REG - PageGroup plc - Full Year Results for the Year Ended 31 Dec 2022
09/03/2023 07:00
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RNS Number : 3673S PageGroup plc 09 March 2023
9 March 2023
Full Year Results for the Year Ended 31 December 2022
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 2022.
Financial summary 2022 2021 Change Change
CC*
Revenue £1,990.3m £1,643.7m +21.1% +19.3%
Gross profit £1,076.3m £877.7m +22.6% +20.2%
Operating profit £196.1m £168.5m +16.4% +14.3%
Profit before tax £194.4m £166.6m +16.6%
Basic earnings per share 43.7p 37.2p +17.5%
Diluted earnings per share 43.5p 37.0p +17.6%
Total dividend per share 15.67p 15.00p
(excl. special dividend)
Total dividend per share 42.38p 41.71p
(incl. special dividend)
HIGHLIGHTS*
· Group gross profit up 20.2% to £1,076.3m, a record year for the
Group
· Record operating profit of £196.1m (2021: £168.5m)
· Conversion rate** decreased to 18.2% (2021: 19.2%), reflecting lower
consultant productivity in H2
· Gross profit per fee earner down 0.6% in constant currencies, but up
1.4% in reported rates
· Record gross profit in 27 countries
· Fee earner headcount increased by 861 (14.2%) vs 2021, total closing
headcount of 9,020
· Strong cash position of £131.5m (2021: £154.0m)
· Total dividends of £133.2m paid during 2022
· Final dividend proposed of 10.76p per share (2021: 10.30p), resulting
in total dividend growth of 4.5% (excluding special dividends)
*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, Nicholas Kirk, Chief Executive Officer, said:
"2022 was a record year for the Group for both gross profit and operating
profit. Gross profit grew 20.2% in constant currencies vs. 2021, and in 27
countries we delivered our best performance on record, demonstrating the
strength of our globally diversified business model.
"Our strong focus on productivity resulted in significant gains in H1 2022
producing an H1 conversion rate of 21.4%. In H2, our Greater China business
was impacted significantly by the COVID lockdowns and restrictions. This was
combined with more challenging trading conditions and a softening in candidate
and client confidence across the majority of our markets in Q4. Overall for
the year, productivity was down 0.6% on 2021 and, as such, our conversion rate
was 18.2%, down from 19.2% in the prior year.
"Today the Board has proposed an increase in the final dividend of 4.5% to
10.76 pence per share, reflecting confidence in the continued strategic
progress of the Group, as well as the strength of our Balance Sheet. Combined
with the interim dividend of 4.91p and the special dividend of 26.71p, this
represents a total dividend of 42.38p.
"Looking forward, there remains a high level of global macro-economic and
political uncertainty in the majority of our markets. However, against this
backdrop, we continue to see candidate shortages and good levels of vacancies.
Given our highly diversified and adaptable business model, with a variable
cost base and a strong balance sheet, we believe we are well-positioned to
weather the uncertainty and continue to deliver strong shareholder returns."
Enquiries:
PageGroup plc +44 (0) 19 3226 4032
Nicholas Kirk, 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 8:30am today. The live presentation can be viewed by following
the link:
https://www.investis-live.com/pagegroup/63f34a374aa86d1500a936db/wesa
(https://protect-eu.mimecast.com/s/ZKZOCAP0nuN4D3K4IGYNlJ?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 80 85 28 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/2023
(https://www.page.com/presentations/year/2023)
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 comes from
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)
deliver organic, high-margin and diversified growth; 2) to position the
business to be scalable, efficient and highly flexible to reflect market
conditions and opportunities; 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
qualified 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 46 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 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 more recently designated two disciplines as being High Potential
disciplines, Technology and Healthcare & Life Sciences.
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 international 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. We are 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 2022 Annual Report and Accounts, which will be available to shareholders
in April 2023.
