Pagegroup Plc

Good morning, everyone, and thank you for joining us on today's Page Group Q1 Choosing Update. My name is Drew, and I'll be the operator on the call today. After today's prepared remarks, we will have a Q&A session. If you would like to ask a question during that time, please press star followed by one on your telephone keypad. And to withdraw your question, it's star followed by two. With that, it's my pleasure to hand over to Kelvin Stagg, Chief Financial Officer to begin. Please go ahead when you're ready.

Thank you, Drew. Good morning, everyone, and welcome to the Page Group 2026 First 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, which will also be available on our website following the call. The group produced another resilient performance despite the heightened geopolitical and macroeconomic uncertainty. Q1 gross profit was £187 million, a decline of 4.9% in constant currencies against 2025. A Fiona headcount increased by 26, or 0.5%, driven by growth in the Americas and Asia-Pacific, partially offset by reductions in EMEA and the UK. Overall, the group ended the quarter with 4,994 Fionas and a total headcount of 6,801. Despite the challenging macroeconomic conditions, gross profit per fee earner and measure of productivity remained high and grew 2% versus Q1 2025. We had net debt at the end of March of around £7 million, in line with expectations. This compares to net cash of £31 million at the end of 2025, having paid out annual bonuses and a quarterly profit share in January. I will now give a brief financial review. we increased our Fiona headcount by 26, or 0.5% during the quarter. We continued to review our Fiona headcount, reallocating resources in line with our strategy, and the areas of the business offering the most significant long-term structural opportunities, as well as ensuring it remains aligned to the levels of activity we are seeing in each of our markets. And this was particularly evident in Q1, where in response to the tougher conditions in EMEA and the UK, we reduced our Fiona headcount by 80, However, in Asia-Pacific and the Americas, due to the continued growth and to maximise market share, we added 106 billion. We reduced our non-operations headcount by 45 in Q1. Despite the challenging macroeconomic conditions, productivity remained high and grew 2% versus Q1 2025. Where we have experienced improved trading in parts of Asia-Pacific and the US, this was driven by a normalisation of levels of conversion of offers to placements. In our other countries, where trading remained challenging, we are yet to see any improvement in this metric. Although our clients' recruitment budgets have tightened in many markets, which extends time to hire, our fee rates remained at record or high levels across all regions. Salary levels remained strong, although the level of increases offered to candidates were not as elevated as they were in 2022 and early 2023, and, as a consequence, the conversion offers to platements remain the most significant challenge. I will now present a regional review. Root gross profit declined 4.9% in constant currencies against Q1 2025. In line with the three previous quarters, we saw variable market conditions across the group, with ongoing challenging conditions in Europe and the UK. However, we delivered a sixth consecutive quarter of growth in the US and a fourth in Asia. In our largest region, Europe, Middle East and Africa, which represented 54% of the group, we declined by 9.2% on Q1 2025. We continue to see tough conditions throughout most of the region, with low levels of candidate and client confidence. Germany, the group's largest market, which represented 13% of the group, declined 7% in the quarter, broadly in line with Q4, with activity levels and business sentiment remaining stable. In line with Q4, our interim business was the most resilient, down 1%, and we continued to see high demand for project-based work, particularly in finance. France, the group's second largest market, which represented 12% of the group, declined 14% due to the ongoing political and macroeconomic uncertainty, leading to continued high levels of candidate and client caution. Temporary recruitment, down 10%, continued to outperform permanent, down 18%. where we saw a 9% reduction in job acquisition per Fiona in Q1. Clients become increasingly selective, slower to make decisions, and more conservative on salary offers. As a result, the recruitment process has become more complex, and time to hire has increased. Spain continues to be the strongest performing market in the region, growing 1%, with ongoing good levels of candidate and client confidence. Elsewhere in Europe, market conditions remain challenging. in all countries. In the Middle East, where our first and foremost priority is the safety and well-being of our 70 people, we declined 12%, with