TIDMPAGE
RNS Number : 0762W
PageGroup plc
20 April 2021
20(th) April 2021
PageGroup plc ("PageGroup" or the "Company")
Annual Report and Accounts and Notice of Annual General
Meeting
PageGroup's Annual General Meeting will be held at 9:30am on
Thursday 3 June 2021 at Page House, 1 Dashwood Lang Road, The
Bourne Business Park, Addlestone, Weybridge, Surrey, KT15 2QW.
In connection with this, the following documents have been
posted or made available to shareholders today:
- Annual Report and Accounts for the year ended 31 December
2020;
- Notice of Annual General Meeting; and
- Proxy form for the Annual General Meeting.
The Annual Report and Accounts and the Notice of Annual General
Meeting are now available to view or download from the following
webpage: www.page.com . Copies of these documents have also been
submitted to the National Storage Mechanism and will shortly be
available for inspection at
https://www.fca.org.uk/#/nsm/nationalstoragemechanism .
A condensed set of the Company's financial statements and
relevant extracts of the Company's management report were included
in the Company's preliminary results announcement for the year
ended 31 December 2020 which was published on 3 March 2021. That
information, together with the additional information contained in
the Appendix to this announcement (which has been extracted from
the Annual Report and Accounts) constitutes the material required
to be communicated to media in unedited full text through a
Regulatory Information Service for the purposes DTR 6.3.5R. This
announcement should be read in conjunction with, and is not a
substitute for, reading the full Annual Report and Accounts.
For further information contact:
Kaye Maguire
General Counsel & Company Secretary
+44(0)20 3077 8069
Appendix
Principal risks and uncertainties
Strategic Risks
1. Shift in Business Model
Nature of risk
We fail to take advantage of technology opportunities to support
our drive on productivity, and customer and candidate
experience.
The emergence of new technology platforms and providers offering
HR solutions and consulting may lead to increased competition and
pressure on margin which may adversely affect the Group's results
if it were unable to respond effectively
Mitigating actions
-- We actively monitor developments in new technologies and
their use in the recruitment sector.
-- We have established an innovation infrastructure with
executive governance and regional innovation groups. Opportunities
are evaluated, those that meet our criteria are developed and
piloted through an innovations lab. The focus is on driving
productivity and the provision of new services.
-- We partner with large media providers such as LinkedIn and
Facebook to ensure that we use media effectively to enhance our
value to clients. All consultants are trained in utilising the
benefits of social media in their day-to-day activity.
-- Through our focused Competitive Edge programme, we train our
consultants in the use of the new technologies to enable them to
resource candidates for our clients at an overall cost that they
cannot match.
-- Our Global IT capability is based around standard
applications and processes, and an outsourced service model with
leading edge providers has enabled us to respond effectively to the
changes resulting from COVID and will continue to enable us to do
so.
-- As well as our day-to-day interaction with clients and
candidates, we conduct formal surveys through SurveyGismo to
understand how candidates and clients needs are developing.
Significant Influencing factors
-- COVID has accelerated the use of digital technology in
recruitment changing the way clients and candidates engage.
-- Further acceleration of digital, automation and artificial
intelligence will create opportunities to use technology in new
ways to address our customers needs.
NET RISK LEVEL INCREASED
2. Transformation and change
Nature of risk
Delivery of the Customer Connect programme, our consultants'
operating systems, takes significantly longer and costs
significantly more than planned.
Future rollouts impact on the operations of business units that
are live on Customer Connect.
Our people and processes are not enabled to exploit the benefits
of Customer Connect.
Mitigating actions
-- A Customer Connect change programme has been established
under the leadership of a senior steering committee who receive
regular status reports.
-- A programme team is in place, led by Operations (front end
staff) supported by experienced programme and IT management
applying tried and tested implementation procedures including
extensive testing.
-- Local management are brought into the programme to deliver
country go lives supported by the programme team, regional IT,
learning and development and finance. An extensive training
programme covers all system functionality and processes including
usage, hints and tips.
-- Learnings from countries that have already gone live are
being taken into new implementations.
