Half Yearly Report

RNS Number : 9636O

Michael Page International PLC

13 August 2014

Half Year Results for the Period Ended 30 June 2014

Michael Page International plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2014.

Financial summary (6 months to 30 June 2014)	2014	2013	Change	Change CER*
Revenue	£512.2m	£503.2m	+1.8%	+8.3%
Gross profit	£263.7m	£261.9m	+0.7%	+7.9%
Operating profit	£35.7m	£32.1m	+11.0%	+21.4%
Profit before tax	£35.6m	£32.0m	+11.1%
Basic earnings per share	7.6p	7.0p	+8.6%
Diluted earnings per share	7.5p	7.0p	+7.1%
Interim dividend per share	3.42p	3.25p	+5.2%

*Constant Exchange Rates

Highlights (Constant Exchange Rates)

· First half Group gross profit growth of 7.9% to £263.7m

· All four regions delivered year-on-year growth

· Strong country performances from major economies: gross profit UK (+10%), US (+23%) and Greater China (+22%)

· FX headwinds impact on gross profit of £19m and EBIT by £3m in H1

· Continued focused investment, including increase in fee earner headcount of 177 in H1, total headcount up 207 (4%)

· Conversion rate of gross profit to operating profit increased to 13.5% (2013: 12.3%)

· Strong balance sheet with net cash at 30 June 2014 of £42.9m

· Interim dividend up 5.2% to 3.42p to be paid on 3 October 2014

Commenting, Steve Ingham, Chief Executive Officer, said:

"PageGroup delivered an increase of 7.9% in year-on-year gross profit growth in constant currencies for the first half, with improvement in all four regions. We saw solid performances across our regions, including strong growth in the major economies of Greater China, the UK and the US. While adverse FX continues to impact our results at reported rates, the underlying business environment is gradually improving in a number of our key markets.

"The Group's conversion rate rose from 12.3% to 13.5% year-on-year. This reflected the full run-rate of cost savings from the work done in 2013 to achieve consistency and efficiency, as well as a steady improvement, in this early stage of the recovery cycle, resulting in growth predominantly in temporary and lower-level permanent recruitment.

"Looking ahead, we expect market conditions to remain challenging in Brazil and France, and for Australia to stabilise. The more positive environment in many of our other countries is expected to continue, with our leading KPIs positive as we start the second half. For the full year, if the current trend of improving growth rates is maintained and foreign exchange rates remain constant, we expect to perform in line with market expectations*."

* Operating Profit: £82.1m (2013: £68.2m)

PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 10.00am on 13 August 2014, the details of which are below.

Link:

http://www.axisto-live.com/investis/clients/pagegroup/presentations/53d77c3ba9fe70222f0801aa/2014-half-year-results

Please use the following dial-in number to join the conference:

+ 44 (0)20 3059 8125

Please quote "PageGroup" or "Michael Page" to gain access to the call

A presentation and recording to accompany the call will be posted on the PageGroup's website during the course of the morning of 13 August 2014 at:

http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2014.aspx

Enquiries:

PageGroup	+44 (0)20 3077 8425
Kelvin Stagg, Chief Financial Officer
Ross Hawley, Director of Investor Relations

FTI Consulting	+44 (0)20 3727 1340
Richard Mountain / Susanne Yule

INTERIM MANAGEMENT REPORT

To the members of Michael Page International plc

GROUP STRATEGY

PageGroup's strategy is to expand and diversify the Group both by geography and professional disciplines, and to become the leading specialist recruitment consultancy in each of our chosen markets. This strategy has been pursued through organic growth of existing and new teams, and diversification by region and discipline. Investment in the business has been focused on developing the long-term sustainability of the business and is supported by significant balance sheet strength and cashflow generation. We invest significantly in our people, as the recruitment, retention and development of the best talent available is central to our ability to grow the business and to manage our resources through economic cycles.

Organic growth

Our strategy is to grow organically, achieved by drawing upon the skills and experiences of proven PageGroup management, ensuring we have the best and most experienced, home-grown talent in each key role. Our team-based structure and profit share business model is highly scalable. The small size of our specialist teams means we can increase headcount rapidly to achieve growth when market conditions are good. Conversely, when market conditions tighten, these entrepreneurial, profit sharing teams reduce in size through natural attrition. Consequently, our cost base contracts during the lean times. Our strategy for organic growth has served the business well over the thirty eight years since its inception and we believe it will continue to do so. We have grown from a small, single discipline management recruitment company operating in one country to a large multidiscipline, multinational business, operating in 35 countries represented by three key brands.

Diversification by region and discipline

Our strategy is to expand and diversify the Group by industry sectors, professional disciplines, geography and level of focus, be it Page Executive, Michael Page or Page Personnel, with the objective of being the leading specialist recruitment consultancy in each of our chosen markets. As recruitment is a cyclical business, impacted significantly by the strength of economies, diversification is an important element of our strategy in order to reduce our dependency on individual businesses or markets and to increase the resilience of the Group. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries, maintaining a consistent team and meritocratic culture as we grow.

Build for the long-term

When we invest in a new business, be it a new country, a new office or a new discipline, we do so for the long-term. Downturns in the general economy of a country or in specific industries will inevitably have a knock-on effect on the recruitment market. However, it has been our practice in the past, and remains our intention, to maintain our presence in our chosen markets through these downturns, while closely controlling our cost base. In this way, we are able to retain our highly capable management teams in whom we have invested and, normally, we find that we gain market share during downturns which positions our business for market-leading rates of growth when the economy improves. Pursuing this approach means that we carry spare capacity during downturns that has a negative effect on profitability in the short-term. A strong balance sheet is, therefore, essential to support the business through these times.

