Hello, welcome to PageGroup's Q4 2022 trading update. My name is Lauren, and I'll be coordinating your call today. There'll be an opportunity for questions at the end of the presentation. If you would like to ask a question, then please press * followed by 1 on your telephone keypad. I will now hand you over to your host, Kelvin Stagg, Chief Financial Officer to begin. Kelvin, please go ahead.
Thank you, good morning, everyone, and welcome to the PageGroup 2022 Q4 and full year trading update. I'm Kelvin Stagg, Chief Financial Officer, and on the call with me is Nick Kirk, PageGroup's new Chief Executive Officer. 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. The group delivered gross profit of GBP 266.4 million in the quarter, and approaching GBP 1.1 billion for the full year, a record year for the group. Against Q4 2021, we grew 3.5% in constant currencies.
Foreign exchange has had a favorable impact on the quarter's growth rate compared to the prior year, increasing our reported gross profit growth rate by 4.4 percentage points or GBP 10.8 million to 7.9%. Reflecting the tougher trading conditions in Q4, we managed down our fee earner headcount by 128 through natural attrition. As such, our ratio of fee earners to non-operational staff decreased slightly to 77.23. Overall, the group had 6,943 fee earners and a total headcount of 9,020. We have a strong balance sheet with net cash at the end of December of around GBP 131 million.
This was down from 186 million at the end of Q3, having paid out GBP 100.5 million in dividends on the 14th of October. Given the slowdown in trading towards the end of Q4, we now expect 2022 full year operating profit to be around GBP 195 million. I will now give a brief financial review. Overall, growth was stronger in temporary than permanent recruitment, which is indicative of the current uncertainty in the market, with clients seeking more flexible options. Temporary recruitment grew 18% against Q4 2021, with permanent down 0.8%. Reflecting this, our ratio of permanent to temporary gross profit was 74.26%, down from 76.24% last quarter. In Michael Page, permanent recruitment represented 83% of gross profit, while in Page Personnel it was less, at 53%.
As is often the case in uncertain times, trading was stronger at lower salary levels, where the financial commitment from clients is less. Accordingly, Page Personnel was the stronger performing brand, up 10% compared to growth of 1.1% in Michael Page. Growth was stronger in temporary recruitment in both Michael Page and Page Personnel. In Q4, we decreased our fee earner headcount by 128 through natural attrition, with reductions in all regions except EMEA. As a result of softening in both candidate and client confidence towards the end of the quarter, productivity decreased 12% in constant currencies compared to Q4 2021. Reflecting continued shortages of candidates, fee rates remained high. Salary levels remained strong, but the increased time to hire that we mentioned in Q3 continues and increased towards the end of the quarter.
While activity such as numbers of jobs and interviews remained high, conversion into placements slowed due to both clients being less urgent to commit and candidates less likely to switch roles. Our operational support headcount rose by 37 as we continue to build out our capabilities in Page Outsourcing. Our ratio of fee earners and operational staff decreased slightly to 77.23. This fee earner headcount and gross profit chart shows the unprecedented scale of the decline in group gross profit in 2020 due to COVID, and the comparison to the global financial crisis in 2008. It shows how we chose strategically to maintain and invest in our platform, which has driven the sharp recovery seen throughout 2021 and the first half of 2022.
With quarterly gross profit reducing in Q3 and Q4, our fee earner headcount has now fallen accordingly. I will now present a brief regional review. 2022 was a record year for the group, with gross profit growing 20% year-on-year. In Q4, we delivered gross profit growth of 3.5% against Q4 2021. However, as the quarter progressed, conditions became increasingly challenging, and we saw a reduction in both candidate and client confidence, leading to further delays in decision making, as well as candidates becoming more reluctant to accept offers. Greater China continued to be affected by COVID restrictions at the start of the quarter, before many restrictions were lifted, which resulted in high infection rates amongst our people, our candidates, and our clients.
