Pagegroup Plc

Good morning everyone and welcome to the Page Group 2026 second quarter trading update. I'm Kelvin Stagg, Chief Financial Officer. 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. Despite ongoing challenging market conditions, The group produced a good performance in Q2. Q2 gross profit was 197.6 million pounds, a decline of 0.2% in constant currencies. For the first half, we delivered gross profit of 385.2 million pounds, a decline of 2.4% in constant currencies. We reduced our Fiona headcount by 80, or 1.6% during Q2, mainly in France and Northern Europe. Overall, the group ended the quarter with 4,914 fee earners and a total headcount of 6,679. Despite the challenging conditions, gross profit per fee earner and measure of productivity remained high and grew 5% versus Q2 2025. In line with expectations and having paid out the 2025 final dividend of around £10 million in June, net debt at the end of June was around £7 million in line with Q1. In the first week of July the cash balance improved to be broadly net flat and we expect to close the year with around 30 to 40 million pounds of net cash. I will now give a brief financial review. We reduced the earner headcount by 80 or 1.6% during Q2, mainly in France and Northern Europe. We remain committed to our strategy and continue to reallocate resources into the areas of the business Offering the most significant long-term structural opportunities, such as in Asia. Overall, our focus remains on aligning headcounts in all of our markets to activity levels and balancing near-term productivity with ensuring we are well placed to take market share as conditions improve. We reduced our non-operations headcount by 42 in Q2, or 2.3%. Despite the challenging macroeconomic conditions, productivity remained high and grew 5% versus Q2 2025. We continue to target higher salary level roles and delivered our highest quarterly productivity since 2022. In the markets where we have experienced improved trading, such as in Asia Pacific, and our U.S. construction business. This was driven by normalization of conversion of offers to placements as both candidates and clients became more willing to negotiate and compromise to deliver a successful outcome. Our business model focuses on white-collar, qualified candidates working in specialist management and leadership roles. The supply of this talent remains a key challenge for our clients and as a result, our permanent fee rates remain at record levels. I will now present a regional review Group gross profit declined 0.2% in constant currencies against Q2 2025. Market conditions remain mixed across the group. We delivered a seventh consecutive quarter of growth in the US and a fifth consecutive quarter of growth in Asia. Page Executive delivered a record quarter with growth of 15% against Q2 2025, demonstrating the success of our strategy, and we returned to growth in Southern Europe in Q2. We also saw challenging but stable conditions in Northern Europe, France and the UK. Overall, around 50% of the group was in growth in Q2. In our largest region, Europe, Middle East and Africa, which represented 51% of the group, we declined 4.8% on Q2 2025, with mixed results across the region. Temporary recruitment down 2%, continued to be more resilient than permanent, down 6%. Germany, the group's largest market, which represented 12% of the group, declined by 4% in Q2, albeit against a soft comparator. We saw strong results from our contracting business and paid executive, but trading was more challenging in our Michael Page permanent recruitment business due to a combination of renewed energy price shocks, ongoing geopolitical tensions, and weak market sentiment. France, our second largest market, declined 12%, Thank you very much. Southern Europe, which represented 14% of the group, returned to growth in Q2. Spain continued to deliver the standout performance, up 9%. Italy grew 7%, driven by a particularly strong performance in Page Executive. Trading in Northern and Central Europe remained more challenging in all markets. The Middle East declined 24%, as both client and candidate confidence remained subdued amid the regional conflict. In line with the tougher trading conditions in Q2, we reduced our fee on a headcount by 62, mainly in France and the Netherlands. The Americas, which represented 21% of the group, grew 7.2%. North America was up 5%, with the US up 5%, a seventh consecutive quarter of growth and an improvement on the growth of 1% in Q1. Construction, our largest discipline. continued to deliver the standout result, up 12%. In addition, we saw a return to growth in our second largest discipline, engineering and manufacturing, up 22% with improving client confidence and high demand for talent, particularly in the aerospace, defence and electronic sectors. However, we have yet to see a broad-based recovery with tough conditions in most other disciplines. In Latin America, gross profit was up 10%. Mexico, our largest country in the