Significant Influencing factors
-- Customer Connect 'Salesforce' based consultant applications
have been rolled out to 7 of our markets including the UK and
Germany. The rollout is targeted to be completed across the Group
by the end of 2022.
-- Salesforce will enable a more efficient and effective
recruitment process enabling productivity improvements.
NET RISK LEVEL STABLE
3. PageGroup brands and services
Nature of risk
As the way clients and candidates source information changes,
the awareness of the PageGroup brands and services could
deteriorate.
The relevance of the client and candidate engagement we offer
could impact our success in acquiring, engaging and nurturing new
clients and candidates.
The quality of the services we provide to both clients and
candidates could have a significant impact on how our brand is
viewed.
We continue to see the reputational impact one-off events can
quickly have with the adoption of social media. Any event that
could cause reputational damage is a risk to the Group, such as a
failure to comply with regulations, or loss or theft of
confidential data anywhere in our operating environment.
Mitigating actions
-- In early 2021 we built on our customer initiatives in the UK
and Asia Pacific with the launch of our global Completely Customer
framework. Its aim is to create a sustainable culture where
customer engagement is an increasing competitive advantage for the
Group. It will achieve this by building a harmonised programme
across PageGroup at local, regional and Group levels.
-- Our data team are focused on the targeting of 'traditional'
digital channels (Google, Facebook, Yahoo, Bing, Baidu). Also
supporting the use of our Salesforce marketing suite and tools such
as Thunderhead to enable segmentation and personalised activity
programmes that will link to our Salesforce based Customer Connect
programme.
-- We have accelerated the rollout of both temporary and
outsourced services, the latter as a global initiative as well as
focusing on growth disciplines such as Technology, Digital and
Healthcare and Life Sciences.
-- We continue to seek feedback from our customers, clients and
candidates as to how we are performing via the use of Feefo, Google
review, net promoter and Glassdoor. We use the feedback to support
changes in how we deliver our services.
-- We continue to develop our work on culture and engagement,
with initiatives such as Unity and Pride at Page focusing on
diversity and inclusion. We also recognise the impact of climate
change which we are reviewing as an emerging risk and an
opportunity to drive improvement.
-- We have established a Crisis Management response process at
Group and Regional levels, which enables us to respond effectively
to any incidents.
Significant Influencing factors
-- The COVID pandemic has accelerated a shift in our recruitment
process to an online digital format.
-- Activity levels across disciplines and industry sectors has shifted.
-- The agenda around ESG has accelerated in all three areas.
NET RISK LEVEL STABLE
4. Global Event (new principal risk)
Nature of Risk
An external event occurs that significantly disrupts business
and world economies requiring a response in excess of 'normal'
contingency planning
Mitigating Actions
-- We have a Group-led Crisis Management policy and process
which covers PageGroup in the event of unpredictable events. This
lays out the processes to be followed in developing appropriate
responses. The Crisis Management process has been cascaded to all
Group and Regional business leaders. Our Crisis Management
processes have been further reinforced by learning from the
COVID-19 response.
-- We maintain a strong ethical culture which ensures that
whatever situation the business faces, the focus is to protect our
employees, clients and candidates as well as ensuring that we
fulfil our broader social responsibilities.
-- A conservative financial strategy which maintains a strong
balance sheet and healthy cash balances and facilities.
-- Experienced and agile management team and structure
regionally based and in a good position to liaise with Group and
local management.
-- A systems capability that means we are not tied to facilities
either for our people or the services that we deliver.
-- A flexible workforce that can be deployed to focus on any
areas of opportunity and be appropriately scaled.
-- Critical suppliers are chosen for their resilience
capabilities and regular checks are conducted to ensure these are
being maintained.
-- Within any event there are opportunities. Our people are
trained to identify these and to develop offerings in support of
business. In doing so we ensure that we behave in an ethical
manner.
Significant Influencing factors
-- Over the past two decades we have experienced the Global
Financial Crisis and the COVID-19 global pandemic, both major
unpredictable incidents that have had immediate and severe long
lasting impacts.
