RNS Number : 9061F
PageGroup plc
07 March 2024
 

7 March 2024

 

PageGroup_c

 

Full Year Results for the Year Ended 31 December 2023

 

Resilient performance in challenging market conditions, restructured cost base, final dividend increased 4.5%

 

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its full year results for the year ended 31 December 2023.

 

Financial summary

2023

2022

Change

Change

CC*

Revenue

£2,010.3m

£1,990.3m

+1.0%

+1.1%

Gross profit

£1,007.1m

£1,076.3m

-6.4%

-6.3%

Operating profit

£118.8m

£196.1m

-39.4%

-39.4%***

Profit before tax

£117.4m

£194.4m

-39.6%


Basic earnings per share

24.4p

43.7p

-44.2%

Diluted earnings per share

24.3p

43.5p

-44.1%






Total dividend per share

(excl. special dividend)

16.37p

15.67p


Total dividend per share

 (incl. special dividend)

32.24p

42.38p



 

 

HIGHLIGHTS*

 

·    Group gross profit down 6.3% to £1,007.1m (2022: £1,076.3m)

·    Operating profit of £118.8m (2022: £196.1m)

·    Conversion rate** decreased to 11.8% (2022: 18.2%)

·    Fee earner headcount decreased by 1,092 (15.7%) vs 2022, total closing headcount of 7,859

·    Gross profit per fee earner at record levels as a result of action on fee earner headcount

·    Strong cash position of £90.1m (2022: £131.5m)

·    Total dividends of £100.1m paid during 2023

·    Final dividend proposed of 11.24p per share (2022: 10.76p), up 4.5%

 

*At constant currency - all growth rates in constant currency at prior year rates unless otherwise stated

**Operating profit as a percentage of gross profit

***Excluding impact of hyperinflation in Argentina

 

 

Commenting, Nicholas Kirk, Chief Executive Officer, said:

 

"We produced a resilient performance in 2023 in challenging market conditions. Despite the year-on-year decline in gross profit and operating profit, we saw good activity levels through most of the year, albeit the conversion of final interviews to accepted offers and therefore gross profit became increasingly challenging due to ongoing lower levels of candidate and client confidence. We saw a slower end to 2023 due to macro uncertainty impacting candidate and client sentiment, which has continued into January and February, albeit they are two of the smallest months of the year from a trading perspective.

 

"In response to the tougher trading conditions, we managed our headcount down from its peak at the end of Q3 2022. Overall for 2023, our fee earner headcount was down 1,092 or 15.7% and we now have a total headcount of 7,859 (2022: 9,020). As a result of this action on headcount, gross profit per fee earner, our measure of productivity, was flat on 2022 and remains at record levels.

 

"Today the Board has proposed an increase in the final dividend of 4.5% to 11.24 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 5.13p and the special dividend of 15.87p, this represents a total dividend of 32.24p.

 

"Looking ahead, macro-economic uncertainty persists. However, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review and can be adjusted rapidly to match market conditions. We are also seeing the benefits from our investments in innovation and technology. Customer Connect is supporting productivity and enhancing customer experience, Page Insights is providing real time data to inform business decisions for both Page and our customers, and we continue to work with our partners to deploy AI and automation tools into our working environment. We made improvements to customer engagement, with our client net promoter score increasing to 55 in 2023 from 52 in 2022. We also continued to develop our social impact programmes and as a business, we changed 133,575 lives in 2023. Given these fundamental strengths, we believe we will continue to perform well in the current challenging markets, and we are confident in our ability to implement our new strategy driving the long-term profitability of the Group." 

 

Enquiries:

 

PageGroup plc

+44 (0) 19 3226 4022

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/65a909599608da1200b5aeca/sdgs

 

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 90 08 06 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/2024

 

 

 

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

Having delivered on our previous vision, namely £1bn of Gross Profit and £200m of Operating Profit in 2022, it was important to set our new strategy and vision for the Group. We took input from our customers, people and investors, as well as the demographic and technology trends that are shaping our industry. The new strategy will take the Group through to 2030 and has three key strategic goals: Operating Profit of £400m; 1 million lives changed; and a Net Promoter Score of over 60.

 

Our operating profit goal is more than double our previous record year in 2022 and is based on targeting gross profit of just under £2bn at a conversion rate in excess of 20%. We will deliver this by building on our existing strengths and leveraging our global platforms. We will focus on what we do best at a city and country level, growing our business in the areas where we see the greatest potential for growth.

 

The first pillar of growth is our core business, which we define as Michael Page and Page Personnel that covers all disciplines except technology. Our focus in the core business is to build on our previous investment strategy, strengthening our market leading positions and, in addition, no longer pursuing more marginal business lines in certain geographies.

 

Technology recruitment is a scale play for Page, enabling us to build high volume, high value business. It is a market in which we already have a high level of experience, as it's our second largest discipline. We will build on our existing strengths in this area whilst targeting key strategic investment opportunities.  We have collected valuable learnings through our IT contracting business in Germany, where we are delivering at record levels, and we will now look to take these learnings elsewhere in the Group, starting in France and Japan. Our strategic goal is to build a £350m gross profit business by 2030, with a 20% conversion rate.