Recruit the best people, develop their talent and promote from within

We recognise that it is our people who are at the heart of everything we do, particularly as an organically grown business. Investing in them is, therefore, a vital element of our strategy. Our strategy is to find the highest calibre staff from a wide range of backgrounds and then do our very best to retain them through a team-based structure, a profit share business model and continuous career development, often internationally. Our strong track record of internal career moves and promotion from within means that people who join us know that they could be our future senior managers and main Board directors.

Our current strategic priorities comprise the following:

• Increase the scale and diversification of PageGroup by growing organically existing and new teams, offices, disciplines and countries;

• Scale the business with a team and meritocratic culture whilst delivering a consistent and high quality client and candidate experience;

• Invest through cycles in our high priority high potential markets - Greater China, Germany, Latin America, South East Asia and the USA;

• Manage our fee earner headcount in all other markets to reflect market conditions;

• Focus on operational support consistency and efficiency including the roll-out of our new technology operating platform, 'Page Recruitment System'; and

• Focus on succession planning and international career paths to encourage retention and development of key staff.

GROUP RESULTS

GROSS PROFIT		Reported (£m)			Constant
Year-on-year	% of Group	H1 2014	H1 2013	%	%
EMEA	41%	107.5	107.1	+0.3%	+5.2%
UK	26%	67.6	61.4	+10.0%	+10.0%
Asia Pacific	19%	51.3	54.3	-5.5%	+7.8%
Americas	14%	37.3	39.1	-4.5%	+11.8%
Total	100%	263.7	261.9	+0.7%	+7.9%

Permanent	77%	203.5	202.6	+0.4%	+8.3%
Temporary	23%	60.2	59.3	+1.5%	+6.4%

The Group's revenue for the six months ended 30 June 2014 increased by 1.8% to £512.2m (2013: £503.2m) and gross profit increased by 0.7% to £263.7m (2013: £261.9m). At constant exchange rates, the Group's revenue increased by 8.3% and gross profit by 7.9%. The Group's revenue mix between permanent and temporary placements was 41:59 (2013: 42:58) and for gross profit was 77:23 (2013: 77:23).

Revenue from temporary placements comprises the salaries of those placed, together with the margin charged. This margin on temporary placements fell slightly to 19.9% (2013: 20.2%) in the first half of 2014. Overall, pricing has remained relatively stable across all regions, although a stronger pricing environment has been experienced in markets and disciplines where there have been increasing instances of candidate shortages.

Headcount increased by 207 in the first half, with the ratio of new fee earners to support staff being 86:14, reflecting the continued strong focus on operational efficiency. In total, administrative expenses in the first half decreased by 0.8% to £228.0m (2013: £229.8m), driven by a further £6.6m of the full run-rate cost savings from the consistency and efficiency exercise in 2013. At constant exchange rates the Group's operating profit from trading activities increased by 21%, although this reduced to £35.7m (2013: £32.1m) or 11% at reported rates.

The Group's conversion rate of gross profit to operating profit from trading activities improved by over one percentage point to 13.5% (2013: 12.3%), reflecting a combination of full run-rate cost savings, steadily improving market conditions in many markets and improving consultant productivity, although in part offset by more challenging conditions in some of the Group's larger markets.

OPERATING PROFIT AND CONVERSION RATES

The Group's organic growth model and profit-based team bonus ensures cost control remains tight. Approximately 75% of first half costs were employee related, including wages, bonuses, share-based long-term incentives, and training and relocation costs. These costs totalled £171m (2013: £175m), and included the annual inflationary salary increase which averaged 3% across the Group, and £4.2m of share-based payment charges (2013: £5.0m). The Group had an average of 5,289 employees across the half, with a front office:back office ratio of 75:25.

Other costs comprised principally information technology and property costs, which together totalled £57m in the first half (2013: £55m). The Group is currently undertaking a significant technology upgrade including the development and roll-out of its new Page Recruiting System "PRS". This is focused on delivering productivity gains for our recruitment consultants such as automatic CV parsing and enhanced job-board management, together with a significantly improved capability to attract candidates through an upgraded multi-device website platform. This roll-out accelerated in the first half and is being expanded across the Group, with an expectation of approaching one third of the consultant network on PRS by the end of 2014.

In total, administrative expenses in the first half decreased by 0.8% to £228.0m. Within this, cost increases from inflationary wage increases and new headcount investment were more than offset by incremental cost saving benefits of £6m, together with a foreign exchange benefit of around £16m. The Group has now seen the vast majority of the year-on-year benefit of the £20m of annualised savings from the 2013 actions, with less than £2m of incremental savings due in H2. At constant currency, administrative expenses increased by £13.7m, or 6.0%.

The Group views its conversion rate, which represents the ratio of operating profit to gross profit, as a key metric for the business. This conversion rate is affected by the macro-economic conditions, the level of investment, particularly in fee earners and the degree of spare capacity within the business. The Group's conversion rate for the period of 13.5% (2013: 12.3%) was a solid improvement on H1 2013.

The EMEA region saw a significant increase in its conversion rate due to the full run-rate impact of the cost savings made in 2013, while the UK also recorded a positive increase in its conversion rate through improving economic conditions and increased consultant productivity. Conversely, both Asia Pacific and the Americas saw their conversion rates decline, due to macro-economic challenges in the major markets of Australia and Brazil, together with increased headcount investment in Asia and North America and the development of new markets such as India and Peru.

The Group was affected in the period by the impact of movements in foreign exchange rates, as sterling strengthened against almost all of the currencies relevant to the Group's operations. In the first half, this reduced the Group's revenue, gross profit and operating profit when expressed in sterling by £33m, £19m and £3m, respectively.

