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Michael Page Anticipates A Demanding Second Half

Michael Page Anticipates A Demanding Second Half

Half Year Results for the Period Ended 30 June 2012

Michael Page International plc the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2012.

Financial summary (6 months to 30 June 2012)

2012

2011

Change

Change CER*

Revenue

&pound502.6m

&pound502.1m

0.1%

2.6%

Gross profit

&pound273.9m

&pound275.1m

-0.5%

2.2%

Operating profit before exceptional items &dagger

&pound36.0m

&pound45.4m

-20.7%

-19.1%

Profit before tax before exceptional items

&pound36.1m

&pound45.5m

-20.6%

Basic earnings per share before exceptional items

7.9p

10.0p

-21.0%

Diluted earnings per share before exceptional items

7.8p

9.7p

-19.6%

Operating profit

&pound28.2m

&pound45.4m

-38.0%

Profit before tax

&pound28.2m

&pound45.5m

-37.9%

Basic earnings per share

6.1p

10.0p

-39.0%

Diluted earnings per share

6.1p

9.7p

-37.1%

Interim dividend per share

3.25p

3.25p

-

*Constant Exchange Rates &dagger Exceptional items relate to a regional management restructure

Highlights

&middot Group gross profit broadly flat -0.5% (2.2%*), the business remains profitable in all key markets

&middot 78% of gross profit generated outside the UK

&middot 58% of gross profit generated from non Finance and Accounting disciplines

&middot Launched a new business in Bogota, Colombia

&middot New offices in Casablanca, Cape Town, Maca&eacute (Rio de Janeiro), Suzhou and Taipei

&middot Gross profit from permanent placements reduced by 2% (1%*)

&middot Gross profit from temporary placements grew by 4% (7%*)

&middot Headcount up by 35 (0.7%) in first half of 2012

&middot Share repurchases of&pound9.4m during the first half of 2012

&middot Strong balance sheet with net cash at 30 June 2012 of &pound32.4m

&middot Interim dividend held at 3.25p

Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said:

"Despite market conditions deteriorating during the second quarter of 2012, the Group delivered broadly flat gross profit (-0.5%) compared to the first half of 2011 and an increase of 2.2% at constant rates of exchange. The second quarter also saw a 4% increase in gross profit compared to the first quarter, against a tough comparator, with Q2 2011 having been our second highest quarter on record, with a growth rate of 32%.

"Over the last 10 years we have continued to diversify and hence have altered significantly the composition of the Group, entirely through organic investment and development, with over three quarters of the Group's gross profits now generated from outside the UK. Our Latin America and Asia businesses combined now represent over 21% of the Group's gross profit, with 36 offices across 10 countries and almost 1,200 staff.

"We continue to invest in geographic diversification where there is long-term growth potential. We opened offices 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. It increased in areas where we have growth, principally Asia and our newer businesses and reduced in other areas, largely from natural attrition. This resulted in headcount remaining broadly flat through the first half.

"It is a clear priority that we continue to manage the cost base 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. The business remains profitable throughout all our major markets, apart from new start-ups.

"We anticipate a challenging second half as we enter the seasonally quieter summer period in both Continental Europe and the UK. This is set against tough comparables and an ongoing backdrop of economic uncertainty. The Group is financially strong, with net cash of &pound32.4m. We remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be broadly in line with current market estimates."

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