TIDMPAGE
RNS Number : 9044U
PageGroup plc
09 April 2021
9 April 2021
PAGEGROUP PLC
FIRST QUARTER 2021 TRADING UPDATE
Q1 Highlights*
-- Group gross profit of GBP184.2m, +2.0% vs. Q1 2020 and -9.9% vs. Q1 2019
-- Monthly sequential improvement through the quarter, exiting
March at +31% vs. 2020 and -2% vs. 2019
-- Large, High Potential markets (36% of Group) +10%
-- EMEA +3.6%: France -7%; Germany +15%
-- Asia Pacific +15.3%: Greater China +45%; SE Asia +12%; India +15%
-- Americas -4.3%: US -9%; Latin America +4%
-- UK -11.0%: Michael Page -5%; Page Personnel -27%
-- Strong cash position, net cash of c. GBP136m (Q4 2020: GBP166m, Q1 2020: GBP83m)
-- Increase in fee earner headcount of 122 to 5,267 (Q1 2020: 5,923)
Outlook
-- Full year operating profit expected to be within the range of GBP90m - GBP100m
* In constant currencies except where stated otherwise
Q1 Gross Profit Analysis
Given the magnitude of the impact of COVID-19 in 2020, we are
also including comparisons against 2019 to ensure the most
appropriate representation of current trading.
Reported (GBPm) Constant vs. 2020 Constant
vs. 2019
Year-on-year % of Group Q1 2021 Q1 2020 % % %
----------- -------- -------- ------- ------------------ ----------
EMEA 52% 95.9 91.2 +5.1% +3.6% -8.4%
----------- -------- -------- ------- ------------------ ----------
Asia Pacific 19% 35.9 31.3 +14.8% +15.3% -4.2%
----------- -------- -------- ------- ------------------ ----------
Americas 15% 26.8 30.9 -13.5% -4.3% -5.6%
----------- -------- -------- ------- ------------------ ----------
UK 14% 25.6 28.9 -11.0% -11.0% -25.1%
----------- -------- -------- ------- ------------------ ----------
Total 100% 184.2 182.3 +1.0% +2.0% -9.9%
----------- -------- -------- ------- ------------------ ----------
Steve Ingham, Chief Executive Officer, PageGroup, said:
"Throughout the pandemic we have continued to focus on the
protection and wellbeing of our employees, candidates and clients,
whilst progressing strategic investments in our platform to take
advantage of the recovery.
"I am pleased to report that year-on-year results in each of the
three months of the first quarter improved sequentially, continuing
the monthly trend since May last year. January and February were
down 13% and 10% respectively, compared to 2020, with March growing
31%. Significantly, our performance in March was down just 2% on
2019. This noticeable improvement in March was seen throughout the
Group and was achieved despite the backdrop of continued and
increasing restrictions or lockdowns in many of our markets. We
delivered record months in March in markets such as Germany, Italy,
Spain and South East Asia. At this stage of the recovery, it is not
easy to determine whether the improved performance is the result of
pent-up supply and demand, or the beginning of a sustainable trend.
Our fee earner headcount is currently down 12.6% on the
pre-pandemic levels in 2019. As visibility develops, our fee earner
headcount will react accordingly.
"We remain confident in our strategy of maintaining and
investing in our platform by continuing to invest carefully in
headcount, exemplified by the 400 experienced hires we added in
2020, plus a further 200 added in Q1 2021, as well as rolling-out
new technology and innovation. We are the clear leader in many of
our markets, with a highly experienced senior management team,
which, we believe, positions us well to take advantage of
opportunities to grow and improve our business. We have maintained
our focus on driving progress towards our long-term strategic
goals.
"Looking ahead, there continues to be a high degree of global
macro-economic uncertainty as COVID-19 remains a significant issue
and lockdowns have returned in a number of the Group's markets.
