FINANCIALS: PageGroup posts record profits but down in the UK

While global recruiter PageGroup witnessed record gross profits last year, its UK divisions have experienced challenging market conditions.

That’s according to a trading update for Q4 and full-year 2017, released this morning.

The update reveals Q4 GP of £182.4m, up from £163.3m in the same quarter of 2016. GP growth was led by EMEA (up 19.7%), the Americas (up 11%) and Asia Pacific (up 8.4%). GP was down 2.8% in the UK.

Over the full year the group posted GP of £711.6m, up from £621m a year previously, with GP up 21.9% in the Americas, 22.2% in EMEA and 14.6% in Asia Pacific, while GP was down 3.8% in the UK.

With regards to the UK performance, the group pointed to a macro environment that has continued to impact confidence, particularly among some multinational clients and more senior permanent candidates, adversely affecting both temporary and permanent recruitment.

The group’s Page Personnel business, which represented 23% of the UK, declined -2% compared to -3% in Michael Page. Across its sectors of operation, financial services – 5% of the UK – grew 4%, while the private sector business (87% of the UK) was down 2% and the public sector (13% of the UK) declined by 10%.

Elaborating further on the group’s performance overall CEO Steve Ingham pointed to strong performances in Q4 for the group’s businesses in Continental Europe, Asia and the Americas.

“We saw improvements and a return to growth in Australia, Brazil and Singapore. However, the UK continued to experience challenging market conditions, with the macro environment impacting some clients and senior candidates. 
“Foreign exchange had a negative impact on our Q4 results, reducing our reported GP by £3.4m and operating profit by around £1m, mainly due to currency movements in Asia Pacific and the Americas. However, for the full year, foreign exchange benefited our results, increasing our reported GP by £29.4m and operating profit by around £6m.
“Our strategy of continued investment in our five large, high potential markets of Greater China, Germany, Latin America, South-East Asia and the US resulted in combined Q4 growth, ahead of the group average, at +18%.
“The UK, however, was down -2.8%, with client and candidate confidence levels continuing to be impacted by the ongoing uncertainty around the macro environment.
“Looking forward, we remain cautious in several markets as we enter 2018: primarily in the UK, where we will continue to focus on protecting margins while investing in structural opportunities; in Australia, where we have invested in headcount and a new office in Canberra; and in Brazil, which remains challenging, despite a stronger performance in Q4. 

“However, we will continue to invest in our large high potential markets, as well as in markets with favourable trading conditions, both existing and new markets, such as India and the Nikkei market in Japan. We will, as always, continue to focus on driving profitable growth while being able to respond quickly to changes in market conditions.”

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