Final Results
5 March 2014
Full Year Results for the Year Ended 31 December 2013
Michael Page International plc ("PageGroup"), the specialist professional recruitment company, announces its full year results for the year ended 31 December 2013.
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Financial summary |
2013 |
2012 |
Change |
Change CER* |
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Revenue |
£1,005.5m |
£989.9m |
+1.6% |
+1.2% |
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Gross profit |
£513.9m |
£526.9m |
-2.5% |
-2.7% |
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Operating profit before exceptional items ** |
£68.2m |
£65.1m |
+4.7% |
+4.7% |
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Profit before tax before exceptional items |
£67.1m |
£64.8m |
+3.5% |
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Basic earnings per share before exceptional items |
15.1p |
13.6p |
+11.0% |
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Diluted earnings per share before exceptional items |
14.9p |
13.5p |
+10.4% |
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Operating profit |
£65.7m |
£57.3m |
+14.7% |
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Profit before tax |
£64.1m |
£57.0m |
+12.4% |
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Basic earnings per share |
13.8p |
11.9p |
+16.0% |
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Diluted earnings per share |
13.7p |
11.7p |
+17.0% |
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Total dividend per share |
10.5p |
10.0p |
+5.0% |
*Constant Exchange Rates
** Exceptional items: 2013 operating profit charge of £2.5m (2012: £nil) relating to Page Personnel France. 2013 restructuring charge of £nil (2012: £7.8m). These items are described fully in note 4.
Highlights
· Revenue increased by 1.2%; gross profit lower by 2.7% at constant exchange rates
· Operating profit ** increased 4.7%, reflecting a focus on operational efficiencies
· Signs of improvement in many markets as the year progressed, notably in the UK and USA
· 20 out of 34 countries achieved year-on-year gross profit growth in 2013
· Continued investment in high potential markets of China, South East Asia, Germany, LatAm and USA
· 2 new offices opened in the Americas, Los Angeles and Monterrey (Mexico)
· EMEA represented 40% of gross profit; UK 24%; Asia Pacific 21%; Americas 15%
· Operational support headcount reduced by 155 (-10.5%) in 2013 delivering recurring £20m pa savings
· Fee earner headcount increased by 186 (+5.1%)
· Strong balance sheet with net cash at 31 December 2013 of £85.4m
· Total dividend increased by 5% to 10.5p
Commenting, Steve Ingham, Chief Executive Officer of PageGroup, said:
"Although 2013 was a challenging year for the recruitment industry and the global economy in general, PageGroup was able to deliver a robust performance, with our key measure of gross profit (net fee income) just 2.5% lower than 2012, at £514m. However, as a result of our focus on operational efficiencies, we delivered an operating profit before exceptional items of £68.2m, exceeding the prior year by 4.7%.
"We achieved good performances in our significant UK and US markets, and also in Spain, the UAE, Mexico and Japan. There were also some signs of recovery in Continental Europe towards the end of the year. In contrast, Australia remained a difficult market, with the continued downturn in the resources sector, and our largest business in Latin America, Brazil, felt the impact of more challenging conditions. The refocusing of the business in the USA has been highly successful. We now have a fast growing and profitable business in this region which has considerable potential for PageGroup. Overall, year-on-year gross profit growth was experienced in 20 of the 34 countries in which we operate.
"A strategic objective in 2013 was to initiate a stronger focus on the consistency and efficiency of our operational support teams. Operational support headcount has been reduced by 155, while fee earner headcount has increased by 186, a net overall increase in headcount of 31. At the same time, we continue to work on ways to deliver the optimal infrastructure and technology to enable our people to best serve the needs of clients and candidates alike.
"The savings made in operational support had a positive impact on our cost base of approximately £10m in 2013 and hence our performance. In total, approximately £20m of recurring costs were removed from the business, with the full benefit to be felt in 2014. These savings will help mitigate cost base growth elsewhere, such as salary increases representing £14m at c. 3% per head; investments in additional fee earner headcount; and in the supporting infrastructure, including the first full year of amortisation of the Gateway IT project intangible asset of around £8.5m (2013: £5.4m).
"During 2013, we also continued to invest in our large, high potential markets of China, South East Asia, Germany, Latin America and the USA, identified in our long-term growth strategy. We see these markets as sizable long-term opportunities to achieve, or in most cases improve, our significant market share and consolidate our position as the established market leader. We are also mindful that these markets will develop according to local conditions and market character, and along differing timeframes. Our financial commitment to these markets is coupled with the investment in transferring highly experienced PageGroup managers to lead the efforts in country which also ensures that the unique PageGroup culture and best practice is adopted from the outset. This is a significant advantage for us, and is fundamental to our consistent organic growth strategy, both across the economic cycle and as we look to grow in new markets.
"The strength and timing of any recovery in world economic markets is uncertain, our visibility relatively short and we remain exposed to some volatile economies. This is demonstrated by the recent adverse movements in foreign currencies that are impacting our overseas results when translated into Sterling (impact on 2014 operating profit of c. £4m at current exchange rates). However, we have continued to invest in additional fee earner headcount in selected markets since the start of the year. We believe our clear and consistent growth strategy, our geographic and discipline diversity and our strong balance sheet, with £85 million of net cash at year end, ensures that we remain in a strong position to respond to any improvements in market conditions in 2014. This is also reflected in our proposed increase of 5% in the total dividend to 10.5p."
Analyst meeting
The company will be presenting to a meeting of analysts at 9.00am today at
FTI Consulting
Holborn Gate
26 Southampton Buildings
London
WC2A 1PB
United Kingdom.
If you are unable to attend in person, you can also follow the presentation on the following link:
Please use the following dial-in numbers to join the conference:
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United Kingdom (Local) |
020 3059 8125 |
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All other locations |
+44 20 3059 8125 |
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Participant password: |
PageGroup |
The presentation and a recording of the meeting will be available on the company's website later today at
http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2014.aspx
Enquiries:
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Michael Page International plc |
01932 264446 |
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Steve Ingham, Chief Executive Officer |
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Kelvin Stagg, Acting Chief Financial Officer |
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Ross Hawley, Director of Investor Relations |
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FTI Consulting |
020 7269 7291 |
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Richard Mountain / Susanne Yule |
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MANAGEMENT REPORT
Cautionary Statement
The Management Report 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 Management Report 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.
GROUP STRATEGY
Our strategy is clear and consistent.
Organic growth
Our strategy is to grow organically, 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. Our team-based structure and profit share business model is highly scalable. The small size of our specialist teams means we can increase headcount rapidly to achieve growth when market conditions are good. Conversely, when market conditions tighten, these entrepreneurial, profit sharing teams reduce in size through natural attrition. Consequently, our cost base contracts during the lean times. Our strategy for organic growth has served the business well over the thirty eight years since its inception and we believe it will continue to do so. We have grown from a small, single discipline management recruitment company operating in one country to a large multidiscipline,
multinational business, operating in 34 countries represented by three key brands.
Diversification by region and discipline
Our strategy is to expand and diversify the Group by industry sectors, professional disciplines, geography and level of focus, be it Page Executive, Michael Page or Page Personnel, with the objective of being the leading specialist recruitment consultancy in each of our chosen markets. As recruitment is a cyclical business, impacted significantly by the strength of economies, diversification is an important element of our strategy in order to reduce our dependency on individual businesses or markets and to increase the resilience of the Group. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries, maintaining a consistent team and meritocratic culture as we grow.
Build for the long term
When we invest in a new business, be it a new country, a new office or a new discipline, we do so for the long-term. Downturns in the general economy of a country or in specific industries will inevitably have a knock-on effect on the recruitment market. However, it has been our practice in the past, and remains our intention, to maintain our presence in our chosen markets through these downturns, while closely controlling our cost base. In this way, we are able to retain our highly capable management teams in whom we have invested and, normally, we find that we gain market share during downturns which positions our business for market-leading rates of growth when the economy improves. Pursuing this approach means that we carry spare capacity during the downturn, which has a negative effect on profitability. A strong balance sheet is, therefore, essential to support the business through these times.
Recruit the best people, develop their talent and promote from within
We recognise that it is our people who are at the heart of everything we do, particularly as an organically grown business. Investing in them is, therefore, a vital element of our strategy. Our strategy is to find the highest calibre staff from a wide range of backgrounds and then do our very best to retain them through a team-based structure, a profit share business model and continuous career development, often internationally. Our strong track record of internal career moves and promotion from within means that people who join us know that one day they can be our future senior managers and main Board directors. Steve Ingham, our Chief Executive Officer, joined PageGroup 27 years ago at recruitment consultant level. Similarly, all of the operational members of our Executive Committee started their PageGroup careers at consultant level and have a total of 125 years of PageGroup experience across the five individuals.
