2020
ANNUAL REPORT
AND ACCOUNTS
Annual Report and Accounts 2020
CONTENTS
STRATEGIC REPORT
Chairman’s Introduction ............................................................................................................... 1
Overview ....................................................................................................................................... 3
Business Model ............................................................................................................................ 5
Strategic Review ........................................................................................................................ 11
KPIs ............................................................................................................................................. 21
Q&A with Steve Ingham, CEO .................................................................................................... 25
Culture & Engagement Framework ............................................................................................ 27
Regional Perspectives ............................................................................................................... 39
Risk Management ....................................................................................................................... 41
Principal Risks and Uncertainties .............................................................................................. 43
Stakeholder Engagement ........................................................................................................... 51
Review of the Year ...................................................................................................................... 54
CORPORATE GOVERNANCE
Chairman’s Introduction to Corporate Governance.................................................................. 59
Our Board of Directors ............................................................................................................... 61
The Executive Board .................................................................................................................. 66
Corporate Governance Report .................................................................................................. 68
Nomination Committee Report .................................................................................................. 73
Audit Committee Report ............................................................................................................ 76
Directors’ Remuneration Report – Annual Statement .............................................................. 81
Directors’ Remuneration Report ................................................................................................ 83
Directors’ Report ...................................................................................................................... 105
Directors’ Statements of Responsibility .................................................................................. 107
FINANCIAL STATEMENTS
Independent Auditor’s Report ................................................................................................. 108
Consolidated Income Statement ............................................................................................. 113
Consolidated Statement of Comprehensive Income .............................................................. 113
Consolidated and Parent Company Balance Sheets ............................................................ 114
Consolidated Statement of Changes in Equity ....................................................................... 115
Statement of Changes in Equity – Parent Company .............................................................. 116
Consolidated and Parent Company Cash Flow Statements ................................................. 117
Notes to the Financial Statements .......................................................................................... 118
ADDITIONAL INFORMATION
Shareholder information and advisers .................................................................................... 146
Annual Report and Accounts 2020
We are one of the world’s best known and most respected
specialist recruitment consultancies. We deliver recruitment
services to clients through a network of 139 offices across
37 countries. Our Vision is to increase the scale and
diversification of PageGroup by organically growing existing
and new teams, offices, disciplines and markets.
OUR STRATEGY
LARGE,
HIGH POTENTIAL
Typically under-developed markets, but where we
have a successful track record and confidence in
our ability to scale our operations substantially.
LARGE,
PROVEN
These are large markets where we are already
proven with a strong track record and a
significant presence.
SMALL AND MEDIUM,
HIGH MARGIN
Markets which are, or could be, significant profit
contributors with attractive conversion margins,
but each are unlikely (or not yet proven) to be
able to grow to more than 300 fee earners.
OUR BRANDS
Annual Report and Accounts 2020
WHERE WE OPERATE
COUNTRIES ACROSS
THE WORLD
37
North America
UK
EMEA
Asia
Australasia
HEADCOUNT
6,694
Latin America
OFFICES
139
HIGHLIGHTS
GROSS
PROFIT
£610.2m
-28.1%*
2019: £855.5m
CONVERSION
RATE**
2.8%
2019: 17.1%
* in constant currency at prior year rates ** Operating Profit as a percentage of Gross Profit
OPERATING
PROFIT
£17.0m
-90.1%*
2019: £146.7m
BASIC EARNINGS
PER SHARE
-1.8p
-105.6%*
2019: 32.2p
ORDINARY AND
SPECIAL DIVIDEND
% NON-UK
GROSS PROFIT
-
2019: 26.43p
86.7%
2019: 84.2%
1
CHAIRMAN’S INTRODUCTION
2020 PERFORMANCE
We entered 2020 with the emergence of COVID-19 in Mainland
China. By the end of the first quarter, it was apparent that we
had entered unprecedented times and were in the midst of
a global pandemic. The safety of our people was our highest
priority and, following the example we set in China, we swiftly
moved our employees to home working as the pandemic spread
through Asia Pacific, Europe, the UK and finally the Americas.
Our experienced Executive leadership team reacted quickly
to the exceptionally tough trading conditions and successfully
steered the Company through a challenging year, demonstrating
the flexibility and resilience at the core of our business model.
Our strategic priority has been to protect our platform and
ensure we are well positioned to gain market share as we
recover. We took advantage of government schemes where
possible and actively reduced our cost base. The furlough
income received in 2020 of £3.4m will be repaid to the
UK Government. During the second quarter, our Directors
voluntarily agreed to a 20% reduction in salary, with most other
employees working reduced hours. We also cancelled the
2019 final dividend, suspending our dividend policy. As a result
of the ongoing uncertainties, the Board also do not believe it
appropriate to propose a final dividend for 2020, but will look to
reinstate our dividend policy at the earliest opportunity once we
have more visibility on trading in 2021.
As lockdowns were eased, we gradually re-opened our offices
and brought our staff back from furlough to full time working.
We continued to invest in areas where we saw the greatest
opportunity for growth, including our Large, High Potential
Markets and other areas that were more resilient throughout the
pandemic, such as Contracting, Technology and Health Care &
Life Sciences.
Additionally, to ensure we provide a market leading service to our
clients and candidates, we continued to innovate and embrace
new technologies. Our new Customer Connect operating
system was successfully rolled out to a third of our fee earners
during 2020.
All regions were impacted by the pandemic and overall Group
gross profit was down 28.1% in constant currencies to
£610.2m, with operating profit down 90.1% to £17.0m.
Gross Profit in EMEA, our largest and best performing region,
was down 24%. France and Southern Europe were severely
impacted as a result of government restrictions and local
lockdowns. However, Germany proved resilient and declined just
11%, driven by its contracting business, Michael Page Interim.
Asia Pacific was down 25%. However, Mainland China and
Japan showed strong signs of a recovery, with a return to growth
by the end of December. The Americas was badly impacted by
the pandemic, with North America and Latin America down 30%
and 33% respectively. The UK, our most challenging region,
declined 40%, with regional lockdowns and Brexit-related
uncertainty impacting trading conditions.
BOARD
The correct balance of the Board is fundamental to successfully
delivering the Group’s objectives. In the current unprecedented
economic climate, it is imperative the Board possesses a wide
range of experience to drive us confidently through this difficult
period and emerge well placed to take advantage of new
opportunities.
One of my main priorities is to ensure a well-balanced,
diverse Board, offering broader perspectives that encourage
new innovative strategies that are necessary to stay ahead.
Over the past few years, we have exceeded the target in the
Hampton-Alexander review for FTSE 350 Boards to have 33%
female representation. Due to organic growth and our policy
of promoting from within, it will take some time for the balance
of our Executive Board to reach this target. However, following
recent promotions to our Executive Board, with effect from
STRATEGIC REPORTAnnual Report and Accounts 2020 Annual Report and Accounts 2020
2
1 January 2021, our female representation has increased
to 10%.
also set up in the UK with a diverse membership to provide
greater representation.
I monitor the success of the various programmes in place to
accelerate the promotion of women to leadership positions.
Our Women@Page global network is aimed at engaging
and empowering women across the Group and we have a
coaching programme for women returning from maternity
leave. Additionally, our senior management have diversity
targets linked to their remuneration.
We have a strong focus on succession planning to ensure
potential future leaders are trained and can reach their full
potential. We have talent development programmes available,
including coaching and mentoring to our senior leaders in
addition to our Executive leadership programme.
I am also pleased to announce the appointment of Ben
Stevens who joined the Board as an independent Non-
Executive Director with effect from 1 January 2021. Ben
Stevens will be a member of the Audit, Nomination and
Remuneration Committees and Audit Committee Chair
Designate and brings extensive experience across different
sectors and roles to the Group.
CULTURE, PURPOSE AND STAKEHOLDER
ENGAGEMENT
Our Purpose is to change lives for people through creating
opportunity to reach potential. We are committed to providing
professional success for our clients, candidates and staff and
this is underpinned by our values of passion, determination,
working as a team while enjoying what we do and making
a difference.
The Board work closely with our culture & engagement
team, reviewing all aspects of our culture such as talent
development, diversity & inclusion, internal communications
and operations. During the year, a Centre of Excellence was
setup to provide a global forum to help drive the adoption of
and engagement with our various campaigns and initiatives.
In accordance with the requirements of the Corporate
Governance Code, all members of the Board effectively
engage with employees. This is done using a variety of
channels, including attendance at employee meetings, live
virtual events and surveys. The health and wellbeing of our staff
is our key priority and the impact of the pandemic meant that
it has never been so important for the employee voice to be
heard. As a result of our remote working survey we introduced
the staying connected campaign to provide help and support
to employees with the sudden shift to homeworking, social
interaction and mental wellbeing. Our Senior Leadership team
demonstrated their approachability via Live Events held on
Microsoft Teams.
We also carried out two pulse surveys in the year to assess
the needs of our staff, with positive results. 90% of our
people found our communication tools were effective in
providing information and 84% of people felt proud to work
at PageGroup. The results of the pulse surveys and other
assessments from employee engagement initiatives are also
discussed during Board meetings and as part of our twice-
yearly culture and engagement review, where future actions are
agreed to ensure our culture is aligned globally, in line with our
business objectives and our Purpose and values.
Customer centricity is vital to ensure that we retain our position
as a global market leader. Our recent technological innovations
meant we were well placed at the start of the pandemic to
seamlessly move our customers over to online tools, including
video interviews and online webinars. We were able to
continue to provide our customers with a first-class service,
providing the support and information necessary to assist
them with the additional challenges they faced. As a Board, we
continue to monitor and assess the views of both candidates
and clients so that procedures and system innovations can be
made to ensure we continue to provide a high-quality service.
SUSTAINABILITY
Despite COVID-19’s dominance this year, 2020 has given us
the opportunity to reflect on our approach to sustainability.
The review allowed us to broaden the meaning of sustainability
and take a deep dive into each element of ESG (Environment,
Social and Governance). We reflected on our hard work and
achievements to date, as well as looked towards improving
our future.
I am proud to announce that PageGroup has now joined the
UN Global Compact. The UN Global Compact provides a
framework for developing a more sustainable and responsible
business. We are excited to be joining the largest corporate
sustainability initiative in the world. Whilst this is an important
step, it is the first in a series of exciting sustainability initiatives
to be released over the course of 2021.
LOOKING AHEAD
As we enter 2021, recent news on the efficacy of vaccines
for COVID-19 is positive, and in the UK we are encouraged
that the Brexit deal has provided a degree of clarity. However,
COVID-19 remains a significant issue and is likely to remain so
for at least the medium term. Prior to the pandemic, there were
also a number challenges in some of the Group’s markets as
a result of political instability, driving further macro-economic
uncertainty.
However, we remain committed to investing in our Large,
High Potential Markets, as well as other countries, brands and
disciplines where we see the greatest potential for growth,
such as Contracting, Technology and Health Care & Life
Sciences.
We have a core of engaged, motivated and experienced
employees and we will continue to support them and look to
add expertise. We know the future remains unpredictable, but
we believe now is the right time to continue to invest in our
flexible and highly diversified business model. We will maintain
our focus on the long-term vision of the Group to drive
progress towards our strategic goals.
Finally, this year has been exceptionally challenging and
our staff and Executive Leadership team have exceeded
expectations. We recognise the significant sacrifices that have
been made during the year, including staff who volunteered to
take salary reductions or those who worked reduced hours.
Our success is reliant upon their loyalty, contribution and
continued support. On behalf of the Board, I would like to say
thank you to all of our people for their high levels of dedication
and resilience throughout the year.
The success of the Board’s Diversity and Inclusion agenda is
demonstrated by the attainment of several awards, including
the Times Top 50 Employers for Women 2020 and FT Diversity
Leaders 2021 Top 100. During the year, a shadow board was
David Lowden
Chairman
STRATEGIC REPORTSTRATEGIC REPORTFINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 3
OVERVIEW
PAGE 5 BUSINESS MODEL
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
Highly profitable
Maintain a strong
balance sheet
Highly cash generative
Sustainable organic growth
Team-based service delivery
Strong brands
Diversification to mitigate
cyclicality by geography, brand
and discipline
Focus on operational
efficiency
Talent and skills development/
retention
Effective use of technology
PAGE 11 STRATEGY
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
To be the leading specialist
recruiter in each of the
markets in which we operate
Career development structure
Assurance of a quality service
Training
Global mobility
Effective recruitment
process
Long-term investment into
core markets
•
•
Large, High Potential
Large, Proven
• Small and Medium,
High Margin
PAGE 41 RISKS
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
Macro-economic exposure
Shift in business model
People development
Foreign exchange translation
risk
Delivery of operational
efficiencies
Attraction and retention
Technology; systems
transformation and
change; data security;
brand reputation; financial
management and control;
fiscal and legal compliance
PAGE 21 KPIs
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
Gross profit growth
Fee earner headcount growth
Employee satisfaction survey
Gross profit diversification
Gross profit per fee earner
Management experience
Perm:Temp ratio
Cash
Earnings per share
Fee earner:operational
support staff ratio
Conversion rate
PAGE 81 REMUNERATION
Measurement performed
at a granular level
D&I review ratings
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
EPS growth: three year
cumulative
PBT performance
Comparator gross profit
growth
Strategic targets
Systems and innovation
Leadership and people
development
Retention/succession
Cost and financial
management
Risk management and
internal controls
IT strategic development
PAGE 18 DIVIDEND POLICY
FINANCIAL
STRATEGIC
PEOPLE
OPERATIONAL
Maintain a strong balance
sheet
Maintain core ordinary
dividend
Return surplus cash to
shareholders by special
dividends and/or share
buybacks
Ensure dividends are paid at
sustainable levels such that
investment in the business
and its people is maintained
First use of cash is to satisfy
operational and investment
needs, as well as to hedge
liabilities under the Group’s
share plans
STRATEGIC REPORTAnnual Report and Accounts 2020 4
A MESSAGE FROM STEVE
I would like to welcome you to our Strategic Report, where I will outline our Business Model and
Strategic Framework. I will then take you through our Strategic Review outlining the source of our
competitive advantage and our strategic response to the global COVID-19 pandemic. Following on
from this, I will take you through how we approach investment in our markets and the relationship
to our strategic plan. I will then outline how we see current market dynamics and our capital
allocation policy.
We continue this year to relate how we measure performance, through our KPIs – both financial
and non financial – with associated risks. These risks then link directly to the four elements
(financial, strategic, people and operational) of the performance criteria in our current executive
share plans.
Steve Ingham
CEO PageGroup
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 5
BUSINESS MODEL
OUR MODEL AT WORK
OUR PURPOSE
Our Value
Proposition Model
OUR PEOPLE
An experienced senior
management team and high-quality
consultants. Expertise in premium
candidate sourcing and advocating
for client and candidate.
OUR CULTURE
Diverse and inclusive culture with
ingrained values of how to do
business ethically. We have created
an environment where developing
our people and achieving results for
the customer is paramount.
OUR RELATIONSHIPS
We work closely with our clients
and candidates. Our customer
centric ethos upholds our reputation,
maintains our competitive edge and
enables our business to thrive.
OUR BRAND AND SCALE
Global reach, with deep local
knowledge. Specialist industry and
market knowledge. High levels of
operational efficiency.
TECHNOLOGY AND
INNOVATION
Focussed on how best to acquire,
engage and nurture customers
to build long-term relationships.
The use of technology allows us to
leverage growth and improve our
conversion rate.
FINANCIAL CAPABILITY
Our business is supported by a
strong balance sheet and significant
cash flow generation.
CLIENTS
• Sector expertise
• Appropriate candidate shortlist
• Professional high-quality service
CONSULTANTS
• Team-based structure and compensation
• Access to jobs across entire Group
• Consistent process
CANDIDATES
• Professional high-quality service
• Market understanding and client profiling
• Career advice
UNDERPINNED BY OUR VALUES
WE MAKE A DIFFERENCE
WE ENJOY WHAT WE DO
WE WORK AS A TEAM
STRATEGIC REPORTAnnual Report and Accounts 2020 OUR MODEL AT WORK
6
Delivering
our strategic
objectives
LEADS TO...
• Repeat business
• Greater exclusivity
• Future candidates
LEADS TO...
• Rapid career promotion
• Career opportunities
• Reward and recognition
LEADS TO...
• Career-long relationships
• Peer recommendations
• Future clients
Sustainable growth
for the benefit of
our stakeholders
ORGANIC,
HIGH-MARGIN,
DIVERSIFIED
GROWTH:
With a core focus
on organic growth
our broad-based
capabilities enable us
to capitalise on market
opportunities around
the globe, avoiding
over-reliance on one
geography or discipline.
SCALABLE
& FLEXIBLE
CAPACITY:
Our brand and scale
enable us to build
an unrivalled skillset,
together with the ability
to respond quickly
to changing market
conditions.
TALENT
AND SKILLS
DEVELOPMENT:
The recruitment,
retention and
development of talent
is fundamental to
driving our meritocratic
growth model.
Our strategic framework is outlined
on page 7.
EMPLOYEES
Supportive, inclusive
culture where they
experience real
opportunities for
development and a long
and rewarding career.
INVESTORS
Look for investment
growth and seek
confidence their
investment is under
sound stewardship.
CLIENTS &
CANDIDATES
Rely on us to provide
world-class specialist
recruitment services
and solutions to help
drive their business and
careers forward.
COMMUNITIES
& GOVERNMENT
Need businesses that
have a positive impact.
SUPPLIERS
Seek strong and
enduring partnerships
based on fair terms.
Stakeholder engagement is outlined
on page 51.
UNDERPINNED BY OUR VALUES
WE WORK AS A TEAM
WE VALUE DETERMINATION
WE ARE PASSIONATE
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 7
BUSINESS MODEL
STRATEGIC FRAMEWORK
PageGroup is focused on delivering against three key objectives to achieve its Strategic Vision and deliver sustainable
financial returns. These are to:
LOOK FOR ORGANIC, HIGH MARGIN AND DIVERSIFIED GROWTH
1
Our strategy is to expand and diversify the Group by industry
sectors, professional disciplines, geography and brand. As
recruitment is a cyclical business, impacted significantly by the
strength of economies, diversification is an important element
of our strategy as it reduces our dependency on individual
businesses or markets, thereby increasing 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.
Our business model proved resilient during the COVID-19
pandemic, demonstrating the success of our diversification
strategy. With less reliance on any one individual country, brand
or discipline, the business was better positioned to face the
adverse market conditions.
PageGroup’s historical success in each of our markets has
helped identify which geographies will likely produce high-margin
growth, with the greatest potential for long-term success.
Our background is in permanent recruitment, but 28% of
the business is now in the temporary market, with this being
dependent on local culture and market conditions.
Our presence in major global economies provides the greatest
potential for long-term growth in gross profit at attractive
conversion rates. We are now less dependent on our Large,
Proven markets, such as the UK and have greater opportunities
in the large economies, such as Greater China and South East
Asia, where we have been highly profitable in the past. In 2007
our Large, High Potential markets, with then just under 700
fee earners, represented 17% of Group Gross profit. We have
invested heavily in this category, and today it has over 2,000 fee
earners, representing 36% of Group gross profit, highlighting the
success of our diversification strategy.
We have also increased our discipline diversification away from
Accountancy and Financial Services. In 2007, our Accountancy
and Financial Services discipline represented 54% of our Gross
Profit, compared to just 35% in 2020.
2
POSITION THE BUSINESS TO BE EFFICIENTLY SCALABLE AND HIGHLY
FLEXIBLE TO REACT TO MARKET CONDITIONS
Our ability to respond quickly to changes in market conditions
is critical to managing the business efficiently through economic
cycles. We ensure that we always have the ability to flex our
capacity up and down, while maintaining a core presence
in each market to service clients with excellence and retain
management experience.
Our team-based structure and profit share business model
is highly scalable. The small size of our specialist teams also
means that we can increase our headcount rapidly to achieve
growth. When market conditions tighten, these teams then
reduce in size largely through natural attrition. Consequently, our
cost base will be reduced in a slowdown.
Having invested years in training and developing our highly
capable management teams, our objective is to ensure we
retain this expertise within the Group. By following this course
of action, we typically gain market share during downturns
and position our businesses for market-leading growth when
economic conditions improve.
Our global footprint requires high levels of operational efficiency
in order to achieve this strategic objective. Our focus on Shared
Service Centres has delivered greater economies of scale and
greater efficiencies. It has driven consistency, increased flexibility
and improved the quality of service provided to our operational
business. Collectively these Shared Service Centres allow us to
be more agile, reduce our fixed costs and remove constraints on
how fast we can react to changing market conditions.
3 NURTURE AND DEVELOP OUR PEOPLE, DRIVING OUR MERITOCRATIC
GROWTH MODEL
We recognise that it is our people who are at the heart
of everything we do and the recruitment, retention and
development of talent is fundamental in our ability to achieve
long-term sustainable organic growth.
Diversity and inclusion are key to our culture and the success of
our business. Understanding the values and cultural differences
of our employees helps them reach their potential as we build a
stronger, more successful business. A business which reflects
society and the clients and candidates whose lives we change.
We seek to find the highest calibre staff from a diverse range of
backgrounds and then do our very best to retain them through
offering a fulfilling career and an attractive working environment.
This includes a team-based structure, a profit share business
model and continuous training and 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 Executive
Board members.
During the year, we developed our continuous listening strategy,
giving us the ability to listen to our employees and act on their
feedback, so we could give them the best possible support and
improve performance.
STRATEGIC REPORTAnnual Report and Accounts 2020 8
OUR STRATEGY
The Group’s strategy aims to expand
and diversify the business organically
by professional disciplines, brands
and geographies, with the objective of
being the leading specialist recruitment
consultancy in each of our chosen
markets.
A FOCUS ON ORGANIC GROWTH
PageGroup’s business model has proved itself both through
economic cycles and as the business has expanded into a global
enterprise. At its core is a focus on organic growth.
GLOBAL MANAGEMENT MOBILITY
We regularly move experienced directors
into markets where they can add the most
value and guide the business through the
challenges of a market cycle, while allowing
us to retain and motivate key senior talent.
TEAM PROFIT-LED
COMPENSATION
A focus on team-based
performance rather than the
individual promotes positive
corporate behaviour and
consistent quality of service for
both clients and candidates.
EXPERIENCED
MANAGEMENT POOL
Experience through economic
cycles and across geographies
and disciplines reduces our
learning curve, maximises
scalability and is crucial for
placing resources where they will
add the most value.
ORGANIC
GROWTH
PRODUCTIVITY-LED
EXPANSION
Our operational metrics
focus on productivity,
by team, discipline and
geography. This bottom-up
approach aligns expansion
criteria throughout the
Group, focusing and
optimising investment on
key priorities.
CAREER DEVELOPMENT
STRUCTURE
PageGroup offers its consultants a
well-defined and varied career
in recruitment. This includes a clear
development structure with significant
opportunities for the most talented.
AGILE AND RESPONSIVE
Recruitment is a fast-paced
and dynamic business. Our
agility gives us the confidence to
respond quickly to opportunities
and challenges as they appear.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 9
BUSINESS MODEL
OUR VISION
HEADCOUNT
GROSS PROFIT
OPERATING PROFIT
10,000 £1bn
£200m-£250m
Despite 2020 being an extremely challenging year, our Vision remains consistent – to increase the scale and diversification of
PageGroup by organically growing existing and new teams, offices, disciplines and markets. In numbers, our Vision is to deliver
Group gross profit of one billion pounds, which, depending on how fast we get to that figure, will generate operating profit of
between £200m - £250m. To deliver these results, at 2018 productivity, when we first published this Vision, we will require a total
Group headcount of 10,000. We believe that with our focus on operational support, we are now better placed to improve our fee
earner to operational support staff ratio. The work we have done to standardise and simplify our support functions will enable us to
grow our fee earner headcount without a corresponding increase in our support headcount and consequently, we believe that we
can achieve a ratio of 82:18.
WHAT WE DO
PageGroup is a worldwide leader in specialised recruitment. We have over 40 years recruitment experience and deliver
recruitment services to clients across 37 countries through our network of 139 offices.
Einkauf & Supply Chain
Finanaz
Finanzas y Contabilidad
DISCIPLINE
EXPERTISE
We’ve developed PageGroup’s reputation
as a global recruitment leader through
our focus on specialist areas of the
market, replicated across our international
network. Within our four broad discipline
categories, we operate across 14 specialist
discipline teams. We then specialise further
within these (e.g. digital marketing within
marketing) to ensure we provide expert
recruitment services to our clients.
PERM AND
TEMP MIX
PageGroup is the international market
leader for permanent recruitment
in the majority of the countries in
which we operate. We also have a
substantial and growing temporary
recruitment business in markets
where temporary placements for
professionally qualified candidates are
culturally accepted.
GEOGRAPHIC
REACH
Our substantial and well-balanced
business reaches across all
regions, including Latin America
and Asia. Our global model allows
us to source candidates from
domestic and international markets
and provide a comprehensive
service to both local and
multinational clients.
STRATEGIC REPORTAnnual Report and Accounts 2020 10
OUR BRANDS
PAGE PERSONNEL
Page Personnel offers specialist
recruitment services to clients
requiring permanent employees,
temporary or contract staff.
Mirroring the geographical and
sector coverage of Michael
Page, it provides specialist
services to organisations
requiring talent at professional
clerical and support levels.
PAGE EXECUTIVE
MICHAEL PAGE
The original PageGroup brand
is normally established as the
first business in each new
country that we enter. Michael
Page is comprised of 25
specialisms, each providing
a service to a specialist area
of the market, recruiting
permanent, temporary, contract
and interim opportunities,
typically at qualified professional
and management level. The
businesses we work with range
from SMEs to global blue-chip
organisations.
With typical margins above
those of Michael Page and Page
Personnel, our executive search
division of PageGroup provides
a range of search, selection and
talent management solutions for
organisations on a permanent
and interim basis. Recognised
for our powerful in-house
research function, speed and
flexibility of response, and
assignment completion rates,
organisations worldwide use
Page Executive to secure their
senior talent. The roles on which
we focus typically sit at the sub-
board and Board levels.
PAGE OUTSOURCING
Our newest brand, Page Outsourcing, harnesses the power of the other PageGroup brands. Our flexible
recruitment outsourcing solution allows our clients to focus on their core business. We manage a range of
recruitment activity from high volume needs to specialist support for HR departments across all levels of the
recruitment market. Page Outsourcing represents an opportunity for the Group to accelerate growth across all
segments of the market.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 11
STRATEGIC REVIEW
OUR STRATEGIC RESPONSE TO THE GLOBAL COVID-19 PANDEMIC
Above all else, the health and safety or our employees,
candidates and clients was and remains our first priority. Early
in the pandemic we were able to move our consultants swiftly
to homeworking, with full system access, minimising service
disruption to our clients and candidates, while ensuring the
safety of our employees.
The Group’s overarching strategy has been to protect our
operating platform, securing as many roles as possible through
the crisis. Our aim was to protect the shape of the business,
retaining our experienced employees and continuing to support
our clients and candidates. We have maintained our network of
offices and broad and diverse platform of brands, disciplines
and geographies.
Our flexible and highly diversified business model proved
resilient, enabling us to react quickly to changes in market
conditions and demonstrating the success of our diversification
strategy. With less reliance on any one individual country, brand
or discipline, the business was better positioned to face the
adverse market conditions.
Our aim was to balance tight cost management, while
ensuring we positioned the Group to take full advantage of all
opportunities as conditions improved. We actively reduced our
cost base and took advantage of government schemes where
possible. During the second quarter, our Directors voluntarily
agreed to a 20% reduction in salary, with most other employees
working reduced hours. We also cancelled the 2019 final
dividend and suspended our dividend policy.
Now the Group is trading profitably each month and with £166m
of net cash, the Board has decided to repay the furlough income
to HMRC.
To ensure we are best placed to take advantage of market
opportunities as we recover, we have been hiring experienced
fee earners from the competition. During the year, following an
unprecedented level of interest, this selective investment has
enabled us to add around 400 experienced fee earners with an
average tenure per fee earner of 4.1 years.
These hires have been focused in our targeted areas of
investment which have also proved more resilient in the
pandemic. In our Technology discipline, we are investing in
growth disciplines, including IT and other STEM disciplines.
There is also an increased focus on our Healthcare & Life
Sciences discipline, where we have hired from the competition to
expand in growth areas. We are also replicating our successful
German Interim business model in other markets.
Another area of strategic investment has been in Page
Outsourcing. This is our newest brand and was created to meet
the growing demands of our clients. It leverages our internal
capabilities in offering a customised solution for high-volume
hiring and specific project recruitment needs across all levels
of the market. We have a growing track record in this area and
significant infrastructure already in place. During the year, we
also made a senior appointment into our Page Outsourcing
brand to drive our offering within MSP, RPO and project
recruitment.
STRATEGIC REPORTAnnual Report and Accounts 2020 12
To achieve our strategic goals, it was and remains critical to keep our
people informed and engaged. The key to our success during the
pandemic was the global communications and technology infrastructure
that we have put in place over the last five years. Despite the challenging
conditions, we continued with the roll out of Customer Connect, our new
operating system and PageInsights, our data intelligence tool. Additionally,
our move to the cloud gave us greater flexibility in the remote working
environment.
We were able to utilise a range of tools to ensure our people remained
informed and updated, including Yammer, our internal social network and
we rolled out Microsoft Teams. This meant consultants could continue
talking to their candidates, clients and most importantly, each other. We
also used Boost our blended learning platform to provide training for
people in what has been an uncertain and unusual environment. These two
tools enabled global communication and ongoing team level collaboration,
preserving our team-based culture.
Our continuous listening strategy, implemented this year, gave a great
opportunity for us to listen to our employees and act on their feedback, so
we could give them the best possible support and improve performance.
During the year, we carried out two pulse surveys that specifically focussed
on the unique needs of our employees during the pandemic. We also
carried out global on-boarding surveys to help understand the needs of
new joiners, how engaged they were feeling and help us to reduce attrition.
We have strong coverage across both permanent and temporary markets
and are ideally positioned to deliver these solutions to our clients, given our
geographical spread and broad discipline and salary level offerings, being
able to match the needs of our largest multi-national clients. Our business
model has proved resilient, despite the unprecedented conditions and
we remain confident in our strategy of maintaining our platform. We will
continue to carefully invest in headcount, as well as continuing to roll-out
new technology and innovation. We are the clear leader in many of our
markets, with a highly experienced senior management team, which, we
believe, gives us the ability to react quickest as market conditions around
the world recover and capitalise on market share opportunities.
TECHNICAL
DISCIPLINES
Increase exposure to technical
disciplines including IT and
other STEM specialisms
PAGE
OUTSOURCING
Our recent senior appointment
provides an opportunity to expand
our Page Outsourcing business
INTERIM AND
CONTRACTING
Replicate our highly successful
German Interim business model in
other markets
HEALTHCARE AND
LIFE SCIENCES
Increased focus on Healthcare and
Life Sciences
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 13
STRATEGIC REVIEW
OUR COMPETITIVE ADVANTAGE
Our true competitive advantage is the combination of these four factors and the balance we have achieved in
the business for over 40 years. We generate funds through fees earned for placing candidates in permanent, temporary
and contract roles.
SCALE
Our scale enables PageGroup to commit to markets through economic cycles, which
combined with our strong financial standing has given clients the confidence to build lasting
relationships with us. Temporary staff also derive comfort from our financial strength that
their services will be paid for.
The breadth of our client base, even in our new markets, gives us the ability to offer diverse
expertise across a wide range of complementary specialisms and geographies, enhancing
our offering to the market and the candidate pools we can access.
Our scale has facilitated us building an unrivalled skillset with high levels of experience,
which is available to clients of any size and across all sectors in which we operate.
BRAND
We deliver specialised sector experience operated via four key brands:
Page Executive, Michael Page, Page Personnel and Page Outsourcing, supported
by supplementary brands throughout our international locations.
The first class reputation of our brands gives high-quality candidates assurance
to place key decisions on their future in our hands. Our superior level of expertise
and the knowledge of our consultants inspire trust and assurance of quality
service, for both clients and candidates, enabling our brands to outperform other
recruitment businesses.
STRATEGIC REPORTAnnual Report and Accounts 2020 14
CULTURE
PageGroup’s culture is unique in the sector and sets us apart from the
competition. Our global culture delivers a consistent approach, both internally and
externally, whilst remaining accepting of each of our market’s local characteristics.
A diverse team brings different perspectives and insight to our business and our
promotion of diversity and inclusion ensures we add value to the markets we
recruit into on behalf of our clients. We work closely with our clients to source and
recruit from a diverse talent pool to provide them with the best possible candidate.
We have ingrained values of how to do business ethically and to make long-term
decisions. Our Purpose and our values that are the key to our success are set out
on page 27.
INNOVATION
The digital revolution has transformed the recruitment market. The impact of technology
on behaviours and expectations of both clients and candidates continues to grow at pace.
Our innovation approach is focused on how best to acquire, engage and nurture customers
to build long-term relationships. We have an innovation team that ensures we have a good
understanding of the different recruitment trends and form partnerships with the most advanced
technology providers who can help us create an innovative experience for our customers.
Our internal Business Technology function focuses on designing, implementing and exploiting
scalable global systems. By improving our processes and tools, we empower consultants to be
more productive. In our operational business we are utilising technologies such as Salesforce
and Thunderhead to engage with customers throughout their journey.
The use of technology allows us to leverage growth in the business and improve our
conversion rate.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 15
STRATEGIC REVIEW
HOW WE CATEGORISE OUR MARKETS
INVESTMENT APPROACH
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 cash flow generation. This market categorisation provides an investment framework for the business.
Investment comes in a range of forms including headcount, new offices and infrastructure, marketing spend and minimum levels of
market presence through the economic cycle.
LARGE,
HIGH POTENTIAL
LARGE,
PROVEN
CATEGORISATION
EXAMPLES
SUBSTANTIAL, HIGH-POTENTIAL
MARKETS FOR RECRUITMENT. Typically
under-developed, but where PageGroup
has a successful track record and
confidence in its ability to successfully
scale operations. Each satisfied key
criteria including:
• Positive PageGroup track record;
• Ability to adapt PageGroup culture to local
culture;
• Ability to hire and retain local consultants;
• Ability to roll-out disciplines and open offices;
• Attractive conversion rate potential; and
•
Large-scale economies.
GERMANY
GREATER CHINA
LATIN AMERICA
SOUTH EAST
ASIA
THE US
LARGE MARKETS in which PageGroup
is already proven with a strong track
record and a significant presence.
UK
FRANCE
SMALL AND
MEDIUM,
HIGH MARGIN
Have been, or could be, SIGNIFICANT
PROFIT CONTRIBUTORS for
PageGroup, but each not likely to be in
excess of 300 fee earners.
AUSTRALIA
THE
NETHERLANDS
ITALY
SPAIN
JAPAN
INDIA
MIDDLE EAST
AFRICA
CANADA
TURKEY
OTHER
EUROPEAN
COUNTRIES
STRATEGIC REPORTAnnual Report and Accounts 2020 16
INVESTMENT
APPROACH
STRATEGIC
VISION
2020 RESULTS
2021 STRATEGY
Sustained
investment
through cycle –
adding headcount/
offices/disciplines.
Create a market
leading network of
offices, management
and headcount.
c. 40% of Group
gross profit/fee
earners; 20%
conversion rates.
Gross profit decline of -24.8% for
the year, with Germany the most
resilient declining just -11%.
Elsewhere, Greater China -27%,
South East Asia -23%, the US -30%
and Latin America -33%. In South
East Asia, we opened our first office
in the Philippines. This category
represents 36% of Group gross profit
(2019: 35%).
Continue investment
in new headcount
and management
team, whilst improving
conversion rates and
productivity.
Investment reflects
gross profit growth
and market
conditions.
Collectively return to
2007 peak levels of
operating profit and
conversion rates;
equivalent to c. 45%
of Group gross profit/
fee earners.
Continue to drive future
growth through existing
capacity, as well as
improving conversion
rates and productivity.
Gross profit decline of -32.5%
for the year. Trading conditions in
the UK were badly impacted by
both Brexit related uncertainty and
COVID-19, with a decline -40%.
Elsewhere, trading conditions in our
Australian and European businesses
were also badly impacted by the
pandemic, with Australia -35%,
France -28%, Italy -28%, the
Netherlands -28% and Spain -29%.
Respond to market
conditions, focus
on high margin
opportunities.
Investment responsive
to market conditions.
Expected to represent
c.15% of Group gross
profit/fee earners; 30%
conversion rates.
Gross profit decline of 21.7%
for the year. Japan was the best
performing, declining -9%. Belgium
and India were also resilient,
-16% and -14%, respectively.
Elsewhere, other countries were
badly impacted by the pandemic,
with the Middle East -30% and
Switzerland -26%.
Continued focus on
growth and improving
our conversion rates
and productivity.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 17
STRATEGIC REVIEW
MARKET DYNAMICS
The professional recruitment sector has always been highly sensitive to fluctuating economic conditions and is strongly influenced
by client and candidate confidence. Market liquidity can change rapidly, whether in terms of availability of jobs or candidate
confidence in taking the next step in their career.
It can also be localised, by geography or discipline, and differ between temporary and permanent placements in the
same market.
In a number of geographic regions, such as Latin America or Greater China, our potential markets are very large, yet relatively
immature. This provides not only significant market share opportunities, but also business development challenges. New markets
can take time to crack, but the advantages of being an early participant and building scale can be considerable.
As well as the influence of the general macro-economic environment on business activity, there are a number of market-based
drivers that can materially impact PageGroup’s financial performance. These are split into elements which affect market liquidity
and those which influence gross profit and consultant productivity. It is the nature of the professional recruitment market that
strong market conditions will see drivers in both elements align and this can have a dramatic impact on PageGroup’s overall
performance and conversion margins.
MARKET LIQUIDITY
IMPACT
CANDIDATE AVAILABILITY
Often highly discipline/geography-specific,
especially at midpoints in the cycle as client
confidence grows. This is a key driver of most
other elements, as the quality of a recruiter is
most clearly demonstrated through their ability
to source difficult-to-find candidates.
CANDIDATE CONFIDENCE
A major influence on market liquidity
where the macro-environment is
sufficiently stable, candidates will look
to progress their careers, which helps
to drive job liquidity.
FINANCIAL IMPACT
Mainly visible through improvement in gross profit, a buoyant
market helps to drive consultant productivity.
GROSS PROFIT AND PRODUCTIVITY
IMPACT
FEES/RATES
Group average typically
moves within a 10%
range over the cycle
(19.5%-22%).
WAGE INFLATION
Reflects level of candidate shortage
and liquidity within a particular
discipline or geography, plus
macro-economic conditions.
TIME TO HIRE
As candidates become scarcer,
companies reduce the number of
interviews and shorten the decision
making process in order not to lose
preferred candidates.
FINANCIAL IMPACT
Notable influence on both gross profit and also conversion rate. Productivity, especially in
permanent recruitment, is significantly enhanced as these market drivers align positively.
STRATEGIC REPORTAnnual Report and Accounts 2020 18
CAPITAL ALLOCATION POLICY
The Group’s strategy is to operate a policy of financing the
activities and development of the Group from our retained
earnings and to maintain a strong balance sheet position.
We first use our cash to satisfy our operational and investment
requirements and to hedge our liabilities under the Group’s
share plans.
We then review our liquidity over and above this requirement
to make returns to shareholders, firstly by way of ordinary
dividends. Our policy is to grow the ordinary dividend over
the course of the economic cycle, in line with our long-term
growth rate. We believe this will enable us to sustain the level
of ordinary dividend payments during a downturn, as well as
increasing it during more prosperous times.
Cash generated in excess of these first two priorities will be
returned to shareholders through supplementary returns, using
special dividends or share buybacks.
Due to the COVID-19 pandemic in 2020, we suspended our
dividend policy to preserve liquidity. We will continue to review
this position in 2021 and plan to resume allocating capital to
shareholders as market conditions improve.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 19
CUSTOMER CONNECT
Our new operating system, Customer Connect, is a single instance, cloud-
based front-office technology platform that ensures we drive growth and support
innovation. The data-driven platform delivers a modern user experience making it
easy to engage with our customers at every opportunity to drive productivity.
Customer Connect is based on the Salesforce platform, allowing us to fully integrate
our CRM, digital and customer engagement programmes, which have been tested
and refined over the last five years. The scale of the technology manages high
volumes and acts as a filter to drive quality, allowing our marketing programme to
do more of the heavy lifting, so our consultants can focus on creating meaningful
conversations and relationships with our customers.
The integration gives our consultants full visibility of marketing activity and gives our
management the detail on how this is being followed up. For our customers, we are
improving their experience by managing their engagement across all touch points.
This delivers personalised and relevant interactions, ensuring we are measuring our
effectiveness for them.
We have tested and refined campaigns set up for both candidates and clients
across their lifecycle with us. Automated and triggered by customer activity, they
allow us to keep prospects engaged. The native integration displays what customer
activity has taken place, enabling meaningful discussions with our teams.
For clients, we run reactivation campaigns and are now able to trace client contact
activity and revenue generation. Candidate campaigns start from application and
are delivered based on where they are in the lifecycle. Talent pools are targeted to
re-engage with passive candidates, to ensure we have an engaged database for
our consultants to work with. By personalising these campaigns we are able to
drive conversion rates.
During the year, we successfully rolled out Customer Connect to over a third of our
fee earners, with further roll outs planned to the remainder of the Group in 2021
and 2022.
customer
connect
BETTER
VISIBILITY
of activity delivered and
followed up…
BETTER
ALIGNMENT
enabling consultants to
do what they do best…
BETTER
CUSTOMER
EXPERIENCE
by managing
engagement across
all touch points…
PAGEINSIGHTS
One of our core areas of focus is the development of our data programme
and ensuring that it provides both operational and strategic advantage
for the Group. PageInsights is a business intelligence tool that combines
our internal data with global external data sources, such as Government
information and millions of online adverts, in an accessible format to
present insight to our customers. Unique to PageGroup, it provides us
with a competitive advantage when engaging and delivering value-add
services to our existing and new customers.
Our clients want data and insights on recruitment trends to benchmark
externally, understand competitive roles and identify future skills and
experience evolving in their industries. Our consultants have this data at
their fingertips, giving them the confidence to consult on what is needed
to secure the best talent and enabling them to develop high-trust and
long-term relationships.
The tool also has the potential to evolve, as additional external data
sources become available and Customer Connect provides further internal
data alignment opportunities.