NET RISK LEVEL AMBER
5. People
Nature of risk
Attraction
Operations - we cannot recruit people with the right potential.
A lack of inclusion limits our recruitment pool. Operational
Support - we cannot recruit people with the right levels of
experience.
Retention
We cannot retain our high performers. We do not provide an
environment, working practices and processes that suit our people.
A lack of diversity impacts on our ability to retain talent. A lack
of opportunity impacts our ability to retain talent.
Development
Operations - We fail to develop the potential of our people.
Operational Support - we do not provide development
opportunities.
Attrition
We do not manage leavers efficiently. Leavers have a detrimental
impact on our reputation.
Mitigating actions
Actions in response to the COVID pandemic
-- Our Regional HRD's have worked with Regional Management to
support our people via communications and training via BOOST, our
digital blended learning system, in adapting to new ways of
working, understanding our business' response to COVID and
maintaining their wellbeing with guidance for both managers and
their teams.
-- We are monitoring the wellbeing and ongoing requirements of
our people through regular surveys during the COVID pandemic to
understand our people requirements enabling us to adapt our support
approach.
-- We have taken the opportunity to strengthen our teams with
the recruitment of individuals with recruitment experience to
support us in those areas with growth opportunities.
Ongoing Initiatives
-- We continue to promote the Group Purpose around 'changing
lives', which we also cascade through our Page Employee Value
Proposition.
-- We are exploiting our learning capabilities via BOOST!. New
blended learning programmes came onstream in September to target,
amongst other things, improving on-boarding and speed to success.
Our performance management process via Talent Toolbox drives
clarity and focus on objectives and behaviours.
-- A truly global Talent, Succession and Development (TS&D)
review to ensure strong talent pipeline and address any gaps at
senior levels, i.e. MD and above.
-- Investment in leadership development programmes: Page
Leadership Excellence, Global Director Academy and Executive
Leadership Development. Programmes have been adapted to reflect
longer term changes resulting from the impact of COVID-19.
-- Ongoing development of our diversity and inclusion programmes
globally, Openpage and Unity@page, ensure we can recruit and retain
from all groups of society as our workplace is attractive and
inclusive to all. We have continued to develop our focus on ESG
through our work on Culture and Engagement.
-- We have responded to changing requirements in ways of working
accelerated by the COVID pandemic with a flexible working policy,
which also protects our strength in teamwork.
-- We continue to monitor KPIs specifically focused on driving
improvements in our retention rates. We conduct regular employee
surveys targeted at specific points in an employee's journey with
us and specific events. We use this feedback to guide our employee
initiatives.
Significant Influencing factors
-- As a result of COVID our people have had to work remotely to
varying degrees across the globe depending on local guidance. The
health & safety and wellbeing of our people has been and
continues to be a priority as we manage the impact of COVID. This
change will undoubtedly have an impact on how we work in the
future.
-- This presents opportunities, but also requires different
management processes to ensure we maintain the health and wellbeing
of our people and their operational effectiveness.
NET RISK LEVEL INCREASED
Operational Risks
6. Information Systems
Nature of risk
Change
The business does not appropriately control programme and
project delivery. Strategic Business Technology led programmes do
not deliver business objective stated. Poorly controlled changes
are made or changes are poorly executed which impacts on service
levels.
Services
A disruption of service due to a failure of our internal
processes or procedures or due to a failure of or at our third
party service providers. Business Continuity and Disaster Recovery
is not sufficient to allow business Operations to continue.
Data
Systems are implemented without the necessary data protection
controls.
Mitigating actions
Change
-- New requests for programmes and projects are approved and
prioritised through a global demand process before
commencement.
-- Strategic programmes' objectives are agreed with and reported on to the Executive Board.
-- A Global PMO process sets out controls for the delivery of programmes and projects.
-- Technical changes to critical systems managed in line with
defined processes to protect the integrity and stability of these
systems
Services
-- Single Points of Failure for critical systems are reviewed on
a regular basis and mitigating actions put in place.
