11th Mar 2015 11:07
LONDON (Alliance News) - Michael Page International PLC Wednesday said its pretax profit rose in 2014 as revenue increased on the back of a strong performance in key markets like the UK, Germany the US and China, although its earnings abroad were hit by the strength of sterling.
The FTSE 250-listed recruitment company said its pretax profit for the year was GBP80.4 million, up from GBP64.1 million in 2013. Gross profit increased 3.7% to GBP532.8 million to GBP513.9 million, but was held back by the strength of sterling, with gross profit at constant currencies up 10%. The company derives 74% of its gross profit from outside the UK.
Revenue increased 4.1% to GBP1.05 billion from GBP1 billion, though sterling also dragged on its revenue growth heavily and revenue would have risen 9.9% if exchange rates had remained flat over the year. Michael Page said it saw good performances in core markets in the year, including in the UK, Germany, the US and China.
The company said it will pay a final dividend of 7.58 pence per share, up from 7.25 pence a year earlier, with its total dividend increased to 11 pence from 10.5 pence.
Chief Executive Steve Ingham said the underlying business environment is more positive in some key markets, with an improvement seen in the second half of 2014. But he said the strong sterling impact the company faced in 2014 has continued into 2015.
Michael Page shares were up 0.7% to 498.5 pence on Wednesday.
Michael Page said conditions in the Europe, Middle East and Africa market were mixed in the year, with revenue increasing 3%. Revenue would have been up 9% if the euro hadn't weakened against sterling during the year.
The group said its largest units in the region, France and Germany, performed well, with growth in their Page Personnel business offset by more challenging conditions in the Michael Page business, which focuses predominantly on permanent placements.
Revenue in the UK increased 9% to GBP326 million, boosted by the continuing economic recovery in the country. The group said its property and construction, human resources and finance and accounting segments all performed well, boosting more muted growth in its retail and sales divisions. Michael Page revenue rose 9%, while Page Personnel revenue increased 22%.
Asia Pacific revenue increased 2%, although would have been up 13% at constant currencies, with the division benefiting from better trading conditions in Australasia and a robust performance in the Greater China market. All South East Asia markets performed well, the company said, barring a fall in gross profit in its Singapore division.
Americas revenue continued the same pattern, with reported revenue up 2% but local currency revenue increasing 9%. North America and Canada both performed well, the company said, while Latin America remains resilient despite mixed market conditions in Brazil, disrupted by the World Cup in June and by elections in October. Barring Brazil, the Latin America region posted a strong performance, Michael Page said, with record results in Mexico, Argentina, Chile and Colombia.
The trends are broadly in line with those highlighted by Michael Page's FTSE 250 rival Hays PLC in its half-year results, reported in late February. Hays posted a rise in pretax profit and said its net fee income increased in the half, but its shares dropped as it said continuing sterling strength could have an impact on its full-year results.
By Sam Unsted; [email protected]; @SamUAtAlliance
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