Half Year Results 2016
Agenda Financial Review Capital Strategy and Returns Summary and Outlook
Financial Review
H1 2016 Group Financial Highlights Reported Constant H1 2016 H1 2015 % % Revenue £575.9m £530.4m +8.6% +5.5% Gross Profit £299.2m £280.9m +6.5% +3.6% Operating Profit £47.1m £40.0m +17.6% +12.1% Basic Earnings Per Share 10.8p 9.1p +18.7% Net Cash £73.6m £100.5m -26.7% Interim Dividend Per Share 3.75p 3.60p +4.2% Supplementary Dividend Per Share 6.46p 16.0p 4
Income Statement H1 2016 H1 2015 Reported Constant £m £m % % Revenue 575.9 530.4 +8.6% +5.5% Gross Profit 299.2 280.9 +6.5% +3.6% Operating Profit 47.1 40.0 +17.6% +12.1% Net Interest (expense)/income (0.2) 0.4 Profit Before Tax 46.9 40.4 Taxation (13.1) (12.1) Profit After Tax 33.8 28.3 Effective Tax Rate 28.0% 30.0% Earnings Per Share Basic (pence) 10.8 9.1 +18.7% Diluted (pence) 10.8 9.0 +20.0% 5
Conversion by Region H1 2016 H1 2015 Gross Operating Conversion Gross Operating Conversion Profit Profit Rate Profit Profit Rate £m £m % £m £m % GROUP 299.2 47.1 15.7 280.9 40.0 14.3 EMEA 129.1 23.8 18.5 109.1 15.6 14.3 UK 74.8 11.6 15.6 75.7 12.5 16.5 ASIA PACIFIC 56.5 9.4 16.6 56.0 9.9 17.6 AMERICAS 38.8 2.3 5.8 40.1 2.0 5.0 Conversion Rate is the amount of Gross Profit converted into Operating Profit 6
Depreciation, Amortisation and Capital Expenditure H1 2016 H1 2015 £m £m Depreciation 4.4 3.7 Amortisation 3.8 3.9 Total 8.2 7.6 Capital expenditure 11.9 5.7 • Increased capital expenditure due to the fit out of new European SSC and for office moves in locations such as New York, Paris and Tokyo • New office in Neuilly, Paris is the Group’s largest by headcount • Moved offices in Tokyo and out of the Chrysler building in New York to a more suitable open-plan office • Additional floors at our new European Shared Service Centre as the transition continues 7
Balance Sheet H1 H1 2016 2015 £m £m Intangible assets 36.5 36.5 Tangible assets 26.8 20.3 Trade and other receivables 262.7 218.4 Trade, other payables, current and deferred taxes (164.0) (134.6) Net cash 73.6 100.5 Net assets 235.6 241.1 • Trade and other receivables increased by c. £24m due to foreign exchange movements • Following payment of special dividend of £50m in H2 2015, net cash was £26.9m lower than H1 2015 8
H1 Cash flow: Shares purchased to hedge share plan exposures H1 2016 H1 2015 Movement in net cash (£m) (21.4) 10.5 £m 9
Capital Strategy and Returns
Capital Strategy • To finance the activities and development of the Group from retained earnings while maintaining a strong balance sheet position • First use of cash is to satisfy operational and investment requirements, as well as hedging the Group’s liabilities under its share plans • Second use of cash is an ordinary dividend: - To grow the ordinary dividend in line with our long term growth rate - Sustain the level of ordinary dividend payment during downturns - Increase the ordinary dividend during more prosperous times Cash generated in excess of these first two priorities will be returned to shareholders through • supplementary returns using: - Special dividend and /or - Share buybacks 11
Track Record of Shareholder Returns £m
Assessment of Surplus Cash H1 2016 H1 2015 Special Dividend (£m) 20.0 50.0 £m
Dividends H1 2016 H1 2016 H1 2015 H1 2015 (pence per share) £m (pence per share) £m Interim 3.75 11.6 3.6 11.3 Supplementary 6.46 20.0 16.0 50.0 Total 10.21 31.6 19.6 61.3 • Interim Dividend increased by 4.2% Supplementary return of £20m • Both payable to shareholders on 12 th October • Ordinary dividend yield of 3.4% • • Total dividend yield of 5.3% Dividend yield calculated using a share price of 340p 14
Summary and Outlook
Summary & Outlook • Trading conditions anticipated to remain challenging in several key markets - No contagion from referendum result seen so far outside of UK and the Financial Summary Outlook Services markets - Some slowing in candidate and client activity in the UK Ongoing focus on conversion rates and productivity • - Conversion rate up to 15.7% (H1 2015: 14.3%) - Fee earner movements to react to market conditions both up and down - Continued focus on standardisation and efficiency • Returning cash to shareholders - Interim dividend of 3.75p, up 4.2%, total £11.6m - Supplementary dividend of 6.46p, total £20.0m • Continue to focus on driving profitable growth, whilst remaining able to respond quickly to any changes in market conditions 16
18 Cautionary Statement This presentation contains certain statements that are neither reported financial results nor other historical information. The information contained in this presentation is not audited, is for personal use and informational purposes only and is not intended for distribution to, or use by, any person or entity in any jurisdiction in any country where such distribution or use would be contrary to law or regulation, or which would subject any member of the PageGroup plc group of companies to any registration requirement. No representation or warranty, express or implied, is or will be made in relation to the accuracy, fairness or completeness of the information or opinions made in this presentation. Certain statements included or incorporated by reference within this presentation may constitute “forward -looking statements” that are based on current expectations or beliefs, as well as assumptions about future events. There are risk factors that can cause actual results to differ materially from those expressed in or implied by such statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. PageGroup plc disclaims any intention or obligation to revise or update any forward-looking statements that may be made in this presentation, regardless of whether those statements are affected as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast. This presentation does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in PageGroup plc, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the shares of PageGroup plc. Past performance cannot be relied upon as a guide to future performance. Liability arising from anything in this presentation shall be governed by English Law. Nothing in this presentation shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.
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