REVIEW OF 2013
Market conditions in 2013 made for another challenging year, but the Group delivered an increase over 2012 in operating profit (before and after exceptional items), despite gross profit (net fee income) being down 2.5%.
We were encouraged by our performance in Q4, which saw our first positive growth in constant currency since Q1 of 2012, and by the improvement in the year-on-year quarterly gross profit growth rate in each of the last three quarters. Year-on-year gross profit growth was experienced in 20 countries and we finished the year with a strong balance sheet and £85m of net cash.
Revenue
Revenue for the year ended 31 December 2013 was £1,005.5m, exceeding our revenue in 2012 of £989.9m by 1.6%. Our revenue from permanent placements decreased by 4.5% to £403.1m (2012: £422.0m), while revenue from temporary recruitment was up by 6.1% at £602.5m (2012: £567.9m). The differences in these performances are in line with what we would normally expect at this point in the cycle, as temporary recruitment tends to pick up earlier in the recovery, but will be overtaken by the subsequent much faster recovery in permanent recruitment.
Gross profit
Our strategy of diversification by region has reduced our exposure to changes in market conditions. The rate of growth is impacted by the strengths of the economies and the maturity/competitiveness of the recruitment markets in each region.
We have continued to invest in the large, high potential markets of the US, Germany, Latin America, Greater China and South East Asia and have seen some of the benefits of this investment with year-on-year growth of 8.7% in the Americas and 6.9% in Asia. We delivered year-on-year gross profit growth in 20 countries and record breaking performances in China, Japan, Turkey, Russia, UAE, Malaysia, Mexico and Chile.
Gross profit from permanent placements decreased by 4.3% and represented 76.3% of Group gross profit (2012: 77.8%) while gross profit from temporary placements increased by 3.8% representing 23.7% (2012: 22.2%) of Group gross profit.
Group gross margin decreased to 51.1% (2012: 53.2%) reflecting the 1.5% growth in the proportion of temporary business and a small reduction in the gross margin achieved on temporary placements to 20.2% (2012: 20.6%), where strong pricing in rapidly growing markets has been offset by competitive pressures elsewhere.
Gross profit by discipline
Diversification by discipline is a core element of our strategy. Our oldest discipline, Finance and Accounting, now represents just 41% of Group gross profit, while 59% is generated from other areas, significantly reducing our exposure to any particular market sector and reducing our overall risk. Our diversification into Engineering, Procurement & Supply Chain and Property & Construction has been particularly successful and this category now represents nearly 20% of our gross profit. Financial Services, once approximately 14% of Group gross profit, now only represents approximately 7% of Group and 4% of UK gross profit, but has remained stable at this level for the past six quarters.
Administration costs and conversion of gross profit to operating profit
During the year we remained focused on the conversion of gross profit to operating profit through improved operational efficiency. During 2013 we undertook an exercise to standardise and streamline many of our operational support functions, which drove significant cost savings; a reduction of approximately £10m in operational support costs in 2013 and run-rate savings of approximately £20m at the end of the year.
With around 75% of our cost base relating to employee costs, a decrease of 155 operational support staff during 2013 drove significant savings. Most of this decrease was in our European operations, which with relatively high employment and social charges meant that associated one-off costs offset some of the savings achieved in 2013. The full benefit of this exercise will be seen in 2014.
The conversion of gross profit to operating profit is also impacted by our investment strategy. In 2013 we continued to pursue our strategy of investing in our high potential markets as well as investing in our existing markets to drive their long-term potential. Overall, we increased our fee-earner headcount by 186 during the year. Naturally it takes some time before these new fee-earners reach full productivity and this, together with the other start-up costs incurred as investments are made to open or expand new offices, adversely impacted the conversion rate.
Administration expenses in the year included share based charges of £6.8m (including social security) (2012: £13.2m) in respect of the Group's deferred annual bonus scheme, long-term incentive plan and share option schemes. The reduction in the charge compared to 2012 was primarily due to some performance elements not being met, causing charges for these plans made in previous years to be credited in 2013.
The net position taking into account savings made from our operational support efficiency initiatives, the cost of investments in fee-earners and our operating platform and share costs was an overall net increase of 31 heads, but a decrease of £16.0m in our administration costs (before exceptional items), a 3.5% reduction on 2012. Our conversion rate of gross profit to operating profit increased to 13.3% during the year (2012: 12.4%).
In normal circumstances, the operational gearing of the business model leads us to expect that a decline in gross profit will lead to a larger proportionate decrease in operating profit. However, in 2013, although there was a 2.5% decrease in gross profit, operating profit before exceptional items increased by 4.7%, as a result of the streamlining of our operational support functions.
REGIONAL REVIEW OF 2013
Continental Europe, Middle East and Africa (EMEA)
EMEA is our largest region, representing 40% of the Group's gross profit for the year (2012: 41%). Revenue in the year was £407m, which was 1% higher than 2012 (constant currency -2.9%). However, gross profit at £208m was 4.9% lower than 2012 (constant currency -8.2%).
Market conditions remained challenging across the region, particularly in our largest markets of France and Germany, which is a predominantly permanent recruitment business. France and Germany make up 50% of our EMEA region and both countries saw gross profit decrease in the year. However, while these two markets remain challenging, they improved as the year progressed and our optimism has increased with regard to their outlook. In
France we operate under all three of our brands; Page Executive, Michael Page and Page Personnel. Page Personnel alone would be France's market leader in professional recruitment with over 250 consultants and a focus on salaries below 45,000 Euro. It is primarily a temporary recruitment business, but also undertakes permanent recruitment. In the fourth quarter this business grew 9.1%, with permanent recruitment up 1.2% and temp recruitment up 15.2%.
Germany is seen as a strategic high potential growth market for the Group. As discussed in the strategy section, we remain, therefore, committed to continuing our investment in Germany to grow the business despite continued challenging trading conditions.
While our businesses in EMEA experienced a decline of 8.2% in gross profit at constant currency over the year, there were encouraging signs of improvement as the year progressed, with the decline in the fourth quarter only 1.3%. At the end of the year, France and Germany looked close to returning to positive growth. In addition, strong performances were seen in many countries, most notably in the UAE (+15%), Turkey (+46%) and Spain (+9%), as well as in Portugal, Sweden, Poland, Ireland, Russia and Qatar.
Our headcount in the region declined during the year by 154 heads. This was largely a result of our strategy to seek out efficiencies and consistency across the regions, with 130 of the decrease related to operational support roles, representing a 21% decrease in operational support heads. Fee-earner headcount declined by 24 during the year, but was up 47 in the fourth quarter, reflecting our growing optimism in the region.
United Kingdom
The UK is the most established and largest business in the Group, but following our strategy of geographic diversification now represents just 24% of Group gross profits. Growth returned to the UK in the second quarter of 2013 and full year revenue increased by 0.9% on 2012 to £299m. Full year gross profit grew by 2.2% to £124m, with gross profit growth rates increasing throughout 2013.
The UK business is highly diverse, recruiting for many industries and professions and across a broad salary spectrum. Although markets remained challenging in 2013, we continued to capitalise on our discipline diversification and depth of management experience. Strong performances were seen in our Logistics, Procurement & Supply Chain, and Property and Construction businesses. Our newer disciplines such as Digital Marketing and Design also performed very well year-on-year. Public sector, which comprises just over 13% of the UK business, grew 25% year-on-year while growth in the private sector remained flat. The UK region's dependence on financial services has fallen considerably in recent years and now represents a stable 4% of UK gross profit, compared to its peak of approximately 11% in 2007.
Our Page Personnel brand, representing 19% of the UK business, grew by 21% in the fourth quarter of the year, with permanent recruitment up 27% and temporary recruitment up 13%. Page Personnel focuses on roles with a salary below £40,000 and, therefore, in line with the job market at this level, recruits a higher proportion of temporary roles. Typically, as markets recover, lower-level job recruitment tends to improve first, which was reflected in the growth rate for permanent recruitment being higher than in temporary.
We continue to focus on our conversion rate. Operating profit before exceptional items increased by 16.6% to £18.4m and conversion of gross profit to operating profit increased to 14.8% in the year, from 13% in 2012.
