The proposed interim dividend had not been approved by the Board at 30 June 2013 and therefore has not been included as a liability. The comparative interim dividend at 30 June 2012 was also not recognised as a liability in the prior period.

 

The proposed interim dividend of 3.25 pence (2012: 3.25 pence) per ordinary share will be paid on 4 October 2013 to shareholders on the register at the close of business on 6 September 2013.

 

 

8.         Share-based payments

 

In accordance with IFRS 2 "Share-based Payment", a charge of £5.0m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2012: £7.9m, 31 December 2012: £14.2m).

 

  

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

2012

Audited

 

 

 

 

Earnings

 

30 June

2013

Unaudited


 

30 June

2012

Unaudited


Earnings for basic and diluted earnings per share (£'000)

21,454


18,768


36,197

Exceptional items (£'000) (note 4)

-


5,315


5,308

Earnings for basic and diluted earnings per share before exceptional items (£'000)

21,454


24,083


41,505







Number of shares






Weighted average number of shares used for basic earnings per share ('000)

306,210


305,602


305,345

Dilution effect of share plans ('000)

2,445


4,271


3,136

Diluted weighted average number of shares used for diluted earnings per share ('000)

308,655


309,873


308,481







Basic earnings per share (pence)

7.0


6.1


11.9

Diluted earnings per share (pence)

7.0


6.1


11.7

Basic earnings per share before exceptional items (pence)

7.0


7.9


13.6

Diluted earnings per share before exceptional items (pence)

7.0


7.8


13.5







 

The above results all relate to continuing operations.

 

 

10.        Property, plant and equipment

 

Acquisitions and disposals

During the period ended 30 June 2013 the Group acquired property, plant and equipment with a cost of £4.3m (30 June 2012: £4.6m, 31 December 2012: £7.9m).

 

Property, plant and equipment with a carrying amount of £0.4m were disposed of during the period ended 30 June 2013 (30 June 2012: £0.1m, 31 December 2012: £0.3m), resulting in a loss on disposal of £46k (30 June 2012: loss of £5k, 31 December 2012: loss of £5k).

 

 

11.        Trade and other receivables

 


     30 June

2013 Unaudited

£'000


30 June

2012

Unaudited

£'000


31 December

2012

Audited

£'000

Current






Trade receivables

158,052


159,161


141,706

Other receivables

6,237


5,112


4,653

Prepayments and accrued income

34,655


37,285


36,148


198,944


201,558


182,507







Non-current






Prepayments 

3,827


5,209


3,310

 

  

 

12.        Trade and other payables

                                                                                                                                                                                       



     30 June

2013 Unaudited

£'000


30 June

2012

Unaudited

£'000


31 December

2012

Audited

£'000

Current







Trade payables


4,868


5,536


9,605

Other tax and social security


41,318


42,299


39,709

Other payables


14,619


22,777


16,679

Accruals


65,571


71,179


71,920

Deferred income


667


882


820



127,043


142,673


138,733

Non-current







Deferred income


2,993


2,569


2,653

Other tax and social security


81


53


126



3,074


2,622


2,779

 

13.        Cash flows from operating activities

 



Six months ended


 

Year ended

31 December

2012

Audited

£'000



 

30 June

2013

Unaudited

£'000


 

30 June

2012

Unaudited

£'000









Profit before tax


32,021


28,243


57,003

Exceptional items (note 4)


-


7,845


7,834

Profit before tax and exceptional items


32,021


36,088


64,837

Depreciation and amortisation charges


8,125


5,830


15,073

Loss on sale of property, plant and equipment, and computer software


46


5


5

Share scheme charges


4,089


7,461


11,884

Net finance costs/(income)


99


(81)


284

Operating cash flow before changes in working capital and exceptional items


44,380


49,303


92,083

(Increase)/decrease in receivables


(12,442)


(11,750)


7,454

Decrease in payables


(14,613)


(2,233)


(5,066)

Cash generated from underlying operations


17,325


35,320


94,471

 

 

 

14.        Cash and cash equivalents

                                                                                                     



     30 June

2013 Unaudited

£'000


30 June

2012

Unaudited

£'000


31 December

2012

Audited

£'000








Cash at bank and in hand


47,769


47,907


62,431

Short-term deposits


6,212


9,536


8,338

Cash and cash equivalents


53,981


57,443


70,769

Bank overdrafts


(6,366)


(25,031)


(9,396)

Cash and cash equivalents in the statement of cash flows


47,615


32,412


61,373

 

 

 

The Group operates a multi-currency notional cash pool. Currently the main Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in this cash pool, although it is the Group's intention to extend the scope of the participation to other Group companies going forward. The structure facilitates interest and balance compensation of cash and bank overdrafts.

 

Responsibility statement:

 

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

 

a)   the condensed set of interim 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                                                                                  A Bracey

Chief Executive Officer                                                               Chief Financial Officer

 

 

            13 August 2013

 

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

 

http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2013.aspx

 

              

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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