-- Appropriate support agreements and service levels are in place with vendors.
-- For issues that occur, incident management will follow a
defined process to minimise disruption to business users.
-- We have defined our third party management policies and
processes with dedicated service managers, supported by the Senior
Leadership Team and a dedicated IT procurement function.
-- Recovery time and recovery point objectives for critical
systems are agreed with the business and tested.
Data
-- Business Technology processes are compliant with data regulation requirements.
-- New systems are designed in compliance with data regulation legislation.
Significant Influencing factors
PageGroup has established global standard processes, with a move
to an outsourced services model utilising world class systems and
suppliers.
NET RISK LEVEL STABLE
7. Cyber Security
Nature of risk
Loss of data or systems due to the actions of:
Malicious Outsiders - targeted attack of PageGroup systems.
Malicious Insiders - assisted or generated attack by a
disgruntled employee or contractor.
Accidental Outsiders - errors caused by our suppliers.
Accidental Insiders - successful Phishing, Social Engineering,
Business Email Compromise
Mitigating actions
Our dedicated Information Security Team continues to mature and
identify areas for continued improvement.
-- We have launched several additional defences that continue to
reduce the opportunity of a cyber-attack. They include: Our new
Cyber Insurance Policy.
-- Warning Banners on all emails to identify potential phishing
attacks, plus 1000 higher risk users (HR, Finance, Execs, PAs) have
an advanced anti- phishing email defence with an ability to
auto-report malicious activity.
-- An 'anti-impersonation' tool that prevents email compromise attacks.
-- Active Web Monitoring identifies malicious website
registrations attempting to use the PageGroup brand or where a
website is actively mimicking ourselves to falsely attract clients
and candidates away from our business. The process now in place
allows us to have them taken down.
-- Updated and enhanced our Multi Factor Authentication
methodologies to continue to ensure secure access to our systems
(similar to banking applications).
-- Password Quality Enhancements, ensuring users select highly
secure passwords (similar to banking applications).
-- Implementation of a new security and privacy management tool
to identify and manage risks more cohesively across our global
business. Better governed vulnerability and patch management
process including new reporting dashboards.
-- Fine-tuning of our Security Operations Centre (SOC) Alerts in
recognition of our current changes in working practices. Ongoing
Audit remediation activities.
-- Implementation of ISO 27001 Certification - a globally
recognised and externally assessed InfoSec Framework.
Significant Influencing factors
-- The COVID pandemic has presented opportunities for scammers
to prey on staff who are working from home with fake government and
HR related emails and links that attempt to extract data or upload
malware.
-- The most common route into an organisation's network is via
phishing emails (over 90%). As Page relies heavily on the use of
email, and it is normal to receive emails from unknown senders, our
exposure to phishing remains high.
-- Business Email Compromise (BEC), whereby an executive's email
is compromised and used to authorise payments or extract
confidential information, have also increased since the
pandemic.
-- The move to using public Cloud services for business-critical
activities, our significant email use, and extensive use of social
media have increased the Group's exposure to external threats.
-- Cyber-attacks continue to increase globally.
NET RISK LEVEL STABLE
8. Fiscal and legal compliance
Nature of risk
The Group operates in a large number of jurisdictions that have
varying legal, tax and compliance requirements. Any non-compliance
with client contract requirements and legislation or regulatory
requirements could have an adverse effect on the Group's brands or
financial results.
Mitigating actions
-- On material legal or fiscal changes there is a Group led
approach to regulatory and legislation policies, supported by
external advisors globally and in each country. Group Treasury have
supported regional management in addressing banking, funding and
the requirements of sanctions.
-- We have set up a central review of our ESG activity to ensure
we maintain appropriate reporting and support our activities in
delivering on ESG compliance requirements.
-- Our Group Tax team co-ordinate with regional management and
tax advisors on the Group's tax matters.
See financial management risk for financial compliance
activities
Significant Influencing factors
-- Detailed requirements resulting from Brexit still remain
unclear and will likely develop over the next 2 years.
