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Michael Page International - Results Reflect Stablisation

MICHAEL PAGE INTERNATIONAL PLC - Full Year Results for the Year Ended 31 December 2009

Michael Page International plc ("Michael Page"), the specialist professional recruitment company, announces its full year results for the year ended 31 December 2009.

Financial summary




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Operating profit





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*Constant Exchange Rates

2009 operating and financial highlights
Profit before tax was 21.1m despite very challenging market conditions
Group headcount at 31 December 2009 of 3,549, down by 1,394 since start of 2009, largely through natural attrition
Targeted geographic and discipline diversification of business continued
68% of gross profits generated from outside the UK
50% of gross profit generated from non Finance and Accounting disciplines
29% of gross profit generated from temporary placements
114.8m of cash generated from operations (2008: 185.2m)
Strong balance sheet with net cash of 137.2m (2008: 94.3m)
Total dividend maintained at 8.0p

Includes net cash received of 41.0m in respect of VAT claim (see Notes 11 and 12)

Current trading and outlook
In general, market conditions have stabilised
Some geographies showing signs of improvement
Headcount stabilised with selective fee earner hiring in a number of locations
Agreement in principle reached with HMRC: 28.5m net of fees will be retained, subject to legal contract

Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said:
"2009 was an extreme test of the Group's strategy and I am delighted that the business responded well to the challenge. We maintained our market presence across our network of offices, disciplines and countries, invested modestly in new businesses and maintained our track record of being profitable in every quarter.

"We are encouraged by the 10% sequential growth in Group gross profits we recorded in the fourth quarter of 2009, with three of our four regions recording quarter on quarter improvement. We are now seeing a recovery in several markets and geographies and whilst the strength of this recovery is uncertain, we believe that, with a strong balance sheet position and spare capacity in the business, we are well positioned to improve significantly our performance in 2010."

JPMorgan have issued the following update:
The detailed Q4 trading statement (8 January) means that main focus of this mornings FY results is likely to be on the outlook statement the group has already provided the FY gross & operating profit outcome as well as the year end net cash position (137m). Overall the outlook is reassuring - market conditions have generally stabilized, and some markets are now showing signs of improvement to the extent that the group is now selectively hiring fee earners. We believe that there is upside risk to estimates, particularly at the lower end of the range. However, the significant rally in the shares from their lows leaves Michael Page trading on 13x peak earnings and so, in our view, the shares are already reflecting significant upgrades. We therefore retain our Neutral recommendation.
FY results as per the Q4 trading statement FY gross profit came in at 351.7m as announced and operating profit at 20.2m (JPMe 20.4m) as indicated by the trading statement in January.
Dividend maintained as with the interim dividend, the final has been held flat giving a total for the year of 8.0p per share (JPMe 8.0p).
Outlook - market conditions stabilizing, some geographies improving. In general, market conditions are said to have stabilized, and Michael Page is now seeing a recovery in several markets and geographies. As a result, the group is now adding back headcount selectively in a number of locations. The management believe that they are well positioned to benefit from a recovery and deliver strong growth in profits when this materializes - although they do include the caveat that the strength of the recovery remains uncertain. The overriding comment in connection with the outlook for 2010 remains unchanged from January - Michael Page believe that they are well positioned to significantly improve performance in 2010. We would expect the management to provide further insight into current trading at the presentation later this morning (9am).
Agreement in principle reached with HMRC for Michael Page to retain 28.5m (net of fees) of the 37.4m already received.
Modest upside risk to estimates although there is little by way of news in the statement itself or compared to results from the other staffers, the outlook statement is reassuring and we see scope for estimates to move up, all else being equal, particularly the lower end of the range.


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