 

We will build our capabilities in Page Executive, where our global offering has been well received by clients who are keen to look beyond geographic borders to identify the best leadership talent. Our objective is not to compete directly with the global executive search firms, but to grow our reputation in the market that sits just above the Michael Page brand, through to the lower end of where the global executive search firms operate. Our goal by 2030 is for Page Executive to be a business generating over £200m of gross profit, with a conversion rate above the average for the Group.

 

Our Strategic Customer Solutions team is focused on creating business partnerships, building out our capabilities and offering to our most significant customers, to create long-term mutual value. Our Page Outsourcing brand will play a significant role in this area to respond to evolving client demand. With our global footprint, combined with our capabilities in delivery and insights, we are best placed to develop an enhanced client solutions business. Our goal by 2030 is to deliver a global strategic customers business with gross profit of £500m, at a conversion rate of 20%.

 

Since 2020, we have been committed to the goal of changing one million lives by 2030.  By the end of 2023, we had changed just over 500,000 lives. We are driven to have a positive impact in the communities in which we operate. We will work to become an industry role model for ESG and we will achieve this by consciously focusing on the area of Social Impact by capitalising on our people expertise.  

 

Our third goal is focused on delivering a best-in-class customer experience by achieving a client Net Promoter Score of 60+. As a cross industry benchmark, this would see us exceeding what is classed as 'excellent'. This is a critical measure of how we build deeper, repeat relationships with clients to ensure our long-term success. In 2022 our score was 52 and this increased to 55 in 2023.

 

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 47 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.

 

We have an organic growth structure, investing in existing and new teams, offices, disciplines and countries, to ensure we maintain a consistent team and meritocratic culture as we grow. 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.

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.

 

Sustainability

 

We continue to strengthen our approach to sustainability and embed it across our organisation. Our purpose is to change lives and that is why our target to change one million lives by 2030 sits at the centre of our new corporate Strategy. We change lives by placing candidates and working with charities and other partners to break down the barriers to employment for those from under-represented backgrounds. In 2023, we changed a further 133,575 lives meaning we have changed over 500,000 lives since we set the target in 2020. We also furthered our commitment to the environment by setting long and near-term Net Zero science-based targets. These targets are with the Science-Based Targets initiative for formal validation. Our Scope 1 and 2 emissions decreased by a further 15% this year and we have put the processes and initiatives in place to ensure we reduce emissions across our full value chain over time, including a focus on reducing our business travel and supply chain emissions. Our sustainability business has continued its strong growth, and we are proud to place candidates into sustainability-related and green jobs around the world. For further information on our sustainability efforts, please refer to https://www.page.com/sustainability.

 

Risks

 

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 2023 Annual Report and Accounts, which will be available to shareholders in April 2024.

 

GROUP RESULTS  

 

GROSS PROFIT

 

Reported

CC

 

% of Group

2023 (£m)

2022 (£m)

%

%

EMEA

55%

549.5

538.5

+2.0%

+0.3%

Americas

17%

173.3

193.4

-10.4%

-9.2%

Asia Pacific

16%

159.6

195.3

-18.3%

-14.3%

UK

12%

124.7

149.1

-16.4%

-16.4%

Total

100%

1,007.1

1,076.3

-6.4%

-6.3%







Permanent

73%

733.6

826.3

-11.2%

-10.9%

Temporary

27%

273.5

250.0

+9.4%

+8.9%

 

At constant exchange rates, Group revenue increased 1.1% to £2,010.3m (2022: £1,990.3m), but gross profit decreased 6.3% to £1,007.1m (2022: £1,076.3m) for the year ended 31 December 2023. Gross profit per fee earner was flat in constant currencies but decreased by 0.3% in reported rates to £159.0k (2022: £159.4k).

 

The Group's revenue and gross profit mix between permanent and temporary placements were 37:63 (2022: 42:58) and 73:27 (2022: 77:23) respectively. This is reflective of the tougher trading conditions during the year, particularly within permanent recruitment, whereas temporary was more resilient. Revenue from temporary placements comprises the salaries of those placed, together with the margin charged. This margin on temporary placements was broadly in line with 2022 at 21.5% (2022: 21.6%). Overall, pricing remained strong, as we continued to see candidate shortages and high levels of vacancies in the majority of our markets.

 

Total Group headcount decreased by 1,161 in the year to 7,859. This comprised a net decrease of 1,092 fee earners (15.7%) and 69 operational support staff (3.3%). We reduced our headcount in all four quarters, with reductions in all regions, in line with the tougher trading conditions seen throughout 2023.

 

In total, administrative expenses increased 0.9% to £888.3m (2022: £880.2m). The Group's operating profit from trading activities totalled £118.8m (2022: £196.1m).

 

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 £66.8m (2022: £60.6m).

 

The Group's conversion rate for the year decreased from 18.2% in 2022 to 11.8%. This was due to the more challenging trading conditions experienced through 2023 in the majority of our markets, partially offset by the reduction in fee earner headcount.