-- As our US business grows we recognise the complexity of each
state having its own fiscal and legal rules.
-- Changes to the tax status of temporary and contract workers in the UK under IR35.
-- Business is operating more complex structures, eg. statement
of works and contracting, entering the RPO market where more legal
responsibility may arise, or risk of reclassification of the
services provided.
-- In the post COVID environment fiscal scrutiny is likely to
increase as governments look to support economic recovery.
NET RISK LEVEL INCREASED
9. Financial management and control
Nature of risk
Failure to maintain adequate financial and management processes
and controls could lead to poor quality management decisions,
resulting in the Group not achieving its financial targets or in
errors in the Group's financial reporting. Failure to standardise
systems and processes could lead to excessive costs within the
finance function.
Mitigating actions
-- The Group maintains strong financial policies and procedures
with Group, Regional and local finance teams to ensure these
policies as well as local statutory requirements are adhered to.
The Group Finance function reviews monthly submissions to ensure
policies are adhered to.
-- Shared Service Centres, now under a global reporting
structure, have increased resilience and introduced greater levels
of process standardisation and improved controls. Global process
owners oversee the maintenance of processes.
-- NetSuite, our standard global finance system, has now been
embedded across the whole Group enabling standardisation on best
practice and global visibility of finance transactions.
-- There are compliance teams located in each region that
support local, Regional and Group management in ensuring revenues
are appropriately recognised.
-- The SSCs have improved opportunities for career paths
allowing hiring and retention of higher calibre personnel.
-- We have Risk and Controls Registers which are owned and
embedded within the businesses. Risk reporting is aggregated
globally and reviewed every 6 months by the Executive and the Audit
Committee.
NET RISK LEVEL INCREASED
10. Data Protection Regulations
Nature of risk
Personal data breaches are committed by our employees and/or
third party vendors. Data requests cannot be fulfilled within
deadlines imposed by regulators.
When responding to Right To Be Forgotten requests, personal data
contained in archived emails isn't deleted immediately.
Our interpretation of data protection laws may prove to be
incorrect following clarification by the courts and/or data
protection regulators. Customers may take issue with our business
processes because their interpretation of data protection law
differs from ours.
Regulator guidance on regulatory action against companies
including imposition of fines for data protection breaches is
evolving and may result in more severe penalties
Mitigating actions
-- Privacy Director is supporting local management in developing
plans to address requirements in Brazil, the US, South Africa and
Dubai. We maintain a regional approach to ensuring requirements are
operationally effective with specialist resources used to support
internal management.
-- We have an ongoing staff data protection training programme,
(including ePrivacy) delivered via our global training
platform.
-- We have regional teams, including legal support, in place who
respond to data requests and data related queries including from
regulators.
-- We also have a Crisis Management policy to address external
data breaches, including informing authorities and customers.
See Cyber Security risk for mitigating activities regarding data
protection loss due to system attacks
Significant Influencing factors
Data Protection regulations in the UK and Europe are now well
established. Other jurisdictions have implemented local
regulations, for example California, or are following along similar
lines to GDPR.
NET RISK LEVEL INCREASED
Financial Risks
11. Macro-economic exposure
Nature of risk
Our recruitment activity is driven largely by economic
performance and levels of business confidence. Businesses are less
likely to need new hires and employees are less likely to move jobs
when they do not have confidence in the economy, leading to
reduced
recruitment activity.
A substantial proportion of the Group's profit arises from fees
that are contingent upon the successful placement of a candidate or
in the case of Temp completion of activity. In these cases, if the
client cancels the assignment at any stage in the process, the
Group receives
no remuneration
Mitigating actions
-- We use our geographical spread to invest in countries and regions where growth is highest.
-- Continue to develop our brands of Page Executive, Michael
Page, Page Personnel and Page Outsourcing targeted to the needs of
geographies.
-- Further develop our disciplines to take opportunities in
growing sectors and those that recover quickest.
-- In those markets built on international business we continue
our drive to shift our client base to more domestic.
-- We have maintained and continue to increase the proportion of
our cost structure that is variable so that we can respond quickly,
for example by our moves to SSCs and IT to a global service based
model.
