International specialist recruitment firm PageGroup (MPI: LSE) reported revenue for the six months ending 30 June 3015 of £530.4 million, an increase of 8.3% in constant currency (CC) compared with £512.2 million during the same period last year. 

Revenue from temporary placements accounted for 58% of total revenue in H1 2015, relatively unchanged compared with 59% last year. Broken down, revenue by employment type was as follows:

In the first half, PageGroup reported a number of one-off items which impacted underlying operating profit. The company closed its business in Russia; the costs associated with exiting this market are expected to be circa £1 million. PageGroup are also establishing a European shared service centre; as such there are associated transition costs which stand at circa £1 million for the year to date.

Steve Ingham, CEO of PageGroup, commented: “For the fourth successive quarter we delivered double-digit gross profit growth in constant currencies and have continued to see improvement in all our regions. Our five high-potential markets of Germany, Greater China, South East Asia, the US and Latin America, despite the challenges in Brazil, are performing at a record level and now represent 30% of Group gross profit.”

“Movements in foreign exchange rates, particularly the Euro, continue to impact our results negatively. This affected our year to date results adversely by £11 million of gross profit and £2 million of operating profit. At June closing rates, this implies a full year impact of £28 million of gross profit and £6 million of operating profit,” he added.

By geography, the company reported revenue growth as follows:

Gross profit, broken down geographically, was as follows:

EMEA, the Group’s largest region contributing 39% of gross profit, experienced improving market conditions throughout the first half. Page Personnel performed well across the region, with growth of 16%. PageGroup’s largest businesses in France and Germany, together representing 47% of the region by gross profit, grew by 6% (CC) and 16% (CC) respectively in the first half.

In France, Page Personnel represents over 60% of the business and had a record first half performance. Similarly, Page Personnel Germany, which represents 31% of the business, had an excellent first half, growing by 29% (CC). Elsewhere in the region, Southern Europe delivered yet another strong set of gross profit results, collectively up by 27% (CC), with growth in excess of 20% (CC) also achieved in Poland and Switzerland.

PageGroup’s business in the Middle East, despite the impact of the fall in oil prices and wider regional instability, performed well, with a record quarter in the UAE.

The UK, representing 27% of group gross profit, reflected continued progression of the business as the region’s recovery maintained its steady momentum. Good levels of demand and candidate shortages provided further signs of improvement, including a small rise in temporary margins.

With clients continuing to focus on hiring at the lower salary levels, Page Personnel, which represents 20% of the UK, performed strongly, with growth of 23% (CC). Page Personnel Finance was strong across the UK, while the newer Page Personnel HR, Secretarial, and Property & Construction disciplines continued to expand their footprint successfully.

Asia Pacific represents 20% of group gross profit; with Asia, comprising 14% of the group and 72% of Asia Pacific, achieving a record first half. The company reported a record half in Greater China, which grew by 14% (CC) despite a strong comparison base of 22% reported in H1 2014. Hong Kong also had their best ever result in its 20 years, with Page Personnel Hong Kong up by 33% (CC).

Elsewhere in Asia, Malaysia, Indonesia and India, all had record first halves, each growing by over 35% in constant currencies.

In Australasia, where Australia was up 1% (CC), the number of placements at lower salary levels increased. As a consequence, the company saw a strong performance from Page Personnel, which grew 23% (CC) in H1. In Michael Page, trading conditions were particularly difficult in Queensland and Victoria, and in the Engineering and Property & Construction disciplines.

In the Americas, which represents 14% of group gross profit, North America performed strongly, up by 16% (CC), with both the US and Canada producing their best ever results. New York, in particular, had a very strong performance, driven by Financial Services. PageGroups’ Canadian business had a strong first half, and overall grew by 33% (CC).

Latin America was up 4%, despite variable market conditions across the region. Brazil which accounted for 46% of LatAm, experienced another challenging half, down by 15% (CC). The political and economic uncertainty continued to impact trading conditions in Brazil and, with this expected to continue for some time, the company reduced its fee earner headcount by 42, or 20%.

PageGroup believes that the short-term prospects for its business in Brazil, while profitable, will remain difficult. However, the company believes that there will be opportunities to increase its market share that will ensure it will emerge even stronger, when this market recovers.

Elsewhere, other countries, which now represent 54% of gross profit in LatAm, had another strong half, growing at 32% (CC). The company’s performances in Mexico and Argentina were particularly strong. Mexico grew by 35% (CC) in the first half.

PageGroup reports gross profit across four primary business segments: Finance & Accounting (Fin & Acc); Legal, Technology, HR, Secretarial, and Healthcare (Legal & Tech), Engineering, Property & Construction, Procurement, and Supply Chain (EPPS), and Marketing, Sales, and Retail (MSR). 

Revenue by business segment during H1 2015 was broken down as follows (constant currency changes were not provided):

Mr Ingham concluded: “We are pleased with the first half performance and the outlook is positive for all our regions in the second half. We remain focused on continuing our investment in the future of the Group while at the same time, improving our productivity and conversion rate. Aside from the impact of foreign exchange, the Board’s expectations for the full year remain unchanged.”

In trading today, the company’s share price rose by 3.5% to £5.46, an increase of 26.4% compared with a year ago. Based on its current share price, the company has a market value of £1.8 billion.