Sustainability
Our sustainability strategy continues to drive purposeful impact across
PageGroup. In 2022 we made strong progress against our ambitious targets. We
also continued to embed sustainability across the business, including through
the launch of a sustainability training programme across our Managing Director
population. From a social impact perspective, we changed approximately 135,000
lives in 2022. This is the highest number since we started measuring our
impact and another great step towards our target of changing over a million
lives by 2030. We change lives by placing candidates and working with
charities and other partners to break down the barriers to employment for
those from disadvantaged backgrounds. From an environmental perspective, we
increased the breadth of our scope 3 GHG emissions disclosures to include all
material categories and improved our data quality and processes. Overall,
scope 1 & 2 emissions decreased by 30% in 2022 due to the continued
success of our energy transition to renewables, as well as improvements in
data visibility. Scope 3 emissions in 2022 are higher than emissions in 2021
driven by headcount growth. 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 2022 (£m) 2021 (£m) % %
EMEA 50% 538.5 432.0 +24.7% +25.5%
Asia Pacific 18% 195.3 179.3 +8.9% +4.7%
Americas 18% 193.4 138.5 +39.6% +26.7%
UK 14% 149.1 127.9 +16.6% +16.6%
Total 100% 1,076.3 877.7 +22.6% +20.2%
Permanent 77% 826.3 676.1 +22.2% +19.2%
Temporary 23% 250.0 201.6 +24.0% +23.3%
At constant exchange rates, Group revenue increased 19.3% to £1,990.3m (2021:
£1,643.7m) and gross profit increased 20.2% to £1,076.3m (2021: £877.7m)
for the year ended 31 December 2022. Gross profit per fee earner decreased by
0.6% in constant currencies, but was up 1.4% in reported rates, to £159.4k,
(2021: £157.2k).
The Group's revenue and gross profit mix between permanent and temporary
placements were unchanged at 42:58 (2021: 42:58) and 77:23 (2021: 77:23)
respectively. Growth in permanent recruitment was stronger in the first half
of the year, whilst temporary growth improved in the second half, as trading
conditions became more challenging. Revenue from temporary placements
comprises the salaries of those placed, together with the margin charged. This
margin on temporary placements increased to 21.6% in 2022 (2021: 21.0%) and we
also saw an improvement in our permanent margin. Overall, pricing improved, as
we continued to see candidate shortages and high levels of vacancies in the
majority of our markets.
In our Large, High Potential markets category, which now represents 39% of the
Group (2021: 38%), gross profit increased 18% in constant currencies to
£417.3m. Excluding Greater China, which was impacted heavily by COVID
restrictions through H2, this growth rate was 27%.
Total Group headcount increased by 1,182 in the year to 9,020. This comprised
a net increase of 861 fee earners (+14.2%) and an increase of 321 operational
support staff (+18.2%). This additional headcount was primarily into our areas
of strategic investment, as well as those markets with the strongest trading
conditions. Compared with 2020 and 2021, a lower proportion of these fee
earner headcount additions were experienced hires, as the availability of
these hires has become more limited. Our support staff headcount additions
were made to support this fee earner growth, as well as build capabilities in
our newest brand, Page Outsourcing. As a result, our fee earner to operational
support staff ratio decreased marginally to 77:23 (2021: 78:22).
In total, administrative expenses increased 24.1% to £880.2m (2021:
£709.2m). The Group's operating profit from trading activities totalled
£196.1m (2021: £168.5m), an increase of 14.3% in constant currencies and
16.4% in reported rates.
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 £60.6m (2021: £53.7m).
The Group's conversion rate for the year decreased from 19.2% in 2022 to
18.2%. The conversion rate was higher in H1 at 21.4%, compared with H2 at
15.0%. This was due to the more challenging trading conditions experienced
through the second half in the majority of our markets, together with the
impact of COVID restrictions in Greater China.
EMEA was the Group's most profitable region in 2022, with a conversion rate of
22.7%, up from 21.6% in 2021. This improvement is due to the continued focus
on conversion across the region and despite macro-economic conditions becoming
more challenging in the second half of the year. Conversion in Asia Pacific
fell to 18.0% (2021: 21.8%) due primarily to the tough conditions in Greater
China. The Americas' conversion rate reduced to 9.2% from 13.8% in 2021, as a
result of the continued investments in these Large, High Potential Markets, as
well as the slowdown seen in the second half. In the UK, conversion increased
to 14.0% (13.2%) driven by improved productivity.
A net interest charge of £1.7m (2021: £1.9m) was primarily due to an IFRS 16
interest charge of £1.6m.
Earnings per share and dividends
In 2022, basic and diluted earnings per share increased to 43.7p and 43.5p
respectively (2021: 37.2p basic and 37.0p diluted), as a result of the
increase in profit from the record results.
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.
A proportion of the cash generated in excess of these first two priorities
will be returned to shareholders through supplementary returns, using special
dividends or share buybacks.
Given the strong results in 2022, combined with high levels of surplus cash,
we paid an interim dividend of 4.91 pence per share, an increase of 4.5% over
the 2021 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 £100.5m, paid out in October 2022.
