12 January 2022
PAGEGROUP PLC
FOURTH QUARTER AND FULL YEAR 2021 TRADING UPDATE
A RECORD QUARTER AND YEAR FOR THE GROUP
Q4 Highlights
· Group gross profit of £246.8m, +55.1% vs. 2020 (+24.2% vs. 2019)
· A record quarter and year for the Group; a record quarter for 17 countries
· Large, High Potential markets (38% of Group) +41% vs. 2019
· EMEA +21.2%: France +3%; Germany +53% all vs. 2019
· Asia Pacific +33.8%: Greater China +32%; SE Asia +58%; Japan +44%; India +95% all vs. 2019
· Americas +33.3%: US +28%; Latin America +44% all vs. 2019
· UK +14.1%: Michael Page +18%; Page Personnel +4% all vs. 2019
· Increase in fee earner headcount of 310 in Q4 to 6,082 (Q4 2019: 6,027)
· Productivity up 25% on Q4 2019
· Strong cash position, net cash of c. £152m (Q3 2021: c. £195m, Q4 2020: c. £166m)
· Interim and special dividends of £100.2m paid on 13 October 2021
· 2021 full year operating profit marginally in excess of our previous guidance of in the region of £165m
Note: Given the magnitude of the impact of COVID-19 in 2020, we are also providing comparisons in constant currencies against 2019, our previous record year, to ensure the most appropriate representation of current trading.
Q4 Gross Profit Analysis
| | | Gross Profit (£m) | Growth Rates (%) | ||||
| Year-on-year | % of Group | 2021 | 2020 | 2019 | Reported vs. 2020 | Constant vs. 2020 | Constant vs. 2019 |
| EMEA | 50% | 123.0 | 88.3 | 103.5 | +39.3% | +48.0% | +21.2% |
| Asia Pacific | 20% | 49.0 | 34.0 | 37.4 | +44.1% | +48.7% | +33.8% |
| Americas | 15% | 38.4 | 22.7 | 32.3 | +68.9% | +75.7% | +33.3% |
| UK | 15% | 36.4 | 21.0 | 31.9 | +73.2% | +73.2% | +14.1% |
| Total | 100% | 246.8 | 166.0 | 205.1 | +48.6% | +55.1% | +24.2% |
| | | | | | | | |
| Permanent | 77% | 190.1 | 121.3 | 150.6 | +56.7% | +63.3% | +30.5% |
| Temporary | 23% | 56.7 | 44.7 | 54.5 | +26.8% | +33.0% | +6.9% |
FULL YEAR GROSS PROFIT ANALYSIS
| | | Gross Profit (£m) | Growth Rates (%) | ||||
| Year-on-year | % of Group | 2021 | 2020 | 2019 | Reported vs. 2020 | Constant vs. 2020 | Constant vs. 2019 |
| EMEA | 49% | 432.6 | 319.4 | 418.3 | +35.5% | +40.5% | +5.8% |
| Asia Pacific | 20% | 179.6 | 121.1 | 163.3 | +48.2% | +53.3% | +14.9% |
| Americas | 16% | 138.7 | 88.8 | 138.8 | +56.3% | +67.2% | +15.1% |
| UK | 15% | 128.2 | 80.9 | 135.1 | +58.3% | +58.3% | -5.1% |
| Total | 100% | 879.1 | 610.2 | 855.5 | +44.0% | +49.3% | +7.2% |
| | | | | | | | |
| Permanent | 77% | 677.7 | 436.7 | 643.8 | +55.2% | +61.0% | +10.3% |
| Temporary | 23% | 201.4 | 173.5 | 211.7 | +16.1% | +19.7% | -2.0% |
Steve Ingham, Chief Executive Officer, PageGroup, said:
"I am pleased to report that 2021 was a record year for the Group. The quarterly improvements we saw in 2021 continued in Q4, with growth in constant currencies of 24.2% vs. 2019, a record quarter. Given the magnitude of the impact of COVID-19 on 2020, we are continuing to compare our results to 2019, our previous record gross profit year.
"Productivity is at record levels, up 25% on Q4 2019. This is driven by improved trading conditions, a shorter time to hire facilitated by video interviewing, investments in new systems, wage inflation and improvements in fee rates as a result of the high demand and short supply of candidates.