COMBINES INTERNAL
AND EXTERNAL DATA
SOURCES
GOVERNMENT LABOUR
STATISTICS
GLOBAL DATA FROM
HUNDREDS OF MILLIONS
OF JOB POSTINGS
INTERNAL APPLICATION
DATA
STRATEGIC REPORTAnnual Report and Accounts 2020 20
ONE INTEGRATED PLATFORM Intelligent automation engaging customers
throughout lifecycle
Talent pools refined:
identify engaged
candidate database
Personalised
campaigns, driving
conversion rates
ENGAGING THE
TALENT POOL
CANDIDATE
Candidate to
Client
transformation
REACTIVATED
CLIENT PROGRAMME
CLIENT
Ongoing relevant
campaigns: win-back
and cross-sell
Joined up view of client
contact activity and revenue
generation
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 21
KEY PERFORMANCE INDICATORS
We measure our progress against our strategic objectives using the following key performance indicators:
FINANCIAL
GROSS PROFIT GROWTH (%)*
-28.1
2020
2019
2018
2017
2016 3.0
5.0
15.9
9.8
* Increase in gross profit in constant currency
over the prior year
How measured: Gross profit growth
represents revenue less cost of sales
expressed as the percentage change over
the prior year. It consists principally of
placement fees for permanent candidates
and the margin earned on the placement of
temporary candidates.
Why it’s important: This metric indicates
the degree of income growth in the business.
It can be impacted significantly by foreign
exchange movements in our international
markets. Consequently, we look at both
reported and constant currency metrics.
How we performed in 2020: Gross profit
decreased -28.1% in constant currencies
and -28.7% in reported rates (2019: +5.0% in
both constant currencies and reported rates).
This was due to macro-economic uncertainty
as well as rolling lockdowns due to the
COVID-19 pandemic.
Relevant strategic objective:
Organic growth.
GROSS PROFIT DIVERSIFICATION (%)
Ex-UK
Ex-Accounting and
Financial Services
86.7%
65.2%
Ex-UK
Ex-Finance
2020
86.7
2019
84.2
2018
83.0
2017
80.2
2016
76.4
65.2
65.1
65.2
63.3
61.6
BASIC EARNINGS PER SHARE (P)
How measured: Total gross profit from: a)
geographic regions outside the UK; and b)
disciplines outside of Accounting & Financial
Services, each expressed as a percentage of
total gross profit.
Why it’s important: These percentages
give an indication of how the business has
diversified its revenue streams away from its
historic concentrations in the UK and from the
Accounting & Financial Services disciplines.
How we performed in 2020:
Geographies: the percentage increased to
86.7% from 84.2% in 2019, largely as a result
of the UK being impacted more severely by
the COVID-19 pandemic.
Disciplines: the percentage was broadly flat
at 65.2% (2019: 65.1%), with the COVID-19
pandemic affecting the Group’s operations in
all disciplines.
Relevant strategic objective:
Diversification.
-1.8
2020
2019
2018
2017
2016
CASH (£M)
2020
2019
2018
2017
2016
32.2
32.5
26.5
23.1
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
underlying profitability of the Group and the
progress made against the prior year.
How we performed in 2020: The Group
saw a 105.6% fall in Basic EPS to -1.8p,
due to COVID-19 and an increase in the
effective tax rate.
Relevant strategic objective:
Sustainable growth.
166.0
97.8
97.7
95.6
92.8
How measured: Cash and short-term
deposits.
Why it’s important: The level of cash
reflects our cash generation and conversion
capabilities and our success in managing
our working capital. It determines our ability
to reinvest in the business, to return cash
to shareholders and to ensure we remain
financially robust through cycles.
How we performed in 2020: Cash
increased to £166.0m (2019: £97.8m). The
significant increase in the cash balance
compared to 2019 was primarily due to the
unwind of working capital of £84.6m, deferral
of c. £11m of tax payments and a strong
focus on cash collection.
Relevant strategic objective:
Sustainable growth.
RATIO OF PERMANENT VS TEMPORARY PLACEMENTS
Gross profit Permanent Temporary
2020
2019
2018
2017
2016
72
75
76
75
76
28
25
24
25
24
How measured: Gross profit from each type
of placement expressed as a percentage of
total gross profit.
Why it’s important: This ratio reflects both
the current stage of the economic cycle
and our geographic spread, as a number of
countries culturally have minimal temporary
placements. It gives a guide as to the
operational gearing potential in the business,
which is significantly greater for permanent
recruitment.
How we performed in 2020: The ratio
decreased slightly to 72:28 (2019: 75:25).
As is usually the case in downturns,
permanent recruitment is hit harder when
trading conditions deteriorate. Temporary and
contracting recruitment was more resilient to
the tougher trading conditions, particularly in
disciplines such as Technology.
Relevant strategic objective:
Diversification.
STRATEGIC REPORTAnnual Report and Accounts 2020 22
STRATEGIC
FEE EARNER HEADCOUNT GROWTH (%)
-14.6
2020
-1.5
2019
2018
2017
2016
5.1
11.3
16.7
How measured: Number of fee earners
and directors involved in revenue-
generating activities at the year end,
expressed as the percentage change
compared to the prior year.
Why it’s important: Growth in fee
earners is a guide to our confidence
in the business and macro-economic
outlook, as it reflects our expectations
as to the level of future demand for our
services above the existing capacity
currently within the business.
How we performed in 2020: Net fee
earner headcount declined by 882, or
-14.6% in the year, resulting in 5,145 fee
earners at the end of the year. We have
continued to invest in certain areas of the
Group such as Technology, Contracting,
Healthcare & Life Sciences and Digital,
adding nearly 400 experienced fee
earners to the Group in the year.
Relevant strategic objective:
Sustainable growth.
GROSS PROFIT PER FEE EARNER (£’000)
2020
2019
2018
2017
2016
113.3
140.4
138.3
139.9
135.2
How measured: Gross profit divided by
the average number of fee-generating
staff, calculated on a rolling monthly
average basis.
Why it’s important: This is our indicator
of productivity, which is affected by levels
of activity in the market, capacity within
the business and the number of recently
hired fee earners who are not yet at full
productivity. Currency movements can
also impact this figure.
How we performed in 2020:
Productivity decreased 19.3% to
£113.3k (2019: £140.4k). During the
lockdowns, our fee earners saw a
significant reduction in activity. This,
together with our strategy of maintaining
our operating platform of experienced
consultants to take market share when
markets recover, resulted in a short-term
drop in productivity.
Relevant strategic objective:
Organic growth.
FEE EARNER:OPERATIONAL SUPPORT STAFF RATIO
Fee earner Support
2020
2019
2018
2017
2016
77
78
79
78
77
23
22
21
22
23
How measured: The percentage of
fee earners compared to operational
support staff at the year end, expressed
as a ratio.
Why it’s important: This reflects the
operational efficiency in the business in
terms of our ability to grow the revenue-
generating platform at a faster rate than
the staff needed to support this growth.
How we performed in 2020: The ratio
decreased to 77:23 from 78:22 in 2019.
This was driven by a decline in our fee
earner headcount of 882, in response
to the more challenging trading
conditions in many of our markets.
Our operational support staff headcount
decreased by 122.
Relevant strategic objective:
Sustainable growth.
CONVERSION RATE (%)
2020 2.8
2019
2018
2017
2016
17.1
17.5
16.6
16.3
How measured: Operating profit (EBIT)
expressed as a percentage of gross profit.
Why it’s important: This reflects the level
of fee-earner productivity and the Group’s
effectiveness at controlling costs in the
business, together with the degree of
investment being made for future growth.
How we performed in 2020: The
Group’s conversion rate decreased to
2.8% (2019: 17.1%), driven by the sharp
decrease in gross profit due to COVID-19,
partly mitigated by the reduction in
headcount and cost saving initiatives.
Relevant strategic objective:
Sustainable growth.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION
23
KEY PERFORMANCE INDICATORS
PEOPLE
EMPLOYEE INDEX
Positive engagement score
83%
MANAGEMENT EXPERIENCE
2020
2019
2018
2017
2016
12.3 years
12.5 years
12.0 years
11.9 years
11.6 years
How measured: A key output of the
employee surveys undertaken periodically
within the business.
Why it’s important: A positive working
environment and motivated team helps
productivity and encourages retention of key
talent within the business.
How we performed in 2019: We recorded an
83% positive score for employee engagement
in the latest Employee Survey in 2019. No
overall Employee Survey was performed in
2020, but our Working Environment Survey
told us that 90% of our people felt our
communication tools are effective in providing
the information they need; 85% feel part of a
team despite not being physically together;
70% see their health and wellbeing as a top
priority for the Company; and 84% feel proud
to work at PageGroup.
Relevant strategic objective:
Sustainable growth.
How measured: Average tenure of front-office
management measured as years of service for
directors and above.
How we performed in 2020: The average
tenure of the Group’s management was
broadly flat at 12.3 year (2019: 12.5 years).
Why it’s important: Experience through the
economic cycle and across both geographies
and disciplines is critical for an organic
cyclical business operating across the globe.
Our organic business model relies on an
experienced management pool to enable
flexibility in resourcing and senior management
succession planning.
Relevant strategic objective:
Talent and skills development.
GHG EMISSIONS
In accordance with the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, PageGroup reports on all direct greenhouse
gas (GHG) emissions (relating to the combustion of fuel and the
operation of any facility, together with any fugitive emissions); and
indirect GHG emissions (through the purchase of electricity, heat,
steam or cooling).
being impacted by the COVID-19 pandemic. Where data was
less complete due to disruption experienced in some countries,
we took the approach to extrapolate any omissions rather than
underestimate, to ensure all our emissions were adequately
covered. Fugitive emissions are not reported, as the Company is
not responsible for the maintenance of air conditioning in any of
its offices.
Since 2014, we have gathered energy data from our major
offices. This is in conjunction with our environmental policy that
focuses on implementing efficiency measures in our offices, to
reduce energy consumption and carbon emissions. Data for
our emissions reporting covers the period 1st October 2019 –
30th September 2020. We have continued to gather data in the
same manner as previous years, with the 2nd half data period
The Company’s total 2020 emissions from energy and fuel used
in its properties and vehicles, together with comparable data for
the previous 4 years, are reported below. This is the second year
we have reported our emissions data covering a 5 year period. In
2020 UK emissions accounted for 695 tonnes of CO2 (2019:934)
representing 13.1% of global emissions.
Total energy derived emissions (tonnes CO2e) properties and vehicles
2020 Energy
(kWh)
Source of emissions
2016
2017
2018
2019
2020
Group
Direct GHG emissions (relating to the combustion of
fuel and the operation of any facility)
Indirect GHG emissions (through the purchase of
electricity, heat, steam or cooling)
1,816
1,808
1,994
2,033
2,023
25,832,435
4,608
4,876
5,376
4,393
3,264
9,259,423
Total emissions
6,424
6,684
7,370
6,426
5,287
35,091,860
STRATEGIC REPORTAnnual Report and Accounts 2020 24
I
S
T
R
A
T
E
G
C
R
E
P
O
R
T
Emissions have been calculated in line with the GHG Protocol
Corporate Reporting Standard, and calculated using the
UK Government’s 2020 conversion factors for fuels, gases
and UK electricity, and the International Energy Agency (IEA)
conversion factors for non UK electricity generation.
This is the second year we are reporting on total global energy,
as well as the percentage for our UK operation. Our total
global energy consumption was 35,091,860 kWh with UK
energy consumption 2,923,144 kWh, representing 8.3%.
Our total energy consumption is calculated using electricity
and gas purchased in kWh and fuel volumes converted to
kWh using UK Government GHG Conversion Factors for
Company Reporting.
Emissions derived from property energy consumption directly
under the Company’s control have been calculated by using
the majority of our offices across the world (including the entire
UK business). This year, we were able to increase the sample
which now represents over 75% of the global headcount in
2020. The emissions for the remaining offices were calculated
by extrapolating headcount. Emissions derived from property
energy consumption amounted to around 62% of total
emissions.
In the 2nd half of the period covering our emissions reporting,
many of our colleagues across the world either worked from
home (during lockdowns) or did a combination of office based
and home working. This period varied by the global spread of
the pandemic, restrictions in local jurisdiction and ranged from
a few weeks to many months. We have not included energy
usage due to home working in our emissions calculations
this year, but, as we believe a more flexible approach to
working is likely to continue, we will be looking at a practical
way to account for emissions due to home working in our
future reporting.
Emissions from fuel consumed by Company owned or leased
vehicles in 2020, were calculated using the fuel consumed
by the Company car fleets in a sample of countries (UK,
Germany, Italy, France, Netherlands and Poland) representing
around 49% of the Company’s global car fleet. In 2020, the
Company’s global car fleet was just under 1,500 vehicles (a
6.7% decrease on the prior year). The total vehicle emissions
for the global fleet were calculated by first extrapolating
the total diesel and petrol consumptions per vehicle from
the sample across the entire fleet, and then calculating the
resulting emissions.
Although the number of cars reported by the countries
decreased, the total emissions from our fleet reduced by
less than 1%. During the pandemic, there was a noticeable
increase in colleagues using Company vehicles rather than
public transport, as they would have pre-pandemic.
The intensity values are based on emissions derived from
property energy and vehicle fuel per 1,000 employees in
the headcount. This factor was chosen as being the most
representative of the Company’s activity levels and being
unaffected by issues such as business mix or foreign
exchange variations.
Energy derived emissions – CO2e
tonnes per 1,000 employees
2016
2017
2018
2019
2020
1,061
990
934
821
787
The Company’s 2020 emissions intensity improved by 4.2%
compared with 2019.
The Company is undertaking a review to its approach to
sustainability. During the course of 2021, the reported
emissions of 5,287 tonnes for 2020 will be offset. Additionally,
the Company plans to set out its five year road map to
becoming carbon net zero. This will build on our previous
strategy to seek and implement energy saving and
environmentally responsible initiatives, wherever possible.
Previous initiatives have included relocating to more energy
efficient offices, the use of energy efficient printers, the use
of dedicated recycling bins and the introduction of bike to
work schemes.
Our new strategy will be both ambitious and stretching and
will see us transition to renewable energy across those offices
where we have operational control, move our car policy to
hybrid and electric vehicles, and also look to capture our
Scope 3 emissions over the next 3 years.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION
25
Q&A WITH STEVE INGHAM, CEO
INTRODUCTION
Steve Ingham has led PageGroup since 2006
and his tenure makes him one of the most
experienced CEOs on the FTSE 250. Steve’s
career with PageGroup spans over three
decades. When he joined, the Company had
just 240 staff in three countries.
Driven to create opportunity for people,
regardless of background, he has played
an integral role in building a truly global
business with a headcount of just under 7,000
employees across 37 countries. Under Steve,
the business has expanded and diversified
while maintaining its ethos of rewarding
collaborative teamwork and inclusivity.
Following a near-fatal skiing accident in
March 2019, Steve is a wheelchair user and
understands first-hand the importance of
employers’ commitment to workplace diversity
and the need for opportunities to be presented
to the disabled workforce and the barriers that
they face.
HOW DID YOU RESPOND TO
COVID-19?
The health and safety of our employees,
candidates and clients has always been our
priority. We benefited from the experience
of our business in Greater China which was
impacted by COVID-19 at the end of January
2020. Using this knowledge, we were able to
ensure that our consultants could transition
to working from home with full access to the
systems they needed, without any service
interruption.
It was critical in the early phase of our
response to keep our people informed and
engaged. We ensured people had frequent
and transparent interaction with senior
management and their teams. Yammer, our
internal social network and Microsoft Teams
have been crucial tools in maintaining a
continuous conversation across the Group. I
personally recorded a number of video
updates and held global open Q&A events to
engage with our teams worldwide.
“The health and safety of
our employees, candidates
and clients has always been
our priority.”
We encouraged people to ‘Stay Connected’,
sharing posts of their home setup and how
teams undertook activities to motivate and
work together in unique circumstances.
There were numerous events, such as virtual
breakfast meetings, nationwide running clubs
and Friday quizzes.
STRATEGIC REPORTAnnual Report and Accounts 2020 26
travel. I am delighted that PageGroup is able to strive to
become carbon net zero, a crucial step for any organisation.
YOU TALK ABOUT DIVERSITY AND INCLUSION
AS A CORE PRINCIPLE AT PAGE. CAN YOU GIVE
US SOME EXAMPLES?
Diversity and Inclusion has always been part of the DNA
of Page. Over the years we have founded several internal
programmes to promote the values and cultural differences of
our employees and help them reach their potential.
In early 2020, we launched Unity@Page to ensure we
optimise learnings from one culture to another and promote
the benefit of multicultural perspectives in the workplace.
We have started a reverse mentoring programme which gives
our culturally diverse employees the opportunity to mentor
senior leaders and to discuss our commitment to inclusion
and diversity.
We have also launched an Operational Shadow Board in the
UK, whose members reflect the diversity in our workforce.
They have surpassed expectations and are bringing fresh
ideas to the fore which are already changing practices.
“Diversity and Inclusion has
always been part of the DNA
of Page.”
Our Parents@Page network stepped up to help support
parents across the Group, as many juggled working full-time
and helping with their children’s education. We held regular
webinars on how to work from home with children, but also
for our managers on how to support our working parents.
For our Ability@Page network, I myself hosted an International
Day of Persons with Disabilities roundtable with some of the
most influential people within the disability space. During
2021, we will also be launching our Hidden Talent campaign,
which aims to make PageGroup an employer of choice for
disabled candidates and to further progress how we can
change the landscape for getting more disabled candidates
into work.
In June, our Pride@Page network held our annual Pride
Month, celebrating our LGBTQ+ community around the
world. Our Women@Page network has been sharing
monthly interviews with stories and successes from women
throughout the Group.
All of the above is just a snapshot of the activity and progress
we are making worldwide to ensure that everyone brings their
whole self to work.
Our dedication to making Page an inclusive place for all is also
clearly being recognised, with several awards in the year such
as “The Times Top 50 Employers for Women” and “Top 100
Financial Times Leader in Diversity”, to name but a few.
Mental health and wellbeing were a particular focus, with
regular webinars and presentations on ways to manage
anxiety and emotional health.
In December, we asked our teams worldwide for their
thoughts on our working environment. 90% of people said our
communication tools are effective in providing the information
they need, 83% believed we are doing what is necessary to
support our customers during the COVID-19 crisis, and nearly
84% said they are proud to work at PageGroup.
Looking ahead, 79% of people would like to alternate
between the office and remote working. Where possible, and
subject to local laws, we have endeavoured to keep offices
open to allow everyone a choice in how they work.
WHAT IS YOUR OUTLOOK AND BIGGEST
CHALLENGE FOR 2021?
As we enter 2021, clearly COVID-19 remains a global issue
and there is a high degree of uncertainty in many of our
markets. Whilst we have seen growth return in some of our
markets, such as Mainland China and Japan, much of the
Group continues to be impacted by local lockdowns.
Our overarching strategy throughout 2020 was to protect and
invest in our operating platform, to ensure we were in the best
position to gain market share as conditions improved. This
meant protecting as many roles as possible and retaining our
experienced employees who continue to support our clients
and candidates. To illustrate, whilst gross profit for the year
was down 28%, we only reduced our fee earner headcount
by 15%. In comparison, in 2009 during the Global Financial
Crisis, our headcount reduced far more, down 31%.
During 2021, we will continue to invest in targeted areas such
as Technology, Healthcare & Life Sciences and Contracting,
which have been the most resilient during the pandemic.
We will also continue to focus on two of our most recent
investments, our Interim business in Germany and our Nikkei
market business in Japan, which grew 6% and 47% for
the year, respectively. To support these key growth areas,
we have selectively hired approaching 400 experienced fee
earners from many of our competitors.
We are the clear leader in many of our markets, with a highly
experienced senior management team, which, we believe,
positions us well to take advantage of opportunities to grow
and improve our business.
WHAT ARE YOU DOING TO HELP COMBAT
CLIMATE CHANGE?
PageGroup recognises the risk that climate change poses to
society. Events such as severe weather are causing disruption
to eco-systems, communities and economies all over the
world. Due to the office-based nature of PageGroup’s work,
we have a relatively small carbon footprint. However, as a
global, listed company we recognise our responsibility to
reduce our greenhouse gas emissions and we plan to take
urgent action against climate change. This will ensure that
people today, as well as future generations, may enjoy the
benefits of living in a healthy and sustainable environment.
I am proud to announce we have offset our 2020 carbon
emissions and, in the coming months, we will be setting out
our ambitious five-year road-map to become carbon net zero,
as well as other sustainability initiatives.
In doing so, we will continue to reduce our carbon emissions
by converting traditional electricity to renewable sources,
reducing waste and, COVID-19 aside, reducing business
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 27
CULTURE & ENGAGEMENT FRAMEWORK
OUR PAGEGROUP CULTURE
Nobody could have predicted what people and businesses
across the world experienced during 2020. It has been a steep
learning curve for businesses, individuals and society as a whole.
At PageGroup, our focus on our Purpose which states that
‘We change lives for people through creating opportunity to reach
potential’, alongside our strong, team-based culture, has been
key to sustaining our business through this unprecedented time.
The emergence of COVID-19 affected every region from the first
quarter of 2020 and our focus was first and foremost on the
health, safety and wellbeing of our people, our clients and
our candidates.
From the start we were determined to protect our people,
support our customers and manage our costs so that we
could emerge from the crisis ready to take advantage of every
opportunity.
The great attitude, resilience and support shown throughout our
workforce was outstanding and demonstrated our values every
step of the way.
Our investment in technology enabled us to roll out Microsoft
Teams in a matter of days so that by the end of March all c.
7,000 of our employees worldwide were able to work remotely.
During the summer, we also rolled out our updated global intranet
giving every employee an online one-stop-shop for all the tools
they need to do their job and pursue their career at PageGroup.
As we worked through the regulations and requirements of
furlough and other government support schemes across the
world, and working from home became the new reality, we
started our ‘Staying Connected’ campaign of communications to
help us stay in touch with each other and our customers.
We made use of webinars and video calls to stay connected
with our customers and with each other, including global Q&A
sessions with our Chairman, CEO and Executive Board, and
we leveraged our continuous listening strategy to regularly ask
our employees how they were feeling. Their feedback helped
us provide them with the best possible support during such a
difficult time.
The sacrifices and contributions our workforce have made this
year would not have been possible without our unique and
inclusive culture and we will continue working harder than ever
to maintain it.
The four pillars of our Culture & Engagement Framework help
articulate our unique culture and are supported and reinforced
through the measures. Our measures provide the Board with
internal cultural assessment metrics which enable it to take well
informed decisions on culture and engagement matters.
Our Purpose and our Values are clear – they define the reason we
are in business as well as the way we do business, and they set
us apart from our competitors.
This year also saw us create a centre of excellence for culture
and engagement. This global forum helps us drive adoption
and engagement with our initiatives and campaigns, share and
implement best practice, and ensure a consistent approach as
we continue shaping and evolving our culture globally, in line with
our business objectives and our Purpose and values.
CULTURE &
ENGAGEMENT FRAMEWORK
OUR
PURPOSE
What we do every day
OUR
MEASURES
Keeping us on track,
focused on continuous
improvement
STRATEGIC REPORTAnnual Report and Accounts 2020
CULTURE & ENGAGEMENT FRAMEWORK
CULTURE &
ENGAGEMENT FRAMEWORK
28
OUR
VALUES
OUR
PEOPLE
OUR
CUSTOMERS
Reflected in everything
we do, setting us apart
from our competition
PageGroup is all about
people
Staying ahead – leading
our industry
Creating opportunities to engage
with people through key life
moments; having valuable
conversations – more frequently
and with more relevant dialogue.
CAREER PROGRESSION
Transparent and meritocratic
career paths
TALENT DEVELOPMENT
Industry-leading training
DIVERSITY & INCLUSION
A culture of inclusion
REWARDS & WELLBEING
Celebrating success; fostering
a high-trust, high-performance
culture
GIVING BACK TO OTHERS
Changing lives in the communities
where we live and work
CUSTOMERS AT THE CENTRE
OF OUR BUSINESS
Aiming to be the most
customer centric recruiter
and setting us apart from the
competition by delivering an
excellent experience for our
customers. Staying ahead –
leading our industry to best
support our customers.
Improving processes and tools
to support consultant productivity
through:
LEVERAGING TECHNOLOGY
Improving our customer experience
INNOVATIVE APPROACHES
Providing a more effective service
BUILDING RELATIONSHIPS
Going further to build lasting
relationships with our clients,
candidates and consultants
Through a personal, professional
service, creating the opportunity
for candidates and clients to reach
their potential
OUR
PEOPLE
Employee voice
Retention
OUR
CUSTOMERS
EXTERNAL
RECOGNITION
Changing lives, giving
back to others
Engaging our customers –
NPS, customer satisfaction
Public Commitments
Awards
Career progression &
mobility
Rewards & Recognition
Environment
Talent Development
Wellbeing
Diversity & Inclusion
Retaining our customers
– repeat business, Preferred
Supplier Agreements
Innovation
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION
29
CULTURE & ENGAGEMENT FRAMEWORK
BOARD OVERSIGHT – CULTURE & ENGAGEMENT
The Board is responsible collectively for the Group’s culture
and each and every member of the Board is responsible for
engaging with the workforce. When considering the Corporate
Governance Code’s requirements on effective workforce
engagement, the Board did not adopt one of the three specified
engagement methods set out in the Code, it adopted alternative
arrangements as permitted under the Code for engagement
purposes and as described below.
The alternative arrangements are made up of the various
channels of engagement utilised by Board members. The
Board considers there has been effective engagement with
the workforce in 2020, as all members of the Board have been
involved in the engagement processes and gained different
insights and perspectives from a range of employees. The Board
has a standing agenda item for Board members to report on
employee voice activity and, as such, the employee voice is
frequently heard and discussed in the Boardroom.
The Board dedicates significant time to adequately consider
culture and engagement matters. It holds sessions at the half
year, and at the end of the year, where it invites the Chief People
Officer and Global Diversity & Inclusion Director to come to the
Board to discuss cultural considerations. These sessions provide
a progress update on all the various cultural and engagement
initiatives running across the Group and enables the Board to
intervene, shape and decide future actions as required.
In 2020, the Board understood that it would need to adapt
the ways in which it engaged with the workforce. Previously,
Board members had relied on office visits, data relating to our
culture and engagement framework’s measures, survey data,
attending the Group senior leadership conference and ad
hoc Company-run events, to ensure each Director was visible
and could meaningfully engage with employees. Not all these
engagement methods could continue throughout the pandemic,
as office visits and physical meetings became difficult. As a
result, the Chairman presented alongside executives in virtual
global live events, run across all our key time zones, which
included live Q&A sessions for employees to ensure two-way
dialogue between Board members and the workforce. Non-
Executive Board members took on responsibility for joining
virtually management meetings across every region to hear from
our teams on issues that were relevant to them. Board members
also have access to Yammer, a widely adopted internal social
networking tool, which enables Board members to be involved in
events as they happen across the organisation.
There are various ways the Board utilised its, and the business’s
work, on culture and engagement. In 2020 employees were
asked to temporarily reduce their salary or working hours for a
quarter and to move to remote working. Given the significant
impact of this, and the tremendously difficult backdrop to the
year, it was important that the Board had oversight of the “Staying
Connected” campaign and discussed the remote working
survey results, to ensure negative trend data had not emerged.
It also considered the Customer Connect programme, the new
operating system for consultants and approved the continued
roll out of the system. The Board understood the importance of
providing the best technology tools for our people to enable them
to continue to provide first class services to our customers. It
also oversaw the introduction of on-boarding surveys at months
1, 3, 6, 9 and 12 of the employee life cycle considering this as
important to understand long-term productivity and attrition.
The Board, through the work of the Nomination Committee,
spent considerable time reviewing talent development and
succession plans and promotions. Through this work it approved
the restructuring of the Executive Board, the Group’s Executive
Committee. The changes took effect at the beginning of 2021
and in keeping with our organic growth strategy gives a number
of proven, high performing senior executives new development
opportunities. The Board is also pleased to report that this
restructure now means that there is female representation on the
Executive Board.
In 2021 the Board intends to continue its focus on culture
and engagement, leveraging and enhancing data wherever
possible, to help drive decision making. It will particularly seek
to continue to focus on the acceleration of female talent within
the organisation.
STRATEGIC REPORTAnnual Report and Accounts 2020 30
OUR PEOPLE
TALENT DEVELOPMENT AND CAREER PROGRESSION
PageGroup is a meritocracy, focused on promoting from within, and offering opportunities for all. Career progression and talent
development are an integral part of our approach and we offer a clear and transparent career journey alongside the development
and support needed to help our people reach their potential.
The global pandemic has accelerated the work we have been doing to introduce blended learning solutions for our workforce.
This means they are able to learn in a more flexible and agile way, through a variety of materials including video, infographics,
interactive e-learning, gamification and virtual and physical classroom sessions.
During 2020 we started the roll-out of our on-line Global Onboarding Programme for new starters on the operations side of the
business. It is designed to increase speed to productivity by fast-tracking their learning on who we are, what we do, how to get
started and how to be a successful recruiter.
Our annual talent review process supports the development of our people and underpins our ability to measure and reinforce the
strength of our leadership talent pipeline. Formal succession and development planning was a key focus for us in 2020, ensuring
we identify and accelerate the development of high-potential talent alongside the progression of female leaders into senior roles.
A BLENDED LEARNING APPROACH
We offer a cutting-edge blended learning experience supported by our digital learning platform. Our people
are able to learn through a variety of materials to give them an enhanced experience designed to fully
embed their learning.
With employees working remotely for so much of 2020, our digital learning platform played a crucial role in
the ongoing development of our employees, leading to increased engagement with the platform. Existing
development programmes were adapted and new ones created to reach our people as they worked from
home. New content was also created to provide support for all employees, including managers, during this
challenging time, including manager toolkits and guidance on wellbeing.
During the year, a blended learning programme was released to support the rollout of our new customer
platform, Customer Connect, leading us to our highest number of digital learning logins to date.
THE GLOBAL DIRECTOR ACADEMY
The Global Director Academy (GDA) is a development and recognition programme for our high-potential
employees and future leaders. In response to the pandemic, we adapted what was a face-to-face
programme into a virtual programme delivered through video content, online materials, work-based learning
and virtual classrooms. An integrated online coaching programme helps further embed our culture of
inclusion, supporting participants to become more inclusive leaders through greater self-awareness.
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CULTURE & ENGAGEMENT FRAMEWORK
A DIVERSE & INCLUSIVE WORKFORCE
We are proud of our commitment to diversity and inclusion and our relentless focus on supporting and promoting a culture and working
environment where all our employees feel valued and heard, and feel they belong.
This year was no exception, despite the pandemic, our range of networks and support across the business continued to increase.
Initiatives throughout 2020 included:
Increasing awareness, visibility and
engagement with internal and external events
centred around our Women@Page network
Global D&I Campaigns with high levels of
engagement, driving increased membership
of our Yammer networks – International
Women’s Day, Pride Month and World
Mental Health Day
UK– montage
Singapore – Activities
Mexico – supporting pride
APAC – screenshot
Chile – montage
LATAM – Senior Meeting
N A M – R a i n b o w C o o k o f f
Greater China – allies
Global policy changes and guidelines for maternity
arrangements, part-time working and flexible working
‘A Woman’s Journey’ series, building a
network of female role models globally
WHE RE A MUL TICUL TURAL WORKFORCE T HRIVES
Reverse Mentoring Programme
B E P A R T O F TH E EV O LU TI ON
WHERE OUR JUNIO R CU LTURALL Y DIVERSE COLL EA GUES
MENTOR OUR SENIOR LEADERS
Reverse
Mentoring
Programme as
part of our Unity@
Page programme
Introduction of a Shadow Board
in the UK representing the diversity
of our workforce
Focus Groups – ensuring our networks are offering the right support
Maternity Workshops
Parental Seminars
Flexibility@Page
Global Network Groups –
giving employees a voice so we can listen
and act on feedback
Women in Leadership Programme
Free Emergency Back-up Child/Elder Care
Global Female Mentoring
Programme (+330 partnerships)
Our ongoing activity is supported by increasing ownership and accountability across the organisation. Tracking our progress shows
us where we need to improve and focus our efforts as we move forward, and includes:
6 monthly global reporting and
tracking of gender balance
MD targets on gender
diversity linked to bonus
6 month reporting on regional progress
on diversity & inclusion
Measuring female engagement through all surveys in our continuous listening
programme from onboarding, throughout their career with us.
Dedicated D&I section of
the TS&D Review process
STRATEGIC REPORTAnnual Report and Accounts 2020 32
GENDER DIVERSITY
Board Directors & Officers
Senior Management
Other Employees
2020
2019
5 (56%)
5 (56%)
4 (44%)
4 (44%)
2020
2019
349 (72%)
139 (28%)
323 (70%)
140 (30%)
2020
2019
2,867(44%)
3,705 (56%)
3,760 (45%)
4,581 (55%)
Gender diversity is a very important focus for us. We recognise that there has been a small drop in women in our overall senior
management group and we will watch this closely throughout 2021. However, we have had good success at the most senior
levels of management with women now making up 28.3% of the Executive Board and their direct reports as defined by the
Corporate Governance Code, when compared with 2019’s disclosure of 21.2%. We have also seen improvements in maternity
return rates, our latest reporting showing a global return rate of 93.6% and the male/female ratio of people moving internationally,
although that overall number has been impacted due to COVID-19. For further details on actions we are taking to improve women’s
representation at the most senior levels, please see pages 74 and 75.
Flexibility@Page
EMPLOYEE VOICE
Our focus on our people has been more
important this year than ever before. Our
collaborative, team-based culture gave us a
solid base from which to support our people,
each other, and our customers, as soon as the
impact of COVID-19 began to appear across
the world.
Our continuous listening strategy, implemented
this year, gave even greater opportunity for
us to listen to our employees and act on their
feedback, to give them the best possible
support knowing what would help them most.
• We introduced global on-boarding
surveys, sent to all our new joiners at
months 1, 3, 6, 9 and 12 to help us
fully understand why our employees
are joining, staying with us and how
engaged they’re feeling to help us reduce
attrition, improve performance and make
PageGroup an even better place to work.
• During this unprecedented year we
carried out two pulse surveys to
specifically focus on the unique needs
of our employees during the pandemic.
The first, in May, asked how people
were feeling, particularly related to
homeworking and their health and
wellbeing; with a follow-up survey in
November asking about their on-going
working environment and in what areas
they felt they would need more support.
Our next Have Your Say survey to all
employees is planned for April 2021.
The results from all our surveys are shared
with the Board and form part of the alternative
arrangements adopted by the Board to
ensure it hears the employee voice in the
boardroom. It is supplemented by attendance
by Board members at employee meetings,
involvement with Company events, attending
and presenting at virtual live events and other
employee measurement data provided to
Board members as part of the twice yearly
culture and engagement review sessions.
Continuous Listening Roadmap 2021
Lifecycle surveys – On-Boarding/Exit Surveys
OnDemand pulse surveys
REMOTE WORKING
SURVEY RESULTS
Thank you for letting us know your thoughts in our remote working survey – globally 62% of
you responded and contributed over 7,500 comments which far exceeded our expectations.
The results will help us see where we can take action to help give meaningful support and help reduce stress
and anxiety as we move forward. Here are some of the key global results – look out for your local results
which will be shared within your region.
THE TOP FOUR GLOBAL RESULTS FOR OUR REMOTE WORKING SURVEY WERE:
91.2%
89.4%
89.2%
87.7%
The company has
implemen ted effective
systems for keeping remote
employees connected
I am p roud to work
at this company
We are able to support the needs
of our customers while
employees h ave moved to
working remotely
I feel that I a m
part of a team
WHERE DO PEOPLE FEEL THEY WILL CONTINUE NEEDING MOST SUPPORT:
21%
13.7%
11.3%
8.4%
Help understanding changing
priorities and expectations
Coping with
financial stresses
Access to
technology & systems
Managing
workloa d
SOME THOUGHTS FROM AROUND THE WORLD:
“Open communication is critical”
“Set a routine, create a to do list and
book-end your day wit h an activity to
start and end it”
“Take regular b reaks –
moving about is good for you!”
“Workout , go for walks, call family and friends
every day”
“Have a structure to your day and week”
“Set yoursel f a small target each day so you
will have achieved something, talk about your
feelings , it’s ok to feel not 100%”
STAYINGCONNECTED!
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 33
CULTURE & ENGAGEMENT FRAMEWORK
REWARDS & WELLBEING
At PageGroup, recognition isn’t just financial. Our flexible
approach to working life, supported by innovative technology,
facilitates work-life balance and fosters self-development and
career growth. Flexible benefits can be tailored by each individual
to suit their lifestyle, and our celebration of success through
rewards and incentives helps promote a culture of teamwork
and achievement.
Across all regions, support for our people includes comprehensive
Employee Assistance Programmes, mental health champions,
support networks and global awareness campaigns. During this
extraordinary year, nothing has been more important than the
health and wellbeing of our people.
At the start of the pandemic, our immediate focus was on
ensuring everyone was as safe as possible, putting in place all
possible measures in line with local guidelines and legislation,
and enabling all our global workforce to work remotely.
Our globally aligned crisis communication plans were swiftly
put in place, including our ‘Staying Connected’ campaign
reinforcing practical messaging and top tips for: remote working;
mental wellbeing; physical activity; social interaction and a very
visible and approachable leadership team making use of all our
communication channels to stay in touch including two-way
communication via Live Events on Microsoft Teams.
Our Working Environment Survey told us that:
90%
of our people feel our communication
tools are effective in providing the
information they need;
85%
feel part of a team despite not being
physically together;
see their health and wellbeing as a
top priority for the Company;
70%
84%
and 84% feel proud to work at
PageGroup.
“Proud to be @Page in
these difficult times”
STRATEGIC REPORTAnnual Report and Accounts 2020 “No place I'd rather be!”
34
“This just shows how
remarkable we are as
one, as Page, when
times are tough”
“We'll get through this, all together”
Preparing our UK offices for a safe return – Southampton
“Great to see some friendly faces and to be back
in the office – it felt like we’d never been away”
Paul Spicer
“Really good to get back to see friends, share
ideas and be ready for the return in the next
weeks!”
Jack Hughes
“Setting us above a lot of other
employers in these times…”
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 35
CULTURE & ENGAGEMENT FRAMEWORK
GIVING BACK TO OTHERS
Giving back to others through use of our skills and expertise as well as fundraising activities, has always been a key part of our culture.
This year has, of course, been different in so many ways and has presented barriers to fundraising and other charitable activities.
However, where opportunities have been available, we have pushed forward with our goal of giving back to society and the communities
in which we work.
Volunteers from our offices in Australia, for example, helped run a virtual work experience programme for underprivileged high school
students via the Smith Family Work Inspirations charity, and in APAC as a whole we raised c. $25,000 supporting Movember.
Several of our offices were able to support people needing help to enter, or re-enter, the workplace by providing clothing and
accessories, including over 200 kg of donations to La Cravate Solidaire in France.
In the UK, we continued our support of Great Ormond Street Hospital. Our fundraising efforts during the year included a virtual pub quiz
and participation in the charity’s fundraisers of ‘Taskmaster Challenge’ and ‘Steptember’.
APAC
Movember raised c.$25,000
UK
AUSTRALIA
Steptember
Virtual pub quiz
Charity run
FRANCE
CHINA
SPAIN
220kg business clothes
donation to la cravate solidaire
Webinar: caritas school of
employability – searching for
a job with new technologies
Charity flea market
BELUX
Charity cycle tour fundraiser
for little heroes
Operation smilecharity
Latam
GERMANY
Donations to SOS children’s villages
towards combating COVID-19 in Africa
JAPAN
COLOMBIA
Webinar: labour inclusion
for adolescents in a state
of vulnerability
MEA
ARGENTINA
SINGAPORE
Ramadan charity pub quiz
COVID relief fundraiser
Children’s Cancer Foundation
Save the Children plankdemic fundraiser
We are looking forward to pushing ahead with our focus on giving back to others during 2021.
STRATEGIC REPORTAnnual Report and Accounts 2020 36
THE ENVIRONMENT AND SUSTAINABILITY
We aim to be a business that all our stakeholders are proud
to be associated with, and a key part of that is minimising
our impact on the environment. Across our regions we have
a strong focus on reducing our reliance on brown energy
by swapping to green energy, increasing our recycling,
encouraging the adoption of electric or hybrid cars, and
supporting several cycle-to-work schemes. We have
processes in place to monitor and report on our greenhouse
gas emissions. Our impact is predominantly through energy
consumption and business travel. See pages 23 and 24 for
details of our environmental reporting in 2020.
As a services based business, in many respects we have
less of an environmental impact than others. However, in our
view it is incumbent on all large businesses to minimise their
environmental impact. In 2020 we reviewed and reflected
on our approach to the environment and sustainability. We
intend to offset our 2020 carbon emissions and in 2021 we
will set out a five-year road map to become carbon net zero.
We are also in the process of adopting several UN sustainable
development goals and setting up a new governance and
reporting framework for sustainability.
Signed six new green energy contracts in the UK.
In Poland we
have joined the
cycle to work
campaign as well
as supporting the
Arka environmental
foundation.
All energy purchased in Germany, Sweden and most of our offices
in Spain are using renewable energy.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 37
CULTURE & ENGAGEMENT FRAMEWORK
OUR CUSTOMERS
As a people business, we are focused on delivering a
connected customer experience; one where our systems
help us engage with clients and candidates with relevant
information, at the right time and in the right place to enable
their recruitment journey. Alongside many other businesses,
2020 presented us with a series of unprecedented and
unforeseeable challenges to ensuring customer engagement
remained at the forefront of our activity.
Our global footprint and technology platforms allowed us to
learn from the first impact of COVID-19 in Mainland China and
across our other markets. We moved swiftly to ensure the safety
and wellbeing of our customers as well as our own people,
implementing a variety of measures including remote working,
video interviews, online webinars, and relevant support
and advice.
The innovative technology that helps drive our business
and puts us at the forefront of our industry, enabled us to
quickly switch to working remotely and continue supporting
our customers as their needs changed – and continue to
change. We were able to provide our customers with service,
information and communication to help them navigate the
challenges of the pandemic and its knock-on impacts,
including:
•
consistent, timely and relevant content across all our
websites and marketing platforms with advice covering
topics to meet immediate needs including: remote hiring;
health and wellbeing; and managing people during
lockdown; and
• webinar programmes in every region as trusted advisers
supporting ongoing client contact – which beat industry
benchmarks for attendees.
