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PageGroup hikes final dividend as international growth offsets weak UK performance amid Brexit uncertainty

“Our flexible and diversified business model ensures that we are able to respond quickly to changes in market conditions," said chief executive Steve Ingham
jobs
The UK was the only market to post a decline in gross profit in 2018

Brexit uncertainty hit the UK division of recruitment firm PageGroup PLC (LON:PAGE) in 2018 but growth in overseas jobs markets led to 20.4% jump in total pre-tax profit.

Pre-tax profit rose to £142.3mln last year from £118.2mln in 2017 on revenue of £1.5bn, up 14.5% on a year ago.

READ: PageGroup achieves record 2018 but shares drop amid Brexit worries

Gross profit – a key performance measure for recruiters –  increased 15.9% to a record of £814.8mln.

Europe, Middle East and Africa unit led the growth with an 18.7% rise in gross profit to £394.3m, accounting for 48% of the total. Growth was driven by strong demand in Germany and France.

The Asia Pacific grew gross profit by 20.6% to £16.12mln, despite more challenging market conditions in Mainland China amid a trade dispute with the US, on the back of growth in Hong Kong, Australia, Singapore, Japan and India. The division represented 20% of total gross profit.

The Americas, including North and Latin America, saw gross profit rise 19.4% to £121mln, making up 15% of the group.

The UK was the only division to post a decline with gross profit down 1.7% to £138.4mln as business confidence weakened amid political uncertainty. It represented 15% of total gross profit.

Total headcount reached a record of 7,772, up 11.3% on the previous year.

PageGroup recommended a final dividend of 9p per share, up 4.7% on a year ago, after paying an interim dividend of 4.1p and a special dividend of 12.73p in October. The total dividend for the year represents a yield of 5.7%.

Looking ahead, chief executive, Steve Ingham, said:  "We are mindful of the macro-economic uncertainties that exist, but 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 £200mln- £250mln of operating profit.

“Our flexible and diversified business model ensures that we are able to respond quickly to changes in market conditions."

Shares gained 2.3% to 458.3p in morning trading. 

Shore Capital repeated a 'buy' recommendation and target price of 590, saying the 2018 results were in line with its expectations.

"Whilst we appreciate the current macro environment creates an extremely uncertain outlook, the recent sell-off in the shares overly discounts these risks in our view," it said.

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