REG - PageGroup plc - Final Results
03/03/2022 07:00
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RNS Number : 4524D PageGroup plc 03 March 2022
3 March 2022
Full Year Results for the Year Ended 31 December 2021
A Record Year for the Group
PageGroup plc ("PageGroup"), the specialist professional recruitment company,
announces its full year results for the year ended 31 December 2021.
Financial summary 2021 2020 Change Change
CC*
Revenue £1,643.7m £1,304.8m +26.0% +30.2%
Gross profit £877.7m £610.2m +43.8% +49.1%
Operating profit £168.5m £17.0m >100% >100%
Profit before tax £166.6m £15.5m >100%
Basic earnings per share 37.2p -1.8p >100%
Diluted earnings per share 37.0p -1.8p >100%
Total dividend per share 15.00p -
(excl. special dividend)
Total dividend per share 41.71p -
(incl. special dividend)
HIGHLIGHTS*
· Group gross profit up 49.1% to £877.7m, a record year for the Group
· Group gross profit up 7% vs previous record year of 2019
· New record operating profit of £168.5m (2020: £17.0m)
· Conversion rate** increased to 19.2% (2020: 2.8%), 2021 H2
conversion rate of 22.0%
· Gross profit per fee earner up 43.7% to £157.2k (2020: £113.3k)
· Record gross profit in 22 countries
· Fee earner headcount increased by a net 55 (1%) vs Q4 2019, joiners
include the hiring of c. 1,100 experienced fee earners since Q2 2020, total
closing headcount of 7,838
· Strong cash position of £154.0m (2020: £166.0m)
· Interim and special dividends of £100.2m paid on 13 October 2021
· Final dividend proposed of 10.30p per share (2020: Nil)
*At constant currency - all growth rates in constant currency at prior year
rates unless otherwise stated
**Operating profit as a percentage of gross profit
Commenting, Steve Ingham, Chief Executive Officer, said:
"I am pleased to report that 2021 was a record year for the Group for both
gross profit and operating profit. We prioritised the protection and wellbeing
of our employees, candidates and clients through the pandemic, whilst making
clear decisions regarding strategic investments in our platform to take market
share in the recovery. This is reflected in our record results.
"We saw strong quarterly improvement through the year, with the Group
returning to growth vs. 2019 in Q2 onwards, delivering growth in constant
currencies of 2%, 13% and 24% for Q2, Q3 and Q4 respectively.
"We have a resilient highly diversified business model, with focus on High
Potential disciplines such as Technology and Healthcare & Life Sciences
delivering robust results during the pandemic and in the recovery. Our Large,
High Potential geographic markets all delivered a record year in 2021, up 60%,
collectively, now representing 38% of the Group.
"We remain confident in our strategy of investing in and growing our platform.
We continued to invest carefully in headcount, demonstrated by the c. 400
experienced hires we added in 2020, and the further c. 700 added in 2021. Our
fee earner headcount is now up 1% on the pre-pandemic level at the end of
2019. We also continued to invest in implementing new technology and
innovation, with our new operating system, Customer Connect, now live across
the Group, excluding Latin America, which is scheduled to go live in H1 2022.
"Our strong focus on productivity, up 43.7% on 2020, resulted in an
improvement in our conversion rate to 19.2% (2020: 2.8%). With gross profit
growth accelerating and productivity increasing, our conversion rate in H2
rose to 22%.
"Today the Board has proposed a final dividend of 10.30p, reflecting
confidence in the long-term strategic progress of the Group. Combined with the
interim dividend of 4.70 pence per share and the special dividend of 26.71
pence per share, this represents a total dividend of 41.71p with a yield of
6.6% at the year end share price.
"As we enter 2022, we are alert to the macro-economic uncertainties that
exist. However, we have a flexible and highly diversified business model which
allows us to adapt quickly to changing market conditions. We continue to grow
our platform, invest carefully in headcount, and prioritise the roll out of
new technologies. We are the clear leader in many of our markets, with a
highly experienced senior management team, which positions us well to take
advantage of opportunities to grow our business. We maintain our focus on our
vision for the Group to be the leading specialist recruiter in each of the
markets in which we operate."
Enquiries:
PageGroup plc +44 (0) 20 3077 8172
Steve Ingham, Chief Executive Officer
Kelvin Stagg, Chief Financial Officer
FTI Consulting +44 (0) 20 3727 1340
Richard Mountain/Susanne Yule
The Company will host a conference call and presentation for analysts and
investors at 8:00am today. The live presentation can be viewed by following
the link:
https://www.investis-live.com/pagegroup/6214f027d99fcd0c006732f1/gthq
(https://protect-eu.mimecast.com/s/q_paCYvO6FLom91mc0BjTo?domain=investis-live.com)
Please use the following dial-in numbers to join the conference:
United Kingdom (Local) 020 3936 2999
All other locations +44 20 3936 2999
Please quote the access code 42 84 04 to gain access to the call
The presentation and recording to accompany the call will be available on the
Company's website later today at:
https://www.page.com/presentations/year/2022
(https://www.page.com/presentations/year/2022)
MANAGEMENT REPORT
CAUTIONARY STATEMENT
This 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.
This 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
At PageGroup we have a clear strategic vision via our four brands of Page
Executive, Michael Page, Page Personnel and Page Outsourcing. We aim to be the
leading specialist recruiter in each of the markets in which we operate. We
have sought to achieve this by developing a significant market presence in
major global economies, as well as targeting new markets where we see the
greatest potential for long-term gross profit growth at attractive conversion
rates.
We offer our services across a broad range of disciplines and specialisms,
solely within the professional recruitment market. Our origins are in
permanent recruitment, but around a quarter of our gross profit is in
temporary placements, where local culture and market conditions allow. We
focus on opportunities where our industry and market expertise can set us
apart from our competition. This enables us to offer a premium service that is
valued by clients and attracts the highest calibre of candidates.
Our mix of permanent to temporary recruitment reflects the balance of our
business mix, both in terms of brands, where Michael Page, our largest brand,
and Page Executive operating at higher salary levels, have a naturally higher
level of permanent recruitment, as well as our geographic mix. We are market
leaders in regions such as Latin America, Greater China and South East Asia,
where we are also seeing the emergence of the white-collar temporary
recruitment market.
PageGroup is focused on delivering against three key objectives to achieve its
strategic vision and provide sustainable financial returns. These are: 1) to
look for organic, high-margin and diversified growth; 2) to position the
business to be scalable, efficient and highly flexible to reflect market
conditions; and 3) as a people-oriented, organically driven business, to
nurture and develop talent and skills which are fundamental to us achieving
long-term sustainable growth.
We therefore invest significantly in our people, as the recruitment,
retention, succession and development of the best talent available is central
to our ability to grow the business and to manage our resources through
economic cycles. Investment in the business has been focused on developing
the long-term sustainability of the Group and is supported by significant
balance sheet strength and cash flow generation.