With a consistent, global approach we optimised our service
to our customers in all markets at a time when many of them
needed us more than ever.
UK
USA
EUROPE
ASIA PACIFIC
LATAM
4.9/5
4.9/5
4.8/5
4.5/5
4.4/5
2020 customer rating highlights from our review platforms Feefo and Google Reviews across countries within our regions
WHAT OUR CUSTOMERS HAVE SAID ABOUT OUR SERVICE
“High-quality candidates and
constant communication.”
SWITZERLAND
“It is uncanny how
you’re able to really identify
our ideal candidates.”
USA
“A great
recruiting experience.”
MEA
STRATEGIC REPORTAnnual Report and Accounts 2020 AWARDS & PUBLIC COMMITMENTS
We signed a number of pledges and charters demonstrating our commitment to inclusion in the workplace. We appreciate public
recognition of our activities and commitments and our awards and accreditations include:
LATAM
NAM
38
EUROPE
APAC
UK
FT Diversity Leaders 2021 Top 100
AND MATERNITY RIGHTS
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONHIGHLY RECOMMENDED 39
REGIONAL PERSPECTIVES
EMEA
ASIA PACIFIC
WHAT ARE YOUR PRIORITIES FOR 2021?
WHAT ARE YOUR PRIORITIES FOR 2021?
We expect COVID-19 to continue to be the dominant issue
for the region in the medium term. We are hopeful the recent
vaccination programme will prove to be a success and enable
a gradual route out of lockdowns, though there remains
uncertainty over the efficacy and the timing of rollouts.
We will, however, continue to look to invest in markets where we
saw resilient growth, such as our Technology focused Interim
business in Germany.
HOW DID YOU DELIVER AGAINST YOUR 2020
PRIORITIES?
Trading conditions were impacted by COVID-19 throughout
2020 and consequently gross profit declined 24.4%. France
and Southern Europe, where the impact of COVID-19 was
initially felt most significantly, both declined by 28%.
Germany declined 11%, with our Technology focused Interim
business, which proved most resilient to the deterioration in the
macro-economic conditions, growing 6%.
Benelux declined 24% and the Middle East and Africa, which
represented around 3% of the region, declined 30%.
Across the region, headcount decreased by 338 (-10.2%) in
response to the market conditions.
Operating profit decreased from £90.3m in 2019 to £30.6m
in 2020. This was primarily due to the decrease in gross
profit. Overall, this represents a conversion rate of 9.6%
(2019: 21.6%).
In Mainland China, where we saw growth as we exited the
year, we will continue to focus on our domestic clients which
now represent over half of our business.
We will also continue to drive investment elsewhere in the
region, particularly in our Nikkei market business in Japan,
which was one of the success stories of 2020, as well as India.
HOW DID YOU DELIVER AGAINST YOUR 2020
PRIORITIES?
Asia Pacific gross profit declined by 25.1%. Greater China
declined 27%, with Hong Kong down 46%. Conditions
improved as the year progressed, with Mainland China growing
15% in December and social unrest easing in Hong Kong.
South East Asia was down 23%, with Singapore down 28%.
During Q2, we opened in the Philippines, our sixth country in
this Large, High Potential market.
India, where we now have around 150 fee earners, declined
15%. Whilst Japan was down 9% for the year, our domestic
Nikkei market business delivered a record year, up 47%.
Australia declined 35%, impacted initially by the bushfires in Q1
and then COVID-19.
Headcount across the region declined by 294 (-17.5%) with
declines mainly in Australia and Greater China.
Operating profit decreased 81.9% to £3.8m as a result of the
impact of COVID-19.
GROSS PROFIT £M
2020
2019
2018
£319.4m
£418.3m
£394.3m
PERMANENT TO TEMPORARY RATIO
34%
66%
PERMANENT
TEMPORARY
HEADCOUNT
2020
2019
2018
2,979
3,317
3,299
GROSS PROFIT £M
2020
2019
2018
£121.1m
£163.3m
£161.2m
PERMANENT TO TEMPORARY RATIO
16%
84%
PERMANENT
TEMPORARY
HEADCOUNT
2020
2019
2018
1,385
1,679
1,709
STRATEGIC REPORTAnnual Report and Accounts 2020 40
THE AMERICAS
UK
WHAT ARE YOUR PRIORITIES FOR 2021?
WHAT ARE YOUR PRIORITIES FOR 2021?
In North America, we expect the significant disruption from
COVID-19 to continue into 2021. However, we will continue
to focus on our strategy of diversification, with particular
focus on building our newer offices outside of New York.
We also expect Latin America to continue to be impacted
by COVID-19 in 2021. Despite this, we will continue to
invest in areas such the emerging temporary market, as
well as focusing on improving productivity.
HOW DID YOU DELIVER AGAINST YOUR 2020
PRIORITIES?
The Americas gross profit declined by 31.4% from
£138.8m in 2019 to £88.8m in 2020.
In the US, one of our Large, High Potential markets, we
declined 30% as a result of significant disruption from
COVID-19, as well as political uncertainty and social
unrest. Conditions were particularly tough within our largest
discipline, Construction, with sites closed for large periods
of the year.
In Latin America, another of our Large, High Potential
markets, gross profit was down 33%. The region has been
one of the most impacted by COVID-19, having received
little governmental support. Brazil was down 28%, Mexico
down 43%, with the other five countries in the region down
28%, collectively. Headcount across the region decreased
by 221 (-16.1%) mainly in the US and Mexico.
Operating profit decreased 147.0% to -£7.0m (2019:
£19.3m), with a conversion rate of -7.9% (2019: 13.9%).
In the UK we are encouraged that the Brexit deal has
provided a degree of clarity.
We will focus particularly on our strategic areas of
investment, such as Healthcare & Life Sciences and
Technology, where we added around 80 experienced fee
earners during 2020.
HOW DID YOU DELIVER AGAINST YOUR 2020
PRIORITIES?
In the UK gross profit declined by 40.0% to £80.9m, due
to the significant impact of COVID-19 and Brexit related
uncertainty.
Our Michael Page business, which is more senior candidate
focused, was more resilient than Page Personnel, with
declines of 39% and 44%, respectively.
During the year, our fee earner headcount reduced by a
net 105 (11.5%). The leavers were mainly new joiners or
those on performance review. This was partially offset by
selectively hiring around 80 experienced fee earners from our
competitors.
Due to the sharp decline in gross profit, operating profit was
down 159.9% to -£10.3m (2019: £17.3m), a conversion rate
of -12.8% (2019: 12.8%).
GROSS PROFIT £M
GROSS PROFIT £M
2020
2019
2018
£88.8m
£138.8m
£121.0m
2020
2019
2018
£80.9m
£135.1m
£138.4m
PERMANENT TO TEMPORARY RATIO
PERMANENT TO TEMPORARY RATIO
16%
84%
PERMANENT
TEMPORARY
HEADCOUNT
2020
2019
2018
1,155
1,376
1,328
37%
63%
PERMANENT
TEMPORARY
HEADCOUNT
2020
2019
2018
1,175
1,326
1,436
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 41
RISK MANAGEMENT
PROCESS
The Group recognises that the effective management of risk is
key to achieving our objectives. Risk management is therefore
considered to be an integral part of our process of business
management forming part of our strategy review, our business
plans and the delivery of our daily activity.
To support our management in this process, we have a Group-
wide risk review process which identifies the principal risks that
could impact our business and determines the mitigating
actions required to ensure that these risks are controlled to
an acceptable level.
Within this process we assess all risks that could have a significant
impact on the ability of the business to deliver its short-term plans
and medium and long-term strategy. This includes reviewing for
any emerging risks.
Our agreed level of risk appetite, approved by the Board, guides
the level of acceptable risk.
This is supported by risk registers that are maintained locally at
country and process level and consolidated twice a year. We
combine these with a top-down review of risks conducted with
senior management that is summarised and formally reviewed
by the Executive Board and the Audit Committee on behalf of
the Board.
In the intervening periods, the risks associated with changes
in either the external environment or internal operations are
discussed as part of our ongoing business reviews and are
responded to accordingly.
In key risk areas we also have established compliance teams
whose role it is to ensure we comply with processes on
an ongoing basis. These are in IT security, data regulation
compliance, revenue recognition, project management and
regional legal teams.
Our risk management process categorises our principal risks into
Strategic, Financial, People and Operational.
The Executive Board and the Board continue to focus on
Strategic, People and Financial risks. For these, we disclose KPIs
which we use to monitor the risk impact, and the rewards and
incentives we apply to ensure effective management.
See strategic framework on page 7.
Our Operational risks are those that the Executive Board have
agreed can be managed by our people on a day-to-day basis.
These are included within our risk registers and are reviewed by
the Board on an exceptions basis.
The risks around cyber security and compliance with Data
Protection legislation are such exceptions which are reviewed at
Board level on an ongoing basis.
Our Internal Audit programme of activity aligns the provision of
assurance to the controls that mitigate the principal risks identified
from this process.
OUR RISK AND CONTROL FRAMEWORK
RISK AND CONTROL FRAMEWORK
CONTROLS
FUNCTIONS
REVIEW
Business
Reviews/ Internal
Control Checklists
Management
Policies and Procedures
Compliance Team
Risk Registers
Group Finance
Risk Management/
Group Financial Control
EXECUTIVE
BOARD
BOARD/AUDIT
COMMITTEE
Audit Reports
Quarterly Updates
Internal Audit
STRATEGIC REPORTAnnual Report and Accounts 2020 42
OUR RISK APPETITE AND NET RISK
LEVELS
Recruitment is inherently sensitive to the economic
environment and thus financially dependent on the
economic cycle.
PageGroup operates in this environment with a low risk
appetite, seeking to mitigate its strategic risks, maintain a
strong financial position and only taking the operational risks
it has the experience and capability to manage.
Our growth model is organic, rolling out the proven disciplines
for our brands to a wide geographic spread. We drive this by
developing and promoting our people from within the business,
ensuring consistency of model and business culture across
the Group.
We continue to focus on the services we provide to our clients
and candidates ensuring quality engagements in a manner that
meets both their needs and expectations and our targets for
process efficiency.
We maintain a strong sales-driven, meritocratic culture
with a commitment to operating in an ethical, legal and
sustainable manner.
We will always operate a conservative financial position with
a strong balance sheet, reflecting the degree of operational
gearing inherent in the business.
We monitor our net risk position against our risk appetite and
ensure where possible management action is focused on risks
which we can appropriately further mitigate.
This measured approach to taking risk ensures we are best
placed for success globally.
RISK CATEGORIES
STRATEGIC
Shift in business
model
Transformation and
change
PageGroup brands
and services
Global
event
PEOPLE
People attraction, development and retention
OPERATIONAL
Information
systems
Cyber
security
Fiscal and
legal compliance
Financial management
and control
Data protection
regulations
FINANCIAL
Macro-economic exposure
Foreign exchange – translation risk
NET RISK LEVEL
1. Shift in Business Model
2. Transformation and change
3. PageGroup brands and services
4. Global event
5. People
6. Information systems
7. Cyber security
8. Fiscal and legal compliance
9. Financial management and control
10. Data protection regulations
11. Macro-economic exposure
12. Foreign exchange translation
LOW
MEDIUM
HIGH
Unacceptable to take risk
Higher willingness to take risk
2019
2020
2019
/20
2019
/20
2020
2019 2020
2019
/20
2019
/20
2019 2020
2019 2020
2017
/18
2019 2020
2019 2020
2019
2020
LOW
MEDIUM
HIGH
Risk appetite range
2020
PageGroup actual net risk assessment
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 43
PRINCIPAL RISKS AND UNCERTAINTIES
The Board’s view of direction of travel of gross risk:
Similar to prior year
Lower than prior year
Increased since prior year
The COVID-19 pandemic has significantly impacted businesses
on a global scale during 2020. Although vaccines are currently
being rolled out, the ongoing impact is likely to continue well into
2021 and perhaps 2022 and is by no means certain. It is also
likely that some areas, for example the acceleration of digital,
will be a lasting impact. We have mitigated this, both with short-
term actions but also with activities that we believe as well as
mitigating any negative impacts, offer opportunities for growth.
The impact of COVID is reflected in each of our principal risks.
We have also added a principal risk to reflect future Global
Events. This has enabled us to both ensure effective
management of the current event, but also ensure we are well
prepared in the future.
EMERGING RISKS
In addition to our principal risks we also identify any emerging
risks. In 2020 we have recognised climate change as such a
risk. We will specifically assess the potential impacts of climate
change on PageGroup in our risk reviews, ensuring we monitor
changes to determine both mitigating actions but also at which
point it becomes appropriate to recognise this as a principal risk.
In the meantime, there are elements of the impact of climate
change that we reflect in our current principal risks, for example
reporting requirements around CO2 emissions included as part of
our ESG response in the legal and fiscal compliance risk.
PRINCIPAL RISKS
STRATEGIC
1
SHIFT IN BUSINESS MODEL
NATURE OF RISK
MITIGATING ACTIONS
• We fail to take advantage of technology
• We actively monitor developments in new technologies and their use in the recruitment
opportunities to support our drive on productivity,
and customer and candidate experience.
• The emergence of new technology platforms and
providers offering HR solutions and consulting
may lead to increased competition and pressure
on margin which may adversely affect the Group’s
results if it were unable to respond effectively.
SIGNIFICANT INFLUENCING FACTORS
• COVID has accelerated the use of digital technology
in recruitment changing the way clients and
candidates engage.
• Further acceleration of digital, automation and
artificial intelligence will create opportunities to
use technology in new ways to address our
customers needs.
NET RISK LEVEL INCREASED
sector.
• We have established an innovation infrastructure with executive governance and
regional innovation groups. Opportunities are evaluated, those that meet our criteria are
developed and piloted through an innovations lab. The focus is on driving productivity
and the provision of new services.
• We partner with large media providers such as LinkedIn and Facebook to ensure that we
use media effectively to enhance our value to clients. All consultants are trained in utilising
the benefits of social media in their day-to-day activity.
• Through our focused Competitive Edge programme, we train our consultants in the
use of the new technologies to enable them to resource candidates for our clients at an
overall cost that they cannot match.
• Our Global IT capability is based around standard applications and processes, and
an outsourced service model with leading edge providers has enabled us to respond
effectively to the changes resulting from COVID and will continue to enable us to do so.
• As well as our day-to-day interaction with clients and candidates, we conduct formal
surveys through SurveyGismo to understand how candidates and clients needs are
developing.
2
TRANSFORMATION AND CHANGE
NATURE OF RISK
MITIGATING ACTIONS
• Delivery of the Customer Connect programme, our consultants’ operating
systems, takes significantly longer and costs significantly more than planned.
• Future rollouts impact on the operations of business units that are live on
Customer Connect.
• Our people and processes are not enabled to exploit the benefits of
Customer Connect.
SIGNIFICANT INFLUENCING FACTORS
• Customer Connect ‘Salesforce’ based consultant applications have been
rolled out to 7 of our markets including the UK and Germany. The rollout is
targeted to be completed across the Group by the end of 2022.
• Salesforce will enable a more efficient and effective recruitment process
enabling productivity improvements.
NET RISK LEVEL STABLE
• A Customer Connect change programme has been established
under the leadership of a senior steering committee who receive
regular status reports.
• A programme team is in place, led by Operations (front end staff)
supported by experienced programme and IT management
applying tried and tested implementation procedures including
extensive testing.
• Local management are brought into the programme to deliver
country go lives supported by the programme team, regional
IT, learning and development and finance. An extensive training
programme covers all system functionality and processes
including usage, hints and tips.
• Learnings from countries that have already gone live are being
taken into new implementations.
STRATEGIC REPORTAnnual Report and Accounts 2020 44
3
BRANDS AND SERVICES
NATURE OF RISK
MITIGATING ACTIONS
• As the way clients and candidates source information
changes, the awareness of the PageGroup brands and
services could deteriorate.
• The relevance of the client and candidate engagement we
offer could impact our success in acquiring, engaging and
nurturing new clients and candidates.
• The quality of the services we provide to both clients and
candidates could have a significant impact on how our
brand is viewed.
• We continue to see the reputational impact one-off events
can quickly have with the adoption of social media. Any
event that could cause reputational damage is a risk to
the Group, such as a failure to comply with regulations, or
loss or theft of confidential data anywhere in our operating
environment.
SIGNIFICANT INFLUENCING FACTORS
• The COVID pandemic has accelerated a shift in our
recruitment process to an online digital format.
• Activity levels across disciplines and industry sectors has
shifted.
• The agenda around ESG has accelerated in all three areas.
NET RISK LEVEL STABLE
• In early 2021 we built on our customer initiatives in the UK and Asia Pacific
with the launch of our global Completely Customer framework. Its aim is to
create a sustainable culture where customer engagement is an increasing
competitive advantage for the Group. It will achieve this by building a
harmonised programme across PageGroup at local, regional and Group levels.
• Our data team are focused on the targeting of ‘traditional’ digital channels
(Google, Facebook, Yahoo, Bing, Baidu). Also supporting the use of our
Salesforce marketing suite and tools such as Thunderhead to enable
segmentation and personalised activity programmes that will link to our
Salesforce based Customer Connect programme.
• We have accelerated the rollout of both temporary and outsourced services,
the latter as a global initiative as well as focusing on growth disciplines such as
Technology, Digital and Healthcare and Life Sciences.
• We continue to seek feedback from our customers, clients and candidates as
to how we are performing via the use of Feefo, Google review, net promoter
and Glassdoor. We use the feedback to support changes in how we deliver
our services.
• We continue to develop our work on culture and engagement, with initiatives
such as Unity and Pride at Page focusing on diversity and inclusion. We
also recognise the impact of climate change which we are reviewing as an
emerging risk and an opportunity to drive improvement.
• We have established a Crisis Management response process at Group and
Regional levels, which enables us to respond effectively to any incidents.
4
GLOBAL EVENT (NEW PRINCIPAL RISK)
NATURE OF RISK
MITIGATING ACTIONS
• An external event occurs that significantly disrupts business
and world economies requiring a response in excess of
‘normal’ contingency planning.
SIGNIFICANT INFLUENCING FACTOR
• Over the past two decades we have experienced
the Global Financial Crisis and the COVID-19 global
pandemic, both major unpredictable incidents that have
had immediate and severe long lasting impacts.
NET RISK AMBER
• We have a Group-led Crisis Management policy and process which covers
PageGroup in the event of unpredictable events. This lays out the processes
to be followed in developing appropriate responses. The Crisis Management
process has been cascaded to all Group and Regional business leaders. Our
Crisis Management processes have been further reinforced by learning from the
COVID-19 response.
• We maintain a strong ethical culture which ensures that whatever situation the
business faces, the focus is to protect our employees, clients and candidates
as well as ensuring that we fulfil our broader social responsibilities.
• A conservative financial strategy which maintains a strong balance sheet and
healthy cash balances and facilities.
• Experienced and agile management team and structure regionally based and in
a good position to liaise with Group and local management.
• A systems capability that means we are not tied to facilities either for our people
or the services that we deliver.
• A flexible workforce that can be deployed to focus on any areas of opportunity
and be appropriately scaled.
• Critical suppliers are chosen for their resilience capabilities and regular checks
are conducted to ensure these are being maintained.
• Within any event there are opportunities. Our people are trained to identify these
and to develop offerings in support of business. In doing so we ensure that we
behave in an ethical manner.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 45
45
Annual Report and Accounts 2020
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
PEOPLE
5
PEOPLE
NATURE OF RISK
Attraction
• Operations – we cannot recruit people with the right
potential.
• A lack of inclusion limits our recruitment pool.
• Operational Support – we cannot recruit people with the
right levels of experience.
Retention
• We cannot retain our high performers.
• We do not provide an environment, working practices and
processes that suit our people.
• A lack of diversity impacts on our ability to retain talent.
MITIGATING ACTIONS
Actions in response to the COVID pandemic
• Our Regional HRD’s have worked with Regional Management to support our
people via communications and training via BOOST, our digital blended learning
system, in adapting to new ways of working, understanding our business’
response to COVID and maintaining their wellbeing with guidance for both
managers and their teams.
• We are monitoring the wellbeing and ongoing requirements of our people
through regular surveys during the COVID pandemic to understand our people
requirements enabling us to adapt our support approach.
• We have taken the opportunity to strengthen our teams with the recruitment of
individuals with recruitment experience to support us in those areas with growth
opportunities.
• A lack of opportunity impacts our ability to retain talent.
Ongoing initiatives
Development
• Operations – We fail to develop the potential of our people.
• Operational Support – we do not provide development
opportunities.
Attrition
• We do not manage leavers efficiently.
• Leavers have a detrimental impact on our reputation.
SIGNIFICANT INFLUENCING FACTORS
As a result of COVID our people have had to work remotely to
varying degrees across the globe depending on local guidance.
The health & safety and wellbeing of our people has been and
continues to be a priority as we manage the impact of COVID.
This change will undoubtedly have an impact on how we work
in the future.
This presents opportunities, but also requires different
management processes to ensure we maintain the health and
wellbeing of our people and their operational effectiveness.
NET RISK LEVEL INCREASED
• We continue to promote the Group Purpose around ‘changing lives’, which we
also cascade through our Page Employee Value Proposition.
• We are exploiting our learning capabilities via BOOST!. New blended learning
programmes came onstream in September to target, amongst other things,
improving on-boarding and speed to success. Our performance management
process via Talent Toolbox drives clarity and focus on objectives and behaviours.
• A truly global Talent, Succession and Development (TS&D) review to ensure
strong talent pipeline and address any gaps at senior levels, i.e. MD and above.
• Investment in leadership development programmes: Page Leadership
Excellence, Global Director Academy and Executive Leadership Development.
Programmes have been adapted to reflect longer term changes resulting from
the impact of COVID-19.
• Ongoing development of our diversity and inclusion programmes globally,
Openpage and Unity@page, ensure we can recruit and retain from all groups of
society as our workplace is attractive and inclusive to all. We have continued to
develop our focus on ESG through our work on Culture and Engagement.
• We have responded to changing requirements in ways of working accelerated
by the COVID pandemic with a flexible working policy, which also protects our
strength in teamwork.
• We continue to monitor KPIs specifically focused on driving improvements in our
retention rates. We conduct regular employee surveys targeted at specific points
in an employee’s journey with us and specific events. We use this feedback to
guide our employee initiatives.
STRATEGIC REPORTAnnual Report and Accounts 2020 46
OPERATIONAL
6
INFORMATION SYSTEMS
NATURE OF RISK
Change
MITIGATING ACTIONS
Change
• The business does not appropriately control programme and
• New requests for programmes and projects are approved and prioritised
project delivery.
through a global demand process before commencement.
• Strategic Business Technology led programmes do not deliver
• Strategic programmes’ objectives are agreed with and reported on to the
business objective stated.
Executive Board.
• Poorly controlled changes are made or changes are poorly
• A Global PMO process sets out controls for the delivery of programmes
executed which impacts on service levels.
and projects.
Services
• A disruption of service due to a failure of our internal
processes or procedures or due to a failure of or at our third
party service providers.
• Technical changes to critical systems managed in line with defined
processes to protect the integrity and stability of these systems.
Services
• Single Points of Failure for critical systems are reviewed on a regular
• Business Continuity and Disaster Recovery is not sufficient to
basis and mitigating actions put in place.
allow business Operations to continue.
• Appropriate support agreements and service levels are in place with
Data
vendors.
• Systems are implemented without the necessary data
• For issues that occur, incident management will follow a defined process
protection controls.
to minimise disruption to business users.
SIGNIFICANT INFLUENCING FACTOR
PageGroup has established global standard processes, with a
move to an outsourced services model utilising world class
systems and suppliers.
• We have defined our third party management policies and processes
with dedicated service managers, supported by the Senior Leadership
Team and a dedicated IT procurement function.
• Recovery time and recovery point objectives for critical systems are
agreed with the business and tested.
NET RISK LEVEL STABLE
Data
• Business Technology processes are compliant with data regulation
requirements.
• New systems are designed in compliance with data regulation legislation.
7
CYBER SECURITY
NATURE OF RISK
MITIGATING ACTIONS
Loss of data or systems due to the actions of:
• Malicious Outsiders – targeted attack of PageGroup systems.
Our dedicated Information Security Team continues to mature and
identify areas for continued improvement.
• Malicious Insiders – assisted or generated attack by a
disgruntled employee or contractor.
• Accidental Outsiders – errors caused by our suppliers.
• Accidental Insiders – successful Phishing, Social Engineering,
Business Email Compromise.
SIGNIFICANT INFLUENCING FACTORS
• The COVID pandemic has presented opportunities for
scammers to prey on staff who are working from home with
fake government and HR related emails and links that attempt
to extract data or upload malware.
• The most common route into an organisation’s network is
via phishing emails (over 90%). As Page relies heavily on the
use of email, and it is normal to receive emails from unknown
senders, our exposure to phishing remains high.
• Business Email Compromise (BEC), whereby an executive’s
email is compromised and used to authorise payments or
extract confidential information, have also increased since
the pandemic.
• The move to using public Cloud services for business-critical
activities, our significant email use, and extensive use of social
media have increased the Group’s exposure to external threats.
• Cyber-attacks continue to increase globally.
NET RISK LEVEL STABLE
• We have launched several additional defences that continue to reduce the
opportunity of a cyber-attack. They include:
• Our new Cyber Insurance Policy.
• Warning Banners on all emails to identify potential phishing attacks, plus
1000 higher risk users (HR, Finance, Execs, PAs) have an advanced anti-
phishing email defence with an ability to auto-report malicious activity.
• An ‘anti-impersonation’ tool that prevents email compromise attacks.
• Active Web Monitoring identifies malicious website registrations attempting
to use the PageGroup brand or where a website is actively mimicking
ourselves to falsely attract clients and candidates away from our business.
The process now in place allows us to have them taken down.
• Updated and enhanced our Multi Factor Authentication methodologies
to continue to ensure secure access to our systems (similar to banking
applications).
• Password Quality Enhancements, ensuring users select highly secure
passwords (similar to banking applications).
• Implementation of a new security and privacy management tool to identify
and manage risks more cohesively across our global business.
• Better governed vulnerability and patch management process including
new reporting dashboards.
• Fine-tuning of our Security Operations Centre (SOC) Alerts in recognition of
our current changes in working practices.
• Ongoing Audit remediation activities.
• Implementation of ISO 27001 Certification – a globally recognised and
externally assessed InfoSec Framework.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 47
47
Annual Report and Accounts 2020
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
8
FISCAL AND LEGAL COMPLIANCE
NATURE OF RISK
The Group operates in a large number of jurisdictions that have varying legal, tax and compliance
requirements.
Any non-compliance with client contract requirements and legislation or regulatory requirements
could have an adverse effect on the Group’s brands or financial results.
SIGNIFICANT INFLUENCING FACTORS
• Detailed requirements resulting from Brexit still remain unclear and will likely develop over the
next 2 years.
• As our US business grows we recognise the complexity of each state having its own fiscal and
legal rules.
• Changes to the tax status of temporary and contract workers in the UK under IR35.
• Business is operating more complex structures, eg. statement of works and contracting,
entering the RPO market where more legal responsibility may arise, or risk of reclassification of
the services provided.
• In the post COVID environment fiscal scrutiny is likely to increase as governments look to
support economic recovery.
NET RISK LEVEL INCREASED
MITIGATING ACTIONS
• On material legal or fiscal changes there
is a Group led approach to regulatory and
legislation policies, supported by external
advisors globally and in each country.
• Group Treasury have supported regional
management in addressing banking, funding
and the requirements of sanctions.
• We have set up a central review of our ESG
activity to ensure we maintain appropriate
reporting and support our activities in delivering
on ESG compliance requirements.
• Our Group Tax team co-ordinate with regional
management and tax advisors on the Group’s
tax matters.
See financial management risk for financial
compliance activities.
9
FINANCIAL MANAGEMENT CONTROL
NATURE OF RISK
MITIGATING ACTIONS
• Failure to maintain adequate
financial and management
processes and controls
could lead to poor quality
management decisions,
resulting in the Group not
achieving its financial targets
or in errors in the Group’s
financial reporting.
• Failure to standardise systems
and processes could lead to
excessive costs within the
finance function.
NET RISK LEVEL
INCREASED
• The Group maintains strong financial policies and procedures with Group, Regional and local finance teams
to ensure these policies as well as local statutory requirements are adhered to. The Group Finance function
reviews monthly submissions to ensure policies are adhered to.
• Shared Service Centres, now under a global reporting structure, have increased resilience and introduced
greater levels of process standardisation and improved controls. Global process owners oversee the
maintenance of processes.
• NetSuite, our standard global finance system, has now been embedded across the whole Group enabling
standardisation on best practice and global visibility of finance transactions.
• There are compliance teams located in each region that support local, Regional and Group management in
ensuring revenues are appropriately recognised.
• The SSCs have improved opportunities for career paths allowing hiring and retention of higher calibre
personnel.
• We have Risk and Controls Registers which are owned and embedded within the businesses. Risk reporting
is aggregated globally and reviewed every 6 months by the Executive and the Audit Committee.
10
DATA PROTECTION REGULATIONS
NATURE OF RISK
MITIGATING ACTIONS
• Personal data breaches are committed by our employees and/or third party vendors.
• Privacy Director is supporting local management in
• Data requests cannot be fulfilled within deadlines imposed by regulators.
• When responding to Right To Be Forgotten requests, personal data contained in
archived emails isn’t deleted immediately.
• Our interpretation of data protection laws may prove to be incorrect following
clarification by the courts and/or data protection regulators.
• Customers may take issue with our business processes because their interpretation of
data protection law differs from ours.
• Regulator guidance on regulatory action against companies including imposition of
fines for data protection breaches is evolving and may result in more severe penalties.
SIGNIFICANT INFLUENCING FACTORS
Data Protection regulations in the UK and Europe are now well established. Other
jurisdictions have implemented local regulations, for example California, or are following
along similar lines to GDPR.
NET RISK LEVEL INCREASED
developing plans to address requirements in Brazil, the
US, South Africa and Dubai. We maintain a regional
approach to ensuring requirements are operationally
effective with specialist resources used to support
internal management.
• We have an ongoing staff data protection training
programme, (including ePrivacy) delivered via our global
training platform.
• We have regional teams, including legal support, in
place who respond to data requests and data related
queries including from regulators.
• We also have a Crisis Management policy to address
external data breaches, including informing authorities
and customers.
See Cyber Security risk for mitigating activities regarding
data protection loss due to system attacks.
STRATEGIC REPORTAnnual Report and Accounts 2020 48
FINANCIAL
11
MACRO-ECONOMIC EXPOSURE
NATURE OF RISK
• Our recruitment activity is driven largely by economic performance and levels of business
confidence. Businesses are less likely to need new hires and employees are less likely to
move jobs when they do not have confidence in the economy, leading to reduced
recruitment activity.
• A substantial proportion of the Group’s profit arises from fees that are contingent upon the
successful placement of a candidate or in the case of Temp completion of activity. In these
cases, if the client cancels the assignment at any stage in the process, the Group receives
no remuneration
SIGNIFICANT INFLUENCING FACTOR
• COVID-19 has significantly impacted economies across the globe and forecasts have been
changing frequently, both in terms of the scale of the downturn and period to recovery.
MITIGATING ACTIONS
• We use our geographical spread to invest
in countries and regions where growth is
highest.
• Continue to develop our brands of Page
Executive, Michael Page, Page Personnel
and Page Outsourcing targeted to the
needs of geographies.
• Further develop our disciplines to take
opportunities in growing sectors and those
that recover quickest.
• In those markets built on international
business we continue our drive to shift our
client base to more domestic.
• We are, however, seeing some upturn in economic performances in Asia, particularly
• We have maintained and continue to
Mainland China and Japan where the impacts of COVID appear to be abating.
• As part of the Brexit process a trade deal has now been agreed between the UK and Europe.
The unknown ongoing impact of Brexit, however, has added to the uncertainty on economic
growth particularly for the UK, but also for Europe.
• The US election result is being heralded as political stability. Relations between the US and
Greater China, however, remain fragile and made worse by the COVID pandemic.
• There are some industry sectors that have benefitted from the impact of the COVID
pandemic. Examples are online retailers, cloud service providers, food retailers, healthcare,
and the tech sector.
NET RISK LEVELS INCREASED
increase the proportion of our cost structure
that is variable so that we can respond
quickly, for example by our moves to SSCs
and IT to a global service based model.
• We continue to balance permanent and
temporary/contracting recruitment mix in
line with business levels in each market.
The temporary business tends to be more
resilient in times of economic downturn.
• We protect key resources in the short-
term so that we can capitalise when the
economies recover.
12
FOREIGN EXCHANGE
NATURE OF RISK
• Material changes in the strength of Sterling against the Group’s main functional currencies
significantly affects the Group’s reported Sterling profits in the financial statements.
• The main functional currencies in addition to Sterling are the Euro, US and Australian Dollars.
SIGNIFICANT INFLUENCING FACTORS
• COVID-19 has introduced a significant increase in the risk around movement in currencies
due to the impact on both economic growth but also on the level of country debt taken to
stabilise the impact. Different economies will recover at different speeds. The relative
recovery of the UK economy and financial strength will have the largest impact.
• The impact of Brexit, despite a trade deal being agreed, on the performance of Sterling
is still unclear.
• As we continue to expand successfully our overseas operations, our translation exposure to
Sterling increases.
• Current banking consensus is that the exchange rate will remain at around current levels,
albeit with an increasing spread of forecast for both the US Dollar and the Euro.
NET RISK LEVEL INCREASED
MITIGATING ACTIONS
• Our Group Treasury function reviews
our cash position on a regular basis.
Repatriation of funds and conversion back
to Sterling protects against any significant
Sterling recovery.
• We do not hedge the translation of
our profits.
• Our communications focus on ensuring the
market correctly adjusts for any impact.
• We have little cross-border trading activity,
so the impact on transactions is limited to
intercompany items.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 49
PRINCIPAL RISKS AND UNCERTAINTIES
GOING CONCERN
The Board has undertaken a review of the Group’s forecasts
and associated risks and sensitivities, considering the expected
impact of COVID-19 on trading in the period from the date of
approval of these financial statements to 31 March 2022 (the
review period).
Following the reduction in activity starting in February 2020, the
Group adopted a number of cost control and cash conservation
measures. Through the second quarter and continuing through
the second half of the year, activity levels started to pick up in
several of the Group’s markets. The activity improvements are
reflected in KPIs, such as new opportunities, candidates sent to
clients, interviews and offers in several of our markets. This trend
has continued in line with the Group’s Base Case forecast, as
described below.
The Group had £166m of cash at 31 December 2020, with
no debt except for IFRS 16 lease liabilities of £103.5m. Debt
facilities relevant to the period comprise a committed £30m
RCF with BBVA (facility expiring in May 2022 with all covenants
waived until the expiry of the facility), an uncommitted £300m
government CCFF (available to March 2022 if drawn in March
2021), an uncommitted UK trade debtor discounting facility
(up to £50m depending on debtor levels) and an uncommitted
£20m UK bank overdraft facility.
The Group has developed Base Case and Downside scenarios
that demonstrate the Board’s best estimate and severe but
plausible downside scenarios respectively for the review period.
The Downside scenario is based on assumptions for gross
profit and costs that take account of the possibility of further
COVID-19 lockdowns and further recessionary pressures, at
similar levels to that experienced in 2020. These are mitigated
by the reduction in fee earner headcount as a result of natural
attrition to some extent, but do not take account of all the
other cost containment or cash preservation measures available
to the Group if required. All scenarios demonstrate significant
cash headroom, with no requirement to utilise any of the
facilities.
Having considered the Group’s forecasts, the level of cash
resources available to the business and the Group’s borrowing
facilities, the Group’s geographical and discipline diversification,
limited concentration risk, as well as the ability to manage
the cost base, the Board has concluded that the Group has
adequate resources to continue in operational existence for the
period through to March 2022.
STRATEGIC REPORTAnnual Report and Accounts 2020 50
We consider that this stress-testing based assessment of the
Group’s prospects is reasonable in the circumstances given
the inherent uncertainty involved.
CONFIRMATION OF LONGER-TERM VIABILITY
The Directors confirm that their assessment of the principal
risks and uncertainties facing the Group was robust. Based
upon the robust assessment of the principal risks and
uncertainties facing the Company and the stress-testing based
assessment of the Company’s prospects, all of which are
described above, the Directors have a reasonable expectation
that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period to 31
December 2023. However, we operate in an environment
of limited visibility, dependent upon confidence in the global
marketplace. Further weakness in the macro-economic
outlook may cause us to adapt our strategy during the three-
year period in response, leading to a re-evaluation of additional
risks involved which might impact the business model.
COMPLIANCE WITH SECTION 414 OF THE
COMPANIES ACT 2006
We have complied with the requirements under the provisions
of the Companies Act 2006 contained in Sections 414CA and
414CB of the Companies Act 2006. The relevant references
can be found below:
Description
Business Model
Page
5
Non-financial Key Performance Indicators
21 to 24
Description and management of principal
risk and impact of business activity
Employees
Social and community
Respect for human rights
41 to 48
27 to 38
27 to 38
27 to 38
Anti-corruption and anti-bribery
71 and 80
Environmental matters
23 to 24
and 36
VIABILITY STATEMENT
ASSESSING THE PROSPECTS OF THE COMPANY
Our strategy and the key risks we face are described on pages
11 to 20 and 41 to 48. A full business forecasting process
is performed on a quarterly basis, with a full budget for the
following year created during October and November, being
presented to the Board in December. The Board reviews the
Group’s strategy and approves an annual Group budget.
Performance is then monitored by the Board through the
review of monthly reports showing comparisons of results
against budget, quarterly forecasts and the prior year, with
explanations provided for significant variances. Discussion
around strategy is undertaken by the Board in its normal
course of business, as well as at an annual dedicated
strategy day.
We also prepare longer term projections which drive our
strategic plan. These are typically three years. Our strategic
plan provides a clear vision for the Group, aligns the Group
to one clear culture, provides clarity on investment priorities,
branding, belief in achievable goals, and clarity on the goals for
our financial vision.
THE PERIOD OVER WHICH WE
CONFIRM LONGER-TERM VIABILITY
Within the context of the above, in accordance with provision
31 of the UK Corporate Governance Code, the Board has
assessed the viability of the Group.
Given the inherent uncertainty involved, the period over
which the Directors consider it possible to form a reasonable
expectation as to the Group’s longer term viability is the
three-year period to 31 December 2023. This period has
been selected as it is short enough to present the Board and,
therefore, users of the annual report with a reasonable degree
of confidence, whilst still providing an appropriate longer term
outlook. Whilst the Board has no reason to believe the Group
will not be viable over a longer period, the Board has taken
into account the short-term visibility inherent in a recruitment
business with a permanent recruitment bias.
STRESS TESTING
The forecasting and budgeting process is also supported
by scenarios that encompass a broad range of potential
outcomes. These scenarios are designed to explore the
resilience of the Group to the potential impact of the significant
risks as set out on pages 43 to 48, or a combination of those
risks. A range of scenarios were considered, including cyber
incidents, disintermediation by way of innovation, changes in
technology, movements in foreign exchange rates, and a global
downturn. We have assumed that, as in the past, as downside
risks materialise our headcount will flex through natural attrition
in line with the drop of gross profit, such that the impact on
operating profit is partially mitigated.
The scenarios were designed to be severe, but plausible
and were modelled individually and in combination. In each
case, the Group remained viable throughout. However, it is
considered extremely unlikely that this combination of events
would ever occur. Controls are also in place, where possible,
to mitigate the impact of these scenarios and these are
described on pages 43 to 48.
Various events may also alert the Main and Executive Boards
to a potential threat to viability, for example, macro-events drive
the recruitment industry, a drop in GDP in a particular country
may lead to a reduction in gross profit growth rates.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION
51
STAKEHOLDER
ENGAGEMENT
The following describes how the Directors have had
regard to the matters set out in section 172(1) of the
Companies Act 2006. This section of the strategic
report and the pages to which it refers, comprises the
Company’s section 172(1) statement together with the
statements as to how the Directors have engaged with
employees and had regard to their interests and how the
Directors have had regard to the Company’s business
relationships with customers, suppliers and other
external stakeholders.
The Board understands that providing global recruitment
services touches many lives. In 2020, due to the
challenges presented by the global pandemic, the Board
was faced with a number of difficult decisions which
involved consideration of a range of stakeholder interests
and impacted stakeholder groups differently. These
decisions were not taken lightly and were driven by a
long-term view of what would be in the best interests of
the Company and all of its stakeholders.
Given the importance and impact of decisions taken in
2020, the Board continues to appreciate the importance
of ensuring it has an effective engagement framework
to capture feedback from stakeholder groups. The
various engagement methods are summarised below
together with the Board’s oversight. The Board confirms
it considers the engagement framework to be working
effectively having utilised the variety of engagement
activities and opportunities available to it which facilitated
its understanding of stakeholder interests.
OUR COMMITMENT TO OUR
STAKEHOLDERS
EMPLOYEES
Want to work in a supportive, inclusive culture
where they experience real opportunities for
development and a long and rewarding career.
INVESTORS
Look for investment growth and seek
confidence their investment is under sound
stewardship.
CLIENTS & CANDIDATES
Rely on us to provide world class specialist
recruitment services and solutions to help drive
their business and careers forward.
COMMUNITIES & GOVERNMENT
Need businesses that have a positive impact.
SUPPLIERS
Seek strong and enduring partnerships based
on fair terms.
ENGAGING TO CHANGE LIVES,
CREATE OPPORTUNITY AND
REACH POTENTIAL
Key stakeholder
Mechanism of engagement/feedback and
Board oversight
Stakeholder concerns and outcome of feedback
Principal decisions
Link to strategy
EMPLOYEES
INVESTORS
The Board is collectively responsible for the Group’s
culture and each and every member of the Board is
responsible for engaging with the workforce. When
considering the Corporate Governance Code’s
requirements on effective workforce engagement, the
Board adopted alternative arrangements as permitted
under the Code for engagement purposes and as
described below.
Board members attend management meetings and
global live events. The Board also review or have
access to data and information provided through the
mechanisms below:
Surveys – in 2020 Group-wide “Remote Working
Survey” and “Our Working Environment” Survey,
and on-boarding and exit surveys;
@Page networks;
Biannual Culture & Engagement sessions
inc. D&I review;
Yammer; and
Speak up helpline reviews
All main Board meetings include an investor relations
report which contains details of investor feedback.