OTHER ITEMS

Depreciation and amortisation for the half year totalled £9.2m (2013: £8.1m). This included amortisation relating to the Page Recruiting System of £4.2m (2013: £1.3m), an increase of £2.9m on 2013, principally due to the amortisation commencing in May 2013, 4 months into the prior period.

A net interest charge of £0.1m reflects the continuing low interest rate environment, with £0.3m of interest income on cash balances held through the period offset by financial charges related to the Group's Invoice Discounting Facility and overdrafts used to support local operations.

The charge for taxation is based on the expected effective annual tax rate of 34.0% (2013: 33.0%) on profit before taxation.

Basic and diluted earnings per share for the six months ended 30 June 2014 were 7.6p and 7.5p respectively (2013: 7.0p).

CASH FLOW

The Group started the year with net cash of £85.4m. In the first half £22.7m was generated from operations after funding an increase in working capital of £25.9m, primarily due to an increase in trade receivables. Tax paid was £13.1m and net capital expenditure was £6.4m, with net interest received of £0.1m. During the first half, £25.4m was spent on the purchase of shares into the employee benefit trust to hedge exposures under share-based awards, £2.7m was received from the exercise of share options and dividends of £22.2m were paid to shareholders. After adverse currency movements of £0.7m, the Group had net cash of £42.9m at 30 June 2014.

DIVIDENDS AND SHARE REPURCHASES

It is the Board's intention to pay dividends at a level that it believes is sustainable throughout economic cycles and to continue to use share repurchases to return surplus cash to shareholders. The Board remains confident of the Group's longer term prospects and has therefore decided to increase the interim dividend to 3.42p (2013: 3.25p) per share. The interim dividend will be paid on 3 October 2014 to shareholders on the register on 5 September 2014.

5.5m shares were purchased into the employee benefit trust during the first half at a cost of £25.4m.

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

EMEA	Gross Profit (£m)		Growth rates
(41% of Group in H1 2014)			Reported	Constant
H1 2014 vs. H1 2013	107.5	107.1	+0.3%	+5.2%

EMEA is the Group's largest region, contributing 41% of Group gross profit in the first half. Revenue in the region increased by 2.6% to £210.6m (2013: £205.3m) and gross profit increased slightly by 0.3% to £107.5m (2013: £107.1m). In constant currency, revenue increased by 7.1% on the first half of 2013 and gross profit increased by 5.2%.

The EMEA region experienced mixed market conditions throughout the first half. Our large businesses in France and Germany, together representing 49% of the region by gross profit, grew by 5% and 7% respectively in the first half. Each saw strong growth in their Page Personnel businesses being offset by continued difficult trading conditions in Michael Page, which focuses on higher salary and predominantly permanent placements. Overall, 16 countries, representing 88% of the region, grew in constant currency compared to the first half of 2013. Of these, significant growth was seen in Southern Europe, Turkey, Middle East and Poland.

The 41.3% increase in operating profit for the first half of 2014 to £14.7m (2013: £10.4m), and improvement in the conversion rate to 13.7% (2013: 9.7%) was due principally to the full run-rate of the cost savings achieved in the prior period through the reduction in operational support staff and related costs. Headcount across the region increased by 150 (8%) in the first half of 2014 to 2,036 at the end of June 2014 (1,886 at 31 December 2013), with the majority being fee earners.

UNITED KINGDOM

UK	Gross Profit (m)		Growth rates
(26% of Group in H1 2014)
H1 2014 vs. H1 2013	67.6	61.4	+10.0%

In the UK, representing 26% of the Group's gross profit in the first half, revenue at £155.6m (2013: £146.1m), and gross profit at £67.6m (2013: £61.4m) reflected continued progression of the business as the UK recovery maintained its steady momentum.

The UK market continued to enjoy steady growth and showed signs of greater confidence both in London and the regions, with increasing instances of candidate shortages in certain disciplines. Excluding Financial Services, Finance & Accounting (+17%) and technical disciplines such as Property & Construction (+28%) performed strongly. Page Personnel was up 17% for the first half, reflecting stronger activity in temporary and permanent recruitment at the professional clerical level.

Headcount grew modestly, up 3% during the first half of 2014 to 1,361 at the end of June 2014 (1,319 at 31 December 2013), as the business was able to achieve consultant productivity gains, while adding headcount selectively to the more strongly performing disciplines. This enabled operating profit to increase 13.1% to £10.8m (2013: £9.6m) and the conversion rate increased to 16.0% (2013: 15.6%).

ASIA PACIFIC

Asia Pacific	Gross Profit (£m)		Growth rates
(19% of Group in H1 2014)			Reported	Constant
H1 2014 vs. H1 2013	51.3	54.3	-5.5%	+7.8%

In Asia Pacific, representing 19% of the Group's gross profit in the first half, revenue decreased by 2.8% to £93.1m (2013: £95.7m) and gross profit decreased by 5.5% to £51.3m (2013: £54.3m), with the region being impacted significantly by FX translation. In constant currency, revenue increased by 13.1% and gross profit increased by 7.8%.

Asia, comprising 13% of the Group and 67% of the Asia Pacific region, enjoyed strengthened trading conditions and benefitted from the increasing experience and maturity of our local consultants. This helped Greater China achieve growth of 22%, with improving momentum through the half year, including record months from all offices in June. In Australia, gross profit was down 6.9% in constant currency as we continued to be impacted by the downturn in the mining and commodities sector. However, the Australian market stabilised progressively as the rate of decline slowed through the first half, in part due to softer comparators from the prior year.

Operating profit fell by 11.7% to £8.5m (2013: £9.6m), resulting in a decrease in the conversion rate to 16.5% (2013: 17.7%). Headcount across the region was broadly flat through the first half at 1,114 at the end of June 2014 (1,111 at 31 December 2013). The decline in the conversion rate was principally due to challenging trading conditions in Australia.