Foreign exchange had a favorable impact on the quarter's growth rate compared to the prior year, increasing the reported gross profit growth rate by 4.4 percentage points or GBP 10.8 million. Whilst activity levels such as the number of jobs and interviews remained high, conversion into placements flowed due to both clients being less urgent to commit and candidates less likely to switch roles. In our largest region, Europe, Middle East and Africa, which represented 53% of the group, we grew 11.8% on Q4 2021. Michael Page, which is focused on higher income permanent recruitment, was up 13% for the quarter. Page Personnel, which is focused on lower-level recruitment with a higher proportion of temporary, grew 10%.
France, the group's largest market, delivered a record quarter and grew 7% with stronger growth in Page Personnel, which have been slower to recover from the pandemic. However, France exited the quarter slower in December, with increased caution amongst both clients and candidates. Germany, representing 12% of the group, delivered another record quarter, up 14% against a tough comparator with strong growth in all three brands. Our Michael Page Interim business, which is focused primarily on technology, was the best performing, up 35%. We now have over 700 fee earners in Germany, which positions us well for ongoing growth in this large high potential market. Elsewhere in EMEA, we delivered robust results, but generally saw candidate and client confidence decreasing towards the end of the quarter.
Having added 197 fee earners in Q3, we added at a slower rate in Q4, up 21 for the region overall. The Americas, representing 18% of the group, delivered growth of 6.6%. US was up 2%, down from 14% in Q3. Construction, our largest discipline in the US, saw a slowing in residential builds alongside reduced funding for commercial projects. In Latin America, gross profit grew 13% despite political and macroeconomic uncertainty across the region, particularly in Brazil. Mexico, our largest country in the region, was up 1% compared to 17% in Q3, impacted by increased delays in decision-making. Brazil was up 2% and the remaining countries grew 33 collectively, with record quarters delivered by both Argentina and Colombia. In line with the more challenging conditions, overall fee earner headcount decreased by 59, mainly in the US and Brazil.
In Asia Pacific, representing 16% of the group, Q4 gross profit declined 15.8% on 2021. Permanent recruitment across the region declined by 19, while temporary recruitment grew 5, reflecting the uncertain market conditions. In Asia, 12% of the group, we declined 20, driven by the impact of COVID on Greater China. In Greater China, 4% of the group, we declined 41. Mainland China was down 52. This was driven initially by COVID lockdowns, followed by the relaxation of restrictions and subsequent high infection rates, which further impacted activity levels. Hong Kong was also impacted and declined 26% in the quarter. Southeast Asia, our other large high potential market in the region, declined by 2% against Q4 2021, driven by declines in both Singapore and Indonesia, down 9% and 23% respectively.
India, 13% of Asia, grew 10% against another tough comparator. We now have around 230 fee earners in this highly profitable market. Elsewhere, Japan declined 5% whilst Australia was flat. Our fee earner headcount decreased by 64% in the quarter, mostly in Greater China. In the U.K., which represented 13% of the group, gross profit declined 1.9%. Page Personnel, which operates at lower salary levels and have been slower to recover from the pandemic, was up 31%, whereas Michael Page declined 12%. Growth slowed from 9.5% in Q3 as we saw more clients deferring hiring decisions and increased caution with candidates. Reflecting the more challenging trading conditions, our fee earner headcount reduced by 26% in Q4. I will now hand you over to Nick for a brief summary before we move on to the Q&A.
Thank you, Kelvin. 2021 was a record year for the group, with gross profit growing 20% year-on-year. In Q4, we delivered gross profit growth of 3.5% against Q4 2021. As the quarter progressed, conditions became increasingly challenging and we saw a reduction in both candidate and client confidence. Due to these tougher trading conditions, gross profit per fee earner, our measure of productivity, declined 12%. Given the slowdown in trading towards the end of Q4, we now expect 2022 full year operating profit to be around GBP 195 million. Looking forward, there remains a high level of global macroeconomic and political uncertainty in the majority of our markets. However, against this backdrop, we continue to see candidate shortages and good levels of vacancies.
Given our highly diversified and adaptable business model, with a cost base that can be adjusted rapidly and a strong balance sheet, we believe we are well positioned to weather the uncertainty and continue to make strong shareholder returns. Kelvin and I will now be happy to take any questions you may have.