Headcount increased by 82 during 2013, the majority of which were fee earners, reflecting stronger market conditions and, with confidence slowly improving, we believe that we are well positioned to take advantage should the economy continue its recovery in 2014.
Asia Pacific
Trading in our Asia Pacific region continued to be impacted by the difficult trading conditions in Australia. The region contributed 21% of Group gross profit in 2013 (2012: 22%). Revenue decreased 1.5% to £189.4m, gross profit decreased by 7.9% and operating profit decreased by 33.6%.
In constant currency gross profit for the region decreased by 4.7%, with combined gross profit for Australia and New Zealand down 19% on the previous year as a result of the continued slow-down in the mining and natural resources sector in Australia and its effect on the wider economy. Consequently, having represented 44% of the region's gross profit in 2012, this fell to 36% in 2013. In 2011 and 2012, we achieved an exceptional performance from our Australian business, largely driven by the expansion of the mining and natural resources sector that drove the Australian economy, despite the effects of the global financial crisis experienced in most major economies around the world. However, as the resources sector slowed impacting the wider economy, our Australian business found trading conditions difficult during 2013 and gross profit declined by 20% in constant currency to approximately £38m. Market conditions in Australia remain difficult but stable.
In contrast, our Asia businesses continued to grow year-on-year delivering a record gross profit performance in 2013 with growth of 7% on the prior year. Asia now represents 62% of the region's gross profit, compared to 55% in 2012 and only 39% in 2008. Greater China grew by 1% in terms of gross profit year-on-year, India by 23%, Malaysia by 80% and Japan grew by 25% and finished the year with a record quarterly performance in quarter four.
Headcount across the region as a whole increased by 75 (7%), with Australasia headcount down by 8% and Asia up by 18%. We expect that headcount will continue to increase in Asia in 2014 in line with our strategy of investing in our strategic high-potential growth markets, which include Greater China and South East Asia.
The Americas
The Americas region represented 15% of the Group's gross profit during 2013 (2012: 14%). Revenue increased by 12.1% to £111m (2012: £99m) and gross profit increased by 5.6% to £76m (2012: £72m). In constant currency, gross profit grew by 8.7%.
Operating profit increased significantly to £4.6m from a loss of £1.7m in 2012, with the conversion rate increasing to 6.1% from -2.3% in 2012.
In North America, the USA performed particularly well with gross profit growing 31% to £25.8m. Market sentiment continued to improve in the USA and this, along with the management changes in 2012 and subsequent investments made in 2013 to strengthen the teams across the region, has driven improvements in gross profit and the conversion rate. The USA business now operates from nine offices, having opened an office in Los Angeles during the year.
In Latin America, our largest business, Brazil, felt the impact of tougher economic conditions and consequently gross profit fell by 8%. However, overall gross profit in Latin America increased by 1% due to our other Latin American countries, representing 37% of our Latin American region, performing extremely well, with Mexico increasing gross profit by 22% to £8.2m, Chile increasing its gross profit by 20% to £5.0m, and our newer business in Colombia growing gross profit in excess of 100%; all three recorded record gross profit years.
Overall headcount in the Americas region increased by 28. Headcount in the USA was up by 20% and is now approaching 250, and we have over 500 heads in Latin America.
FINANCIAL REVIEW OF 2013
Exceptional items
French Profit Share:
In October 2013, Page Personnel France (PPF) received notice from the Competent Authorities of the UK and France of their decision regarding a transfer pricing case that had arisen as a result of a French tax audit in March 2008. The decision, which was unexpected, increased the profit generated by PPF, which, as per the mandatory profit share or "participation aux resultants de l'entreprise" that is particular to France, drove a requirement to pay increased employee profit share, both to employees of PPF and also to the temporary workers placed by that company. As a result, the Group has taken in 2013, an exceptional operating profit charge of £2.5m, interest expense on late payment of corporation tax and profit share of £0.6m and additional tax charge on the exceptional item of £0.7m relating to prior periods.
A further £0.6m relating to 2013 is included within operating profits from underlying activities, together with a tax credit of £0.1m, which have not been treated as exceptional items. A proportion of these charges were determined by the tax ruling, with the remainder for other years based on assumptions.
Restructuring charge:
In 2012 there was an exceptional restructuring charge of £7.8m, relating to the removal of a layer of management in Continental Europe and the Americas.
Amortisation of intangible assets
In May, we commenced use of our new operating system and related applications in Boston, USA, and accordingly, began the amortisation of these intangible assets over a five year period. The 2013 charge for these intangible assets was £5.4m, reflecting the eight months of amortisation in 2013.
Taxation
Tax on profit was £21.5m (2012: £20.8m). This represented an effective tax rate of 33.5% after exceptional items (2012: 36.5%). Before exceptional items the Group's effective tax rate was 30.9% (2012: 36.0%). The rate is higher than the effective UK Corporation Tax rate for the year of 23.25% due to disallowable items of expenditure and profits being generated in countries where corporation tax rates are higher than in the UK. The effective tax rate is lower than in 2012 due to the benefit of additional net future and current deductions for share based reward plans in the UK and overseas territories of approximately 4.1%, partially offset by taxes on the current year exceptional item of approximately 1.1%.
Share Options and Share repurchases
At the beginning of 2013, the Group had 22.8m share options outstanding, of which 3.5m had vested, but had not been exercised. During the year, options were granted over 4.6m shares under the Group's Share Option Plans, options were exercised over 4.5m shares, generating £14.4m in cash, and options lapsed over 1.1m shares. At the end of 2013, options remained outstanding over 21.8m shares, of which 7.9m had vested but had not been exercised. During 2013, the Group's Employee Benefit Trust did not purchase any shares to satisfy employee share plan awards (2012: £18m) and no shares were repurchased by the Company and cancelled during the year (2012: nil).
Earnings per share and dividends
In 2013, basic earnings per share before exceptional items increased by 11% to 15.1p (2012: 13.6p), reflecting our focus on improving efficiency, and a lower effective tax rate. Diluted earnings per share, before exceptional items, which takes into account the dilution effect of share plans, were 14.9p (2012: 13.5p). After exceptional items, basic earnings per share were 13.8p, an increase of 16.0% on 11.9p in 2012 and diluted earnings per share were 13.7p (2012: 11.7p).
The Group's strategy is to pay dividends to shareholders at a level that the Board believes is sustainable through economic cycles, while maintaining a strong balance sheet to support the required investment in the growth and development of the Group. In line with increase in operating profits, the improved gross profit growth rates experienced as the year progressed and the improved outlook in a number of the Group's markets, a final dividend of 7.25p (2012: 6.75p) per ordinary share is proposed, which, together with the interim dividend of 3.25p (2012: 3.25p) per ordinary share, increases the total dividend for the year by 5% over 2012 to 10.5p per ordinary share.
The proposed final dividend, which amounts to £22.2m, will be paid on 23 June 2014 to shareholders on the register as at 23 May 2014, subject to shareholder approval at the Annual General Meeting.
Cash Flow and Balance Sheet
Cash flow in the year was strong with £24.0m of net cash being generated to bring the closing net cash balance to £85.4m at 31 December 2013. The Group has a £50m invoice financing arrangement and a £10m committed overdraft facility in place to ease cash flow across its operations and ensure access to funds should they be required, but neither of these were in use at the year end.
The movements in the Group's cash flow in 2013 reflected improvements in many of the Group's markets as the year progressed. The increase of 1.6% in the Group's revenue drove a £10.3m increase in working capital, an outflow of £12.7m compared to 2012. This comprised an increase of £8.5m in receivables, compared to a decrease of £7.5m in 2012, as well as a decrease in payables of £1.8m, compared to last year's decrease of £5.1m.
Capital expenditure was £3.6m lower in 2013 at £13.3m (2012: £16.9m). Our capital expenditure is driven primarily by headcount, in terms of expenditure on office accommodation and infrastructure, and by the development and maintenance of our IT systems. The lower level of capital expenditure reflects the reduced spending on software development.
Dividend payments were in line with the prior year at £30.8m (2012: £30.6m). However, there were sizeable differences in cashflow as a result of the purchase and issue of shares related to share options. In 2013, £14.4m was received by the Group from the exercise of options compared to only £7.8m received in 2012. In addition, in 2013, no cash was used to purchase shares for the employee benefit trust to satisfy future employee share awards, whereas in 2012 £18.0m was used for this purpose.
The most significant item in our balance sheet is trade receivables which amounted to £146.7m at 31 December 2013 (2012: £141.7m). Days sales in debtors at 31 December 2013 was 47 days (2012: 47 days).