The Board has proposed a final dividend of 10.76p (2021: 10.30p) per ordinary
share, up 4.5% on the 2021 final dividend. When taken together with the
interim dividend of 4.91p (2021: 4.70p) per ordinary share, this is an
increase in the total dividend for the year of 4.5%. The proposed final
dividend, which amounts to £34.2m, will be paid on 19 June 2023 to
shareholders on the register as at 19 May 2023, subject to shareholder
approval at the Annual General Meeting on 1 June 2023.
We will continue to monitor our cash position in 2023 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 £246.4m (2021: £186.3m) generated
from operations. The closing cash balance was £131.5m at 31 December 2022
(2021: £154.0m). The decrease on 2021, despite the stronger results, is due
primarily to the cash returned to shareholders through the payment of
dividends in the year, totalling £133.2m.
On 9 December 2022, PageGroup entered into a five year £80m committed
multi-currency revolving credit facility agreement with HSBC and BBVA. In
addition, PageGroup maintains an uncommitted Confidential Invoice Facility
with HSBC whereby the Group has the option to discount receivables in order to
advance cash. The invoice Facility is for up to £50m depending on debtor
levels. Neither of these facilities were drawn as at 31 December 2022. These
facilities are used on an ad hoc basis to fund any major Group GBP cash
outflows.
Income tax paid in the year was £61.6m (2021: £37.0m) and net capital
expenditure was £29.6m (2021: £25.7m).
Total dividends of £133.2m were paid in 2022 (2021: £100.2m). The lower
share price in 2022 meant that there was a decrease in cash receipts from
share option exercises, with £0.4m in 2022, compared to £16.4m in 2021. In
2022, £14.8m (2021: £10.4m) 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 £307.8m at 31 December 2022 (2021: £254.6m), 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 significant increase in the debtor book as a result of
the strong trading conditions in a large part of the year.
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA is the Group's largest region, contributing 50% 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
(50% of Group in 2022) 2022 2021 Reported CC
Gross Profit 538.5 432.0 +24.7% +25.5%
Operating Profit 122.1 93.4 +30.7% +32.0%
Conversion Rate (%) 22.7% 21.6%
In constant currencies, revenue grew 23.7% to £1,069.3m (2021: £869.6m) and
gross profit grew 25.5% to £538.5m (2021: £432.0m).
2022 represented a record year for EMEA, with strong performances delivered
throughout the region. France, the Group's second largest market, grew 17%,
with good growth across both Michael Page and Page Personnel, up 18% and 16%,
respectively. Germany, our third largest market, grew 31% for the year against
a tough comparator in 2021, with the standout performance in our
Technology-focused Interim business, up 46%. In our other European markets,
Benelux grew 31% and Southern Europe was up 30%, with record results in all
four markets of Italy, Spain, Portugal and Turkey. The Middle East and Africa
grew 22%.
2022 operating profit increased 32.0% in constant currencies to £122.1m
(2021: £93.4m), with a conversion rate of 22.7% (2021: 21.6%). The region had
the highest conversion rate in the Group, despite the tougher macro-economic
conditions in the second half of the year. Headcount across the region
increased by 637 (+18.5%) during the year, to 4,085 at the end of 2022 (2021:
3,447).
ASIA PACIFIC
Asia Pacific represented 18% of the Group's gross profit in 2022, with 79% of
the region being Asia and 21% 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, more than 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 87% and temporary placements only 13% 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
(18% of Group in 2022) 2022 2021 Reported CC
Gross Profit 195.3 179.3 +8.9% +4.7%
Operating Profit 35.2 39.0 -9.6% -12.1%
Conversion Rate (%) 18.0% 21.8%
In Asia Pacific, in constant currencies, revenue grew 8.8% to £318.4m (2021:
£282.0m) and gross profit grew 4.7% to £195.3m (2021: £179.3m).
We delivered record gross profit in Asia Pacific, up 4.7% against 2021. This
was achieved despite the adverse impact of COVID restrictions on Greater
China. Greater China declined 16% with Mainland China down 23% and Hong Kong
down 8%. This was due initially to the COVID lockdowns, with the subsequent
relaxation of restrictions and resulting high infection rate also impacting
activity levels. South East Asia delivered a record year, up 22%, with
Singapore up 10%. India and Japan also achieved record results, up 39% and
10%, respectively. Australia continued its post-pandemic recovery and grew 12%
versus 2021.
Operating profit declined 12.1% in constant currencies to £35.2m (2021:
£39.0m), with the conversion rate decreasing to 18.0% (2021: 21.8%). This was
driven by the decline in productivity of 11% in the year, due primarily to the
challenging trading conditions in Greater China. Headcount across the region
increased 133 (7.8%) in the year, ending the year at 1,842 (2021: 1,709).