Organic, scalable growth
Our strategy is to grow organically, achieved by drawing upon the skill and
experience 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 favourable.
Conversely, when market conditions tighten, these entrepreneurial,
profit-sharing teams reduce in size, largely through natural attrition.
Consequently, our cost base contracts in downturns. Our strategy for organic
growth has served the business well over the 45 years since its inception and
we believe it will continue to do so. We have grown from a small,
single-discipline recruitment company operating in one country to a large
multidiscipline, multinational business, operating in 37 countries.
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, Page Personnel or Page Outsourcing, with the objective of being
the leading specialist recruitment consultancy in each of our chosen markets.
The Group has designated five markets as Large, High Potential markets. These
are typically under-developed in terms of recruitment, but where we have a
successful track record and confidence in our ability to scale operations
successfully. The five Large, High Potential markets are Germany, Greater
China, Latin America, South East Asia and the US. India and Japan are two
further markets which have the potential to be classified in this category in
the future.
We have also designated two disciplines as being High Potential disciplines,
Healthcare & Life Sciences and Technology.
As recruitment is a cyclical business, impacted significantly by the strength
of economies, diversification is an important element of our strategy as it
reduces our dependency on individual businesses or markets, thereby increasing
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.
Talent and skills development
We recognise that it is our people who are at the heart of everything we do,
particularly as an organically grown business, where ensuring we have a talent
pool with experience through economic cycles and across both geographies and
disciplines is critical. Investing in our people is, therefore, a vital
element of our strategy. We seek the highest calibre staff from a diverse
range of backgrounds and then do our very best to retain them through offering
a fulfilling career and an attractive working environment.
This includes a team-based structure, a profit share business model and
continuous training and career development, often internationally. Our strong
track record of internal career moves and promotion from within means that
people who join us know that they could be our future senior managers and Main
Board Directors.
Diversity and inclusion are key to our culture and the success of our
business. It is not just an item on our to-do list, it's an inherent part of
our culture and our business. We are a people business - the people who work
here, the companies we do business with, the candidates whose lives we change
for the better on a daily basis, and the communities and individuals we help
as we give back to others. Understanding the values and cultural differences
of our employees helps them reach their potential as we build a stronger, more
successful business. A business which reflects society and the clients and
candidates whose lives we change.
Sustainable growth
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. Our organic and team-based business
model allows us to grow strongly when market conditions are favourable,
enabling us to increase our fee earner headcount investment rapidly.
Conversely, 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 can retain our highly
capable management teams in whom we have invested. 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 downturns, which can have a
negative effect on profitability in the short term. A strong balance sheet is,
therefore, essential to support the business at these times.
Our strategic priorities comprise the following:
· increase the scale and diversification of PageGroup by organically
growing existing and new teams, offices, disciplines, brands and countries;
· manage the business with a team and meritocratic culture, while
delivering a consistent and high-quality client and candidate experience;
· invest through cycles in our Large, High Potential markets of
Germany, Greater China, Latin America, South East Asia and the US to achieve
scale and a market leading position;
· invest through cycles in our High Potential disciplines of Technology
and Healthcare & Life Sciences;
· manage our fee earner headcount in all other markets to reflect
prevailing market conditions, by adding selectively to geographies and
disciplines where there is positive growth momentum, while reducing headcount
where the outlook for growth or fee earner productivity is weak;
· focus on operational support consistency; and
· focus on succession planning and international career paths to
encourage retention and development of key staff.
The main factors that could affect the business and the financial results are
described in the "Principal Risks and Uncertainties" section in the PageGroup
plc 2021 Annual Report and Accounts, which will be available to shareholders
in April 2022.
Sustainability
Our ESG strategy drives purposeful impact today and will expand as our
businesses grow in the future. At the start of 2021, we signed the UN Global
Compact, which provides a framework for developing a more sustainable
business. We also published our inaugural sustainability report and set out a
ten-year sustainability vision, including ambitious targets. From an
environmental perspective, during 2021 our total carbon emissions decreased by
17%, primarily due to the transition our offices to renewable energy and a
continued reduction in business travel. We will continue to reduce our carbon
emissions by further adoption of renewable energy sources, reducing waste and
maintaining a focus on business travel. From a social impact perspective,
during 2021 we changed approximately 114,000 lives through placements and
social impact programmes such as webinars and CV and interview writing
workshops with charities, another great step towards our target of changing
over a million lives within ten years. We will achieve this by giving our
skills back as a recruiter by placing candidates and working with charities
and schools to breakdown the barriers to employment for minority groups.
This work includes our social impact programmes such as mock interview and CV
writing workshops. For further information on our sustainability efforts,
please refer to https://www.page.com/sustainability
(https://www.page.com/sustainability) .
GROUP RESULTS
GROSS PROFIT Reported CC
% of Group 2021 (£m) 2020 (£m) % %
EMEA 49% 432.0 319.4 +35.3% +40.3%
Asia Pacific 20% 179.3 121.1 +48.0% +53.1%
Americas 16% 138.5 88.8 +56.0% +66.9%
UK 15% 127.9 80.9 +58.0% +58.0%
Total 100% 877.7 610.2 +43.8% +49.1%
Permanent 77% 676.1 436.7 +54.8% +60.7%
Temporary 23% 201.6 173.5 +16.2% +19.8%
At constant exchange rates, Group revenue increased 30.2% to £1,643.7m (2020:
£1,304.8m) and gross profit increased 49.1% to £877.7m (2020: 610.2m) for
the year ended 31 December 2021. Gross profit per fee earner increased 43.7%
to £157.2k (2020: £113.3k).
The Group's revenue mix between permanent and temporary placements was 42:58
(2020: 34:66) and for gross profit was 77:23 (2020: 72:28), as the recovery in
2021 was driven by permanent recruitment. Revenue from temporary placements
comprises the salaries of those placed, together with the margin charged. This
margin on temporary placements increased to 21.0% in 2021 (2020: 20.1%) and we
saw an improvement in our perm margin as well. Overall, pricing has improved,
as a result of candidate shortages in the majority of our markets.
In our Large, High Potential markets category, which now represent 38% of the
Group, gross profit increased 60% in constant currencies to £332.5m,
outperforming the rest of the Group.
Total Group headcount increased by 1,144 in the year to 7,838. This comprised
a net increase of 937 fee earners (+18.2%) and an increase of 207 operational
support staff (+13.4%). This increase in our fee earner headcount was driven
by continued investment as trading conditions improved. We added c. 700
experienced fee earners to the Group during the year, in addition to the c.
400 experienced fee earners that joined in 2020. This additional headcount was
primarily into our strategic areas of investment, as well as those areas which
have been more resilient during the COVID-19 pandemic. As a result of this
increase in net fee earner headcount, our fee earner to operational support
staff ratio improved to 78:22 (2020: 77:23).