Thank you. If you would like to ask a question, then please press * followed by 1 on your telephone keypad. If you change your mind, please press * followed by 2. When preparing to ask your question, please ensure that your phone is unmuted locally. As a reminder, that is star followed by 1 to ask a question. Our first question comes from Anvesh Agrawal from Morgan Stanley. Anvesh, please go ahead.
Good morning. I got three questions. The first, despite the weakness, the temp growth looks quite solid. Wondering if you can explain some of the drivers behind it. Is there anything specific to this cycle which is driving that strong temp growth? Second, I mean, can you just explain the reason behind the loss of productivity in Q4, while there is a slowdown, but the overall fee number or fee growth number in Q4 was kind of still in line with where the market was expecting. It seems the drop-through rate was weaker. Finally, in FY2023, how should we think about the drop-through rate or the cost base? I mean, are you now at a stage where you're looking to actively cut the cost or you still manage through natural attrition? Thank you.
Well, if I go with maybe temp growth to begin with, I guess temp growth is something that we typically see when there is uncertainty in the market. Clients tend to opt to take a candidate on a temporary or contract basis versus taking them on perm, where they may be more uncertain about the future. I guess our read on that would be that perhaps it indicates some lack of confidence within our client base that instead of hiring perm, they would be more interested in taking a candidate on a temporary basis.
In terms of fee growth, I think, our growth rate clearly slowed as we went through the second half of last year. I think the conversion rate was really driven by a productivity drop. I guess the answer is possibly that the expectation for GP was somewhat lower than it would have been had we had a stronger performance going through it. Our cost base, if anything, dropped slightly, as we went into Q4, with a reduction in fee earners. There were a small number of underlying cost increases in some other areas of SG&A, really in terms of sort of IT costs and the like.
It was more driven by a lower productivity that led to a lower conversion than really anything in terms of fee earned headcount. Possibly the consensus for GP growth was lower than it might have been otherwise. The last one on cost base is really, I guess, a question around fee earned headcount going forward. I think you probably heard us say at the time that we did our Q3 results that we maybe were a little bit surprised by the number of fee earners that have gone in in Q3. I think that was off the back of obviously having a very strong first half.
A number of those had gone into European countries whereby the actual start date is quite long, and therefore we saw people that had been hired during May and June, who didn't join until sort of well into, to Q3. I think the messaging internally, however, was very strong. Therefore we saw the additions drop, and therefore natural attrition, which is still currently running for us at a relatively low rate, but would be in the very high twenties, low thirties, depending on the market, allow us to just drop our fee on a headcount.
I think depending on the market as we go forward, and clearly our team-based profit share allows us to be very cute as to where we're dropping headcount according to the activity that our people are seeing on the ground. I would expect our headcount possibly to drift a little bit as we go into next year, but it'll really adjust to what the market conditions are as we go through that period. Our fee cost base at the moment is currently running somewhere around GBP 75 million a month. And that is unlikely to move materially apart from fee on a headcount, as I say, which we'll keep an eye on as we go forward. Hopefully that helps you a little bit with your modeling.
Yeah, that's really useful. Just on the profit shared, that roughly equates to, what, 10% of the fees, as sort of a ballpark?
It's not far off. I mean, it doesn't really work that way. It's more probably in terms of about 25% of pre-bonus profit. If you wanted to use 10% of fees as a proxy, you wouldn't be far off.
Sure. That's helpful. Thank you.
Thank you. Our next question comes from Kean Marden from Jefferies. Kean, please go ahead.
Thanks. Morning, all. Just on Germany, I think your narrative feels a little more solid there, it doesn't feel like you are flagging a sequential deterioration in the Q4. I'm wondering whether that is due to your scale, so you guys taking market share or just whether the market is a little bit more robust in Germany. Secondly, are you seeing wage rate inflation falling in any particular areas that you'd like to call out? It's obviously a very topical debate in the markets at the moment. Thirdly, I don't know whether you're gonna assist with a sort of December exit rate, Kelvin, at the group level or maybe divisionally, but put some narrative around that would be helpful.