THE AMERICAS

Americas	Gross Profit (£m)		Growth rates
(14% of Group in H1 2014)			Reported	Constant
H1 2014 vs. H1 2013	37.3	39.1	-4.5%	+11.8%

In the Americas, representing 14% of the Group's gross profit, revenue decreased by 6.0% to £52.9m (2013: £56.2m) and gross profit decreased by 4.5% to £37.3m (2013: £39.1m), as the region suffered from significant adverse foreign exchange movements that reduced revenue and gross profit by £8.5m and £6.3m, respectively. In constant currency, revenue increased by 9.1% and gross profit increased by 11.8%.

In North America, our businesses performed well, with gross profit in the USA up 23% in constant currency. This reflected continued strong market conditions and high levels of activity. Our Canadian business also performed strongly and opened a new office in Calgary in July.

In Latin America, gross profit was up 6% year-on-year in constant currency. Brazil experienced mixed market conditions, starting the year positively, before being impacted by the World Cup in June which disrupted business activity and delayed decision making. Excluding Brazil, the other countries in the region (40% of LatAm) performed very strongly, up over 21% with record performances from Mexico, Argentina and Colombia. A new business was launched in Lima, making Peru our sixth country in the Latin American region.

Headcount increased modestly by 1% in the first half of 2014 to 826 at the end of June 2014 (814 at 31 December 2013). Operating profit decreased to £1.6m (2013: £2.5m), with a conversion rate of 4.4% (2013: 6.4%). The decline in the conversion rate was due principally to the challenging trading conditions in Brazil and headcount investment in North America.

CURRENT TRADING AND OUTLOOK

While adverse FX continues to impact our results at reported rates, the underlying business environment is gradually improving in a number of our key markets in this early stage of the recovery cycle. This gives us the confidence to continue to invest, both in infrastructure and, selectively, additional fee earners and we will continue this investment in people and infrastructure as we continue to see improving market conditions.

Looking ahead, we expect market conditions to remain challenging in Brazil and France, and for Australia to stabilise. The more positive environment in many of our other countries is expected to continue, with our leading KPIs positive as we start the second half. For the full year, if the current trend of improving growth rates is maintained and foreign exchange rates remain constant, we expect to perform in line with market expectations*.

* Operating Profit: £82.1m (2013: £68.2m)

KEY PERFORMANCE INDICATORS ("KPIs")

We measure our progress against our strategic objectives using the following key performance indicators:

KPI	Definition, method of calculation and analysis

Gross profit growth	How measured: Gross profit represents revenue less cost of sales and consists of the total placement fees of permanent candidates, the margin earned on the placement of temporary candidates and the margin on advertising income, i.e. it represents net fee income. The measure used is the increase or decrease in gross profit as a percentage of the prior year gross profit. Why it's important: The growth of gross profit relative to the previous year is an indicator of the growth of the net fees from the business as a whole. It demonstrates whether we are in line with our strategy to grow the business. How we performed in H1 2014: With signs of improvement in many of our markets, gross profit income in H1 2014 increased by 7.9% in constant currency, although this reduced to 0.7% at reported rates after the impact of foreign exchange. The Group remains profitable in all established markets. Relevant strategic objective: Organic growth
Percentage of gross profit generated outside the UK	How measured: Total gross profit from regions outside the UK expressed as a percentage of total gross profit. Why it's important: To measure the success of our strategy to diversify into new markets which are less competitive/less developed than the UK market. How we performed in H1 2014: 74% of our gross profit was generated outside the UK. We have continued our strategy of geographic diversification. However, the proportion of business generated outside the UK has reduced slightly due to a strong performance in the UK and mixed performances from our other regions. Relevant strategic objective: Diversification
Gross profit outside finance and accountancy	How measured: Total gross profit from disciplines outside of finance and accounting expressed as a percentage of total gross profit. Why it's important: We look at the proportion of gross profit from the different disciplines to measure the success of our strategy of diversification into more disciplines to reduce our exposure to any one sector. A key indicator is the percentage outside of our original core discipline of finance and accountancy. How we performed in H1 2014: 61% of our gross profit was generated from disciplines outside the core areas of finance and accounting. This compares to 59% in H1 2013 as we continue to follow our diversification strategy. Relevant strategic objective: Diversification
Ratio of gross profits generated from permanent and temporary placements	How measured: Gross profit from each type of placement expressed as a percentage of total gross profit. Why it's important: This ratio helps us to understand where we are in the economic cycle since the temporary market tends to be more resilient when the economy is weak, although in several of our core strategic markets, working in a temporary role, or as a contractor or interim employee, is not currently normal practice, for example Greater China, Singapore, Malaysia and Latin America How we performed in H1 2014: In H1 2014, 77% of our gross profit was generated from permanent placements and 23% from temporary. This remains in line with H1 2013. Relevant strategic objective: Organic growth
Gross profit per fee earner	How measured: Gross profit for the year divided by the average number of fee generating operating staff in the year Why it's important: This is a key indicator of productivity. How we performed in H1 2014: Gross profit per fee earner was £66.7k in H1 2014 compared to £72.0k in H1 2013. There has been a decrease in productivity compared to 2013 as a result of the increase in fee earning heads during the first half who are not yet at full productivity, as well as impacts from adverse currency movements. Relevant strategic objective: Organic growth
Conversion before exceptional items	How measured: Operating profit before interest and taxation (EBIT) before exceptional items as a percentage of gross profit. Why it's important: This demonstrates the Group's effectiveness at controlling the costs and expenses associated with its normal business operations. It will be impacted by the level of productivity and the level of investment for future growth. How we performed in H1 2014: Operating profit as a percentage of gross profit increased to 13.5% in 2014, up from 12.3% in the prior year, driven by the work done in 2013 to achieve consistency and efficiency across the Group, as well as a steady improvement in trading conditions. Relevant strategic objective: Build for the long-term
Basic earnings per share before exceptional items	How measured: Profit for the year attributable to the Group's equity shareholders, divided by the weighted average number of shares in issue during the year Why it's important: This measures the overall profitability of the Group. How we performed in H1 2014: Earnings per share in H1 2014 was 7.6p, a 8.6% improvement on the EPS in 2013 of 7.0p. Relevant strategic objective: Build for the long-term, Organic growth
Days sales outstanding (DSO)	How measured: Calculated by comparing how many days' billings it takes to cover the outstanding debtor balance at the year end. Why it's important: This measures the length of time taken for us to receive payment from our clients and indicates how well we are managing the Group's major asset. How we performed in H1 2014: DSO was 46 days at the end of 2014, slightly down on the prior year (2013: 48 days). The decrease in the period reflects the continued focus on cash collections and a greater proportion of temporary revenue, with the average debtor days being lower for the temporary business compared to the permanent business. Relevant strategic objective: Build for the long-term
Net cash	How measured: Cash and short-term deposits less bank overdrafts and loans. Why it's important: The level of net cash is a key measure of our success in managing our working capital and determines our ability to reinvest in the business and to return cash to shareholders. How we performed in H1 2014: Net cash decreased during the first half of the year to £42.9m in line with expectations, as a result of the payment of our 2013 final dividend of £22.2m and share purchases into the Employee Benefit Trust of £25.4m. Net cash 30 June 2013: £47.6m, 31 December 2013: £85.4m. Relevant strategic objective: Build for the long-term