In total, administrative expenses increased 19.6% to £709.2m (2020:
£593.2m). The Group's operating profit from trading activities totalled
£168.5m (2020: £17.0m), an increase of over 100%.
OPERATING PROFIT AND CONVERSION RATES
The Group's organic growth model and profit-based team bonus ensures cost
control remains tight. Approximately three-quarters of costs were employee
related, including wages, bonuses, share-based long-term incentives, and
training & relocation costs. Depreciation and amortisation for the year
totalled £53.7m (2020: £61.8m).
The Group's conversion rate for the year increased from 2.8% in 2020 to 19.2%.
The conversion rate improved significantly as the year progressed, with a H2
conversion rate of 22.0% compared with a H1 conversion rate of 15.9%. This was
due to the sharp increase in productivity and gross profit.
Conversion rates improved in all of the Group's regions. Asia Pacific was the
Group's most profitable region, with a conversion rate of 21.8%, which
represents a considerable increase on 2020. EMEA also remained highly
profitable, with conditions improving towards the end of the year and the
conversion rate of 21.6% was consistent with the pre-pandemic level in 2019.
The UK and the Americas were most impacted by the COVID-19 pandemic, though
their conversion rates recovered well in 2021 to 13.2% and 13.8% respectively,
above their pre-pandemic levels in 2019.
A net interest charge of £1.9m (2020: £1.5m) was primarily due to an IFRS 16
interest charge of £1.3m. Excluding IFRS 16, the net interest charge of
£0.6m reflected the continued low interest rate environment and borrowing
facility charges.
Earnings per share and dividends
In 2021, basic and diluted earnings per share increased to 37.2p and
37.0p respectively (2020: -1.8p), as a result of the increase in profit due
to the improved economic conditions.
The Group's strategy is to operate a policy of financing the activities and
development of the Group from our retained earnings and to maintain a strong
balance sheet position. The first use of our cash is to satisfy our
operational and investment requirements and to hedge our liabilities under the
Group's share plans. We then review our liquidity over and above these
requirements to make returns to shareholders, firstly by way of an ordinary
dividend.
Our policy is to grow this ordinary dividend over the course of the economic
cycle, in line with our long-term growth rate. We believe this will enable us
to sustain the level of ordinary dividend payments during a downturn as well
as to increase it during more prosperous times.
Cash generated in excess of these first two priorities will be returned to
shareholders through supplementary returns, using special dividends or share
buybacks.
Having suspended our dividend policy in 2020 during the pandemic, in 2021 we
announced the resumption of our dividend policy. In October 2021, we paid an
interim dividend of 4.70 pence per share, an increase of 9.3%, being 4.5% for
2020 and 4.5% for 2021, over the 2019 interim dividend. In addition, in line
with our policy of returning surplus capital to shareholders, we also paid a
special dividend of 26.71 pence per share. Taking both dividends together,
this amounted to a cash return to shareholders of £100.2m.
In line with the continued improvement in trading conditions, a final dividend
of 10.30p (2019: 0.00p) per ordinary share is proposed. When taken together
with the interim dividend of 4.70p (2019: 4.30p) per ordinary share, this is
an increase in the total dividend for the year of 9.6% over the proposed 2019
ordinary dividends to 15.00p per ordinary share. The proposed final dividend,
which amounts to £32.9m, will be paid on 17 June 2022 to shareholders on the
register as at 20 May 2022, subject to shareholder approval at the Annual
General Meeting on 31 May 2022.
We will continue to monitor our cash position in 2022 and will make returns to
shareholders in line with the above policy.
Cash flow and balance sheet
Cash flow in the year was strong, with £186.3m (2020: £169.0m) generated
from operations. The closing cash balance was £154.0m at 31 December 2021
(2020: £166.0m). The slight decrease on 2020 despite the stronger trading
conditions is due primarily to the payment of interim and special dividends in
the year, totalling £100.2m. Given the recovery in the Group's trading and
strong cash position, the Board decided to repay the UK Government Furlough
income of £3.4m in April 2021.
PageGroup maintains a Confidential Invoice Facility with HSBC whereby the
Group has the option to discount receivables in order to advance cash. The
Group also has a Revolving Credit Facility with BBVA, expiring in May 2023,
with a total drawable amount of £30m. We have agreed a covenant waiver to the
end of the agreement on this facility to ensure we retain access to these
funds should they be required. Neither of these facilities were in use as at
31 December. These facilities are used on an ad hoc basis to fund any major
Group GBP cash outflows.
Income tax paid in the year was £37.0m (2020: £31.7m) and net capital
expenditure was £25.7m (2020: £21.7m). The expenditure increased due to
increased spend on Customer Connect, our new Operating System, as well as
investment into laptops and new IT equipment to support the fee earner
headcount additions made during the year.
An interim and special dividend of £100.2m was paid in 2021 (2020: £0.0m).
The significantly higher share price in 2021 meant that there was an increase
in cash receipts from share option exercises, with £16.4m in 2021, compared
to £0.4m in 2020. In 2021, £10.4m (2020: £14.4m) was also spent on the
purchase of shares by the Employee Benefit Trust to satisfy future committed
obligations under our employee share plans.
The most significant item in our balance sheet was trade receivables, which
amounted to £254.6m at 31 December 2021 (2020: £186.1m), comprising
permanent fees invoiced and salaries and fees invoiced in the temporary
placement business, but not yet paid. Day's sales in debtors marginally
increased due to the increase in the debtor book as a result of the
improvement in trading conditions, particularly within permanent recruitment
which tends to have a longer collection period.
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA is the Group's largest region, contributing 49% of the Group's gross
profit in the year. With operations in 17 countries, PageGroup has a strong
presence in the majority of EMEA markets and is the clear leader in specialist
permanent recruitment in the two largest, France and Germany, and many of the
others. Across the region, permanent placements accounted for 70% and
temporary placements 30% of gross profit.
The region includes four of our Large, Proven markets, France, Spain,
Italy and the Netherlands, across which there is a broad range of
competition. EMEA also includes Germany, one of the Group's Large, High
Potential markets, which has low penetration rates (markets where less than
30% of recruitment is outsourced) and significant growth potential,
particularly in temporary recruitment. In addition, there are markets such as
Poland, Turkey and Africa, which are less developed, with limited competition,
but are increasingly looking for professional recruitment services.
EMEA £m Growth rates
(49% of Group in 2021) 2021 2020 Reported CC
Gross Profit 432.0 319.4 +35.3% +40.3%
Operating Profit 93.4 30.6 >100% >100%
Conversion Rate (%) 21.6% 9.6%
In constant currencies, revenue grew 25.5% to £869.6m (2020: £717.3m) and
gross profit grew 40.3% to £432.0m (2020: £319.4m).
Trading conditions improved significantly during the year as vaccines were
successfully rolled out across the region and lockdown restrictions eased.
