Final Results
Michael Page International PLC
25 February 2004
25 February 2004
MICHAEL PAGE INTERNATIONAL PLC
Full Year Results for the year ended 31 December 2003
Michael Page International plc ("Michael Page"), the specialist professional
recruitment company, announces its full year results for the period ended 31
December 2003.
Key Points
• Revenue (gross profit) of £178.5m, in challenging conditions
• Q4 2003 revenue of £45.7m, 4% increase over Q4 2002
• Profit before tax* of £23.5m, slightly ahead of expectations
• Basic earnings per share of 3.8p and adjusted earnings per share of 4.1p
• £29.2m cash generated from operating activities
• Dividend maintained at 3.4p
* pre exceptional items of £1.1m (statutory profit before tax: £22.4m)
Commenting on the results, Terry Benson, Chief Executive of Michael Page, said:
"Michael Page performed creditably during the year and exited 2003 in a strong
financial position. This was achieved despite another challenging year for
recruitment specialists.
"In the UK, our largest geographic market, there is now clear evidence of
increasing activity levels across all disciplines and we have now begun
investing in anticipation of further growth. The outlook in Asia Pacific and
the Americas is also improving and we are planning to open a number of new
offices in those markets. However, in Continental Europe, trading conditions
remain weak and our expectation is that 2004 will prove another difficult year
for our businesses there.
"For the Group as a whole, our current expectation is that our first quarter
revenues will be of a similar order to the £45.7m in the fourth quarter of 2003,
with pre-bonus costs, including new investments, running at an average monthly
rate of approximately £13m over the year as a whole."
Enquiries:
Michael Page International plc 020 7269 2205
Terry Benson, Chief Executive
Stephen Puckett, Finance Director
Financial Dynamics 020 7269 7291
David Yates/Richard Mountain
Chairman's Statement
The Group performed creditably during the year and exited 2003 in a strong
financial position. This was achieved despite it being another challenging year
for recruitment specialists. The slowing down of economic activity and weakening
of business confidence experienced throughout 2002 continued into the first half
of 2003, compounded by the war in Iraq and the outbreak of SARS. These
conditions impacted directly upon the professional employment markets and
consequently on the results of the Group. However, towards the end of the first
half we experienced a slight improvement in activity which continued throughout
the second half of the year.
Financial highlights
As a consequence of these difficult trading conditions, turnover for the year
ended 31 December 2003 was 2.8% lower at £372.6m (2002: £383.5m). Temporary
placement activity has been more resilient than permanent and this shift in
business mix contributed to a revenue (gross profit) reduction of 7.4% to
£178.5m (2002: £192.6m). Given the Group's high operational gearing, operating
profit before exceptional items reduced by 28.8% to £22.9m (2002: £32.1m).
Profit before tax and exceptional items was £23.5m (2002: £32.6m) and earnings
per share before exceptional items were 4.1p (2002: 5.8p).
Cash flow was again very strong during the year with the Group generating £29.2m
(2002: £46.7m) from operating activities. At 31 December 2003 the Group had net
cash of £22.4m (2002: £21.4m).
Dividends and share repurchases
Despite the reduction in profits, the Board is recommending that the dividend be
maintained at last year's level. A final dividend of 2.3p per ordinary share is
proposed which, together with the interim dividend of 1.1p per ordinary share
paid in October, makes a total dividend for the year of 3.4p (2002: 3.4p) per
ordinary share. The final dividend will be paid on 4 June 2004 to those
shareholders on the register at 7 May 2004. The total dividend is covered 1.2
times by earnings per share before exceptional items of 4.1p.
In view of the uncertain and weak market conditions during 2003, we did not make
any share repurchases. However, we anticipate share repurchases being an ongoing
use of surplus cash and accordingly will be seeking shareholders' consent for a
renewal of the repurchase authority at the Annual General Meeting on 27 May
2004.