Thank you.
Okay. Well, I'll take the question on Germany. I mean, our German business is an excellent operation. We have, we're seeing shortages of candidates in full effect in that marketplace. Our consultants are still very busy, albeit that they did also see some softening on the perm side. As you saw in the numbers, the contract business continues to perform extremely well.
As to why I think it's a combination of the two things that you mentioned. I think, one, I think we are still growing and taking market share, but also I think as it stands, the German recruitment market is standing up, better than some of the others.
Yeah. Let me take the other two. Wage inflation and wage rates. I think I'll take them in two areas. Internally, and therefore what we would probably say is wage inflation is running somewhere broadly between 4% and 5%. I think it's near a 4% across continental Europe. Across the U.K. and the U.S., it's probably near a 5%. That broadly reflects what we'll be giving our people as annual salary increases where that's applicable in January. That's sort of what I would call wage inflation. I think in terms of what people are being offered to move jobs, which is always a bit more than that, it's currently running probably still maybe 10-15 in the U.S., maybe probably nearer 10 in Europe and the U.K.
I think it has come down from the froth that we were seeing in the first half of 2022, where in all reality, those numbers, particularly in the U.S., could have been 20%, 30% or even higher than that at points. In Europe was probably also somewhere at least 15%, if not 20%. Some of the froth has come off it, but you can still get a decent salary increase if you move jobs. Albeit that clearly in January, the delta between what you're gonna get anyway in wage inflation and what you're gonna get to move jobs has decreased. That may well be some of the reason that we're seeing candidates more willing to defer their decision-making or go back and negotiate for buybacks with their own employers.
I think we'll just have to see how that continues during the year. The only other point I'd make on that is, we did highlight in the statement that our fee rates remain at record high levels, and that would only reflect the fact that there are candidate shortages, and that's likely to support some increase in good candidates getting good job offers to move jobs going forward. That's obviously subject to how the macro evolves as the year progresses. The exit rate. The exit rate actually is quite complicated to explain, and it's less about the rate that we saw in terms of 2022 over 2021. It's actually the comp, which for us when we were talking about it, in 2021 was over 2019.
For those of us that have just about decent memories, we can remember that in December 2019, we had trade tariffs that were kicking off, and therefore we had quite a weak comparator in 2019, which means that the 2021 December comparator over 2019 was extremely strong. Therefore, when you look at the December exit rate over that 2021 comparator, it looks particularly weak. What I would say is, actually, if you're trying to get a better sense for the quarter, then the quarterly growth rate which we saw, which was 3.5%, deteriorated relatively slowly through the Q4. We exited slower than we were in October. November was the midpoint, and December was the low point.
It was mildly negative or flat as opposed to particularly negatively down if you look at it in the round. Does that help you, Kean?
Yeah. No, it does. Divisionally, is that across all four divisions or was EMEA maybe a little bit. Actually, you can call that from.
EMEA was stronger.
Yeah.
Yeah. EMEA was stronger, supported particularly by Germany. Actually the majority of the businesses in Europe and Northern Europe, also Benelux, was a bit stronger, slightly more robust. I think in all cases they were slower in December, but they certainly weren't down in the sort of the flat to negative. They were positive. The U.K., the U.S., Latin America were all probably in the middle of the pack. Obviously in Asia Pac, we were negative through the quarter. We didn't exit, particularly outside of China, much more negatively than the rest of the quarter. Even within China, actually it was fairly flat, albeit there was a bit more disruption right at the very end, but not noticeably.
Okay. Thank you. If I may just put one last quick one on. If China reopens post the COVID restrictions, how quickly will it take your business there to see the benefit of that?
I think we're very well-positioned in China, and it's one of the things we haven't, partly because we don't want to, partly because we can't really, moved a lot of people out of China to other markets because of our 280 people we have in mainland China, there are only 2 expats in China. Our management team in China is Chinese. Therefore, it's a business that they built that they're wanting to reignite. We have taken over the last 2.5 years, a number of the more junior people out of that market, partly because they were the easiest ones to move on.