Other ways in which investors’ feedback is captured
include:
Investor Roadshows;
Investor Conferences;
Investor Relations Reports;
Individual investor meetings;
Opportunities to engage with Chair and Committee
Chairs; and
AGM.
When it became evident that the pandemic would spread
beyond our China business, a rapid consultation exercise
Implementation of temporary salary reductions or
We are a people
reduction in hours to reduce the Group’s overall costs
business and
between HR, managers and employees was implemented.
and moving to wholescale remote working to mitigate
The purpose of which was to identify what worked best for our
the risk of spreading COVID-19. We accelerated our
people and the business given the difficult road ahead. This
roll-out of digital tools to enable employees to connect
was a global effort, and testament to our culture that everyone
to the same systems as in an office environment.
was willing to be flexible in working patterns, working locations
and in respect to pay. All of which helped the Group continue
to provide its services and reduce its costs as it sought to
stabilise from the initial impact of lockdowns across its markets.
Where Government guidelines would allow, in the
different countries in which we operate, we launched an
extensive programme to ensure our offices were COVID
secure and protocols were in place. This was to give
our people the flexibility of working where they felt most
efficient and safe.
Throughout 2020 the Board has utilised the various employee
voice channels that it has put in place to listen and understand
the needs of our people, including the need to feel secure and
Results from our global Remote Working Survey led
to our #stayingconnected campaign, the launch of
the global programme around flexibility at Page and
have tools to work effectively. The Board oversaw and reviewed
global alignment around Health & Wellbeing, reinforced
through local Employee Assistance Programmes.
the results of the “Remote Working Survey” and “Our Working
Environment” Survey. Key items that came out of which were
the need for our people to stay safe, stay connected and have
flexibility wherever possible.
Like many companies, the Board reviewed the Company’s
Suspension of dividends.
dividend policy in light of the impact of the pandemic. Full
details are set out in the case study overleaf.
Board members are provided with KPI market trend
data and have presentations on:
Market Deep Dives;
Net Promoter Scores; and
Page Insights data.
Views and information from across the business were provided
The Board considered whether in light of the pandemic
The sustainability
to the Board regarding the Customer Connect programme
including the needs of clients and candidates. Customer
it should delay the implementation of the Customer
Connect system. It agreed that it was a strategically
Connect is the new operating system for consultants, which
important upgrade necessary to provide the service
of the business
depends on
offering first
provides a more intuitive, functionally efficient system designed
it seeks to deliver for clients and candidates and the
class, innovative
to make our customers’ experience the best available in the
system is being rolled out across our markets.
CLIENTS &
CANDIDATES
Board understanding of the Company’s impact and
oversight is achieved through reporting on the
following:
ESG activity;
Annual consideration of tax strategy & modern slavery
policy; and
Regulatory engagement.
COMMUNITIES
& GOVERNMENT
In 2020 the Board oversaw the review of:
Modern Slavery compliance activities; and
Supplier on-boarding process.
SUPPLIERS
The Board understands relationships with suppliers are
The UK trading company’s latest payment practices
partnerships and it is important to our suppliers to pay them
reporting shows that the average time taken to pay
Our business
is dependent
promptly.
invoices is 1-2 days and 97% – 99% of invoices are paid
on responsible
The Board understands the importance for suppliers’ being
aware and understanding the Company’s expectations of them.
sector.
To ensure the customer voice is heard, the Board is provided
with market trend data and presentations by executive
management which helps them understand key disciplines and
customer needs in the perm and temp recruitment markets.
For example, customers want insight to understand more
about the market they are operating within and how best to
compete for talent and secure roles.
The Board oversaw the implementation of Page
Insights. A business intelligence tool, which combines
internal data with global external data sources, such as
Government information and millions of online adverts
to support customer needs for insights as well as
internal planning and targeting.
Preserving jobs was a key priority for governments around the
The Board considered it was in the interests of the
world. Through engagement with the Company’s advisers the
Company and its stakeholders to utilise furlough and
Board has stayed abreast of developments and expectations
tax deferrals. However, following careful consideration
in the markets in which it operates. During the pandemic the
in 2021 it considers the business is in a position to
Group has sought to preserve its business platform for future
repay UK furlough monies.
growth to ensure it continues to make a positive impact in the
communities in which it operates and contributes to wider
society as a whole.
Environmental considerations are a priority for a range of
stakeholder groups including feedback received from investors
Supporting increased focus on environmental matters
such as the green energy initiatives and off-setting
and employee survey data.
2020 carbon omissions.
within 30 days.
Introduction of a new updated Supplier Code of
Conduct which can be found on www.page.com. The
revised Code is aimed at promoting and upholding high
ethical and professional standards across our supply
chain and consistent with our Values and Employee
Code of Conduct. The Code forms part of our Supplier
on-boarding process and is published via our Vendor
Management tool.
The Board considers the Company has an important role to
play in seeking to mitigate the risks of modern slavery. This
prompted its decision to oversee the review of high-risk UK
suppliers in respect of modern slavery compliance.
Introduction of KPIs for suppliers in the UK regarding
modern slavery and review of high-risk UK suppliers in
respect of modern slavery compliance.
our strategy will
only be achieved
through having
an engaged,
connected
workforce, that
places employee
wellbeing at
the heart of our
behaviours and
values.
As a listed
company it is
vitally important
that we have a
strong shareholder
base which is
committed to
the Group for
the long-term.
Delivering returns
to our investors is
inextricably linked
to the Company’s
success.
recruitment
services and
solutions to all our
customers.
Being a positive
contributor to
society as a
whole aligns to
our Purpose and
Values and makes
us an attractive
business to all our
stakeholders.
business partners
with expertise in
areas outside of
recruitment.
STRATEGIC REPORTAnnual Report and Accounts 2020 Board oversight
The Board is collectively responsible for the Group’s
culture and each and every member of the Board is
responsible for engaging with the workforce. When
considering the Corporate Governance Code’s
requirements on effective workforce engagement, the
Board adopted alternative arrangements as permitted
under the Code for engagement purposes and as
described below.
Board members attend management meetings and
global live events. The Board also review or have
access to data and information provided through the
mechanisms below:
Surveys – in 2020 Group-wide “Remote Working
Survey” and “Our Working Environment” Survey,
and on-boarding and exit surveys;
Biannual Culture & Engagement sessions
@Page networks;
inc. D&I review;
Yammer; and
Speak up helpline reviews
include:
Investor Roadshows;
Investor Conferences;
Investor Relations Reports;
Individual investor meetings;
Chairs; and
AGM.
Opportunities to engage with Chair and Committee
Board members are provided with KPI market trend
data and have presentations on:
Market Deep Dives;
Net Promoter Scores; and
Page Insights data.
Board understanding of the Company’s impact and
oversight is achieved through reporting on the
following:
ESG activity;
policy; and
Regulatory engagement.
Annual consideration of tax strategy & modern slavery
In 2020 the Board oversaw the review of:
Modern Slavery compliance activities; and
Supplier on-boarding process.
Key stakeholder
Mechanism of engagement/feedback and
Stakeholder concerns and outcome of feedback
Principal decisions
Link to strategy
52
When it became evident that the pandemic would spread
beyond our China business, a rapid consultation exercise
between HR, managers and employees was implemented.
The purpose of which was to identify what worked best for our
people and the business given the difficult road ahead. This
was a global effort, and testament to our culture that everyone
was willing to be flexible in working patterns, working locations
and in respect to pay. All of which helped the Group continue
to provide its services and reduce its costs as it sought to
stabilise from the initial impact of lockdowns across its markets.
Throughout 2020 the Board has utilised the various employee
voice channels that it has put in place to listen and understand
the needs of our people, including the need to feel secure and
have tools to work effectively. The Board oversaw and reviewed
the results of the “Remote Working Survey” and “Our Working
Environment” Survey. Key items that came out of which were
the need for our people to stay safe, stay connected and have
flexibility wherever possible.
Implementation of temporary salary reductions or
reduction in hours to reduce the Group’s overall costs
and moving to wholescale remote working to mitigate
the risk of spreading COVID-19. We accelerated our
roll-out of digital tools to enable employees to connect
to the same systems as in an office environment.
Where Government guidelines would allow, in the
different countries in which we operate, we launched an
extensive programme to ensure our offices were COVID
secure and protocols were in place. This was to give
our people the flexibility of working where they felt most
efficient and safe.
Results from our global Remote Working Survey led
to our #stayingconnected campaign, the launch of
the global programme around flexibility at Page and
global alignment around Health & Wellbeing, reinforced
through local Employee Assistance Programmes.
We are a people
business and
our strategy will
only be achieved
through having
an engaged,
connected
workforce, that
places employee
wellbeing at
the heart of our
behaviours and
values.
All main Board meetings include an investor relations
report which contains details of investor feedback.
Other ways in which investors’ feedback is captured
Like many companies, the Board reviewed the Company’s
dividend policy in light of the impact of the pandemic. Full
details are set out in the case study overleaf.
Suspension of dividends.
Views and information from across the business were provided
to the Board regarding the Customer Connect programme
including the needs of clients and candidates. Customer
Connect is the new operating system for consultants, which
provides a more intuitive, functionally efficient system designed
to make our customers’ experience the best available in the
sector.
To ensure the customer voice is heard, the Board is provided
with market trend data and presentations by executive
management which helps them understand key disciplines and
customer needs in the perm and temp recruitment markets.
For example, customers want insight to understand more
about the market they are operating within and how best to
compete for talent and secure roles.
Preserving jobs was a key priority for governments around the
world. Through engagement with the Company’s advisers the
Board has stayed abreast of developments and expectations
in the markets in which it operates. During the pandemic the
Group has sought to preserve its business platform for future
growth to ensure it continues to make a positive impact in the
communities in which it operates and contributes to wider
society as a whole.
Environmental considerations are a priority for a range of
stakeholder groups including feedback received from investors
and employee survey data.
The Board understands relationships with suppliers are
partnerships and it is important to our suppliers to pay them
promptly.
The Board understands the importance for suppliers’ being
aware and understanding the Company’s expectations of them.
The Board considered whether in light of the pandemic
it should delay the implementation of the Customer
Connect system. It agreed that it was a strategically
important upgrade necessary to provide the service
it seeks to deliver for clients and candidates and the
system is being rolled out across our markets.
The Board oversaw the implementation of Page
Insights. A business intelligence tool, which combines
internal data with global external data sources, such as
Government information and millions of online adverts
to support customer needs for insights as well as
internal planning and targeting.
The Board considered it was in the interests of the
Company and its stakeholders to utilise furlough and
tax deferrals. However, following careful consideration
in 2021 it considers the business is in a position to
repay UK furlough monies.
Supporting increased focus on environmental matters
such as the green energy initiatives and off-setting
2020 carbon omissions.
The UK trading company’s latest payment practices
reporting shows that the average time taken to pay
invoices is 1-2 days and 97% – 99% of invoices are paid
within 30 days.
Introduction of a new updated Supplier Code of
Conduct which can be found on www.page.com. The
revised Code is aimed at promoting and upholding high
ethical and professional standards across our supply
chain and consistent with our Values and Employee
Code of Conduct. The Code forms part of our Supplier
on-boarding process and is published via our Vendor
Management tool.
The Board considers the Company has an important role to
play in seeking to mitigate the risks of modern slavery. This
prompted its decision to oversee the review of high-risk UK
suppliers in respect of modern slavery compliance.
Introduction of KPIs for suppliers in the UK regarding
modern slavery and review of high-risk UK suppliers in
respect of modern slavery compliance.
As a listed
company it is
vitally important
that we have a
strong shareholder
base which is
committed to
the Group for
the long-term.
Delivering returns
to our investors is
inextricably linked
to the Company’s
success.
The sustainability
of the business
depends on
offering first
class, innovative
recruitment
services and
solutions to all our
customers.
Being a positive
contributor to
society as a
whole aligns to
our Purpose and
Values and makes
us an attractive
business to all our
stakeholders.
Our business
is dependent
on responsible
business partners
with expertise in
areas outside of
recruitment.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 53
53
Annual Report and Accounts 2020
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
CASE STUDY
Key decisions taken by the Board in 2020 included revoking its recommendation that a final dividend
be paid for 2019 and electing not to pay an interim dividend in 2020. These decisions had a short-term
negative impact on shareholders and were deliberated on extensively. The decision making process
included the Board’s consideration of its understanding of its shareholder base and previous feedback
from shareholders. Our shareholders tell us that they are interested in long-term holding in the business
and support the Group’s strategy to continue to seek future growth and diversification. In the year under
review, the Board was faced with an unprecedented event beyond its control which impacted future
trading in a way that could not be predicted. Taking account of this uncertainty, and the importance of
preserving the platform for the future, the Board determined it necessary to suspend the payments of
dividends. This was also considered appropriate given the interests of other stakeholders, government
furlough funds had been accessed in 2020 and employees had suffered temporary pay reductions.
We engaged across our shareholder base throughout 2020 to ensure our rationale was understood
and reiterated that the Group fully intends to restore returns to shareholders once stability returns to the
business and its markets. When the Board reinstates dividend payments this will take full account of the
Group’s cash position, investment projects, history of returns, consensus for dividend per share and our
competitors’ return rates.
STRATEGIC REPORTAnnual Report and Accounts 2020 54
Change
CC*
-20.5%
-28.1%
-90.1%
REVIEW OF THE YEAR
Financial summary
2020
2019
Change
Revenue
Gross profit
Operating profit
Profit before tax
Basic earnings per share
Diluted earnings per share
£1,304.8m
£1,653.9m
£610.2m
£17.0m
£15.5m
-1.8p
-1.8p
£855.5m
£146.7m
£144.2m
32.2p
32.2p
13.70p
26.43p
-21.1%
-28.7%
-88.4%
-89.2%
-105.6%
-105.6%
Total dividend per share (excl. special dividend)
Total dividend per share (incl. special dividend)
-
-
*At constant currency – all growth rates in constant currency at prior year rates unless otherwise stated
At constant exchange rates, Group revenue decreased
20.5% and gross profit decreased 28.1% for the year ended
31 December 2020. Gross profit per fee earner decreased
18.7% to £113.3k (2019: £140.4k). At reported rates, revenue
decreased 21.1% to £1,304.8m (2019: £1,653.9m) and gross
profit decreased 28.7% to £610.2m (2019: £855.5m).
The Group’s revenue mix between permanent and temporary
placements was 34:66 (2019: 39:61) and for gross profit was
72:28 (2019: 75:25). Revenue from temporary placements
comprises the salaries of those placed, together with the
margin charged. This margin on temporary placements
decreased slightly to 20.1% in 2020 (2019: 21.1%). Overall,
pricing remained relatively stable across all regions, although a
weaker pricing environment was experienced in markets more
impacted by COVID-19.
In our Large, High Potential markets category, now
representing 36% of the Group, gross profit decreased 24.8%
in constant currencies to £218.2m. This category performed
slightly better than the rest of the Group, primarily due to the
resilience of our business in Germany.
Total Group headcount decreased by 1,004 in the year to
6,694. This comprised a net decrease of 882 fee earners
(-14.6%) and a decrease of 122 operational support staff
(-7.3%). The reduction in our fee earner headcount was a
response to the tough macro-economic conditions caused
by the COVID-19 pandemic. The leavers were largely recent
joiners who were therefore very inexperienced in recruitment,
or those on performance review. We have continued to invest
in our business model, with approaching 400 experienced fee
earners added to the Group during the year. This additional
headcount was primarily into our strategic areas of investment,
as well as those areas which have been more resilient during
the COVID-19 pandemic. As a result of this reduction in net fee
earner headcount, our fee earner to operational support staff
ratio was 77:23 (2019: 78:22). In total, administrative expenses
decreased 16.3% to £593.2m (2019: £708.8m).
REGIONAL REVIEWS
Gross profit
Year-on-year
EMEA
Asia Pacific
Americas
UK
Total
Permanent
Temporary
% of Group
2020 (£m)
2019 (£m)
%
Reported
CC
%
52%
20%
15%
13%
319.4
121.1
88.8
80.9
100%
610.2
72%
28%
436.7
173.5
418.3
163.3
138.8
135.1
855.5
643.8
211.7
-23.7%
-24.4%
-25.8%
-25.1%
-36.0%
-31.4%
-40.0%
-40.0%
-28.7%
-28.1%
-32.2%
-31.5%
-18.0%
-17.8%
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 55
REVIEW OF THE YEAR
EUROPE, MIDDLE EAST AND AFRICA (EMEA)
EMEA
(£m)
Growth rates
(52% of Group in 2020)
Gross profit
Operating profit
Conversion rate (%)
2020
319.4
30.6
9.6%
2019
418.3
90.3
21.6%
Reported
CC
-23.7%
-66.1%
-24.4%
-66.5%
MARKET PRESENCE
EMEA is the Group’s largest region,
contributing 52% of the Group’s gross profit
in the year. With operations in 17 countries,
PageGroup has a strong presence in the
majority of EMEA markets and is the clear
leader in specialist permanent recruitment
in the two largest, France and Germany.
Across the region, permanent placements
accounted for 66% and temporary
placements 34% of gross profit.
The region includes four of our Large,
Proven markets, France, Spain, Italy and
the Netherlands, across which there is a
broad range of competition. EMEA also
includes Germany, one of the Group’s
Large, High Potential markets, which has
low penetration rates (markets where less
than 30% of recruitment is outsourced) and
significant growth potential, particularly in
temporary recruitment. In addition, there
are markets such as Poland, Turkey and
Africa, which are less developed, with
limited competition, but are increasingly
looking for professional recruitment
services.
PERFORMANCE
In constant currencies, revenue decreased
17.7% on 2019 and gross profit
decreased 24.4%. In reported rates,
revenue in the region was down 16.8% to
£717.3m (2019: 861.8m) and gross profit
decreased 23.7% to £319.4m (2019:
£418.3m).
Trading conditions were impacted by
COVID-19 throughout the region, with
many countries again entering lockdown
at the end of the year. Our largest
businesses in the region, France and
Germany, together representing over half
ASIA PACIFIC
Asia Pacific
(£m)
Growth rates
(20% of Group in 2020)
Gross profit
Operating profit
Conversion rate (%)
2020
121.1
3.8
3.1%
2019
163.3
19.8
12.1%
Reported
-25.8%
-80.9%
CC
-25.1%
-81.9%
of the region by gross profit, declined
28% and 11%, respectively. Michael
Page Interim in Germany, which is mainly
focused on technology, was one of our
most resilient businesses during the
pandemic, growing 6% overall for the
year. In our other European markets,
Benelux was down 24%, Southern
Europe down 28% with Italy and Spain
down 28% and 29%, respectively. The
Middle East and Africa, which represented
3% of the region, declined 30%.
2020 operating profit decreased 66.1%
to £30.6m (2019: £90.3m), a conversion
rate of 9.6% (2019: 21.6%). The region
was the most resilient to the COVID-19
pandemic and had the highest
conversion rate in the Group. Headcount
across the region decreased by 338
(-10.2%) to 2,979 at the end of 2020
(2019: 3,317).
MARKET PRESENCE
Asia Pacific represented 20% of the
Group’s gross profit in 2020, with 79%
of the region being Asia and 21%
Australasia. Other than in the financial
centres of Hong Kong, Singapore and
Tokyo, the Asian market is generally highly
under-developed and offers attractive
opportunities in both international and
domestic markets at good conversion
rates. Two of our Large, High Potential
markets, Greater China and South
East Asia, are in this region. With a
highly experienced management team,
approaching 1,200 staff and limited
competition, the size of the opportunity
in Asia is significant. Across Asia, driven
by cultural attitudes towards white collar
temporary recruitment, permanent
placements accounted for 84% and
temporary placements 16% of gross
profit.
Australia, one of our Large, Proven
markets, is a mature, well-developed and
highly competitive recruitment market.
PageGroup has a meaningful presence
in permanent recruitment in the majority
of the professional disciplines and major
cities in Australia. Page Personnel has
a growing presence and significant
potential to expand and grow market
share.
PERFORMANCE
In Asia Pacific, in constant currencies,
revenue decreased 20.1% and gross
profit decreased by 25.1%. In reported
rates, revenue decreased 21.0% to
£216.0m (2019: £273.4m) and gross
profit decreased 25.8% to £121.1m
(2019: £163.3m).
In Asia, representing 16% of the Group,
gross profit declined 22%. Greater
China declined 27%, with Hong Kong
down 46%. Conditions improved as the
year progressed, with Mainland China
growing 15% in December and social
unrest easing in Hong Kong. South East
Asia was down 23% on the prior year,
with Singapore down 28%. We opened
in the Philippines during the year, our
sixth country in this Large, High Potential
market. India, where we have around 150
fee earners, declined 15%. Japan was
down 9% for the year, though our Nikkei
market business delivered a record year,
up 47%. Australia declined 35%.
Operating profit decreased 80.9%
to £3.8m (2019: £19.8m), with the
conversion rate down at 3.1% (2019:
12.1%). The region remained profitable,
with conditions improving towards the end
of the year. Headcount across the region
declined 294 (-17.5%), ending the year at
1,385 (2019: 1,679).
STRATEGIC REPORTAnnual Report and Accounts 2020 56
THE AMERICAS
Americas
(£m)
Growth rates
(15% of Group in 2020)
Gross profit
Operating profit
Conversion rate (%)
2020
88.8
-7.0
-7.9%
2019
138.8
19.3
13.9%
Reported
CC
-36.0%
-31.4%
-136.4%
-147.0%
MARKET PRESENCE
The Americas represented 15% of the
Group’s gross profit in 2020, being
North America (64% of the region)
and Latin America (36% of the region).
The US and Latin America are two of
the Large, High Potential markets in
our growth strategy. The US, where
we have eight offices, has a well-
developed recruitment industry, but in
many disciplines, especially technical,
there is limited national competition
of any scale. PageGroup’s breadth
of professional specialisms and
geographic reach is uncommon and
provides a competitive advantage.
Latin America is a highly under-
developed region, where PageGroup
enjoys the market-leading position
with around 700 employees in seven
countries. There are few international
competitors and none with regional
scale. Across the Americas, permanent
placements accounted for 84% of gross
profit and temporary placements 16%.
PERFORMANCE
In constant currencies, revenue
decreased by 17.5% and gross profit
decreased by 31.4%. In reported
rates, revenue decreased by 24.8% to
£154.3m (2019: £205.1m) while gross
profit decreased 36.0% to £88.8m
(2019: £138.8m).
In North America, gross profit decreased
by 30% in constant currencies. The
US declined 30%, with tough trading
conditions due to COVID-19, as well as
political uncertainty and social unrest.
Conditions were particularly tough within
UNITED KINGDOM
UK
(13% of Group in 2020)
Gross profit
Operating profit
Conversion rate (%)
(£m)
Growth rate
2020
80.9
-10.3
-12.8%
2019
135.1
17.3
12.8%
-40.0%
-159.9%
MARKET PRESENCE
The UK represented 13% of the Group’s
gross profit in 2020, operating from
25 offices covering all major cities. It
is a mature, highly competitive and
sophisticated market with the majority
of vacant positions being outsourced
to recruitment firms. PageGroup
has a market leading presence in
permanent recruitment across the UK
and a growing presence in temporary
recruitment. In the UK, permanent
placements accounted for 63% and
temporary placements 37% of
gross profit.
The UK business operates under all four
of our brands, with representation in
13 specialist disciplines via the Michael
Page brand. There remains opportunity
to roll-out new discipline businesses
under the lower salary-level Page
Personnel brand, which now represents
24% of UK gross profit.
PERFORMANCE
In the UK, revenue decreased 30.7% to
£217.3m (2019: £313.6m) and gross
profit declined 40.0% to £80.9m (2019:
£135.1m).
The UK was significantly impacted by
COVID-19, as well as Brexit related
uncertainty. The Brexit deal has
provided a degree of clarity. Page
Personnel declined 44% and Michael
Page, which is focused on more senior
opportunities, declined 39%.
Due to this sharp decline in gross profit,
operating profit was down 159.9% to
-£10.3m, a conversion rate of -12.8%.
our largest discipline, Construction, with
sites closed for large periods of the year.
In Latin America, gross profit was down
33% year-on-year in constant currencies.
The region has been one of the most
impacted by COVID-19, having received
little governmental support. Brazil was
down 28%, Mexico down 43%, with the
other five countries in the region down
28%, collectively.
Driven by our strategy of maintaining
our trading platform in these two Large,
High Potential markets, operating profit
decreased to -£7.0m (2019: £19.3m),
with a conversion rate of -7.9% (2019:
13.9%). Headcount across the region
decreased by 221 (-16.1%) in 2020 to
1,155 (2019: 1,376).
Headcount decreased 11.4% to 1,175
at the end of December 2020 (2019:
1,326). Our fee earner headcount
reduced by 105 (11.4%) in response to
the challenging trading conditions seen
throughout the year.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 57
REVIEW OF THE YEAR
OPERATING PROFIT AND CONVERSION RATES
The Group’s organic growth model and profit-based team
bonus ensures cost control remains tight. Approximately three-
quarters of costs were employee related, including wages,
bonuses, share-based long-term incentives, and training &
relocation costs.
Depreciation and amortisation for the year totalled £61.8m
(2019: £57.5m). Amortisation relating to our operating
system, PRS, was £7.5m (2019: £6.2m), which is now
concluded.
Throughout this pandemic, all our people have pulled together
in these difficult times. In the second quarter, employees agreed
to reduced working weeks or placement onto government
assistance schemes. 450 of our most senior employees,
including the Main and Executive Boards, agreed to salary
cuts of 20% in Q2. This, in addition to access to government
assistance schemes, reduced travel, and reduced client and
candidate entertaining, enabled us to achieve a reduction in our
cost base of 21% in Q2, 15% in Q3 and 10% in Q4 compared
to March. We are thankful to all our people who agreed to take
salary reductions, work four-day weeks or make other sacrifices
for the long-term benefit of the Group during this period.
The Group’s conversion rate for the year of 2.8% was a decline
from 17.1% in 2019. This was due to the sharp decrease in
gross profit as a result of COVID-19, partly mitigated by the
reduction in headcount and cost saving initiatives.
Conversion rates were impacted in all of the Group’s regions.
EMEA was the Group’s most resilient region, with a conversion
rate of 9.6%. Asia Pacific also remained profitable, with
conditions improving towards the end of the year and conversion
was 3.1% compared to 12.1% in 2019. The UK and the
Americas were most impacted by the COVID-19 pandemic, with
conversion rates of -12.8% and -7.9% respectively.
A net interest charge of £1.5m (2019: £2.4m) was primarily due
to an IFRS 16 interest charge of £1.7m. Excluding IFRS 16, the
net interest income of £0.2m reflected interest income, albeit in
the continued low interest rate environment, partially offset by
borrowing facility charges.
EARNINGS PER SHARE AND DIVIDENDS
In 2020, basic and diluted earnings per share both decreased to
-1.8p (2019: 32.2p), as a result of the reduction in profit due to
the COVID-19 pandemic, as well as an increase in the effective
tax rate.
The Group’s strategy is to operate a policy of financing the
activities and development of the Group from our retained
earnings and to maintain a strong balance sheet position. We
first use our cash to satisfy our operational and investment
requirements and to hedge our liabilities under the Group’s
share plans. We then review our liquidity over and above these
requirements to make returns to shareholders, firstly by way of
an ordinary dividend.
Our policy is to grow this ordinary dividend over the course of
the economic cycle, in line with our long-term growth rate. We
believe this will enable us to sustain the level of ordinary dividend
payments during a downturn as well as to increase it during
more prosperous times.
Cash generated in excess of these first two priorities will be
returned to shareholders through supplementary returns, using
special dividends or share buybacks.
In 2020, in line with many of its peers, PageGroup announced
the temporary suspension of its dividend policy. This was against
a backdrop of unprecedented global economic disruption and
significant near-term uncertainty caused by the outbreak of
COVID-19 and designed to preserve liquidity. We will seek to
restart our dividend programme as market conditions improve
and greater clarity over the trading outlook is restored.
CASH FLOW AND BALANCE SHEET
Cash flow in the year was strong, with £169.0m (2019: £194.1m)
generated from operations. The closing cash balance was
£166.0m at 31 December 2020 (2019: £97.8m). The significant
increase in the cash balance compared to 2019 was primarily
due to the unwind of working capital of £84.6m, deferral of c.
£11m of tax payments and a strong focus on cash collection.
Several actions were taken during the year to protect liquidity
and ensure a strong cash flow throughout. We deferred tax
payments and utilised government support schemes where
available, as well as ensuring the Group had access to additional
liquidity, should this be required, as described below. We actively
protected against potential downsides from the pandemic,
despite remaining confident in our business model throughout.
Due to the continued strong cash position, we will now be
repaying the UK Government furlough income of £3.4m.
PageGroup maintains a Confidential Invoice Facility with HSBC
whereby the Group has the option to discount receivables in
order to advance cash. The Group also has a Revolving Credit
Facility with BBVA, expiring in 2022, with a total drawable
amount of £30m. We have agreed a covenant waiver to the end
of the agreement on this facility, to ensure we retain access to
these funds should they be required. Neither of these facilities
were in use as at 31 December. These facilities are used on
an ad hoc basis to fund any major Group GBP cash outflows.
The Group also gained access to the Bank of England Covid
Corporate Finance Facility, with a limit of £300m, which has not
been drawn against. We do not currently expect to draw down
on this facility.
Income tax paid in the year was £31.7m (2019: £37.0m) and
net capital expenditure in 2020 was £21.7m (2019: £24.6m).
Spending on software was broadly flat on 2019 and was
primarily related to the roll out of our new operating system,
Customer Connect. Spending on property, plant and equipment
decreased, with no significant office moves in the year, as well as
a reduction in our fee earner headcount.
Due to the suspension of our dividend policy, no dividend
payments were made during 2020 (2019: £83.5m). The lower
share price in 2020 meant that there was a decrease in cash
receipts from share option exercises, with £0.4m in 2020,
compared to £7.2m in 2019. In 2020, £14.4m (2019: £10.0m)
was also spent on the purchase of shares by the Employee
Benefit Trust to satisfy future committed obligations under our
employee share plans.
The most significant item in our balance sheet was trade
receivables, which amounted to £186.1m at 31 December 2020
(2019: £271.1m), comprising permanent fees invoiced and
salaries and fees invoiced in the temporary placement business,
but not yet paid. Days’ sales in debtors decreased due to the
significant unwind of our debtor book.
STRATEGIC REPORTAnnual Report and Accounts 2020 58
CASH FLOW WATERFALL 2020
280
240
200
£m
160
120
80
40
84.3
97.8
31.6
84.6
21.7
0.4
14.4
39.2
5.8
(40.1)
166.0
Dec 2019
EBITDA
Working
Capital
Tax and net
interest
Net
Capex
Share options
exercised
EBT share
purchases
Exchange
Dec 2020
Lease
Liability
repayments
Cash
Increase
Decrease
FOREIGN EXCHANGE
SHARE OPTIONS AND SHARE REPURCHASES
At the beginning of 2020 the Group had 10.3m share options
outstanding, of which 4.2m had vested, but had not been
exercised. During the year, options were granted over 1.8m
shares under the Group’s share option plans. Options were
exercised over 0.1m shares, generating £0.4m in cash, and
options lapsed over 0.7m shares. At the end of 2020, options
remained outstanding over 11.4m shares, of which 5.3m had
vested, but had not been exercised. During 2020, 3.8m shares
were purchased for the Group’s Employee Benefit Trust, and
no shares were cancelled (2019: 2.2m shares were purchased
and no shares were cancelled).
AUDIT TENDER
Following the competitive tender process during the year,
the Audit Committee has recommended, and the Board has
approved the retaining of Ernst & Young LLP (EY) as the
Company’s auditor. The Board will propose the re-appointment
of EY as external auditor for the year ending 31 December
2021 at the Company’s Annual General Meeting in June 2021.
Approved by the Board on 2 March 2021 and signed on its
behalf by:
Kelvin Stagg
Chief Financial Officer
Foreign exchange had a marginal impact on the Group’s
results for the year, decreasing revenue by c. £9m, gross profit
by c. £5m and increasing operating profit by c. £2m.
TAXATION
The tax charge for the year was £21.3m (2019: £40.8m). This
represented an effective tax rate of 136.9% (2019: 28.3%).
We have generated profits in overseas countries which have
higher rates and we have been subject to additional taxes on
profits which have contributed 61.7% to the tax rate in 2020.
Losses arose in the year that we could not recognise due to
the requirement to have profits against which to offset in the
foreseeable future. In addition, we wrote off deferred tax assets
on losses which expired in the period as well as deferred tax
assets on deductible temporary differences and losses where
we do not consider it probable that there will be taxable profits
to support their recovery in future periods. Together, these two
categories increased the tax rate by 22.3%.
Disallowable and other permanent differences are broadly in
line with 2019, though with the significant reduction in PBT,
the impact on the rate has been much greater. Similarly to
2019, adjustments in respect of prior periods were one-off in
nature, and again have a higher impact on the rate due to the
lower PBT in 2020. Finally, there have been changes to the
substantively enacted tax rates which apply to the calculation
of deferred tax, predominantly in the UK (moving from 17% to
19%). Collectively, these three categories increased the tax rate
by 33.9%.
These factors add to the basic UK rate of 19% to give the total
effective tax rate of 136.9%.
The tax charge for the year reflects the Group’s tax strategy,
which is aligned to business goals. It is PageGroup’s policy to
pay its fair share of taxes in the countries in which it operates
and deal with its tax affairs in a straightforward, open and
honest manner. The Group’s tax strategy is set out in detail on
our website in the Investor section under “Responsibilities”.
STRATEGIC REPORTSTRATEGIC REPORTAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATION 59
CHAIRMAN’S INTRODUCTION TO
CORPORATE GOVERNANCE
David Lowden,
Chairman
Dear Shareholder,
On behalf of the Board, I am pleased to present the Company’s
Corporate Governance Report for the financial year ended
31 December 2020.
When I communicated with you 12 months ago, the impact of
COVID-19 on some of our Asian markets was evident. However,
the grip the global pandemic would have on all our lives and
across all of the Company’s markets was not yet known. 2020
was unquestionably a challenging year for the Group due to
the unprecedented decline in global trading conditions. I am
tremendously proud of how the business responded and
adapted. Moreover, I would like to acknowledge the support
received from all our stakeholders when presented with the
tough decisions we had to take. I have sought to share below
the Board’s role in this collective response. I am confident the
actions we have taken during the year were the right ones and
for the Company’s ultimate long-term sustainable success.
CORPORATE GOVERNANCE
This Corporate Governance Report sets out how the Company
has complied with the UK Corporate Governance Code 2018
(the “Code”). It also aims to explain the work and activities of the
Board, and the work of its Committees and details the annual
evaluation process for the year under review.
A great deal of work has occurred since introduction of the Code
in 2018 to develop key corporate governance areas such as
culture and engagement. Through utilising collaboration tools
such as Microsoft Teams and presenting and attending virtual
Company-wide global live events, the Board has continued in
this work during 2020. By ensuring the Group’s culture and
engagement framework has continued to evolve, it has been
able to ensure its understanding of the employee voice and that
culture is aligned to strategy. In 2020, a year like no other, the
Board has had to consider carefully all stakeholder interests
appropriately. Such assessments have unsurprisingly formed a
large part of the Board’s corporate governance agenda.
The Group’s Main Board and Committee structure is outlined
below. This framework underpins the Board’s ability to set the
overall strategic direction of the Group. It also supports its core
values, policies and procedures, which in turn, creates a culture
in which our business and employees can act effectively and
with integrity.
BOARD COMPOSITION AND ACTIVITIES
There were no changes to the Board’s membership in 2020.
The stability of the Board has proven to be a strength of the
organisation in the last 12 months, given the external volatility
the Company experienced. Having Board members that truly
understand the strategy and inner workings of the business
meant the Board could quickly identify actions required to
preserve the Group’s platform, whether this be ensuring
funding was available should it be needed or understanding the
OUR CORPORATE GOVERNANCE FRAMEWORK
THE BOARD
The Board’s role is to provide entrepreneurial leadership of the Group within a framework of prudent and
effective controls which enable risk to be assessed and managed. It has a formal schedule of matters reserved
for its decision. More details on pages 68 to 72.
NOMINATION
COMMITTEE
AUDIT
COMMITTEE
Responsible for ensuring that
the Company has the executive
and non-executive leadership
it requires and a diverse talent
pipeline.
Details on pages 73 to 75.
Responsible for the integrity of the
Company’s financial statements and
performance, ensuring the necessary
internal controls and risk management
systems are in place and effective.
Details on pages 76 to 80.
REMUNERATION
COMMITTEE
Responsible for the review,
recommendation and
implementation of the Group’s
remuneration strategy, its
framework and cost.
Details on pages 81 to 104.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 60
requirement to ask our people, including the Board,
to volunteer to temporarily reduce their salaries, fees or
working hours.
Although there have been benefits to the stability of the
Group’s leadership, the Board is aware of the importance
of regularly refreshing its membership and significant work
was undertaken in 2020 regarding succession, including the
appointment of Ben Stevens on 1 January 2021 as a Non-
Executive Director and Audit Chair Designate. Please see the
Nomination Committee report for further details.
As you would expect, the Board met frequently in 2020.
It was important to understand in real-time how the business
was adapting to challenges presented by the pandemic. The
Board’s key focus was on the Group’s financial well-being and
understanding the needs of all its stakeholders, in particular
prioritising the health and welfare of our people. It also sought
to build upon the progress made in respect of embedding
the corporate governance changes incorporated since the
introduction of the Corporate Governance Code 2018
(the “Code”).
I hope you find our Corporate Governance Report informative.
I will be available at the 2021 Annual General Meeting to
respond to any questions you may have on this Report.
David Lowden
Chairman
2 March 2021
CHIEF FINANCIAL
OFFICER (CFO)
Responsible for managing the
financial risks, reporting and planning
of the Group.
CHIEF EXECUTIVE
OFFICER (CEO)
Key responsibility is to develop and deliver
the Group’s strategy within the policies and
values established by the Board.
GENERAL COUNSEL &
COMPANY SECRETARY
Responsible for ensuring the Board
complies with all legal, regulatory and
governance requirements.
EXECUTIVE BOARD
The Executive Board is chaired by the CEO
and includes the CFO. The Executive Board
is responsible for overseeing operations in
our regions and for overseeing business
operational functions Group-wide.
Details on pages 66 to 67.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 61
OUR BOARD OF DIRECTORS
DAVID LOWDEN
CHAIRMAN
Date of Appointment: Director, August 2012 Chairman, December 2015
Past Roles: David was a member of the Board of Taylor Nielson
Sofres plc, the marketing services business, from 1999 to 2009,
becoming Chief Executive Officer in 2006. Before joining Taylor
Nielson Sofres plc, David held senior financial positions in Asprey
plc, A.C. Nielsen Corporation and Federal Express Corporation.
David’s prior roles include Non-Executive Director and Chairman
of the Audit Committee for Cable & Wireless Worldwide plc,
Senior Independent Director and Chairman of the Remuneration
Committee of Berensden plc, Non-Executive Director and
Chairman of the Audit and Risk Committee of William Hill plc. From
January 2019, he was a Non-Executive Director of Huntsworth
plc and was Chairman of the Board of Huntsworth plc and its
Nomination Committee from March 2019 until Huntsworth plc was
sold to Clayton Dubilier & Rice LLP in May 2020.
Other Current Appointments: Senior Independent Director of
Morgan Sindall Group plc. Non-Executive Director, and Senior
Independent Director of Capita plc.
Board Committees: Nomination (Chairman)
Skills and Experience:
•
Extensive experience in both general management and
financial management
Many years of operating within international businesses with
cultural diversity
•
• Strong strategic understanding
• Proven ability for delivering shareholder value
• Strong financial, marketing and commercial skills
Experienced non-executive in several sectors
•
Contribution: The Company’s long-term sustainability is
safeguarded by having an effective chair of the Board and
David Lowden successfully fulfils this role. His experience is
significant having held senior non-executive and chair positions
across a range of listed companies. The Board draws upon his
experience and guidance regularly and his deep understanding
of the business enables him to ensure the needs of the business
are met across the range of strategic and governance matters
affecting the Company.
STEVE INGHAM
CHIEF EXECUTIVE OFFICER, EXECUTIVE DIRECTOR
Date of Appointment: Plc Board, February 2001 Chief Executive Officer, April 2006
Past Roles: Steve joined Michael Page in March 1987 as
a consultant in the newly created Michael Page Marketing
business. He was then responsible for the launch of the London
marketing team and was promoted to Operating Director in
1990. He was promoted again in 1994 to Managing Director of
both the Marketing and the newly launched Sales businesses.
Steve then started and took responsibility for several other
discipline businesses and was promoted to the Board as Page
became a public company in February 2001. In 2005 he took full
responsibility for all UK businesses and then in March 2006, Steve
was appointed Chief Executive.
Prior to joining PageGroup Steve spent four years at Johnson
Matthey as a qualified metallurgist. From January 2013 to April
2019 he held the position of Non-Executive Director, Debenhams
plc. Steve was also a member of the Corporate Partnership
Board, Great Ormond Street Hospital from April 2008 to
December 2020.
Other Current Appointments: Member of the Corporate
Partnership Board, Back Up - a charity focussed on providing
support to people with spinal injuries.
Board Committees: None
Skills and Experience:
•
•
34 years’ service with the Group and recruitment industry
14 years as a CEO of a FTSE 250 public company, with
strong IR skills, delivering shareholder value
Strong entrepreneurial and strategic skills having initiated and
grown many new global businesses
•
•
•
•
•
•
•
Extensive experience in business development and account
management
Significant international experience including the emerging
markets of SE Asia, China, Latin America and India
Leadership of a global people business having seen
PageGroup grow from 240 to approaching 7,000 employees
across 37 countries
Taken the Group through a global restructure to ensure all
operational support staff are centralised, where possible, in
shared service centres, and consistent everywhere.