France, the Group's second largest market, grew 27%. Conditions were tougher
in Page Personnel, which represents around 60% of France. Germany, our third
largest market, grew 48% for the year, with strong growth and record
performances across all brands. In our other European markets, Benelux grew
32% and Southern Europe, which was severely impacted by the pandemic in 2020,
was up 60%, with Italy and Spain increasing 52% and 64%, respectively. The
Middle East and Africa, which represented 3% of the region, grew 46%.
2021 operating profit increased over 100% to £93.4m (2020: £30.6m),
returning to the 2019 conversion rate of 21.6%. The region was the most
resilient to the COVID-19 pandemic, with conditions improving significantly
through 2021. Headcount across the region increased by 468 (+15.7%) during
the year, to 3,447 at the end of 2021 (2020: 2,979, 2019: 3,317), taking it
above the pre-pandemic levels.
ASIA PACIFIC
Asia Pacific represented 20% of the Group's gross profit in 2021, with 80% of
the region being Asia and 20% Australia. Other than in the financial centres
of Hong Kong, Singapore and Tokyo, the Asian market is generally highly
under-developed and offers attractive opportunities in both international and
domestic markets at good conversion rates. Two of our Large, High Potential
markets, Greater China and South East Asia, are in this region. With a highly
experienced management team, approaching 1,500 staff and limited competition,
the size of the opportunity in Asia is significant. Across Asia, driven by
cultural attitudes towards white collar temporary recruitment, permanent
placements accounted for 88% and temporary placements only 12% of gross
profit, well below the Group average of 23%.
Australia, one of our Large, Proven markets, is a mature, well-developed and
highly competitive recruitment market. PageGroup has a meaningful presence in
permanent recruitment in the majority of the professional disciplines and
major cities in Australia. Page Personnel has a growing presence and
significant potential to expand and grow market share.
Asia Pacific £m Growth rates
(20% of Group in 2021) 2021 2020 Reported CC
Gross Profit 179.3 121.1 +48.0% +53.1%
Operating Profit 39.0 3.8 >100% >100%
Conversion Rate (%) 21.8% 3.1%
In Asia Pacific, in constant currencies, revenue grew 34.3% to £282.0m (2020:
£216.0m) and gross profit grew 53.1% to £179.3m (2020: £121.1m).
In Asia, representing 16% of the Group, gross profit increased 57% on 2020.
Greater China increased 57% with Mainland China up 58% and Hong Kong up 65%.
South East Asia was up 70%, with Singapore up 55%. India delivered a record
year, up 87%, aided by the opening of our Bangalore office in Q4 2019. Japan
was up 37% and delivered a record year. Australia grew 43%, despite having
seen continued uncertainty around lockdowns, which varied significantly by
state.
Operating profit increased more than 100% in constant currency to £39.0m
(2020: £3.8m), with the conversion rate increasing significantly to 21.8%
(2020: 3.1%). This was driven by the significant improvement in productivity,
up 45% in the year, together with the improvement in trading conditions.
Overall, the region had the highest conversion rate in the Group in 2021.
Headcount across the region increased 324 (23.4%) in the year, ending the year
at 1,709 (2020: 1,385, 2019: 1,679).
THE AMERICAS
The Americas represented 16% of the Group's gross profit in 2021, with North
America representing 62% of the region and Latin America, 38%. The US and
Latin America are two of the Large, High Potential markets in our growth
strategy. The US, where we have eight offices, has a well-developed
recruitment industry, but in many disciplines, especially technical, there is
limited national competition of any scale. PageGroup's breadth of
professional specialisms and geographic reach is uncommon and provides a
competitive advantage.
Latin America is a highly under-developed region, where PageGroup enjoys the
market leading position with around 800 employees in seven countries. There
are few international competitors and none with regional scale. Across the
Americas, permanent placements accounted for 88% of gross profit and temporary
placements 12%.
Americas £m Growth rates
(16% of Group in 2021) 2021 2020 Reported CC
Gross Profit 138.5 88.8 +56.0% +66.9%
Operating Profit 19.2 -7.0 >100% >100%
Conversion Rate (%) 13.8% -7.9%
In constant currencies revenue increased by 53.9% to £220.7m (2020: £154.3m)
while gross profit increased 66.9% to £138.5m (2020: £88.8m).
In North America, gross profit increased by 62%. The US grew 64% as trading
conditions improved and we delivered growth in newer disciplines, including
Technology. We also saw good growth in Construction, following the re-opening
of construction sites during the year.
Latin America recovered well from the pandemic after a particularly
challenging 2020, and delivered a record year. Gross profit was up 77%, with
Brazil up 73%, Mexico up 81% and the other five countries increasing 76%
collectively.
As a result of this improvement in trading conditions, operating profit
increased to £19.2m (2020: -£7.0m), with a conversion rate of 13.8% (2020:
-7.9%), despite significant investment in the 2 Large, High Potential
geographic markets in the region. Headcount across the region increased by 226
(+19.6%) in 2021 to 1,381 (2020: 1,155, 2019: 1,376).
UNITED KINGDOM
The UK represented 15% of the Group's gross profit in 2021, operating from 26
offices covering all major cities. It is a mature, highly competitive and
sophisticated market with the majority of vacant positions being outsourced to
recruitment firms. PageGroup has a market leading presence in permanent
recruitment across the UK and a growing presence in temporary recruitment. In
the UK, permanent placements accounted for 75% and temporary placements 25% of
gross profit.
The UK business operates under all four of our brands, with representation in
13 specialist disciplines via the Michael Page brand. There remain
opportunities to launch new discipline businesses under the lower salary-level
Page Personnel brand, which represented 22% of UK gross profit.
UK £m
(15% of Group in 2021) 2021 2020 Growth rate
Gross Profit 127.9 80.9 +58.0%
Operating Profit 16.9 -10.3 >100%
Conversion Rate (%) 13.2% -12.8%
In the UK, revenue increased 24.9% from £217.3m in 2020 to £271.5m, whilst
gross profit increased 58.0% from £80.9m in 2020 to £127.9m.
COVID-19 continued to impact trading during the first half of 2021, with
restrictions in place through most of Q1 and Q2. Trading conditions then began
improving steadily, with the region returning to growth in Q3 compared to
2019. Overall, the UK grew 58% with Michael Page up 63% and Page Personnel up
46%. Trading conditions were tougher in Page Personnel, which operates at
lower salary levels, but encouragingly they returned to growth in Q4 compared
to 2019.
Operating profit for the year increased to £16.9m (2020: -£10.3m), with the
conversion rate improving to 13.2% (2020: -12.8%). The 2021 conversion rate
was negatively impacted by the repayment of furlough to HMRC during the year,
excluding this item, the 2021 conversion rate would have been 15.8%.
Headcount increased 126 (+10.7%) in the year to 1,301 at the end of December
2021 (2020: 1,175, 2019: 1,326), marginally behind the pre-pandemic level.