Employees
I wish to express my thanks to the staff worldwide for their commitment, loyalty
and efforts throughout this sustained period of difficult trading conditions
when they have maintained your Company's position as the international leader in
the specialist recruitment industry.
Outlook
In the UK, our largest geographic market, there is now clear evidence of
increasing activity levels across all disciplines and we have now begun
investing in anticipation of further growth. The outlook in Asia Pacific and
the Americas is also improving and we are planning to open a number of new
offices in those markets. However, in Continental Europe, trading conditions
remain weak and our expectation is that 2004 will prove another difficult year
for our businesses there.
For the Group as a whole, our current expectation is that our first quarter
revenues will be of a similar order to the £45.7m in the fourth quarter of 2003,
with pre-bonus costs, including new investments, running at an average monthly
rate of approximately £13m over the year as a whole.
Adrian Montague
Chairman
25 February 2004
Chief Executive's Review
Whilst having to review another challenging year, I do so in the belief that
there are encouraging signs that the worst is behind us in many of our markets.
During the year we have continued to invest cautiously and sensibly in the
organic development of our businesses, while maintaining our normal tight cost
control, and produced over £23.5m of profits before exceptional items.
We started the year with 2,390 fee generating and support staff operating from
107 offices in 16 countries. During the course of the year we took the
opportunity, upon the expiration of lease commitments, to consolidate a small
number of offices in the UK and France, and at 31 December 2003 we employed
2,260 fee generating and support staff operating from 105 offices in 16
countries.
United Kingdom
In the UK, turnover fell by 4.7% to £194.3m (2002: £203.9m) and revenue (gross
profit) by 8.7% to £90.6m (2002: £99.3m). Operating profits before exceptional
items were £15.6m (2002: £20.5m). Revenue in the second half of the year was
7.2% higher than in the first half reflecting improved trading conditions. The
operational gearing effect on these increased revenues, combined with good cost
control, resulted in a 32% increase in second half operating profits, compared
with the first half.
The revenues of the finance and accounting businesses of Michael Page Finance,
Michael Page City and Accountancy Additions, which generate approximately two
thirds of our UK revenue, were 12% lower than in 2002.
Michael Page Finance, the largest of the three businesses, recorded its highest
quarterly revenue of the year in the fourth quarter, which was very encouraging
given that this quarter includes the seasonally quieter Christmas period.
Although the revenue of Michael Page City for the year as a whole was 20% lower
than in 2002, the second half improved significantly on the first, reflecting
the improved confidence levels experienced by many large financial institutions.
The revenue of Accountancy Additions, which specialises in lower level finance
and accounting positions, proved, as in 2002, to be the most resilient and least
affected by adverse economic conditions.
The combined revenues of Michael Page Marketing, Michael Page Sales and Michael
Page Retail, were 7% lower than in 2002 and represented 23% of the UK total. The
Marketing and Sales businesses, which had borne the full brunt of the economic
downturn in 2001 and 2002, particularly in the Technology and Telecoms sectors,
were both beneficiaries of increased levels of enquiry as the year progressed.
Michael Page Retail produced another sound performance, with second half revenue
9% higher than the first. The national coverage of these businesses increased to
eight offices in January 2004 with the opening of an office in Bristol.
In 2003, Michael Page Legal achieved almost identical levels of revenue to 2002,
the second half being 6% stronger than the first. The revenue of our Technology
business improved substantially in the second half enabling us to achieve a
break-even position for the year as a whole. Our newer businesses, Michael Page
Human Resources and Michael Page Engineering and Supply Chain Management both
achieved in excess of 30% revenue growth year on year. We have extended the
geographical coverage of both businesses and they are now represented in four
and five locations respectively.
In December we started a new business, Michael Page Secretarial, in the City and
West End of London.
Continental Europe
Our Continental European businesses continued to experience extremely
challenging trading conditions throughout the year. Turnover was 5.6% lower at
£120.4m (2002: £127.6m) and revenue 12.2% lower at £58.2m (2002: £66.3m).