Experience in other sectors and industries having worked on
the Boards of a major charity and retailer
Ensured the Group has a clear vision, purpose and values
as well as a clear priority to improve Page’s diversity and
sustainability
• Awarded the Institute of Recruitment Professionals Lifetime
Achievement Award in 2017
Contribution: Steve Ingham’s contribution is necessary to enable
the Company to deliver its strategy to shareholders and its wider
stakeholders. He has unparalleled understanding of the business,
culture and future goals of the Company. These skills are gained
by his extensive experience of working within the industry and
for the organisation itself. He has 34 years’ experience of the
Company and the recruitment sector and has a strong record
of delivering sustainable success for the Company over the last
decade. A wheelchair user since March 2019, following a near
fatal skiing accident, Steve has led the business in promoting
workplace diversity, in particular the opportunities available to
disabled candidates.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 62
KELVIN STAGG
CHIEF FINANCIAL OFFICER, EXECUTIVE DIRECTOR
Date of Appointment: June 2014
Past Roles: Kelvin joined PageGroup plc in July 2006 as
Group Financial Controller and Company Secretary. He was
appointed Acting Chief Financial Officer in October 2013. He
held the title of Company Secretary until December 2013. In
June 2014, Kelvin was appointed Chief Financial Officer. Prior
to joining the Group, Kelvin spent six years at Allied Domecq
and three years at Unilever in a variety of finance functions. He
has significant international experience and has high levels of
compliance, change management, large teams and systems
experience, across almost every finance discipline. He is a
Chartered Management Accountant.
Other Current Appointments: None
Board Committees: None
Skills and Experience:
•
More than 14 years in the Group with a detailed
knowledge of the Group’s operations
•
•
•
Extensive experience in finance, audit and risk
management
Significant international experience including roles in the
UK, Continental Europe and Asia
High levels of compliance, change management, large
teams and systems experience, across almost every
finance discipline
• Strong network of finance professionals
Contribution: Kelvin Stagg is integral to the Company’s long-
term success as he manages the financial risks, reporting
and planning of the business, contributes to the Company’s
strategy and oversees global delivery of all support services
to the business including implementation of all large scale
projects. He has extensive experience of managing multi-
discipline areas and having been employed for over 14 years
at the Company, he understands the operation of the business
at all levels.
SIMON BODDIE
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of Appointment: September 2012
Past Roles: Simon qualified as a Chartered Accountant
with Price Waterhouse. He was Group Finance Director of
Electrocomponents plc from 2005 until 2015. Prior to that
Simon held a variety of senior finance positions with Diageo
over a 13-year career, latterly Finance Director of Key Markets.
Other Current Appointments: Chief Financial Officer, Coats
Group plc until 31 March 2021. Non-Executive Director of
Learning Technologies Group plc.
Board Committees: Audit (Chairman), Nomination,
Remuneration
Skills and Experience:
• CFO of FTSE 250 public company for over fifteen years
•
Extensive experience in financial, audit and risk
management
• Many years of operating within international businesses
with cultural diversity
Emerging markets experience
•
• Strong strategic and commercial understanding
• Broad industry experience, including consumer goods,
distribution and manufacturing
• Proven ability for delivering shareholder value
Contribution: Simon Boddie’s contribution to the Board and
the Audit Committee can be summarised by reference to his
thorough understanding of financial matters facing large listed
global entities. For over 10 years he has held executive director
positions in global FTSE 250 businesses as a Chief Financial
Officer and, as such, is ideally placed to ensure scrutiny
and rigour in respect of financial reporting and internal and
external controls.
Simon will retire from the Board on 1 September 2021 having
served nine years.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 63
OUR BOARD OF DIRECTORS
MICHELLE HEALY
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of Appointment: October 2016
Past Roles: Before joining Kerry Group plc, Michelle was Group
People & Culture Officer for ISS World Services A/S. Prior to
this she has held a number of senior executive roles including
Director, Group Integrated Change Programme at SABMiller plc
and General Manager UK & Ireland for British American Tobacco
plc, having previously undertaken a number of senior HR roles
within the Group. Michelle’s executive career spans four global
listed companies and she has lived and worked in nine countries
across Europe and Asia.
Other Current Appointments: Chief Human Resources Officer,
Kerry Group plc
Board Committees: Audit, Nomination, Remuneration
Skills and Experience:
•
Extensive experience in global human resources leadership
•
Extensive experience in leading and delivering organisational
change and transformation
• Breadth and depth of leadership experience in global listed
businesses in service, consumer and business to business
• Strong strategic understanding
•
Extensive experience in general management
Contribution: The Company’s long-term success is highly
influenced by ensuring it has a well thought through human
capital strategy. It recognises its people are at the heart of
everything it does, particularly as an organically grown business.
Michelle Healy offers the Board deep insight into its approach
in this respect. She has held a number of senior HR leadership
roles while also having run businesses at an operational level.
PATRICK DE SMEDT
SENIOR INDEPENDENT DIRECTOR
Date of Appointment: August 2015
Past Roles: Patrick spent 23 years at Microsoft during which
time he founded the Benelux subsidiaries, led the development
of its Western European business and served as Chairman
of Microsoft for Europe, Middle East and Africa. Since leaving
Microsoft in 2006, Patrick has served on the boards of a
number of European public and private companies. His previous
appointments include: Non-Executive Director and Chairman of
the Remuneration Committee of Victrex plc, Senior Independent
Director and Chairman of the Remuneration Committee of
Morgan Sindall plc and Anite plc, Chairman (Interim) KCOM
Group plc and Non-Executive Director of Kodak Alaris Holdings
Ltd. He has deep knowledge of international markets and
information technology, and experience as a non-executive in
diverse industry sectors.
Other Current Appointments: Chairman of the Board and
the Nomination Committee of EMIS Group plc Chairman and
Non-Executive Chairman of Divitias Holdco Limited (trading as
GCI Managed Services Ltd) and Chairman of the Board and the
Nomination Committee of Bytes Technology Group plc.
Board Committees: Audit, Nomination, Remuneration
Skills and Experience:
•
•
•
•
Extensive experience of technology and customer services
Experienced non-executive in several sectors
Extensive experience in general management
Many years of operating within international businesses with
cultural diversity
• Proven ability for delivering shareholder value
•
Leading and delivering change
Contribution: Patrick De Smedt brings extensive understanding
of technology to the Board, a key consideration for any
company’s long-term success. His experience at Microsoft
and involvement with a range of technological industries in
international markets is invaluable in the Board’s decision
making. He understands large-scale transformation projects
and can assist the Board in determining the benefits and threats
posed by technologies in the sector.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 64
SYLVIA METAYER
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of Appointment: September 2017
Past Roles: Sylvia has previously held a variety of finance
and general management roles in companies operating in
a number of sectors, including Mattel Inc., Vivendi SA, and
Houghton Mifflin Harcourt & Co.
Other Current Appointments: Chief Growth Officer of
Sodexo SA leading strategy, digital, marketing and sales and
member of the Sodexo Group Executive Committee. Trustee
of the Quebec-Labrador Foundation and a member of the
International Advisory Board of HEC Business School, Paris.
Board Committees: Audit, Nomination, Remuneration
Skills and Experience:
•
Extensive experience and understanding of international
markets, including the USA, Europe, China, India, and
South East Asia
•
•
•
Extensive experience in general and financial
management
Leading and delivering change
Finance, HR, IT and Supply Chain management
• Proven ability for delivering shareholder value
• Strong strategic understanding
Contribution: Sylvia Metayer has significant experience
working for international organisations in finance and general
management leadership positions. Her guidance and
observations on the demands and challenges in the various
international markets in which the Company operates strongly
supports the Company’s expansion and its ongoing success.
Further, her financial acumen adds additional strength and
depth to the Company’s strategic decision-making.
ANGELA SEYMOUR- JACKSON
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of Appointment: October 2017
Past Roles: Angela has previously held Executive Director
roles with Aegon UK, RAC Motoring Services Limited and
Aviva UK Limited, and was Senior Advisor to Lloyds Banking
Group (insurance). Prior to that Angela held senior marketing
roles with Bluecycle.com Limited, CGU Insurance plc, General
Accident plc and the Norwich Union Insurance Group. Angela
has also served as a Non-Executive Director of esure plc.
She was Deputy Chairman, Senior Independent Director and
Chair of the Remuneration Committee of GoCompare.com
Group until February 2021 when GoCompare.com Group was
acquired by Future plc.
Other Current Appointments: Non-Executive Director at
Future plc, Non-Executive Director at Janus Henderson
Group plc, Rentokil Initial plc and Trustpilot Limited. Angela is
also the Deputy Chair of Pikl, a start-up insurance business.
Board Committees: Audit, Nomination, Remuneration
Skills and Experience:
• Wealth of experience in service focused organisations
•
Experienced executive and non-executive in several
sectors
• Strong marketing and commercial skills
• Strong strategic understanding
• Member of the Chartered Institute of Marketing
Contribution: Angela Seymour-Jackson has held numerous
senior executive marketing roles and non-executive director
appointments in highly regulated environments. She therefore
provides key skills to the Board in respect of marketing and
customer services which are significant areas of focus for the
Company. Her experience in the highly regulated industries
means that Angela makes a valuable contribution as Chair of
the Remuneration Committee.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 65
OUR BOARD OF DIRECTORS
BEN STEVENS
INDEPENDENT NON-EXECUTIVE DIRECTOR
Date of Appointment: January 2021
Past Roles: Ben was previously the Group Finance Director and
member of the Board of British American Tobacco (“BAT”) plc,
having spent 19 years with the company in a variety of finance
and operational roles in the UK and overseas. Prior to that, he
held commercial and finance roles at both Thorn EMI plc and BET
plc. He has also held non-executive director roles with Trifast plc
in the UK and with ITC Ltd in India. He holds a Bachelor’s degree
in Economics from University of Manchester and MBA from
Manchester Business School, University of Manchester.
Other Current Appointments: Non-executive director and
Chair of the Audit Committee of ISS A/S.
Board Committees: Audit (Chair Designate), Nomination,
Remuneration.
•
Extensive experience in financial, audit and risk management
• Significant international experience through roles in the UK
and overseas
Contribution: Ben Stevens brings a range of skills to the
Board and the Audit Committee. He has extensive international
executive leadership experience, having led the finance function of
a FTSE 100 business for a number of years. He has also worked
internationally and managed international businesses throughout
his career. This experience makes him well placed to understand
a wide range of business issues. He has a deep understanding
and proven track record regarding the role and responsibilities
of the Audit Committee in a large listed Group, given his current
non-executive position as Audit Committee Chair at ISS A/S.
Skills and Experience:
• CFO of a FTSE 100 public company for over ten years
•
Extensive line management experience having been Director,
Europe for BAT and Managing Director of BAT’s operations in
Pakistan and in Russia.
KAYE MAGUIRE
GENERAL COUNSEL & COMPANY SECRETARY
Date of Appointment: October 2018
Past Roles: Prior to joining PageGroup plc, Kaye spent over
9 years at Legal & General Group plc and held a variety of senior
positions including Chief Resourcing & Legal Officer at Legal
& General Investment Management Limited. Prior to this she
worked as a solicitor for a number of top tier law firms including
Hogan Lovells and Allen & Overy.
Contribution: Kaye Maguire has significant experience in leading
legal, HR and governance teams and advising boards on a range
of contentious and non-contentious legal issues including cross-
border transactions and litigation. Her experience serves the
Board well in terms of ensuring legal and governance matters are
anticipated, considered and addressed.
Skills and Experience:
• Over 17 years’ experience in legal and company secretarial
matters for public companies
•
Extensive listed company, compliance, litigation and
corporate governance experience
• Senior legal counsel experience in FTSE 250 companies
across different sectors
CORPORATE GOVERNANCEAnnual Report and Accounts 2020
THE EXECUTIVE BOARD
66
STEVE INGHAM
GARY JAMES
PATRICK HOLLARD
Chief Executive Officer,
Executive Director
See biography on page 61.
KELVIN STAGG
Chief Financial Officer,
Executive Director
See biography on page 62.
Chief People Officer
Gary joined Michael Page Finance in
London in 1984. He has held numerous
senior roles in the Sales and Marketing
business. In 2002 he was appointed
Managing Director in North America
and as Regional Managing Director of
the Asia Pacific region in August 2006.
Since 2019 Gary has been responsible
for the Group’s global HR functions. He
has been instrumental in driving forward
the Group’s culture and engagement
framework, talent development
programmes and diversity initiatives.
Regional Managing Director -
Latin America, Middle East and
Africa
Patrick joined Michael Page in France
in 1996, having worked previously
for KPMG Peat Marwick. Prior to
that, he had been Vice-President of
AISEC International, the student-led
organisation, from 1991 to 1992.
Appointed director in 1999, he moved
to Sao Paulo to launch Michael Page
Brazil, and then launched offices in
Mexico in 2006, Argentina in 2008,
Chile in 2010 and Colombia in 2011.
Appointed Regional Managing Director
in 2007, he is now responsible for
PageGroup’s operations in Latin
America, Middle East and Africa.
OLIVER WATSON
Chief Operating Officer
Oliver joined Michael Page in 1995.
He was appointed director of Michael
Page UK Sales in 1997 and then
managing director in 2002. In 2006,
he was appointed Regional Managing
Director for Michael Page UK Sales,
Marketing and Retail. In 2007 he
launched Michael Page Middle East
and in 2009, he became Regional
Managing Director for Michael Page UK
Finance, Marketing and Sales, Middle
East, Scotland and Ireland. In recent
years he led and grew PageGroup’s
operations in the USA and Canada. In
2018 Oliver was appointed COO with
responsibility for increasing productivity
through innovation, technology and
people. He is responsible for the
Group’s technology functions, shared
service centres and ensuring the
adoption of new initiatives. He has been
key in ensuring the successful roll-out
of the Group’s new operating system,
Customer Connect.
ANTHONY THOMPSON
Regional Managing Director - Asia
Pacific
Anthony moved from South Australia
to commence his Michael Page career
in Hong Kong in 2001. He managed
and established several disciplines
and brands in Hong Kong and China
and was appointed Managing Director,
Hong Kong and Southern China in
2006. In 2012, he was appointed
Regional Managing Director for Greater
China with several offices established
across China, Hong Kong and Taiwan.
In 2015, Anthony moved to Singapore
with additional responsibility for South-
East Asia. He subsequently took on
the leadership of India and Japan and
was appointed to the Executive Board
in 2018. He is now also responsible for
PageGroup’s operations in Australia.
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THE EXECUTIVE BOARD
From 1 January 2021 the Executive Committee, known within the Group as the Executive Board, was reconfigured. Please see below
for the biographies of the new Executive Board members.
EAMON COLLINS
Chief Customer Officer
Eamon joined the Group in 2007 as UK Marketing
Director and previous to this he held senior
marketing and communication roles at Samsung
and Hitachi. Eamon became the Group Marketing
Director in 2012 and was responsible for the
Group’s global brand, communications and digital
channels. During his time in this role, he oversaw
significant changes both to the platforms that
PageGroup uses in reaching customers and to
the marketing teams worldwide that work on
them. In January 2021, Eamon was appointed
as the Chief Customer Officer to PageGroup and
became responsible for ensuring the voice of the
customer is heard and enhancing understanding
of our customer base to drive consistent customer
experiences and relationships. He has retained
responsibility for marketing as this forms a critical
part of building customer focused programmes.
NICOLAS BÉCHU
Regional Managing Director – Northern &
Central Europe, Italy and Turkey
Nicolas joined Michael Page in France (Paris)
as a Consultant in the Finance practice in 1995
and was promoted to Director in 2000. In 2002,
he launched the newly established business
in Belgium and was promoted to Managing
Director in 2003. In 2007, he moved to Milan
to manage the PageGroup operations in Italy.
In 2010, he transferred to the Netherlands
(Amsterdam) and became responsible for
Northern Europe. In 2014 he also became
responsible for Germany. In 2021, his remit was
extended and he is now responsible for Austria,
Italy, Poland, Switzerland and Turkey.
ISABELLE BASTIDE
NICHOLAS KIRK
Regional Managing Director – France, Spain
and Portugal
Isabelle started her career in the banking sector,
then quickly moved to a recruitment agency where
she managed a portfolio of large national accounts.
She joined Page Personnel France in 1999 as a
consultant in Finance and was quickly promoted
to Director. In the 2000s she grew a number of
disciplines resulting in very strong market position
for our French business. She was made Managing
Director of Page Personnel France in 2007 and in
2014, she launched Page Outsourcing in France.
Since 2015, Isabelle has been responsible for all
of the Page Executive, Michael Page and Page
Personnel brands in France. Appointed to the
Executive Board in January 2021, Isabelle is now
responsible for the Group’s operations in France,
Spain and Portugal. Isabelle is also the executive
sponsor for diversity and inclusion for Europe.
Regional Managing Director – UK & North
America
Nick joined the business in 1995 as a Michael Page
Sales consultant based in Leeds. As the office
network expanded, he relocated to London, the
Home Counties and then Birmingham working in
start-up businesses. Nick became a Director in 2002
and then the Managing Director of Michael Page
Sales in 2007. In 2009, he transferred across to Page
Personnel with a brief to transform the operating
model. He spent the next 4 years expanding into
new disciplines and rapidly growing the Page
Personnel business. Nick was promoted to Regional
Managing Director in 2013 and took on the additional
responsibility of Michael Page Finance in the UK.
In early 2018, he restructured the UK business
and in doing so launched a more customer centric
operating model. Later that year, he was promoted to
UK Managing Director which included responsibility
for non-operational functions. At the beginning of
2021, he extended his remit and now runs operations
in the UK, Canada and the USA.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020
68
CORPORATE GOVERNANCE REPORT
THE BOARD AND ITS OPERATION
• Group strategy and corporate objectives;
The Board of PageGroup plc is the body responsible for the
overall management and conduct of the Group’s business,
and approving and overseeing implementation of its strategy. It
has the powers and duties set out in relevant laws of England
and Wales and in its Articles of Association.
The Board’s role is to provide strategic leadership to the Group
within a framework of prudent and effective controls which
enables risk to be anticipated, assessed and managed.
The Board is responsible collectively to the Company’s
shareholders for the long-term success of the Company and
for ensuring the Company contributes to all its stakeholders
and to wider society as a whole.
COMPOSITION OF THE BOARD
As at 31 December 2020 the Board comprised the Chair,
the Chief Executive Officer, the Chief Financial Officer and
five independent Non-Executive Directors. Ben Stevens
was appointed as a Non-Executive Director and Audit Chair
Designate with effect from 1 January 2021. The biographies of
each of the Directors and the contribution each Director makes
to the Board can be found on pages 61 to 65.
The composition of the Board is kept under review to ensure
it has the necessary skills and experience to lead the Group.
It also monitors the independence of the Directors. The
Board considers all current Non-Executive Directors to be
independent. In addition, the Board determined that David
Lowden was independent at the time of his appointment
as Chair.
There is a clear division of responsibilities between the role
of the Chair and that of the Chief Executive Officer. While
the Board is responsible collectively for the success of the
Company, the Chair manages the Board to ensure that the
Company has appropriate objectives and an effective strategy.
The Chairman ensures that there is a Chief Executive Officer
with a team to implement the approved strategy and that there
are procedures in place to inform the Board of performance
against objectives. The Chair also ensures that the Company
operates in accordance with the principles of good corporate
governance. The Chairman’s other significant commitments
are noted on page 61. The Board considers that these are not
a constraint on the Chairman’s agreed time commitment to
the Company.
Patrick De Smedt, as Senior Independent Director, acts as
an alternative channel of communication for shareholders. He
also acts as a sounding board for the Chair and serves as an
intermediary for other Directors.
Steve Ingham, the Chief Executive Officer, has overall
responsibility for the day-to-day management of the Group’s
operations. He develops the vision and strategy for the
Board’s review, implements the Board’s strategy and chairs
the Executive Committee (known within the Group as
the “Executive Board”) which executes the delivery of the
annual operating plans. He also leads the programme of
communication with shareholders.
Executive and Non-Executive Directors are equal members
of the Board and have collective responsibility for Board
decisions. The Non-Executive Directors bring a wealth of skills
and experience to the Board and its Committees.
The Board has a formal schedule of matters reserved for its
decision which include:
•
determining the nature and extent of the significant risks
the Board is willing to take in achieving the strategic
objectives of the Company;
• major changes to the nature, scope or scale of the
•
•
•
business of the Group;
corporate governance matters;
approval of Nomination Committee recommendations on
the appointment and removal of Directors and succession
planning;
changes to the Group’s capital structure and approval of
any business plan prior to a new entity being established
in a new territory;
•
financial reporting, audit and tax matters;
• material contracts and transactions not in the ordinary
course of business;
• material capital expenditure projects;
•
•
•
approval of the annual budget;
obtaining major finance; and
communications with stakeholders and complying with
regulatory requirements.
INDUCTION, TRAINING
AND INFORMATION
Relevant training, advice and information is made available
to Directors to enable the Board to function effectively and
efficiently. This is achieved through a variety of means such
as internal and external presentations from senior executives
within the business, advisors and tailored guidance briefings
circulated to Board members. As and when new Directors
join the Board, the Chairman assisted by the General Counsel
& Company Secretary are responsible for their induction. On
appointment to the Board, each Director discusses with the
Chairman and the General Counsel & Company Secretary the
extent of the training required. A tailored induction programme
covering individual requirements is provided. The programme
would typically consist of individual meetings with senior
executives, attending senior management meetings and
internal conferences and shadowing consultants to understand
the day-to-day activities of the business. As mentioned above,
Ben Stevens was recently appointed to the Board as a Non-
Executive Director and Audit Committee Chair Designate. In
light of the ongoing constraints posed by COVID-19, a number
of these induction activities have been undertaken virtually.
In addition, the induction covers the Company’s services,
Group structure, Board arrangements, the culture and
engagement framework, financial, and environmental, social
and governance information, detailed market presentations,
and significant and emerging risks.
Directors update and refresh their knowledge and familiarity
with the Group through participation at meetings with, and
receiving presentations, from senior management. Site visits
normally also take place but have been difficult in light of the
pandemic. To compensate for this, Directors have joined a
range of virtual management meetings and live virtual events in
all our regions, which has enabled them to keep pace with the
challenges and opportunities within our business in 2020.
In addition to the above, every Director has access to the
advice and services of the General Counsel & Company
Secretary. The General Counsel & Company Secretary is
present at all Board meetings and is responsible to the Board
for ensuring that Board procedures are complied with as
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CORPORATE GOVERNANCE REPORT
well as advising the Board on new legislation and corporate
governance matters. Board Committees and Directors are also
able to access independent professional advice at the Group’s
expense if the Directors deem it necessary in order for them to
carry out their responsibilities.
The Board operates an annual cycle of matters for its
consideration, supplemented with strategic topics and
governance matters. Governance matters are reviewed to
ensure a strong link to strategy. The frequency of meetings
and the Board agendas are also kept under continuous review
to ensure any matter that requires discussion at, or escalation
to, the Board can be accommodated. For each Board and
Committee meeting Directors receive a pack of relevant papers
and information on the matters to be discussed. The Board
uses a third party board portal to distribute information quickly
and securely. At Board meetings, the Chief Executive Officer
presents a comprehensive update on the business issues across
the Group and the Chief Financial Officer presents a detailed
analysis of the financial performance. The Board also receives
at each Board Meeting an Investor Relations Report, including
any feedback from investors and Investor Roadshows. Regional
Managing Directors and other senior managers may also attend
relevant parts of Board meetings and the Board Strategy Day in
order to make presentations on their areas of responsibility. All
of the above gives a comprehensive view on the issues facing
the business and enables robust review of the current and future
performance of the Group.
BOARD ACTIVITIES
2020 was an unprecedented year for the business and the
Board responded in a variety of ways. It held regular meetings,
9 in total, together with a separate dedicated strategy day. The
primary focus of the Board’s work for the year was to monitor
the financial performance of the business and determine the
actions required to steer the Group through the challenges
presented by the COVID-19 pandemic.
Financial Performance and Strategy: Every Board meeting
held during the year included review of the Group’s financial
results and monitoring of key metrics such as cash position,
headcount and overall costs. Regular modelling and liquidity
information was provided and refreshed as the Group responded
to developments during the year. Like many companies
impacted by short-term economic conditions, the Board had
to reconsider its position regarding the 2019 final dividend.
When it reported last year the extent of the pandemic was
still to be seen. However, as this emerged and the prolonged
uncertainty to the markets we operate within continued, the
Board considered it must withdraw its recommendation of a full
year 2019 dividend and elected not to pay an interim dividend in
2020. Given the impact of the pandemic on trading, the Board
also considered it prudent to review the debt facilities available to
it, in case use of these became necessary.
Culture and Engagement: Supporting our people and
ensuring their safety and wellbeing has underpinned the Board’s
decision-making in 2020. The Board oversaw the move to
remote working and spent time understanding the impact this
had on our people. The Board held formal sessions with the
Chief People Officer and Global Diversity & Inclusion Director to
consider the Group’s culture and engagement framework. Full
details of the framework can be found on pages 27 to 38.
Compliance and Regulation: The Board received updates
on compliance matters including corporate reporting updates,
UK Corporate Governance Code 2018 (the “Code”) and related
regulations and guidance. The Board prioritises data protection
and information security matters and receives quarterly updates
on both. The Board reviewed the Group’s cyber security maturity
on a quarterly basis and oversaw the achievement of ISO 27001
certification in 2020.
Change and Innovation: The Board has received dedicated
sessions from the team responsible for the roll out of the Group’s
new marketing and client operating platform, Customer Connect.
The Board was kept regularly appraised of the status of the
implementation and monitored the programme against budget.
BOARD COMMITTEES
The Board has three Board Committees, each of which provides
regular reports to the Board: the Audit Committee, Nomination
Committee and Remuneration Committee. The Audit and
Remuneration Committees are comprised solely of independent
Non-Executive Directors.
The Nomination Committee is comprised of all Non-Executive
Directors and is chaired by the Chairman of the Board who was
independent on appointment. Details of the composition and
activities of each Committee can be found in the respective
reports of each Committee: the Audit Committee Report on
pages 76 to 80; the Nomination Committee Report on
pages 73 to 75; and the Directors’ Remuneration Report on
pages 81 to 104.
Each Committee has clear terms of reference which are reviewed
annually, copies of which can be found on the Company’s
website www.page.com.
Each Committee also reviews its effectiveness and makes
recommendations to the Board of any appropriate changes as
and when required. The Chair of each of the Board Committees
will be available to answer shareholders’ questions at the
forthcoming Annual General Meeting on 3 June 2021. If due
to the ongoing pandemic this is not possible as government
guidance suggests the meeting should be held in a closed
setting, the Company will seek alternatives to ensure
shareholders can ask questions of Board members.
The General Counsel & Company Secretary acts as secretary
to each of these Committees and minutes of meetings are
circulated to all Committee members and to all members of the
Board unless it would be inappropriate to do so.
The Group also has an Executive Board which is chaired by the
Chief Executive Officer. Biographies for Executive Board members
in 2020 can be found on pages 66 to 67. From 1 January 2021,
the Executive Board has been expanded. The changes mean all
markets are represented at the Executive Board. Additionally the
new structure enables increased exposure and responsibilities
for a number of our highest performing executives and will mean
there is female representation at the Executive Board level.
The Executive Board usually meets, at least, four times a year
and is responsible for assisting the Chief Executive Officer in
the performance of his duties. These include the development
and implementation of strategy, operational plans, policies,
procedures and budgets. These activities are performed at a
regional level by regional management teams for each of the
UK, North America, Continental Europe, Asia Pacific and Latin
America, Middle East and Africa. Each regional board, known as
“Regional Boards” usually meet at least four times a year.
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE
During the year ended 31 December 2020 and to the date of this
document, the Company has complied with all of the provisions
of the Code. The Code is publicly available on the FRC website
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 70
(www.frc.org.uk). Please see below for details regarding the
application of the principles of the Code.
Principles
Pages
Board leadership and
Company Purpose (A-E)
Division of responsibilities (F-I)
Composition, succession and
evaluation (J-L)
Audit, risk and Internal control
(M-O)
Remuneration (P-R)
27 to 53 (Risk, Culture and
Engagement and Stakeholder
Engagement)
59 to 60 and 68 to 72 (Corporate
Governance Report)
61 to 65 and 73 to 75 (Nomination
Committee Report and Directors
Biographies)
41 to 50 and 68 to 80 (Corporate
Governance Report, Audit Committee
Report, Principal risks, Going
Concern and Viability Statement)
81 to 104 (Directors’ Remuneration
Report)
BOARD AND COMMITTEE ATTENDANCE
The table below sets out the number of meetings of the Board
held during the year and individual attendance by the Directors
at these meetings, demonstrating commitment to their role
as Directors of the Company. Attendance by the relevant
members of each Committee can be found on page 76 (Audit
Committee), page 74 (Nomination Committee) and page 86
(Remuneration Committee). The Board met nine times during
the year. During the year under review the Non-Executive
Directors met on several occasions without the Executive
Directors being present. The Non-Executive Directors also met
without the presence of the Chairman.
Director
No. of meetings attended
David Lowden
Simon Boddie
Patrick De Smedt
Michelle Healy
Steve Ingham
Sylvia Metayer
Angela Seymour-Jackson
Kelvin Stagg
9 out of 9
9 out of 9
81 out of 9
9 out of 9
82 out of 9
9 out of 9
9 out of 9
9 out of 9
1. An additional meeting was scheduled in 2020. Patrick De Smedt had a
previous commitment for an Annual General Meeting for a company of which
he is a director. As all other Board Directors were available, it was considered
appropriate to proceed.
2. Absence due to an unforeseen hospital operation.
SUCCESSION PLANNING
Executive development and succession planning discussions
are held annually. These discussions focus on the development
and succession of the Executive Directors, Executive Board
members and other senior managers in the Group, with the
aim of ensuring that existing senior executives are being
developed and that there is a diverse pipeline of talented
senior individuals within the business. Development and
succession planning is a critical part of the Chief Executive
Officer’s performance objectives for annual bonus and long-
term remuneration. The Group operates an extensive Talent,
Succession & Development programme across the business
which assesses development needs and nurtures high-
potential employees throughout the various stages of their
careers. Diversity considerations are a fundamental element of
the programme.
In addition, the Nomination Committee also considers the
breadth and depth of experience of the Non-Executive
Directors and considers on a regular basis succession
planning for the Board as a whole. In the year under review
the Board commenced a search for a new Audit Committee
Chair. Further details on this search and the Board’s policy on
diversity both at Board level and the Group can be found in the
Nomination Committee Report on page 74 and the Strategic
Report on page 32. David Lowden will reach 9 years’ service
on the Board in 2021, having been appointed as a Non-
Executive Director in August 2012 and as Chair in December
2015. The Board is mindful of the provisions of the Corporate
Governance Code regarding the chair’s term of office and
plans to take steps to identify a successor in due course.
PERFORMANCE EVALUATION
The Code requires that there is a formal and rigorous annual
evaluation of the Board, its Committees and individual
Directors. In 2019 the review was externally facilitated by
Lintstock, an independent advisory firm specialising in Board
evaluations with no connection to the Group or any individual
Director. Themes that arose from the 2019 review included:
maintaining momentum on understanding the customer and
employee voice, succession planning, particularly in respect
of future non-executive positions given length of tenure, and a
continual focus on productivity.
To address this feedback, the Board took the following steps
in 2020:
Customer and Employee Voice: The Board reviewed
the outcome of the Group’s global remote working survey
and other pulse surveys, attended a number of regional
management meetings and the Chair presented at the
Global live interactive event updates to the workforce. On
understanding customers, the Board held a session on Page
Insights, a new business intelligence tool, to support customer
needs. During the year, the Managing Directors of France, the
UK and the Regional Managing Director of Northern Europe &
Germany all presented on the markets in which they work, and
customer needs within these markets.
Non-Executive Director Succession: Through the work
of the Nomination Committee, which reports progress to the
Board, an extensive search for a new Audit Committee Chair
was launched and Ben Stevens was appointed to the Board
as Audit Chair Designate at the beginning of 2021.
Productivity: In the absence of normal trading conditions,
normal metrics have not been relevant. However, actions
have been taken to increase productivity in the long term.
The Group took the opportunity to hire proven recruiters from
competitors in key markets and Customer Connect, the new
operating system for consultants continues to be rolled out
successfully, making the day-to-day work of consultants
more efficient.
In 2020 an internal Board and Committee evaluation was
conducted by David Lowden, the Chairman, assisted by
the General Counsel & Company Secretary and the Senior
Independent Director. The objective and scope of the
annual evaluation was to assess all aspects of the Board’s
effectiveness. The review took the format of a detailed
questionnaire completed by all Board members hosted on
a secure third party portal. Feedback was provided on an
anonymous basis and the areas evaluated included:
- the Board’s approach and handling of the pandemic to date;
- stakeholder understanding and oversight;
- understanding and implementation of strategy including
strategic priorities; and
- the Board‘s focus, relationships and support provided to it.
The Chair followed up the results from the questionnaires
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CORPORATE GOVERNANCE REPORT
directly with each Director on a one-to-one basis, where the
outcomes were discussed, together with the performance
of the Directors. Additionally, a separate questionnaire was
completed in respect of the Chair’s performance and the Senior
Independent Director conducted a review of the Chairman by
speaking both with him and to the Directors individually about the
Chair’s performance.
A comprehensive report on the evaluation was prepared for, and
discussed at, the Board. The outcome of the review was that
the Board and the Chairman are performing well and that the
challenges that the pandemic has presented are being managed
appropriately. However, the Board is acutely aware of managing
the business’s recovery. Key items that emerged for consideration
and action during 2021 include maximising and monitoring
productivity as the Group seeks to recover from the pandemic,
particularly in new areas of investment such as Page Outsourcing.
Board composition and succession continues to be a keen area
of focus for the Board including ensuring comprehensive on-
boarding and transition to the new Audit Chair in 2021.
RE-ELECTION OF DIRECTORS
The Code requires all Directors to retire and stand for re-election
at each Annual General Meeting. All Directors will submit
themselves for re-election, or in the case of Ben Stevens’
election, at the forthcoming Annual General Meeting on
3 June 2021.
INTERNAL CONTROL AND RISK
MANAGEMENT
The Board retains responsibility for the Group’s overall risk
appetite and for the effectiveness of its risk management and
internal control systems. The procedures established by the
Board have been designed to meet the requirements of the
Group and the risks to which it is exposed and are reviewed on a
regular basis.
These procedures also provide an ongoing process for identifying,
evaluating and managing principal and emerging risks. The
system of internal control includes financial, compliance and
operational controls, which are designed to meet the Group’s
needs. These controls aim to safeguard Group assets, ensure
that proper accounting records are maintained, that the financial
information used within the business and for publication is reliable
and supports the successful delivery of the Group’s strategy. Any
system of internal control can only provide reasonable, but not
absolute, assurance against material misstatement or loss. In
practice the Board delegates the implementation of the Board’s
policy on risks and control to executive management and this is
monitored by an Internal Audit function which reports back to the
Board through the Audit Committee.
The key elements of our system of internal control are as follows:
•
Group Organisation – The Board of Directors meets at
least eight times a year and holds extra meetings where
this is considered necessary. This was the case in 2020
as the Board saw the importance in staying abreast
of developments as the impact of COVID-19 emerged
throughout the world. The Board meetings focus both on
strategic issues and operational and financial performance.
There is also a defined policy on matters reserved strictly
for the Board. The Regional Managing Director, supported
by a Regional Finance Director, of each of our regions is
accountable for establishing and monitoring internal controls
within our respective regions.
• Annual Business Plan – The Board reviews the Group’s
strategy and business plan. Performance is then monitored
by the Board through the review of monthly reports showing
comparisons of results against budget or modelling, and
the prior year, with explanations provided for significant
variances. 2020 was a year where typical forecasts and
budgets were not possible, given that there was such a
high degree of uncertainty in market conditions. The Board
reviewed other metrics which indicated how the Group was
performing, for example, liquidity and costs and compared
performance to a variety of modelling scenarios.
• Policies and Procedures – Policies and procedures
are documented over both financial controls and non-
quantifiable areas such as the Group’s whistleblowing policy
and its policy relating to anti-bribery and corruption and gifts
and hospitality.
• Risk Management – The Board has established a
framework for identifying current and emerging risks
and processes and controls for managing risk, both at
a strategic and operational level. As a minimum, this
is reviewed on an annual basis. In 2020, this was also
reviewed prior to announcing half year results. In 2020 we
determined that an additional principal risk of a “Global
Event” should be added to our risks and we have identified
“Climate Change” as an emerging risk. An overview of our
framework and a summary of the principal and emerging
risks identified, together with mitigating actions, can be
found in the Strategic Report on pages 41 to 48.
•
Internal Audit – The Group’s Internal Audit function
examines business process controls throughout the Group
on a risk basis and reports the findings to the Executive
Board and Audit Committee. Agreed actions are monitored
and reported to the Audit Committee, who in turn report
to the Board. During the year, despite the pandemic,
our control functions continued throughout. Our Internal
Audit staff were not furloughed and utilised technology to
complete the Audit plan.
• Confirmations from Executive Management – The
Managing Director and Finance Director of our operations
in each country formally certify twice a year whether the
business has adhered to the system of internal control
during the period, including compliance with Group policies.
The statement also requires the reporting of any significant
control issues that have emerged, including suspected or
reported frauds, so that areas of Group concern can be
identified and investigated as required. These confirmations
and supporting controls self-assessment questionnaires are
reviewed by the Internal Audit function and a summary of
findings is provided to the Audit Committee for review.
In accordance with the requirements of the Code and the
recommendations of the FRC’s Guidance on Risk Management
and Related Financial and Business Reporting, the Board has
reviewed and agreed its approach to risk and its risk appetite
when considering its strategy and the management of its risks.
It has also considered its longer-term viability. Details on the
Board’s risk appetite and its assessment of its longer-term
viability can be found in the Strategic Report on pages 49 to 50.
Further, the Board, with the assistance of the Audit Committee,
has carried out a review of the effectiveness of the Group’s risk
management and internal control systems, including a review
of the Internal Audit activities and the financial, operational and
compliance controls for the period from 1 January 2020 to the
date of this Annual Report. No significant failings or weaknesses
were identified. A confirmation of any necessary actions is,
therefore, not provided. However, had there been any such
failings or weaknesses the Board confirms that necessary actions
would have been taken to remedy them.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 72
WHISTLEBLOWING
The Board takes its oversight duties of the Company’s
whistleblowing arrangements very seriously. PageGroup
operates an external global confidential ‘Speak-Up’ helpline
supported by a speaking-up policy available on each country’s
website and translated into all PageGroup languages. The
Board reviews all instances that the helpline is utilised in the
year. In 2020 two instances were recorded, relating to a local
employment related matter and a working environment issue.
Investigations were conducted into these matters with reports
provided to the Board. The Board was satisfied with the
Group’s conduct and response.
DIRECTORS’ CONFIRMATION
The Directors are responsible for preparing the Annual Report in
accordance with applicable law and regulations. Having taken
advice from the Audit Committee, the Board considers the
Annual Report and Accounts, taken as a whole, as fair, balanced
and understandable and that it provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
Neither the Company nor the Directors accept any liability
to any person in relation to the Annual Report except to the
extent that such liability could arise under English law.
RELATIONS WITH SHAREHOLDERS
Understanding the views of shareholders and active
engagement with our shareholders is always considered a key
priority for the Board.
The Chief Executive Officer and the Chief Financial Officer
supported by the Investor Relations team make themselves
available, wherever possible, to meet with shareholders and
analysts at their request. In 2020, 4 investor roadshows and 8
investor relations conferences were held. There were also c. 23
individual meetings, telephone or video calls. The meetings were
held either in person or virtually during the lockdowns in the UK.
This regular engagement was supplemented with presentations
to analysts after our quarterly and full year results. The Chairman
and the Chairs of the Committees also make themselves
available for individual investor engagement. For example,
Angela-Seymour Jackson conducted an extensive shareholder
and proxy engagement exercise in 2019, through to the AGM in
2020, regarding the remuneration policy review.
The Annual Report and Accounts is available to all
shareholders either in hard copy or via the Company’s website
www.page.com. The website contains up-to-date information
on the Group’s activities, published financial results and the
presentations used for briefings and investor meetings held
during the year. These are available to download.
Under normal circumstances, the Annual General Meeting is
an additional opportunity for Board members to meet with
shareholders and investors and give them the opportunity to
ask questions. Final voting results are published through a
Regulatory Information Service and on the Company’s website
following the meeting. This year shareholders were invited
to email questions to the investor relations team as following
government guidance the meeting was held in a closed setting.
The Board looks forward to the Annual General Meeting in
2021 and engaging with shareholders. If shareholders are not
able to attend alternative arrangements will be made to ensure
shareholders questions are answered.
CONFLICTS
The Company has implemented robust procedures in line
with the Companies Act 2006, requiring Directors to seek
appropriate authorisation from the Board prior to entering into
any outside business interests which have, or could have, a
direct or indirect interest that conflicts, or may conflict, with the
Group’s interests. These procedures have operated effectively
throughout the year under review. The Nomination Committee
is responsible for reviewing possible conflicts of interest. It
makes recommendations to the Board as to whether a conflict
should be authorised and the terms and conditions on which
any such authorisation should be given by the Board. Only
Directors without an interest in the matter being considered
will be involved in the decision and each Director must act in a
way they consider, in good faith, will promote the success of
the Group. All Directors are aware of their continuing obligation
to report any new interests, or changes in existing interests,
that might amount to a possible conflict of interest in order
that these may be considered by the Board and appropriate
authorisation given.
David Lowden
Chairman
2 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 73
NOMINATION COMMITTEE REPORT
Boddie, Patrick De Smedt, Michelle Healy, Sylvia Metayer and
Angela Seymour-Jackson. Board and Committee appointments
are for three-year periods. As mentioned above, Angela Seymour
Jackson and Sylvia Metayer reached three years’ service on the
Board in 2020 and their appointments were extended for a further
three years. Please see page 97 for further details. No Director
is entitled to vote in respect of their own continuing appointment
and neither Angela Seymour-Jackson or Sylvia Metayer took part
in discussions about their extension of appointment.
Only members of the Committee are invited to attend meetings.
Other individuals such as the Chief People Officer and external
advisers may attend meetings by invitation when appropriate
and necessary. This arrangement fosters appropriate challenge,
questioning and debate regarding the recommendations made by
the Committee to the Board.
