Good morning. Thank you for attending today's PageGroup full year results. My name is Sarah, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to ask a question, press star one on your telephone keypad. I'd like to pass the conference over to our host, Nick Kirk, Chief Executive Officer. Please go ahead.
Thank you. Good morning, everyone, and welcome to the PageGroup 2025 full year results presentation. I'm Nick Kirk, Chief Executive Officer. On the call with me is Kelvin Stagg, Chief Financial Officer. The group produced a resilient performance despite continued market uncertainty. We saw variable market conditions across the regions, with ongoing challenging conditions in continental Europe and the U.K. We continue to grow in the U.S., and we saw improved conditions in Asia-Pacific, particularly during the second half of the year. The conversion of interviews to accepted offers remained the most significant area of challenge as ongoing macroeconomic uncertainty continued to impact candidate and client confidence, which extended time to hire. As you know, we've taken robust action to optimize our cost base by simplifying our management structure, reducing our operational leadership team, and improving the efficiency of our business support functions.
We remain committed to our strategy, and I will update you on our progress later in the presentation. I will now hand you over to Kelvin to take you through our financial review.
Thank you, Nick. Although I will not read it through, I'd just like to make reference to the legal formalities that are covered in the cautionary statement in the appendix to this presentation, which will also be available on our website following the call. In 2025, the group delivered gross profit of GBP 769.5 million, down 7.6% in constant currencies against 2024. Operating profit in 2025 was GBP 20.9 million, down from GBP 52.4 million. Our conversion rate was 2.7%. Earnings per share was GBP 0.029 . We ended the year with net cash of GBP 31.4 million. Today, the board has proposed a final dividend of GBP 0.0321 per share.
Combined with the interim dividend of GBP 0.0536 , this represents a total dividend of GBP 0.0857 . I will now take you through the financial review. Against the ongoing challenging trading conditions, we have taken robust action to optimize our cost base by simplifying our management structure, reducing our operational leadership team, and further improving the efficiency of our business support functions. These initiatives incurred a one-off cost of around GBP 15 million in 2025, partially offset by savings of around GBP 5 million. This will deliver annualized savings of around GBP 15 million per year from 2026. Given the distorted effects of these one-off costs at a regional level, we have presented the conversion rates both including and excluding these costs.
Looking at each of our regions, starting with the largest, EMEA, our underlying conversion rate was 9.6%, down from 13.2% in the prior year. Profitability decreased on 2024 due to the tougher trading conditions seen in 2025. The Americas' underlying conversion rate was broadly similar to 2024 at 4.4%. However, in Asia-Pacific and the U.K., while our trading conversion was positive, after central cost allocations, both regions had a negative underlying conversion rate at -1.4% and -8.7% respectively. The tax charge for the year was GBP 7.2 million, which represented an effective tax rate of 44.4%. The higher-than-normal tax rate is due primarily to the impact of irrecoverable overseas withholding taxes and permanent differences, which have a disproportionate effect due to the reduction in profits.
In 2026, the effective tax rate is expected to be around 35%. The most significant item on our balance sheet was trade and other receivables of GBP 317 million, which decreased by GBP 11.4 million versus 2024. After returning a total of GBP 53.6 million to shareholders by way of ordinary dividends in 2025, net cash at the end of the year was GBP 31.4 million. Overall, net assets decreased by GBP 47.8 million from GBP 262.4 million to GBP 214.6 million. This slide shows the key movements in our cash throughout the year. Our EBITDA inflow was GBP 81.8 million, partially offset by an increase in net working capital of GBP 8.1 million.
Tax and net interest payments were GBP 23.7 million, and net capital expenditure was GBP 11.3 million, down from GBP 15.8 million in 2024. Payments made in relation to lease liabilities reduced cash by GBP 41.6 million. The group purchased GBP 8.3 million worth of shares into the employee benefit trust to satisfy future committed obligations under our group share plans. The largest outflow of cash, totaling GBP 53.6 million, was dividends. The overall impact of these cash flows was to decrease the group's net cash position by GBP 63.9 million to GBP 31.4 million at the end of the year. The group aims to run the balance sheet in a position of net cash. We have a clear capital allocation strategy with three defined and well-established uses of cash.