The decline in activity continued throughout the year with second half revenue
10% lower than in the first. As a result the region recorded a loss in the
second half, resulting in a full year operating loss before exceptional items of
£0.3m (2002: £5.6m profit).
France is our second largest geographic market after the UK, representing
approximately 20% of the Group's 2003 revenues, and once again trading
conditions proved to be very difficult. Revenue from permanent placements was
22% lower than in 2002. The temporary and contracting businesses fared better
but still experienced a 16% decline in revenue year on year. Whilst continuing
to maintain our market leading position, staff numbers were reduced by over 25%
from the beginning of 2003 and we successfully consolidated a number of offices
during the year.
Our businesses in The Netherlands, Germany and Switzerland also experienced
difficult trading conditions throughout the year. Our businesses in Italy, Spain
and Portugal fared better and as a result achieved similar levels of revenue to
2002.
Clearly the depressed economic environment in many Continental European markets
severely impacted the Group's businesses over the past three years. Nevertheless
we are committed to these markets in the longer term and accordingly we have
continued to invest modestly and sensibly in 2003 with the opening of small
offices in Zurich and Berlin, and expanded our offices in Rotterdam, which
opened in 2002, and Dusseldorf, by starting Michael Page Engineering and
Production.
Asia Pacific
Turnover for the region was 10.0% higher at £51.4m (2002: £46.7m), revenue was
9.2% higher at £25.0m (2002: £22.9m) and operating profit before exceptional
items increased to £7.6m (2002: £6.8m).
The economy in Australia proved to be the most resilient of all our major
markets in 2003 and I am pleased to report another year of achievement. Our
businesses in Melbourne and Perth all benefited from strong demand by domestic
clients. As elsewhere in the world, demand from our clients in the International
Financial Services, Telecoms and Technology sectors was subdued in Sydney in the
first half, but showed signs of improvement towards the end of the year. The
newer businesses, Michael Page Human Resources and Michael Page Engineering,
both progressed well during the course of 2003. The lease of our Sydney office
expired in December and we successfully relocated to new premises with minimum
disruption in what was the beginning of the seasonally quieter summer period in
Australia. Having carefully evaluated the opportunities in Queensland, a new
office was opened in Brisbane in January 2004.
Our businesses in Hong Kong and Singapore, both of which have traditionally been
heavily dependent on the International Financial Services, Telecoms and IT
sectors, experienced a particularly anxious start to 2003 due to the outbreak of
SARS. The impact proved to be less than we originally feared and both businesses
exceeded internal expectations. We are equally pleased with the progress of our
Tokyo office, which increased revenue year on year by over 50% and produced an
operating profit in 2003.
We remain confident that the Asia Pacific region, in particular Greater China,
offers considerable longer term potential for the Group.
The Americas
Turnover for the region was £6.6m (2002: £5.4m) and revenue increased to £4.6m
(2002: £4.1m). Revenue in the second half of 2003 was over 40% higher than in
the first half and consequently the first half losses were largely recovered and
the region only recorded a small operating loss before exceptional items for the
year of £0.1m (2002: £0.7m loss). The increased revenue achieved in the second
half reflects both improving overall trading conditions, particularly in the
USA, and the continuing investment in our own staff and new offices.
In my review last year I anticipated the opening of a third office in the USA in
2003, despite the extremely challenging environment we faced at that time. I am
pleased to report that our office in Stamford, Connecticut was duly opened in
September and we are very satisfied with its progress to date.
In Sao Paulo, Brazil, we enjoyed another successful year and were
particularly pleased with the development of Michael Page Engineering and
Production. We opened an office in Rio de Janeiro and it is our intention to
expand into Sales and Marketing recruitment during the course of 2004.
New IT system
We have now successfully commenced the global roll out of our new front office
recruitment system, which is now live in the UK, France and USA. The worldwide
roll out is currently anticipated to be substantially complete by the end of
2004.
