Global – PageGroup’s fourth quarter gross profit soars 55% in constant currency on strong demand and raises full-year profit guidance


January 12, 2022

PageGroup (PAGE:LSE) today announced that the group’s gross margin increased by 55.1% at constant currency during the fourth quarter of 2021, compared to the same period last year.

For the year 2021, gross profit of the group increased by 49.3% over 2020.

Due to the impact of the Covid-19 pandemic in 2020, PageGroup has also provided constant currency comparisons to 2019 showing strong improvement over the pre-pandemic period.

Gross profit

(in millions of £) Q4 2021 Q4 2020 Q4 2019 % change vs 2020 % Constant Currency Change vs 2020 % change at constant exchange rate vs 2019
Europe, Middle East and Africa 123.0 88.3 103.5 39.3% 48.0% 21.2%
Asia Pacific 49.0 34.0 37.4 44.1% 48.7% 33.8%
Americas 38.4 22.7 32.3 68.9% 75.7% 33.3%
UK 36.4 21.0 31.9 73.2% 73.2% 14.1%
Total 246.8 166.0 205.1 48.6% 55.1% 24.2%
Permanent 190.1 121.3 150.6 56.7% 63.3% 30.5%
Temporary 56.7 44.7 54.5 26.8% 33.0% 6.9%

Steve Ingham, Chief Executive of PageGroup, said: “I am pleased to report that 2021 has been a banner year for the group. The quarterly improvements we saw in 2021 continued into the fourth quarter, with growth at constant currencies of 24.2% compared to 2019, a record quarter.

Ingham continued: “Productivity is at record highs, up 25% from the fourth quarter of 2019. This is due to improved business conditions, a faster time-to-hire facilitated by video interviews, investments in new systems, salary inflation and the improvement of fee rates accordingly. high demand and shortage of candidates.

“This notable improvement in the fourth quarter was seen across the group and was achieved despite the backdrop of continued restrictions or lockdowns in many of our markets,” Ingham said.

“Reflecting the continued improvement in business conditions, in the fourth quarter we added 310 employees, bringing the total to 937 in 2021,” Ingham continued. second half of 2020, a total of approximately 1,100. Our employee headcount has now reached pre-pandemic levels at the end of 2019.”

Gross profit for the full year was £879.1 million.

Unless otherwise indicated, all growth rates shown below are in constant currency and relative to 2019.

In Europe, Middle East and Africa, the improvement in commercial conditions that the group experienced at the end of Q3 continued in Q4, up 21.2% compared to Q4 2019. France increased by 3 %, improving from the 8% decline in Q3. Conditions continue to be tougher at Page Personnel, which accounts for around 60% of France, operating at lower wage levels, and is down 4%, compared to 14% growth at Michael Page.

Germany, the group’s third largest market, recorded another record quarter, up 53%, with strong growth and record performances across all brands. Belgium grew by 13% and the Netherlands by 15%. Southern Europe was up 31%, with record quarters in all four countries, including Italy and Spain, up 19% and 33% respectively. The Middle East and Africa region grew by 14%, with a record quarter in the United Arab Emirates, up 22%, broadly flat compared to the third quarter. In line with the improvement in commercial conditions, the group’s salaried workforce increased by 146 people, mainly in France, Germany and Spain.

In Asia-Pacific, mainland China grew 46% and Hong Kong, which took longer to recover than other markets in the region, grew 11%, a significant improvement from growth of 1 % in the third quarter. Overall, Greater China was up 32% for the quarter.

Southeast Asia recorded another record quarter, up 58%. Singapore grew 36%, with the other five countries in the region posting 75% growth for the quarter, collectively. Japan grew 44%, a record quarter, and a further improvement from 36% growth in the third quarter. India also had a record quarter, with growth of 95%. Australia was up 7% for the quarter, a notable improvement from the 3% decline in Q3. The number of employees in the region increased by 82 people during the quarter, mainly in Mainland China and South East Asia.

In the Americas, the United States was up 28% in Q4 with strong growth across all offices. In Latin America, the gross margin increased by 44%, a record quarter, compared to growth of 22% in the third quarter. Mexico, the largest country in the region, posted a 27% increase, an improvement from 18% growth in the third quarter.

Brazil grew 41% for the quarter, compared to 27% in Q3. Elsewhere in Latin America, the other countries grew by 63% in the quarter collectively, with record quarters for Argentina, Colombia and Panama. The group increased its workforce by 59 people in the region in the fourth quarter, mainly in the United States and Brazil.

In the UK, gross margin increased by 14.1% in the quarter, a significant improvement from the 1.3% increase in Q3. The Michael Page business (+18% in Q4) focused on higher salaries held up better than Page Personnel (+4% in Q4), which returned to growth in the quarter. The number of employees increased by 23 people during the quarter.

Last week, PageGroup announced that Chairman David Lowden would step down from the board on April 30, 2022. Lowden has served on the board since August 2012. Angela Seymour-Jackson has been named chair-elect.

Yesterday, endowment rival Robert Walters released its trading update with the group’s net fee income up 39% in constant currency with growth across all regions during the fourth quarter. The group also said the negotiation was ahead of expectations.

Ingham said: “Given our strong performance in December, we now expect full year 2021 operating profit to be slightly above our previous guidance of around £165m. “

The revised forecast is an update to the previously announced forecast of £155m.

“We believe that our strategy of maintaining and investing in our platform throughout the pandemic has been key to achieving the results we are announcing today. This has been demonstrated by our investment in experienced hires, as well as by continued deployment of technology and innovation,” said Ingham.

“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. , Ingham added.

Pagegroup shares last traded at £635.00, up 0.16% on the day and 8.10% below its 52-week high of £691.00, set on 5 November 2021. The company has a market capitalization of £2.08 billion.


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