OTHER FINANCIAL ITEMS
Foreign exchange
Foreign exchange impacted the Group's results for the year negatively,
decreasing revenue by c. £55m, gross profit by c. £32m and operating profit
by c. £8m.
Taxation
The tax charge for the year was £48.3m (2020: £21.3m). This represented an
effective tax rate of 29.0% (2020: 136.9%). The rate is higher than the
effective UK rate for the calendar year of 19% (2020: 19%) principally due to
the impact of higher tax rates in overseas countries and to a lesser extent,
disallowable expenditure. There are some countries in which the tax rate is
lower than the UK, but the impact is small either because the countries are
not significant contributors to Group profit, or the tax rate difference is
not significant. The decrease in the effective tax rate from the prior year is
a result of the significant one-off derecognition of deferred tax assets in
2020.
In 2021, the tax rate was impacted primarily by higher tax in overseas
countries (+7.8%), derecognition of losses and other tax attributes of
(+3.3%), prior year adjustments of (-2.9%), tax on share-based payments
(-0.1%) and other permanent differences (+1.5%), principally employee related
expenditure and entertainment expenses.
The tax charge for the year reflects the Group's tax strategy, which is
aligned to business goals. It is PageGroup's policy to pay its fair share of
taxes in the countries in which it operates and deal with its tax affairs in a
straightforward, open and honest manner. The Group's tax strategy is set out
in detail on our website in the Investor section under "Responsibilities".
Share options and share repurchases
At the beginning of 2021 the Group had 11.4m share options outstanding, of
which 5.3m had vested, but had not been exercised. During the year, options
were granted over 2.0m shares under the Group's share option plans. Options
were exercised over 3.6m shares, generating £16.4m in cash, and options
lapsed over 2.0m shares. At the end of 2021, options remained outstanding over
7.9m shares, of which 3.8m had vested, but had not been exercised. During
2021, 2.2m shares were purchased for the Group's Employee Benefit Trust, and
no shares were cancelled (2020: 3.8m shares were purchased and no shares were
cancelled).
KEY PERFORMANCE INDICATORS (KPIs)
KPI Definition, method of calculation and analysis
Financial
Gross profit growth How measured: Gross profit growth represents revenue less cost of sales
expressed as the percentage change over the prior year. It consists
principally of placement fees for permanent candidates and the margin earned
on the placement of temporary candidates.
Why it's important: This metric indicates the degree of income growth in the
business. It can be impacted significantly by foreign exchange movements in
our international markets. Consequently, we look at both reported and constant
currency metrics.
How we performed in 2021: Gross profit increased 49.1% in constant currencies
and 43.8% in reported rates against 2020. Trading conditions have improved
significantly coming out of the COVID-19 pandemic with 22 countries delivering
record years.
Relevant strategic objective: Organic growth
Gross profit diversification How measured: Total gross profit from: a) geographic regions outside the UK;
and b) disciplines outside of Accounting & Financial Services, each
expressed as a percentage of total gross profit.
Why it's important: These percentages give an indication of how the business
has diversified its revenue streams away from its historical concentrations in
the UK and from the Accounting & Financial Services disciplines.
How we performed in 2021: Geographies: the percentage decreased to 85.4% from
86.7% in 2020 but was still up on the 84.2% in 2019. The significant increase
seen in 2020 was largely a result of the UK being impacted severely by the
COVID-19 pandemic.
Disciplines: the percentage has increased in 2021 to 67.9% (2020: 65.2%), as
we have delivered strong growth in other disciplines, particularly Technology.
Relevant strategic objective: Diversification
Ratio of gross profit 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 reflects both the current stage of the
economic cycle and our geographic spread, as a number of countries culturally
have minimal white collar temporary roles. It gives a guide as to the
operational gearing potential in the business, which is significantly greater
for permanent recruitment.
How we performed in 2021: The ratio increased to 77:23 (2020: 72:28). This was
driven by the post-pandemic recovery being more weighted towards permanent
recruitment, with temporary taking longer to recover. This is as a result of
stronger recovery in the higher salary-levels, which is predominately
permanent recruitment as well as the strength of our Technology discipline,
which has higher levels of permanent recruitment.
Relevant strategic objective: Diversification
Basic earnings per share (EPS) 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 underlying profitability of the Group
and the progress made against the prior year.
How we performed in 2021: The Group saw a >100% increase in Basic EPS to
37.2p (2020: -1.8p). This was driven by the significant increase in profits,
with the improved trading conditions driving a significant improvement in
productivity.
Relevant strategic objective: Sustainable growth
Cash How measured: Cash and short-term deposits
Why it's important: The level of cash reflects our cash generation and
conversion capabilities and our success in managing our working capital. It
determines our ability to reinvest in the business, to return cash to
shareholders and to ensure we remain financially robust through cycles.
How we performed in 2021: Cash decreased to £154.0m (2020: £166.0m). The
Group demonstrated strong cash generation during 2021 as trading conditions
improved. Cash generated during the year increased in line with profitability
and is net of the interim and special dividends totalling £100.2m that were
paid in October 2021.
Relevant strategic objective: Sustainable growth
Strategic
Fee earner headcount growth How measured: Number of fee earners and directors involved in
revenue-generating activities at the year-end, expressed as the percentage
change compared to the prior year.
Why it's important: Growth in fee earners is a guide to our confidence in the
business and macro-economic outlook, as it reflects our expectations as to the
level of future demand for our services above the existing capacity currently
within the business.
How we performed in 2021: Net fee earner headcount increased by 937, or +18.2%
in the year, resulting in 6,082 fee earners at the end of the year. Our
fee-earner headcount is now 1% above the pre-pandemic level at the end of
2019. We continued to invest in disciplines such as Technology and Healthcare
& Life Sciences. We also added around 700 experienced fee earners in the
year.
Relevant strategic objective: Sustainable growth
Gross profit per fee earner How measured: Gross profit divided by the average number of fee-generating
staff, calculated on a rolling monthly average basis.
Why it's important: This is our indicator of productivity, which is affected
by levels of activity in the market, capacity within the business and the
number of recently hired fee earners who are not yet at full productivity.
Currency movements can also impact this figure.
How we performed in 2021: In constant currencies, gross profit per fee earner
was up 43.7% vs. 2020 to £157.2k (2020: £113.3k). This productivity increase
was due largely to the improved trading conditions in 2021, combined with
video interviewing reducing time to hire, wage inflation and improvements in
fee rates from candidate shortages, alongside the strategic decisions and
investments made during the pandemic.
Relevant strategic objective: Organic growth
Fee earner: support staff headcount ratio How measured: The percentage of fee earners compared to operational support
staff at the year end, expressed as a ratio.
Why it's important: This reflects the operational efficiency in the business
in terms of our ability to grow the revenue-generating platform at a faster
rate than the staff needed to support this growth.