Strategy
Since 2001 we have experienced the most challenging trading conditions for at
least a decade or more. During this period we have retained a level of resource
that has enabled us to maintain and indeed grow our presence in some markets and
start new businesses in developing markets. Our staff around the world should be
congratulated for these achievements and we will continue to invest in their
training and development.
I believe the demand for our services will increase in the coming years. Our
overall strategy remains absolutely unchanged. We intend to stay focused on our
core competency of specialist recruitment and to grow the business organically
by the expansion of existing businesses in their local markets, the introduction
of the disciplines into existing locations and by entering new geographic
markets.
The United States offers significant long-term opportunities for the Group and
it remains our objective to grow our business in the USA organically, as rapidly
as internal resources will allow. To this end we already have in place a plan of
action which should allow us to open new offices in Boston and Chicago within
the first half of 2004.
Terry Benson
Chief Executive
25 February 2004
Finance Director's Review
Profit and loss account
Turnover
Turnover for the year was 2.8% lower at £372.6m (2002: £383.5m). In the second
half of 2003, turnover was 6.5% higher than in the first half and was 3.5%
higher than the second half of 2002.
Turnover from temporary placements increased marginally by 0.6% to £243.8m
(2002: £242.2m) and represented 65.4% (2002: 63.2%) of Group turnover. Turnover
from permanent placements was £128.8m (2002: £141.2m).
Gross profit (revenue)
Revenue for the year decreased by 7.4% to £178.5m (2002: £192.6m) representing
an overall gross margin of 47.9% (2002: 50.2%). The percentage reduction in
revenue is greater than the reduction in turnover due to a combination of a
higher proportion of temporary placements in 2003 and a lower gross margin on
temps. Revenue from temporary placements was £56.7m (2002: £59.7m) and
represented 31.7% (2002: 31.0%) of Group revenue. The gross margin achieved on
temporary placements was 23.2% (2002: 24.7%).
Revenue in the second half of 2003 was 3.4% higher than in the first half. The
Group's quarterly revenue in the first quarter of 2001 was £69.6m and it
declined sequentially to £49.5m in the first quarter of 2002. After three
relatively stable quarters of around £50m from the fourth quarter of 2001 to the
second quarter of 2002, it declined sequentially through to the first quarter of
2003. We have now had another three stable quarters of around £45m and in the
fourth quarter of 2003 recorded the first year on year quarterly increase since
the first quarter of 2001.
Operating profit
Administrative expenses in the year reduced to £155.6m (2002: £160.5m) before
exceptional items, principally due to the lower profit related bonuses payable
to staff.
The Group's largest category of expenditure is the remuneration of our
consultants and support staff. Headcount of the Group was 2,390 at 1 January
2003 and reduced to 2,279 at 30 June. The Group's headcount has remained
relatively stable during the second half of the year and at 31 December 2003 we
employed 2,260 consultants and support staff.
As a result of the revenue decline and the Group's high operational gearing,
operating profit before exceptional items was £22.9m (2002: £32.1m).
Exceptional items
At the end of 2001, the Group committed to a 20 year lease on 33,000 sq.ft. of
offices in London to provide space for future expansion and to accommodate
existing businesses whose leases were expiring in 2002 to 2004. Possession of
the new offices took place in the first half of 2003 and, given the reductions
in headcount, a substantial amount of space is now vacant. In accordance with
FRS 12 the Group has recorded an exceptional charge for vacant properties of
£3.0m.
On flotation in March 2001, the Group incurred an exceptional charge and made a
provision of £6.0m in respect of employer's social charges on the Restricted
Share Scheme which vests in 2004. This liability, which is dependent upon the
price of Michael Page shares, has been estimated in these accounts at £4.1m
using the share price at 31 December 2003 (186p). As a consequence there is an
exceptional credit in the year of £1.9m. When this liability crystallises, any
material difference from the current provision will be taken as an exceptional
item in the 2004 accounts.
Net interest
The net interest receivable in the year was £0.6m (2002: £0.5m). During the year
£0.4m of interest was earned on surplus cash balances which were invested in the
short-term money market. In addition interest of £0.2m was received on a tax
related refund.