THE AMERICAS
The Americas accounted for 18% of the Group's gross profit in 2022, with North
America representing 62% of the region and Latin America, 38%. The US and
Latin America are two of our Large, High Potential markets. The US, where we
have 8 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 real competitive advantage.
Latin America is a highly under-developed region, where PageGroup enjoys the
market leading position with over 1,000 employees in seven countries. There
are few international competitors and none with regional scale. Across the
Americas, permanent placements accounted for 89% of gross profit and temporary
placements 11%.
Americas £m Growth rates
(18% of Group in 2022) 2022 2021 Reported CC
Gross Profit 193.4 138.5 +39.6% +26.7%
Operating Profit 17.9 19.2 -6.7% -26.3%
Conversion Rate (%) 9.2% 13.8%
In constant currencies revenue increased 17.6% to £282.9m (2021: £220.7m)
while gross profit was up 26.7% to £193.4m (2021: £138.5m), making the
Americas our fastest growing region in 2022.
In North America, gross profit increased 24%, with record years delivered by
both our US and Canada markets. The US grew 23% due to strong trading
conditions and the continued growth of our newer disciplines, including
Technology. We also saw good growth in Construction, our largest discipline in
the US, although we saw a slowing in residential builds and reduced funding
for commercial projects through H2.
Latin America also delivered a record year, with gross profit up 30%. Brazil
was up 17%, Mexico up 25% and the other five countries increased 45%,
collectively. Our newest brand Page Outsourcing performed ahead of plan in
Latin America, with potential for strong future growth.
Despite the strong growth in 2022, operating profit decreased to £17.9m
(2021: £19.2m), with a conversion rate of 9.2% (2021: 13.8%). The conversion
rate in H1 increased, from 14.3% in H1 2021 to 14.7%. However, more
challenging trading conditions in H2, combined with the ongoing headcount
investment in the 2 Large, High Potential geographic markets in the region,
resulted in a lower overall conversion rate. Headcount across the region
increased by 309 (+22.4%) in 2022 to 1,690 (2021: 1,381).
UNITED KINGDOM
The UK represented 14% of the Group's gross profit in 2022, 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 74% and temporary placements 26% 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 increase the size and breadth of our reach under the higher
salary-level Page Executive brand.
UK £m
(14% of Group in 2022) 2022 2021 Growth rate
Gross Profit 149.1 127.9 +16.6%
Operating Profit 20.9 16.9 +23.4%
Conversion Rate (%) 14.0% 13.2%
In the UK, revenue increased 17.7% on 2021 to £319.6m (2021: £271.5m),
whilst gross profit increased 16.6% from £127.9m in 2021 to £149.1m. Michael
Page grew 4% and Page Personnel 57%. Trading conditions continued to improve
in Page Personnel, which operates at lower salary levels and had been slower
to recover post-pandemic.
Operating profit for the year increased to £20.9m (2021: £16.9m), with the
conversion rate improving to 14.0% (2021: 13.2%). This was due to the improved
productivity achieved in the year, although the conversion rate was lower in
the second half as trading conditions slowed. Headcount increased 103 (+7.9%)
in the year to 1,404 at the end of December 2022 (2021: 1,301).
OTHER FINANCIAL ITEMS
Foreign exchange
Foreign exchange had a favourable impact on the Group's results for the year,
increasing revenue by c. £29m, gross profit by c. £22m and operating profit
by c. £3m.
Taxation
The tax charge for the year was £55.4m (2021: £48.3m). This represented an
effective tax rate of 28.5% (2021: 29.0%). The rate is higher than the
effective UK rate for the calendar year of 19% (2021: 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.
In 2022, the tax rate was impacted primarily by higher tax in overseas
countries (6.7%), derecognition of losses and other tax attributes of (2.4%),
prior year adjustments of (-0.3%), and other permanent differences (0.9%),
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 2022 the Group had 7.9m share options outstanding, of
which 3.8m had vested, but had not been exercised. During the year, options
were granted over 2.2m shares under the Group's share option plans. Options
were exercised over 0.1m shares, generating £0.4m in cash, and options lapsed
over 0.1m shares. At the end of 2022, options remained outstanding over 9.8m
shares, of which 5.7m had vested, but had not been exercised. During 2022,
2.9m shares were purchased for the Group's Employee Benefit Trust, and no
shares were cancelled (2021: 2.2m 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 2022: Gross profit increased 20.2% in constant currencies
and 22.6% in reported rates against 2021. This was driven by strong trading
conditions and the success of our strategic investments made over recent
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 2022: Geographic regions: The percentage outside of the UK
increased from 85.4% in 2021 to 86.1% in 2022, largely as a result of the
strong performance by our regions outside of the UK, with all 3 of our other
regions achieving a record year.