region, grew 7%, an improvement on the 8% decline in Q1, albeit against the softer comparator. We continue to see ongoing tariff-related uncertainty in this market. Brazil was down 6%. Temporary recruitment up 12%, continued to outperform permanent, down 14%. Ahead of the general election in H2, clients are taking a more cautious approach, postponing both hiring and investment decisions. Columbia, which now represents around 20% of Latin America, was the standout market in the region, delivering a record quarter, up 15%, with another particularly strong performance in our technology-focused consulting business. Elsewhere in Latin America, our remaining countries grew 29% collectively. Journal headcounts in the region decreased by 33%, with the timing of the next intake cohort of fee earners in the US starting in early July. In Asia Pacific, which represented 17% of the group, Q2 gross profit grew 9.4% on 2025. In Asia, which represented 14% of the group, we grew 11%, our fifth consecutive quarter of growth, with 9 out of 11 markets growing. We continue to see improvements in both candidate and client confidence, which is helping to secure placements, particularly for more senior roles. Greater China was up 17%, an improvement on the growth of 11% in Q1. Mainland China grew 28%, due partly to a soft comparator, but with improved trading across both brands. Customer sentiment remained stable, with increased willingness to make decisions, resulting in improved offer-to-placement conversion rates. Hong Kong was up 2%. Southeast Asia grew 4% with strong trading conditions across most of our markets in this region. In Japan, where we have invested in peonies due to the size of the market and its strategic importance, we delivered another standout performance, up 18%. India grew 7%, another record quarter. Australia was flat with stable market conditions. We increased our peony headcount by 26% in the quarter, mainly in Japan and India. In the UK, which represented 11% of the group, gross profit declined 5.3%. The market remains tough but stable, with pockets of optimism beginning to appear in paid executive, entry and technology. Reflective of market uncertainty, temporary recruitment, up 1%, outperform permanent, down 8%, where we continue to see lower job acquisition levels per Fianna. We reduced our Fianna headcount by 11.25%. I will now provide a summary of our results. Despite ongoing challenging market conditions, the group produced a good performance in Q2. We saw continued growth in Asia Pacific and the Americas, as well as a return to growth in Southern Europe. In total, around 50% of the group was in growth. However, trading remained more challenging across France, Northern Europe and the UK. In the markets where we experienced improved trading, this was driven by a normalisation of conversion of offers to placements, as both candidates and clients became more willing to negotiate and compromise to deliver a successful outcome. In the markets where trading remained challenging, we have yet to see any improvement in this metric. We remain committed to our strategy and continue to reallocate resources into markets where we see an improvement in business confidence and activity levels, such as in Asia. The progress we are making in productivity, technological innovation, operational efficiency and strategic execution demonstrates that our strategy is working in positions as well for future growth. We continue to harness the power of age and our position as the global leader for specialist management and leadership recruitment, placing more senior talent at higher salary levels and at higher fee rates, which has driven our highest level of productivity since our record year in 2022 and a record quarter for Page Executive. We have a flexible cost base throughout the owner headcount which adjusts naturally to market conditions. Alongside this we continue to control the cost base tightly and have undertaken various programs since the launch of our new strategy to manage it in light of the tougher market conditions. These programs included managing our support headcount, moving our SSCs to more cost effective locations, Closing offices and reducing management layers. Collectively excluding savings due to the reduction in fair headcount, these initiatives have delivered annualised savings of around £40 million. This cost-based control has continued in 2026, incurring some one-off costs, which we will cover in more detail at the entrance. Whilst we have seen an improvement and signs of a normalisation in trading in a number of our markets, There still remains a high degree of uncertainty in the outlook for the rest of the year. We have a highly diversified and adaptable business model, a strong balance sheet and a cost base that is under continuous review. The Board currently expects 2026 operating profit to be in line with company compiled consensus of around £28 million. Nick and I will now be happy to take any questions you may have.

Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. To remove your question, press star 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. Thank you. We will now take our first question from Andy Groble from BNP Paribas. Please go ahead.

Hi, good morning. Just a couple from me, if I may. Firstly, on the conversion of offers to placements which you talked to, which areas are seeing improvement? Are there any areas that are still going backwards on that metric? And kind of broadly across the group, Where does that stand versus, I guess, both the trough and where you would expect it to get to in a normalised market? Thank you. And then secondly, just on the UK, some of the market data was better in June, and on a two-year stack, you've made big strides in that region. Are you seeing that improvement through the course of the quarter, and how do you see this pan out through Q3, given Thank you very much.

Thanks Andy. I can take those two. So in terms of the conversion of offers to placements, I mean broadly where we're seeing improvements in results, that's where we're seeing improvements of the conversion of those offers to placements. So I suppose where it's most embedded is somewhere like the construction business we have in the US where we've seen a seventh consecutive quarter of growth. and that would now be back up to where it would have been at peak as you referred to it so probably four out of five so back to normal levels you still always get one turned down because a camper might get multiple offers and will pick you that another one over your one etc or you might still get buy back but that certainly returns to more normal levels as it has across many many parts of Asia now where we've had five consecutive quarters of growth so very much back towards where it would have been I think in your question you said, are there any markets where it's going backwards? I don't think there is. I think probably most of the markets where it's tougher, it's stable, but stable at a lower level. So at that level around a three out of five rather than four out of five. I'm thinking markets like France as an example of that. So as we start to see kind of more normalization across other markets, we would start to see that rate of conversion improving. Thank you very much. because more of the processes that they're managing are resulting in successful outcomes. For somewhere like the US construction business now that is, as we said before, seven quarters into a recovery, they are now starting to also see top of the funnel gains as well and we'll react to that by bringing some more Fiona headcounts selectively as we move through the second half of the year. As we come back to then the UK, yeah, we're pleased to see the result in the UK. It's been tough in the UK for quite a period of time. and we're starting to see some pockets of optimism. Areas like page executive, interim technology all perform pretty well in Q2 so we're pleased with that. I think it is still relatively fragile is business confidence and you refer to potentially a change in leadership of the country and we'll have to wait to see what that means for business. I don't know at this stage because I haven't seen any policies. So We'll wait and see, but I think what we're doing in the UK is very much self-help. We're focusing on the areas where we believe we can operate well. We, as you know, closed our page personnel business here back in 2024, so we're now over a year on from that. And we're seeing the results of that. Our productivity in the UK was up 11% in Q2, and that's as a result of us trading up. and moving more into the Michael Page and PageExec markets and really putting our resource into those businesses. So, yeah, pleased with how the UK is going but still relatively early stages and not back in growth as yet.

Great, thank you very much.

Thank you. We will now take our next question from Carl Green from RVC. Please go ahead.

Yeah, thanks very much. Good morning, gents. Just a couple from me as well. On the cost-based control measures, which you've alluded to in the statement, I know you're going to elaborate on this more at the interim phase, but just kind of any early hints as to the phasing around this in terms of costs going in and then benefits coming out of the other side at this stage. And then the second question, Americas, you did reference Mexico having a soft comp year on year. That looks like it's pretty soft actually for the next couple of quarters as well. So the question would be, are you confident that we're going to see good levels of like-for-like FD growth continue in the Americas as you see things at the moment? Thank you.

Thanks, Carl. Okay, well, I'll take the Americas question and then pass over to Kelvin for the cost-based question. I think, yes, as regards the Americas, I mean, we saw, what, 9% growth in the Latam region in Q2, and it's really trading in line with expectations. Mexico was our biggest business there, and as you alluded to, it had a stronger quarter of 7%. It seems to be a bit more improved confidence. We're still waiting on the... Outcome of the renegotiation of the NAFTA deal between the US and Mexico, but we hear that that's kind of an anytime now type situation, so that's positive. And again, you know, what we saw there was growth coming through improved productivity. So this, as I said before, this return to normalization of offers converting into placements and productivity in Mexico was up 24%, so we were delighted with that. Brazil is still a little bit tougher. We're waiting on the results or the outcome of the upcoming election later in the year. And so that's kind of just put people in a situation where they're holding off on decisions at the moment. But hopefully that will settle down once the result is known. Colombia is really the success story for us in America at the moment. Another record quarter, over 100 heads and a strong focus on tech consulting. and that was up 15% in Q2 and I don't see any reason why that will soften in the second half of the year so no I think that certainly our performance across the Americas, LATAM region specifically is looking good going into the second half.