How we performed in 2021: The ratio returned to the 2019 level of 78:22 from
77:23 in 2020. In line with our strategy of maintaining and investing in our
platform, we have added c. 700 experienced hires to the Group in 2021. These,
plus those who have joined from outside of recruitment, net of attrition,
means that we have added 937 fee earners in the year. Our operational support
staff headcount increased by 207.
Relevant strategic objective: Sustainable growth
Conversion rate How measured: Operating profit (EBIT) expressed as a percentage of gross
profit.
Why it's important: This reflects the level of fee-earner productivity and
the Group's effectiveness at controlling costs in the business, together with
the degree of investment being made for future growth.
How we performed in 2021: The Group's conversion rate increased to 19.2%
(2020: 2.8%) due to the increase in gross profit driven by increased
productivity, demonstrating the operational gearing in the business. The
conversion rate improved significantly as the year progressed, with a H2
conversion rate of 22.0% compared with a H1 conversion rate of 15.9%.
Relevant strategic objective: Sustainable growth
People
Employee engagement index How measured: A key output of the employee surveys undertaken periodically
within the business.
Why it's important: A positive working environment and motivated team helps
productivity and encourages retention of key talent within the business.
How we performed in 2021: We recorded an 82% positive score for employee
engagement in the latest Employee Survey in 2021. Our Survey told us that 91%
of our people feel we have implemented effective systems for keeping connected
with our customers while working remotely; 88% would describe PageGroup as an
organisation that cares about its people; 84% feel their manager genuinely
cares about their health and wellbeing; and 89% feel proud to work at
PageGroup.
Relevant strategic objective: Sustainable growth
Management experience How measured: Average tenure of front-office management measured as years of
service for directors and above.
Why it's important: Experience through the economic cycle and across both
geographies and disciplines is critical for an organic cyclical business
operating across the globe. Our organic business model relies on an
experienced management pool to enable flexibility in resourcing and senior
management succession planning.
How we performed in 2021: The average tenure of the Group's management was up
marginally at 13.0 years (2020: 12.3 years).
Relevant strategic objective: Talent and skills development
Total GHG emissions How measured: Direct and Indirect GHG emissions calculated in line with the
GHG Protocol.
Why it's important: The emissions calculations look at the CO2e impact of our
operations in absolute terms.
How we performed in 2021: Total GHG emissions (scope 1, 2 and 3) reduced by
17% to 8,396 tonnes CO(2)e and combined scope 1 & 2 emissions reduced by
22% to 3,403 tonnes CO(2)e. Reductions have been driven primarily by the
transition of our offices to renewable energy and a continued reduction in
business travel.
Relevant strategic objective: Sustainable growth.
Intensity values of GHG emissions How measured: Intensity values for GHG emissions are based on property and
vehicle emissions per 1,000 headcount. Headcount is viewed as being the most
representative metric for PageGroup's activity levels and is unaffected by
issues such as business mix or foreign exchange variations.
Why it's important: Intensity values help to normalise the GHG metrics and
place them in the context of the Group's changing business profile,
particularly in terms of increases in headcount. It helps to identify where
progress has been made on emissions reduction.
How we performed in 2021: Tonnes of CO2e per employee reduced by 25% to 1.12
Tonnes of CO(2)e per employee, as we have decreased our absolute emissions
while also increasing headcount.
Relevant strategic objective: Sustainable growth.
The source of data and calculation methods year-on-year are on a consistent
basis, including changes resulting from the use of 2021 DEFRA conversion
factors. The movements in KPIs are in line with expectations.
Steve Ingham Kelvin Stagg
Chief Executive Officer Chief Financial Officer
2 March 2022
Consolidated Income Statement
For the year ended 31 December 2021
2021 2020
Note £'000 £'000
Revenue 3 1,643,740 1,304,791
Cost of sales (766,020) (694,542)
Gross profit 3 877,720 610,249
Administrative expenses (709,210) (593,221)
Operating profit 3 168,510 17,028
Financial income 4 290 588
Financial expenses 4 (2,155) (2,072)
Profit before tax 3 166,645 15,544
Income tax expense 5 (48,289) (21,286)
Profit/(Loss) for the year 118,356 (5,742)
Attributable to:
Owners of the parent 118,356 (5,742)
Earnings per share
Basic earnings per share (pence) 8 37.2 (1.8)
Diluted earnings per share (pence) 8 37.0 (1.8)
The above results all relate to continuing operations
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
2021 2020
£'000 £'000
Profit/(loss) for the year 118,356 (5,742)
Other comprehensive income/(loss) for the year
Items that may subsequently be reclassified to profit and loss:
Currency translation differences (8,423) 5,945
Total comprehensive income for the year 109,933 203
Attributable to:
Owners of the parent 109,933 203
Consolidated Balance Sheet
As at 31 December 2021
Re-presented
2021 2020
Note £'000 £'000
Non-current assets
Property, plant and equipment 9 24,836 26,401
Right-of-use assets 94,956 95,414
Intangible assets - Goodwill and other intangible 2,065 2,097
- Computer software 47,100 39,708
Deferred tax assets 19,659 17,688
Other receivables 10 12,849 13,169
201,465 194,477
Current assets
Trade and other receivables 10 355,797 252,476
Current tax receivable 13,214 16,889
Cash and cash equivalents 12 153,983 165,987
522,994 435,352
Total assets 3 724,459 629,829
Current liabilities
Trade and other payables 11 (230,382) (175,337)
Provisions (6,755) (5,425)
Lease liabilities (30,125) (32,711)
Current tax payable (22,241) (12,365)
(289,503) (225,838)
Net current assets 233,491 209,514
Non-current liabilities
Other payables 11 (18,332) (12,483)
Lease liabilities (72,215) (70,758)
Deferred tax liabilities (354) (1,589)
Provisions (3,950) (3,260)
(94,851) (88,090)
Total liabilities 3 (384,354) (313,928)
Net assets 340,105 315,901
Capital and reserves
Called-up share capital 3,286 3,286
Share premium 99,564 99,564
Capital redemption reserve 932 932
Reserve for shares held in the employee benefit trust (47,338) (55,498)
Currency translation reserve 16,897 25,320
Retained earnings 266,764 242,297
Total equity 340,105 315,901
The Balance Sheet has been re-presented to provide separate disclosure for
provisions within current and non-current liabilities which were previously
disclosed within accruals. Further information is disclosed in Note 2 to the
Financial Statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
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 2020 3,286 99,507 932 (47,662) 19,375 248,949 324,387