Disciplines: The percentage increased to 68.1% from 67.9% in 2021, as the
Group saw significant growth in disciplines such as Technology during 2022.
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 2022: The ratio remained consistent with 2021 at 77:23.
Growth was stronger in permanent recruitment during H1, when trading
conditions were particularly strong. In H2, growth in temporary recruitment
was stronger, driven by greater market uncertainty, with temporary recruitment
giving clients more flexibility.
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 2022: The Group saw a 17.5% increase in Basic EPS to
43.7p, due to the strong operating results for the year.
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 2022: Cash decreased to £131.5m (2021: £154.0m). The
Group generated strong cash in 2022, offset by total dividends paid, totalling
£133.2m.
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 2022: Net fee earner headcount increased by 861, or +14.2%
in the year, resulting in 6,943 fee earners at the end of the year. We have
continued to invest, particularly in certain areas of the Group such as
Technology, Contracting, Healthcare and Life Sciences, as well as in those
markets where we saw the highest growth potential.
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 2022: Productivity decreased 0.6% in constant currencies,
but increased 1.4% in reported rates, to £159.4k (2021: £157.2k). Excluding
Greater China, which was impacted significantly by COVID restrictions,
productivity increased by 1%.
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 2022: The ratio decreased to 77:23 from 78:22 in 2021.
This was driven by operational support headcount additions of 321 (18.2%), to
support the fee earner headcount growth of 861 (14.2%), as well as build
capabilities in our newest brand, Page Outsourcing.
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 2022: The Group's conversion rate for the year decreased
to 18.2% (2021: 19.2%). The conversion rate was higher in H1, at 21.4%
compared with H2, at 15.0%, due to the more challenging trading conditions,
particularly in Q4.
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 2022: We recorded an 87% positive score for employee
engagement in the latest Employee Engagement Survey in 2022. This compares
with 82% in the last equivalent survey performed in 2021. The 2022 survey was
a combination of questions, including: how valued our people felt; how proud
they were to work for PageGroup; and how they can see their work relates to
PageGroup's purpose of changing lives.
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 2022: The average tenure of the Group's management
decreased slightly to 12.3 years (2021: 13.0 years). This was due to a
significant number of promotions to director in the year.
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 CO(2)e impact of
our operations in absolute terms.
How we performed in 2022: Total GHG emissions (scope 1, 2 and 3) increased by
23% to 65,311 tCO(2)e. Increases were due to scope 3 increases driven by
headcount growth, as well as increases in procurement activity and business
travel. Operational emissions (scope 1 and 2 emissions) reduced by 30% to
2,982 tCO(2)e due to the continued transition of our offices to renewable
energy, showing continued progress against our operational net zero target.
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 2022: Tonnes of CO(2)e per employee increased by 1% to 7.2
Tonnes of CO(2)e per employee, as our absolute GHG emissions have increased in
line with 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 2022 DEFRA conversion
factors. Purchased goods and services and commuting has been included in 2022
for the first time and 2021 emissions figures have been retrospectively
calculated. The movements in KPIs are in line with expectations.