KEY PERFORMANCE INDICATORS ("KPIs")
We measure our progress against our strategic objectives using the following key performance indicators:
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KPI |
Definition, method of calculation and analysis |
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Gross profit growth |
How measured: Gross profit represents revenue less cost of sales and consists of the total placement fees of permanent candidates, the margin earned on the placement of temporary candidates and the margin on advertising income, ie. it represents net fee income. The measure used is the increase or decrease in gross profit as a percentage of the prior year gross profit. Why it's important: The growth of gross profit relative to the previous year is an indicator of the growth of the net fees from the business as a whole. It demonstrates whether we are in line with our strategy to grow the business. How we performed in 2013: With continued economic weakness in many of our markets, gross profit income decreased by 2.5% in 2013. However, the Group remains profitable in all established markets and there were signs of improvement towards the end of the year. Relevant strategic objective: Organic growth
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Percentage of gross profit generated outside the UK |
How measured: Total gross profit from regions outside the UK expressed as a percentage of total gross profit. Why it's important: To measure the success of our strategy to diversify into new markets which are less competitive/less developed than the UK market. How we performed in 2013: 76% of our gross profit was generated outside the UK compared to 77% in 2012. We have continued our strategy of geographic diversification. The proportion of business generated outside the UK has fallen back slightly due to good performance on behalf of the UK in 2013 and slightly weaker performances in EMEA and Asia Pacific relative to the prior year. Relevant strategic objective: Diversification
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Gross profit outside finance and accountancy |
How measured: Total gross profit from disciplines outside of finance and accounting expressed as a percentage of total gross profit. Why it's important: We look at the proportion of gross profit from the different disciplines to measure the success of our strategy of diversification into more disciplines to reduce our exposure to any one sector. A key indicator is the percentage outside of our original core discipline of finance and accountancy. How we performed in 2013: 59% of our gross profit was generated from disciplines outside the core areas of finance and accounting. This compares to 58% in 2012 as we continue to follow our diversification strategy. Relevant strategic objective: Diversification
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Ratio of gross profits generated from permanent and temporary placements |
How measured: Gross profit from each type of placement expressed as a percentage of total gross profit. Why it's important: This ratio helps us to understand where we are in the economic cycle since the temporary market tends to be more resilient when the economy is weak. How we performed in 2013: In 2013, 76% of our gross profit was generated from permanent placements and 24% from temporary. This compares to 78% permanent and 22% temporary in 2012. Relevant strategic objective: Diversification
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Gross profit per fee earner |
How measured: Gross profit for the year divided by the average number of fee generating operating staff in the year Why it's important: This is a key indicator of productivity. How we performed in 2013: Gross profit per fee earner was £139.2k in 2013 compared to £140.4k in 2012. There has been a marginal decrease in productivity compared to 2012 relating to continued competitive pressure on fees and investment in fee earning heads during the year who are not yet at full productivity. Relevant strategic objective: Organic growth
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|
Conversion before exceptional items |
How measured: Operating profit before interest and taxation (EBIT) before exceptional items as a percentage of gross profit. Why it's important: This demonstrates the Group's effectiveness at controlling the costs and expenses associated with its normal business operations. It will be impacted by the level of productivity and the level of investment for future growth. How we performed in 2013: Operating profit as a percentage of gross profit increased to 13.3% in 2013, up from 12.4% in the prior year. Improving efficiency is a strategic priority for the Group and during 2013 there has been a focus on streamlining support areas and cutting costs. Operational support heads were reduced by 155 during the year. However, there has been corresponding increase in fee earning heads and the benefits are not expected to feed through until 2014 when the new heads are fully productive. Relevant strategic objective: Build for the long-term
|
|
Basic earnings per share before exceptional items |
How measured: Profit for the year attributable to the Group's equity shareholders, divided by the weighted average number of shares in issue during the year Why it's important: This measures the overall profitability of the Group. How we performed in 2013: Earnings per share in 2013 was 15.1p, an 11.0% improvement on the EPS in 2012 of 13.6 pence. Relevant strategic objective: Build for the long-term, Organic growth
|
|
Days sales outstanding (DSO) |
How measured: Calculated by comparing how many days' billings it takes to cover the outstanding debtor balance at the year end. Why it's important: This measures the length of time taken for us to receive payment from our clients and indicates how well we are managing the Group's major asset. How we performed in 2013: DSO was 47 days at the end of 2013 in line with the prior year (2012: 47 days) Relevant strategic objective: Build for the long-term
|
|
Net cash |
How measured: Cash and short-term deposits less bank overdrafts and loans Why it's important: The level of net cash is a key measure of our success in managing our working capital and determines our ability to reinvest in the business and to return cash to shareholders. How we performed in 2013: Net cash increased during the year to £85.4m (2012: £61.4) Relevant strategic objective: Build for the long-term
|
The movements in KPIs are consistent with the business performance as discussed in the Management Report. The source of data and calculation methods year-on-year are on a consistent basis.
GOING CONCERN
In adopting the going concern basis for preparing the financial statements, the Directors have considered the business activities of the Group as well as the principle risks and uncertainties. Based on the Group's level of cash, the level of borrowing facilities available, the geographical and discipline diversification, the limited concentration risk, as well as the ability to manage the cost base, the Board is satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the date of approval of these accounts. As a result, the going concern basis continues to be appropriate in preparing the financial statements.
TREASURY MANAGEMENT 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.
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 which facilitates interest and balance compensation of cash and bank overdrafts.
Foreign Exchange Translation risk
In 2013 the Group operated in 34 countries around the world and carried out transactions recorded in twenty five local currencies. In line with normal accounting policies, the Group's Income Statement and Cash Flow Statement are reported in Pounds Sterling using the average exchange rate for each month to translate the local currency into Sterling and the balance sheet is translated at the closing rate of exchange at the balance sheet date. The Group is therefore exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.
Foreign Exchange Transaction risk
As a service company, most of the Group's transactions are within the respective territories in which the local businesses operate and therefore there are few cross-border transactions between Group companies. This means that the Group does not have a material exposure to transactional currency risk nor a material exposure to foreign denominated monetary assets and liabilities.
Royalties are charged for the use of the Group's trademarks and management fees are charged for Group and regional functions that provide services to other Group subsidiary companies. Foreign exchange gains and losses are recognised in accordance with IFRS on the settlement of these transactions where the cash received, when converted into Sterling, differs from the amounts previously recorded in the Income Statement. These exchange gains and losses are included within operating profit.
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.
The table below shows the relative movements of the Group's main trading currencies against Sterling during 2013, when compared to those prevalent during 2012. Negative percentages indicate that Sterling has weakened against the foreign currency during the period.
|
Currency |
Movement in the average exchange rate used for Income Statement translation between 2012 and 2013 |
Movement in the year end exchange rate used for Balance Sheet translation between 2012 and 2013 |
|
Euro |
-4% |
-3% |
|
Swiss Franc |
-2% |
-1% |
|
Brazilian Real |
10% |
17% |
|
US Dollar |
-1% |
2% |
|
Australian Dollar |
7% |
18% |
|
Hong Kong Dollar |
-1% |
2% |
|
Singapore Dollar |
-1% |
5% |
|
Chinese Renminbi |
-4% |
-1% |
|
Japanese Yen |
20% |
24% |
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.
|
Risk |
Actions to mitigate risk |
|
|
|
|
Our people The Group's strategy of organic growth, with nearly all senior operational positions being filled from within, relies on its ability to recruit, develop and retain high performing individuals. The failure to attract and retain employees with the right skill-set, particularly the resignation of key individuals, may adversely affect the Group's operating performance and financial results. |
We have a strong focus on succession planning at all levels of the business with particular focus on the development of high-performing individuals identified as future leaders. We continue to have a strategy of filling senior operational positions from within, which is a key part of our retention strategy. Our employees observe high performers being rewarded with promotion and know that PageGroup provides sustainable career opportunities. Key high performing individuals are identified and have progression plans, recognising their specific needs at different stages of their development. PageGroup targets its recruitment process to attract and employ high quality people. We have a strong sense pride in everything we do, with a strong sense of teamwork core to PageGroup culture. This drives determination to succeed, both individually and as a team, increasing the motivation of our staff and making their career more rewarding. We have a well established appraisal process where personal development as well as progress against sales targets is discussed. We make significant investments in employee training and development across the organisation, including the opportunity for international career development. Training is aligned at the consultant level, set at a high standard and is both broad based and individually focused to support leaders as they develop up through PageGroup. We are committed to a competitive pay and benefits structure and use benchmarking to ensure we remain competitive. We operate a performance-led culture with bonus representing a proportion of pay. This bonus structure is based on team profitability, which has been shown to encourage the retention of high-performing individuals even in economic downturns. We make awards of share options linked to the Group's financial performance to key senior employees which provide a long-term retention incentive and align their motivations with those of our shareholders. PageGroup employment contracts contain protection in the event of an employee leaving, which, at a senior level, usually contain notice periods and provisions relating to confidentiality and non-solicitation.