Partly because, we only had something like 10 people back in 2012 and, well, pretty much everybody in China had only ever seen a good market up until things became tough as the pandemic started. We have a much higher proportion of management, whether that be sort of team managers right up into directors and MDs in China than we would have elsewhere in the world because we've held onto that core of management. Therefore, if the market picks up, pinning junior consultants underneath those people is relatively straightforward to do. We could come back fast, albeit I, I think it's going to be a difficult first half.
Thanks very much, guys. Appreciate it.
Welcome.
Thank you. Our next question comes from Karl Green from RBC. Karl, please go ahead.
Yes, thanks very much. Just a couple of questions from me, following up on that last comment about China. I appreciate it's only sort of 4% of group fees, but can you indicate sort of broadly what sort of EBIT margin or conversion ratio the Greater China business will have made for 2022? Was it still profitable? Did it go slightly negative? That's my first question. Secondly, sort of more broadly, you've given a lot of detail and a lot of very helpful color around regional and country actions. Are there any kind of trends that you saw towards the back end of Q4 by discipline that you would call out, just in terms of anything that's noteworthy there, please?
China, I can talk to. I think for China, really, it's a first half, second half conversation. China actually is normally a very highly profitable market. Fee rates in mainland China would be around 25, possibly slightly higher in Hong Kong, and not far off in Taipei. The first half of last year, conversion rates wouldn't have been far off 20, possibly into the low 20s. The second half of last year, progressively through the year, would have trended down towards largely break even. We didn't make a loss in China. For the second half as a whole, we might have scraped into double digits. I suspect in Q4 it was broadly flat.
We should be able to hold it there, relatively comfortably, as I say, for quite a period of time, in terms of discipline.
In terms of disciplines, I mean, in many respects, probably what you'd expect is that the high growth areas like technology still performed well. I mean, just for some detail there, big job losses on the West Coast don't impact our organization. We don't recruit for the likes of Meta or Microsoft or these kind of organizations to any particular degree. We're typically working with organizations where we're putting technology staff into corporate customers. That's, that held up. That was pretty robust. Then at the other end of the scale, albeit it's not a particularly big part of our business at all, but recruiting for retail clients would be tougher, as you can imagine, as there's more of a move towards online sales rather than store sales. Yeah, I mean, there wasn't anything particular that stood out.
I asked the same question to the leadership team, and I don't think there was any specific trend over and above what I mentioned there.
Okay. Very helpful. Thank you.
Thank you. Our next question comes from James Rose from Barclays. James, please go ahead.
Hi there. I've got three, please. Firstly, on activity metrics through December and January, I mean, could you give us a bit more color on those? Are there any sort of early signs that vacancies are falling significantly, or is it more of a confidence problem for now? Secondly, on SG&A, some of the cost savings we've talked about, which are achievable post-COVID, can you sort of update us on how those are going? Are they still likely to come through? Thirdly, net cash still seems to be in a good position. Would you consider share buybacks over FY 2023?
Okay. Well, I'll take the first question around activity metrics. The simple answer was that at the top end of the sales pipeline, we didn't see any alterations. Right at the top there, we normally look at job acquisition. That didn't drop. We then look at conversion of jobs to interview. That didn't drop. We would still see in pretty much all of our markets, and certainly globally, those front-end activity metrics trending above this time last year. No change at that end. As we try to indicate in the statement, the issue for us became further down the sales pipeline when you're then looking at first interview to second interview conversion, and even more so than final interview to offer to acceptance.
As to why, I would say that's probably based on what you mentioned in your question, which is just a confidence issue. Certainly as it got towards the back end of the year, I think we had situations where a number of candidates, particularly in the Michael Page space, were starting to look at January thinking about a January salary increase, a January bonus, questioning whether now was the right time to move, being in a position where they weren't getting a 20% increase in their salary on offer. They were getting a 10% increase on salary on offer, then thinking, "Well, I might be getting 5% in January from my current employer, and I might see what they've got on offer during my review." I think that was more of what we saw rather than anything drying up at the front end.