Nicholas Kirk Kelvin Stagg
Chief Executive Officer Chief Financial Officer
8 March 2023 8 March 2023
Consolidated Income Statement
For the year ended 31 December 2022
2022 2021
Note £'000 £'000
Revenue 3 1,990,287 1,643,740
Cost of sales (913,993) (766,020)
Gross profit 3 1,076,294 877,720
Administrative expenses (880,215) (709,210)
Operating profit 3 196,079 168,510
Financial income 4 1,104 290
Financial expenses 4 (2,817) (2,155)
Profit before tax 3 194,366 166,645
Income tax expense 5 (55,354) (48,289)
Profit for the year 139,012 118,356
Attributable to:
Owners of the parent 139,012 118,356
Earnings per share
Basic earnings per share (pence) 8 43.7 37.2
Diluted earnings per share (pence) 8 43.5 37.0
The above results all relate to continuing operations
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
2022 2021
£'000 £'000
Profit for the year 139,012 118,356
Other comprehensive income for the year
Items that may subsequently be reclassified to profit and loss:
Currency translation differences 15,441 (8,423)
Total comprehensive income for the year 154,453 109,933
Attributable to:
Owners of the parent 154,453 109,933
Consolidated Balance Sheet
As at 31 December 2022
2022 2021
Note £'000 £'000
Non-current assets
Property, plant and equipment 9 36,123 24,836
Right-of-use assets 100,996 94,956
Intangible assets - Goodwill and other intangible 1,955 2,065
- Computer software 38,045 47,100
Deferred tax assets 18,641 19,659
Other receivables 10 13,224 12,849
208,984 201,465
Current assets
Trade and other receivables 10 437,247 355,797
Current tax receivable 17,233 13,214
Cash and cash equivalents 12 131,480 153,983
585,960 522,994
Total assets 3 794,944 724,459
Current liabilities
Trade and other payables 11 (289,108) (230,382)
Provisions (2,772) (6,755)
Lease liabilities (31,268) (30,125)
Current tax payable (18,050) (22,241)
(341,198) (289,503)
Net current assets 244,762 233,491
Non-current liabilities
Other payables 11 (14,951) (18,332)
Lease liabilities (78,564) (72,215)
Deferred tax liabilities (1,345) (354)
Provisions (6,683) (3,950)
(101,543) (94,851)
Total liabilities 3 (442,741) (384,354)
Net assets 352,203 340,105
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 (56,626) (47,338)
Currency translation reserve 32,338 16,897
Retained earnings 272,709 266,764
Total equity 352,203 340,105
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Called-up Reserve
share for shares
capital held in the
£'000 employee
benefit trust
£'000
Share Capital Currency
premium redemption translation
£'000 reserve reserve
£'000 £'000
Retained Total
earnings equity
£'000 £'000
Balance at 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 and 1 January 2022 3,286 99,564 932 (47,338) 16,897 266,764 340,105
Currency translation differences - - - - 15,441 - 15,441
Net income recognised directly in equity - - - - 15,441 - 15,441
Profit for the year ended 31 December 2022 - - - - - 139,012 139,012
Total comprehensive income for the year - - - - 15,441 139,012 154,453
Purchase of shares held in employee benefit trust - - - (14,838) - - (14,838)
Exercise of share plans - - - - - 447 447
Reserve transfer when shares held in the employee benefit trust vest - - - 5,550 - (5,550) -
Credit in respect of share schemes - - - - - 5,989 5,989
Debit in respect of tax on share schemes - - - - - (706) (706)
Dividends - - - - - (133,247) (133,247)
- - - (9,288) - (133,067) (142,355)
Balance at 31 December 2022 3,286 99,564 932 (56,626) 32,338 272,709 352,203
Condensed Consolidated Statement of Cash
Flows
For the year ended 31 December 2022
2022 2021
Note £'000 £'000
Profit before tax 194,366 166,645
Depreciation and amortisation charges 60,592 53,728
Loss/(Profit) on sale of property, plant and equipment, and computer software 4,398 (59)
Share scheme charges 5,989 7,052
Net finance costs 1,713 1,864
Operating cash flow before changes in working capital 267,058 229,230
Increase in receivables (61,509) (115,318)
Increase in payables 40,821 72,372
Cash generated from operations 246,370 186,284
Income tax paid (61,598) (37,046)
Net cash from operating activities 184,772 149,238
Cash flows from investing activities
Purchases of property, plant and equipment (21,982) (10,233)
Purchases of intangible assets (9,693) (18,130)
Proceeds from the sale of property, plant and equipment, and computer software 2,080 2,629
Interest received 1,104 290
Net cash used in investing activities (28,491) (25,444)
Cash flows from financing activities
Dividends paid (133,247) (100,230)
Interest paid (1,213) (841)
Lease liability principal repayment (35,896) (37,026)
Issue of own shares for the exercise of options 447 16,431
Purchase of shares into the employee benefit trust (14,838) (10,369)
Net cash used in financing activities (184,747) (132,035)
Net decrease in cash and cash equivalents (28,466) (8,241)
Cash and cash equivalents at the beginning of the year 153,983 165,987
Exchange gain/(loss) on cash and cash equivalents 5,963 (3,763)
Cash and cash equivalents at the end of the year 12 131,480 153,983
Notes to the consolidated preliminary
results
For the year ended 31 December 2022
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 2022 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 2022 were approved by the directors on 8 March 2023. The Annual
General Meeting of PageGroup plc will be held at the registered office, 200
Dashwood Lang Road, Addlestone, Surrey, KT15 2QW on 1 June 2023 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
Section 408 of the Companies Act 2006 and UK-adopted International Accounting
Standards (IFRSs), 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 2022 and are presented in UK Sterling and all values
are rounded to the nearest thousand (UK £'000), except when otherwise
indicated.