|
|
Shift in business model The emergence of new technology platforms including, for example, the growing use of social media, may lead to increased competition and pressure on margins which may adversely affect the Group's results if it is unable to respond effectively. |
We actively monitor developments in the recruitment industry and have a pro-active social media strategy. The use of social media, newspapers, the Internet and other forms of media involve additional and highly skilled internal resources for clients and so it may prove less costly for PageGroup to provide the service. We have access to an extensive, qualified candidate database through highly trained and often specialised consultants. We partner with the large providers such as LinkedIn and Facebook, to ensure that we use this form of media to enhance our value to clients. All consultants are trained in utilising the benefits of social media.
|
|
Macro economic exposure - risk of downturn Recruitment activity is driven largely by economic cycles and the levels of business confidence. Businesses are less likely to need new hires and employees are less likely to move jobs when they do not have confidence in the market so leading to reduced recruitment activity. A substantial proportion of the Group's profit arises from fees that are contingent upon the successful placement of a candidate in a position. If the client cancels the assignment at any stage in the process, the Group receives no remuneration.
|
We have diversified our business by expansion geographically, by increasing the number of disciplines in which we specialise, and by establishing three brands to address the different levels of the recruitment market; the clerical professional sector; the qualified professional market; and the executive search sector. We also continue to balance our business between permanent and temporary staff in line with the ratio of permanent to temporary in each of the markets in which we operate. The temporary business tends to be more resilient in times of economic downturn. The relatively low fixed cost base allows the Group to scale up and down according to the economic environment, with circa 75% of the Group's cost base being employment related costs, so mitigating the impact of the downturn on Group profitability. |
|
Damage to reputation or PageGroup Brands Our brands are material assets of the Group and maintaining their reputation is key to continued success. Any event that could cause reputational damage is a risk to PageGroup such as a failure to comply with legislation, or other regulatory requirements, or confidential data being lost or stolen. |
We have a process to identify risks, allocate owners and monitor actions with the Internal Audit Function providing assurance over key risks. Our corporate governance framework includes a review of internal controls. We have comprehensive policies for key areas including Social Media, Data Protection and Information Security. We actively monitor media to identify where there are unusually high references to the PageGroup/Michael Page name. We have a clear escalation/reporting path so that any potential incidents can be managed effectively. We are supported by FTI Consulting who provide on-going advice on the protection and management of our brand. Other mitigating actions are included under legal compliance and data management.
|
|
Technology The Group is reliant on a number of IT systems to provide its services to clients and candidates. The current IT infrastructure is complex and ageing, increasing the risk of significant systems failure. A serious system disruption, loss of data or security breach could have a material impact on our operations and on the Group's financial results.
|
Our technology strategy is a regular focus at Board meetings and at meetings of the Executive Committee to ensure that it supports the strategic objectives of the Group. A programme of work has commenced to update the IT infrastructure and deliver a new operating system and related applications. The Group has a Disaster Recovery Plan which includes the storing of back-up data off site and the ability to quickly establish disaster recovery sites should there be a critical systems failure. The performance of external technology suppliers is continually monitored to ensure business critical services are maintained. |
|
IT Transformation and Change The new suite of operating software and related applications was piloted in the Boston office from May 2013 and is planned to be rolled out further during 2014. There is a risk of disruption to the business should the software fail to function adequately or if staff are not properly trained. If the system failed it could affect our ability to provide a high quality recruitment service to our clients and could affect our operational and financial performance.
|
This project is reviewed regularly by both the Board and Executive Committee to ensure that it is on target. The roll-out will be done in stages so that there is limited interruption to the business. Any issues that arise during the pilot in Boston will be resolved at that location before it is implemented elsewhere in North America and then on to other global offices. The plan includes a significant investment in staff training. The risks to the delivery of a high-quality service and the consequent impacts upon our business performance are mitigated by the greater part of the recruitment service not being system dependent, for example, candidate interviews, telephone activity, client meetings, etc. |
|
Data Management Confidential, sensitive and personal data is held across the Group. Failure to handle this data properly could expose the Group to financial penalties and reputational risk. |
We have adopted a comprehensive IT security strategy, and have management policies and control documents which include metrics on performance and risk. These are reviewed regularly. We have a global security team and established IT governance to ensure defined controls are operating as expected. IT risk management is also in place, which reports directly to the Chief Information Officer. This team ensures the effectiveness of the Group's security solution and controls, monitors and addresses any cyber security threats, in partnership with our external security partner. Security vulnerability is assessed and the remediation of identified risks and alerts is tracked. Regular security assurance checks take place across all regions and penetration testing undertaken. To date this has not identified any material issues. We have comprehensive data protection policies in place and procedures for the handling and storing of confidential, sensitive and personal data.
|
|
Legal Compliance and contracts The Group operates in a large number of legal jurisdictions that have varying legal and compliance regulations. Any noncompliance with client contract requirements and legislative or regulatory requirements could have an adverse effect on the Group's financial results. |
The Group's Legal department, the Company Secretary, and local legal and compliance teams are advised by leading external advisors, as required, in regard to changes in legislation that affect the Group's business, including employment legislation, and corporate governance. Our consultants and operational support staff receive induction training and regular update training regarding the Group's policies and procedures and compliance with relevant legislation and regulations, for example, around discrimination legislation and pre-employment checks. The Group holds all normal business insurance cover including employers' liability, public liability and professional indemnity insurance. Contracts include clauses to ensure PageGroup's rights are protected.
|
|
Foreign Exchange - translation risk 73% of the Group's operating profit is derived from operations outside the UK, so material changes in the strength of sterling against the main functional currencies could have an adverse effect on the Group's reported sterling profits in the financial statements. The main functional currencies in addition to Sterling, are the Euro, Australian dollar, US dollar, Chinese Renminbi and Brazilian Real. |
Our strategy of continued geographical diversification reduces our exposure to translation risk. The Group does not actively attempt to hedge the exposure from translation risk as this is a reporting risk only and not an operational risk. The Group does not have material transactional currency exposures nor is there a material exposure to foreign denominated monetary assets and liabilities. |
BOARD CHANGES
The changes we made to your Board in 2012 have borne fruit. In the last Annual Report we explained that we had appointed a new Remuneration Committee Chairman, David Lowden, and were about to appoint a new Audit Committee Chairman, Simon Boddie. Both have performed with distinction during 2013, adding to the effectiveness of our Board and our governance. We have also put in place a new remuneration plan for Executive Directors, better aligning their interests and objectives with those of our shareholders.
The appointment of Kelvin Stagg as Acting Chief Financial Officer immediately following the resignation of Andrew Bracey in October reflects the focus we have given to succession planning. Kelvin had already been identified as the leading internal succession candidate given his considerable experience of the business as Group Financial Controller and Company Secretary for over seven years. Development and succession planning remains one of your Board's most important priorities.
In last year's Chairman's Statement we mentioned that a higher proportion of women on our Board would not only bring different skills and perspectives, but also support our gender diversity objectives across the Group. So we are delighted that Danuta Gray joined our Board in December, adding considerable international line leadership and non-executive experience as well as a strong technology background. Together with Ruby McGregor-Smith, our Senior Independent Director, women now make up 40% of our independent non-executive directors and 29% of our Board. Over 80% of our Board members also have considerable international business experience. This is critical given the global nature of PageGroup.
OUTLOOK
The strength and timing of any recovery in world economic markets is uncertain, our visibility relatively short and we remain exposed to some volatile economies. This is demonstrated by the recent adverse movements in foreign currencies that are impacting our overseas results when translated into Sterling (impact on 2014 operating profit of c. £4m at current exchange rates). However, we have continued to invest in additional fee earner headcount in selected markets since the start of the year. We believe our clear and consistent growth strategy, our geographic and discipline diversity and our strong balance sheet, with £85 million of net cash at year end, ensures that we remain in a strong position to respond to any improvements in market conditions in 2014. This is also reflected in our proposed increase of 5% in the total dividend to 10.5p.
