Recruiter PageGroup PLC (LON:PAGE) hiked its interim dividend by 5.1% as it shrugged off a weak UK jobs market to deliver a 12.5% increase in gross profit.
The company said gross profit, or net fees, rose to £396mln in the first six months of the year from £352mln last year, as growth in international job markets offset a decline in the UK and the impact of foreign exchange headwinds.
Permanent job placements accounted for 77% of total gross profit, with temporary making up the rest.
Gross profit in the UK, which represents 18% of the total, fell 4.6% to £69.7bn as employers continued to hold back on hiring new staff amid political and economic uncertainty.
EMEA the strongest performing region
PageGroup’s biggest market – Europe, Middle East and Africa (EMEA) – was the strongest performing region with a 20.3% increase in gross profit to £194.9mln. EMEA accounts for 49% of total gross profit.
The Asia Pacific region achieved an 11.1% rise in gross profit to £74.1mln and the Americas grew 14.2% to £57.3mln, with the two representing 19% and 14% of the total, respectively.
The group’s pre-tax profit and operating profit both jumped 18.1% to £67.2mln and revenue increased 11.7% to £751.6mln.
READ: PageGroup raises 2018 guidance after record quarterly gross profit
The company lifted its interim dividend to 4.10p from 3.90p and declared a special dividend of 12.73p, in line with the previous year.
The conversion rate, which measures operating profit as a percentage of gross profit, rose to 17% from 16.2%.
Chief executive Steve Ingham said the growth in profits and the conversion rate reflected an improved business performance, operational efficiencies, continued investment in new fee earners, two new offices in Canberra and Chengdu, and the group’s launch in Vietnam.
Challenges facing PageGroup
While Ingham said he was pleased with the company’s performance, it continues to face challenges including Brexit in the UK, tough trading in Catalonia and the upcoming elections in Latin America.
"We will continue to focus on driving profitable growth as we progress towards our Vision of 10,000 headcount, £1bn of gross profit and £200mln - £250mln of operating profit, whilst being able to respond quickly to any changes in market conditions,” he added.
The total headcount increased by 428 to 7,457 at the end of the first half, with fee-earner headcount up by 319 to 5,816, a record level for the Group.
Liberum maintains 'hold' rating
Liberum left its rating on the stock at 'hold', saying earnings were slightly ahead of its forecast but the cash conversion and special dividend were weaker than expected.
"In terms of the outlook the company haven’t provided any incremental colour on trading but given these results, it would appear that management remains confident despite the prevailing uncertainties in the UK and Latin America," it said.
Shares edged up 0.5% to 602p in morning trading.