 

As part of this refined strategy and our increased focus on our conversion rate target, we have already implemented a number of initiatives to reduce our cost base. These initiatives mainly focused on: removing management layers; some small office closures including our onshore presence in Sweden; and re-sizing our operational support function to reflect the reduction in fee earner headcount. 

 

These initiatives have incurred a one-off restructuring cost in 2023 of £10.6m, offset by the majority of the cost savings being realised in FY23. The net negative impact this year was c. £2m. Going forward, we expect these initiatives to deliver annualised savings of c. £20m per annum compared to our FY23 cost base from FY24 onwards. However, this will be partially offset by inflationary salary rises made in January, which will add c. £10m to our FY24 cost base.

 

EMEA was the Group's most profitable region in 2023, with a conversion rate of 16.8%. This was reflective of the region experiencing more resilient trading conditions through 2023. Conversion in Asia Pacific fell to 7.3% (2022: 18.0%) due primarily to the continued tough conditions in Greater China, as well as our strategic decision to hold on to our experienced headcount in this market. The Americas' conversion rate was 10.2%, with tougher market conditions in the US but Latin America being more resilient. While the UK trading business was profitable despite the tougher trading conditions, the high proportion of senior management and operational support based in the UK meant the region had a negative conversion rate of 2.2%.

 

A net interest charge of £1.4m (2022: £1.7m) was primarily due to an IFRS 16 interest charge of £2.5m.

 

Earnings per share and dividends

In 2023, basic and diluted earnings per share decreased to 24.4p and 24.3p respectively (2022: 43.7p basic and 43.5p diluted), as a result of the decrease in profits due to the tougher trading conditions.

 

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 high levels of surplus cash, we paid an interim dividend of 5.13 pence per share, an increase of 4.5% over the 2022 interim dividend. In addition, in line with our policy of returning surplus capital to shareholders, we also paid a special dividend of 15.87 pence per share. Taking both dividends together, this amounted to a cash return to shareholders of £66.2m, paid out in October 2023.

 

The Board has proposed a final dividend of 11.24p (2022: 10.76p) per ordinary share, up 4.5% on the 2022 final dividend. When taken together with the interim dividend of 5.13p (2022: 4.91p) per ordinary share, this is an increase in the total dividend for the year of 4.5%. The proposed final dividend, which amounts to £35.4m, will be paid on 21 June 2024 to shareholders on the register as at 17 May 2024, subject to shareholder approval at the Annual General Meeting on 3 June 2024.

 

We will continue to monitor our cash position in 2024 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 £212.0m (2022: £246.4m) generated from operations. The closing cash balance was £90.1m at 31 December 2023 (2022: £131.5m). The decrease on 2022 is due primarily to the cash returned to shareholders through the payment of dividends in the year, totalling £100.1m.

 

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 2023. These facilities are used on an ad hoc basis to fund any major Group GBP cash outflows.

 

Income tax paid in the year was £59.0m (2022: £61.6m) and net capital expenditure was £30.8m (2022: £29.6m).

 

Total dividends of £100.1m were paid in 2023 (2022: £133.2m). Cash receipts from share option exercises in 2023 reflected the share price over that period, with £1.9m in 2023, compared to £0.4m in 2022. In 2023, £17.5m (2022: £14.8m) 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 £270.5m at 31 December 2023 (2022: £307.8m), comprising permanent fees invoiced and salaries and fees invoiced in the temporary placement business, but not yet paid. Day's sales in debtors decreased due to temporary recruitment, which has a shorter collection period, being more resilient in 2023 than permanent recruitment.

 

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

 

EMEA is the Group's largest region, contributing 55% 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 67% and temporary placements 33% of gross profit.

 

EMEA

 £m

Growth rates

(55% of Group in 2023)

2023

2022

Reported

CC

Gross Profit

549.5

538.5

+2.0%

+0.3%

Operating Profit

92.2

122.1

-24.5%

-25.7%

Conversion Rate (%)

16.8%

22.7%



 

In constant currencies, revenue grew 2.5% to £1,117.2m (2022: £1,069.3m) and gross profit grew 0.3% to £549.5m (2022: £538.5m).

 

We delivered resilient results in EMEA, despite trading conditions that became tougher as the year progressed. France, the Group's largest market, was flat, despite tougher trading conditions in Michael Page, down 2%, whereas Page Personnel was more resilient, up 1%, due to the higher degree of temporary recruitment. Germany, our second largest market, grew 4% for the year against a tough comparator in 2022, with the standout performance in our Technology-focused Interim business, up 15%. Elsewhere in the region, Benelux and Southern Europe both declined 1%. The Middle East and Africa grew 12%.

 

The region delivered operating profit of £92.2m (2022: £122.1), with a conversion rate of 16.8% (2022: 22.7%). This was the highest conversion rate in the Group, despite the tougher macro-economic conditions as the year progressed. Headcount across the region decreased by 271 (6.6%) during the year, to 3,814 at the end of 2023 (2022: 4,085).