We will next update the market on our first quarter trading for 2014 in an announcement on 15 April 2014.
Steve Ingham
Chief Executive Officer
4 March 2014
Consolidated Income Statement
For the year ended 31 December 2013
|
|
|
|
Before |
|
After |
|
Before |
|
After |
|
|
|
|
Exceptional |
Exceptional |
Exceptional |
|
Exceptional |
Exceptional |
Exceptional |
|
|
|
|
Items |
Items (note 4) |
Items |
|
Items |
Items |
Items |
|
|
|
|
2013 |
2013 |
2013 |
|
2012 |
2012 |
2012 |
|
|
Note |
|
£'000 |
£'000 |
£'000 |
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
3 |
|
1,005,502 |
- |
1,005,502 |
|
989,882 |
- |
989,882 |
|
Cost of sales |
|
|
(491,621) |
- |
(491,621) |
|
(463,013) |
- |
(463,013) |
|
Gross profit |
3 |
|
513,881 |
- |
513,881 |
|
526,869 |
- |
526,869 |
|
Administrative expenses |
|
|
(445,703) |
(2,453) |
(448,156) |
|
(461,748) |
(7,834) |
(469,582) |
|
Operating profit |
3 |
|
68,178 |
(2,453) |
65,725 |
|
65,121 |
(7,834) |
57,287 |
|
Financial income |
5 |
|
531 |
- |
531 |
|
907 |
- |
907 |
|
Financial expenses |
5 |
|
(1,625) |
(574) |
(2,199) |
|
(1,191) |
- |
(1,191) |
|
Profit before tax |
3 |
|
67,084 |
(3,027) |
64,057 |
|
64,837 |
(7,834) |
57,003 |
|
Income tax expense |
6 |
|
(20,733) |
(720) |
(21,453) |
|
(23,332) |
2,526 |
(20,806) |
|
Profit for the year |
|
|
46,351 |
(3,747) |
42,604 |
|
41,505 |
(5,308) |
36,197 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Owners of the parent |
|
|
|
|
42,604 |
|
|
|
36,197 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (pence) |
9 |
|
|
|
13.8 |
|
|
|
11.9 |
|
Diluted earnings per share (pence) |
9 |
|
|
|
13.7 |
|
|
|
11.7 |
The above results all relate to continuing operations.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2013
|
|
|
2013 |
|
2012 |
|
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
Profit for the year |
|
42,604 |
|
36,197 |
|
|
|
|
|
|
|
Other comprehensive loss for the year |
|
|
|
|
|
Items that may subsequently be reclassified to profit and loss: |
|
|
|
|
|
Currency translation differences |
|
(4,700) |
|
(5,171) |
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
37,904 |
|
31,026 |
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
Owners of the parent |
|
37,904 |
|
31,026 |
Consolidated Balance Sheet
As at 31 December 2013
|
|
|
|
2013 |
|
2012 |
|
|
Note |
|
£'000 |
|
£'000 |
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
10 |
|
25,238 |
|
28,913 |
|
Intangible assets - Goodwill and other intangible |
|
|
1,971 |
|
2,091 |
|
- Computer software |
|
|
40,126 |
|
42,006 |
|
Deferred tax assets |
|
|
10,377 |
|
9,192 |
|
Other receivables |
11 |
|
2,865 |
|
3,310 |
|
|
|
|
80,577 |
|
85,512 |
|
Current assets |
|
|
|
|
|
|
Trade and other receivables |
11 |
|
186,488 |
|
182,507 |
|
Current tax receivable |
|
|
7,060 |
|
6,970 |
|
Cash and cash equivalents |
14 |
|
87,070 |
|
70,769 |
|
|
|
|
280,618 |
|
260,246 |
|
|
|
|
|
|
|
|
Total assets |
3 |
|
361,195 |
|
345,758 |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
12 |
|
(133,664) |
|
(138,733) |
|
Bank overdrafts |
14 |
|
(1,676) |
|
(9,396) |
|
Current tax payable |
|
|
(11,780) |
|
(12,612) |
|
|
|
|
(147,120) |
|
(160,741) |
|
|
|
|
|
|
|
|
Net current assets |
|
|
133,498 |
|
99,505 |
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Other payables |
12 |
|
(4,697) |
|
(2,779) |
|
Deferred tax liabilities |
|
|
(891) |
|
(850) |
|
|
|
|
(5,588) |
|
(3,629) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
3 |
|
(152,708) |
|
(164,370) |
|
|
|
|
|
|
|
|
Net assets |
|
|
208,487 |
|
181,388 |
|
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Called-up share capital |
|
|
3,208 |
|
3,178 |
|
Share premium |
|
|
71,739 |
|
60,221 |
|
Capital redemption reserve |
|
|
932 |
|
932 |
|
Reserve for shares held in the employee benefit trust |
|
|
(50,022) |
|
(62,071) |
|
Currency translation reserve |
|
|
20,415 |
|
25,115 |
|
Retained earnings |
|
|
162,215 |
|
154,013 |
|
Total equity |
|
|
208,487 |
|
181,388 |
Condensed Consolidated Statement of Changes in Equity
For the year ended 31 December 2013
|
|
|
|
|
|
|
|
|
Reserve |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for shares |
|
|
|
|
|
|
|
|
|
Called-up |
|
|
|
Capital |
|
held in the |
|
Currency |
|
|
|
|
|
|
|
share |
|
Share |
|
redemption |
|
employee |
|
translation |
|
Retained |
|
Total |
|
|
|
capital |
|
premium |
|
reserve |
|
benefit trust |
|
reserve |
|
earnings |
|
equity |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 January 2012 |
|
3,167 |
|
57,215 |
|
932 |
|
(65,652) |
|
30,286 |
|
154,650 |
|
180,598 |
|
Currency translation differences |
|
- |
|
- |
|
- |
|
- |
|
(5,171) |
|
- |
|
(5,171) |
|
Net expense recognised directly in equity |
|
- |
|
- |
|
- |
|
- |
|
(5,171) |
|
- |
|
(5,171) |
|
Profit for the year ended 31 December 2012 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
36,197 |
|
36,197 |
|
Total comprehensive (loss)/income for the year |
|
- |
|
- |
|
- |
|
- |
|
(5,171) |
|
36,197 |
|
31,026 |
|
Purchase of shares held in employee benefit trust |
|
- |
|
- |
|
- |
|
(17,952) |
|
- |
|
- |
|
(17,952) |
|
Exercise of share plans |
|
11 |
|
3,006 |
|
- |
|
- |
|
- |
|
4,799 |
|
7,816 |
|
Reserve transfer when shares held in the employee benefit trust vest |
|
- |
|
- |
|
- |
|
21,533 |
|
- |
|
(21,533) |
|
- |
|
Credit in respect of share schemes |
|
- |
|
- |
|
- |
|
- |
|
- |
|
11,843 |
|
11,843 |
|
Debit in respect of tax on share schemes |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(1,309) |
|
(1,309) |
|
Dividends |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(30,634) |
|
(30,634) |
|
|
|
11 |
|
3,006 |
|
- |
|
3,581 |
|
- |
|
(36,834) |
|
(30,236) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
- |
|
- |
|
- |
|
- |
|
(4,700) |
|
- |
|
(4,700) |
|
Net expense recognised directly in equity |
|
- |
|
- |
|
- |
|
- |
|
(4,700) |
|
- |
|
(4,700) |
|
Profit for the year ended 31 December 2013 |
|
- |
|
- |
|
- |
|
- |
|
- |
|
42,604 |
|
42,604 |
|
Total comprehensive (loss)/income for the year |
|
- |
|
- |
|
- |
|
- |
|
(4,700) |
|
42,604 |
|
37,904 |
|
Exercise of share plans |
|
30 |
|
11,518 |
|
- |
|
- |
|
- |
|
2,881 |
|
14,429 |
|
Reserve transfer when shares held in the employee benefit trust vest |
|
- |
|
- |
|
- |
|
12,049 |
|
- |
|
(12,049) |
|
- |
|
Credit in respect of share schemes |
|
- |
|
- |
|
- |
|
- |
|
- |
|
5,602 |
|
5,602 |
|
Credit in respect of tax on share schemes |
|
- |
|
- |
|
- |
|
- |
|
- |
|
13 |
|
13 |
|
Dividends |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(30,849) |
|
(30,849) |
|
|
|
30 |
|
11,518 |
|
- |
|
12,049 |
|
- |
|
(34,402) |
|
(10,805) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2013 |
|
3,208 |
|
71,739 |
|
932 |
|
(50,022) |
|
20,415 |
|
162,215 |
|
208,487 |
Consolidated Statement of Cash Flows
For the year ended 31 December 2013
|
|
|
|
2013 |
|
2012 |
|
|
Note |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from underlying operations |
13 |
|
81,533 |
|
94,471 |
|
Exceptional items (note 4) |
|
|
(3,027) |
|
(7,834) |
|
Cash generated from operations |
|
|
78,506 |
|
86,637 |
|
Income tax paid |
|
|
(24,367) |
|
(24,371) |
|
Net cash from operating activities |
|
|
54,139 |
|
62,266 |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(8,480) |
|
(7,919) |
|
Purchases of intangible assets |
|
|
(4,815) |
|
(9,012) |
|
Proceeds from the sale of property, plant and equipment, and computer software |
|
|
565 |
|
449 |
|
Interest received |
|
|
531 |
|
907 |
|
Net cash used in investing activities |
|
|
(12,199) |
|
(15,575) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Dividends paid |
|
|
(30,849) |
|
(30,634) |
|
Interest paid |
|
|
(1,475) |
|
(1,218) |
|
Issue of own shares for the exercise of options |
|
|
14,429 |
|
7,816 |
|
Purchase of shares into the employee benefit trust |
|
|
- |
|
(17,952) |
|
Net cash used in financing activities |
|
|
(17,895) |
|
(41,988) |
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
24,045 |
|
4,703 |
|
Cash and cash equivalents at the beginning of the year |
|
|
61,373 |
|
58,168 |
|
Exchange loss on cash and cash equivalents |
|
|
(24) |
|
(1,498) |
|
Cash and cash equivalents at the end of the year |
14 |
|
85,394 |
|
61,373 |
Notes to the consolidated preliminary results
For the year ended 31 December 2013
1. Corporate information
Michael Page International plc (the "Company") is a limited liability company incorporated in Great Britain and domiciled within the United Kingdom whose shares are publicly traded. The consolidated preliminary results of the Company as at and for the year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the "Group").