Details of David Lowden’s and all Committee members’ other
significant commitments can be found on pages 61 to 65. The
Committee considers and approves any additional appointments
held by Directors. In 2020, Patrick De Smedt was appointed
Chairman of AIM listed, EMIS Group plc. He is also Chairman of
Bytes Technology Group plc which was admitted to the London
Stock Exchange in December 2020. Both appointments were
considered to be significant additional appointments for the
purposes of the Corporate Governance Code. However, in the
opinion of the Committee neither appointment interferes with
Patrick De Smedt’s duties and time commitment to the Company.
RESPONSIBILITIES
The key responsibilities of the Committee are to:
•
assess and nominate members to the Board in accordance
with the process and diversity considerations outlined below;
• maintain the right mix of character, skills and experience on
the Board and its Committees;
• make recommendations to the Board on development
and succession plans for members of the Board and
senior management;
•
•
•
approve job descriptions and written terms of appointment
for Directors;
review the independence of Non-Executive Directors, taking
into account their other directorships; and
consider diversity and inclusion objectives in terms of the
Group’s talent pipeline and new senior appointments.
When the Committee considers an appointment it follows a
formal and transparent procedure. It is assisted in its search
for new Non-Executive Directors by an independent executive
search company. With each new search the Committee selects
the executive search company which it considers the most
appropriate and relevant for the assignment. These executive
search companies have no connection with the Company other
than the provision of the search services. With each assignment
a detailed candidate profile is compiled and discussed by the
Committee, taking into consideration the balance of skills and
experience of existing Board members and the requirements of
the Company and its future strategy. Once finalised the profile is
recommended by the Committee to the Board for its approval.
If approved, a search and selection process based on that profile
is undertaken. The recruitment process places importance on
diversity considerations. Candidates are identified and selected
against objective criteria including their skills and experience
while having due regard to the benefits of diversity on the Board.
Shortlisted candidates are then interviewed by the Chairman
of the Board, the Chief Executive Officer and members of the
David Lowden,
Committee Chairman
Dear Shareholder,
I am delighted to present the Nomination Committee Report
for the year ended 31 December 2020. As a people business,
the work of the Committee is key to the Company’s ongoing
success. Throughout 2020 the Committee concentrated its
efforts on succession for key roles across the Group and Board
and focussed on reviewing, monitoring and progressing the
Company’s talent management and development programmes.
The Committee wants to ensure that the Company’s leaders now
and in the future, represent our clients, candidates and society
as a whole. Therefore, across all its activities, the Committee has
diversity considerations at the top of its agenda.
The Board represents a range of nationalities and backgrounds.
Membership of the Board and Committees did not change during
the course of the year. The Committee keeps its membership
under review and was satisfied that the Board and its Committees
had the appropriate mix of skills, experience and knowledge.
During the year the Committee recommended to the Board
that the appointments of Angela Seymour-Jackson and Sylvia
Metayer be extended for a further three-year term as their initial
appointments expired during 2020. Both Directors have skills
and experience that the Committee considers invaluable to the
Board. Angela Seymour-Jackson has extensive experience across
a range of sectors in a number of multi-national companies,
making her well placed to navigate the challenges faced by any
Board. Sylvia Metayer’s strategic insight into macro-economics,
combined with her financial reporting and operations experience
makes her vital to the Board’s decision making.
As we reported last year, non-executive succession was a priority
for the Committee in 2020. Simon Boddie will reach nine years
on the Board in September 2021. The Committee undertook a
search for his replacement in 2020. I am pleased to confirm that
Ben Stevens was appointed to the Board on 1 January 2021
and will take over as Audit Committee Chair when Simon Boddie
steps down from the Board in September 2021. I would like to
thank Simon Boddie for his contribution to the Company, his input
has been consistently insightful, relevant and reliable.
PURPOSE
The Nomination Committee is responsible for ensuring that the
Company has the executive and non-executive Board leadership
it requires, both now and for the future. It reviews all key senior
roles to ensure that comprehensive succession plans are in place
to safeguard the organisation’s stability and to ensure talented
individuals are provided with opportunities to develop. It is an
important component of the Company’s governance framework
and our organic growth strategy.
MEMBERSHIP
During the year under review the members of the Committee were
David Lowden, who was Chairman of the Committee, Simon
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 74
Committee and the Board. Thereafter a recommendation of
appointment is made to the Board. This process was followed
in respect of the Audit Chair search undertaken in 2020.
The Committee monitors length of tenure for the Board and
Committee members to ensure ongoing independence.
ACTIVITIES DURING THE YEAR
During 2020 the Committee met on seven occasions. Details
of the members’ attendance at meetings of the Committee are
as follows:
Director
David Lowden
Simon Boddie
Patrick De Smedt
Michelle Healy
Sylvia Metayer
Angela Seymour-Jackson
No. of meetings attended
7 out of 7
7 out of 7
7 out of 7
7 out of 7
7 out of 7
7 out of 7
COMMITTEE’S FOCUS DURING 2020
As in previous years the Talent, Succession and Development
programmes continue to mature across the organisation.
The Committee reviewed progress across the suite of
programmes. At senior director level this includes the Global
Director Academy Inclusive Leadership programme and 360
degree feedback surveys. The Company continues to partner
with YSC and following a review of the YSC programmes, a
coaching for impact programme run by YSC for Managing
Directors was introduced. The Accelerated Development
Programme was rated highly by participants and continues for
Regional Managing Directors and above with some adaptation
to the coaching timeline, which aligns to our increased
emphasis on coaching across the Company. The Committee
monitors access to these talent programmes and promotions
to ensure gender and other diversity characteristics are
represented. The reporting output from the review gives a
high level of insight into the Group’s talent. It also enables the
Committee to identify, with confidence, successors for senior
and critical roles.
The pandemic invariably presented some challenges for the
Talent, Succession & Development review, and as a result
extra time was provided to complete these activities and,
as necessary, content was moved online, and sessions
undertaken virtually.
The Talent, Succession & Development review focussed on the
Director and above population and the Committee reviewed a
talent matrix and succession plans for all critical roles.
In respect of Board succession, the Committee appointed an
executive search agency to identify a Non-Executive Director
and Audit Chair Designate. The independent search agency,
with no connection to the Group or individual Directors, Inzito
Partnership, undertook the search. In keeping with the Board’s
diversity policy, the shortlist contained at least 30% female
candidates and a number of candidates from an ethnically
diverse background. Following an extensive search, at the start
of 2021, Ben Stevens, was appointed to the Board as a Non-
Executive Director and Audit Chair Designate. Ben’s wealth
of experience across sectors, geographies and in executive
and non-executive finance and commercial roles makes him
exceptionally well placed to take on the responsibilities of Audit
Committee Chair.
David Lowden will reach 9 years’ service on the Board in 2021,
having been appointed as a Non-Executive Director in August
2012 and as Chair in December 2015. The Committee is
mindful of the provisions of the Corporate Governance Code
regarding the chair’s term of office and plans to take steps to
identify a successor in due course.
The activities of the Committee were reviewed as part of
the annual Board evaluation process which, in 2020, was
undertaken internally by the Chairman supported by the Senior
Independent Director and the General Counsel & Company
Secretary. The evaluation showed that the Committee is
performing well with progress having been made in succession
planning. Committee members recognise that it is a priority
for the Committee to continue to drive progress in respect of
diversity considerations and seek to continue to develop the
pipeline for senior executive positions. Further details of the
evaluation process can be found in the Corporate Governance
Report on pages 70 to 71.
DIVERSITY
As a recruitment company we are passionately committed to
promoting diversity, inclusion and equality in the workplace
both internally and externally. Our Company Purpose is to
change lives for people by creating opportunities to reach
potential and diversity and inclusion is therefore inextricably
linked to our strategy.
The Committee views diversity and inclusion in its broadest
sense. It is fully committed across the organisation to a
diversity policy which seeks diversity of ethnicity, experience,
capability, geographic experience, gender and all other
qualities which makes each of us unique.
The Board’s diversity and inclusion policy is available on the
Company’s website at www.page.com. The Nomination
Committee implements the policy and a summary of its key
objectives are below:
•
to ensure different perspectives and insight are brought to
all areas of the business, including the Board, generating
creativity, problem-solving capability and sustainability that
would not otherwise be possible;
• maintain Board and Committee membership to be at least
one-third female; and
•
ensure candidate lists for Board positions should include
individuals drawn from a wide range of experiences and
backgrounds.
Objective
Maintain Board and Committee membership to be at least one-third
female.
Implementation and progress
Met: Board currently has over one-third female representation.
Objective
Company aspires to meet the Parker Review objective of one
Director from a minority ethnic background by 2024.
Status
Ongoing: The Board is committed to meeting this objective and
intends to do so in line with the Parker Review timescales.
Objective
Female representation of at least 25% within senior management
and their direct reports as defined by the Corporate Governance
Code (the “Code”).
Status
Met: As at 31 December 2020, 28.3% of senior management as
defined by the Code and their direct reports were female.
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The Board has a mix of complementary skills and a range
on nationalities are represented. However, the Board
acknowledges that it lacks ethnic diversity and is actively
taking steps to address this. The recent Audit Committee Chair
search produced a shortlist with ethnic minority candidates
that proceeded to the final stages of the selection process.
Unfortunately, on this occasion, these candidates were not
successful to final appointment. However, the Company remains
resolute in its intention and commitment to meet the Parker
Review recommendation of having at least one Director of
colour by 2024. Ethnic diversity considerations remain a key
consideration in all future appointments.
The Committee will also seek to continue to exceed the
recommendations of the Hampton-Alexander Review with
over 33% of the Board being female. However, we continue to
recognise that there is currently a lower proportion of women
holding senior roles below Board level positions. The Company
has been working hard to address this and a summary of the
actions implemented to improve this are below.
• High potential womens’ progress is tracked as part of the
Global Talent, Succession & Development Programme.
• Managing Directors and above have diversity objectives
relating directly to their remuneration.
• Since January 2021, the Group’s Executive Committee,
known as the Executive Board, includes female
representation.
Board Directors as at 31 December 2020
Men
5 (62.5%)
Women
3 (37.5%)
Executive Board & Direct Reports as at
31 December 20201
Men
38 (71.7%)
Women
15 (28.3%)
1. As determined in accordance with the definition contained in the Code
The Group’s Executive Board was restructured with effect
from 1 January 2021 and since this date includes female
representation. Further details regarding increasing
representation of women across the organisation can
also be found on pages 31 and 32.
• A mentoring programme is in place for senior women
PLAN FOR 2021
and there is ongoing and continued support for the
women@page global network aimed at engagement,
enablement and empowerment of women across the
organisation. The network sponsored campaigns around
the world such as International Women’s Day.
•
The development programme for directors, the Global
Director Academy, run across the Group for key talent,
has a 50:50 gender split for each cohort.
• Where internal promotion is not viable for a position,
the Group is fully committed to diverse shortlists with
female representation.
The Committee intends to focus on continuing its work in
respect of succession planning. It also plans to continue to
develop its work in promoting, reviewing and monitoring the
Company’s Talent, Succession & Development activities to
ensure year-on-year improvement in the outcomes delivered.
David Lowden,
Committee Chairman
2 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 AUDIT COMMITTEE REPORT
76
other members of the Committee have a sufficiently wide
range of business experience and expertise such that the
Committee has competence relevant to the sector in which the
Company operates. The relevant qualifications and experience
of the Committee members are shown in their biographies
on pages 61 to 65. The Committee met with the Director of
Internal Audit and external auditor during the year without the
presence of management in order to provide an opportunity
for confidential discussion. The Director of Internal Audit and
the external auditor also met with, and have direct access on
an ongoing basis, to the Chair of the Committee. Additionally,
the Committee held private sessions with the Chief Financial
Officer and the General Counsel & Company Secretary.
PRINCIPAL AREAS OF FOCUS
The Committee is committed to maintaining and monitoring the
quality and integrity of financial reporting, as well as assessing
the Company’s risk management systems and internal control
environment. Given the external backdrop, a large focus for
the Committee in 2020 was to ensure timely, transparent and
above all accurate financial reporting. The Committee spent
considerable time assessing the overall impact of COVID-19
on the financial statements including appropriateness and
adequacy of disclosures. This involved reviewing with the
external auditor the going concern and viability statements
together with debtor experience and taxation. The Committee
also held a session on crisis management which identified the
learnings from the COVID-19 experience and assessed any
additional risks that the pandemic presented to the business.
It sought assurance that any such risks were being managed
appropriately. I am pleased to report that the Audit Committee
was provided with the information it required swiftly and
proactively. The previous investment in systems, including the
global finance system, is serving the business well, and has
helped facilitate adapting to widespread remote working.
When the Committee reported last year, the full impact of the
pandemic had not yet been witnessed. As discussed above,
a considerable amount of time was dedicated to monitoring
the increasing impact the pandemic had on the business in
2020. However, the Committee also reviewed the accounting
treatment of large scale projects such as Customer Connect,
the status of information security controls and carried out the
external audit tender. Further, the Company’s tax and treasury
policies were considered by the Committee and recommended
for approval by the Board. For further details of the Company’s
tax strategy, please see www.page.com. Set out in the table
overleaf is a summary of the main activities of the Committee
during 2020. Key issues covered by the Committee are
reported through regular reports to the Board.
The Committee met on seven occasions. Committee meetings
are set to coincide with key dates of the financial reporting
calendar and the audit cycle. The Committee is provided with
sufficient resources to undertake its duties.
Details of the members’ attendance at the meetings of the
Committee are as follows:
Director
No. of meetings attended
Simon Boddie
Patrick De Smedt
Michelle Healy
Sylvia Metayer
Angela Seymour-Jackson
1. Absence due to unforeseen circumstances
7 out of 7
7 out of 7
7 out of 7
61 out of 7
7 out of 7
Simon Boddie,
Committee Chair
Dear Shareholder,
I am pleased to present the Audit Committee Report for the
year ended 31 December 2020. The integrity of the Company’s
financial reporting and risk management is of the upmost
importance. In 2020 the Audit Committee has been acutely
aware of its responsibilities in this regard and examined,
monitored and challenged financial reports, risk management
and internal controls in order to provide assurance to the
Company’s stakeholders of the financial health and risk profile
of the business. Despite the challenges of the pandemic,
I am pleased to report that the Committee has also met its
commitment to tender external audit services and details of the
outcome and process can be found below.
PURPOSE
The Audit Committee is a fundamental part of the Group’s
governance framework as the guardian of the integrity of the
Company’s financial statements and external reporting of
performance. It also must ensure that the necessary internal
controls and risk management systems are in place and
effective.
MEMBERSHIP
The Committee’s membership did not change in 2020. I serve
as the Chair of the Committee. Patrick De Smedt, Michelle
Healy, Sylvia Metayer and Angela Seymour-Jackson all served
as Committee members throughout the year. Ben Stevens was
appointed to the Committee on 1 January 2021 and will take
over as Chair of the Committee in September 2021 when I step
down, having served on the Committee and Board for 9 years.
I am confident that Ben’s extensive experience as a CFO and
as a non-executive director in listed companies will serve the
Committee well.
Each member of the Committee has a wealth of business
experience across a range of sectors making them well placed
to perform the work of the Committee. The Committee’s
training takes place on an ongoing basis through updates
provided by the Company’s external auditor or internal finance
team, on developments in corporate reporting and legislation
and regulatory guidance.
Only members of the Committee are entitled to attend
meetings. Other individuals, such as the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer,
the General Counsel & Company Secretary, the Director of
Internal Audit and the external Audit Partner are regularly
invited to attend meetings as necessary. The Committee can
invite others to attend as appropriate.
The Board annually assesses the competence of those
sitting on the Committee, and in 2020 it was satisfied that
the Chairman of the Committee had the recent and relevant
financial experience required by the Code. Sylvia Metayer
also has relevant financial and accounting experience and
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 77
AUDIT COMMITTEE REPORT
FINANCIAL REPORTING
In its financial reporting to shareholders and other stakeholders,
the Board seeks to ensure that it presents a fair, balanced
and understandable assessment of the Group’s position and
long-term sustainability, providing necessary information for
shareholders to assess the Company’s business model, strategy
and performance. The Company has an established process
for reviewing the Annual Report and Accounts to ensure it is
fair, balanced and understandable. This process was followed
this year. It included: ensuring compliance with the regulatory
requirements for the Annual Report and Accounts; a thorough
review of going concern analysis; a process to determine the
accuracy, consistency and clarity of the data and language; and
a detailed review by all appropriate parties including external
advisers. A checklist of all the elements of the process was
completed to document the process and cascaded sign-off
implemented through the Group’s management structure
to provide assurance to the Committee that the appropriate
procedures had been undertaken by all Group companies.
The Committee has reviewed the Company’s 2020 Annual Report
and Accounts. It provided comments that were incorporated into
the Annual Report and Accounts and has advised the Board that,
in its opinion, the Annual Report and Accounts taken as a whole
is fair, balanced and understandable and provides the information
necessary to assess the Company’s performance, business
model and strategy.
MAIN ACTIVITIES OF THE AUDIT COMMITTEE DURING 2020
The Committee has an agreed, rolling programme of agenda items which the Committee Chair and General Counsel & Company
Secretary keep under regular review to ensure that all key financial reporting and risk matters are properly considered. The list below
summarises the key items considered by the Committee during the year.
JANUARY
APRIL
OCTOBER
Review of Financial Statements
Review of Financial Statements
Review of Financial Statements
• Quarter 4 trading update
• Quarter 1 trading update
• Quarter 3 trading update
Regulatory update
• Briefing on Brydon Report
MARCH
Review of Financial Statements
• Draft preliminary announcement
and 2019 Annual Report and
Accounts
•
External auditor’s year-end report
• Going concern analysis
•
•
•
Viability statement
Fair, balanced and understandable
review
Judgemental and accounting
issues
• Management letter of
representation
• Confirmation of external auditor’s
Independence
JULY
Review of Financial Statements
• Quarter 2 trading update
AUGUST
Review of Financial Statements
Compliance
• Update on external audit tender
DECEMBER
Review of Financial Statements
• Review of 2020 Annual Report and
Accounts process
• Draft interim report
Risk and Internal Control
•
Judgemental and accounting issues
•
Internal audit update
• Going concern analysis
• Approval of internal audit plan
Risk and Internal Control
•
Internal audit update
• Crisis management – learning from
COVID-19 experience
• Risk review and confirmation of
principal and emerging risks
for 2021
• Risk review and confirmation of
principal and emerging risks
• Annual review of anti-bribery
compliance
External Auditor
• Review of Group insurance renewal
• Audit progress update report
• Review of IFRS 16 reporting
External Auditor
Compliance
Risk and Internal Control
•
Internal audit update
Compliance
• Review of litigation register
• Meeting with external auditor
without Executive Directors
•
External auditor’s interim review
• Scope of the full year audit
•
Interim review of management letter
of representation
• Year-end legislative and procedural
matters
•
Terms of reference review
• Annual committee evaluation
• Non-audit fees review
•
EY engagement letter
Tax and Treasury
• Review of tax strategy
• Review of Treasury policy
• Meeting with Head of Internal Audit
Compliance
without Executive Directors
• Meeting with Head of Internal
Compliance
External Auditor
•
External auditor effectiveness and
rigour survey
Audit, CFO and General Counsel
& Company Secretary without
Executive Directors
• Review of litigation register
• Update on external audit tender
• UK Corporate Governance Code
compliance
• Recommendation to the Board on
external auditor appointment
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 78
SIGNIFICANT ACCOUNTING ISSUES AND AREAS OF JUDGEMENT
The Committee focuses in particular on key accounting policies and practices adopted by the Group and any significant areas of
judgement that may materially impact reported results as well as the clarity of disclosures, compliance with financial reporting
standards and the relevant requirements around financial and governance reporting. Details on accounting policies can be found on
pages 118 to 123.
The significant issues and areas of judgement considered by the Committee during the year and how these were addressed were
as follows:
Significant issue
How the Committee addressed the issue
Revenue
Recognition
Context: Revenue recognition for permanent and temporary placements, with particular focus on period
end cut off and appropriate accounting treatment in accordance with IFRS and Group accounting policies.
Revenue from permanent placements is derived from both retained assignments (income recognised
on completion of defined stages of work) and non-retained assignments (income recognised at the date
an offer is accepted by a candidate and where a start date has been determined). There is a risk that a
candidate reverses their decision to take up a placement before the start date and as such the revenue
recognised would be reversed. A provision is made by management, based on past historical experience,
for the proportion of those placements where this is expected to occur. Revenue from temporary
placements, which represents amounts billed for the services of temporary staff, including the salary cost
of these staff, is recognised when the service has been provided.
Actions taken: As in previous years, the Committee assesses the Group's revenue recognition policies
relative to IFRS and the sector to ensure they are appropriate, and challenges management on the internal
control and compliance processes over revenue recognition, taking into account the views of Internal
Audit and the external auditor. The external auditor explained to the Committee the procedures they
performed to address revenue recognition, including the procedures performed around period-end cut-off
and assessment of provision recognised in respect of expected revenue reversals. On the basis of their
audit work, the external auditor concluded that the revenue recognition is in accordance with the Group’s
revenue recognition policy and IFRS, and the provision for expected revenue reversals is appropriate.
Conclusions and rationale: The Committee concluded that the approach to revenue recognition was
consistent with the policies and the judgements made were appropriate.
EXTERNAL AUDITOR’S INDEPENDENCE AND
EFFECTIVENESS
The Committee monitors the objectivity, independence and
effectiveness of the external auditor. The Company is mindful
of the provisions of the Code, best practice, the Competition
and Market Authority Audit Order 2014 and audit legislation
in particular as regards audit firm rotation and the provision of
non-audit services.
Ernst & Young LLP (“EY”), the Company’s current external
auditor, was first appointed in 2011. In accordance with audit
regulation, EY operates a policy of rotating the Audit Partner
every five-years. Bob Forsyth, was appointed in 2016 with his
five-year term completing after the 2020 audit.
The Committee operates a policy for the tender of external
audit services. This policy provides that in accordance with
applicable law and regulation, the Company will re-tender
the external audit at least every ten years and will change
the external auditor at least every 20 years. The Committee
determined that it was in the best interests of shareholders
to commence a competitive tender of external audit services,
with the tender to take place during 2020.
The Committee had originally hoped to conclude the tender
in time to bring a recommendation to the Company’s Annual
General Meeting on 4th June 2020. However, this was
postponed as a result of the pandemic, to ensure the tender
could be undertaken effectively. Following a rigorous process
described overleaf, EY was successful in the tender process.
In accordance with the FRC’s revised Ethical Standard 2019,
the Committee reviewed all non-audit services to ensure
the non-audit services are closely linked to the audit itself
or required by law or regulation. The total non-audit fees
in respect of non-audit services for the year under review
amounted to c. £32k. These non-audit fees related to certifying
revenue in the Netherlands for local filing requirements. A local
law requirement for the Spanish business to file a ‘non-financial
statement’ containing non-financial and diversity information
relating to environmental, social, employee, human rights and
anti-corruption and bribery matters. The fees also related to
factual reporting on revenue and payroll expenses required for
the French business and were services typically undertaken by
the statutory auditor.
EY advised the Group that they intended to increase their audit
fee for 2020 significantly, from £0.8m to £1.3m. EY stated
that the increase was to maintain a viable audit at the quality
of its own professional and regulatory standards, as well as
those expected by the Audit Committee. Therefore, while audit
quality was the prime factor, one aspect of the tender, was
to determine if the increased fee level was competitive in the
market. Following this tender process, we are comfortable that
the increased fee level remains competitive and, as described
on page 79, EY provided the strongest overall proposition and
so were retained.
The Committee regularly reviews the objectivity and
independence of the external auditor and has concluded this is
safeguarded by:
• Obtaining assurances from the external auditor that
adequate policies and procedures exist within its firm to
ensure that the firm and staff are independent of the Group
by reason of family, finance, employment, investment and
business relationship (other than in the normal course of
business);
•
Enforcing a policy of reviewing all cases where it is
proposed that a former employee of the external auditor
be employed by the Group in a senior management
position or at Board level;
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 79
AUDIT COMMITTEE REPORT
• Monitoring the external auditor’s compliance with applicable
UK ethical guidance on the rotation of audit partners; and
• Approving non-audit services prior to being undertaken by
the external auditor.
The quality, performance and effectiveness of the external
auditor is reviewed annually by the Committee. This covers
the quality of robust challenge provided by the audit team in
the centre and at key components and the level of expertise
and resources applied to the audit, as well as assurance that
there are no issues which could adversely affect the auditor’s
independence and objectivity.
The Committee reviews the:
• Robustness of the external auditor’s plan and its
identification of key risks;
• Approach to and execution of the agreed plan;
• Robustness (including the audit's team's ability to challenge
management) and perceptiveness of the external auditor
in handling key accounting and audit judgements including
demonstrating professional scepticism and independence;
• Quality and content of reports provided to the Committee by
the external auditor including reporting on internal control;
•
Feedback from management which is ascertained from staff
surveys completed by staff involved in the audit process;
and
• Communications in and outside of meetings, between the
external auditor and the Committee.
The Committee considers how the auditor has demonstrated
professional scepticism and challenged management
assumptions. For example, the Committee reviewed how the
auditor challenged management in the area of going concern,
due to uncertainty from the COVID-19 pandemic. Challenges
were made over the various scenarios that management had
modelled, the level of stress testing in the models and the impact
that this would have on the ability of the Group to continue as a
going concern. The Committee ensured that they were satisfied
that the external auditor reviewed the level of liquidity in the
Group, the access to funding, as well as the covenants attached
to that funding.
EXTERNAL AUDIT TENDER
Although the Board and the Audit Committee remain satisfied
with EY’s quality of service, as well as their independence and
objectivity, the Audit Committee recommended to the Board that
a competitive tender process take place in 2020. A formal tender
of the external audit had not been carried out since EY was first
engaged in 2011.
In accordance with legislation, a range of firms including
representatives from the “Big Four” and Challenger firms
participated. Four firms, two from the Big Four and two from
Challenger firms, were asked to submit a detailed Request
for Proposal (RFP). Institutional shareholders were consulted
throughout the year at various investor roadshows and ad hoc
meetings as they occurred. Notice of the intention to tender was
also given in the 2019 preliminary results announced in March, as
well as the full year Annual Report and Accounts. The feedback
from investors was that they trusted the Audit Committee to
manage a process in the best interests of the key stakeholders.
The RFP was judged against objective criteria. The criteria
included, but was not limited to, the ability to deliver a high
quality audit, strength of team and its ability to challenge, use of
technology and depth of supporting expertise in the firm. The
tendering firms were scored against objective criteria determined
in advance of the process. Findings of audit quality inspection
reports published by the FRC were also considered. Fees
proposed by the four firms were taken into consideration, but the
ability to deliver a high quality audit was the largest single factor
driving selection.
Each of these firms was given access to members of the
Group’s senior management team, as well as a data room.
Presentations were then made by all firms to a panel, initially
comprising the senior finance team, with three of the four being
put forward to the Audit Committee subsequently for a second
round of presentations to the Committee.
While all firms put forward a strong tender and would have been
able to deliver a successful and robust audit, the Committee
considered that EY best met the criteria that had been set, in
particular one of audit quality. In line with the partner rotation
policy, a new EY Audit Partner, Joe Yglesia, will be the Audit
Partner for the 2021 external audit.
At the conclusion of the process, the Audit Committee
recommended to the Board that EY be reappointed as external
auditor. The Board approved this recommendation, with feedback
being provided to all four firms.
The Company confirms that it has complied with the provisions
of the CMA‘s Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014 for
the financial year under review.
INTERNAL CONTROL AND RISK MANAGEMENT
The Board’s responsibilities for, and their report on, risk
management and the systems of internal control and their
effectiveness are set out in the Corporate Governance Report on
page 71.
On behalf of the Board, the Audit Committee undertakes a
robust assessment of principal and emerging risks. This involves
reviewing the Group’s risk assessment procedures and risk
registers and its longer term viability. The risk assessment takes
account of all top down and aggregate risk and presents the
effectiveness of the controls to mitigate the principal risks of
the business, including environmental, social and governance
matters, inherent in the strategy of the business and its plan. The
risk assessments consider the level of gross risk to the business,
the effectiveness of controls in mitigating these risks and the
resulting net risk level. If the net risk level is above the Group’s
risk appetite, management develop further remedial action plans.
There are processes across the Group to consider emerging
risks. Within our Group operational risk assessment and
reporting process cycle, twice per annum management are
formally required to consider and disclose any emerging risks.
These are reviewed at a Group level together with a top down
perspective gained from discussion with senior management. In
addition, our internal audit programme reviews the basis of risk
submissions with local management for principal risks, including
any emerging risks. The principal risk reports are independently
reviewed with the external auditor to identify the potential risks
that the Group should be considering and anticipating. In 2020,
the internal audit plan was adapted to include the impact of
the pandemic on both the wider business and IT response in
terms of risk assessment, controls and mitigating activities. The
country audit programme focussed on enhanced risks arising
from the impact of the pandemic in assessing controls. These
were specifically around financial revenue recognition, debtor
management and revenue compliance. In addition due to the
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 80
various travel restrictions imposed during the year, audit activity
successfully switched to remote working. We have through
the utilisation of technology been able to conduct the audits
planned for 2020 remotely with minimal impact on audit quality.
Further, we considered our principal risks and added an
additional risk of “Global Events”. This risk captures how
we have, and would handle a global event in the future. The
exact timing and nature of these incidents are, by their very
nature, impossible to predict. However, we have in place a
crisis management process enabling us to respond to “events”
ensuring we can take the best available actions to mitigate the
impact on the Group. Further details of this risk and the areas
of mitigation can be found on pages 41 to 48. We have also
adopted “Climate Change” as an emerging risk.
The Company’s risk review procedures include regular reports
to the Committee from the Director of Internal Audit on the
performance of the system of internal controls and on its
effectiveness in managing material and emerging risks and
identifying any control failings or weaknesses.
The Committee reviews the Group’s risk management process
annually, with the outcome being reported to the Board. This,
together with regular updates to the Board on material risks,
allows the Board to make the assessment on the system
of internal controls and the residual risks for the purpose of
making its public statement. The risk process, together with
the key risks and their indicators, have been identified and
mitigating actions are described in the Strategic Report on
pages 41 to 48. Key performance indicators are highlighted for
the main financial, strategic and people risks in the Strategic
Report on pages 21 to 24.
Where weaknesses have been identified in the system of
internal controls for the mitigation of risks to an acceptable
level, plans to strengthen the control system are put in place.
Action plans in this respect are regularly monitored until
complete. During the period under review there were no
control failings or weaknesses that resulted in material losses.
INTERNAL AUDIT ACTIVITIES
The Group’s Internal Audit function comprises a Director of
Internal Audit and a team of internal auditors and we have a
co-source agreement in place with a third party internal audit
provider. The Director of Internal Audit reports to the Audit
Committee and works with the CFO and CEO to determine
priorities. He also has direct access to the Committee and
the Board. This ensures there is opportunity for frank and
open dialogue.
The scope of work for the Internal Audit function is agreed
with the Committee annually with the findings from internal
audits being reported to the Executive Board and the Audit
Committee. Businesses are audited on a rotational risk-based
approach to assess the effectiveness of controls to mitigate
risks to an acceptable level. All major risks are addressed in this
process, including Group functions and change programmes as
are those around governance, environmental and social related
matters. Actions to maintain and improve the effectiveness of
the control environment are agreed with the Executive Board
and are monitored and reported to the Committee. Risks are
also regularly reviewed and required changes are made to
the risk profile and, where necessary, to the activity of Internal
Audit. All changes to the Internal Audit plan are agreed with the
Chair of the Committee and reported to the Executive Board
and the Committee. Understandably, adaptations to the original
internal audit plan occurred during the year under review due
to the pandemic. This included substituting some business
as usual audits with audits on the business’s response to the
pandemic and an IT compliance audit.
COMMITTEE EVALUATION
The activities of the Committee were reviewed as part of the
Board evaluation process performed during the year under
review. The 2020 evaluation process was undertaken internally,
having been facilitated externally in 2019. The Committee’s
performance was assessed across the range of work it
oversees including effectiveness in reviewing and assessing
the work of the internal and external auditors, risk identification
and management and the Group’s system of internal controls.
The review also examined the Committee’s oversight of
financial reporting and assessed the extent to which the
Company has adapted to COVID-19. The overall performance
of the Committee was rated highly. The Committee was
considered to have adapted well to performing its role despite
the challenges presented by the pandemic. Priorities for
the upcoming year include ensuring effective transition to a
new Audit Committee Chair and continuing the Committee’s
rigorous focus on financial reporting, internal controls and risk
assessment of the business. Further details of the outcome of
the Board and Committee evaluation process, and the areas
of focus for 2020 can be found in the Corporate Governance
Report on pages 70 to 71.
FRAUD
The Committee reviews the procedures for the prevention and
detection of fraud in the Group. Suspected cases of fraud
must be reported to the Chief Financial Officer and the Director
of Internal Audit and investigated by operational management
and Internal Audit. The outcome of any investigation is
reported to the Committee. A register of all suspected
fraudulent activity and the outcome of any investigation is kept
and is circulated to the Committee on a regular basis. During
the year in question, no frauds of a significant nature were
reported.
ANTI-BRIBERY AND CORRUPTION AND
BUSINESS ETHICS
The Company has a Code of Conduct which can be found
on its website www.page.com. This sets out the standards
of behaviour by which all employees of the Group are bound
and is based on the Company’s commitment to acting
professionally, fairly and with integrity.
The Group maintains a zero tolerance approach against
corruption. It has an established anti-bribery and corruption
policy, which includes guidance on the giving and receiving
of gifts and hospitality. This policy applies throughout the
Group and is complemented by anti-bribery and corruption
training for senior managers, and staff in risk areas across the
Group. In order to capture any concerns that employees or
external parties may have in relation to bribery and corruption,
the policy highlights internal contacts who can assist in any
queries surrounding gifts and hospitality or concerns around
bribery and corruption. The gifts and entertainment register is
reviewed by the Committee to ensure transparency. A review
of compliance with the policy is undertaken annually and
reported to the Committee. The review undertaken in 2020
showed there was a good understanding of the issues and no
breaches were reported. Additionally, the Company operates
a global “Speak Up” helpline and actively promotes its use for
any ethical matters.
Simon Boddie
Chair of the Audit Committee
2 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 81
DIRECTORS’ REMUNERATION REPORT
Angela Seymour-
Jackson
Committee Chair
SECTION 1
Dear Shareholder
On behalf of the Board I am pleased to present the Directors’
Remuneration Report for 2020. This has been an exceptionally
challenging year for many organisations, with COVID-19 causing
unprecedented impact on many businesses, employees and
broader stakeholders. I would like to personally thank our
Executive Directors, Steve Ingham and Kelvin Stagg, for the
leadership they have shown through this unprecedented period.
PageGroup, in common with the wider recruitment sector, has
been heavily affected and we have used Committee discussions
to consider the impact of the pandemic and have carefully
focussed Remuneration Committee activity on considering the
full range of stakeholders when making decisions.
This disclosure describes the specific outcomes of this process
but also draws out the wider context and factors we considered
when making decisions, including use of discretion applied
by the Committee. More detail is included within the Report,
including the way that we approached decision making for the
operation of the ESIP for 2020 and ensuring wider alignment
across the workforce.
IMPLEMENTATION OF OUR NEW
REMUNERATION POLICY
Our new Remuneration Policy was approved by over 90% of
our shareholders at the 2020 AGM on 4th June 2020, with
the implementation of Remuneration Policy in 2019 receiving
in excess of 94% shareholder approval. I thank again all of our
shareholders for their constructive input into the consultation
process as we discussed and sought views over the changes
we proposed to the Policy, and the nature of the ongoing
dialogue that remains in place. We discussed as a Committee
all the feedback from shareholders and proxy agencies received
in connection with our new Policy in the run up to the AGM,
and have had a number of follow-up sessions with particular
shareholders following their comments to us.
IMPACT OF COVID-19 ON EXECUTIVES
AND EMPLOYEES
As the potential impact of COVID-19 became evident the
Company took key actions to protect our people, and to ensure
we could retain and support key talent across the business.
The focus of the organisation was on the welfare of colleagues
around the world, enabling them to continue to work where
possible, utilising technology to maintain relationships with
clients and candidates. Examples elsewhere within the Annual
Report illustrate the way that people across the organisation
showed resilience and commitment to continue to focus on
customer needs.
Restrictions imposed as a result of the pandemic varied across
our locations, and we learned and shared experience from our
colleagues and businesses around the world, beginning with
those in mainland China, who were the first to experience the
direct effects of the virus and the resulting change to routines
and ways of working.
The Company took actions in Q2 to protect short-term
profitability, but also to ensure that we could come out of
“lockdown” situations in a position of strength. Examples of
actions included:
Executive Directors and Board
Waiving of 20% of salary / fees for Q2
Senior leaders within the business
450 of our most senior employees voluntarily agreed to
salary cuts of 20% during Q2
Other employees
Agreement by some employees to reduced working weeks
Some placed onto Government-backed support schemes
(including use of the furlough scheme in the UK).
All employees reverted to full pay after reduction for one-quarter of the year.
COVID-19: DECISION-MAKING FRAMEWORK AND
REWARD OUTCOMES FOR 2020 ESIP
The Executive Single Incentive Plan (ESIP) is our only incentive
mechanism in place for Executive Directors. Implemented
in 2017, it is a structure that looks at the combination of
performance achieved through a balanced scorecard,
considering both 1-year and 3-year performance metrics.
It is designed to reduce volatility through the economic cycle and
drive performance and align Executives through shareholding
in the business. That being said, we recognise the material
impact that COVID-19 has had on the business in 2020 and
have actively reflected this in considering how the Plan operates
and associated outcomes. We have provided full insight into
the factors we considered in determining awards and the way
they are delivered later in this report, along with disclosure of
performance against all the specific performance metrics.
COMMITTEE DISCRETION
The Core Formula delivered outcomes under two of the four
metrics (strategic performance and relative gross profit) but
failed to reach threshold levels for EPS or for Profit before Tax
(PBT) performance to warrant an award. As a Committee we
decided to exercise discretion to reduce the award, such that
only the long-term metric (of gross profit performance over the
period 2018-2020) would drive an award. We were confident
that strategic progress had been robust over the period (as
evidenced through our disclosure) but did not feel it appropriate
to link reward outcomes to performance metrics that were
related solely to 2020. This is in reflection of the overall financial
performance of the business in 2020 and the wider shareholder
experience including the decision to suspend dividend
payments. This discretion reduced awards under the ESIP from
28% of maximum to 16.5% for the CEO, and a similar level of
reduction for the CFO.
Additionally, the Executives requested that no cash payments
be made in respect of the ESIP for 2020, with the total value of
any award under the Plan being delivered in shares that will vest
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 82
equally on the 2nd and 3rd anniversary of the award date. We
were happy to support this request, which further reinforces
the strong culture at PageGroup and the Executive Directors’
commitment to aligning their outcomes to the wider workforce
and to the shareholder experience.
Following the application of discretion to the ESIP outcome,
the Committee is confident that the outcomes are reflective
of both the impact that COVID-19 has had on the business,
employees and shareholders, while also recognising the long
term performance of Executives. Furthermore, we believe the
Policy has operated as intended.
LOOKING FORWARD – ESIP FOR 2021
We will make some changes to the operation of the ESIP for
2021 designed to strengthen alignment of Executives with
the business as we look to prepare for a strong recovery from
COVID-19. All these changes are within the parameters of
the existing Remuneration Policy approved by shareholders in
June 2020. Specifically, we will:
•
•
increase weighting towards Relative Gross Profit within the
long-term performance metrics; and
include strategic objectives which include actions that
support strong recovery from the pandemic.
At a time of significant uncertainty the Committee felt greater
weighting on a relative performance metric was appropriate
to assess the way the management team have positioned
the business for recovery from the pandemic compared to
industry peers.
We will not look to make any changes to previous target
ranges for EPS set by the Committee and outlined within
previous remuneration disclosures. The overall weighting of the
ESIP towards long-term performance is unchanged at 55%
of the total opportunity available. As a Committee we have
determined forward looking EPS targets for the period 2021-
2023, to support operation of the ESIP in the future.
The targets and our approach to how these have been set
at this uncertain time is explained on pages 92 to 93.
WIDER WORKFORCE VISIBILITY AND ALIGNMENT
We recognise that we have broader responsibilities as a
Committee to have appropriate oversight of reward across the
organisation and the way that this aligns to the wider culture.
As a result, we have spent proportionately more Committee
time understanding and discussing the approach to reward
across PageGroup and the way that this aligns to the overall
business strategy. This included the way that elements of
the reward package on offer for employees are determined
and governed, including application across a globally diverse
workforce. We focussed on the way that variable plans
link both the performance of the individual and business
performance into the calculations of awards payable and the
way that the reward structure evolves as people progress
through the organisation and take on bigger roles. More details
on the insight we gained as a Committee on wider workforce
remuneration is disclosed later in this report.
CONCLUSION
I hope this letter and the accompanying disclosure will give you
as a shareholder visibility of the operation of the Committee
over the past year and the way we have considered the impact
of COVID-19 in forming decisions on reward, considering
the wider impact that the pandemic has had across our
stakeholder base. Additionally we have focused on how the
ESIP will be used in 2021 to support business growth with the
intention of rewarding actions taken during 2020 to strengthen
the business for recovery.
We have always sought to engage with our shareholders
openly and constructively and maintain an effective dialogue on
reward. I look forward to this continuing over the coming year.