"This noticeable improvement in Q4 was seen throughout the Group and was achieved despite the backdrop of continued restrictions or lockdowns in many of our markets. Given the strength of our performance in December, we now expect 2021 full year operating profit to be marginally in excess of our previous guidance of in the region of £165m.
"We believe that our strategy of maintaining and investing in our platform throughout the pandemic has been key to us achieving the results we are announcing today. This was demonstrated by our investment in experienced hires, as well as continuing with the roll out of technology and innovation.
"Reflecting the continued improvement in trading conditions, in Q4 we added 310 fee earners giving a total of 937 in 2021. Within these 2021 additions were c. 700 experienced hires, adding to the c. 400 experienced hires we added in the second half of 2020, giving a total of c. 1,100. Our fee earner headcount has now reached the pre-pandemic level at the end of 2019.
"We are the clear leader in many of our markets, with a highly experienced senior management team, which we retained in 2020. We believe this helped us make the right investment decisions in 2020 and 2021 and positions us well to take advantage of opportunities to grow and improve our business.
"Looking ahead, there continues to be a high degree of global macro-economic uncertainty as COVID-19 remains a significant issue and restrictions remain in a number of the Group's markets. However, we are maintaining our focus on driving progress towards our long-term strategic goals."
Geographical Analysis (unless otherwise stated all growth rates are in constant currency and vs. 2019)
| EMEA | Gross Profit (£m) | Growth Rates | ||||
| (50% of Group) | 2021 | 2020 | 2019 | Reported vs. 2020 | Constant vs. 2020 | Constant vs. 2019 |
| Q4 | 123.0 | 88.3 | 103.5 | +39.3% | +48.0% | +21.2% |
| FY | 432.6 | 319.4 | 418.3 | +35.5% | +40.5% | +5.8% |
| Unless otherwise stated, all growth rates are for the quarter in constant currency and vs. 2019
· France (14% of Group) +3% o Page Personnel -4% o Michael Page +14% · Germany (11% of Group) +53% · Benelux +13% o Belgium +13% o Netherlands +15% · Southern Europe +31% o Italy +19% o Spain +33% · Middle East and Africa, +14% Headcount at 31 December 2021: 3,447 (31 December 2019: 3,317) | ||||||
In Europe, Middle East and Africa, the improvement in trading conditions we experienced at the end of Q3 continued into Q4, which was up 21.2% against Q4 2019. France grew 3%, an improvement on the decline of 8% in Q3. Conditions continued to be tougher in Page Personnel, which represents around 60% of France, operating at lower salary levels, and was down 4%, compared to growth of 14% in Michael Page. Germany, the Group's third largest market, delivered another record quarter, up 53%, with strong growth and record performances across all brands. Benelux was up 13%, with Belgium up 13% and the Netherlands up 15%. Southern Europe grew 31%, with record quarters in all four countries, including Italy and Spain, which were up 19% and 33%, respectively. The Middle East and Africa was up 14%, with a record quarter in the UAE, up 22%, broadly flat on Q3. In line with the improved trading conditions, our fee earner headcount increased by 146 mainly in France, Germany and Spain.
| Asia Pacific | Gross Profit (£m) | Growth Rates | ||||
| (20% of Group) | 2021 | 2020 | 2019 | Reported vs. 2020 | Constant vs. 2020 | Constant vs. 2019 |
| Q4 | 49.0 | 34.0 | 37.4 | +44.1% | +48.7% | +33.8% |
| FY | 179.6 | 121.1 | 163.3 | +48.2% | +53.3% | +14.9% |
| Unless otherwise stated, all growth rates are for the quarter in constant currency and vs. 2019
· Asia (16% of Group) +45% · Greater China (8% of Group and 47% of Asia) +32% o Mainland China +46% o Hong Kong +11% · South East Asia +58% o Singapore +36% · Japan +44% · India +95% · Australia +7% Headcount at 31 December 2021: 1,709 (31 December 2019: 1,679) | ||||||
In Asia Pacific, gross profit for Q4 was up 33.8% to £49.0m. Mainland China was up 46% and Hong Kong, which has been slower to recover than other markets in the region, was up 11%, a significant improvement on the growth of 1% in Q3. Overall, Greater China grew 32% for the quarter. The other Large, High Potential market in the region, South East Asia, delivered another record quarter, up 58%. Singapore grew 36%, with the other 5 countries in the region growing 75% for the quarter, collectively. Japan grew 44%, a record quarter, and a further improvement on the growth of 36% in Q3. India also delivered a record quarter, growing 95%. Australia grew 7% for the quarter, a notable improvement on the decline of 3% in Q3. Our fee earner headcount in the region increased by 82 in the quarter, mainly in Mainland China and South East Asia.