The consolidated preliminary results of the Group for the year ended 31 December 2013 were approved by the directors on 4 March 2014. The Annual General Meeting of Michael Page International plc will be held at the registered office, Page House, The Bourne Business Park, 1 Dashwood Lang Road, Addlestone, Surrey, KT15 2QW on 5 June 2014 at 12.00 noon.
2. Basis of preparation and accounting policies
Basis of preparation
Whilst the information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted for use in the European Union and as issued by the International Accounting Standards Board, this announcement does not itself contain sufficient information to comply with IFRSs.
The consolidated financial statements comprise the financial statements of the Group as at 31 December 2013 and are presented in UK sterling and all values are rounded to the nearest thousand (UK £'000), except when otherwise indicated.
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Management Report. The 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. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Accounts.
Nature of financial information
The financial information contained within this preliminary announcement for the 12 months to 31 December 2013 and 12 months to 31 December 2012 do not comprise statutory financial statements for the purpose of the Companies Act 2006, but are derived from those statements. The statutory accounts for Michael Page International plc for the 12 months to 31 December 2012 have been filed with the Registrar of Companies and those for the 12 months to 31 December 2013 will be filed following the Company's Annual General Meeting.
The auditors' reports on the accounts for both the 12 months to 31 December 2013 and 12 months to 31 December 2012 were unqualified and did not include a statement under Section 498 (2) or (3) of the Companies Act 2006.
The Annual Report and Accounts will be available for shareholders in April 2014.
Significant accounting policies
The accounting policies applied by the Group in these consolidated preliminary results are the same as 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 costs. This is the measure reported to the Group's Chief Executive Officer, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance.
(a) Revenue, gross profit and operating profit by reportable segment
|
|
|
Revenue |
|
Gross Profit |
||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
407,013 |
|
403,223 |
|
207,771 |
|
218,382 |
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
|
298,579 |
|
295,876 |
|
124,060 |
|
121,408 |
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
Australia and New Zealand |
110,642 |
|
119,344 |
|
39,730 |
|
51,677 |
|
|
Asia |
78,754 |
|
72,853 |
|
66,076 |
|
63,177 |
|
|
Total |
189,396 |
|
192,197 |
|
105,806 |
|
114,854 |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
110,514 |
|
98,586 |
|
76,244 |
|
72,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,005,502 |
|
989,882 |
|
513,881 |
|
526,869 |
|
|
|
Operating Profit |
||||||||||
|
|
|
Before |
|
|
|
After |
|
Before |
|
|
|
After |
|
|
|
Exceptional |
|
Exceptional |
|
Exceptional |
|
Exceptional |
|
Exceptional |
|
Exceptional |
|
|
|
Items |
|
Items |
|
Items |
|
Items |
|
Items |
|
Items |
|
|
|
2013 |
|
2013 |
|
2013 |
|
2012 |
|
2012 |
|
2012 |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
25,925 |
|
(2,453) |
|
23,472 |
|
22,070 |
|
(6,090) |
|
15,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
18,387 |
|
- |
|
18,387 |
|
15,771 |
|
(1,744) |
|
14,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
Australia and New Zealand |
6,700 |
|
- |
|
6,700 |
|
14,164 |
|
- |
|
14,164 |
|
|
Asia |
12,543 |
|
- |
|
12,543 |
|
14,803 |
|
- |
|
14,803 |
|
|
Total |
19,243 |
|
- |
|
19,243 |
|
28,967 |
|
- |
|
28,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
4,623 |
|
- |
|
4,623 |
|
(1,687) |
|
- |
|
(1,687) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit |
68,178 |
|
(2,453) |
|
65,725 |
|
65,121 |
|
(7,834) |
|
57,287 |
|
|
Financial expense |
(1,094) |
|
(574) |
|
(1,668) |
|
(284) |
|
- |
|
(284) |
|
|
Profit/(loss) before tax |
67,084 |
|
(3,027) |
|
64,057 |
|
64,837 |
|
(7,834) |
|
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, 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 |
||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
124,070 |
|
125,560 |
|
68,912 |
|
70,596 |
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
|
130,280 |
|
104,392 |
|
42,733 |
|
48,414 |
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
Australia and New Zealand |
21,492 |
|
26,842 |
|
8,310 |
|
11,809 |
|
|
Asia |
40,926 |
|
43,159 |
|
8,785 |
|
9,182 |
|
|
Total |
62,418 |
|
70,001 |
|
17,095 |
|
20,991 |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
37,367 |
|
38,835 |
|
12,188 |
|
11,757 |
|
Segment assets/liabilities |
354,135 |
|
338,788 |
|
140,928 |
|
151,758 |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax |
|
7,060 |
|
6,970 |
|
11,780 |
|
12,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
361,195 |
|
345,758 |
|
152,708 |
|
164,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant & Equipment |
|
Intangible Assets |
||||
|
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
|
EMEA |
|
7,668 |
|
9,034 |
|
441 |
|
495 |
|
|
|
|
|
|
|
|
|
|
|
United Kingdom |
|
7,307 |
|
7,968 |
|
41,078 |
|
42,712 |
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
Australia and New Zealand |
1,799 |
|
1,454 |
|
78 |
|
100 |
|
|
Asia |
2,100 |
|
2,599 |
|
49 |
|
116 |
|
|
|
3,899 |
|
4,053 |
|
127 |
|
216 |
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
6,364 |
|
7,858 |
|
451 |
|
674 |
|
|
|
25,238 |
|
28,913 |
|
42,097 |
|
44,097 |
(c) Revenue and gross profit by discipline
|
|
Revenue |
|
Gross Profit |
||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
Finance and Accounting |
464,763 |
|
465,378 |
|
211,658 |
|
220,561 |
|
|
|
|
|
|
|
|
|
|
Legal, Technology, HR, Secretarial and Other |
230,490 |
|
219,980 |
|
105,275 |
|
106,422 |
|
|
|
|
|
|
|
|
|
|
Engineering, Property & Construction, Procurement & Supply Chain |
181,343 |
|
177,883 |
|
100,977 |
|
102,817 |
|
|
|
|
|
|
|
|
|
|
Marketing, Sales and Retail |
128,906 |
|
126,641 |
|
95,971 |
|
97,069 |
|
|
|
|
|
|
|
|
|
|
|
1,005,502 |
|
989,882 |
|
513,881 |
|
526,869 |
(d) Revenue and gross profit generated from permanent and temporary placements
|
|
Revenue |
|
Gross Profit |
||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
£'000 |
|
£'000 |
|
|
|
|
|
|
|
|
|
|
Permanent |
403,051 |
|
422,005 |
|
392,213 |
|
409,660 |
|
|
|
|
|
|
|
|
|
|
Temporary |
602,451 |
|
567,877 |
|
121,668 |
|
117,209 |
|
|
|
|
|
|
|
|
|
|
|
1,005,502 |
|
989,882 |
|
513,881 |
|
526,869 |
4. Exceptional items
French Profit Share
In October 2013, Page Personnel France (PPF) received notice from the Competent Authorities of the UK and France of their decision regarding a transfer pricing case that had arisen as a result of a French tax audit in March 2008. The decision, which was unexpected, increased the profit generated by PPF, which, as per the mandatory profit share or "participation aux resultants de l'entreprise" that is particular to France, drove a requirement to pay increased employee profit share, both to employees of PPF and also to the temporary workers placed by that company. As a result, the Group has taken in 2013, an exceptional operating profit charge of £2.5m, interest expense on late payment of corporation tax and profit share of £0.6m and additional tax charge on the exceptional item of £0.7m relating to prior periods.