Going concern
The Board has undertaken a review of the Group's forecasts and associated
risks and sensitivities, in the period from the date of approval of the
financial statements to 31 March 2024 (review period).
The Group had £131.5m of cash as at 31 December 2022, with no debt except for
IFRS 16 lease liabilities of £109.8m. Debt facilities relevant to the review
period comprise a committed £80m RCF maturing December 2027, an uncommitted
UK trade debtor discounting facility (up to £50m depending on debtor levels)
and an uncommitted £20m UK bank overdraft facility.
Despite the macroeconomic and political uncertainty that currently exists, and
its inherent risk and impact on the business, based on the analysis performed
there are no plausible downside scenarios that the Board believes would cause
a liquidity issue. As a result, given the strength of performance in 2022, the
level of cash in the business and Group's borrowing facilities, the
geographical and discipline diversification, limited customer 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 31 March 2024.
Nature of financial information
The financial information contained within this preliminary announcement for
the 12 months to 31 December 2022 and 12 months to 31 December 2021 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 2021 have been filed with the
Registrar of Companies and those for the 12 months to 31 December 2022 will be
filed following the Company's Annual General Meeting.
The auditors' reports on the accounts for both the 12 months to 31 December
2022 and 12 months to 31 December 2021 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
2023.
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 2022.
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective, that has had a material impact on
the financial statements.
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
2022 2021 2022 2021
£'000 £'000 £'000 £'000
EMEA 1,069,346 869,574 538,488 431,960
Asia Pacific 318,359 282,008 195,276 179,296
Americas 282,942 220,671 193,397 138,520
United Kingdom 319,640 271,487 149,133 127,944
1,990,287 1,643,740 1,076,294 877,720
Operating Profit
2022 2021
£'000 £'000
EMEA 122,079 93,435
Asia Pacific 35,244 39,004
Americas 17,885 19,163
United Kingdom 20,871 16,908
Operating profit 196,079 168,510
Financial expense (1,713) (1,865)
Profit before tax 194,366 166,645
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 assets.
(b) Segment assets, liabilities and non-current assets by
reportable segment
Total Assets Total Liabilities
2022 2021 2022 2021
£'000 £'000 £'000 £'000
EMEA 338,251 285,573 248,585 201,748
Asia Pacific 128,299 132,995 69,995 64,405
Americas 116,647 94,581 60,635 43,789
United Kingdom 194,514 198,096 45,476 52,171
Segment assets/liabilities 777,711 711,245 424,691 362,113
Income tax 17,233 13,214 18,050 22,241
794,944 724,459 442,741 384,354
Property, Plant & Equipment Intangible Assets
2022 2021 2022 2021
£'000 £'000 £'000 £'000
EMEA 14,072 10,571 2,296 2,247
Asia Pacific 6,194 4,318 110 279
Americas 7,378 5,325 5 -
United Kingdom 8,479 4,622 37,589 46,639
36,123 24,836 40,000 49,165
Right-of-use assets Lease liabilities
2022 2021 2022 2021
£'000 £'000 £'000 £'000
EMEA 61,760 54,413 65,136 57,143
Asia Pacific 17,415 16,132 20,042 17,154
Americas 11,950 10,692 14,434 13,432
United Kingdom 9,871 13,719 10,220 14,611
100,996 94,956 109,832 102,340
The below analyses in notes (c) and (d) relates to the requirement of IFRS 15
to disclose disaggregated revenue by streams and region.
(c) Revenue and gross profit generated from permanent and
temporary placements
Revenue Gross Profit
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Permanent 832,014 682,233 826,321 676,099
Temporary 1,158,273 961,507 249,973 201,621
1,990,287 1,643,740 1,076,294 877,720
(d) Revenue generated from permanent and temporary placements by
reportable segment
Permanent Temporary
2022 2021 2022 2021
£'000 £'000 £'000 £'000
EMEA 380,002 303,762 689,344 565,812
Asia Pacific 170,029 158,329 148,330 123,679
Americas 170,970 123,545 111,972 97,126
United Kingdom 111,013 96,597 208,627 174,890
832,014 682,233 1,158,273 961,507
The below analyses in notes (e) revenue and gross profit by discipline (being
the professions of candidates placed) and (f) revenue and gross profit by
strategic market have been included as additional disclosure over and above
the requirements of IFRS 8 "Operating Segments".