The first is to satisfy the operational and investment requirements of the group, as well as to hedge liabilities under the group's share plans. Once the first requirement is met, the second is for payment of ordinary dividends, where our policy is to increase them at the long-term growth rate of the group, subject to affordability. Finally, any remaining cash surplus is to be distributed to shareholders by way of a supplementary return. While reviewing the group's current and future cash position in light of the sustained challenging trading environments and the ongoing unpredictable nature of our markets, the board believes it is prudent to declare a final dividend for 2025 of GBP 0.0321 per share. This action balances the group's current level of profitability and affordability with the desire to continue to invest in growth areas.
The board recognizes the importance of dividends to shareholders and will continue to assess the level of dividend payments while considering the group's prospects. I'm gonna hand you over to Nick to take you through our strategic review.
Thank you, Kelvin. We launched our strategy in September 2023 with three key strategic goals: delivering operating profit of GBP 400 million, changing 1 million lives and increasing our Net Promoter Score to over 60. Our primary financial goal is to deliver GBP 400 million of operating profit in the medium term. Despite the tougher market conditions, we've made progress with our strategy. We continue to reallocate resource into the areas of the business where we see the most significant long-term structural opportunities. I will talk about this in more detail later in the presentation. Against our social impact goal of changing 1 million lives, we performed strongly. Progress in this area is measured by the number of people whose lives we have changed by placing them into work, as well as the number of people who access programs we run that support traditionally underrepresented groups accessing employment.
In 2025, we changed over 140,000 lives, meaning that in total we've changed over 790,000 since 2020. As a result of our continued commitment and success in this area, we are well on track to deliver our target by 2030. We also made excellent progress on our customer experience goal of achieving a client Net Promoter Score of over 60. From our pre-strategy baseline of 52, we saw improvements in 2023 and 2024. In 2025 our score grew again to 66, rating us as excellent and exceeding our target for the second consecutive year. Our Net Promoter Score reflects the commitment we have to deliver for our customers. Our strategy prioritizes delivering what we are famous for, building on our existing strengths and leveraging our established global platform.
To achieve our strategy, we have four pillars of growth: our core business, our technology business, Page Executive and Enterprise Solutions. Our core business is the main driver of group performance. We define our core business as Michael Page and Page Personnel, which covers all disciplines except Technology. Technology recruitment is a scale play for the group, enabling us to build a high volume, high value business in what for us is already a significant market. Page Executive is a market gap play with a specialization in senior leadership search and recruitment, as well as offering executive advisory services. Enterprise Solutions is a partnership play as we build out our capabilities and breadth of offering to create long-term mutual value with our strategic customers. I will now provide a brief update on the progress we've made within our four pillars of growth.
Within our core business, despite the tougher market conditions, we've continued to reallocate resources to match activity levels, as well as investing into business areas where we see the greatest long-term opportunities. Whilst the macroeconomic uncertainty continues to impact the majority of our geographies, in 2025, we saw a return to growth in our U.S. business and improved conditions in Asia-Pacific. As we anticipated, this recovery has been driven almost entirely by an improvement in the conversion rate of offers to placements rather than increasing activity levels. As a reminder, in permanent recruitment for every five offers a fee earner receives, in a normal trading environment, we would expect four to become placements. Over the past couple of years, this has fallen to around three out of five.
Reviewing our improved performance in the U.S. and Asia-Pacific, what we have seen is a gradual return to a more normal level of conversion of offers to placements. This has been due to clients and candidates being more willing to engage in conversations and negotiations at the latter stages of the recruitment process. As has been widely reported in recent years, trading conditions in the technology sector have been challenging. Despite this, Technology remains our second-largest discipline at 12% of group gross profit. Within Technology, we continue to see a more resilient performance from non-permanent recruitment. We are reshaping this business from the pre-pandemic model, increasing our offering within contracting and interim roles. This is particularly evident in markets such as Brazil, Greater China, Colombia and Spain, which is now our second-largest Technology business after Germany.