Yeah, job count's still in a really good place, interview count in a really good place, but our issue was conversion.
Yeah, I'll pick up the second two. Firstly, on SG&A, I think the cost savings that we talked about really fell into two areas. One was sort of more discretionary spend around business travel, but also around candidate and client entertainment. Pre-pandemic, we talked about each of those being roughly GBP 1 million a month. Property is the other category, which I'll come to afterwards. Business travel, I think business travel has not returned back to what it was previously being that sort of GBP 1 million a month. We're currently running somewhere around half a million. I don't expect it ever will go back to the GBP 1 million a month, albeit to a certain extent it is scalable with the size of the business.
I suppose if the business became materially sizable it could go up. It's really been set off against video. A lot of the meetings that we would have traveled for previously, whether that be candidate interviews, whether it be client interviews, whether it be internal meetings that would have required travel, just don't happen anymore. I think we've probably still got about GBP 6 million of savings for a full year around travel.
Candidate client entertaining has been picking up, albeit I think some of that is a bit of a thing of the past and whether it is the feeling that nowadays people work from home and in many cases, or clients don't actually want to do as much entertaining as they did previously, and it had been drifting off probably pre-pandemic, in all honesty, with some of the issues around sort of bribery and corruption and what you were able to do with candidates and clients. We're probably trending a little bit higher on that, maybe 70% of what we were before, which is also slightly driven by the volume of activity that we've got going on at the moment. I don't expect it to really go much above that, and that'll probably be fairly sustainable.
We're not getting a push, particularly with candidates to want to go back to interviewing, face-to-face, much more than we did last year. The flexibility, the ease of which candidates can now interview, particularly in the earlier rounds, with ourselves, is something that we prefer because obviously it's more productive for us, but we think the candidates do certainly getting those candidates that aren't necessarily looking for a job but might be interested in hearing an interesting story is much easier to do if they're doing it from home, relatively casually, half an hour on an interview in the evening. Some of that is supportive of maintaining those cost savings. Property.
We talked quite a bit about property in the past and our property bill globally pre-pandemic would have been about GBP 50 million a year. It's probably come down slightly, although at the moment it's probably offset by a slightly higher fit-out charge. I can give you a very good example in London that we had three offices in London. We had Victoria House on Bloomsbury Square, where we had up to 400 and 450 really seats for consultants. Aldwych, where I'm sitting today, we've got about 150 seats here, which was mainly for non-ops staff and Aldermanbury Square, where we had about 80 seats. That in total was about 60,000 sq ft.
We're in the process of fitting out a new office, which will be 40,000 sq ft, so two-thirds of the size. The savings is the best part of GBP 2 million a year in operational costs. There will be a sizable fit-out cost in terms of making that move from one to the other. There's actually a cost that we took in 2022 of about one and a half million pounds that related to really joining all of those leases up. As I say, going forward operationally, that will have some savings in it. I think as we go through those savings for the rest of the group could be maybe in total GBP 10 million, so say, roughly 20% of the original GBP 50 million cost.
There will, as I say, be some CapEx that works its way through probably over the next three or four years, in terms of those fit-outs. Final question was around net cash. Yeah, we do have, GBP 131, or we had GBP 131 million at the end of, at the end of the year. We, hopefully for all of our people will have a fairly sizable outflow in January, which is the annual, bonuses for, our more senior staff and the Q4 profit share for our, consultants off the back of a record year. We'd like to think that that will be a decent sized number. I would expect that to be about GBP 30 million.
However, we fully intend to retain our ordinary dividends and more recently we've increased our ordinary dividends by about 4.5% a year. I'd expect that would continue. As we come into the end of July, for the interims, that's when we would normally make a decision around a supplementary return of additional capital, which in recent years has been by way of a special dividend. We paid GBP 85 million last year and GBP 85 million the year before. We certainly have, depending on how we trade, but we have the ability to repeat that. We will, as we did last year, also look keenly at where the share price is at the time and see whether there is an opportunity or whether it makes more sense to go for a share buyback.