A further £0.6m relating to 2013 is included within operating profits from underlying activities, together with a tax credit of £0.1m, which have not been treated as exceptional items. A proportion of these charges were determined by the tax ruling, with the remainder for other years based on assumptions.
Restructuring charge
In 2012 there was an exceptional restructuring charge of £7.8m, relating to the removal of a layer of management in Continental Europe and the Americas.
5. Financial income / (expenses)
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
Financial income |
|
|
|
|
Bank interest receivable |
531 |
|
907 |
|
|
|
|
|
|
Financial expenses |
|
|
|
|
Bank interest payable |
(1,625) |
|
(1,191) |
|
Exceptional interest payable |
(574) |
|
- |
|
|
(2,199) |
|
(1,191) |
6. Taxation
The Group's consolidated effective tax rate in respect of continuing operations for the year ended 31 December 2013 was 33.5% (2012: 36.5%). The effective tax rate is lower than in 2012 due to the benefit of additional net future and current deductions for share based reward plans in the UK and overseas territories of c. 4.1%, partially offset by taxes on the current year exceptional item of approximately 1.1%.
7. Dividends
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
Amounts recognised as distributions to equity holders in the year: |
|
|
|
|
Final dividend for the year ended 31 December 2012 of 6.75p per ordinary share (2011: 6.75p) |
20,798 |
|
20,779 |
|
Interim dividend for the year ended 31 December 2013 of 3.25p per ordinary share (2012: 3.25p) |
10,051 |
|
9,855 |
|
|
30,849 |
|
30,634 |
|
|
|
|
|
|
Amounts proposed as distributions to equity holders in the year: |
|
|
|
|
Proposed final dividend for the year ended 31 December 2013 of 7.25p per ordinary share (2012: 6.75p) |
22,192 |
|
20,503 |
The proposed final dividend had not been approved by the Board at 31 December 2013 and therefore has not been included as a liability. The comparative final dividend at 31 December 2012 was also not recognised as a liability in the prior year.
The proposed final dividend of 7.25p (2012: 6.75p) per ordinary share will be paid on 23 June 2014 to shareholders on the register at the close of business on 23 May 2014 subject to approval by shareholders.
8. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of £6.8m has been recognised for share options and other share-based payment arrangements (including social charges), (2012: £13.2m).
9. Earnings per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
|
Earnings |
2013 |
|
2012 |
|
|
|
|
|
|
Earnings for basic and diluted earnings per share (£'000) |
42,604 |
|
36,197 |
|
Exceptional items (£'000) (note 4) |
3,747 |
|
5,308 |
|
Earnings for basic and diluted earnings per share before exceptional items (£'000) |
46,351 |
|
41,505 |
|
|
|
|
|
|
Number of shares |
|
|
|
|
Weighted average number of shares used for basic earnings per share ('000) |
307,858 |
|
305,345 |
|
Dilution effect of share plans ('000) |
2,561 |
|
3,136 |
|
Diluted weighted average number of shares used for diluted earnings per share ('000) |
310,419 |
|
308,481 |
|
|
|
|
|
|
Basic earnings per share (pence) |
13.8 |
|
11.9 |
|
Diluted earnings per share (pence) |
13.7 |
|
11.7 |
|
Basic earnings per share before exceptional items (pence) |
15.1 |
|
13.6 |
|
Diluted earnings per share before exceptional items (pence) |
14.9 |
|
13.5 |
The above results all relate to continuing operations.
10. Property, plant and equipment and intangible assets
Acquisitions and disposals
During the year ended 31 December 2013 the Group acquired property, plant and equipment with a cost of £8.5m (2012: £7.9m) and intangible assets with a cost of £4.8m (2012: £9.0m).
Property, plant and equipment with a carrying amount of £0.6m were disposed of during the year ended 31 December 2013 (2012: £0.3m), resulting in a loss on disposal of £10k (2012: loss of £5k).
11. Trade and other receivables
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
Current |
|
|
|
|
Trade receivables |
153,339 |
|
148,438 |
|
Less provision for impairment of receivables |
(6,658) |
|
(6,732) |
|
Trade receivables |
146,681 |
|
141,706 |
|
Other receivables |
4,663 |
|
4,653 |
|
Prepayments and accrued income |
35,144 |
|
36,148 |
|
|
186,488 |
|
182,507 |
|
Non-current |
|
|
|
|
Prepayments |
2,865 |
|
3,310 |
12. Trade and other payables
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
Current |
|
|
|
|
Trade payables |
10,709 |
|
9,605 |
|
Other tax and social security |
42,098 |
|
39,709 |
|
Other payables |
8,996 |
|
16,679 |
|
Accruals |
70,643 |
|
71,920 |
|
Deferred income |
1,218 |
|
820 |
|
|
133,664 |
|
138,733 |
|
Non-current |
|
|
|
|
Deferred income |
4,455 |
|
2,653 |
|
Other tax and social security |
242 |
|
126 |
|
|
4,697 |
|
2,779 |
13. Cash flows from operating activities
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
Profit before tax |
64,057 |
|
57,003 |
|
Exceptional items (note 4) |
3,027 |
|
7,834 |
|
Profit before tax and exceptional items |
67,084 |
|
64,837 |
|
Depreciation and amortisation charges |
17,461 |
|
15,073 |
|
Loss on sale of property, plant and equipment, and computer software |
10 |
|
5 |
|
Share scheme charges |
5,611 |
|
11,884 |
|
Net finance costs |
1,668 |
|
284 |
|
Operating cash flow before changes in working capital, finance costs and exceptional items |
91,834 |
|
92,083 |
|
(Increase) / decrease in receivables |
(8,506) |
|
7,454 |
|
Decrease in payables |
(1,795) |
|
(5,066) |
|
Cash generated from underlying operations |
81,533 |
|
94,471 |
14. Cash and cash equivalents
|
|
2013 |
|
2012 |
|
|
£'000 |
|
£'000 |
|
|
|
|
|
|
Cash at bank and in hand |
79,777 |
|
62,431 |
|
Short-term deposits |
7,293 |
|
8,338 |
|
Cash and cash equivalents |
87,070 |
|
70,769 |
|
Bank overdrafts |
(1,676) |
|
(9,396) |
|
Cash and cash equivalents in the statement of cash flows |
85,394 |
|
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.
15. Publication of Annual Report and Accounts
This preliminary statement is not being posted to shareholders. The Annual Report and Accounts will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company.
Copies of the Annual Report and Accounts can be downloaded from the Company's website http://www.pagegroup.co.uk/investors/reports-and-presentations/annual-and-interim-reports/2014.aspx.
16. Annual General Meeting
The Annual General Meeting of Michael Page International plc will be held at Page House, The Bourne Business Park, 1 Dashwood Lang Road, Addlestone, Weybridge, Surrey, KT15 2QW on 5 June 2014 at 12.00 noon.
Responsibility statement of the directors on the annual report
The responsibility statement below has been prepared in connection with the company's full annual report for the year ending 31 December 2013. Certain parts of the annual report are not included within this announcement.
We confirm that, to the best of our knowledge:-
a) the financial statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
b) the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.
On behalf of the Board
|
S Ingham |
|
|
Chief Executive Officer |
|
4 March 2014
This information is provided by RNS
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