However, and notwithstanding the early stage in the year, the
strength of our performance in Q1, and notably in March, has
increased confidence in our outlook for the year. Subject to other
unexpected events, we now expect full year operating profit to be
within the range of GBP90m - GBP100m."
Headcount
We reduced our fee earner headcount by 882 in 2020, primarily
those on performance review or those with very limited experience
in recruitment. This was net of adding c. 400 experienced fee
earners. As conditions continued to improve in Q1, we increased our
fee earner headcount by 122. Our operational support headcount rose
by 19, and, as such, our ratio of fee earners to operational
support staff was maintained at 77:23. Overall, the Group had 5,267
fee earners and a total headcount of 6,835.
Geographical Analysis (unless otherwise stated all growth rates
are in constant currency)
EMEA Gross Profit (GBPm) Growth Rates
(52% of Group) Reported Constant Constant
vs. 2020 vs. 2019
---------- ---------- ---------- ---------- ----------
Q1 2021 vs. Q1 2020 95.9 91.2 +5.1% +3.6% -8.4%
---------- ---------- ---------- ---------- ----------
* March +35.0%, -2.6% vs 2019
* France (15% of Group) -7%
* Germany (11% of Group) +15%
* Southern Europe +18%
o Italy +19%
o Spain +18%
* Benelux -6%
* Middle East and Africa, flat
Headcount at 31 March 2021: 3,048 (31 December 2020: 2,979)
In Europe, Middle East and Africa, the improvement in trading
conditions we experienced at the end of Q4 2020 continued into Q1,
which was up 3.6% overall. However, this was partly as a result of
the weak comparator in March 2020, when the region started to be
impacted by the COVID-19 pandemic. Against Q1 2019, we were down
8.4%. France, currently our largest market declined 7% (-19% vs
2019). March showed an improvement, exiting the quarter up 23%
(-15% vs. 2019). With a higher proportion of temporary workers,
Page Personnel was impacted more significantly by the lockdown. The
Netherlands performed similarly to France. However, Germany, the
Group's third largest market, delivered a record quarter, up 15%,
with March up 37% (+17% vs. 2019). Belgium, Italy and Spain exited
the quarter up 17%, 104% and 74% respectively vs. 2020 and up 11%,
6% and 7% vs. 2019, with Italy and Spain delivering record months
in March.
Asia Pacific Gross Profit (GBPm) Growth Rates
(19% of Group) Reported Constant Constant
vs. 2020 vs.
2019
---------- ---------- --------- ----------- ---------
Q1 2021 vs. Q1 2020 35.9 31.3 +14.8% +15.3% -4.2%
---------- ---------- --------- ----------- ---------
* March +37.6%, +5.5% vs 2019
* Asia (15% of Group) +22%
o Greater China (8% of Group and 50% of Asia) +45%
o Mainland China +66%
o Hong Kong +25%
* South East Asia +12%
o Singapore, flat
* India +15%
* Japan -2%
* Australia -4%
Headcount at 31 March 2021: 1,463 (31 December 2020: 1,385)
In Asia Pacific, gross profit for Q1 was up 15.3%. Mainland
China was up 66% for the quarter (+16% vs. 2019). We exited the
quarter up 26% on 2019. Whilst Hong Kong was up 25%, we remain down
35% on Q1 2019. Overall, Greater China grew 45% for the quarter.
South East Asia delivered a record month in March and was up 12%
for the quarter, with Singapore flat. Japan was down 2% against a
strong comparator of +5% in Q1 2020. India delivered a record
quarter, growing 15%, up from -3% in Q4 2020 and exited the quarter
up 41% compared to 2019. Australia declined 4%, a significant
improvement from a decline of 26% in Q4, with March up 4% on
2019.
Americas Gross Profit (GBPm) Growth Rates
(15% of Group) Reported Constant Constant
vs. vs.
