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Michael Page International Anticipates Further Challenges Despite Profit Growth

Michael Page International Anticipates Further Challenges Despite Profit Growth

Commenting on its Q2 update MPI provided the following financial summary

&middot Group Q2 gross profit of &pound138.0m (&pound144.3m at constant rates of exchange*), 1.6% above (3.7%*) Q1 2012 and 6.6% below (-2.4%*) Q2 2011

&middot Group H1 gross profit of &pound273.9m (&pound281.2m*), 0.4% below (2.2%*) H1 2011

&middot EMEA (42% of Group) Q2 gross profit of &pound57.7m (&pound62.5m*), 4.4% below (-2.0%*) Q1 2012 and 10.1% below (-2.5%*) Q2 2011

&middot UK (23% of Group) Q2 gross profit of &pound31.1m, 1.7% above Q1 2012 and 9.2% below Q2 2011

&middot Asia Pacific (22% of Group) Q2 gross profit of &pound30.5m (&pound30.2m*), 16.2% above (18.6%*) Q1 2012 and 12.5% above (11.2%*) Q2 2011

&middot Americas (13% of Group) Q2 gross profit of &pound18.7m (&pound20.4m*), 0.1% below (4.9%*) Q1 2012 and 16.0% below (-8.3%*) Q2 2011

&middot Q2 Permanent gross profit (79% of Group) of &pound109.5m (&pound114.5m*), 2.8% above (5.0%*) Q1 2012 and 7.6% below (-3.4%*) Q2 2011

&middot Q2 Temporary gross profit (21% of Group) of &pound28.5m (&pound29.8m*), 2.9% below (-1.1%*) Q1 2012 and 2.7% below (1.6%*) Q2 2011

&middot Headcount: 5,321 at 30 June 2012, up 35 (0.7%) since the start of the year and up 12 in Q2 2012

&middot Offices: 2 new offices - Cape Town, in South Africa and Maca&eacute, in Rio de Janeiro, Brazil

&middot Shares: 2.6m (0.8% of issued share capital) purchased into the Employee Benefit Trust during the second quarter at a cost of &pound9.4m

&middot Dividend: &pound20.8m final for 2011 (6.75p per share) paid in June 2012

&middot Net cash at 30 June 2012 in the region of &pound32m (&pound62.5m at 31 March 2012)

* Denotes where overseas results denominated in foreign currencies have been translated at constant rates of exchange for constant currency illustrative purposes.

Commenting on Q2 trading, Steve Ingham, Chief Executive said:

"Despite tough market conditions throughout the second quarter of 2012, the Group delivered a 4% increase in gross profit compared to the first quarter. Against last year, gross profit was down 2% against a tough comparator, with Q2 2011 having been our second highest quarter on record, with a growth rate of 32%.

"We continue to invest in growth areas and geographic diversification where we believe there exists long-term potential, with the opening of an office in Cape Town, in South Africa and a further office in Maca&eacute, Rio de Janeiro, in Brazil, adding to the offices in Taipei, Suzhou, Bogota, and Casablanca opened during the first quarter.

"Our headcount has adjusted to reflect market conditions, increasing in areas where we have growth, principally Asia and our newer businesses, as well as reducing in other areas, largely from natural attrition this resulted in headcount remaining broadly flat quarter-on-quarter.

"It is key from our perspective to manage the cost base, principally headcount, to reflect market conditions, whilst investing to create a platform for greater growth when markets improve. We believe strongly that we have the balance right and the business remains profitable throughout all our major markets, apart from new start-ups.

"We anticipate a challenging third quarter as we enter the seasonally quieter summer period in Continental Europe and the UK, against tough comparables and an ongoing backdrop of economic uncertainty. The Group is financially strong, with net cash in the region of &pound32m. We remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our half and full year operating profit from trading activities to be broadly in line with current market estimates. This operating profit does not include any restructuring charges due to recent regional management changes."


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