Page Group plans to pay back furlough cash even as profit tumbles

Recruitment company Page Group's (PAGE.L) operating profit took a hit of nearly 89% in 2020, with most companies implementing a hiring freeze amid the pandemic.

However, the group ended the year with a “strong cash position” of £166m ($232m) and it intends to repay the £3.4m income it received from the UK government under the furlough scheme.

It also said it will “seek to return to our policy of shareholder returns as market conditions improve and we get more clarity over the trading outlook.”

Shares ticked up roughly 1.9% Wednesday morning.

However, operating profit fell 88.4% from 146.7m in 2019 to£17m in 2020. Revenue was £1.3bn, down 21% year on year, while gross profit was $610m, down almost 29% year-on-year.

CEO Steve Ingham described 2020 as “an unprecedented year, with all of our markets impacted by the COVID-19 pandemic”.

He said “our people made significant sacrifices, predominantly in Q2, with many of our people taking 20% salary cuts or working four day weeks, and demonstrated incredible resilience during the last 12 months.”

He also said the businesses in Germany and Japan both performed “particularly well.”

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“In total, we invested in the recruitment of around 400 experienced hires, largely into these growing disciplines and markets in 2020 and we will continue to invest in these businesses going forward,” he said.

Ingham noted that in the UK, he was encouraged that the Brexit deal and the recent government announcements about lockdown easing have provided "a degree of clarity."

"We remain confident in our strategy of maintaining our platform and continuing to invest carefully in headcount, as well as continuing to roll-out new technology and innovation," he said.

In April 2020, not long after the pandemic hit, the number of vacancies in Britain had more than halved on a leading jobs site. Amid COVID-19 restrictions and businesses under pressure, the recruitment industry has been hit hard.

However, UK hiring began to tick upwards in December, with a renewed rise in permanent placements.

Increased market activity and COVID-19 vaccine hopes led some companies to press on with hiring plans at the end of 2020, a report found.

December saw the first increase in permanent staff appointments since September. Although the growth was only slight, it signalled greater confidence among business chiefs as permanent hires are generally seen as a sign of greater employer confidence in their prospects.

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