We've also been rolling out our proven contracting model from Germany into other markets in Northern Europe. Despite the tough conditions globally, we delivered a record performance in India, and we saw good growth across a number of individual markets, including the U.S., Colombia, Greater China and Japan. Page Executive continues to deliver strong results despite the challenging macro environment with gross profits, sorry, down just 2% against a record comparator. Within this, our best performing markets were Spain, Colombia, Greater China and Southeast Asia. A key element of our Page Executive strategy has been to focus on more senior leadership roles and as a result, increase the salary levels at which we place. This strategy continues to prove successful, and we've seen a notable increase in the median placement salary.
Alongside this, the track record and success of our well tenured consultants in Page Executive has resulted in an increase in our median fee. We continue to believe that the market gap for Page Executive is a significant opportunity for the group and one that we are uniquely placed to exploit. Despite sector-wide challenges in recruitment outsourcing, Enterprise Solutions, which is our business focused on strategic customers, delivered an encouraging performance in 2025. Our well-established global platform across 34 markets allows us to consult with clients as they look to enter new territories. Our customer-centric approach, highlighted by a Net Promoter Score, continues to make us the partner of choice for companies looking to go global. In 2025, against the backdrop of a difficult macro, we generated 12% more gross profit from our largest 20 clients than we did in our record year in 2022.
Within Enterprise Solutions, our outsourcing business delivered growth of 18% and a record performance. We've also seen a strong increase in our sales pipeline as our strategic commitment to global customers gathers momentum. We remain focused on winning business that delivers conversion rates in line with our strategy. As many of you will know, I joined PageGroup in 1995, and over the last 31 years, I've seen huge changes in the sector and the technology that surrounds it. In more recent times, the proliferation of social media and 24-hour news has made the business world a very noisy and fragmented place, with conflicting headlines, opinions and data points.
When it comes to moving jobs or changing careers, it is now more important than ever for candidates to work with an expert who can filter out the noise and guide them through one of the biggest decisions they will make during their working lives. Our industry is built on human relationships, trust, judgment and insight, especially in white-collar professional recruitment. Technology will continue to accelerate the process, but it can't replace the conversations, trust and credibility our consultants bring. When it comes to AI at Page, we've talked before about the importance of building enterprise-wide platforms and having a globally aligned approach to data. We've told you how we've been working closely with major technology partners to build a single integrated data environment ready for AI-enabled products to be deployed quickly across markets.
With these solid foundations now in place, we can be confident that we can exploit the wide range of AI that is available. Our strategy is not to replace the human element, but to augment it. For decisions on AI investment, the question that matters most for us at Page is: Does it make money or will it save money? This mindset keeps us focused on tools that genuinely enhance consultant productivity, have a tangible benefit for our clients, and drive efficiencies in our business support functions. Companies that get this balance right will pull ahead of those that don't. Across the group, we've put this strategy of augmentative AI into action and are already reaping the rewards.
We're delivering qualified client leads to our AI-powered business development hub, which uses internal data and external feeds to help our consultants prioritize their time and focus their effort towards the roles we are most likely to fill. We are harnessing the power of Copilot with our consultants building the agents they need the most to transform how they research roles, prepare insights, and craft follow-ups. We've also used AI to update over 7 million candidate records in 2025, saving our consultants from an otherwise manual task that equates to the equivalent of nearly 2,500 working days. We continue to see the benefits from AI tools we've highlighted to you in the past. Adverts created through our job ad generator delivered 48% more applications per job, with double the number of candidates going on to shortlists compared to manually created adverts.
To keep us looking forwards, our established data and innovation lab gives us the ability to test and learn quickly. Only the use cases that deliver clear commercial value move into production. Whilst AI will play an increasingly important role, we still see that as a supporting one. To repeat what I said earlier, our business is built on human relationships. It's about providing our clients and candidates with the kind of knowledge that comes from great questions and curiosity. Our focus is on using AI where it adds value and keeping people at the center of every meaningful interaction. I will now finish with a brief outlook. Whilst the market outlook remains uncertain due to the unpredictable economic environment, we will continue to control the controllables.