The source of data and calculation methods year-on-year are on a consistent basis. The movements in KPIs are in line with expectations.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks. The main risks that PageGroup believes could potentially impact the Group's operating and financial performance are disclosed in the Annual Report and Accounts for the year ending 31 December 2013 on pages 45 to 49. There have been no changes to these risks in the first half to 30 June 2014.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate the Group's business while maintaining a strong balance sheet position. In a generally benign economic environment this equates to maintaining the Group's net cash/debt position within a relatively narrow band, with cash generated in excess of operational and investment requirements being returned to shareholders. In a period of economic uncertainty, a more cautious funding position will be adopted, with the Group being managed in a net cash position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Eurozone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts. The Group has an Invoice Financing facility with HSBC Bank, the availability of which is limited to the level of UK trade receivable available for financing. This facility is subject to conventional banking covenants.

The main functional currencies of the Group are Sterling, Euro, Australian Dollar and Brazilian Real. 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. Our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting currencies, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. It is the Group's policy not to seek to designate these derivatives as hedges.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the significant uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future being a period of at least 12 months.

CAUTIONARY STATEMENT

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

By order of the Board,

Steve Ingham	Kelvin Stagg
Chief Executive Officer	Chief Financial Officer

12 August 2014

INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 14. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

12 August 2014

Condensed Consolidated Income Statement
For the six months ended 30 June 2014

		Six months ended		Year ended
		30 June	30 June	31 December
		2014	2013	2013
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000

Revenue	3	512,222	503,248	1,005,502
Cost of sales		(248,546)	(241,308)	(491,621)
Gross profit	3	263,676	261,940	513,881
Administrative expenses		(228,017)	(229,820)	(445,703)
Operating profit before exceptional items	3	35,659	32,120	68,178
Exceptional items	4	-	-	(2,453)
Operating profit after exceptional items	3	35,659	32,120	65,725
Financial income	5	276	251	531
Financial expenses	5	(371)	(350)	(2,199)
Profit before tax	3	35,564	32,021	64,057
Income tax expense	6	(12,092)	(10,567)	(21,453)
Profit for the period		23,472	21,454	42,604
Attributable to:
Owners of the parent		23,472	21,454	42,604

Earnings per share
Basic earnings per share (pence)	9	7.6	7.0	13.8
Diluted earnings per share (pence)	9	7.5	7.0	13.7


The above results all relate to continuing operations.

Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2014
		Six months ended		Year ended
		30 June	30 June	31 December
		2014	2013	2013
		Unaudited	Unaudited	Audited
		£'000	£'000	£'000

Profit for the period		23,472	21,454	42,604
Other comprehensive (loss)/income for the period
Items that may subsequently be reclassified to profit and loss:
Currency translation differences		(2,772)	2,567	(4,700)
Total comprehensive income for the period		20,700	24,021	37,904
Attributable to:
Owners of the parent		20,700	24,021	37,904

Condensed Consolidated Balance Sheet
As at 30 June 2014

		30 June	30 June	31 December
		2014	2013	2013
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	10	23,069	27,503	25,238
Intangible assets - Goodwill and other intangible		1,913	2,036	1,971
- Computer software		39,126	42,613	40,126
Deferred tax assets		8,240	9,908	10,377
Other receivables	11	2,364	3,827	2,865
		74,712	85,887	80,577
Current assets
Trade and other receivables	11	207,103	198,944	186,488
Current tax receivable		7,060	6,970	7,060
Cash and cash equivalents	14	52,695	53,981	87,070
		266,858	259,895	280,618
Total assets	3	341,570	345,782	361,195
Current liabilities
Trade and other payables	12	(129,761)	(127,043)	(133,664)
Bank overdrafts	14	(9,771)	(6,366)	(1,676)
Current tax payable		(9,504)	(11,107)	(11,780)
		(149,036)	(144,516)	(147,120)

