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View All NewsUK – PageGroup gross profit up 18.2% in constant currency boosted by international markets, but UK stumbles
International specialist recruitment firm PageGroup (MPI: LSE) reported group gross profit for the first quarter ending 31 March 2018 of £187.7 million, an increase of 12.3% in constant currency when compared to last year and a record quarter for the group.
Gross profit for the first quarter by region was broken down as follows.
| (£ millions) | Q1 2018 | Q1 2017 | Change | Constant Currency |
| EMEA | 94.7 | 78.6 | 20.4% | 18.2% |
| UK | 33.8 | 36.4 | -7.1% | -7.1% |
| Asia Pacific | 32.9 | 30.8 | 6.7% | 13.8% |
| Americas | 26.3 | 24.4 | 8.4% | 20.4% |
| Total | 187.7 | 170.2 | 10.3% | 12.3% |
Steve Ingham, Chief Executive Officer, commented, "Our large, high potential markets grew collectively 21%, following continued significant investment in our fee earner headcount.”
In the EMEA region, Germany reported a record quarter with growth of 28%. Elsewhere, France, 17% of the group, reported growth of 18%. Eight countries overall in the EMEA region reported record quarters.
The UK was down 7.1%, impacted by the timing of Easter. Brexit related uncertainty continued to impact confidence particularly in the Michael Page business, which was down 10%. The group’s Page Personnel business however, grew 2%.
In Asia Pacific, six countries recorded growth in excess of 10%. Greater China saw growth of 17% and South East Asia was up 19%. Japan saw growth of 19% and India reported a record quarter with 26% growth.
The Americas was the group’s fastest growing region. The US grew 17% and Latin America reported growth of 26% for the quarter.
"We were encouraged to see improving performances from markets that had previously been challenging: in Australia, Brazil and Singapore, up 6%, 12% and 19% respectively,” Ingham said.
Gross profit broken down by recruitment type was as follows for the first quarter.
| (£ millions) | Q1 2018 | Q1 2017 | Change | Constant Currency |
| Permanent | 142.1 | 127.7 | 11.3% | 13.9% |
| Temporary | 45.6 | 42.5 | 7.2% | 7.3% |
Permanent recruitment made up 76% of group gross profit while temporary staffing made up 24%.
During the quarter, PageGroup stated that the timing of Easter impacted Q1 and is impacting Q2 this year with the greater impact being on permanent placements in Q1, with some clients and candidates on holiday at the end of the quarter and, therefore, unavailable to finalise placements. The group also reported a £3 million adverse gross profit impact due to foreign exchange rates.
Q1 Gross Profit by discipline was as follows.
| (£ millions) | Q1 2018 | Q1 2017 | Change | Constant Currency |
| Accounting and Financial Services | 65.6 | 63.3 | 3.6% | 5.3% |
| Engineering, Property & Construction, Procurement & Supply Chain | 45.1 | 36.5 | 23.6% | 25.6% |
| Legal, Technology, HR, Secretarial, Healthcare | 44.4 | 37.8 | 17.4% | 19.9% |
| Marketing, Sales and Retail | 32.6 | 32.6 | 0.1% | 2.1% |
| Total | 187.7 | 170.2 | 10.3% | 12.3% |
"We are pleased with the strong group performance in Q1, which was achieved despite the timing of Easter, and we are encouraged by the growth seen in the majority of our markets. However, a number of macro-economic uncertainties remain, including Brexit in the UK, challenges in Catalonia, potential impact from strikes in France, and Brazil's forthcoming elections. Looking ahead, we will continue to focus on driving profitable growth, while being able to respond quickly to any changes in market conditions,” Ingham said.
As of last trade PageGroup traded at £536.50, down 2.54% on the day and 5.21% below its 52-week high of £566.00, set on 29 January 2018. Based on its current share price the company has a market value of £1.80 billion.