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World – Michael Page sees gross profit fall

14 January 2014

Specialist recruiter Michael Page (MPI: LSE) reported gross profit for the fourth quarter ending 31 December 2013 of £125 million, a fall of -1.2% from £126.5 million in Q4 2012. In terms of constant currency, the company reported a marginal increase in gross profit of +0.3%, compared with a year ago.

On an annual basis, the company’s gross profit fell by -2.5%, from £526.9 million in 2012 to £513.9 million last year. In terms of constant currency gross profit fell by -2.7% in 2013 when compared with 2012.   

Gross profit from the company’s temporary recruitment business rose by +4.3% to £31.4 million in Q4 compared, up from £30.1 million last year. Gross profit from permanent recruitment, however, fell by -2.9% to £93.6 million from £96.4 million during the same period last year.

Steve Ingham, CEO of Michael Page, commented: “We are pleased with the strong results from the UK, the US, and Japan; the improving performances in our large businesses in France and Germany; as well as many countries that achieved records in gross profit. The +0.3% increase in the Group’s results at constant currency for the fourth quarter reflects improved performances from over half of our 34 countries and challenging conditions in the others. Gross profit was £125 million in the fourth quarter, which, with the impact of currency movements, was down -1.2% year-on-year in reported rates.”

Gross profit from EMEA excluding the UK fell organically by -1.4% to £52 million during Q4 2013. EMEA represented 42% of the Group’s total gross profit for Q4 2013. On an annual basis, gross profit fell by -8.2% in constant currency to £207.7 million, down from £218.4 million in 2012. Gross profit from EMEA accounted for 40% of total Group gross profit for the year.

The UK reported an organic increase of +5.1% in gross profit during the fourth quarter, rising to £31.8 million from £30.2 million in Q4 2012. The UK accounted for 25% of Group gross profit during Q4 2013 and 24% of Group gross profit for the full year ending 31 December 2013. On an annual basis, the UK reported an organic rise of +2.2% in gross profit from £121.4 million in 2012 to £124.1 million in 2013.

Mr Ingham commented: “The UK, with a steadily improving job count, has now seen two consecutive quarters of +5% year-on-year growth. However, the fourth quarter also saw a continuation of the challenging trading conditions in Australia, which, with the effect of continued adverse foreign exchange movements, impacted the overall performance of the Asia-Pacific region.”

Gross profit from Asia-Pacific fell by -5.7% in terms of constant currency to £24.2 million during Q4 from £27.9 million a year ago. On an annual basis, gross profit fell organically by -4.7% to £105.8 million from £114.9 million in 2012.

“Our business in the US performed particularly well, growing at +35%. However, while conditions in Brazil worsens, our other Latin American businesses of Argentina, Chile, Colombia, and Mexico continued to grow strongly,” Mr Ingham continued.

The Americas reported a gross profit of £17 million during Q4 2013, on par with reported gross profit a year ago, however an increase of +6.7% in terms of constant currency. Annually gross profit rose organically by +8.8% to £76.3 million, up from £72.2 million in 2012.

Mr Ingham concluded: “We have been consistent with our key strategic objectives of continued investment in our high potential markets of China, Southeast Asia, Germany, Latin America, and the US. In China we had a record year in gross profit, notwithstanding growth rates slightly slowing in Q4, and we grew our headcount by over +20% to approaching 450 in 10 offices. In the US we opened our ninth office, Los Angeles, and grew gross profit in Q4 by +35% in US Dollars. Another strategic objective in 2013 was to initiate a strong focus on the consistency and efficiency of our operational support teams. This has had a positive impact on our performance and cost base, the full benefit of which will be felt in 2014.”

In trading today, the company’s share price fell by -2.1% to £4.79, an increase of +21.8% a year ago. Based on its current share price, the company has a market value of £1.5 billion. 

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