We have a strong balance sheet, our cost base is under constant review, and given our highly diversified and adaptable business model, we remain confident in the execution of our strategy. That concludes the formal presentation for this morning. Kelvin and I will now be happy to take any questions you may have.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. To remove your question, press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. Our first question is from Karl Green with RBC Capital Markets. You may proceed.
Yeah, thanks very much. Good morning, Kelvin. Good morning, Nick. Just first question on the dividend. You've laid out a very clear capital allocation policy, but drilling down into the potential balance over the medium to longer term between ordinary dividends and special dividends. Could you just elaborate on how you potentially see that unfolding, clearly subject to how trading unfolds in the meantime? The second question was just on CapEx. I mean, again, very controlled in the year just gone. Just wondered how you anticipate the CapEx budget developing over 2026 and perhaps beyond. Thank you.
No worries. Morning, Karl. Yeah, certainly on the dividend, it's really a question for us of affordability. We obviously have a high amount of operational gearing in the business, and we don't want to add financial gearing to that mix. We're keen to keep the balance sheet with an element of net cash on it. We looked at the, therefore, affordability of a dividend in terms of our cash flow in June and felt that paying what amounts to GBP 10 million worth of dividend in June was the right amount to give us a fair balance of ending the year with enough cash to run the business.
Probably reiterate what I said at the previous trading statement was that whilst we used to say that that was probably around GBP 50 million of net cash to run the business, we now think we can run it on about GBP 25 million, such as the efficiency of our cash management and processes nowadays. I think in paying GBP 10 million, that will bring us in line with that sort of net cash and also allow us to make a decision on the interim dividend when we get to the interims in August. I don't see that as a fundamental rebasing of the dividends.
I feel that when we get back into affordability, i.e., w e generate the cash that we need, we would move, hopefully briskly back to the level of the dividends that we had in 2024, and that then would be the position that we would increase at the longer term rate, which historically has been 4.5% per year. This isn't a fundamental rebasing down to this level. It's a short-term affordability measure before we hopefully return back to the historical ordinary dividend levels. On CapEx, well, historically, and by that I mean probably during the teen years, our CapEx spend was roughly GBP 24 million. It would have been split pretty much GBP 12 million on software capitalization and GBP 12 million on leasehold fit-outs.
For two reasons, one being that largely we finished all of our big software implementations. Our global finance system has been in place for 10 years now. We've got Salesforce in place, and that's been in place for at least eight years now. We don't really have a huge amount of software implementation to do. Coupled with the fact that now all of the software rollouts we're doing, including the HR system that we're rolling out at the moment, which is a relatively small expense in comparison to the two previous finance and operational implementations. Our software is a service, and Software-a s- a-S ervice you can't capitalize, so it's expense through the P&L.
Last year, 2025, the cost for software is about GBP 2 million. I'd expect that probably to be about the same going forward. We had very little leasehold fit-outs in 2021 and 2022 coming out of the pandemic as we look to try and better understand the ways of working and therefore what the office of the future back then was gonna look like. We realized that we didn't really need interview rooms. We interview all of our candidates pretty much online. Therefore, during 2023 and 2024 primarily, we spent quite a lot on office fit-outs as we moved out of the big offices that we had downsized, but also made them sort of places that people wanted to come to, breakout space and different fit-out options. That peaked in 2024. Last year, 2025, that was about GBP 10 million.
I'd probably expect current year and going forward, that will probably be around GBP 8 million. My expectations for CapEx in 2026 are probably collectively about GBP 10 million, and I would expect that to go forward.
Perfect. Thank you.
Thanks, Karl.
Thank you. Our next question is from Rémi Grenu with Morgan Stanley. Please go ahead.
Morning, gentlemen. Just maybe two on my side. The first one, can you maybe tell us a bit more about the difference in performance between the brands Page Personnel and Michael Page? Some kind of update on how the activity has trended within the two brands, and maybe an update as well on the progress that you're making in reallocating resources toward Michael Page and away from Page Personnel. Would like also to understand if it's a process that you're accelerating. The first question on these two brands, and then the second one, any additional initiatives you think could be launched to further reduce the cost base? I'm trying to understand if we should think about potentially adding one-off costs to our forecast in 2026.