Taxation
Tax on profits before exceptional items and goodwill amortisation was £9.0m
(2002: £11.4m), representing an effective tax rate of 38.1% (2002: 35.0%). The
rate is higher than the UK corporation tax rate of 30% as a result of
non-deductible business expenses, profits arising in higher tax rate
jurisdictions, and losses which are unable to be offset against profits in the
current year and against which no deferred tax asset has been recognised. The
rate has increased over 2002 as a direct result of the lower profits in
Continental Europe.
As a result of recent changes in tax legislation, the Company expects to obtain
a deduction for corporation tax purposes when the Restricted Share Scheme vests
in 2004. Based on the price of Michael Page shares at 31 December 2003, the
deduction to UK taxable profits would be approximately £27m which, at the UK
corporation tax rate of 30%, would reduce the tax charge in 2004 by £8.1m.
Earnings per share and dividends
Basic earnings per share were 3.8p (2002: 5.8p) and adjusted earnings per share
before exceptional items were 4.1p (2002: 5.8p). The weighted average number of
shares for the year was 357,955,000 (2002: 366,355,000). The 2003 average number
of shares was lower than 2002 due to the full year effect of the shares
repurchased and cancelled during the second half of 2002.
A maintained final dividend of 2.3p (2002: 2.3p) per ordinary share has been
proposed by the Directors which, together with the interim dividend of 1.1p
(2002: 1.1p) per ordinary share, makes a total dividend for the year of 3.4p
(2002: 3.4p) per ordinary share. The final dividend, which amounts to £8.2m,
will be paid on 4 June 2004 to those shareholders on the register at 7 May 2004.
Balance sheet
We have adopted early the new guidance on accounting for own shares and have
classed these as "EBT reserve" deducted from Shareholders' Funds rather than
being held as investments on the balance sheet. The impact of this is to reduce
the Group's net assets, in both the current and prior year, by approximately
£10m.
The Group had net assets of £53.3m at 31 December 2003 (2002: £48.9m) of which
£22.4m (2002: £21.4m) is represented by net cash.
While capital expenditure is fundamentally driven by the Group's headcount, as
indicated last year, 2003 capital expenditure, net of disposal proceeds,
increased to £6.3m (2002: £2.5m) due to the fit out costs of the new building in
London and the implementation of the new IT system.
Trade debtors were £53.2m at 31 December 2003 (2002: £53.2m) representing debtor
days of 46.0 (2002: 47.5 days).
Cash flow
At the start of the year the Group had net cash of £21.4m.
During the year the Group generated net cash from operating activities of £29.2m
(2002: £46.7m) being £29.7m (2002: £40.5m) of EBITDA, an increase in working
capital requirements of £0.8m (2002: £6.2m reduction) and movements in
provisions of £0.2m (2002: £nil). The increased working capital is largely due
to the greater activity in December 2003 when compared to December 2002.
The principal payments have been:
• £6.3m (2002: £2.5m) of capital expenditure, net of disposal proceeds, on
property, infrastructure, information systems and motor vehicles for staff;
• taxes on profits of £10.7m (2002: £11.5m); and
• dividends of £12.2m (2002: £12.5m).
At 31 December 2003 the Group had net cash balances of £22.4m.
Treasury management and currency risk
It is the Directors' intention to finance the activities and development of the
Group principally from retained earnings and to operate the Group's business
while maintaining the net debt/cash position within a relatively narrow band.
Cash generated in excess of these requirements will be used to buy back the
Company's shares for which renewal of the existing authority is being sought at
the forthcoming Annual General Meeting.
Cash surpluses are invested in short-term deposits with any working capital
requirements being provided by local overdraft facilities.
The main functional currencies of the Group are Sterling, Euro and Australian
Dollar. The Group does not have material transactional currency exposures nor is
there a material exposure to foreign-denominated monetary assets and
liabilities. The Group is exposed to foreign currency translation differences in
accounting for its overseas operations although our policy is not to hedge this
exposure.