 

 

THE AMERICAS

The Americas accounted for 17% of the Group's gross profit in 2023, with North America representing 55% of the region and Latin America, 45%. The US, where we have 7 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 800 employees in seven countries. There are few international competitors and none with regional scale. Across the Americas, permanent placements accounted for 84% of gross profit and temporary placements 16%.

 

 

Americas

 £m

Growth rates

(17% of Group in 2023)

2023

2022

Reported

CC

Gross Profit

173.3

193.4

-10.4%

-9.2%

Operating Profit

17.7

17.9

-0.8%

-1.4%*

Conversion Rate (%)

10.2%

9.2%



 

In constant currencies revenue increased 12.9% to £311.7m (2022: £282.9m) while gross profit declined 9.2% to £173.3m (2022: £193.4m). This is representative of current market conditions, where trading is much tougher within permanent recruitment, whereas temporary has been more resilient.

 

In North America, gross profit decreased 20%, with tough market conditions throughout the year. The US declined 20% due to tough trading conditions impacting candidate and client confidence, particularly within Technology and Financial Services. Over 90% of our gross profit in the US is permanent recruitment, where conditions have been much tougher during 2023.

 

Latin America grew 8%, albeit this was partially due to the hyperinflationary environment in Argentina. Excluding Argentina the region grew 3% for the year. Brazil was up 2%, whereas Mexico was down 6% and the other four countries increased 13%, collectively.

 

The Americas delivered operating profit of £17.7m (2022: £17.9m) due to the resilience of our business in Latin America, offset by tougher trading conditions in the US, where we have strategically held on to our headcount. Across the region, headcount decreased by 361 (21.4%) in 2023 to 1,329 (2022: 1,690).

 

*Excluding the impact of hyperinflation in Argentina

 

ASIA PACIFIC

Asia Pacific represented 16% of the Group's gross profit in 2023, with 78% of the region being Asia and 22% 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.  With a highly experienced management team, more than 1,300 staff and limited competition, the size of the opportunity in Asia is significant. Across Asia Pacific, driven by cultural attitudes towards white collar temporary recruitment, permanent placements accounted for 85% and temporary placements only 15% of gross profit, well below the Group average.  

 

Australia 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.

 

 

Asia Pacific

 £m

Growth rates

(16% of Group in 2023)

2023

2022

Reported

CC

Gross Profit

159.6

195.3

-18.3%

-14.3%

Operating Profit

11.6

35.2

-67.0%

-62.5%

Conversion Rate (%)

7.3%

18.0%



 

In Asia Pacific, in constant currencies, revenue declined 6.1% to £284.8m (2022: £318.4m) and gross profit declined 14.3% to £159.6m (2022: £195.3m).

 

We experienced tough market conditions in Asia Pacific during 2023, particularly within Greater China, where gross profit declined 29% with Mainland China down 31% and Hong Kong down 23%. Whilst COVID restrictions were eased, the recovery was slower than anticipated. This also impacted trading in South East Asia, which was down 16%, with Singapore down 18%. India delivered the standout result and a record year, up 6% on 2022. Japan was down 2% on 2022. Conditions were also tough in Australia which was down 10% on 2022.

 

The region delivered operating profit of £11.6m (2022: £35.2m), with the conversion rate decreasing to 7.3% (2022: 18.0%). This was a result of the tougher trading conditions across the region and our decision to strategically hold on to our headcount in China, partially offset by the reduction in headcount elsewhere. Headcount across the region decreased 290 (15.7%) in the year, ending the year at 1,552 (2022: 1,842).

 

UNITED KINGDOM

The UK represented 12% of the Group's gross profit in 2023, operating from 22 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 69% and temporary placements 31% 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 and by building on our existing strengths across Michael Page and Page Personnel.

 

 

 UK

£m

 

(12% of Group in 2023)

2023

2022

Growth rate

Gross Profit

124.7

149.1

-16.4%

Operating (Loss)/Profit

(2.7)

20.9

<100%

Conversion Rate (%)

-2.2%

14.0%


 

In the UK, revenue decreased 7.2% on 2022 to £296.7m (2022: £319.6m) and gross profit decreased 16.4% from £149.1m in 2022 to £124.7m. Michael Page declined 19% and Page Personnel 11%.

 

Operating result for the year decreased to a loss of -£2.7m (2022: profit of £20.9m). While the UK trading business was profitable despite the tougher trading conditions, the high proportion of senior management and operational support based in the UK meant the region had a negative conversion rate of 2.2%. Headcount decreased 239 (17.0%) in the year to 1,164 at the end of December 2023 (2022: 1,404).