Currency translation differences - - - - 5,945 - 5,945
Net income recognised directly in equity - - - - 5,945 - 5,945
Loss for the year ended 31 December 2020 - - - - - (5,742) (5,742)
Total comprehensive income/(expense) for the year - - - - 5,945 (5,742) 203
Purchase of shares held in employee benefit trust - - - (14,369) - - (14,369)
Exercise of share plans - 57 - - - 330 387
Reserve transfer when shares held in the employee benefit trust vest - - - 6,533 - (6,533) -
Credit in respect of share schemes - - - - - 5,275 5,275
Credit in respect of tax on share schemes - - - - - 18 18
- 57 - (7,836) - (910) (8,689)
Balance at 31 December 2020 and 1 January 2021 3,286 99,564 932 (55,498) 25,320 242,297 315,901
Currency translation differences - - - - (8,423) - (8,423)
Net expense recognised directly in equity - - - - (8,423) - (8,423)
Profit for the year ended 31 December 2021 - - - - - 118,356 118,356
Total comprehensive (expense)/income for the year - - - - (8,423) 118,356 109,933
Purchase of shares held in employee benefit trust - - - (10,369) - - (10,369)
Exercise of share plans - - - - - 16,431 16,431
Reserve transfer when shares held in the employee benefit trust vest - - - 18,529 - (18,529) -
Credit in respect of share schemes - - - - - 7,052 7,052
Credit in respect of tax on share schemes - - - - - 1,387 1,387
Dividends - - - - - (100,230) (100,230)
- - - 8,160 - (93,889) (85,729)
Balance at 31 December 2021 3,286 99,564 932 (47,338) 16,897 266,764 340,105
Condensed Consolidated Statement of Cash
Flows
For the year ended 31 December 2021
2021 2020
Note £'000 £'000
Profit before tax 166,645 15,544
Depreciation and amortisation charges 53,728 61,782
(Profit)/loss on sale of property, plant and equipment, and computer software (59) 262
Share scheme charges 7,052 5,275
Net finance costs 1,864 1,484
Operating cash flow before changes in working capital 229,230 84,347
(Increase)/decrease in receivables (115,318) 124,370
Increase/(decrease) in payables 72,372 (39,760)
Cash generated from operations 186,284 168,957
Income tax paid (37,046) (31,747)
Net cash from operating activities 149,238 137,210
Cash flows from investing activities
Purchases of property, plant and equipment (10,233) (4,892)
Purchases of intangible assets (18,130) (17,770)
Proceeds from the sale of property, plant and equipment, and computer software 2,629 918
Interest received 290 588
Net cash used in investing activities (25,444) (21,156)
Cash flows from financing activities
Dividends paid (100,230) -
Interest paid (841) (413)
Lease liability principal repayment (37,026) (39,234)
Issue of own shares for the exercise of options 16,431 387
Purchase of shares into the employee benefit trust (10,369) (14,369)
Net cash used in financing activities (132,035) (53,629)
Net increase in cash and cash equivalents (8,241) 62,425
Cash and cash equivalents at the beginning of the year 165,987 97,832
Exchange (loss)/gain on cash and cash equivalents (3,763) 5,730
Cash and cash equivalents at the end of the year 12 153,983 165,987
Notes to the consolidated preliminary
results
For the year ended 31 December 2021
1. Corporate information
PageGroup 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 2021 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 2021 were approved by the directors on 2 March 2022. The Annual
General Meeting of PageGroup plc will be held at the registered office, 200
Dashwood Lang Road, Addlestone, Surrey, KT15 2QW on 31 May 2022 at 9.30am.
2. 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 Accounting Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No.1606/2002 as it applies in the European
Union, 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 2021 and are presented in UK Sterling and all values
are rounded to the nearest thousand (UK £'000), except when otherwise
indicated.
It is the directors view that provisions are sufficiently material to be
separately disclosed within the balance sheet, where in previous years these
were disclosed within accruals. Accordingly, comparatives have been
represented on a consistent basis. No third balance sheet is presented because
the representation at the beginning of the comparative period is not
considered material. There is no impact on the income statement, cashflow or
net assets in the balance sheet as a result of this representation.
As a result, the balance sheet for 2020 includes current and non-current
provisions of £10.7m and an associated reduction in accruals.
Refer to Note 16 of the Group Annual Report and Accounts for disclosures in
accordance with IAS 37.
Going concern
The Board has undertaken a review of the Group's forecasts and associated
risks and sensitivities, considering the expected impact of COVID-19 on
trading in the period from the date of approval of the financial statements to
March 2023.
The Group had £154.0m of cash as at 31 December 2021, with no debt except for
IFRS 16 lease liabilities of £102.3m. Debt facilities relevant to the review
period comprise a committed £30m BBVA RCF (May 2023 maturity), an uncommitted
UK trade debtor discounting facility (up to £50m depending on debtor levels)
and an uncommitted £20m UK bank overdraft facility.
Throughout 2021, activity levels picked up in most of the Group's markets and
the cost control and cash preservation methods used in 2020 were not repeated.
However, due to the pandemic reductions in travel and entertaining expenses
remain. There continues to be a high degree of global macro-economic
uncertainty, as COVID-19 remains a significant issue and restrictions remain
in a number of countries across the Group.
However, given the analysis performed, there are no plausible downside
scenarios that we believe would cause an issue. As a result, given the
strength of performance in the year, the level of cash in the business and
Group's borrowing facilities, the geographical and discipline diversification,
limited concentration risk, as well as the ability to manage the cost base,
the Board has concluded that the Group has adequate resources to continue in
operational existence for the period through to March 2023.
Nature of financial information
The financial information contained within this preliminary announcement for
the 12 months to 31 December 2021 and 12 months to 31 December 2020 do not
comprise statutory financial statements for the purpose of the Companies Act
2006, but are derived from those statements. The statutory accounts for
PageGroup plc for the 12 months to 31 December 2020 have been filed with the
Registrar of Companies and those for the 12 months to 31 December 2021 will be
filed following the Company's Annual General Meeting.
The auditors' reports on the accounts for both the 12 months to 31 December
2021 and 12 months to 31 December 2020 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
2022.
New accounting standards, interpretations and amendments adopted by the
Group
The accounting policies adopted in the preparation of the condensed
consolidated preliminary results are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 31 December 2021.