Okay, Rémi. Thank you. I'll take the first one. Kelvin will take the second. I mean, your two questions are slightly kind of obviously linked because it's quite hard to necessarily give you a fair view on the two brands because of the fact that we are moving business across from Page Personnel into Michael Page. We're rebranding parts of the business. We're moving out of less- profitable areas, maybe in lower-level temp, reassigning consultants into more senior contracting work or interim work. It is distorted as a result of the work we're doing.
Perhaps maybe it makes more sense to talk about what we are doing, which is as we move through the next few months, we're looking at the final five or six countries that we have that still run the Page Personnel brand and looking to sunset that brand and focus the business around Michael Page. We feel that that's the right decision in terms of the job market and, you know, future trends around the pressure that you can see and will inevitably probably only grow at that level of admin-heavy roles, clerical roles. You know, we don't want to be in that market. We want to be more focused around the Michael Page and Page Executive brands, which, as you know, are management roles, leadership roles, expert roles.
That's a very clear strategic decision, hence the justification of moving towards those brand areas. At the moment, the reason why it slightly distorts the results between the two, and therefore, I'm not sure it would really help you in terms of making any particular decisions on those two areas.
Yeah. I can take the one on cost. I think, probably look at it in two different areas. One part of it is in operations, that's really about fee earner headcount. The challenge that we have at the moment is the issue in the business, if I frame it that way, is the conversion of offers into placements. We need to have the fee earners there to work the jobs. If they're not working the jobs, then they don't have a percentage chance of converting it into fee rates. Obviously, if those job numbers come down, we've seen that in parts of Europe, probably point towards France, you will see our fee earner headcount come down, and therefore, the cost will come down.
In other areas, where fee earner headcount has been more static, that reflects the fact that the job numbers are relatively static, and it's the conversion of offers into placements, and therefore revenue that's become the problem. Expect to see fee earner headcount move during the year in line with that expectation. On the non-fee earner headcount, obviously we will continue to align our transactional support staff in line with the activity that's going on. You would see that in things like transactional finance. You would see that in transactional HR. You'd see it in what we call middle office, which is non-perm administration for temps and contractors and the like.
We have finished now the transition of our shared service center from Singapore into Kuala Lumpur. That's now very stable, but we obviously have the ability to improve the efficiency of that. Whenever we do one of these transitions, we slightly overstaff it at the beginning and look to get efficiencies as things progress. We are right in the middle of the HR transformation, which is the implementation of an HR system, as I mentioned earlier, but it's also the transition of the HR transactional people from the local countries into primarily our shared service center in Kuala Lumpur.
While that will have a one-off cost, a small one-off cost, a couple of million in the current year, which is already accounted for in terms of where we are in consensus, that will deliver about a GBP 5 million annual saving, kicking in partly during this year but fully from next year. There are some strategic activity we've got at this point. I'm not going to announce any sort of large restructuring charge, but we'll continue to actively manage the cost base as we have done over the last few years.
Understood. One follow-up, if I may. Any trends or insights to take away from the first two months of trading in 2026? I mean, I appreciate these are smaller months, but anything to take away from that?
Yeah. No, you're right. They are smaller months. I think on the basis that we're out again, Rémi, in about 5 weeks with our Q1 update, we'd rather see the big months of the quarter, which is March, to get a complete picture. That's what we've decided to do.
Sounds good. Thanks very much.
Thank you.
Thank you. Our next question is from James Rowland Clark with Barclays. Please go ahead.
Hi. Good morning. Two questions, please. I was just curious as to the sort of operational, practical difficulties of moving your recruiters from Page Personnel to Michael Page and moving upmarket into different sectors. Are there, is there a sort of time lag to delivering, you know, full productivity for those individuals? Is that impacting the business today? How does that impact traction with clients as well, as you, as you move, you know, different personnel into that, into that relationship? Secondly, on cash, appreciate that, you know, GBP 25 million is now a level you're happy to run at. Are you comfortable to dip below that?
I guess as bonuses are paid out, could you maybe elaborate on where you are with cash right now, following some bonuses being paid out at the year-end? How we should think about the sort of shape of that if market conditions remain they are through the year. Thank you.