Yeah I can pick up the cost question so I think we as always have got various different activities going on to try and streamline This year it's primarily looking at back office operations. So as we've mentioned before, we've got a transformation program running in our HR function. We have just gone live in Asia Pacific with SAP SuccessFactors, which is an HR system. And and we're in the process of moving the HR function into the shared service centres around the group. We also have a number of activities ongoing around a location strategy where we for legacy reasons have got people in support functions that are in relatively expensive countries and we continue to move those roles into shared service centres in the lower cost locations. I expect that the one-off costs relating to all of those activities will be mid-single digit and split broadly 50-50 first half and second half. But we will go into a bit more detail about all of that when we get to the intros. Great, thank you very much.

Thank you. Next, we will take questions from James Rowland Clark from Barclays. Please go ahead.

Hi, two short ones I think. So my first is just on the better conversion rates that you're seeing at the moment or that have been ongoing in the US but have improved elsewhere in the group in certain regions. Is that simply candidate confidence or is there something else that's driving that? Is there maybe improved salary offers or anything like that sort of underlying that improvement? and then secondly just on operating profit unchanged. With the better top line trends you're seeing one might have thought that that would be moving up is the one off the reason. It's not. Thank you very much.

Thanks James.

I mean as regards improving conversion rates for anyone who's been involved in moving jobs, it's a cocktail of things. It's never one simple outcome. It's not just about offering more money or flexibility or even being that one-sided it's a client situation and a candidate situation where that chemistry has to work it's two humans in a room it's it's about the financials of course it is it's about selling the story of a future opportunity and career opportunity for the individual it's also about that individual feeling connected to the culture of the company and that's why we so strongly feel the role of the consultant the human in the process is vital as we move forward So, I don't think it's down to any one thing at the moment. It will be partly due to better offers on the table. It will be partly due to candidates feeling a bit more comfortable about moving. It will be partly due to clients who have order books and commitments with their customers and they need to fulfil those commitments and therefore need resource on board. So, it's always lots and lots of different things, but... from our perspective it's pleasing to see some of those elements starting to be more positive than they have been.

Yeah, on the operating profit question, the simple answer is yes, it relates to the one-off costs. We normally expect and we did see about a 70% drop through from the incremental gross profit and which is essentially the profit share that we'll pay away. 30% is the profit share that we pay to the consultants for the incremental revenue. That will drop through as you would expect from the gross profit in the first half but with, as I say, mid-single digit one-off costs that really offset it. Without that, yes, we would have been moving operating profit up.

Great, thank you.

Thank you. The next question is from Steve Wolf from Deutschland. Please go ahead.

Good morning both. Just a quick two from me. One on Germany and your thoughts on the reforms that are happening there and how that sort of fits in with investment in the business there. And then secondly, Your peer on Friday mentioned they've seen some softness in the per market creeping in. Your statement definitely doesn't suggest that at all. I was wondering whether you would be kind enough to perhaps marry the two comments together.