 

 

OTHER FINANCIAL ITEMS

 

Taxation

 

The tax charge for the year was £40.4m (2022: £55.4m). This represented an effective tax rate of 34.4% (2022: 28.5%). The rate is higher than the UK rate for the calendar year of 23.5% (2022: 19%) principally due to the impact of higher tax rates in overseas countries, changes to deferred tax recognition and 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 2023, the tax rate was impacted primarily by higher tax in overseas countries (5.6%), derecognition of losses and other tax attributes of (2.3%), prior year adjustments of (0.3%) and other permanent differences (2.4%), 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 2023 the Group had 9.8m share options outstanding, of which 5.7m had vested, but had not been exercised. During the year, options were granted over 2.6m shares under the Group's share option plans. Options were exercised over 0.6m shares, generating £1.9m in cash, and options lapsed over 0.4m shares. At the end of 2023, options remained outstanding over 11.4m shares, of which 6.1m had vested, but had not been exercised. During 2023, 3.9m shares were purchased by the Group's Employee Benefit Trust, and no shares were cancelled (2022: 2.9m 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 2023: Gross profit decreased 6.3% in constant currencies and 6.4% in reported rates against 2022. This was due to the tough trading conditions in 2023, which impacted client and candidate confidence.

 

Relevant strategic objective: Organic growth

 

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 2023: The ratio decreased from 2022 to 73:27 (2022: 77:23). Market conditions were tougher within permanent recruitment, whereas temporary recruitment was more resilient to the uncertainty, as is normally the case in tougher economic conditions.

 

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 2023: The Group saw a 44.2% decrease in Basic EPS to 24.4p, due to the decline in operating profit from our record year in 2022. 

 

Relevant strategic objective: Sustainable growth

 

Cash

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 2023: Net fee earner headcount decreased by 1,092, or 15.7% in the year, resulting in 5,851 fee earners at the end of the year. As trading conditions became more challenging from the end of 2022 into 2023, we reduced our headcount accordingly, with reductions in all regions.

 

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 2023: Productivity was flat in constant currencies on 2022, but declined 0.3% in reported rates to £159.0k (2022: £159.4k). Whilst we experienced tough trading conditions in 2023, our action on fee earner headcount through the year meant productivity stayed flat on 2022 and at record levels for the Group. 

 

Relevant strategic objective: Organic 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 2023: The Group's conversion rate for the year decreased to 11.8% (2022: 18.2%). This was reflective of the tougher trading conditions during the year, partly offset by the reduction in fee earner headcount.

 

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 2023: We recorded an 85% positive score for employee engagement in the latest Employee Engagement Survey in 2023. This compares with 87% in the last equivalent survey performed in 2022, which was a record year in terms of financial performance. The 2023 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

 

To become Net Zero across our full value chain by 2050

How measured: Direct and Indirect GHG emissions calculated in line with the GHG Protocol.

 

Why it's important: The CO2e impact of our operations and value chain is examined in absolute terms in the emissions estimates.

 

How we performed in 2023: Total GHG emissions (Scope 1, 2 and 3) decreased by -1% to 64,518 tCO2e. Operational emissions (Scope 1 and 2 emissions) reduced by -15% to 2,534 tCO2e due to the continued transition of our offices to renewable energy. Value chain emissions (Scope 3) decreased by -1% to 61,984 tCO2e. A reduction in emissions from our supply chain and waste was offset by increased commuting and travel in our first full year without disruption from COVID-19.

 

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 2023: Tonnes of CO2e per employee increased by 10% to 7.9 Tonnes of CO2e per employee. The percentage reduction in headcount was greater than the reduction in overall emissions. Therefore, intensity values have increased.  

 

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 2023 DEFRA conversion factors. The movements in KPIs are in line with expectations.

 

 

 

Nicholas Kirk

Kelvin Stagg

Chief Executive Officer

Chief Financial Officer

6 March 2024

6 March 2024



 

 

 

Consolidated Income Statement

For the year ended 31 December 2023

 







2023

 


2022

 




Note

 

£'000

 


£'000

 






 

 



Revenue

 



3


2,010,303

 


1,990,287

Cost of sales






(1,003,171)

 

 

(913,993)

Gross profit

 



3


1,007,132

 


1,076,294

Administrative expenses






(888,317)

 


(880,215)

Operating profit

 



3


118,815

 


196,079

Financial income




4


2,236

 


1,104

Financial expenses




4


(3,615)

 


(2,817)

Profit before tax

 



3


117,436

 


194,366

Income tax expense




5


(40,368)

 


(55,354)

Profit for the year

 





77,068

 


139,012











Attributable to:

 









Owners of the parent






77,068

 


139,012











Earnings per share

 





 

 



Basic earnings per share (pence)




8


24.4

 


43.7

Diluted earnings per share (pence)




8


24.3

 


43.5







 

 



The above results all relate to continuing operations



















Consolidated Statement of Comprehensive Income

 






For the year ended 31 December 2023

 




 

 









2023

 


2022

 






£'000

 


£'000

 










Profit for the year

 





77,068

 


139,012











Other comprehensive income for the year

 







Items that may subsequently be reclassified to profit and loss:
















Currency translation differences






(12,353)

 


15,441

Actuarial loss on retirement benefits






(1,735)

 


-

Deferred tax from actuarial loss on retirement benefits






435

 


-







 

 



Total comprehensive income for the year

 



63,415

 


154,453







 

 



Attributable to:

 





 

 



Owners of the parent






63,415

 


154,453

 

 



Consolidated Balance Sheet

As at 31 December 2023




 

 


 




2023

 


2022

 

Note

 

£'000

 

 

£'000

Non-current assets

 


 

 



Property, plant and equipment

9


47,452

 