Net current assets		117,822	115,379	133,498
Non-current liabilities
Other payables	12	(4,583)	(3,074)	(4,697)
Deferred tax liabilities		(891)	(851)	(891)
		(5,474)	(3,925)	(5,588)

Total liabilities	3	(154,510)	(148,441)	(152,708)
Net assets		187,060	197,341	208,487

Capital and reserves
Called-up share capital		3,215	3,194	3,208
Share premium		74,011	66,138	71,739
Capital redemption reserve		932	932	932
Reserve for shares held in the employee benefit trust		(72,653)	(51,907)	(50,022)
Currency translation reserve		17,643	27,682	20,415
Retained earnings		163,912	151,302	162,215
Total equity		187,060	197,341	208,487

Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2014
	Called-up share capital	Share premium	Capital redemption reserve	Reserve for shares held in the employee benefit trust	Currency translation reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2013	3,178	60,221	932	(62,071)	25,115	154,013	181,388
Currency translation differences	-	-	-	-	2,567	-	2,567
Net income recognised directly in equity	-	-	-	-	2,567	-	2,567
Profit for the six months ended 30 June 2013	-	-	-	-	-	21,454	21,454
Total comprehensive income for the period	-	-	-	-	2,567	21,454	24,021
Exercise of share plans	16	5,917	-	-	-	2,012	7,945
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	10,164	-	(10,164)	-
Credit in respect of share schemes	-	-	-	-	-	4,117	4,117
Credit in respect of tax on share schemes	-	-	-	-	-	668	668
Dividends	-	-	-	-	-	(20,798)	(20,798)
	16	5,917	-	10,164	-	(24,165)	(8,068)
Balance at 30 June 2013	3,194	66,138	932	(51,907)	27,682	151,302	197,341

Currency translation differences	-	-	-	-	(7,267)	-	(7,267)
Net expense recognised directly in equity	-	-	-	-	(7,267)	-	(7,267)
Profit for the six months ended 31 December 2013	-	-	-	-	-	21,149	21,149
Total comprehensive (loss)/income for the period	-	-	-	-	(7,267)	21,149	13,882
Exercise of share plans	14	5,601	-	-	-	869	6,484
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	1,885	-	(1,885)	-
Credit in respect of share schemes	-	-	-	-	-	1,485	1,485
Debit in respect of tax on share schemes	-	-	-	-	-	(654)	(654)
Dividends	-	-	-	-	-	(10,051)	(10,051)
	14	5,601	-	1,885	-	(10,236)	(2,736)
Balance at 31 December 2013 and 1 January 2014	3,208	71,739	932	(50,022)	20,415	162,215	208,487

Currency translation differences	-	-	-	-	(2,772)	-	(2,772)
Net expense recognised directly in equity	-	-	-	-	(2,772)	-	(2,772)
Profit for the six months ended 30 June 2014	-	-	-	-	-	23,472	23,472
Total comprehensive (loss)/income for the period	-	-	-	-	(2,772)	23,472	20,700
Purchase of shares held in employee benefit trust	-	-	-	(25,445)	-	-	(25,445)
Exercise of share plans	7	2,272	-	-	-	398	2,677
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	2,814	-	(2,814)	-
Credit in respect of share schemes	-	-	-	-	-	3,648	3,648
Debit in respect of tax on share schemes	-	-	-	-	-	(787)	(787)
Dividends	-	-	-	-	-	(22,220)	(22,220)
	7	2,272	-	(22,631)	-	(21,775)	(42,127)
Balance at 30 June 2014	3,215	74,011	932	(72,653)	17,643	163,912	187,060

Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2014


			Six months ended			Year ended
			30 June	30 June			31 December
			2014	2013			2013
			Unaudited	Unaudited			Audited
	Note	£'000			£'000			£'000
Cash generated from underlying operations	13	22,692			17,325			81,533
Exceptional items	4	-			-			(3,027)
Cash generated from operations		22,692			17,325			78,506
Income tax paid		(13,081)			(12,331)			(24,367)
Net cash from operating activities		9,611			4,994			54,139

Cash flows from investing activities
Purchases of property, plant and equipment			(2,875)		(4,325)			(8,480)
Purchases of intangible assets			(3,763)		(2,582)			(4,815)
Proceeds from the sale of property, plant and equipment, and computer software			201		310			565
Interest received			276		251			531
Net cash used in investing activities			(6,161)		(6,346)			(12,199)

Cash flows from financing activities
Dividends paid			(22,220)		(20,798)			(30,849)
Interest paid			(211)		(364)			(1,475)
Issue of own shares for the exercise of options			2,687		7,945			14,429
Purchase of shares into the employee benefit trust			(25,445)		-			-
Net cash used in financing activities			(45,189)		(13,217)			(17,895)

Net (decrease)/increase in cash and cash equivalents		(41,739)			(14,569)			24,045
Cash and cash equivalents at the beginning of the period		85,394			61,373			61,373
Exchange (loss)/gain on cash and cash equivalents		(731)			811			(24)
Cash and cash equivalents at the end of the period	14	42,924			47,615			85,394

Notes to the condensed set of interim financial statements

For the six months ended 30 June 2014

General information

The information for the year ended 31 December 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2014 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Conduct Authority.

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements. The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2013, were approved by the directors on 4 March 2014. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2013, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.

The directors believe the Group is well placed to manage its business risks successfully. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

New accounting standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2013, except for the adoption of new standards and interpretations effective as of 1 January 2014 for which no material impact on the Group or Company has been identified:

Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)

Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)

Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)

IFRIC 21 Levies

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

3. Segment reporting
All revenues disclosed are derived from external customers.
The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment including allocation of central administration costs. This is the measure reported to the Group's Chief Executive Officer, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance.