| Americas | Gross Profit (£m) | Growth Rates | ||||
| (15% of Group) | 2021 | 2020 | 2019 | Reported vs. 2020 | Constant vs. 2020 | Constant vs. 2019 |
| Q4 | 38.4 | 22.7 | 32.3 | +68.9% | +75.7% | +33.3% |
| FY | 138.7 | 88.8 | 138.8 | +56.3% | +67.2% | +15.1% |
| Unless otherwise stated, all growth rates are for the quarter in constant currency and vs. 2019
· North America (10% of Group) +28% o US +28% · Latin America (5% of Group) +44% o Mexico +27% o Brazil +41% Headcount at 31 December 2021: 1,381 (31 December 2019: 1,376) | ||||||
In the Americas, gross profit for Q4 was up 33.3% to £38.4m. In the US, where the improvements in trading conditions we saw at the end of Q3 continued, we grew 28% in Q4 with strong growth in all offices, though most significantly in Boston and Chicago. In Latin America, gross profit grew 44%, a record quarter, up from growth of 22% in Q3. Mexico, our largest country in the region, was up 27%, improving from the growth of 18% in Q3. Brazil was up 41% for the quarter, up from 27% in Q3. Elsewhere in Latin America, the remaining countries grew 63% in the quarter, collectively, with record quarters for Argentina, Colombia and Panama. We increased our fee earner headcount by 59 across the region in Q4, mainly in the US and Brazil.
| UK | Gross Profit (£m) | Growth Rate | Growth Rate | ||
| (15% of Group) | 2021 | 2020 | 2019 | vs. 2020 | vs. 2019 |
| Q4 | 36.4 | 21.0 | 31.9 | +73.2% | +14.1% |
| FY | 128.2 | 80.9 | 135.1 | +58.3% | -5.1% |
| Unless otherwise stated, all growth rates are for the quarter in constant currency and vs. 2019
· Michael Page +18% · Page Personnel +4% Headcount at 31 December 2021: 1,301 (31 December 2019: 1,326) | |||||
In the UK, gross profit grew 14.1% in the quarter, a significant improvement from the increase of 1.3% in Q3. Our higher salary level focused Michael Page business (+18% in Q4) was more resilient than Page Personnel (+4% in Q4), which encouragingly returned to growth in the quarter. Our fee earner headcount increased by 23 in the quarter.
Headcount
Reflecting the continued improvement in trading conditions, in Q4 we added 310 fee earners giving a total of 937 in 2021. Within these 2021 additions were c. 700 experienced hires, adding to the c. 400 experienced hires we added in the second half of 2020, giving a total of c. 1,100. Our fee earner headcount has now reached the pre-pandemic level at the end of 2019. Our operational support headcount rose by 50 in Q4, and, as such, our ratio of fee earners to operational support staff increased to 78:22. Overall, the Group had 6,082 fee earners and a total headcount of 7,838, compared to 6,027 and 7,698 in Q4 2019 respectively.
Productivity
Productivity is at record levels, up 25% on Q4 2019. This is driven by improved trading conditions, a shorter time to hire facilitated by video interviewing, investments in new systems, wage inflation and improvements in fee rates as a result of the high demand and short supply of candidates.
Financial Position
Save for the effects of Q4 trading detailed above and the payments of the 2021 interim and special dividends of £100.2m on 13 October 2021, there have been no other significant changes in the financial position of the Group since the publication of the results for the quarter ended 30 September 2021. Net cash at 31 December 2021 was in the region of £152m (Q3 2021: c. £195m, Q4 2020: c. £166m)
Shares
At 31 December 2021 there were 328,618,774 Ordinary shares in issue, of which 10,563,022 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 9,084,233 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 Fourth Quarter and Full Year 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 Full Year results on 3 March 2022.
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/61d7231db81c471200ec46f6/ncjd
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 29 13 79 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 12 January 2022 at:
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.
