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Interim Results

PageGroup operating profit up but key markets struggle

10 August 2017 07:47

Professional recruitment company PageGroup increased its operating profit by 9.2% at constant currency to £56.9m in the first half.

Revenue grew by 7.7% to £673.1m.

The company's conversion rate rose to 16.2% from 15.7%, which it said reflects an improved business performance and operational efficiencies. Movements in foreign exchange rates added £28m to gross profit and £6m to operating profit.

Steve Ingham, chief executive officer, said he expects this benefit in the second half to be greatly reduced, at around £2m of gross profit, with a marginal benefit to operating profit.

Ingham said there were improved macro-economic conditions in the first half, particularly in Asia (ex-Singapore), Continental Europe, and Latin America (ex-Brazil).

However, challenging market conditions continued in some of its larger markets, including Brazil, Singapore and the UK. The company made significant investments in its fee earner headcount over the last 12 months, particularly in France, the US and Latin America, ex. Brazil, up 19%, 28% and 22%, respectively.

These investments delivered gross profit growth of 24%, 16% and 24%.

Fee earner headcount grew 276 (+5.9%) to end the half year at a record level for the group of 4,987.

The board announced an interim dividend of 3.9 pence per share, an increase of 4% over last year.

It also announced a special dividend of £40m (12.73 pence per share), making a third consecutive year of special dividends, in line with its intention to return surplus capital to shareholders.

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