Stephen Puckett
Group Finance Director
25 February 2004
Consolidated Profit and Loss Account for the year ended 31 December 2003
Before Exceptional After
exceptional items exceptional
items (note 3) items
2003 2003 2003 2002
Note £'000 £'000 £'000 £'000
Turnover 2 372,616 - 372,616 383,470
Cost of sales (194,131) - (194,131) (190,822)
________ ________ ________ ________
Gross profit 2 178,485 - 178,485 192,648
Administrative expenses (155,601) (1,101) (156,702) (160,512)
________ ________ ________ ________
Operating profit 22,884 (1,101) 21,783 32,136
Net interest 626 - 626 461
________ ________ ________ ________
Profit on ordinary activities before taxation 2 23,510 (1,101) 22,409 32,597
Taxation on profit on ordinary activities 4 (8,994) 330 (8,664) (11,443)
________ ________ ________ ________
Profit on ordinary activities after taxation 14,516 (771) 13,745 21,154
being profit for the financial year
Equity dividends 5 (12,171) - (12,171) (12,263)
________ ________ ________ ________
Retained profit for the financial year 2,345 (771) 1,574 8,891
======== ======= ======== ========
Basic earnings per share (pence) 6 3.8 5.8
Diluted earnings per share (pence) 6 3.8 5.8
Adjusted earnings per share (pence) 6 4.1 5.8
======== ========
The above results relate to continuing operations
Consolidated Statement of Total Recognised Gains and Losses for the year ended
31 December 2003
2003 2002
£'000 £'000
Profit for the financial year 13,745 21,154
Foreign currency translation differences 2,786 1,256
________ ________
Total recognised gains and losses for the year 16,531 22,410
======== ========
Consolidated Balance Sheet at 31 December 2003
As restated
(note 7)
2003 2002
Note £'000 £'000
Fixed assets
Intangible assets 1,539 1,635
Tangible assets 23,101 23,505
________ ________
24,640 25,140
Current assets
Debtors 71,530 70,743
Cash at bank and in hand 23,211 22,040
________ ________
94,741 92,783
Creditors:
Amounts falling due within one year (59,355) (63,069)
________ ________
Net current assets 35,386 29,714
________ ________
Total assets less current liabilities 60,026 54,854
Creditors:
Amounts falling due after more than one year (444) -
Provisions for liabilities and charges 8 (6,239) (6,000)
________ ________
Net assets 2 53,343 48,854
======== ========
Capital and reserves
Called up share capital 3,637 3,637
Capital redemption reserve 113 113
EBT reserve (9,871) (10,000)
Profit and loss account 59,464 55,104
________ ________
Equity shareholders' funds 9 53,343 48,854
======== ========
Consolidated Cash Flow Statement for the year ended 31 December 2003
2003 2002
Note £'000 £'000
Net cash inflow from operating activities 10 29,179 46,657
Returns on investments and servicing of finance 625 467
Taxation paid (10,657) (11,537)
Purchases less disposals of tangible fixed assets (6,349) (2,536)
Equity dividends paid (12,170) (12,524)
________ ________
Net cash inflow before financing 628 20,527
Financing
Sale of shares held by the Employee Benefit Trust 129 -
Repayment of loan notes - (5,452)
Purchase of own shares for cancellation - (13,726)
________ ________
Net cash inflow/(outflow) from financing 129 (19,178)
________ ________
Increase in net cash in the year 11 757 1,349
======== ========
Notes to the statutory accounts
Year ended 31 December 2003
1. Basis of accounting
The preliminary results have been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting and financial
reporting standards. The accounting policies are the same as those set out in
the financial statements of the Group for the year ended 31 December 2002 with
the exception of the change in accounting policy resulting from the adoption of
UITF 38 as described in note 7.