Angela Seymour-Jackson
Chair of the Remuneration Committee
2 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCESTRATEGIC REPORTADDITIONAL INFORMATION 83
DIRECTORS’ REMUNERATION REPORT
SECTION 2: AT A GLANCE
WHAT EXECUTIVES WERE PAID IN 2020 – SINGLE FIGURE
BASE SALARY & BENEFITS
STEVE INGHAM
CEO
KELVIN STAGG
CFO
• Salaries were effective from
1 January 2020
• Benefits include a car
allowance and a pension
allowance of 25% of base for
CEO and 20% for CFO
• Salary figures reflect voluntary
20% reduction in salary during
Q2 2020
ESIP
•
•
Final award 16.5% of maximum
for CEO and CFO following
exercise of downward discretion
by the Committee
Executives elected to take all
awards in deferred shares rather
than cash, released on 2nd and
3rd anniversary of award
TOTAL
Salary
£600,248
Benefits
£182,202
Salary
£349,112
Benefits
£98,385
ESIP
£388,744
Maximum
£2,361,750
ESIP
£195,952
Maximum
£1,190,475
Indicates Maximum Potential
Total
£1,171,194
ESIP
£388,744
Total
£643,449
ESIP
£195,952
Base pay and benefits
£782,450
Base pay and benefits
£447,497
2020 SINGLE FIGURE
£1,171,194
2019 SINGLE FIGURE*
£3,771,201
CHANGE (2019 TO 2020)
(69)%
* Restated to reflect the actual share price on vesting of legacy LTIP awards
£643,449
£1,835,881
(65)%
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 84
ESIP – 2020 AND 2021
ESIP 2020 OUTTURN
• Overall award 16.5% of maximum for CEO and CFO after exercise of discretion downwards by the Committee
Assessment/Weighting
0%
50%
100%
Achievement for CEO/CFO (% max)
PBT
(30%)
0% / 0%
Strategic
(15%)
77.5% / 76.3%
EPS (2018 to 2020)
(35%)
0% / 0%
Relative Gross Profit
(2018 to 2020)
(20%)
82.3% / 82.3%
•
The Committee exercised discretion to not reward delivery of strategic objectives achieved in 2020 (reducing the award
from 28% to 16.5%)
• Opportunity level of 375% of salary and 325% of salary results in award of £388k and £196k to CEO and CFO
respectively
•
Executives elected to take all awards in deferred shares rather than partly in cash, released on 2nd and 3rd anniversary
of award
ESIP 2021 STRUCTURE
• Overall opportunity unchanged: CEO 375%, CFO 325%
• Amended weightings of metrics to align with business strategy and align with business recovery from COVID-19
PBT (2021)
(30%)
Strategic (2021)
(15%)
EPS (2019 to 2021)
(25%)
Relative Gross Profit (2019 to 2021)
(30%)
KEY POINTS
• Balance between long term and short term
weighting unchanged from ESIP 2020: 55%
weighted to longer term performance
•
Increased weighting towards relative gross profit
to recognise actions taken by management during
pandemic to strengthen business for recovery
• No change to EPS targets previously set and
communicated
•
Enhanced weighting to relative gross profit
performance (from 20% to 30% of total)
• See diagram on page 92 for full operation of the
ESIP for 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 85
DIRECTORS’ REMUNERATION REPORT
KEY METRICS
SHAREHOLDING OF EXECUTIVES
CEO = 1,045% of salary, CFO = 546% of salary (against a requirement of 200%)
Shareholding as percentage of salary
CEO: Steve Ingham
Shareholding as percentage of salary
CFO: Kelvin Stagg
2020
828%
217%
1,045%
2020
359%
187%
546%
2019
778%
185%
963%
2019
255%
162%
417%
2018
550% 91%
641%
2018
111%
79%
190%
600%
0
200% 400% 600% 800% 1,000% 1,200%
0
100% 200% 300% 400% 500%
Ordinary shares
ESIP shares (net)
Shareholding requirement = 200% of salary
ORDINARY SHAREHOLDING PROGRESSION
Progression of Ordinary Shareholding
# shares held (000’s)
2020
2019
2018
STEVE
INGHAM
2020
KELVIN
STAGG
2019
2018
0
200
400
600
800
1,000
1,200
GENDER PAY
Our latest disclosures on Gender Pay can be accessed
through the Company’s website www.page.com.
CEO PAY RATIO
See page 100 for more details
Gender Pay Gap
CEO Pay Ratio
Median
As at 5 April 2019
As at 5 April 2018
14%
16%
Mean
19%
21%
25th percentile Median
75th percentile
2020
2019
43:1
160:1
27:1
105:1
17:1
64:1
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 86
SECTION 3: ANNUAL REPORT ON REMUNERATION
This part of the report has been prepared in accordance with Part 3 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulations 2013. The information on pages 83 to 104 has been audited where required
under the Regulations. The elements of the Directors’ Annual Remuneration Report subject to audit include the:
(a)
Single total figure for remuneration and the accompanying notes;
(b)
Details of the performance against metrics for variable awards included in the single total figure table;
(c) Details of the ESIP award made in 2020;
(d) Section on outstanding share awards;
(e) Payments to past Directors; and
(f) Payment for loss of office.
During the year under review the members of the Committee were Angela Seymour-Jackson, who was Chair of the Committee,
Simon Boddie, Patrick De Smedt, Michelle Healy and Sylvia Metayer. Ben Stevens was appointed to the Committee with effect from
1 January 2021. Details of the members’ attendance at meetings of the Committee were as follows:
Director
No. of meetings attended
Angela Seymour- Jackson
Simon Boddie
Patrick De Smedt
Michelle Healy
Sylvia Metayer
6 out of 6
6 out of 6
6 out of 6
6 out of 6
6 out of 6
Only members of the Committee are entitled to attend meetings. Other individuals, such as the Chairman of the Board, who attends
meetings of the Committee regularly, the Chief Executive Officer, the Chief Financial Officer, the Chief People Officer and external
advisers, may attend meetings by invitation when appropriate.
No Director takes part in discussions relating to their own remuneration. The Committee last conducted a review of its Remuneration
Advisers in 2018 and following a comprehensive tender process appointed PricewaterhouseCoopers (“PwC”) as the advisers to
the Committee. PwC is one of the founding members of the Remuneration Consultants Group and as such adheres to the code
of conduct in relation to executive remuneration consulting in the UK. PwC’s appointment commenced in November 2018 and the
Committee is satisfied the advice received is objective and independent.
The fees paid to PwC totalled £80,000. PwC provide unrelated tax advice and mobility services during the year through separate
teams. The Committee is satisfied that these activities do not compromise the independence or objectivity of the advice it has
received from PwC. PwC’s core services are provided on a fixed fee arrangement, with additional items provided on a time and
materials basis.
During 2020 the Committee met 6 times and considered the following topics:
Wider Workforce Consideration
Executive Remuneration
Governance
• Reward structures across the
business and wider reward framework
• Gender pay gap statistics in the UK
• Alignment of reward with culture
• Wider approach to employee reward
during COVID-19 pandemic
• Contrast of respective roles of
Remuneration Committee and
management in determination and
oversight of reward framework below
senior management
• Outcomes of reward for ESIP 2019
and the vesting of legacy LTIP
awards from 2017
• Changes to executive remuneration
arrangements in light of COVID-19
•
•
Target setting process for
outstanding annual targets for
ESIP 2020
• Structure of ESIP 2021 and
alignment with strategy
• Drafting of remuneration report for
2020 Annual Report and level of
disclosure of Committee decisions
behind new Policy
Feedback from shareholders and
shareholder bodies from AGM
• Update on market trends from
Committee advisor
• Committee effectiveness evaluation
•
Terms of Reference review
The Committee presented a new Remuneration Policy to shareholders in 2020 which was approved at the Company’s Annual
General Meeting held on 4 June 2020. Full details of the shareholder voting in this respect can be found on page 97.
COMMITTEE EVALUATION
The activities of the Committee were reviewed as part of the annual evaluation process which, in 2020, was undertaken internally
by the Chairman supported by the Senior Independent Director and the General Counsel & Company Secretary. The evaluation
covered areas such as the performance of the Committee in light of the challenges presented by the pandemic, Chair and advisers’
performance, review of wider workforce remuneration and the alignment of incentives and rewards with the Company’s culture.
The Committee was rated highly and considered effective in performing its responsibilities. For more details about the Board and
Committee evaluation process, see pages 70 to 71.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 87
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’ REMUNERATION AS A SINGLE FIGURE (AUDITED)
The tables below report a single figure for total remuneration for each Executive Director for the years ended 31 December 2020 and
31 December 2019.
Salary
£’000
Benefits
£’000
Pensions
£’000
Subtotal
for
Fixed
Pay
£’000
ESIP -
Cash
£’000
ESIP -
Deferred
Shares
£'000
Legacy
Long-
term
incentives
£’000
Dividends
paid on
unvested
shares
£’000
Subtotal
for
variable
pay
£’000
Total
£’000
Note 1
Note 2
Note 3
Note 4
Note 4
Note 5
Note 6
2020
2019
2020
2019
600
630
349
366
24
237
25
25
158
158
73
73
782
0
389
1,025
712
1,068
447
464
0
354
196
531
n/a
894
n/a
450
0
72
0
37
389
1,171
2,746
3,771
196
643
1,372
1,836
Steve
Ingham
Kelvin
Stagg
Notes:
1. Salary represents the salary paid in cash in respect of the financial year. Values for 2020 include the voluntary reduction in base salary of 20% taken by each of the
Executive Directors within Q2, consistent with approximately 450 leaders across the business.
2. Benefits represent the taxable value of the benefits provided in the year and comprise a company car or cash equivalent; fuel; permanent health insurance; medical
insurance and life insurance. Figures for 2019 include the costs of medical benefits met by the Company following the Chief Executive Officer’s skiing accident (totalling
£112.3k plus tax) to expedite his recovery and return to work.
3. Pension includes the cash value of Company contributions to defined contribution pension plans and cash payments in lieu of pension contributions. In line with our
Remuneration Policy, these have been fixed at the level paid in 2019 and will move to align with the rates for the wider workforce at the end of 2022.
4. The ESIP payment is determined using a balanced scorecard of short and long-term performance measures. Under the Policy 40% of the ESIP award is delivered
in cash and shown in the “ESIP – Cash” column. The remaining 60% of the ESIP is delivered in deferred shares which vest in future tranches, as shown in the “ESIP
– Deferred Shares” column. Executives requested that awards due in cash from ESIP 2020 were instead delivered in deferred shares which was supported by the
Committee.
5. The last vesting from the legacy long-term incentive plan was in March 2020. The values shown have been restated from that disclosed in the 2019 Annual Report
to show the actual share price on the vesting date (16 March 2020), with an associated update to the total single figure value. The share price on vesting was £3.37
compared to the average share price for the final quarter of 2019 of £4.63 (as used as an estimate within the single figure table for the 2019 disclosure).
6. This relates to dividends during the year on shares awarded under the legacy Long-Term Incentive Plan.
NON-EXECUTIVE DIRECTORS’ REMUNERATION AS A SINGLE FIGURE
The tables below report a single figure for total remuneration for each Non-Executive Director for the years ended 31 December
2020 and 31 December 2019. Figures for 2020 reflect the temporary reduction in fees agreed during Q2 2020 of 20%.
David Lowden
Simon Boddie
Patrick De Smedt
Michelle Healy
Sylvia Metayer
Angela Seymour-Jackson
Year
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Fees £’000s
203.1
213.8
66.0
69.5
61.3
64.5
52.7
55.5
52.7
55.5
66.0
69.5
There were no payments to past Directors or any payments for loss of office during 2020.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020
88
DETERMINING AWARDS UNDER 2020 ESIP
We considered the following questions as a Committee as a framework to support our decision making:
What was the formulaic outcome under the plan?
What was the approach to bonuses throughout the
organisation?
Our findings included:
Our findings included:
•
•
•
A formulaic outcome of 28.1% of maximum for the CEO and 27.9%
for the CFO (see full disclosure later)
This included strong delivery against strategic objectives set for each
Executive Director
This was derived from strategic performance linked to 2020, and
Gross Profit Performance against a comparator group for the period
2018-2020
• The business did not award annual cash bonuses to the core
employee population in 2020
• Forward looking awards under LTIP arrangements were made to
senior leaders in the normal way in March 2020 (and will be again
in March 2021)
• The Board have made the decision to repay money accessed
through the UK furlough scheme in 2021
What has been the experience for investors and wider
stakeholders over the past 12 months?
What was the ESIP as a structure designed to do?
Our findings included:
Our findings included:
• Share price at start of the year was £5.25 and was £4.47 on
• ESIP is a single incentive structure in contrast to the mix of annual
31 December 2020 (-15%)
• Dividends were waived in March 2020
• PageGroup made use of Government backed schemes including the
use of the furlough scheme in the UK (during Q2 only).
• PBT for the Group for 2020 was £15.5m compared to £144.2m in
2019
bonus and LTIP used across many organisations
• This is designed to reduce volatility in reward through the
economic cycle and align Executives through shareholding
As a Committee we made the following decisions:
Decision
Committee Rationale
1 To confirm the formulaic outcome of the ESIP against the
targets that were set.
• We wanted to ascertain and disclose the total performance
against the targets set.
2 To apply discretion to exclude from the calculation of awards
amounts linked to the achievement against targets for
2020. In this case this means using discretion to reduce the
performance earned under the strategic metrics to nil.
• 2020 was an exceptionally challenging year for the business.
Strategic performance has been achieved but against the overall
financial outcome for the business and shareholder experience it
did not feel appropriate to include this element of performance.
3 To include performance linked to the 3-year period
• Targets were set and communicated in early 2018 and Gross
Profit performance led to a formulaic outcome over the period.
4 To agree to the request from Executives that any award be
delivered fully in shares with no cash element.
• This was an amendment requested by Executives and leads to a
delay in delivery of value to the executive and greater longer-term
alignment through shareholding.
• We supported the request from the Executives and agreed with
their rationale that it did not feel appropriate to deliver cash
awards under the ESIP in a year where annual cash bonuses
would not be delivered across the organisation.
The Committee considers that with these amendments to the structure of the ESIP, the overall remuneration outcomes for both CEO
and CFO fairly represent the achievements over the respective performance period.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 89
DIRECTORS’ REMUNERATION REPORT
LINKAGE OF COMPANY PERFORMANCE INTO ESIP OUTCOMES.
PBT: The Group’s PBT for 2020 was £15.5m compared to
£144.2m in 2019. The reduction in PBT is reflective of the
difficult market conditions experienced throughout 2020 across
the business.
Strategic Performance: Full details of the strategic objectives
set for each Executive Director and the associated performance
against them is shown on page 88. Performance has been
assessed against the objectives that were set for the Executives
and the formulaic outcome of this process is disclosed within
this report. It is noted that objectives were set before the impact
of COVID-19 could have been foreseen on the business and
the wider global economy. In addition to the performance
documented against these objectives, the Executives have
led the business through unprecedented events, focussing on
protecting the welfare of colleagues around the business and the
PageGroup platform, and taking positive actions to ensure the
business can recover quickly and be stronger as a result.
EPS: Between 2018 and 2020 PageGroup delivered cumulative
EPS of 62.9p with EPS performance in 2020 of (1.8)p.
FORMULAIC BREAKDOWN OF 2020 ESIP (AUDITED)
Relative Gross Profit: The Committee determined awards
under this metric using all publicly available data as at
11 February (the date of the respective Remuneration Committee
meeting). The peer group contains organisations with different
year-ends with different timings of scheduled announcements,
and potential for variation in timings due to COVID-19. This
was the approach adopted by the Committee when the ESIP
structure (and use of this metric) was decided in 2017 and has
been applied consistently since the ESIP has been in operation.
This meant that full data was publicly available for all of the peer
group other than one company (where the last quarter 2020 data
was used).
PageGroup delivered gross profit performance between median
and upper quartile levels against the peer group resulting in
an award of 82.3% of maximum for this metric. In each of the
individual years 2018 and 2019 the business had the strongest
relative gross profit of the peer group.
Performance Metrics
Weighting
Target and Outcome
Achievement (% of max)
Annual Performance Metrics – 2020
Profit Before Tax
30%
We discussed setting targets for this metric at multiple
Committee meetings. Ultimately, due to forward looking
uncertainty and rapidly changing market conditions no target
was set, and the Committee determined that no award would
be applicable under this metric.
CEO
CFO
Award Level 0%
Strategic Metrics
15%
See breakdown in table below
77.5%
76.3%
3-year Performance Metrics (Jan 2018 to Dec 2020)
Cumulative EPS
35%
Threshold EPS = 88.3p (25% vesting) through to Stretch EPS
= 106.1p (100% vesting)
Award Level = 0%
Actual EPS = 62.9p
Relative Gross Profit Growth
20%
Based on average growth over the 3-year period compared
to peer group.
Award Level = 82.3%
Median = 25% vesting through to Upper quartile = Full
vesting
PageGroup Actual = (2.4)%.
Median was (3.8)%, Upper Quartile (2)%
Overall (% maximum)
28.1%
27.9%
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 90
DISCRETION APPLIED BY COMMITTEE
The Committee exercised discretion to exclude the impact of performance achieved in relation to strategic targets linked to 2020
performance. Whilst there was clear achievement against the strategic targets (as evidenced within this disclosure) the Committee
felt it right to exclude this element of performance given the overall level of financial achievement for the year. The impact of this,
and the subsequent final ESIP award is as follows:
Exclusion of Strategic
Metrics (% of maximum)
Final Award (% of
maximum)
CEO
(11.6%)
16.5%
CFO
(11.4%)
16.5%
FINAL AWARD CALCULATION AND DELIVERY (AUDITED)
Maximum Opportunity (% salary)
Final Award (% of maximum)
Final Award (% of salary)
Salary as at 1 January 2020
Final Award Value
CEO
375%
16.5%
61.7%
£629,800
£388,744
CFO
325%
16.5%
53.5%
£366,300
£195,952
The ESIP design is for 40% of the resultant award to be delivered in cash and the balance in deferred shares. At the request of
the Executive Directors, this award will be made fully in shares that will vest equally on the 2nd and 3rd anniversary of award
respectively, subject to the rules of the ESIP approved by shareholders.
STRATEGIC OBJECTIVES AND OUTCOMES WITHIN 2020 ESIP AWARD (AUDITED)
CEO – STEVE INGHAM
Theme
Weighting
Target
Key Achievements
Achievement
(% of max)
77.5%
85%
Total
Strategic
Market
Development
25%
Productivity
25%
Talent
Development
and Inclusion
25%
Cost Control
25%
* Constant currency growth rates
Appropriate levels of headcount
and investment into Large High
Potential markets (LHPM)
•
Increase in % of Group year on year
• Smaller headcount reduction in these markets and
targeted investment in key strategic sectors and
capabilities.
Key productivity initiatives agreed
with Board, and subsequent
measurement and review to
measure change
• New system rollout (Customer Connect) now live in a
70%
number of key markets
• New reporting and KPIs used at Executive Board
•
Increased process automation and new customer
survey developed
• Executive Board reconfigured with effect from 1
75%
January 2021 and associated improvement in gender
diversity
• Development and review of YSC programme to
support senior leadership development
• Cost reductions of (21)% in Q2 and (15)% in Q3
80%
through structured programme of cost containment.
Strategic development of senior
leadership team to accelerate
potential for succession into
bigger or different roles.
Delivery of diversity and inclusion
initiatives across the Group
Cost saving initiatives designed
to address shortfall in gross profit
due to COVID-19.
Delivery of savings in 2020
with ongoing realisation beyond
year end.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 91
DIRECTORS’ REMUNERATION REPORT
CFO – KELVIN STAGG
Theme
Weighting
Measure
Total
25%
Strategic
Market
Development
Productivity
25%
25%
Talent
Development
and Inclusion
Cost Control
25%
Appropriate levels of
headcount and investment
into Large High Potential
markets (LHPM)
Key productivity initiatives
agreed with Board, and
subsequent measurement
and review to measure
change
Strategic development of
senior Finance leadership
team to accelerate potential
for succession into bigger or
different roles.
Delivery of diversity and
inclusion initiatives across all
non-operational areas
Cost saving initiatives
designed to address
shortfall in gross profit due
to COVID-19.
Delivery of savings in 2020
with ongoing realisation
beyond year end.
Key Achievements
•
Increase in % of Group year on year
• Smaller headcount reduction in these markets and targeted
investment in key strategic sectors and capabilities
Achievement
(% of max)
76.3%
85%
• New system rollout (Customer Connect) now live in a
70%
number of key markets
• New reporting and KPIs used at Executive Board
•
Increased process automation and new customer survey
developed
• Amended finance structure changes made effective
70%
end 2020
• New Regional Finance Director position filled
• Cost reductions of (21)% in Q2 and (15)% in Q3 through
80%
structured programme of cost containment.
* Constant currency growth rates
CHANGE IN BOARD’S REMUNERATION COMPARED TO OTHER EMPLOYEES
The following table shows the percentage change from 2019 to 2020 for salary, benefits and annual cash incentives for all Directors,
compared to the average percentage change for employees (excluding Directors) of the listed parent company on a FTE basis.
Change in Salary / Fees
2020 vs 2019
Change in Benefits 2
2020 vs 2019
Change in Annual Cash Incentive
2020 vs 2019
Steve Ingham
Kelvin Stagg
Simon Boddie
Patrick De Smedt
Michelle Healy
David Lowden
Sylvia Metayer
Angela Seymour-Jackson
Wider PageGroup Employees1
1. Represents average UK increase.
2. Excludes pensions
(5%)
(5%)
(5%)
(5%)
(5%)
(5%)
(5%)
(5%)
(5%)
(90)%
0%
n/a
n/a
n/a
n/a
n/a
n/a
0%
(100%)
(100%)
n/a
n/a
n/a
n/a
n/a
n/a
(100%)
This shows the contrast of changes of reward elements between 2019 and 2020. The wider PageGroup employees reflects all
employees of Michael Page International Recruitment Limited as at 31 December 2020. Calculations have been derived on a
full-time equivalent (FTE) basis to enable effective comparison.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020
92
WHAT THE EXECUTIVE DIRECTORS CAN EARN IN 2021
The structure of remuneration for 2021 will consist of the
following elements:
Salary – Base salaries were reviewed with reference to the
level of salary increases agreed for the wider UK population
which was 1.5%. Annual salary levels for the CEO will increase
to £639,200 and the CFO to £371,800 effective 1 January
2021. This follows no increases in salary at the same stage in
the previous year.
Benefits – No changes to benefits provided compared
to 2020.
Pensions – As outlined in our Remuneration Policy agreed
in June 2020, pensions will be fixed at the absolute level paid
to Executives in 2019 and paid monthly alongside salaries.
For the CEO this will equate to an annual value of £157,450
and for the CFO £73,260. This approach will apply in 2021
and 2022 with allowances aligned to our UK workforce from
1 January 2023.
ESIP – We are making some changes to the way we will
implement the ESIP structure for 2021, which will continue
to operate fully within the terms of the Remuneration Policy
agreed by shareholders at the 2020 AGM. The way the ESIP
will be implemented is shown in the following diagram:
ESIP 2021 OPERATION
ESIP 2021 - SINGLE PLAN
Assessment
OPPORTUNITY CEO = 375%, CFO = 325%
Delivery
2026
2019
2021
2022
2023
2024
2025
Proposed Measures, Weightings
and Time Period
PBT (30%)
Strategic (15%)
EPS (2019 to 2021)
(25%)
Relative Gross Profit growth
(2019 to 2021) (30%)
40% of award
in cash
60% of award
in deferred
shares
Dividends
Cash
paid
Under the single plan dividend equivalents will accrue
in respect of any shares deferred but not yet released.
Dividend equivalents are paid, in accordance with the rules,
at the time of vesting.
Half of
shares vest
holding period*
Half of
shares vest
holding period*
deferred
deferred
* Holding Period
Vested shares have to be held for two years if the shareholding guidelines
have not been met at point of release (except for sales to meet a resulting
tax liability).
RELATIVE GROSS PROFIT GROWTH
Assessed against comparator group: Current list of companies: SThree, Robert Half, Randstad, Robert Walters,
Adecco, Hays, Manpower
Performance range: Below median = no award. Median = 25% of award through to 100% of award for upper quartile
performance or above.
In the event of material change of one of the companies within the comparator group (e.g., due to M&A activity) the
Committee retains flexibility to adjust the peer group with a stated desire to capture organic growth only.
Measurement in constant currency.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 93
DIRECTORS’ REMUNERATION REPORT
EPS TARGETS – APPROACH AND APPLICATION
We look to set EPS targets at the start of the respective 3-year performance period. Outlined below are all the EPS targets that have
been set by the Committee for the ongoing operation of the ESIP.
ESIP Scheme
EPS Period
Agreed Cumulative EPS Range (p)
Equivalent Annual Growth %
ESIP 2020
ESIP 2021
ESIP 2022
January 2018 - December 2020
88.3p - 106.1p
5.4% to 15.1%
January 2019 - December 2021
109.7p - 132.2p
January 2020 - December 2022
106.6p to 128.6p
6% to 16%
5% to 15%
As disclosed in last year’s Directors’ Remuneration Report, for
the operation of the ESIP for 2022 and beyond (assessment of
EPS beginning on 1 January 2020) the EPS calculation will be
determined on a constant currency basis.
outturn for 2020 and looks at the trajectory of recovery. The
performance range was determined based on assumptions
around future trading performance and having considered the
range of expectations that exist.
We have now set targets for EPS for the period 2021-2023
with a cumulative EPS range of 48p to 72p. These have been
set at a time where the future economic outlook remains
uncertain. We believe that it is important that Executive
Directors are incentivised to grow the business strongly
through recovery, and we believe that the actions taken to date
through the pandemic are appropriate and will enable a strong
recovery. The associated performance range reflects the EPS
We believe the range set above is stretching, would
demonstrate a robust path out of the current pandemic,
and would appropriately incentivise Executives to drive the
business forward.
FEE LEVELS FOR THE CHAIRMAN AND NON-EXECUTIVE DIRECTORS FOR 2021
The average salary increase that will be applied for UK based staff from 1 January 2020 is 1.5%. It was agreed to increase the
Chairman fee and the basic fee for Non-Executives by this level effective 1 January 2021. The Senior Independent Director fee was
increased by £1k from 1 January 2021.
Year ending 31 December 20201 Effective from 1 January 2021
Chairman
Non-Executive basic fee
Additional fees payable
Senior Independent Director
Chair of the Audit Committee
Chair of the Remuneration Committee
£213,800
£55,500
£9,000
£14,000
£14,000
£217,000
£56,300
£10,000
£14,000
£14,000
1 Levels shown for 2020 are before any temporary reduction in fees during Q2 2020. Actual fee levels received by Non-Executive Directors
are disclosed on page 87 in this report.
SHARES AWARDED IN 2020 (AUDITED)
Conditional awards of deferred shares were made in March 2020 in relation to awards made in respect of the 2019 ESIP.
Number of shares
awarded
Face value at date
of award
Vesting
Steve Ingham
Kelvin Stagg
320,951
159,419
£1,068,128
£530,549
Shares vest in three tranches on the first, second and third anniversary of
award, subject to continued employment.
Awards were made on 13 March 2020. The share price used to make awards was £3.328 being the closing share price on 12
March 2020. The Committee was comfortable that the price used to make awards was appropriate, calculated in line with the ESIP
structure and plan rules, and represents delivery of performance already attained and determined by the Executives.
The share price at the start of the year was £5.23 and was £4.47 on 31 December 2020. The low and high share prices during the
year were £2.79 and £5.27 respectively.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 94
EXECUTIVE SHAREHOLDING AND ALIGNMENT TO THE ORGANISATION
Details of all outstanding share awards are provided later in the report.
The table does not include interests in shares which are subject to ongoing Company performance conditions but does include
shares awarded but not yet vested under the ESIP.
Shareholding as percentage of salary
CEO: Steve Ingham
Shareholding as percentage of salary
CFO: Kelvin Stagg
2020
828%
217%
1,045%
2020
359%
187%
546%
2019
778%
185%
963%
2019
255%
162%
417%
2018
550% 91%
641%
2018
111%
79%
190%
0
200% 400% 600% 800% 1,000% 1,200%
0
100% 200% 300% 400% 500% 600%
Ordinary shares
ESIP shares (net)
Shareholding requirement = 200% of salary
This shows shareholding by each Executive Director well in excess of the mandatory shareholding requirement of 200% of salary.
Share price movement leads to a variation in the overall holding by each executive.
Calculated shareholding level if
share price were to fall by 50p
Shareholding as a percentage of
salary at 31 December 2020
(based on share price of £4.47)
Calculated shareholding level
if share price were to increase
by 50p
Steve Ingham
Kelvin Stagg
928%
485%
1045%
546%
1161%
607%
OUTSTANDING SHARE AWARDS
This section sets out the share interests of the Executive Directors as at 31 December 2020 under the Executive Single Incentive
Plan, the 2009 Share Option Scheme and the legacy Long-Term Incentive Plan.
STEVE INGHAM
ESIP
Number of
shares at
1 January
2020
Granted
during the
year
Vested during
the
year
Lapsed
during
the
year
Number of
shares at 31
December
2020
Vesting
Grant Date
15 March 2018
15 March 2018
12 March 2019
12 March 2019
12 March 2019
13 March 2020
13 March 2020
13 March 2020
77,636
77,636
88,369
88,370
88,370
-
-
-
Total
420,381
-
-
-
-
-
106,983
106,984
106,984
320,951
(77,636)1
-
(88,369)2
-
-
-
-
-
(166,005)
-
-
-
-
-
-
-
-
-
-
16 March 2020
77,636
15 March 2021
-
88,370
88,370
106,983
106,984
106,984
575,327
12 March 2020
12 March 2021
14 March 2022
15 March 2021
14 March 2022
13 March 2023
-
1. A sufficient number of shares were sold to cover applicable taxes with the balance of 41,055 shares held
2. A sufficient number of shares were sold to cover applicable taxes with the balance of 46,731 shares held
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 95
DIRECTORS’ REMUNERATION REPORT
LONG TERM INCENTIVE
Grant
date
Number of
shares at
1 January
2020
Granted
during
the
year
Vested
during
the
year
Lapsed
during
the
year
Number of
shares at 31
December
2020
16 March 2017
276,387
(265,332)1
(11,055)
TOTAL
276,387
-
(265,332)
(11,055)
Nil
Nil
Vesting
date
16 March 2020
-
1. A sufficient number of shares were sold to cover applicable taxes with the balance of 140,313 shares held
KELVIN STAGG
ESIP
Number of
shares at
1 January
2020
Granted
during the
year
Grant Date
15 March 2018
40,597
15 March 2018
40,598
12 March 2019
44,088
12 March 2019
44,088
12 March 2019
44,088
13 March 2020
13 March 2020
13 March 2020
-
-
-
-
-
-
-
-
53,139
53,140
53,140
Vested
during
the
year
(40,597)1
-
(44,088)2
-
-
-
-
-
Total
213,459
159,419
(84,685)
Lapsed
during
the
year
Number of
shares at 31
December
2020
Vesting
-
-
-
-
-
-
-
-
-
-
16 March 2020
40,598
15 March 2021
-
44,088
44,088
53,139
53,140
53,140
12 March 2020
12 March 2021
14 March 2022
15 March 2021
14 March 2022
13 March 2023
288,193
-
1.A sufficient number of shares were sold to cover applicable taxes with the balance of 21,468 shares held
2 A sufficient number of shares were sold to cover applicable taxes with the balance of 23,314 shares held
LONG TERM INCENTIVE
Grant
date
Number of
shares at
1 January
2020
Granted
during
the
year
Vested
during
the
year
Lapsed
during
the
year
Number of
shares at 31
December
2020
16 March 2017
140,662
(133,523)1
(7,139)
TOTAL
140,662
-
(133,523)
(7,139)
Nil
Nil
Vesting
date
16 March 2020
-
1. A sufficient number of shares were sold to cover applicable taxes with the balance of 70,609 shares held
SHARE OPTIONS
Details of options granted under The Michael Page 2009 Share Option Scheme that remain outstanding at 31 December 2020 are
as follows:
The Michael Page 2009 Share Option Scheme
Executive
Grant date
Kelvin Stagg
11 March 2011
Kelvin Stagg
12 March 2012
Total
Number of
options at
1 January 2020
Exercised
during
the
year
Lapsed
during the
year
Number of
options at
31 December
2020
30,000
30,000
60,000
-
-
-
-
-
-
30,0001
30,0002
60,000
Exercise
price (p)
Exercise
period
491.0
477.0
-
2014-2021
2015-2022
-
1. At 31 December 2020, 12,052 of the options granted to Kelvin Stagg on 11 March 2011 had vested and were available for exercise
2. At 31 December 2020, all of the options granted to Kelvin Stagg on 12 March 2012 had vested and were available for exercise
Steve Ingham does not hold any options under The Michael Page 2009 Share Option Scheme.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 96
STATEMENT OF DIRECTORS’ SHAREHOLDINGS (AUDITED)
It is the Company’s policy that Executive Directors are required to build and hold a direct beneficial holding in the Company’s
Ordinary shares of an amount equal to two times their base salary. The beneficial interests of the Directors who served during 2020,
and their connected persons, in the Ordinary shares of the Company are shown in the table below. The table does not include
interests in shares which are subject to ongoing Company performance conditions but does include shares awarded but not yet
vested under the ESIP.
Ordinary
shares held
as at 31 Dec
2020
Unvested
Share Award
(ESIP) as at
31 Dec 2020
% of salary
held 1
Shareholding
requirement
Ordinary shares held
as at 31 Dec 2019
Executives
Steve Ingham
1,165,546
575,327
1045%
200%
Kelvin Stagg
294,028
288,193
546%
200%
Non-Executives
Simon Boddie
Patrick De Smedt
Michelle Healy
-
-
-
David Lowden
10,000
Sylvia Metayer
-
Angela Seymour-Jackson
915
Notes:
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
937,447
178,637
-
-
-
10,000
-
915
1. This uses the closing share price on 31 December 2020 of £4.47 per share and includes unvested shares awarded under the ESIP calculated on a post-tax basis.
The highest and lowest share prices during the year were £5.27 and £2.79 respectively
There were no changes in the Directors’ interests between 31 December 2020 and the date of this report.
RELATIVE IMPORTANCE OF SPEND ON PAY
The graph below shows details of the Company’s retained profit after tax, distributions by way of dividend, shares purchased by
the Michael Page Employee Benefit Trust, overall spend on pay to all employees (see Note 4 in the financial statements on page
126), overall spend on Directors’ pay as included in the single figure table on page 87 and the tax paid in the financial year. The
percentage change to the prior year is also shown.
£m
600
500
400
300
200
100
0
-20%
545.9
438.0
2019
2020
-106%
103.4
-5.7
-100%
83.5
0
44%
14.4
10.0
-65%
2.3
6.6
-14%
31.7
37.0
Profit after
tax (£m)
Dividends
paid (£m)
Shares
purchased by
the EBT (£m)
Overall spend
on pay (£m)
Overall spend
on Directors’
pay (£m)
Tax paid
(£m)
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 97
DIRECTORS’ REMUNERATION REPORT
SERVICE CONTRACTS AND LETTERS OF APPOINTMENT
All Executive Directors’ service contracts contain a twelve-
month notice period. The service contracts also contain
restrictive covenants preventing the Executive Directors
from competing with the Group for six months following
the termination of their employment and preventing the
Executive Directors from soliciting key employees, clients and
candidates of the employing company and Group companies
for twelve months following termination of employment. The
Remuneration Committee has the right to exercise mitigation in
the event of termination.
Non-Executive Directors, including the Chairman of the Board,
are engaged under letters of appointment and do not have
service contracts with the Company. They are appointed for a
fixed term of three years, during which period the appointment
may be terminated by either party upon giving one month’s
written notice or in accordance with the provisions of the
Articles of Association of the Company. There are no provisions
on payment for early termination in the letters of appointment.
After the initial three-year term, Directors may be reappointed
for a further term of three years, subject to annual re-election
at each year’s Annual General Meeting.
Where any Director’s letter of appointment was renewed
during the year they were not entitled to vote on their own
appointment. Copies of the service contracts and letters
of appointment are available for inspection during normal
business hours at the Company’s registered office.
Executive Director
Service Contract Date
Unexpired Term
Notice Period
Steve Ingham
Kelvin Stagg
31 December 2010
No specific term
12 months
27 July 2014
No specific term
12 months
Non-Executive Directors
Letter of Appointment/
Reappointment Date
Unexpired Term at 31 December 2020 1
Simon Boddie
Patrick De Smedt
Michelle Healy
David Lowden
Sylvia Metayer
18 July 2018
18 July 2018
2 October 2019
18 July 2018
5 August 2020
Angela Seymour-Jackson
5 August 2020
Ben Stevens
Notes:
23 December 2020
9 months
7 months
21 months
8 months
32 months
33 months
36 months
1. In the case of Non-Executive Directors, appointments are renewed with effect from the date within the month that the original appointment took effect.
STATEMENT OF VOTING AT THE ANNUAL GENERAL MEETING
At the Company’s Annual General Meeting held on 4 June 2020, shareholders approved the existing Remuneration Policy. The table
below shows the results of the binding voting on the Remuneration Policy and the advisory vote on the Directors’ Remuneration
Report put to shareholders at the 2020 Annual General Meeting. Each resolution required a simple majority of the votes cast to be in
favour in order for each of the resolutions to be passed.
Resolutions
AGM
Votes For
%
Votes Against %
Votes Withheld
Remuneration Policy
4 June 2020
250,926,751
90.71
25,689,170
9.29
15,928,893
Directors’ Remuneration Report
4 June 2020
277,840,849
94.97
14,700,676
5.03
3,288
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 98
TOTAL SHAREHOLDER RETURN
The performance graph below shows the movement in the value of £100 invested in the shares of the Company compared to an
investment in the FTSE 250 index and the FTSE Support Services index over the period 31 December 2010 to 31 December 2020.
The graph shows the Total Shareholder Return generated by the movement in the share price and the reinvestment of dividends.
The FTSE 250 index and the FTSE Support Services index have been selected as the Company was a member of each index
throughout the period. The table below shows the total remuneration of the Chief Executive Officer over the same ten-year period.
CEO
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Single remuneration total
£1,647k
£2,723k
£1,318k
£1,494k
£2,074k
£2,089k
£3,660k
£4,340k
£3,771k
£1,171k
Short-term incentives (% of
maximum) (note 1)
Long-term incentives (% of
maximum)
Executive Single Incentive Plan
(% of maximum)
Notes:
n/a
n/a
58%
71%
68%
60%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
60%
55.35% 96.1%
96%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
91%
87.7%
75.4%
16.5%
1. Prior to 2012 the Company operated uncapped incentives which, by definition, did not have the concept of “maximum”. As a result, it is not possible to provide this
information historically. However, following the changes in 2012 it is possible to provide this information for the years 2013, 2014, 2015 and 2016
31 Dec 2010 31 Dec 2011 31 Dec 2012 31 Dec 2013 31 Dec 2014 31 Dec 2015 31 Dec 2016
31 Dec 2017
31 Dec 2018
31 Dec 2019
31 Dec 2020
300
270
240
210
180
150
120
99.61
89.94
64.14
100.0
90
60
123.64
113.42
74.52
262.30
242.82
275.79
231.77
217.19
216.72
199.23
188.41
186.97
184.40
133.47
114.18
107.67
108.53
162.50
155.51
161.50
150.02
94.30
175.27
172.89
101.08
81.52
85.52
PageGroup
FTSE 250
FTSE SS
EXTERNAL DIRECTORSHIPS
No Executive Directors earned any fees from external directorships during the year ending 31 December 2020.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 99
DIRECTORS’ REMUNERATION REPORT
SECTION 4: REMUNERATION FOR
EMPLOYEES BELOW THE BOARD
Our remuneration philosophy is cascaded through the organisation and we focus on rewarding collective achievement and team-
based success. At senior levels we use a combination of shares and cash to achieve this and drive alignment with the business. At
more junior levels variable reward is delivered through cash only.
Overall reward is benchmarked on a regular basis to the respective local market and is linked to skill and experience in role. We offer
a wider range of benefits that evolves over time. This includes Company provided benefits, but also extends to a range of policies to
support work-life balance and wellbeing.
The Company does not formally consult with employees on remuneration matters to consider executive pay or Remuneration Policy
design but does review information on employee satisfaction with reward throughout the organisation, including reviewing results to
reward questions from surveys run throughout employees’ lifecycle.
REWARD ACROSS THE PAGEGROUP BUSINESS
We operate within a broad reward framework across our organisation, designed to enable effective progression of talent and grow
our own pipeline of talent for the future. We focus on how we drive team-based behaviours to create better customer relationships
to support our strategy of organic growth.
Employees typically receive salary and a range of benefits driven by local market norms and practice. Most of our employees also
have access to variable pay schemes linked to the success they help create.
Our regular activities to engage with our staff (see pages 32 to 33) give us valuable insight of our reward offer and areas of reward
that are working and opportunities for change. We discuss our overall approach as a Board and the way that reward may be
expected to change as someone progresses through the organisation.
BASE SALARY
Salaries are set with reference to the skills and experience of the individual and reflect the local market ranges. The
career journey of the fee earning population enables regular pay reviews on achievement of performance-based
targets which will contribute to the success of the team. For others, salaries are usually reviewed annually and
adjusted in consideration of business affordability, individual performance and local market rates of pay.
BENEFITS
We operate across a range of countries where we see very different practices in terms of benefit provision. Our
benefits typically include items such as pension provision, life insurance and medical cover. The levels of contribution
or investment in benefits will be driven by local market factors rather than a single global approach.
VARIABLE PAY
The variable pay of the consultant population broadly takes two approaches. Some work on an individual commission
basis which promotes individual performance that contributes to the success of the wider team. Others participate
in bonus structures which deliver cash awards based on the success of their respective team. Amounts of bonuses
awarded will be influenced by the performance of the team as well as the performance of the individual.
At a leadership level we also offer deferred cash incentives to drive retention of talent, in addition to the bonus
structures available. At senior leadership levels we provide access to share-based incentives, designed to enable
individuals to build up a holding in Company shares and fully align them to the shareholder experience.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 100
COMMITTEE INSIGHT AND FOCUS
The Committee received an overview of the reward structure in place across the organisation during 2020. Subsequent discussion
included the following themes and responses:
Theme
Findings
Linkage of reward with performance
assessment
• All colleagues participate in performance management processes which give clarity over both
what someone is expected to accomplish and how this should be achieved
•
It is achieved through the combination of:
o Goals: expected outputs over the review period
o KPIs: actions and metrics expected in pursuit of the goals
o Behaviours: that should be demonstrated in pursuit of the above
• Specific behaviours are based around defined criteria linked to seniority of role
• Overall attainment is directly linked to awards under variable plans and any future salary
adjustments.
Provision of benefits across a global
organisation
• Regular assessments are made of market competitiveness of benefits within our key markets,
using external benchmark data.
• Benefits do vary between countries reflecting different market norms.
• Any proposed changes to benefits offered is done through engagement with the regional
HR and finance leaders, with proposals reviewed centrally depending on the level of cost
investment.
Way that awards under variable pay plans
are governed through the business
• Funding of bonus pools is managed with finance teams with central oversight.
• Country leaders make proposals on allocation of bonuses which are reviewed by their
respective managers
• All proposals are collated centrally to review levels of spend and affordability
Alignment to culture and linkage to diversity
and inclusion
• There is a demonstrable cascade of key objectives through the organisation. As an example, all
Managing Directors have designated targets within variable incentive plans requiring progress
on key diversity and inclusion metrics.