Sure, I can take those. So, Germany, I mean, it feels a bit of a mixed picture around the reforms, Steve, because I guess when we talk to our team locally, you know, it's probably a little bit like AI Headlines is that there's many of them and they're very conflicting and I guess that's where we are really in Germany is that no one seems to kind of fully know the the impacts of the investment is it just plugging holes in the existing budget or is it genuinely new investment that will create growth and therefore jobs So, at the moment, you know, our focus really is around what we're doing. The business there performed, as we said, performed well, but, you know, we wanted to make it clear that it was against a soft comparator. Activity levels and sentiment are pretty stable for us in Germany. As you probably know, our business is split about 50% perm and then 50% non-perm. And of that, it's split 10% temp, 40% contracting. and the contracting business is the part that's going particularly well for us. We saw 10% growth there in Q2 focused around finance and technology. and we also experienced some growth in our number of runners which speaks well for the second half of the year so overall in Germany we were pleased with the results but I'm not particularly linking that to any element around the reforms etc because unless you've read something that I've not read we haven't actually seen any concrete evidence of that as yet and we're certainly not getting that feedback from clients saying that they're recruiting ahead of the reforms so I think it's still a little bit wait and see As regards your next question, I mean, probably the two health warnings I'll call out, because we have been in the statement, is that on perm in the UK, still a little bit tougher, and perm in France is still a little bit tougher. But outside of that, though, no, not at all. I mean, you know, we're a predominantly perm business, and therefore if our results are getting better, it's because perm's getting better. So outside of those two, perm's going well for us.

Perfect. Thank you both very much. Cheers. Thank you.

Thank you. We will now take our next question from Abby Bell from UBS. Please go ahead.

Hi, both. Morning. Just a quick question for me. You previously touched on this, but in the release you've commented on a few soft comparators across a few of your markets. Is there anything we should be aware of heading into the Q3 or the next few quarters in terms of soft comparators? And then secondly, could you give us a bit more color on the paid executive performance you commented on? and it driving a strong 50% growth this quarter. Could you comment on any of the regions or end markets that drove this and also where are you planning to scale or invest this part of the business by regional vertical? Thank you.

I don't know off the top of my head if there's any particular soft comparatives that we'll be calling out for H2 just immediately. Maybe whilst I'm talking about page executive Kelvin can have a think but there's nothing immediate that's coming to mind. In Page Executive, let's talk about that for a moment. When we were developing our strategy, it was the area that the exec board really kind of came together on and felt very strongly that we have this, I would say, unique opportunity as a global recruiter with a really strong brand to occupy what we refer to as the market gap, which is that space above the level that MicroPage operate, which in GBP would be, say, up to about £100,000, £120,000 basic salary. And then the market below the big global Shrek firms, the Corn Fairies, Spencer Stewart's, the Hydrics, etc. So really, for them, anything below probably £300,000, £350,000 basic salary. So there's a big space up there. And what we found is that there really isn't any established player in the market. Certainly not a global player. There's lots of boutiques locally. But we remain more convinced than ever that the strategy around paid executive is the right one. It's helping to drive up average fee rates. It's helping to drive up average placement rates, etc. So overall, yeah, very happy with the performance. All regions, frankly, Abby, all regions perform strongly. There's not really one that would pick out. Everywhere perform well in paid executive. and it's as a business it's 92% perm so it's very perm heavy the fee the big so when they land they make a big difference at a country level clearly if they don't they also make a big impact at a country level and as regards headcount we grow Page Executive very much as we grow the group we look at activity levels we look at opportunity and then we hire into those markets and we hold headcount where we're still waiting for the productivity to catch up. What was nice about Q2 was we were able to grow headcount by 5% whilst growing productivity by 10%. And that's the perfect mix for us. I mean, if we can be growing headcount and productivity at the same time, it speaks to better market conditions. In terms of maybe a little bit more colour if it helps, I mean, our top three practices globally are manufacturing, consumer and finance. They're the big three for us. All be it that we do operate in others, but they're the biggest three in terms of mix. So no, I was delighted with the performance of PageExec and hopefully we'll continue to see that through the remainder of the year. Yeah, looking at comps, Abbie,

Thank you very much. Thank you.

Thank you. There are no questions waiting at this time. I will pass the conference back over to Kelvin for any further remarks.

Thank you, Sherry. As there are no further questions, thank you all for joining us this morning. Our next update to the market will be our 2026 interim results on the 6th of August, 2026. Thank you and have a good morning.