We would consult with our shareholders, before doing that. All of those things, James, are on the table, but I would fully expect that we will be making a supplementary return of some magnitude to shareholders later on this year.
Great. Thanks for the color.
Thank you. As a reminder to ask a question, please press * followed by 1 on your telephone keypad. Our final question comes from Andy Grobler from BNP Paribas. Andy, please go ahead.
Hi, good morning. Just a couple from me, if I may. Firstly on headcount, it sounds as if those headcount decisions are still being made kind of team up this stage. What do you need to see before you start taking a kind of top-down approach to headcount reduction? I suppose within that, how far are you going to allow productivity to fall before action or more concerted action needs to be taken? Secondly, and a bit more niche, just on Page Outsourcing, could you talk through the trends you saw in that business towards the end of 2022 and kind of contract build through 2023? Thank you very much.
I'll take the first question on headcount. I think we're probably in a fairly blended position. I mean, if your takeaway from the earlier answer was that the decision-making around hiring or reducing headcount is down at manager level on a local team basis, that would be wrong. There is an overarching guidance to our businesses right now to focus on productivity. Clearly, there are certain markets that you've seen through these results that are delivering growth, that are delivering record quarters. Based on that, where we see opportunities to continue to grow and take market share, that's what we will do.
In other areas where we are starting to see an impact in terms of client and candidate confidence and that feeding through into our productivity, clearly we will be looking at our headcount. You know, the way that we start with that typically is the people that joined us more recently, the inexperienced hires that are newer to the business, that are struggling to make money. It's, you know, recruitment's a tough job, and it's a difficult job to do, and it's a job that many people don't want to do when they're asked to pick up a phone and start making business development calls. You know, that is often through self-selection, and that's what we've seen to date.
You know, we want to see really how trading plays out over the first couple of months, before we make any broader decisions around, you know, where we want to go with holding the base versus a productivity number, et cetera. Because, you know, there's a lot of commentary out there right now that suggests there was a pause in hiring in December. If that's all it was and we start to see some recovery through where the KPIs and front-end activity, and more importantly, conversion, then we want to make sure that we haven't made any drastic decisions that would impact our ability to perform this year.
It's a balance, and I guess, you know, we'll be looking at our trading over the course of the next few weeks, and we'll be in a better position to update you on that when we speak to you again in April.
I'll take the second one on Page Outsourcing, which I genuinely think is an exciting opportunity for us. It remains early days. Oliver Harris joined us, as you know, mid-2020. He brought a plan, and I think it's fairly well-publicized that we were also somewhat cynical about the ability to get good conversion rates out of a outsourcing business. We're ahead of that plan, both from a revenue perspective and from an infrastructure perspective. It's still relatively small, so we will have done something of the order of about GBP 20 million worth of gross profit last year. That's ahead of where we thought we would be, but clearly a relatively small drop in what's a very, very large opportunity going forward.
We have made a number of sizable client wins of the 3-year duration, which are the ones that we're looking towards. We're working on fulfillment centers in order to be able to satisfy that. We have now a resourcing hub base out of Manila, and we also have one based out of Istanbul. We've been investing relatively heavily in our infrastructure, probably more so than we thought we were going to because we didn't think the revenue would build so quickly. We made a small single-digit millions loss last year.
Actually, probably GBP 1 million more than we were going to, off the basis of actually traveling earlier than we thought we were going to, and on the basis that I think this year, we may be break even, we may not quite be break even, depending on how fast we travel. It's an exciting business. We are intending in probably late on this year, Q3 or something, to have some sort of a capital markets event. Not gonna say a day. I don't think we'll do an entire day. I would think that possibly alongside our digital and tech, Page Outsourcing might be something that we want to give you a little bit more of a, an insight into because, I think it is a good opportunity for PageGroup.
Great. Thank you very much.
Welcome.
Thank you. We have no further questions. I'll now hand you back over to Nick Kirk for closing remarks.
Thank you. As there are no further questions, thank you all for joining us this morning. Our next update to the market will be our full year 2022 trading update on the 9th of March. Thank you very much.