Pagegroup Plc

Thank you and good morning, everyone, and welcome to the Page Group 2025 second quarter trading update. I'm Kelvin Stagg, Chief Financial Officer, and on the call with me is Nick Kirk, Chief Executive Officer. Although I will not read it through, I'd just like to make reference to the legal formalities that are covered in the cautionary statement in the appendix to this presentation, and which will also be available on our website following the call. The group delivered gross profit of £194.8 million in the quarter, a decline of 10.5% in constant currencies. For the first half, we delivered gross profit of £389.3 million, a decline of 9.7% in constant currencies. We saw a slight deterioration in activity levels and trading in continental Europe, particularly in our two largest markets, France and Germany. However, we saw some improvement in activity, trading and customer confidence in Asia and the US. We reduced AFIANA headcounts by 133 or 2.5% during Q2, mainly in Europe and the UK. Overall, the group ended the quarter with 5,163 fee earners and a total headcount of 7,034. Productivity? measured as gross profit per fee earner remained high, but declined 3% on Q2 2024. This reflected the reduction in gross profit, partially offset by the decrease in fee earner headcount. We had net cash at the end of June of around £10 million. This compares to £54 million at the end of Q1, having purchased £7 million worth of shares for the Employee Benefit Trust in the quarter, as well as having paid out the 2024 final dividend of £37 million in June. I will now give a brief financial review. We reduced Afriana headcount by 133 or 2.5% during Q2, mainly in Europe and the UK, and on operations headcount decreased by 61 in Q2 or 3.2%, including the end of some double running as we finalised the transition of our shared service centre from Singapore to Kuala Lumpur. Overall, the group had 5,163 fee earners and a total headcount of 7,034. We continued our strategy of reallocating resources into the areas of the business where we saw the most significant long-term structure of opportunities, as well as ensuring it remained aligned to the activity levels we were seeing in each of our markets. Overall, our focus remains to balance near-term productivity with ensuring we remain well-placed to take advantage of opportunities when market conditions improve. Gross profit per fee earner remained high, but decreased 3% compared to Q2 2024. This reflected the reduction in gross profit, partially offset by the decrease in headcount. We saw a slight deterioration in activity levels and trading in continental Europe, particularly in our two largest markets of France and Germany. However, we saw some improvement in activity trading and customer confidence in Asia and the US. Although salary levels remained strong, offers made to candidates were not as elevated as they were in 2022 and early 2023. And as a consequence, the conversion of accepted offers to placements remained the most significant challenge. While our fee rates remained at high levels, as clients' recruitment budgets have tightened, they've become more risk-averse, which has continued to slow the recruitment process, impacting time to hire. In addition, the levels of offers from clients to candidates remain relatively low, raising the opportunity for the current employer to counter-offer. I will now present a regional review. Group gross profit declined 10.5% in constant currencies against Q2 2024. Foreign exchange had a negative impact on our results, decreasing our reported gross profit growth rate by 2.6 percentage points or 5.9 million pounds. We saw varying market conditions across the group with a further worsening in continental Europe and continued challenging conditions in the UK. However, we saw some improvement in Asia and another quarter of growth in the US. Reflecting the uncertain macroeconomic conditions, Temporary recruitment, down 8%, continued to outperform permanent, down 11%, as clients sought more flexible options. This was broadly in line with Q1. In our largest region, Europe, Middle East, and Africa, which represented 53% of the group, we declined 17.1% on Q2 2024, with a worsening in market conditions. Reflecting this uncertainty, temporary recruitment, down 13%, was more resilient than permanent, down 19. France, the group's largest market, which represented 13% of the group, declined 20% due to ongoing political and macroeconomic uncertainty. We saw a more resilient performance in temporary recruitment, which is indicative of the current uncertainty in the market. Germany, our second largest market, declined by 21% in Q2, with declines across all brands, and conditions particularly tough with impermanent, with companies limiting and delaying hiring decisions due to macroeconomic and tariff-related uncertainty. Elsewhere in Europe, trading conditions remain challenging in all countries. In line with the tougher trading conditions in Q2, we reduced our FIANA headcount by 94, mainly in France. The Americas, which represented 19% of the group, grew 2.9%. North America was up 13%, with the US up 14%, a third consecutive quarter of growth, and an improvement on the growth of 7% in Q1 2025. We continue to see good levels of activity and trading, with another quarter of strong results in engineering and a significantly improved performance in construction. In