(e) Revenue and gross profit by discipline
Revenue Gross Profit
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Accounting and Financial Services 720,783 609,012 343,659 281,549
Legal, Technology, HR, Secretarial and Other 667,543 511,466 334,772 260,819
Engineering, Property & Construction, Procurement & Supply Chain 400,959 349,770 251,686 207,200
Marketing, Sales and Retail 201,002 173,492 146,177 128,152
1,990,287 1,643,740 1,076,294 877,720
(f) Revenue and gross profit by strategic market
Revenue Gross Profit
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Large, Proven markets 1,015,599 867,634 483,627 406,618
Large, High Potential markets 688,925 551,547 417,296 332,539
Small and Medium, High Margin markets 285,763 224,559 175,371 138,563
1,990,287 1,643,740 1,076,294 877,720
4. Financial income / (expenses)
2022 2021
£'000 £'000
Financial income
Bank interest receivable 1,104 290
Financial expenses
Bank interest payable (1,213) (841)
Interest on lease liabilities (1,604) (1,314)
(2,817) (2,155)
5. Taxation
Tax on profit was £55.4m (2021: £48.3m). This represented an effective tax
rate of 28.5% (2021: 29.0%). The rate is higher than the effective UK
Corporation Tax rate for the year of 19.0% (2021: 19.0%) due to profits and
disallowable items of expenditure being generated in countries where
corporation tax rates are higher than in the UK.
6. Dividends
2022 2021
£'000 £'000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2021 of 10.30p per ordinary 32,740 -
share (2020: 0.00p)
Interim dividend for the year ended 31 December 2022 of 4.91p per ordinary 15,607 14,998
share (2021: 4.70p)
Special dividend for the year ended 31 December 2022 of 26.71p per ordinary 84,900 85,232
share (2021: 26.71p)
133,247 100,230
Amounts proposed as distributions to equity holders in the year:
Proposed final dividend for the year ended 31 December 2022 of 10.76p per 34,207 32,912
ordinary share (2021: 10.30p)
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 10.76p (2021: 10.30p) per ordinary share will
be paid on 19 June 2023 to shareholders on the register at the close of
business on 19 May 2023.
7. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of £6.0m has been
recognised for share options and other share-based payment arrangements
(including social charges) (31 December 2021: £7.8m).
8. Earnings per ordinary share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 2022 2021
Earnings for basic and diluted earnings per share (£'000) 139,012 118,356
Number of shares
Weighted average number of shares used for basic earnings per share ('000) 318,166 318,237
Dilution effect of share plans ('000) 1,204 1,232
Diluted weighted average number of shares used for diluted earnings per share 319,370 319,469
('000)
Basic earnings per share (pence) 43.7 37.2
Diluted earnings per share (pence) 43.5 37.0
The above results all relate to continuing operations.
9. Property, plant and equipment
Acquisitions and Disposals
During the year ended 31 December 2022 the Group acquired property, plant and
equipment with a cost of £22.0m (2021: £10.2m).
10. Trade and other receivables
2022 2021
£'000 £'000
Current
Trade receivables 320,794 265,727
Less allowance for expected credit losses (12,960) (11,086)
Net trade receivables 307,834 254,641
Other receivables 21,535 7,018
Accrued income 88,951 81,186
Prepayments 18,927 12,952
437,247 355,797
Non-current
Other Receivables 13,224 12,849
11. Trade and other payables
2022 2021
£'000 £'000
Current
Trade payables 11,101 5,908
Other tax and social security 61,079 46,946
Other payables 36,629 34,698
Accruals 180,299 142,830
289,108 230,382
Non-current
Other tax and social security 422 2,022
Accruals 14,529 16,310
14,951 18,332
12. Cash and cash equivalents
2022 2021
£'000 £'000
Cash at bank and in hand 131,480 153,983
Short-term deposits - -
Cash and cash equivalents 131,480 153,983
Cash and cash equivalents in the statement of cash flows 131,480 153,983
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. On 9 December 2022, PageGroup entered into a five year £80m
committed multi-currency revolving credit facility agreement with HSBC and
BBVA. Neither of these facilities were drawn as at 31 December 2022. These
facilities are used on an ad hoc basis to fund any major Group GBP cash
outflows.
13. Annual General Meeting
The Annual General Meeting of PageGroup plc will be held at 200 Dashwood Lang
Road, Addlestone, Surrey, KT15 2QW on 1 June 2023 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/2023
(https://www.page.com/presentations/year/2023)
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 2022. 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
N Kirk K Stagg
Chief Executive Officer Chief Financial Officer
8 March 2023 8 March 2023
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