2. Segmental analysis
Turnover Gross Profit
2003 2002 2003 2002
(a) Turnover and gross profit by geographic region £'000 £'000 £'000 £'000
United Kingdom 194,262 203,868 90,630 99,274
Continental Europe 120,363 127,551 58,227 66,334
Asia Pacific Australia 43,708 39,187 18,082 16,380
Other 7,673 7,503 6,951 6,536
________ ________ _______ _______
Total 51,381 46,690 25,033 22,916
Americas 6,610 5,361 4,595 4,124
_______ _______ _______ _______
372,616 383,470 178,485 192,648
====== ====== ====== ======
Turnover Gross Profit
2003 2002 2003 2002
(b) Turnover and gross profit by discipline £'000 £'000 £'000 £'000
Finance and accounting 256,731 277,818 113,599 126,477
Marketing and sales 61,832 54,590 37,704 38,740
Other 54,053 51,062 27,182 27,431
_______ _______ _______ _______
372,616 383,470 178,485 192,648
====== ====== ====== ======
2003 2002
(c) Profit before interest, taxation and exceptional items by geographic region £'000 £'000
United Kingdom 15,638 20,487
Continental Europe (280) 5,567
Asia Pacific Australia 6,303 5,796
Other 1,285 1,033
_______ _______
Total 7,588 6,829
Americas (62) (747)
________ ________
Profit before interest, taxation and exceptional items 22,884 32,136
Exceptional items (1,101) -
_______ _______
Profit before interest and taxation 21,783 32,136
Net interest 626 461
_______ _______
Profit on ordinary activities before taxation 22,409 32,597
====== ======
As restated
(d) Net assets/(liabilities) by geographic region (note 7)
2003 2002
£'000 £'000
United Kingdom 41,115 30,264
Continental Europe 9,791 17,166
Asia Pacific Australia 4,741 3,825
Other 811 340
_______ _______
5,552 4,165
Total
Americas (3,115) (2,741)
_______ _______
53,343 48,854
====== ======
3. Exceptional items
2003 2002
£'000 £'000
Release of payroll tax provision on Restricted Share Scheme (a) 1,886 -
Property costs (b) (2,987) -
_______ _______
(1,101) -
Taxation on exceptional items 330 -
_______ _______
(771) -
====== ======
(a) Release of payroll tax provision on Restricted Share Scheme
The grant of Restricted Shares on flotation in 2001 gave rise to potential
National Insurance and social security liabilities for which a provision of
£6.0m was established in 2001. As these liabilities crystallise in 2004 when
the Restricted Shares vest, these liabilities have now been estimated using the
share price at 31 December 2003 of 186.0p. The required provision is £4.1m and
as a consequence, £1.9m has been released from the provision.
(b) Property costs
The property cost provision represents rentals and other unavoidable costs on
onerous lease agreements on vacant properties.
4. Taxation
The taxation charge for the year is made up as follows:
2003 2002
Taxation relating to current year £'000 £'000
UK corporation tax at 30% for year 6,236 9,964
Adjustments in respect of prior periods (543) (296)
Overseas corporation tax 2,013 3,516
_______ _______
7,706 13,184
Deferred taxation
Origination and reversal of timing differences 958 (1,741)
_______ _______
Taxation on profit on ordinary activities 8,664 11,443
====== ======
5. Dividends
2003 2002
£'000 £'000
Interim dividend of 1.1p per ordinary share (2002: 1.1p) 3,937 4,030
Proposed final dividend of 2.3p per ordinary share (2002: 2.3p) 8,234 8,233
_______ _______
Total dividend of 3.4p per ordinary share (2002: 3.4p) 12,171 12,263
====== ======
The record date for the final dividend is 7 May 2004 and payment date is 4 June
2004.