Latin America, excluding Argentina due to the hyperinflation, gross profit was down 9%. Mexico, our largest country in the region, was down 18% due to ongoing political uncertainty and low levels of customer confidence. Brazil was down 5%, albeit against a tough comparator. Elsewhere in Latin America, our remaining countries declined 2% collectively. Across the region, Fiona headcount increased by 12. In Asia Pacific, which represented 16% of the group, Q2 gross profit grew 0.6% on 2024, its first quarter of growth since Q2 2022, and a significant improvement on the decline of 11.1% in Q1 2025. Within the region, eight out of our 12 markets delivered growth in Q2. In Asia, which represented 14% of the group, we grew 4% and saw early signs of improvement in trading and customer confidence. In Greater China, we declined 5%, with Mainland China down 17%, but Hong Kong up 16% in the quarter, due partly to a weak comparator, but also driven by improved trading, particularly in Page Executive. Southeast Asia grew by 10% against Q2 2024, with a notable performance in Singapore, up 14%, particularly in Page Executive. India delivered a second consecutive record quarter, up 13%. Japan was flat, an improvement on the decline of 7% in Q1. Australia declined 13% with ongoing challenging conditions across most states. Fiona headcount increased by 5 in the quarter. Non-operations headcount decreased by 37, including the end of some double running as we finalised the transition of our shared service centre from Singapore to Kuala Lumpur. In the UK, which represented 12% of the group, gross profit declined 14.3%. The market remains tough but stable, having delivered a similar growth rate as the previous three quarters. The conversion of accepted offers to placements remained a significant area of challenge, with ongoing subdued levels of client and candidate confidence impacting decision-making and increasing time to hire. Our Fiona headcount decreased by 56 in the quarter. I will now provide a summary of our results. We delivered a resilient performance despite ongoing market uncertainty with mixed results across the group. We saw a slight deterioration in activity levels and trading in continental Europe, particularly in our two largest markets, France and Germany. However, we saw some improvement in activity trading and customer confidence in the US and Asia. The conversion of accepted offers to placements remained the most significant area of challenge, as ongoing macroeconomic uncertainty continued to impact confidence, which extended time to hire. In addition, the levels of offers from clients to candidates remained relatively low, raising the opportunity for the current employer to counteroffer. We continue to see the benefits of our investments in innovation and technology. Customer Connect is supporting productivity and enhancing customer experience. Page Insights is providing real-time data to inform business decisions for both Page and our customers. We continue to work with our partners to deploy AI and automation tools into our working environment. Despite the uncertain outlook due to the unpredictable economic environment, we have a highly diversified and adaptable business model, a strong balance sheet, and our cost base is under continuous review. We continued with our strategy of reallocating resources into the areas of the business where we saw the most significant long-term structural opportunities, as well as ensuring it remained aligned to the activity levels we were seeing in each of our markets. Overall, our focus remains to balance near-term productivity with ensuring we remain well-placed to take advantage of opportunities when market conditions improve. At this time, the Board expects full-year operating profit to be broadly in line with current consensus of £22 million. Nick and I will now be happy to take any questions you may have.

Thank you. If you wish to ask a question, please press star followed by 1 on your telephone keypad now. If for any reason you want to remove your question from the queue, please press star followed by 2. When preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Remy Grenou from Morgan Stanley. Your line is now open. Please go ahead.

Good morning, gentlemen, and thanks for the presentation. Just a few questions on my side. So first, can you provide us more details on the phasing through the quarter? And I'm particularly interested in how the slight deterioration you've seen in France and Germany has materialized. If it's something that you've seen gradually happening through the quarter or if it was back and loaded and the same question for the steep improvements you've seen in the US. So that's the first question. The second one is on, so in the context of what one of your competitors was saying a few weeks back, have you seen any reduction in job flows, any significant one, or any other worrying indicators that could support another phase of volume deterioration and particularly interested in what you've seen in June? And the last one is probably more of a housekeeping question. So can you just update us on the cost savings and how much of the 15 million restructuring we should expect to be expensed and paid in H1 versus H2? that's H2. And if there is any other consideration that we need to have in mind, any additional restructuring costs, you would have to incur going forward.