Thanks, James. As regard to your first question, I think your approach needs to be, with any significant change, to be very thoughtful, to be very careful, and to be patient. We do it step by step, stage by stage. We've already been through this process in Asia, where we look to transition people across from Page Personnel to Michael Page. We've been through this process in the U.K., where we did exactly the same. We've learned a lot of lessons from it. What you're likely to see is initially just a rebranding of operations from Page Personnel into Michael Page.
Steadily and slowly, we'll move people upwards into more senior work, 'cause the last thing we want to do, clearly, is disrupt relationships with clients, disrupt relationships with candidates, and just as importantly, disrupt the fee earners and their ability to earn and deliver for themselves and the company. It's a process. It's not something that happens overnight, where you come in one day and the working brand that you operate under has changed and your client base has changed and your candidates have changed and you've got a new market. That would be a ridiculous way of going about it. As I say, it's something that's very intentional. It's very thoughtful. We're applying lessons that we've learned in other markets where we've done it already.
We'll do it step by step, and we'll be careful to ensure that client relationships aren't impacted as a result, and that consultants' ability to earn remain. But the actual process of moving upwards into more senior work is actually a very normal one. I mean, I think back to my time as a consultant. I mean, if you think about it, you start as a, in my case, a 23-year-old. You're working on relatively junior jobs, entry-level jobs with candidates that are a similar age to you, and you grow up with your candidates. Your candidates become clients, and you recruit them as clients, and they become candidates again. You move through a life cycle with them, and that happens to every single consultant.
Actually, this will actually enable us to more effectively do life cycle management of our candidates as they start to become more senior, 'cause Michael Page obviously has that greater scope through those levels of roles. Yeah, I mean, it's something I am very, very aware of, the team's very aware of, and we will be very thoughtful and intentional about the way we go about it.
Yeah. James, talking to cash, I mean, we operate with a philosophy of having net cash on the balance sheet. That's not a rule that we adhere to on a day-to-day basis. I mean, we have a number of facilities available to us, including a GBP 80 million revolving credit facility. We have a GBP 50 million invoice discount facility, and we have a GBP 20 million overdraft. With a number of temp and non-perm businesses around the world, we need to be able to fund those and we will and do dip into those facilities from time to time to fund working capital requirements for non-perms, as well as dividends when we pay them out.
I'm not strictly adhering to having GBP 25 million in June for the dividend payment. I'm comfortable that we would dip into those for a short period of time. Our current cash balance would be less than GBP 25 million. We're comfortable that we're forecasting to end the year without structural debt, and that's really the philosophy that we're trying to adhere to.
Thank you. That's very helpful.
Thank you. Our next question is from Steve Woolf from Deutsche Bank. Please go ahead.
Hi, guys. Just you were mentioned earlier, Nick, about the level of median fees going up. Could I flip it to sort of fee rates if you look on a like-for-like basis year-to-year? How have you found those? Are they still at, you know, the record high levels you were speaking of before? Or has there been any sort of, you know, weakening in that over the past, you know, few or 12 months, I guess?
No, I did that assessment very recently actually, just to compare 2025 to 2024. No, they're pretty much flat. There might be the odd movement within a country, where a country goes from, say, 30 to 29, but that's offset by another country that goes from 25 to 26. The increase that we saw was within Page Executive, and that's really more through the levels that we're working at, more senior roles, and also the ability to negotiate higher fee rates based on having well-tenured experienced consultants in a market where candidates are in high demand. The fees naturally can be pushed up a little bit because clients need access to these individuals. Overall, to your question, no, 2024, 2025 fees remain at record levels.
Little movements within countries, but as an overall figure, still at that same high level.
Excellent. Thanks, Nick. Cheers.
No worries. Thank you.
Thank you. Again, if you would like to ask a question, please press star followed by one on your telephone keypad. There are no questions waiting at this time. I'll turn the conference back over to Kelvin Stagg, Chief Financial Officer, for any further remarks.
Thank you, Sarah. As there are no further questions, thank you all for joining us this morning. Our next update will be our first quarter trading update on the 14th of April. Thank you very much.
Thank you. That concludes PageGroup full year results. Thank you for your participation. You may now disconnect your line.