2020 2019
----------- --------- ---------- ---------- ----------
Q1 2021 vs. Q1 2020 26.8 30.9 -13.5% -4.3% -5.6%
----------- --------- ---------- ---------- ----------
* March +24.8%, +7.2% vs. 2019
* North America (9% of Group) -9%
o US -9%
* Latin America (6% of Group) +4%
o Brazil +15%
o Mexico, flat
Headcount at 31 March 2021: 1,131 (31 December 2020: 1,155)
In the Americas, one of the worst COVID-19 affected regions,
gross profit for Q1 was down 4.3%. However, this was a significant
improvement on Q4 2020, which was down 23.2%. The US declined 9%.
Having been down 27% in both January and February, the performance
in March improved significantly, increasing 22% (+8% vs. 2019). In
Latin America, gross profit grew 4% (-2% vs. 2019). Mexico, our
largest country in the region, was flat for the quarter (March -12%
vs. 2019), and Brazil was up 15% (March +19% vs. 2019). Elsewhere
in Latin America, the remaining countries were flat for the
quarter, collectively.
UK Gross Profit (GBPm) Growth Rate Growth Rate
(14% of Group) vs. 2020 vs. 2019
---------- ---------- ------------- -------------
Q1 2021 vs. Q1 2020 25.6 28.9 -11.0% -25.1%
---------- ---------- ------------- -------------
* March +16.4%, -18.6% vs 2019
* Michael Page -5%
* Page Personnel -27%
Headcount at 31 March 2021: 1,193 (31 December 2020: 1,175)
In the UK, gross profit declined 11.0% in the quarter, improving
from a decline of 34.2% in Q4 2020. Conditions remained
challenging, with a nationwide lockdown imposed for the majority of
the quarter. Our Michael Page business (-5% in Q1) was more
resilient than Page Personnel (-27% in Q1). Having been down 29% in
January and February combined vs. 2019, the UK's performance in
March improved to a decline of 19% vs. 2019.
Financial Position
Save for the effects of Q1 trading detailed above, the purchase
of shares into the Employee Benefit Trust (EBT) of c. GBP10m and
the furlough repayment of GBP3.4m to the UK Government, there have
been no other significant changes in the financial position of the
Group since the publication of the results for the year ended 31
December 2020. Net cash at 31 March 2021 was c. GBP136m (Q4 2021:
GBP166m; Q1 2020: GBP83m).
Shares
At 31 March 2021 there were 328,618,774 Ordinary shares in
issue, of which 13,993,682 were held by the Employee Benefit Trust
(EBT). The rights to receive dividends and to exercise voting
rights have been waived by the EBT over 12,511,597 shares and
consequently these shares should be excluded when calculating
earnings per share. The total number of voting rights in the
Company is 328,618,774.
Cautionary Statement
This First Quarter 2021 Trading Update has been prepared solely
to provide additional information to shareholders to assess the
Group's strategies and the potential for those strategies to
succeed. The Trading Update should not be relied on by any other
party or for any other purpose. This Trading Update 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 Trading Update and
such statements should be treated with caution due to the inherent
uncertainties, including both economic and business risk factors,
underlying any such forward-looking information. This Trading
Update has been prepared for the Group as a whole and therefore
gives greater emphasis to those matters that are significant to
PageGroup and its subsidiary undertakings when viewed as a
whole.
The Group will issue its Q2 results on 14 July 2021.
This announcement contains inside information for the purposes
of article 7 of EU Regulation 596/2014 and Article 7 of Onshored
Regulation (EU) 596/2014 as it forms part of domestic law by virtue
of the EUWA. The person responsible for making this announcement on
behalf of PageGroup is Kelvin Stagg, Chief Financial Officer.
Enquiries:
PageGroup +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 9:00am today. The live presentation can
be viewed by following the link:
https://www.investis-live.com/pagegroup/6059b7779a138810006bbfe5/mles
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 participant access code 37 09 38 to gain access to
the call.
A presentation and recording to accompany the call will be
posted on the Company's website during the course of the morning of
9 April 2021 at:
https://www.page.com/presentations/year/2021
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END
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