Michael Page to hand £50m to investors

Michael Page chief Steve Ingham plans special divi
Michael Page chief Steve Ingham plans special divi
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Shareholders in Michael Page are in line for a £50 million windfall after the recruitment firm said strong demand from UK job hunters helped boost its earnings in the first half.

The company said operating profits in the UK, which accounts for more than a quarter of its income, jumped 15.5 per cent to £12.5m in the six months to the end of June.

With the business sitting on a net cash balance of about £100m, chief executive Steve Ingham said it now planned to return £50m of surplus capital to investors through a special dividend of 16p a share.

Shareholders will also receive an interim dividend of 3.6p on 2 October – an increase of 5.3 per cent on last year’s payout.

The FTSE 250 firm said four key markets in Germany, Greater China, South-east Asia and the US all performed at record levels. Latin America also produced a record result, despite the impact of political and economic uncertainty in Brazil. These five markets now account for 30 per cent of the group’s gross profit.

Ingham said: “For the fourth successive quarter we delivered double-digit gross profit growth in constant currencies and have continued to see improvement in all our regions. We are pleased with the first-half performance and the outlook is positive for all our regions in the second half. We remain focused on continuing our investment in the future of the group while at the same time improving our productivity and conversion rate.”

The firm said good levels of demand and candidate shortages in the UK provided further signs of improvement, including a small rise in temporary margins, although clients continued to focus on hiring at “lower salary levels”.

Overall pre-tax profits rose 13.7 per cent to £40.4m, on revenues up 3.5 per cent at £530.4m.

Analysts at Investec described the results as “solid”, but added that the group was “still yet to permeate strongly into the higher salary brackets”.

The broker, which rates the recruitment firm’s shares as a “hold”, has pencilled in a 17.8 per cent increase in pre-tax profits for the full year to £92.5m.