36,123

Right-of-use assets



98,386

 


100,996

Intangible assets - Goodwill and other intangible



1,859

 


1,955

Computer software



30,239

 


38,045

Deferred tax assets



19,856

 


18,641

Other receivables

10


13,017

 


13,224




210,809

 


208,984

Current assets

 






Trade and other receivables

10


380,243

 


 437,247

Current tax receivable



 23,384

 


 17,233

Cash and cash equivalents

12


 90,138

 


 131,480




 493,765

 


 585,960








 



 

 



Total assets

3


704,574

 


794,944

 

 






Current liabilities

 






Trade and other payables

11


(259,856)

 


(289,108)

Provisions



(4,298)

 


(2,772)

Lease liabilities



(31,746)

 


(31,268)

Current tax payable



(5,958)

 


(18,050)




(301,858)

 


(341,198)








 

 


 

 



Net current assets

 


191,907

 


244,762








Non-current liabilities

 






Other payables

11


(10,156)

 


(14,951)

Lease liabilities



(79,187)

 


(78,564)

Deferred tax liabilities



(2,342)

 


(1,345)

Provisions



(4,543)

 


(6,683)




(96,228)

 


(101,543)

 



 

 



Total liabilities

3


(398,086)

 


(442,741)








Net assets

 


306,488

 


352,203




 

 



 

 






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



(66,813)

 


(56,626)

Currency translation reserve



19,985

 


32,338

Retained earnings



249,534

 


272,709

Total equity

 


306,488

 


352,203




 

 



 


Consolidated Statement of Changes in Equity

For the year ended 31 December 2023

 

 











Reserve

for shares

held in the

employee

benefit trust

 
















 









Called-up

share

capital

 



Capital

redemption

reserve

 


 

Currency

translation

reserve

 







 

Share

premium

 

 


 

 

Retained

earnings

 

Total

equity

 



 

 

 


 

 

 

 



£'000

 

£'000

 

£'000

 


£'000

 

£'000

 

£'000

 

£'000

 

















Balance at 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 and 1 January 2023

 

3,286

 

99,564

 

932

 

 

(56,626)

 

32,338

 

272,709

 

352,203

 

















Currency translation differences


 

-


-


-



-


(12,353)


-


(12,353)

Actuarial loss on retirement benefits net of tax


 

-


-


-



-


-


(1,300)


(1,300)

Net expense recognised directly in equity


 

-


-


-



-


(12,353)


(1,300)


(13,653)

Profit for the year ended 31 December 2023

 

-


-


-



-


-


77,068


77,068

Total comprehensive (expense)/income for the year

 

-

 

-

 

-

 

 

-

 

(12,353)

 

75,768

 

63,415

Purchase of shares held in employee benefit trust

 

-


-


-



(17,529)


-


-


(17,529)

Exercise of share plans


 

-


-


-



-


-


1,946


1,946

Reserve transfer when shares held in the employee benefit trust vest

 

-


-


-



7,342


-


(7,342)


-

Credit in respect of share schemes


 

-


-


-



-


-


5,501


5,501

Credit in respect of tax on share schemes


 

-


-


-



-


-


1,016


1,016

Dividends


 

-


-


-



-


-


(100,064)


(100,064)



 

-


-


-



(10,187)


-


(98,943)


(109,130)

Balance at 31 December 2023


 

3,286

 

99,564


932



(66,813)


19,985


249,534


306,488

 

 


Condensed Consolidated Statement of Cash Flows

For the year ended 31 December 2023

 






 

 







2023

 

2022

 



Note

 

£'000

 

£'000

 





 

 

 

Profit before tax

 


117,436

 

194,366

Depreciation and amortisation charges



66,781


60,592

Loss on sale of property, plant and equipment, and computer software



819

 

4,398

Share scheme charges



5,501

 

5,989

Net finance costs



1,379

 

1,713

Operating cash flow before changes in working capital

 


191,916

 

267,058

Decrease/(Increase) in receivables



46,057

 

(61,509)

(Decrease)/Increase in payables



(26,002)

 

40,821

Cash generated from operations

 


211,971

 

246,370

Income tax paid



(58,963)

 

(61,598)

Net cash from operating activities

 


153,008

 

184,772









Cash flows from investing activities

 





Purchases of property, plant and equipment



(27,348)

 

(21,982)

Purchases of intangible assets



(4,033)

 

(9,693)

Proceeds from the sale of property, plant and equipment, and computer software



587

 

2,080

Interest received



2,236

 

1,104

Net cash used in investing activities

 


(28,558)

 

(28,491)









Cash flows from financing activities

 





Dividends paid



(100,064)

 

(133,247)

Interest paid



(1,070)

 

(1,213)

Lease liability principal repayment



(40,045)

 

(35,896)

Issue of own shares for the exercise of options



1,946

 

447

Purchase of shares into the employee benefit trust



(17,529)

 

(14,838)

Net cash used in financing activities

 


(156,762)

 

(184,747)









Net decrease in cash and cash equivalents

 


(32,312)

 

(28,466)

Cash and cash equivalents at the beginning of the year

 


131,480

 

153,983

Exchange (loss)/gain on cash and cash equivalents



(9,030)

 

5,963

Cash and cash equivalents at the end of the year

12


90,138

 

131,480

 

 

Notes to the consolidated preliminary results

For the year ended 31 December 2023

 

 

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 2023 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 2023 were approved by the Directors on 6 March 2024. The Annual General Meeting of PageGroup plc will be held at the registered office, 200 Dashwood Lang Road, Addlestone, Surrey, KT15 2NX on 3 June 2024 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 2023 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 March 2025 (review period).