(a) Revenue, gross profit and operating profit by reportable segment
					Revenue					Gross Profit
					Six months ended		Year ended			Six months ended					Year ended
					30 June	30 June	31 December				30 June	30 June	31 December
					2014	2013		2013		2014		2013			2013
					£'000	£'000		£'000		£'000		£'000			£'000

EMEA					210,623	205,250		407,013		107,453		107,137			207,771

United Kingdom					155,645	146,050		298,579		67,586		61,414			124,060

Asia Pacific				Australia and New Zealand	52,318	57,054		110,642		16,701		21,400			39,730
				Asia	40,768	38,672		78,754		34,601		32,907			66,076
				Total	93,086	95,726		189,396		51,302		54,307			105,806

Americas					52,868	56,222			110,514		37,335	39,082				76,244

					512,222	503,248			1,005,502		263,676	261,940				513,881

											Operating Profit
											Six months ended					Year ended
											30 June	30 June	31 December
											2014	2013				2013
											£'000	£'000				£'000
EMEA											14,707	10,408				25,925

United Kingdom											10,833	9,579				18,387

Asia Pacific				Australia and New Zealand						2,120		3,367			6,700
				Asia						6,369		6,248			12,543
				Total						8,489		9,615			19,243

Americas										1,630		2,518			4,623

Operating profit										35,659		32,120			68,178
Exceptional items (note 4)										-		-			(2,453)
Operating profit after exceptional items										35,659		32,120			65,725
Financial expense										(95)		(99)			(1,668)
Profit before tax										35,564		32,021			64,057

The above analysis by destination is not materially different to analysis by origin.
The analysis below is of the carrying amount of reportable segment assets, liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, goodwill and other intangibles.
(b)			Segment assets, liabilities and non current assets by reportable segment
					Total Assets					Total Liabilities
					30 June	30 June	31 December				30 June	30 June				31 December
					2014	2013		2013		2014		2013			2013
					£'000	£'000		£'000		£'000		£'000			£'000

EMEA					123,431	123,641		124,070		66,291		69,775			68,912

United Kingdom					102,120	111,848		130,280		46,288		34,928			42,733

Asia Pacific				Australia and New Zealand	27,499	24,086		21,492		10,921		12,146			8,310
				Asia	40,809	39,774		40,926		8,487		9,364			8,785
				Total	68,308	63,860		62,418		19,408		21,510			17,095

Americas					40,651	39,463		37,367		13,019		11,121			12,188
Segment assets/liabilities					334,510	338,812		354,135		145,006		137,334			140,928

Income tax					7,060	6,970		7,060		9,504		11,107			11,780

					341,570	345,782		361,195		154,510		148,441			152,708

					Property, Plant & Equipment					Intangible Assets
					30 June	30 June	31 December				30 June	30 June				31 December
					2014	2013			2013		2014	2013				2013
					£'000	£'000			£'000		£'000	£'000				£'000

EMEA					6,545	8,836			7,668		398	460				441

United Kingdom					7,078	7,253			7,307		40,005	43,365				41,078

Asia Pacific				Australia and New Zealand	1,916	1,345			1,799		55	107				78
				Asia	1,644	2,620			2,100		36	154				49
				Total	3,560	3,965			3,899		91	261				127

Americas					5,886	7,449			6,364		545	563				451
					23,069	27,503			25,238		41,039	44,649				42,097
The below analyses in notes (c) revenue and gross profit by discipline (being the professions of candidates placed) and (d) revenue and gross profit generated from permanent and temporary placements have been included as additional disclosure over and above the requirements of IFRS 8 "Operating Segments".
(c)		Revenue and gross profit by discipline
					Revenue					Gross Profit
					Six months ended		Year ended			Six months ended				Year ended
					30 June	30 June	31 December			30 June		30 June	31 December
					2014	2013		2013		2014		2013				2013
					£'000	£'000		£'000		£'000		£'000			£'000
Finance and Accounting					228,275	232,308		464,763		104,109		107,367			211,658

Legal, Technology, HR, Secretarial and Other					117,264	115,722		230,490		53,467		53,982			105,275

Engineering, Property & Construction, Procurement & Supply Chain					97,866	90,258		181,343		54,624		52,024			100,977

Marketing, Sales and Retail					68,817	64,960		128,906		51,476		48,567			95,971

					512,222	503,248		1,005,502		263,676		261,940			513,881


(d)	Revenue and gross profit generated from permanent and temporary placements
					Revenue					Gross Profit
					Six months ended		Year ended			Six months ended				Year ended
					30 June	30 June	31 December			30 June		30 June	31 December
					2014	2013		2013		2014		2013			2013
					£'000	£'000		£'000		£'000		£'000			£'000
Permanent					209,073	208,919		403,051		203,458		202,604			392,213

Temporary					303,149	294,329		602,451		60,218		59,336			121,668

					512,222	503,248		1,005,502		263,676		261,940			513,881

4. Exceptional items
The exceptional item in the prior period refers to a transfer pricing case that had arisen as a result of a French tax audit in March 2008. In October 2013, Page Personnel France (PPF) received notice from the Competent Authorities of the UK and France of their decision regarding that case. The decision, which was unexpected, increased the profit generated by PPF, which, as per the mandatory profit share or "participation aux resultants de l'entreprise" that is particular to France, drove a requirement to pay increased employee profit share, both to employees of PPF and also to the temporary workers placed by that company. As a result, the Group took in 2013, an exceptional operating profit charge of £2.5m, interest expense on late payment of corporation tax and profit share of £0.6m and an additional tax charge on the exceptional item of £0.7m relating to prior periods. There are no exceptional items in the current year.
5.	Financial income / (expenses)

		Six months ended		Year ended
		30 June	30 June	31 December
		2014	2013	2013
		£'000	£'000	£'000
Financial income
Bank interest receivable		276	251	531

Financial expenses
Bank interest payable		(371)	(350)	(1,625)
Exceptional interest payable		-	-	(574)
		(371)	(350)	(2,199)
6.Taxation Taxation for the six month period is charged at 34.0% (six months ended 30 June 2013: 33.0%; year ended 31 December 2013: 33.5%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.