clients encumbered at confidence having deteriorated further due to the regional conflict, which also increases the risks of backouts and hiring freezes. Overall for the region, our Fiona headcount reduced by 51 in Q1. The Americas, which represented 19% of the group, grew 1.1% against Q1 2025. The US was up 1%, its sixth consecutive quarter of growth. Our largest discipline of construction continues to deliver the standout results, up 14%. This has been driven by high hiring demand in all markets, notably in commercial, multifamily and healthcare, where the demand for experienced project managers and superintendents remains high. However, we are yet to see a broad-based recovery with tougher conditions in most other disciplines. In Latin America, gross profit grew 1%. Mexico, our largest country in the region, declined 80%, an improvement on the 17% decline in Q4, although we continue to see ongoing tariff-related uncertainty. Brazil was down 7%, albeit against a tough comparator. Temporary recruitment up 12% continued to outperform permanence down 17. Colombia, which now represents around 20% of Latin America, delivered the standout performance, up 15%, with particularly strong trading in our technology-focused consulting business. Our other four countries in the region grew 16% collectively. Overall, Fiona headcount increased by 48% in the quarter, mainly in the US. In Asia Pacific, which represented 16% of the group, Q1 gross profit grew 9.3% on 2025. Asia was up 10%, its fourth consecutive quarter of growth, and an improvement on the growth of 7% in Q4. In Greater China, which represented 4% of the group, we grew 12%, albeit against the stock comparator. We continue to see improvements in both candidate and client confidence, which help to secure placements, particularly for more senior roles. Mainland China and Hong Kong were up 21% and 4% respectively. Southeast Asia grew 5%, with Singapore up 16%, and strong trading conditions across most of our markets in this region. India, where we now have over 260 fionas, was up 10%, its fifth consecutive quarter of double-digit growth. Elsewhere, in Japan, where we have invested in fionas due to the size of the market and its strategic enforcements, we grew 17%, a notable improvement on the growth of 3% in Q4. Australia was up 4%, its second consecutive quarter of growth, supported by good results across most states and particularly strong trading in Victoria. Despite a decline in external job volumes, our consultants delivered strong job acquisition and interview outcomes from a lower headcount, driving improvements in productivity. We increased our Fiona headcount in the region by 58, mainly in Southeast Asia and India. In the UK, which represented 11% of the group, gross profit declined 11.4%. The market remains tough, with clients continuing to delay hiring decisions and candidates remaining cautious about accepting offers. Temporary recruitment down 7%, outperform permanent down 14%, where we saw a 9% reduction in job acquisitions. per Fiona. Our Fiona headcount reduced by 29 in the quarter. I will now provide a summary of our results. The group produced another resilient performance, despite the heightened geopolitical and macroeconomic uncertainty. In line with the three previous quarters, we saw variable market conditions across the group. The conversion of offers to placements remained the most significant area of challenge as ongoing macroeconomic uncertainty continued to impact confidence, extending time to hire. We remain committed to our strategy and continue to reallocate resources into the areas of the business where we see the most significant long-term structural opportunities, as well as ensuring headcount in all of our markets is aligned to activity levels. Overall, our focus remains to balance near-term productivity with ensuring we are well-placed to take advantage of opportunities as market conditions improve. Whilst we have seen signs of normalisation in trading in some of our markets, the increased geopolitical and macroeconomic risks due to the conflict in the Middle East create a heightened degree of uncertainty in the outlook for the rest of the year. Despite this market outlook, we continue to focus on controlling the controllables, invest in innovation and technology, and remain confident in the execution of our strategy. We have a highly diversified and adaptable business model, a strong balance sheet, and a cost base is under continuous review. Nick and I will now be happy to take any questions you may have.

Thank you. We'll now start today's Q&A session. If you would like to ask a question during today's call, please press star followed by one on your telephone keypad. And to withdraw your question, it's star followed by two. Our first question today comes from Abby Bell from UBS. Your line is now open. Please proceed.