PageGroup profit up on solid overseas performance, but UK challenging

FTSE 250 recruiter PageGroup posted an 18% jump in pre-tax profit on Wednesday in a year that saw record gross profit in 22 countries, but the UK was a weak spot.

In the year to 31 December 2017, pre-tax profit rose to £118.2m from £100m the year before, with revenue up 15% to £1.4bn and gross profit 15% higher at a record £711.6m. PageGroup said this was driven by improved business performance and operational efficiencies, broadly offset by challenging economic conditions in markets such as Australia, Brazil, Singapore and the UK.

Meanwhile, operating profit came in at £118.3m from £101m in 2016, at the top end of market expectations. The company lifted its ordinary dividend by 4.3% to 12.50p per share for the year and paid out special dividends of £40m in October.

The company said 22 countries saw record gross profit, including France, Germany, Spain and the US. Its strongest regional growth was in EMEA - which accounts for 47% of the group - where gross profit was up 15% in the year.

The UK, which accounts for 20% of the group, was a weak spot, however, with gross profit down to £140.8m from £146.3m in 2016 and operating profit down to £16m from £24.2m. Engineering, property and construction and technology did well, but market conditions in Page's legal discipline and sales and marketing were more challenging.

Chief executive officer Steve Ingham said: "In 2018 we will continue to invest in our Large High Potential Markets, as well as in markets with favourable trading conditions. However, we remain cautious in several markets as we progress through the year: primarily in the UK, where we will focus on protecting margins; in Australia, where we have invested in headcount and a new office in Canberra; and in Brazil, which remains challenging, despite a stronger performance in the fourth quarter.

"We will, as always, continue to focus on driving profitable growth while being able to respond quickly to changes in market conditions."

At 0810 GMT, the shares were down 4.4% to 500.50p.