July 13, 2022

PageGroup (MPI:LSE), a UK-based staffing firm, reported second-quarter gross profit jumped 25.5% from the same period a year ago.

Growth was broad-based, with the Americas region posting the largest year-over-year increase at 34.1% in constant currency.

Steve Ingham, Managing Director of PageGroup, said: “We continued to deliver strong growth in the second quarter; the group’s gross margin increased by 25.5% compared to 2021, with further good performance across our geographies, disciplines and brands. We achieved a record quarter for the group, with record performances in 25 countries. We ended the quarter strongly, delivering a record month in June, our second month of gross profit above £100m.

“This performance was achieved despite the backdrop of macro-economic and geopolitical uncertainty as well as continued Covid-19 restrictions in certain markets,” Ingham said. “We believe our strategy of maintaining and investing in our platform throughout the pandemic; by investing in experienced recruits; and focus on technology and innovation, has been key for us to achieve these outstanding results.

“We have achieved increased levels of productivity as the group continues to benefit from favorable business conditions, including wage inflation and increased fee rates resulting from high demand and shortage of candidates, as well as ‘faster time-to-hire facilitated by video interviews, and investments in new systems,’ Ingham said.

Q2 gross profit

All growth rates mentioned below are in constant currency and compared to 2019, unless otherwise indicated.

In Europe, the Middle East and Africa, the good commercial conditions continued in the second quarter. France had a record quarter, up 21%, with Michael Page up 26% and Page Personnel up 17%. Germany, the group’s third largest market, achieved another record quarter, up 32%, with strong growth across all brands. The technology-focused Michael Page Interim business performed remarkably well, growing by 40%. Benelux grew 37%, with Belgium and the Netherlands posting record quarters, up 33% and 41%, respectively. Southern Europe also had a record quarter, up 37%, with Italy up 27% and Spain up 38%. The Middle East and Africa grew by 19%. In line with improving business conditions, our employee headcount increased by 137 during the quarter, primarily in the higher growth markets of Germany, Italy and Spain.

In Asia-Pacific, the second quarter gross margin increased by 11.7%, a record quarter. Greater China was down 11%, Mainland China down 13%, due to recent Covid-19 lockdowns and restrictions. Hong Kong was also affected and fell 8% in the quarter. In contrast, Southeast Asia had a record quarter with growth of 33%. India and Japan also posted record quarters, with growth of 47% and 15%, respectively. Australia was up 24% for the quarter.

In the Americas, second quarter gross margin increased by 34.1%, with North America and Latin America achieving record quarters. In the United States, where the improvements in business conditions the group saw in the second half of 2021 continued, the business grew by 30%, achieving a record quarter.

In Latin America, the gross margin increased by 40%. Mexico, the largest country in the region, recorded a 43% increase, achieving a record quarter. Brazil was up 28% and elsewhere in Latin America, other countries were up 45%, collectively, with record results in Argentina, Colombia and Panama.

In the UK, the gross margin increased by 22.6% during the quarter. Page Personnel, which operates at lower salary levels and had taken longer to recover from the pandemic, rose 56%, achieving a record quarter. Michael Page was up 13%.

While commercial conditions remained favorable, the group recruited 307 employees in the second quarter.

PageGroup noted that permanent recruitment gross profit across the group increased by 28.7% at reported rates and 25.7% at constant currency to £220.1 million (Q2 2021: 171, £0 million). Temporary recruitment gross profit increased by 24.6% at reported rates and 24.5% at constant currency to £60.8m (Q2 2021: £48.8m). This translated into a permanent/temporary hiring ratio of 78:22 (Q2 2021: 78:22).

Productivity, measured as gross profit per employee, increased due to continued favorable business conditions, including wage inflation and increased fee rates resulting from high demand and shortage of candidates, as well as a faster time-to-hire facilitated by video interviews, and investments in new systems.

Ingham said: “Looking ahead, we are clearly aware of the heightened degree of macroeconomic and political uncertainty that exists globally, particularly in relation to rising inflation in the majority of markets on which we operate. We regularly monitor all key business performance indicators, but to date have not seen any significant changes outside of the usual seasonal movements. »

“Given our highly diversified and adaptable business model, with a cost base that can be adjusted quickly, we will seek to make progress towards our strategic objectives while remaining vigilant.”

PageGroup also recorded first half gross profit of £539.0, up 33.3% at both reported rates and constant exchange rates on the previous year.

“We are pleased with the group’s performance in the first half of the year and currently expect full year 2022 operating profit to be in line with the company’s compiled consensus of £205m,” Ingham added.

Pagegroup shares last traded at £434.00, up 0.93% on the day and 12.44% above the 52-week low of £386.00 set on June 16 2022. The company has a market capitalization of £1.41 billion.