PageGroup releases Q1 interim management statement
*in constant currencies
Q1 GROSS PROFIT ANALYSIS
% of Group
Steve Ingham, chief executive officer, said, "The 7% year-on-year increase in the Group's gross profit in constant currency for the first quarter reflects improved performances across all regions. We are pleased with the continued strong results coming from the UK and the US, together with a return to growth in our large businesses in France and Germany. In reported rates, gross profit was £126.6m in the first quarter, effectively flat year-on-year, reflecting the impact of foreign exchange movements, particularly in Japan, Australia and Brazil.
"EMEA saw a second consecutive quarter of growth in reported rates, with improved performances in the largest five countries, namely France, Germany, Holland, Italy and Spain. The UK saw its quarterly growth rate increase to 8%, following two consecutive quarters of 5% year-on-year growth in the second half of 2013. In constant currency, our business in the US was up 32%, while our performance in Brazil has recovered from a poor Q4, with growth of 2% year-on-year. This resulted in 16% growth for the Americas region as a whole. In Asia Pacific, all of our Asian businesses enjoyed growth including China, which grew by 5%. Continuing the trend of the previous three quarters, Australia's decline slowed, resulting in gross profit decreasing by 10% in the quarter.
"We continue to invest in the Group to capture future growth, increasing fee earner headcount by 105 since the start of the year, particularly in Germany, Asia and the US. Our large, high potential markets all saw increased investment in the first quarter, including the launch of a business in Lima, Peru. Our financial commitment to these markets is coupled with the investment in transferring highly experienced senior managers to markets where their experience will bring greater returns, quicker. This is a significant advantage for us, and is fundamental to our consistent organic growth strategy, both across the economic cycle and as we look to grow in new markets. We have also further enhanced our key central support functions as part of our focus on driving improvements and global consistency across our operational support teams. Furthermore, following the successful launch in Q1 of our new website across Asia Pacific, we will also accelerate investment from 2015 into this year to roll-out to all major geographies.
"Whilst economic conditions remain variable across our markets, we have the confidence to invest further in headcount and infrastructure, with the steps outlined above resulting in our anticipated investment in the business this year rising by £4 million. At the same time the positive momentum we are seeing in some of the leading indicators in a number of our markets means we would expect to meet current market expectations of full year gross profit*."
* Company compiled consensus of £538.5m