-- We continue to balance permanent and temporary/contracting
recruitment mix in line with business levels in each market. The
temporary business tends to be more resilient in times of economic
downturn.
-- We protect key resources in the short- term so that we can
capitalise when the economies recover.
Significant Influencing factors
-- COVID-19 has significantly impacted economies across the
globe and forecasts have been changing frequently, both in terms of
the scale of the downturn and period to recovery.
-- We are, however, seeing some upturn in economic performances
in Asia, particularly Mainland China and Japan where the impacts of
COVID appear to be abating.
-- As part of the Brexit process a trade deal has now been
agreed between the UK and Europe. The unknown ongoing impact of
Brexit, however, has added to the uncertainty on economic growth
particularly for the UK, but also for Europe.
-- The US election result is being heralded as political
stability. Relations between the US and Greater China, however,
remain fragile and made worse by the COVID pandemic.
-- There are some industry sectors that have benefitted from the
impact of the COVID pandemic. Examples are online retailers, cloud
service providers, food retailers, healthcare, and the tech
sector.
NET RISK LEVEL INCREASED
12. Foreign exchange translation
Nature of risk
Material changes in the strength of Sterling against the Group's
main functional currencies significantly affects the Group's
reported Sterling profits in the financial statements.
The main functional currencies in addition to Sterling are the
Euro, US and Australian Dollars.
Mitigating actions
-- Our Group Treasury function reviews our cash position on a
regular basis. Repatriation of funds and conversion back to
Sterling protects against any significant Sterling recovery.
-- We do not hedge the translation of our profits.
-- Our communications focus on ensuring the market correctly adjusts for any impact.
-- We have little cross-border trading activity, so the impact
on transactions is limited to intercompany items.
Significant Influencing factors
-- COVID-19 has introduced a significant increase in the risk
around movement in currencies due to the impact on both economic
growth but also on the level of country debt taken to stabilise the
impact. Different economies will recover at different speeds. The
relative recovery of the UK economy and financial strength will
have the largest impact.
-- The impact of Brexit, despite a trade deal being agreed, on
the performance of Sterling is still unclear.
-- As we continue to expand successfully our overseas
operations, our translation exposure to Sterling increases.
-- Current banking consensus is that the exchange rate will
remain at around current levels, albeit with an increasing spread
of forecast for both the US Dollar and the Euro.
NET RISK LEVEL INCREASED
Related Party Transactions
Identity of related parties
The Company has a related party relationship with its Directors
and members of the Executive Committee, and subsidiaries
Transactions with key management personnel
Key management personnel are deemed to be the Directors and
members of the Executive Committee as detailed in the biographies
on pages 61 to 67 of the Company's Annual Report and Accounts. The
remuneration of Directors and members of the Executive Committee is
determined by the Remuneration Committee having regard to the
performance of individuals and market trends. The transactions for
the year were:
Related party transactions
2020 2019
GBP'000 GBP'000
---------------------------------------- --------- ---------
Wages and salaries 3,270 5,448
Social security costs 232 467
Short-term benefits 432 682
Pension costs - defined contribution
plans 231 231
Share-based payments and deferred cash
plan 2,464 4,225
---------------------------------------- --------- ---------
6,629 11,053
---------------------------------------- --------- ---------
Company
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation. Details of transactions between the parent company
and subsidiary undertakings are shown below.
Dividends received Amounts owed by Amounts owed to
related parties related parties
2020 2019 2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ---------- --------- --------- --------- ---------- ---------
Transactions 144,312 49,927 808,610 607,159 1,026,512 962,221
-------------- ---------- --------- --------- --------- ---------- ---------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCGZGZDKGRGMZM
(END) Dow Jones Newswires
April 20, 2021 11:14 ET (15:14 GMT)
Pagegroup (LSE:PAGE)
Historical Stock Chart
From Mar 2024 to Apr 2024
Pagegroup (LSE:PAGE)
Historical Stock Chart
From Apr 2023 to Apr 2024