The Group has not early adopted any 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 Board, 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
2021 2020 2021 2020
£'000 £'000 £'000 £'000
EMEA 869,574 717,294 431,960 319,360
Asia Pacific 282,008 215,959 179,296 121,113
Americas 220,671 154,257 138,520 88,791
United Kingdom 271,487 217,281 127,944 80,985
1,643,740 1,304,791 877,720 610,249
Operating Profit
2021 2020
£'000 £'000
EMEA 93,435 30,605
Asia Pacific 39,004 3,789
Americas 19,163 (7,021)
United Kingdom 16,908 (10,345)
Operating profit 168,510 17,028
Financial expense (1,865) (1,484)
Profit before tax 166,645 15,544
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
current 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
2021 2020 2021 2020
£'000 £'000 £'000 £'000
EMEA 285,573 230,350 201,748 163,961
Asia Pacific 132,995 111,090 64,405 54,899
Americas 94,581 80,662 43,789 41,071
United Kingdom 198,096 190,838 52,171 41,632
Segment assets/liabilities 711,245 612,940 362,113 301,563
Income tax 13,214 16,889 22,241 12,365
724,459 629,829 384,354 313,928
Property, Plant & Equipment Intangible Assets
2021 2020 2021 2020
£'000 £'000 £'000 £'000
EMEA 10,571 10,810 2,247 2,666
Asia Pacific 4,318 4,451 279 371
Americas 5,325 6,052 - 120
United Kingdom 4,622 5,088 46,639 38,648
24,836 26,401 49,165 41,805
Right-of-use assets Lease liabilities
2021 2020 2021 2020
£'000 £'000 £'000 £'000
EMEA 54,413 47,941 57,143 51,070
Asia Pacific 16,132 13,924 17,154 14,532
Americas 10,692 14,862 13,432 17,590
United Kingdom 13,719 18,687 14,611 20,277
94,956 95,414 102,340 103,469
The below analyses in notes (c) relates to the requirement of IFRS 16 to
disclose disaggregated revenue streams
(c) Revenue and gross profit generated from permanent and
temporary placements
Revenue Gross Profit
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Permanent 682,233 441,467 676,099 436,689
Temporary 961,507 863,324 201,621 173,560
1,643,740 1,304,791 877,720 610,249
The below analyses in notes (d) revenue and gross profit by discipline (being
the professions of candidates placed) and (e) revenue and gross profit by
strategic market have been included as additional disclosure over and above
the requirements of IFRS 8 "Operating Segments".
(d) Revenue and gross profit by discipline
Revenue Gross Profit
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Accounting and Financial Services 609,012 528,202 281,549 212,243
Legal, Technology, HR, Secretarial and Other 511,466 374,406 260,819 166,249
Engineering, Property & Construction, Procurement & Supply Chain 349,770 273,771 207,200 141,829
Marketing, Sales and Retail 173,492 128,412 128,152 89,928
1,643,740 1,304,791 877,720 610,249
(e) Revenue and gross profit by strategic market
Revenue Gross Profit
2021 2020 2021 2020
£'000 £'000 £'000 £'000
Large, Proven markets 867,634 728,736 406,618 289,202
Large, High Potential markets 551,547 397,166 332,539 218,196
Small and Medium, High Margin markets 224,559 178,889 138,563 102,851
1,643,740 1,304,791 877,720 610,249
4. Financial income / (expenses)
2021 2020
£'000 £'000
Financial income
Bank interest receivable 290 588
Financial expenses
Bank interest payable (841) (413)
Interest on lease liabilities (1,314) (1,659)
(2,155) (2,072)
5. Taxation
Tax on profit was £48.3m (2020: £21.3m). This represented an effective tax
rate of 29.0% (2020: 136.9%). The rate is higher than the effective UK
Corporation Tax rate for the year of 19.00% (2020: 19.00%) due to profits and
disallowable items of expenditure being generated in countries where
corporation tax rates are higher than in the UK.
6. Dividends
2021 2020
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2020 of 0.00p per ordinary share - -
(2019: 0.00p)
Interim dividend for the year ended 31 December 2021 of 4.70p per ordinary 14,998 -
share (2020: 0.00p)
Special dividend for the year ended 31 December 2021 of 26.71p per ordinary 85,232 -
share (2020: 0.00p)
100,230 -
Amounts proposed as distributions to equity holders in the year:
Proposed final dividend for the year ended 31 December 2021 of 10.30p per 32,912 -
ordinary share (2020: 0.00p)
The proposed final dividend had not been approved by the Board at 31 December
and therefore has not been included as a liability.
The proposed final dividend of 10.30p (2020: nil) per ordinary share will be
paid on 17 June 2022 to shareholders on the register at the close of business
on 20 May 2022.
7. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of £7.8m has been
recognised for share options and other share-based payment arrangements
(including social charges) (31 December 2020: £4.3m).
8. Earnings per ordinary share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 2021 2020
Earnings for basic and diluted earnings per share (£'000) 118,356 (5,742)
Number of shares
Weighted average number of shares used for basic earnings per share ('000) 318,237 319,664
Dilution effect of share plans ('000) 1,232 925
Diluted weighted average number of shares used for diluted earnings per share 319,469 320,589
('000)
Basic earnings per share (pence) 37.2 (1.8)
Diluted earnings per share (pence) 37.0 (1.8)
The above results all relate to continuing operations.
9. Property, plant and equipment
Acquisitions and Disposals
During the year ended 31 December 2021 the Group acquired property, plant and
equipment with a cost of £10.2m (2020: £4.9m).
Property, plant and equipment with a carrying amount of £2.2m were disposed
of during the year ended 31 December 2021 (2020: £0.8m), resulting in a loss
on disposal of £0.0m (2020: loss of £0.3m).
10. Trade and other receivables
2021 2020
£'000 £'000
Current
Trade receivables 265,727 197,195
Less allowance for expected credit losses and revenue reversals (11,086) (11,061)
Net trade receivables 254,641 186,134
Other receivables 7,018 4,393
Accrued income 81,186 51,282
Prepayments 12,952 10,667
355,797 252,476
Non-current
Other Receivables 12,849 13,169
11. Trade and other payables
2021 2020
£'000 £'000
Current
Trade payables 5,908 3,993
Other tax and social security 46,946 44,890
Other payables 34,698 35,664
Accruals 142,830 90,790
230,382 175,337
Non-current
Accruals 16,310 11,836
Other tax and social security 2,022 647
18,332 12,483
12. Cash and cash equivalents
2021 2020
£'000 £'000
Cash at bank and in hand 153,983 108,849
Short-term deposits - 57,138
Cash and cash equivalents 153,983 165,987
Cash and cash equivalents in the statement of cash flows 153,983 165,987
The Group operates multi-currency cash concentration and notional cash pools,
and an interest enhancement facility. The Eurozone subsidiaries and the
UK-based Group Treasury subsidiary participate in the cash concentration
arrangement, the Group Treasury subsidiary retains the notional cash pool and
the Asia Pacific subsidiaries operate the interest enhancement facility. The
structures facilitate interest compensation of cash whilst supporting working
capital requirements.
PageGroup maintains a Confidential Invoice Facility with HSBC whereby the
Group has the option to discount facilities in order to advance cash on its
receivables. The facility is used only ad hoc in case the Group needs to fund
any major GBP cash outflow.
13. Annual General Meeting
The Annual General Meeting of PageGroup plc will be held at 200 Dashwood Lang
Road, Addlestone, Surrey, KT15 2QW on 31 May 2022 at 9.30am.
14. 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:
https://www.page.com/presentations/year/2022
(https://www.page.com/presentations/year/2022)
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 2021. Certain
parts of the annual report are not included within this announcement.
We confirm that, to the best of our knowledge:-
a) that the consolidated financial statements, prepared in accordance with
UK-adopted international accounting standards, give a true and fair view of
the assets, liabilities, financial position and profit of the parent company
and 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 K Stagg
Chief Executive Officer Chief Financial Officer
2 March 2022 2 March 2022
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