Michael Page profits fly higher despite forex pressures
Full year profits from Michael Page for 2014 were higher than recent guidance and market expectations as the specialist recruiter capitalised on robust performances in the UK and Germany and even better from the US and China.
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Support Services
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Although adverse foreign exchange rates hit gross profit by £33m and operating profit by £6m, the FTSE 250 group still grew operating profit 15.1%, or 24% at constant exchange rates, to £78.5m on revenue up 4.1%, or 9.9% at constant rates, to £1.05bn.
Basic earnings per share before exceptional items were up 22% to 18.4p, reflecting the improved business performance and a lower effective tax rate.
Although cash flow was very strong again, up 12% to £88.1m, leaving £90m in the bank at year end, directors maintained their sustainable dividend policy, with a 7.58p final payment resulting in the total dividend rising 4.8% to 11.0p.
Chief executive Steve Ingham hailed the group's conversion rate, of operating profit as a percentage of gross profit, climbing to 14.7% from 13.3% thanks to steadily improving market conditions and the full run-rate of cost savings from the 2013 business review.
At the end of the year, fee-earner and total headcounts were at record levels for the group, together with the best fee earner-to-operational support ratio to date.
He warned that adverse FX had continued into the second half, such that if the 2014 results were restated at February 2015 exchange rates, gross profit and operating profit would have reduced by a further 4%.
"PageGroup has made good progress against its strategic objectives in 2014. With two new countries launched, and additional disciplines rolled out in both the Michael Page and Page Personnel brands, the business continued to grow its market presence in core target areas.
"Both our temporary and permanent recruitment businesses saw growth, further diversifying our service offering."