7. Dividends
		Six months ended		Year ended
		30 June	30 June	31 December
		2014	2013	2013
		£'000	£'000	£'000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2013 of 7.25p per ordinary share (2012: 6.75p)		22,220	20,798	20,798
Interim dividend for the period ended 30 June 2013 of 3.25p per ordinary share		-	-	10,051
		22,220	20,798	30,849

Amounts proposed as distributions to equity holders in the period:
Proposed interim dividend for the period ended 30 June 2014 of 3.42p per ordinary share (2013: 3.25p)		10,481	10,016	-
Proposed final dividend for the year ended 31 December 2013 of 7.25p per ordinary share		-	-	22,192

The proposed interim dividend had not been approved by the Board at 30 June 2014 and therefore has not been included as a liability. The comparative interim dividend at 30 June 2013 was also not recognised as a liability in the prior period.

The proposed interim dividend of 3.42 pence (2013: 3.25 pence) per ordinary share will be paid on 3 October 2014 to shareholders on the register at the close of business on 5 September 2014.
8. Share-based payments
In accordance with IFRS 2 "Share-based Payment", a charge of £4.2m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2013: £5.0m, 31 December 2013: £8.4m).

9. Earnings per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

	Six months ended		Year ended
	30 June	30 June	31 December
Earnings	2014	2013	2013

Earnings for basic and diluted earnings per share (£'000)	23,472	21,454	42,604
Exceptional items (£'000) (note 4)	-	-	3,747
Earnings for basic and diluted earnings per share before exceptional items (£'000)	23,472	21,454	46,351

Number of shares
Weighted average number of shares used for basic earnings per share ('000)	309,595	306,210	307,858
Dilution effect of share plans ('000)	3,012	2,445	2,561
Diluted weighted average number of shares used for diluted earnings per share ('000)	312,607	308,655	310,419

Basic earnings per share (pence)	7.6	7.0	13.8
Diluted earnings per share (pence)	7.5	7.0	13.7
Basic earnings per share before exceptional items (pence)	7.6	7.0	15.1
Diluted earnings per share before exceptional items (pence)	7.5	7.0	14.9

The above results all relate to continuing operations.

10. Property, plant & equipment, computer software

Acquisitions and disposals
During the period ended 30 June 2014 the Group acquired property, plant & equipment and computer software with a cost of £6.6m (30 June 2013: £6.9m; 31 December 2013: £13.3m).
Property, plant & equipment and computer software with a carrying amount of £0.4m were disposed of during the period ended 30 June 2014 (30 June 2013: £0.4m; 31 December 2013: £0.5m), resulting in a loss on disposal of £181k (30 June 2013 loss of £46k; 31 December 2013: loss of £10k).
11. Trade and other receivables
	30 June	30 June	31 December
	2014	2013	2013
	£'000	£'000	£'000
Current
Net trade receivables	159,708	158,052	146,681
Other receivables	7,246	6,237	4,663
Prepayments and accrued income	40,149	34,655	35,144
	207,103	198,944	186,488
Non-current
Prepayments	2,364	3,827	2,865

12. Trade and other payables
	30 June	30 June	31 December
	2014	2013	2013
	£'000	£'000	£'000
Current
Trade payables	4,333	4,868	10,709
Other tax and social security	43,262	41,318	42,098
Other payables	7,872	14,619	8,996
Accruals	73,131	65,571	70,643
Deferred income	1,163	667	1,218
	129,761	127,043	133,664
Non-current
Deferred income	4,350	2,993	4,455
Other tax and social security	233	81	242
	4,583	3,074	4,697

13.	Cash flows from operating activities
			Six months ended		Year ended
			30 June	30 June	31 December
			2014	2013	2013
			£'000	£'000	£'000

Profit before tax			35,564	32,021	64,057
Exceptional items (note 4)			-	-	3,027
Profit before tax and exceptional items			35,564	32,021	67,084
Depreciation and amortisation charges			9,162	8,125	17,461
Loss on sale of property, plant and equipment, and computer software			181	46		10
Share scheme charges			3,637	4,089		5,611
Net finance costs			94	99		1,668
Operating cash flow before changes in working capital and exceptional items			48,638	44,380		91,834
Increase in receivables			(24,302)	(12,442)		(8,506)
Decrease in payables			(1,644)	(14,613)		(1,795)
Cash generated from underlying operations			22,692	17,325		81,533


14.	Cash and cash equivalents

		30 June		30 June		31 December
		2014		2013		2013
		£'000		£'000		£'000
Cash at bank and in hand		43,718		47,769		79,777
Short-term deposits		8,977		6,212		7,293
Cash and cash equivalents		52,695		53,981		87,070
Bank overdrafts		(9,771)		(6,366)		(1,676)
Cash and cash equivalents in the statement of cash flows		42,924		47,615		85,394



The Group operates a multi-currency notional cash pool. Currently the main Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in this cash pool, although it is the Group's intention to extend the scope of the participation to other Group companies going forward. The structure facilitates interest and balance compensation of cash and bank overdrafts.

RESPONSIBILITY STATEMENT

The Directors confirm that to the best of their knowledge:-

a) the condensed set of interim financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting"

b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).