6. Earnings per share
Basic and Exceptional Adjusted
diluted EPS items EPS
Year ended 31 December 2003
Profit after taxation (£'000) 13,745 771 14,516
_______ _______ _______
Weighted average number shares ('000) 357,955 - 357,955
_______ _______ _______
Earnings per share (pence) 3.8 - 4.1
====== ====== ======
Year ended 31 December 2002
Profit after taxation (£'000) 21,154 - 21,154
_______ _______ _______
Weighted average number shares ('000) 366,355 - 366,355
_______ _______ _______
Earnings per share (pence) 5.8 - 5.8
====== ====== ======
7. Prior year adjustment
The Group has adopted UITF Abstract 38 "Accounting for ESOP Trusts" early. The
early adoption of this UITF has resulted in "Investments in own shares" being
classed as "EBT reserve" on the balance sheet and deducted from shareholders'
funds rather than being held as an asset. Prior year net assets have reduced by
£10.0m as a result of this restatement. There is no effect on profit in either
the current or preceding financial year.
8. Provisions for liabilities and charges
2003 2002
£'000 £'000
Payroll tax liability on the Restricted Share Scheme (note 3) 4,114 6,000
Vacant property provision (note 3) 2,125 -
______ ______
6,239 6,000
===== =====
9. Consolidated Reconciliation of Movements in Shareholders' Funds for the
year ended 31 December 2003
2003 2002
£'000 £'000
Profit for the financial year 13,745 21,154
Dividends (12,171) (12,263)
_______ _______
Retained profit for the financial year 1,574 8,891
Foreign currency translation differences 2,786 1,256
_______ _______
4,360 10,147
Purchase of own shares for cancellation - (13,726)
Sale of shares held by the Employee Benefit Trust 129 -
_______ _______
Net addition/(reduction) to shareholders' funds 4,489 (3,579)
_______ _______
Opening shareholders' funds as previously stated 48,854 62,433
Prior year adjustment (note 7) - (10,000)
_______ _______
Opening shareholders' funds as restated 48,854 52,433
_______ _______
Closing shareholders' funds 53,343 48,854
====== ======
10. Reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
£'000 £'000
Operating profit before exceptional items 22,884 32,136
Exceptional items (note 3) (1,101) -
_______ _______
Operating profit after exceptional items 21,783 32,136
Depreciation and amortisation charges 7,688 8,067
Loss on sale of fixed assets 241 262
(Increase)/decrease in debtors (313) 10,349
Decrease in creditors (459) (4,157)
Increase in provisions (note 8) 239 -
_______ _______
Net cash inflow from operating activities 29,179 46,657
====== ======
11. Reconciliation of net cash flow to movement in net cash
2003 2002
£'000 £'000
Increase in net cash in the year 757 1,349
Decrease in debt financing - 5,452
Foreign exchange movements 305 224
_______ _______
Movements in net cash in year 1,062 7,025
Opening net cash 21,372 14,347
_______ _______
Closing net cash 22,434 21,372
====== ======
12. Analysis of net cash
At Foreign At
1 January Cash exchange 31 December
2003 flow movements 2003
£'000 £'000 £'000 £'000
Cash at bank and in hand 22,040 852 319 23,211
Bank overdrafts (668) (95) (14) (777)
_______ _______ _______ _______
Total net cash 21,372 757 305 22,434
====== ====== ====== ======
13. Preliminary Announcement
The financial information set out above does not constitute the Group's
audited statutory accounts within the meaning of Section 240 of the Companies
Act 1985. The financial information for the year ended 31 December 2002 has
been extracted from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The report of the auditors on those
accounts was unqualified and did not contain a statement under section 237 (2)
or (3) of the Companies Act 1985. The Group accounts for the year ended 31
December 2003 will be finalised on the basis of the financial information
presented by the Directors in the preliminary announcement.
14. Issue of Annual Report and Accounts
The 2003 Annual Report and Accounts will be posted to shareholders by
16 April 2004. Copies may be obtained after this date from the Company
Secretary, 39-41 Parker Street, London WC2B 5LN. Telephone No. 020 7831 2000.
15. Annual General Meeting
The Annual General Meeting of Michael Page International plc will be
held at 39-41 Parker Street, London, WC2B 5LN on 27 May 2004 at 12.00 noon.
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 20th May 2024
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