 

The Board considered a variety of downsides that the Group might experience, such as a global downturn, a cyber-attack resulting in significant reputational damage and loss of clients and candidates, and the Group's business model becoming ineffective due to new innovations such as recruitment via social media. All modelled scenarios would be expected to impact gross profit and headcount, impacting conversion.

 

The Group had £90.1m of cash as at 31 December 2023, with no debt except for IFRS 16 lease liabilities of £110.9m. 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. Under these latest forecasts, the Group is able to operate without the need to draw on its available facilities. The forecast cash flows indicate that the Group will comply with all relevant banking covenants during the review period.

 

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.

 

Given the Group's resilient performance in 2023, the level of cash in the business and the 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 operation, meet its liabilities as they fall due, retain sufficient available cash and not breach the covenants under the RCF for the foreseeable future, being a period of at least 12 months from the date of the approval of the financial statements. The Board therefore considers it appropriate for the Group to adopt the going concern basis in preparing its financial statements.

 

Nature of financial information      

 

The financial information contained within this preliminary announcement for the 12 months to 31 December 2023 and 12 months to 31 December 2022 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 2022 have been filed with the Registrar of Companies and those for the 12 months to 31 December 2023 will be filed following the Company's Annual General Meeting.

 

The auditors' reports on the accounts for both the 12 months to 31 December 2023 and 12 months to 31 December 2022 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 2024.

 

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 2023.

 

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

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














EMEA




1,117,150

 


1,069,346


549,511

 


538,488















Asia Pacific




284,821

 


318,359


159,636

 


195,276















Americas




311,653

 


282,942


173,312

 


193,397















United Kingdom




296,679

 


319,640


124,673

 


149,133






2,010,303

 


1,990,287


1,007,132

 


1,076,294

 

 











Operating Profit

 

 










2023

 

 

2022

 










£'000



£'000

 














EMEA









92,176



122,079











 




Asia Pacific









11,613



35,244











 

 

 


Americas









17,749



17,885











 




United Kingdom









(2,723)



20,871

Operating profit

 







118,815



196,079

Financial expense








(1,379)



(1,713)

Profit before tax

 







117,436



194,366

 

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

 





2023

 


2022

 

2023

 

 

2022

 





£'000

 


£'000

 

£'000


 

£'000

 














EMEA




322,635



338,251

 

250,651



248,585










 

 




Asia Pacific




99,919



128,299

 

58,548



69,995







 

 


 

 

 

 


Americas




98,697

 

 

116,647

 

50,333

 

 

60,635







 

 


 

 

 

 


United Kingdom




159,939

 

 

194,514

 

32,596

 

 

45,476

Segment assets/liabilities

 


681,190

 


777,711

 

392,128

 


424,691

Income tax




23,384

 

 

17,233

 

5,958

 

 

18,050






704,574

 


794,944

 

398,086

 


442,741

 




















Property, Plant & Equipment

 

Intangible Assets

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














EMEA




16,101



14,072

 

2,044

 


2,296










 

 




Asia Pacific




5,269



6,194

 

37

 


110







 

 


 

 




Americas




5,947

 

 

7,378

 

3

 


5







 

 


 

 




United Kingdom




20,135



8,479

 

30,014

 


37,589






47,452

 


36,123

 

 


40,000

 














Right-of-use assets

 

Lease liabilities

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














EMEA




70,907



61,760

 

76,867

 


65,136










 

 




Asia Pacific




12,486



17,415

 

16,854

 


20,042







 

 


 

 




Americas




7,989

 

 

11,950

 

10,257

 


14,434







 

 


 

 




United Kingdom




7,004



9,871

 

6,955

 


10,220






98,386

 


100,996

 

110,933

 


109,832

 

 

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

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














Permanent



738,563

 


832,014


733,657

 


826,321















Temporary



1,271,740

 


1,158,273


273,475

 


249,973






2,010,303

 


1,990,287


1,007,132

 


1,076,294

 

(d)       Revenue generated from permanent and temporary placements by reportable segment

 






Permanent

 

Temporary

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














EMEA




369,582



380,002

 

747,568

 


689,344










 

 




Asia Pacific




135,462



170,029

 

149,359

 


148,330







 

 


 

 




Americas




146,916

 

 

170,970

 

164,737

 


111,972







 

 


 

 




United Kingdom




86,603



111,013

 

210,076

 


208,627






738,563

 


832,014

 

1,271,740

 


1,158,273

 

The below analysis in note (e) revenue and gross profit by discipline (being the professions of candidates placed) has 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

