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APAC GP up 22% in Q4 2018 for PageGroup

PageGroup has released a trading update for the fourth quarter and full year 2018.


PageGroup delivered fourth quarter gross profit of £211.1m, up 15.4% in constant currencies and 15.8% in reported rates. For the full year, foreign exchange decreased its reported gross profit by c. £10m and operating profit by c. £2m. In constant currencies, Michael Page grew 14%, with Page Personnel growing faster, up 18% in the quarter.


Gross profit from permanent recruitment grew 17.8% in reported rates and 17.6% in constant currencies, to £159.9m (Q4 2017: £135.7m). Gross profit from temporary recruitment grew 9.8% in reported rates and 9.0% in constant currencies, to £51.2m (Q4 2017: £46.7m). This resulted in a ratio of permanent to temporary recruitment of 76:24.


The UK grew 2.1%, its second consecutive quarter of marginal growth, despite continued Brexit uncertainty impacting candidate and client confidence. Page Personnel, which represents a quarter of the UK, grew 12%. Michael Page, which is focused on more senior opportunities and was impacted by the uncertainty to a greater extent, declined -1%.


EMEA Q4 gross profit grew 13.9%, against a tough comparator of 19.3% in Q4 2017, to £104.4m. Both Michael Page and Page Personnel continued to deliver strong performances, with growth of 13% and 15%, respectively. France, representing 17% of the Group, grew 10%, despite a particularly tough comparator in Q4 2017 of 28%. This was a record quarter, despite the impact caused by the disruption from the ‘gilet jaunes’ protests. Germany grew 28%, with its interim business growing 44%. Italy grew 23% and Spain was up 10%, slightly above its Q3 growth rate, with a marginal decline in Catalonia offset by strong growth elsewhere. Benelux grew 13%, with the Netherlands up 15%. The Middle East and Africa grew 19%, with continued strong growth in the UAE, up 46%.


In Asia Pacific, PageGroup’s second largest region, gross profit grew 22.0% to £41.2m. Greater China, one of its Large, high potential markets grew 12%, below its Q3 growth rate of 31%, due to confidence in Mainland China being affected by trade tariff uncertainty. While Hong Kong remained strong, Mainland China experienced slowing activity in the quarter. South East Asia, another of its large, high potential markets grew 30%, with a strong performance from Singapore, up 37%, in line with its Q3 growth rate. Japan, where it continues to focus on both the Gaishikei and Nikkei markets, grew 28%, a third consecutive record quarter. India grew 79% up from 68% in Q3. Australia, following its investment in fee earners and a new office in Canberra, grew 25%, with strong growth in all offices.


The Americas continues to be its fastest growing region and grew 29.2% to £32.0m. North America grew 30%, with the US up 32% and Canada up 20%. In the US, growth was strong in all offices, with notable performances from Boston, Houston and Los Angeles. Latin America grew 28%, a record quarter for the region. The Brazilian market continued to perform well, growing 25%, its fifth consecutive quarter of double-digit growth. Mexico, the largest country in the region, grew 30%. Elsewhere, the other four countries in the region all grew in excess of 20%, with a record performance from Colombia.


Steve Ingham (pictured), chief executive officer, said, “The Group delivered Q4 gross profit growth of 15.4%, against a tough comparator, where growth improved from c. 9% in the first three quarters of 2017 to c. 14% in Q4. 2018 was a record year for the Group, and Q4 was a record quarter, with all of our four regions delivering growth and 20 countries growing at over 20%.


“Our five large, high potential markets of Germany, Greater China, Latin America, South East Asia and the US continued to perform strongly, growing 25% collectively, with all five delivering a record year. Germany grew 28%, with our Interim business up 44%. In Asia Pacific, Greater China’s growth slowed to 12% in Q4 from 31% in Q3, due to confidence in Mainland China being affected by trade tariff uncertainty. South East Asia was up 30%, with Singapore the standout performer, up 37%. The US grew 32%, with strong growth in all offices. Latin America was up 28%, with Brazil up 25%, and the other five countries in Latin America all up over 20%. 


“In our six large, proven markets, the UK delivered a second consecutive quarter of marginal growth, up 2.1%, despite continued Brexit related uncertainty. France grew 10% despite a tough comparator and the impact of the disruption from the ‘gilet jaunes’ protests. Italy and the Netherlands continued to perform well, up 23% and 15%, respectively. Spain, despite the continued challenges in Catalonia, grew 10%, slightly above its Q3 growth rate. Australia, following our investments in fee earner headcount and a new office in Canberra, performed strongly, with growth of 25%, up from 17% growth in Q3.


“Outside these two categories, we saw good growth in the majority of our other markets, particularly in India and Japan, which grew 79% and 28%, respectively. 


“Having added 561 fee earners in the first three quarters, additions in Q4 slowed to 58. Whilst additions in Q4 are normally lower, we are also mindful of the heightened geopolitical and macroeconomic uncertainty, which has the potential to impact client and candidate confidence. 


“We will continue to focus on driving profitable growth, while continuing our strategic investments towards our Vision of 10,000 headcount, £1bn of gross profit and £200m – £250m of operating profit. Our flexible and diversified business model ensures that we are able to respond quickly to changes in market conditions. We are pleased with the Group’s performance and expect 2018 operating profit to be in line with consensus.”


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