 

 





2023

 


2022

 

2023

 


2022

 





£'000

 


£'000

 

£'000

 


£'000

 














Accounting and Financial Services



720,927

 


720,783


332,282

 


343,659











 




Technology


360,392

 


328,286


138,069

 


149,634



 

 




 

 



Legal, HR, Secretarial and Other


315,811

 


339,257


163,308

 


185,138











 




Engineering, Property & Construction, Procurement & Supply Chain

427,850

 


400,959


242,897

 


251,686











 




Marketing, Sales and Retail



185,323

 


201,002


130,576

 


146,177






2,010,303

 


1,990,287


1,007,132

 


1,076,294

 

 

4.         Financial income / (expenses)

 







2023

 

2022

 






£'000

 

£'000

Financial income

 








Interest receivable






2,236


1,104










Financial expenses

 








Interest payable






(1,072)


(1,213)

Interest on lease liabilities






(2,543)


(1,604)







(3,615)


(2,817)

 

 

5.         Taxation

 

The tax charge for the year was £40.4m (2022: £55.4m). This represented an effective tax rate of 34.4% (2022: 28.5%). The rate is higher than the effective UK rate for the calendar year of 23.5% (2022: 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.  This is slightly lower than the prior year mainly due to the profit mix in the year and a small reduction in tax provisions.

 

In 2023, the tax rate was impacted primarily by higher tax in overseas countries (5.6%), derecognition of losses and other tax attributes of (2.3%), prior year adjustments of (0.3%), and other permanent differences (2.4%), 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".

 

 

6.         Dividends

 







2023

 

2022

 






£'000

 

£'000

Amounts recognised as distributions to equity holders in the year:

 



Final dividend for the year ended 31 December 2022 of 10.76p per ordinary share (2021: 10.30p)

33,889


32,740

Interim dividend for the year ended 31 December 2023 of 5.13p per ordinary share (2022: 4.91p)

16,166


15,607

Special dividend for the year ended 31 December 2023 of 15.87p per ordinary share (2022: 26.71p)

50,009


84,900







100,064


133,247










Amounts proposed as distributions to equity holders in the year:

 












Proposed final dividend for the year ended 31 December 2023 of 11.24p per ordinary share (2022: 10.76p)

35,449


34,207

 

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 11.24p (2022: 10.76p) per ordinary share will be paid on 21 June 2024 to shareholders on the register at the close of business on 17 May 2024.       

 

 

7.         Share-based payments

 

In accordance with IFRS 2 "Share-based Payment", a charge of £5.5m has been recognised for share options and other share-based payment arrangements (excluding social charges) (31 December 2022: £6.0m).

 

8.         Earnings per ordinary share

 

The calculation of the basic and diluted earnings per share is based on the following data:









Earnings

2023

 


2022

 





Earnings for basic and diluted earnings per share (£'000)

77,068

 


139,012






Number of shares

 




Weighted average number of shares used for basic earnings per share ('000)

315,784

 


318,166

Dilution effect of share plans ('000)

1,311

 


1,204

Diluted weighted average number of shares used for diluted earnings per share ('000)

317,095

 


319,370






Basic earnings per share (pence)

24.4

 


43.7

Diluted earnings per share (pence)

24.3

 


43.5

 

The above results all relate to continuing operations.

 

 

9.         Property, plant and equipment

 

Acquisitions and Disposals

 

During the year ended 31 December 2023 the Group acquired property, plant and equipment with a cost of £27.3m (2022: £22.0m).         

 

 

10.       Trade and other receivables

 


2023

 


2022

 

£'000

 


£'000

Current

 




Trade receivables

281,652

 


320,794

Less allowance for expected credit losses

(11,144)



(12,960)

Net trade receivables

270,508

 


307,834

Other receivables

10,187

 


21,535

Accrued income

83,426

 


88,951

Prepayments

16,122

 


18,927


380,243

 


437,247

Non-current

 




Other Receivables

13,017

 


13,224

 

 

11.       Trade and other payables

 


2023

 


2022

 

£'000

 


£'000

Current

 




Trade payables

8,383

 


11,101

Other tax and social security

61,557

 


61,079

Other payables

33,595

 


36,629

Accruals

156,321

 


180,299


259,856

 


289,108

Non-current

 




Other tax and social security

1,045

 


422

Accruals

9,111

 


14,529


10,156

 


14,951

 

 

12.       Cash and cash equivalents

 








2023

 

 

2022

 







£'000

 

 

£'000

 







 

 



 Cash at bank and in hand







90,138

 


131,480

 Short-term deposits







-

 


-

 Cash and cash equivalents

 






90,138

 


131,480

 Cash and cash equivalents in the statement of cash flows

 






90,138

 


131,480

 

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. The facility is used only ad hoc in case the Group needs to fund any major GBP cash outflow.

 

13.       Annual General Meeting

The Annual General Meeting of PageGroup plc will be held at 200 Dashwood Lang Road, Addlestone, Surrey, KT15 2NX on 3 June 2024 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/2024

 

 

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 2023. 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



6 March 2024 

6 March 2024 

 

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