Ways that the organisation gains insight into
employee satisfaction with reward
• Questions are included within the “Have Your Say” engagement survey and the employee
lifecycle surveys linked to pay and benefits and trends tracked over time.
• Discussion of reward can occur within many of the existing forums within the business (e.g.,
Page networks such as Women@page, Unity@page etc.)
• Pulse surveys and use of internal technology (e.g., Yammer) monitors responses to key
questions and tracks changes
• Engagement sessions with staff members, including those attended by Non-Executive
Directors.
• Feedback from employees who choose to leave us (gained through exit surveys)
CEO PAY RATIO
This is the second year that we have disclosed the ratio of CEO remuneration to that of our employees in the UK.
CEO Pay Ratio
Calculation Method
25th Percentile
Median
75th Percentile
2020
2019
Option A
Option A
43:1
160:1
27:1
105:1
17:1
64:1
We believe that the median ratio is consistent with the Company’s wider policies on employee reward, pay and progression.
The significant reduction in the single figure and CEO pay ratio from 2019 to 2020 reflects the higher weighting towards variable
reward for Executive Directors compared to other employees across the organisation and is broken down in more detail on the
following page.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 101
DIRECTORS’ REMUNERATION REPORT
COMMENTARY ON THE RATIO
There has been a significant fall in the CEO pay ratio between 2019 and 2020. This is primarily linked to the change in the CEO
single figure as explained below
Change in CEO Single Figure 2019 to 2020 (£k)
4,500
4,000
3,500
3,000
2,500
£k
2,000
1,500
1,000
500
0
-334
-894
-213
-30
4,105
-1,391
-72
1,171
Single Figure
disclosed 2019
Restated
Single Figure
Exclusion of
Legacy LTIP
Reduction
in benefits
Reduction
in salary
Reduction in
value of ESIP
Exclusion of
dividends
Single Figure
2020
Reward Change Commentary
Restated Single
Figure
Exclusion of the
Legacy LTIP
Salary
Benefits
The single figure value in the 2019 Annual Report used an assumption for the share price to determine the final value of the
legacy long-term LTIP. This value has been restated (see page 87) reflecting the lower actual share price at the time of vest
In addition, the 2019 single figure included the value of the legacy award that vested in March 2020 (as well as the value of shares to
be awarded under the 2019 ESIP). This is a consequence of the way that the regulations require these values to be disclosed within
the single figure table and reflected the end of the transition from former reward arrangements to the ESIP structure.
Reflects voluntary waiver of 20% of salary during Q2 of 2020.
The benefits figure for the CEO included additional medical payments, designed to facilitate a return to work after a skiing
accident.
ESIP Outcome
Variable compensation outcomes: after discretion exercised by the Committee the award under the ESIP for 2020 was 16.5% of
maximum.
Dividends
Dividends included in the 2019 single figure related to shares awarded under the legacy LTIP in place prior to the introduction of
the ESIP in 2017.
APPROACH AND CALCULATION
We have elected to use Option A to calculate the ratio as we believe this gives the most accurate insight into employee pay and benefits
and closest comparison to the CEO single figure value. The calculation is effective 31 December 2020 and calculations for employees
have been produced on a full-time equivalent basis consistent with the single figure total. The reward structure for our CEO is weighted
far more towards variable reward than most of our employees within the UK. Therefore, we expect future changes to this ratio to be
linked to changes in variable award levels under the ESIP and future share price movement.
We also recognise that the earnings profile across our UK employees and that both the mean and median can be useful measures of
dispersion. We have provided two supplementary ratios for illustration as follows:
Scenario
Resulting CEO Single Figure
Resulting CEO Pay to Median Ratio
CEO “On-Target” Remuneration compared to 2020 UK Median
FTE Reward
£2,004k
CEO single figure compared to UK mean FTE earnings
£1,171k (as disclosed)
The employee figures for our UK workforce to calculate the ratios are as follows:
51:1
21:1
Scenario
Total pay and benefits – 2020
Change on 2019
Total salary
Change on 2019
25th Percentile
£27,431
7.1%
£26,000
6.1%
Median
£43,245
10.6%
£35,000
14.4%
75th Percentile
£68,694
6.9%
£50,000
12.9%
These values are calculated on a full-time equivalent basis as required under the regulations, based on our UK workforce as at 31 December 2020.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 102
SECTION 5: OUR REMUNERATION POLICY
Our Remuneration Policy was approved by Shareholders at the 2020 AGM held on 4 June 2020. The Policy is designed to enable
us to attract, retain and fairly reward high calibre Executive Directors and drive meaningful and lasting alignment between achieved
performance and reward outcomes.
Our full remuneration policy is set out in the Directors’ Remuneration Report 2019 and can be found on our website www.page.
com. Central to the Policy is the use of the Executive Single Incentive Plan (ESIP) as an incentive structure. The ESIP provides a
structure that:
•
•
•
•
firmly aligns pay with performance;
recognises the cyclical nature of the industry;
reduces undue volatility to drive performance and retention of Executives throughout all stages of the economic cycle; and
ensures that Executives build up meaningful shareholdings to align with shareholders.
PageGroup Strategic Priorities
Current ESIP Performance Measures*
Organic, high margin and diversified growth
Annual PBT Performance 3-year EPS growth
Efficiently scalable and highly flexible to react to market
conditions
Gross Profit growth relative to defined peer group
Nurture and develop people
Innovation
*as used for operation of ESIP 2020
Strategic Measures
Strategic Measures
The ESIP structure rewards Executives for the appropriate delivery of our strategy and value to shareholders. The Committee
believes this model is an appropriate fit for the PageGroup business – ultimately our key responsibility in considering reward. The
ESIP recognises the cyclical nature of the recruitment sector, and as a way of motivating leaders, drives superior business outcomes
and acts as a retention mechanism through the economic cycle.
Changes made to the operation of the ESIP when the Policy was approved in 2020 included:
•
•
•
•
prospective disclosure of all long-term targets;
extension of vesting period;
increase minimum portion of assessment linked to long-term metrics; and
simplification and consolidation of performance measures.
The ESIP is motivational, trusted by our Executives and has subsequently been cascaded to lower levels of leaders within the
business to drive alignment and consistency in the way we operate reward.
It allows us to implement a pay for performance philosophy without undue volatility, drives higher levels of shareholding in the
business and ensures alignment of Executives with the experience of shareholders. The phased nature of share vesting further
supports alignment and management of reward volatility.
Our Remuneration Policy aligns with Provision 40 of the UK Corporate Governance Code 2018 as explained below:
Clarity
We actively engage with
shareholders and demonstrate how
their views and perspectives are
considered in the development of
our Policy.
Simplicity
We look to describe the structure of reward clearly to
both participants and shareholders through effective
disclosures. Target documents are issued to Executives
each year to ensure clear understanding of the way
reward will be delivered and assessed.
Alignment to culture
The Policy aligns to our business model
and reflects alignment to our strategy.
Measures used to determine awards link
to our Strategic Priorities.
Predictability
Examples of the range of outcomes
under the Policy are shown within
the scenario graphs.
This demonstrates the way that
different performance levels change
reward outcomes for individuals and
the associated impact of changes in
the Company share price.
Proportionality
A significant proportion of the total reward opportunity is
performance driven, with clear linkage between business
metrics and variable reward outcomes.
Metrics for variable awards are key KPI measures
for the business and align to delivery of strategy and
performance against goals set.
A significant proportion of variable awards are delivered
in shares and Executives are required to develop and
maintain a material shareholding in the business to fully
align to the shareholder experience.
Risk
The Committee retains ultimate discretion
to vary outcomes from formulaic results if
they do not judge this to accurately reflect
underlying business performance.
Malus and Clawback provisions apply to
all awards and we operate post-cessation
shareholding requirements to further
align Executives to long-term business
performance.
A summary of our Policy is provided on the following pages.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 103
DIRECTORS’ REMUNERATION REPORT
EXECUTIVE DIRECTORS’ POLICY
Base Salary
Benefits
Pension
Incentives
Shareholding
Purpose
Attract, retain and
reward high calibre
Executive Directors.
Operation
Salary levels (and
subsequent increases)
are set after reviewing
various factors including
individual and Company
performance, role and
responsibility, internal
relativities such as the
increases awarded
to other employees
and prevailing market
levels for Executive
Directors at companies
of comparable status
and market value,
considering the total
remuneration package.
Salaries are normally
reviewed annually.
Salary is paid monthly,
and increases are
generally effective from
1 January.
Attract, retain
and reward high
calibre Executive
Directors. Provision
of opportunities for
connecting with clients,
investors and staff to
facilitate growth strategy.
Competitive benefits
including car allowance
or company car
(including running
costs), private medical
insurance for the
individual and family,
permanent health
insurance and four times
salary life assurance.
Provision of relocation
assistance and any
associated costs or
benefits (including but
not limited to housing
benefits, personal tax
advice and school fees)
upon appointment if/
when applicable. The
Company may also
provide tax equalisation
arrangements.
Attract, retain
and fairly reward
high calibre
Executive
Directors.
Rewards both short and
long-term performance. Aligns
interests of Executive Directors
with shareholders.
To align Executives to
Company performance
through meaningful
levels of mandatory
shareholding. Post-
cessation Policy
to align Executives
beyond termination of
employment.
Executive
Directors
may receive
a defined
contribution
pension
benefit or cash
supplement.
Awards are paid in cash
(40%) and deferred shares
(60%) vesting at defined future
dates subject to continued
employment.
Shareholding requirements
are operated to align
Executive Directors’
interests with those of
shareholders.
The current requirement is
200% of base salary.
A new post-cessation
shareholding policy will
require leavers to hold
2x salary for the first
12 months post cessation
and 1x salary for the
subsequent 12 months.
The plan consists of metrics
linked to annual performance
only, and other metrics that
consider performance over a
3-year period. At least 50%
of any award will depend on
assessment against longer
term metrics.
Performance will be measured
against a balanced scorecard,
to support the Company’s
strategy. Performance targets
will be a mix of financial and
strategic targets which may
comprise, but are not limited to,
the following: PBT; key strategic
projects; people development;
cost management; relative
Gross Profit vs a comparator
group; and EPS. A maximum
of 25% vesting will apply for
threshold performance.
A post-vesting holding period
applies. Directors who have
not reached the shareholding
requirement of 200% of base
salary will be required to hold
vested shares from each
tranche of the ESIP for a further
two years post-vesting, except
for sales for the purposes of
meeting tax liabilities on vesting
and exercise.
A minimum of 80% of the
possible award will normally be
linked to financial metrics.
Dividend equivalents accrue
during the vesting period
but are only released to the
extent awards vest. Malus and
clawback provisions will apply
to the total award, including
cash and deferred portions, for
misstatement of performance,
substantial failure of risk control,
and gross misconduct.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 104
EXECUTIVE DIRECTORS’ POLICY TABLE (CONTINUED)
Base Salary
Benefits
Pension
Incentives
Competitive benefits
in line with market
practice.
Maximum Salaries will not normally
increase by more than RPI +5%
except increases in excess of
this may be awarded in the
case of new Executive Directors
where it is appropriate to offer
a below market salary initially
on appointment and a series
of staged increases, subject to
performance and experience
in role, to bring to a market
competitive salary. Aim for
market competitive salaries
New appointments at the
Executive Director level will
receive a cash allowance
in line with the wider UK
workforce.
Pension contribution levels
for incumbent Executive
Directors will be frozen at
the level received in 2019
through to the end of 2022
and then replaced to align
to the prevailing rate of the
wider UK workforce from
1 January 2023.
Maximum award for
CEO = 375% of salary.
Maximum award for
CFO = 325% of salary.
NON-EXECUTIVE DIRECTORS’ POLICY
The Board Chairman and Non-Executive Directors receive a fee for their services and do not receive any other benefits from the
Group, nor do they participate in any of the bonus or share schemes. The fees recognise the responsibility of the role and the
time commitments required and are not performance related or pensionable. They are paid monthly in cash and there are no
other benefits.
Non-Executive Directors, including the Chairman of the Board, are engaged under letters of appointment and do not have service
contracts with the Company. They are appointed for a fixed term of three years, during which period the appointment may be
terminated by either party upon one month’s written notice or in accordance with the Articles of Association of the Company.
There are no provisions on payment for early termination in the letters of appointment. After the initial three-year term, they may
be reappointed for a further term of three years, subject to annual re-election at Annual General Meetings.
Element
Purpose and Link to Strategy Operation
Maximum Opportunity
Fees
Attract, retain and fairly reward
high calibre individuals.
The maximum aggregate
fees for Directors allowed
by the Company’s Articles
of Association is £600,000.
Current fee levels are set
out in the Directors’ Annual
Remuneration Report.
Reviewed by the Board after recommendation by
the Chairman and Chief Executive Officer (and
by the Committee in the case of the Chairman)
considering individual responsibilities, such as
Committee Chairmanship, time commitment,
general employee pay increases, and prevailing
market levels at companies of comparable status
and market value. Fee increases are normally
reviewed annually and are generally effective from
1 January.
Non-Executive Directors also receive
reimbursement of reasonable expenses incurred
in connection with Company business and the
Company may settle any tax incurred in relation
to these.
The Directors’ Remuneration Report has been approved and signed on behalf of the Board of Directors.
Angela Seymour-Jackson
Chair of the Remuneration Committee
2 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 105
DIRECTORS’ REPORT
Kaye Maguire,
General Counsel &
Company Secretary
Likely future developments .............................................. 2
The Directors present their Report together with the consolidated
financial statements for the year ended 31 December 2020.
Certain information that fulfils the requirements of the Directors’
Report can be found elsewhere in this document as noted in
the table opposite. This information is incorporated into this
Directors’ Report by reference. Pages 68 to 80, 105 to 107 and
146 to 149 also comprise the Directors’ Report for the year
ended 31 December 2020.
DIRECTORS
There have been no changes to the Board in the year under
review. The Directors who served throughout the year were
David Lowden, Simon Boddie, Patrick De Smedt, Steve
Ingham, Michelle Healy, Kelvin Stagg, Sylvia Metayer and Angela
Seymour-Jackson. Ben Stevens was appointed to the Board on
1 January 2021.
Policy on disability ...................................................105-106
RESULTS AND DIVIDENDS
Employee engagement and stakeholder
consideration ............................................ 27-38 and 51-53
Greenhouse gas emissions and energy consumption . 23-24
Directors’ interests ...................................................... 94-96
Share capital and acquisition of own shares ................... 105
Directors’ disclosure of information to the
auditor in respect of the audit ......................................... 107
Directors’ Responsibility Statement ................................ 107
Going concern ................................................................. 49
Viability Statement ............................................................ 50
Appointment and replacement of Directors ..................... 71
Articles of Association .............................................147-149
Powers of Directors .................................................148-149
Share capital and shareholder rights
– Restriction on transfer of shares ............................... 148
– Rights attaching to shares ........................................ 147
– Restrictions on voting ............................................... 147
– Details of employee share schemes ..................138-140
Subsidiary and associated undertakings
and branches ..........................................................131-135
The results for the year are set out in the Consolidated Income
Statement on page 113. An analysis of revenue, profit and net
assets by region is shown in Note 2 on pages 123 to 124.
Following the difficult trading conditions across the Group
as a result of the global pandemic, the proposed 2019 Final
dividend of £30.2m announced with the Group’s preliminary
results announcement was subsequently withdrawn. In light of
the ongoing level of uncertainly that has been generated by the
pandemic, the Board has taken the decision to suspend the
Company’s dividend policy. It is the intention of the Board to
return to making shareholder returns when conditions improve.
SHARE CAPITAL
As at 31 December 2020 the Company’s issued capital
comprised a single class of 328,618,744 Ordinary shares
of 1p each, totalling £3,286,187.44. At the Annual General
Meeting held on 4 June 2020 the shareholders authorised the
Company to purchase up to a maximum of 10% of the issued
share capital in the market. No shares were repurchased during
the year. Shareholders also authorised the Directors to allot
shares up to an aggregate nominal value of £1,095,395.91.
Further resolutions in respect of these matters will be put to
shareholders at the forthcoming Annual General Meeting.
During the year 15,000 shares were issued to satisfy share
options exercised. The Company reviews the award of shares
made under the various employee and executive share plans
in terms of their effect on dilution limits and complies with the
dilution limits recommended by The Investment Association.
STAKEHOLDERS AND EMPLOYMENT POLICY AND
EMPLOYEE INVOLVEMENT
Pages 51 to 53 of the strategic report and the pages to which
it refers, comprises the Company’s section 172(1) statement
together with the statements as to how the Directors have
engaged with employees and had regard to their interests and
how the Directors have had regard to the Company’s business
relationships with customers, suppliers and other external
stakeholders.
The Group continues to give full and fair consideration to
applications for employment made by disabled persons, having
regard to their respective aptitudes and abilities. The Group’s
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 106
employment policy includes the continued employment
of those who may become disabled during their employment,
and the provision of training and career development
and promotion.
The Directors have also engaged with employees and taken
their interests into account in respect of decision making.
The Group is committed to employee involvement throughout
the business. Employees are kept well informed of the
performance and strategy of the Group through personal
video briefings, regular online interactive briefings, Yammer
(the Group’s internal social collaboration site), emails and other
communications from the Chief Executive Officer and members
of the Executive Board. Further details of employment policies
and employee involvement can be found in the Strategic
Report on pages 27 to 38.
DIRECTORS’ INDEMNITIES
The Company purchased and maintained Directors’ and
Officers’ Liability Insurance throughout the period under review,
which gives appropriate cover for legal actions brought against
the Directors. The Company granted separate indemnities to
the Directors to cover liabilities arising from third parties. The
extent of the indemnities provided is as permitted under law.
FINANCIAL INSTRUMENTS AND FINANCIAL RISK
MANAGEMENT
Details of the Group’s use of financial instruments, including
financial risk management objectives and policies of the Group,
and exposure of the Group to certain financial risks can be
found in Note 21 on pages 140 to 144.
SIGNIFICANT AGREEMENTS CONTAINING
CHANGE OF CONTROL PROVISIONS
The Company has an invoice discounting facility that
terminates on a change of control, with prepaid amounts
being repayable.
Directors’ and employees’ contracts do not normally provide
for payment for loss of office or employment as a result of a
change of control. However, the Company operates several
share and share option schemes for the benefit of its Executive
Directors and employees, the rules of which contain provisions
which may cause options and share awards granted to vest on
a change of control.
POLITICAL CONTRIBUTIONS
No political contributions were made during the year. The
Company has a policy of not making political donations to
political organisations or independent election candidates
anywhere in the world as defined by the Political Parties,
Election and Referendums Act 2000.
POST BALANCE SHEET EVENTS
There have been no significant post balance sheet events since
31 December 2020.
LISTING RULE 9.8.4
There is no information required to be disclosed under Listing
Rule 9.8.4., save that for the purposes of Listing Rule 9.8.4(5)
the Directors waived emoluments from the Company as further
described in the Directors’ Remuneration Report.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held on
3 June 2021.The notice of meeting will be made available
on the Company’s website www.page.com and posted
separately to shareholders that have requested this.
By order of the Board
Kaye Maguire
General Counsel & Company Secretary
2 March 2021
SUBSTANTIAL SHAREHOLDERS
At 31 December 2020 the Company had been notified, in accordance with the FCA Disclosure Guidance and Transparency Rules,
of the undermentioned noted interests in its Ordinary share capital. The percentage of voting rights shown below are as at the date
of notification.
Shareholder
Liontrust Investment Partners LLP
The Capital Group Companies, Inc
Heronbridge Investment Management LLP
Franklin Templeton Institutional LLC
Tameside MBC re Greater Manchester Pension Fund
No. of Ordinary shares
% of voting rights
33,299,147
16,455,148
16,303,888
16,104,930
9,940,870
10.13%
5.01%
4.96%
4.93%
3.03%
The following notifications were received during the period 1 January 2021 to 2 March 2021:
Shareholder
No. of Ordinary shares
% of voting rights
Liontrust Investment Partners LLP
36,137,014
11.00%
Since the date of disclosure, the above shareholdings may have changed.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 107
DIRECTORS’ REPORT
DIRECTORS’ STATEMENTS OF RESPONSIBILITY
The Directors are responsible for preparing the Annual Report
and the Group financial statements in accordance with
applicable law and regulations. Detailed below are statements
made by the Directors in relation to their responsibilities,
disclosure of information to the Company’s auditor and
going concern.
and enable them to ensure that the Company and the Group
financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Group
and parent company and Group and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Report that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website.
2. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors confirm, to the best of their knowledge:
•
•
that the consolidated financial statements, prepared in
accordance with IFRSs in conformity with the Companies
Act 2006 and IFRSs adopted pursuant to Regulation(EC) No
1606/2002 as it applies in the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the parent company and undertakings included in
the consolidation taken as a whole; and
that the Annual Report, including the Strategic Report,
includes a fair review of the development and performance
of the business and the position of the Company and
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
3. DISCLOSURE OF INFORMATION TO THE
AUDITOR
Having made the requisite enquiries, so far as the Directors are
aware as at the date of this Statement, there is no relevant audit
information (as defined by section 418(3) of the Companies
Act 2006) of which the Company’s auditor is unaware and the
Directors have taken all the steps they ought to have taken
as a Director to make themselves aware of any relevant audit
information and to establish that the Company’s auditor is aware
of that information.
Kelvin Stagg
Chief Financial Officer
2 March 2021
1. FINANCIAL STATEMENTS AND ACCOUNTING
RECORDS
Company law of England and Wales requires the Directors to
prepare financial statements for each financial year. Under that
law the Directors have elected to prepare the Group and parent
company financial statements in accordance with International
Financial Reporting Standards (‘IFRSs’) in conformity with the
Companies Act 2006. Under company law the Directors must
not approve the Group financial statements unless they are
satisfied that they give a true and fair view of the state of affairs
of the Group and the Company and of the profit or loss of the
Group and the Company for that period.
Under the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules, Group financial statements are required
to be prepared in accordance with IFRSs adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European
Union.
In preparing these financial statements the Directors are
required to:
•
select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and then apply them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
•
•
•
•
•
present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
provide additional disclosures when compliance with the
specific requirements in IFRSs is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the Group’s financial position and
financial performance;
in respect of the Group financial statements, state whether
IFRSs in conformity with the Companies Act 2006 and
IFRSs adopted pursuant to Regulation(EC) No 1606/2002
as it applies in the European Union have been followed,
subject to any material departures disclosed and explained
in the financial statements;
in respect of the parent company financial statements, state
whether IFRSs in conformity with the Companies Act 2006,
have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis
unless it is appropriate to presume that the Company and/
or the Group will not continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
and Group’s transactions and disclose with reasonable accuracy
at any time the financial position of the Company and the Group
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 108
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PAGEGROUP PLC
OPINION
In our opinion:
• PageGroup plc’s Group financial statements and Parent company financial statements (the “financial statements”) give a true
and fair view of the state of the Group’s and of the Parent company’s affairs as at 31 December 2020 and of the Group’s loss
for the year then ended;
•
•
the Group financial statements have been properly prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant
to Regulation (EC) No.1606/2002 as it applies in the European Union;
the Parent company financial statements have been properly prepared in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006 as applied in accordance with section 408 of the Companies
Act 2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of PageGroup plc (the ‘Parent company’) and its subsidiaries (the ‘Group’) for the year
ended 31 December 2020 which comprise:
Group
Parent company
Consolidated income statement for the year ended 31 December 2020
Consolidated statement of comprehensive income for the year then ended
Consolidated balance sheet as at 31 December 2020
Balance sheet as at 31 December 2020
Consolidated statement of changes in equity for the year then ended
Statement of changes in equity for the year then ended
Consolidated statement of cash flows for the year then ended
Statement of cash flows for the year then ended
Related notes 1 to 24 to the financial statements, including a summary of
significant accounting policies
Related notes 1 to 24 to the financial statements including a
summary of significant accounting policies
The financial reporting framework that has been applied in
their preparation is applicable law and International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 and, as regards to the Group financial
statements, International Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union and as regards the Parent
company financial statements, as applied in accordance with
section 408 of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
Group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group
and Parent company’s ability to continue to adopt the going
concern basis of accounting included:
• We confirmed our understanding of management’s
going concern assessment process, performed our own
related risk assessment, and engaged with management
early to ensure all key factors were considered in their
assessment.
• We obtained management’s going concern assessment,
including the cash forecast for the going concern period
to 31 March 2022 (the review period), being at least 12
months from the date of approval of the Annual Report.
The Group has modelled a Base Case scenario and
a Downside case designed to assess the impact of a
severe but plausible scenario. We assessed whether the
Downside assumptions reflected sufficiently the severity of
likely COVID-19 restrictions and impact on trading.
• We tested the key assumptions in the forecasts by
reference to historical trends, independent sector
forecasts and other information where available, taking
into account the impact of COVID-19. We tested the
methodology and calculations employed by the model
to determine if they were appropriate to make the
assessment for the Group.
• We considered the mitigating factors included in the
cash forecasts that are within control of the Group. This
included review of the Company’s non-operating cash
outflows and evaluating the Company’s ability to control
these outflows as mitigating actions if required.
• We also verified the existence and availability of the BBVA
Revolving Credit Facility, associated terms and confirmed
all covenants are waived to maturity.
• We reviewed the Group’s going concern disclosures
included in the Annual Report in order to assess that the
disclosures were appropriate and in conformity with the
reporting standards and FRC guidance.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and Parent company’s ability to continue as a going
concern for the review period to 31 March 2022. In relation to
the Group and Parent company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 109
statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of
accounting.
Revenue
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future events or
conditions can be predicted, this statement is not a guarantee
as to the Group’s or Parent company’s ability to continue as a
going concern.
OVERVIEW OF OUR AUDIT APPROACH
Audit scope
• We performed an audit of the complete
financial information of 6 components and audit
procedures on specific balances for a further 5
components.
• The components where we performed full or
specific audit procedures accounted for 85% of
Profit before tax, 82% of Revenue and 76% of
Total assets.
Profit before tax
Total assets
Full scope
components
Specific scope
components
Total
Full scope
components
Specific scope
components
Total
Full scope
components
Specific scope
components
2020
58%
2019
59%
24%
23%
82%
99%
82%
64%
(14%)
21%
85%
59%
85%
54%
17%
18%
Total
76%
72%
Key audit matters
• Revenue recognition for permanent and
temporary placements
*Significant change in the percentage contribution from prior year is due to the mix
of profit and loss between the components due to COVID-19
Materiality
• Overall Group materiality of £5m which
represents 5% of 2020 normalised profit
before tax. We used professional judgement
to determine materiality given the impact of
COVID-19 on the Group’s results.
AN OVERVIEW OF THE SCOPE OF THE
GROUP AUDIT
TAILORING THE SCOPE
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine our
audit scope for each component within the Group. Taken
together, this enables us to form an opinion on the consolidated
financial statements. We take into account size, risk profile,
the organisation of the Group and effectiveness of group-wide
controls, changes in the business environment and other factors
such as recent Internal audit results when assessing the level of
work to be performed at each component.
In assessing the risk of material misstatement to the Group
financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial
statements, of the 37 reporting components of the Group, we
selected 11 components covering entities within the United
Kingdom, France, the United States, Germany, China, Hong
Kong, Australia, Italy, Spain, Netherlands and Belgium which
represent the principal business units within the Group.
Of the 11 components selected, we performed an audit of the
complete financial information of 6 components (“full scope
components”) which were selected based on their size or risk
characteristics. For the remaining 5 components (“specific
scope components”), we performed audit procedures on
specific accounts within that component that we considered
had the potential for the greatest impact on the significant
accounts in the financial statements either because of the size
of these accounts or their risk profile. The audit scope of these
components may not have included testing of all significant
accounts of the component but will have contributed to the
coverage of significant accounts tested for the Group.
The reporting components where we performed audit
procedures accounted for:
Of the remaining 26 components that together represent 18% of
the Group’s revenue, none are individually greater than 3% of the
Group’s revenue. For these components, we performed other
procedures, including analytical review procedures on a country-
by-country basis, obtaining an understanding of the Group-wide
entity level controls over all components and assessing the
results of the Internal Audit reviews to identify any potential risks
of material misstatement to the Group financial statements.
We have also verified bank reconciliations to test cash balances,
performed data analytics to test the correlation between
revenue, accounts receivable and cash and revenue cut-off
procedures around year-end at some of the larger locations
within these remaining 26 components.
INVOLVEMENT WITH COMPONENT TEAMS
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at
each of the components by us, as the primary audit engagement
team, or by component auditors from other EY global network
firms operating under our instruction. For the six full scope
and five specific scope components, audit procedures were
performed by component audit teams. Procedures on the
Group’s Head Office were performed directly by the primary
audit team. For all full and specific scope components, where
the work was performed by component auditors, we determined
the appropriate level of Group team involvement as described
below to enable us to determine that sufficient audit evidence
had been obtained as a basis for our opinion on the Group as
a whole.
IMPACT OF COVID-19 PANDEMIC
The Group audit team intended to complete site visits to the UK
Shared Service Centre (SSC) which accounts for the UK and
US businesses, Germany, France and the EMEA SSC based in
Spain. The planned site visits had to be adjusted and replaced
by virtual meetings due to the travel restrictions imposed by the
COVID-19 outbreak.
The virtual meetings involved discussing the audit approach with
the component teams and any issues arising from their work,
reviewing key audit working papers on risk areas. The Senior
Statutory Auditor and Group audit senior manager attended the
virtual audit closing meeting for the UK and the US components
with the local management. The Group audit team led video
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 110
conference calls with all the component teams to discuss key
audit procedures over significant risks and key judgements,
with the Senior Statutory Auditor leading 9 of the 11 calls.
The independent partner had calls with 7 of the 11 component
Audit Partners. The Group audit team led 3 regional audit
closing meetings held via video conference with regional
management and the Group CFO, at which key areas of local
judgement and audit findings were discussed.
For all components, the year-end review of relevant audit work
papers was facilitated by the EY electronic audit file platform,
screen sharing or the provision of copies of work papers direct
to the Group audit team.
The Group audit team interacted regularly with the component
teams where appropriate during various stages of the audit,
reviewed key working papers and were responsible for the
scope and direction of the audit process. This, together with
the additional procedures performed at Group level, gave us
appropriate evidence for our opinion on the Group financial
statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit
of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
REVENUE RECOGNITION FOR PERMANENT AND TEMPORARY PLACEMENTS
Refer to the Audit Committee Report (page 78); Accounting policies (page 119); and Note 2 of the Consolidated Financial Statements (page 123).
Key observations
communicated to the
Audit Committee
We concluded that
revenue recognised
for permanent and
temporary placements
is correctly recorded
in accordance with
the Group’s revenue
recognition criteria
and IFRS, and that the
provision for expected
revenue reversals was
appropriate.
The Risk
Our response to the risk
The Group has reported permanent
placement revenue of £441.5million
(2019: £649.9million) and temporary
placement revenue of £863.3million
(2019: £1,004million).
For permanent placements there is
a risk around the timing of revenue
recognition as revenue is recognised
when customer and candidate
agreement is achieved, which may be
several months in advance of the start
of employment. Consequently, there is
a risk that:
• recognition occurs before revenue
recognition criteria have been met;
• period end cut-off is performed
incorrectly; or
• management judgement is incorrectly
applied in estimating the level of
provision required for potential
revenue reversals when placements
are not taken up as agreed.
• Temporary placement revenue is
recognised when the customer
has approved the timesheet.
Consequently, there is a risk that:
• revenue is recognised before an
approved timesheet has been
submitted; or
• that period end cut-off is performed
incorrectly.
For both permanent and temporary
placements we have identified the
risk of management override by
manipulation of revenue through
management initiated or top-side
journals.
We performed the following full and specific scope audit procedures
over this risk area at 11 components, which covered 82% of the
revenue balance:
• For permanent and temporary revenue streams, we identified
and assessed the design of key controls to validate that revenue
recognition was appropriate and applied in accordance with the
Group’s accounting policies.
• For all 11 components, we used data analytics covering all revenue
transactions in the year to test the correlation between revenue,
accounts receivable and cash.
• Performed period-end cut off testing for a sample of revenue
transactions to check all revenue recognition criteria for the permanent
and temporary placements had been met and that revenue had been
recognised in the correct period.
• Compared the level of permanent placement revenue reversals over
the last 12 months, which occur as a result of non-completion of
contractual placements, to the provision recorded against accrued
income and trade receivables to determine if the assumptions used
to calculate the provision were appropriate. We also re-performed the
provision calculation to confirm its accuracy.
• Performed testing of cash collections made post year-end for a sample
of balances to validate the existence of accrued revenue and trade
receivable balances. For those transactions not collected in cash we
verified documents to check all revenue recognition criteria had been
met.
• To address the risk of management override, we performed journal
entry testing over revenue, focusing on management initiated entries
and top-side adjustments specifically around year end.
For all other components which represent 18% of the revenue balance:
• For three components representing greater than 2% each of the
Group’s revenue we used data analytics to test the correlation between
revenue, accounts receivable and cash; performed period-end cut off
testing for a sample of revenue transactions to check that all revenue
recognition criteria for the permanent and temporary placements had
been met; and that revenue had been recognised in the correct period.
• We performed audit procedures centrally on a country-by-country
basis to address the risk of an undetected material error occurring in
all other components representing 18% of the Group’s revenue. These
comprised analytical review of revenue and gross profit, and ratio
analysis of key performance indicators including revenue and gross
profit per fee earner.
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 111
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually
or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements.
Materiality provides a basis for determining the nature and extent
of our audit procedures.
We determined materiality for the Group to be £5 million (2019:
£7.1 million), representing 5% of 2020 normalised profit before
tax (2019 – 5% of Profit Before Tax). This approach is a change
from the prior year to reflect the volatility in the results of the
Group arising from the impact of COVID-19. Normalised profit
before tax for 2020 was set at 2016 profit before tax of £100m
due to similar levels of revenue and gross profit during the year.
We determined materiality for the Parent company to be
£6.7 million (2019: £5.7 million), which is 0.5% of total assets
(2019: 0.5% of total assets). We believe that total assets is an
appropriate basis to determine materiality given the nature of
the Parent company as the holding company of the Group. The
materiality was capped at the Group allocated materiality of £0.8
million (2019: 1.1 million).
Performance materiality
The application of materiality at the individual account or balance
level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment, our
judgement was that performance materiality was 75% (2019:
75%) of our planning materiality, namely £3.8m (2019: £5.1m).
We have set performance materiality at this percentage due to
lower likelihood of misstatements.
Audit work at component locations for the purpose of obtaining
audit coverage over significant financial statement accounts
is undertaken based on a percentage of total performance
materiality. The performance materiality set for each component
is based on the relative scale and risk of the component
to the Group as a whole and our assessment of the risk of
misstatement at that component. In the current year, the range
of performance materiality allocated to components was £0.8m
to £2.3m (2019: £1.1m to £2.9m).
Reporting threshold
An amount below which identified misstatements are considered
as being clearly trivial.
We agreed with the Audit Committee that we would report to
them all uncorrected audit differences in excess of £0.25m
(2019: £0.36m), which is set at 5% of planning materiality,
as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming our
opinion.
OTHER INFORMATION
The other information comprises the information included in the
Annual Report and Accounts set out on pages 1 to 149 other
than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information contained
within the Annual Report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether there is a material misstatement in the
financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of
the other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
In our opinion, the part of the directors’ remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
•
•
the information given in the strategic report and the
directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group
and the Parent company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the
Parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the Parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement
in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Group and
company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 49;
• Directors’ explanation as to its assessment of the
company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 50;
CORPORATE GOVERNANCEAnnual Report and Accounts 2020 112
• Directors’ statement on fair, balanced and understandable
set out on page 72;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 71;
•
•
The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on pages 41 to 42; and
The section describing the work of the audit committee
set out on page 76.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 107, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group and Parent company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or the Parent company or to
cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with
governance of the company and management.
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and
determined that the most significant are those that relate
to the reporting framework (IFRS, the Companies Act
2006 and UK Corporate Governance Code) and the
relevant tax compliance regulations in the jurisdictions
in which the Group operates and the EU General Data
Protection Regulation (GDPR). There are no significant,
industry specific laws or regulations that we considered in
determining our approach.
our enquiries through our review of board minutes and
papers provided to the Audit Committee, as well as
consideration of the results of our audit procedures
across the Group to either corroborate or provide contrary
evidence which was then followed up. Our assessment
included the tone from the top and the emphasis on a
culture of honest and ethical behaviour.
• We assessed the susceptibility of the Group’s financial
statements to material misstatement, including how fraud
might occur, by meeting with management from various
parts of the business to understand where it considered
there was susceptibility to fraud. We engaged our
forensics specialists in assisting our assessment of the
susceptibility of the Group’s financial statements to fraud.
We considered the programmes and controls that the
Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how senior
management monitors those programmes and controls.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws and
regulations that could give rise to a material misstatement
in the financial statements, including instructions to full
and specific scope component teams. Our procedures
included enquires of Group management, legal counsel
and Internal Audit; journal entry testing, with a focus on
management initiated or top-side adjustments identified
based on characteristics of journal posting date and
times, account pairings, specific key words and phrases
derived from forensic investigations experience; and
consideration of any specific bribery, corruption or other
regulatory risk.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO
ADDRESS
• We were appointed by the company in June 2011 to audit
the financial statements for the year ended 31 December
2011 and subsequent financial periods.
•
•
•
The period of total uninterrupted engagement including
previous renewals and reappointments is 10 years,
covering the years ending 31 December 2011 to 2020.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Group or the Parent
company and we remain independent of the Group and
the Parent company in conducting the audit.
The audit opinion is consistent with the additional report to
the audit committee.
USE OF OUR REPORT
This report is made solely to the Parent company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than
the Parent company and the Parent company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
• We understood how PageGroup plc is complying with
those frameworks by making enquiries of management,
internal audit, those responsible for legal and compliance
procedures and the company secretary. We corroborated
Bob Forsyth (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
3 March 2021
CORPORATE GOVERNANCEAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 113
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit
Financial income
Financial expenses
Profit before tax
Income tax expense
(Loss)/profit for the year
Attributable to:
Owners of the parent
Earnings per share
Basic earnings per share (pence)
Diluted earnings per share (pence)
Note
2
2
2
5
5
2
6
3
9
9
The above results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2020
(Loss)/Profit for the year
Other comprehensive income/(loss) for the year
Items that may subsequently be reclassified to profit and loss:
Currency translation differences
Loss on hedging instruments
Total comprehensive income for the year
Attributed to:
Owners of the parent
2020
£’000
1,304,791
(694,542)
610,249
(593,221)
17,028
588
(2,072)
15,544
(21,286)
(5,742)
2019
£’000
1,653,948
(798,498)
855,450
(708,781)
146,669
494
(2,918)
144,245
(40,800)
103,445
(5,742)
103,445
(1.8)
(1.8)
32.2
32.2
2020
£’000
(5,742)
5,945
–
203
203
2019
£’000
103,445
(14,842)
(939)
87,664
87,664
FINANCIAL STATEMENTSAnnual Report and Accounts 2020
CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS
As at 31 December 2020
Note
Group
2020
£’000
2019
£’000
Company
2020
£’000
2019
£’000
114
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
- Goodwill and other intangibles
- Computer software (including assets
held under construction)
Investments
Deferred tax assets
Other receivables
Current assets
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Net current assets/(liabilities)
Non-current liabilities
Other payables
Lease liabilities
Deferred tax liabilities
Total liabilities
Net assets
Capital and reserves
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
10
11
12
12
13
17
14
14
7
20
2
15
11
7
15
11
17
2
18
19
19
19
19
26,401
31,925
95,414
120,246
2,097
2,087
39,708
36,967
–
–
–
–
–
–
–
–
–
17,688
13,169
–
534,795
529,520
18,915
15,036
–
–
–
–
194,477
225,176
534,795
529,520
252,476
16,889
165,987
435,352
365,555
808,610
607,159
13,008
97,832
–
–
–
–
476,395
808,610
607,159
629,829
701,571
1,343,405
1,136,679
(184,022)
(215,811)
(1,026,656)
(962,363)
(32,711)
(29,139)
(12,365)
(19,110)
–
–
–
–
(229,098)
(264,060)
(1,026,656)
(962,363)
206,254
212,335
(218,046)
(355,204)
(12,483)
(70,758)
(1,589)
(11,613)
(99,473)
(2,038)
(84,830)
(113,124)
–
–
–
–
–
–
–
–
(313,928)
(377,184)
(1,026,656)
(962,363)
315,901
324,387
316,749
174,316
3,286
99,564
932
3,286
99,507
932
(55,498)
(47,662)
25,320
242,297
315,901
19,375
248,949
324,387
3,286
99,564
932
–
–
3,286
99,507
932
–
–
212,967
316,749
70,591
174,316
The financial statements of PageGroup plc (Company Number 3310225) set out on pages 113 to 145 were approved by the Board
of Directors and authorised for issue on 2 March 2021. The Company’s profit for the financial year amounted to £137.1m (2019:
£2.4m loss).
Signed on behalf of the Board of Directors
Steve Ingham,
Chief Executive Officer
Kelvin Stagg,
Chief Financial Officer
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT
115
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2020
2019
Called-up
share capital
£’000
Note
Share
premium
£’000
Reserve
for shares
held in the
employee
benefit trust
£’000
Capital
redemption
reserve
£’000
Currency
translation
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
Balance at 1 January 2019
3,284
98,502
932
(50,673)
34,217
232,319
318,581
Loss on adoption of IFRS 16
–
–
–
–
–
(1,450)
(1,450)
Balance at 1 January 2019 (restated)
3,284
98,502
932
(50,673)
34,217
230,869
317,131
Currency translation differences
Net loss recognised
directly in equity
Loss on hedging instruments
Profit for the year
Total comprehensive
(expense)/income for the year
Purchase of shares held in the employee
benefit trust
Exercise of Share Plans
Transfer from reserve for shares held in
the employee benefit trust
Credit in respect of share schemes
Credit in respect of tax on share schemes
Dividends
8
Balance at 31 December 2019 and
1 January 2020
2020
Currency translation differences
Net income recognised
directly in equity
Loss for the year
Total comprehensive
income/(expense) for the year
Purchase of shares held in the employee
benefit trust
Exercise of share plans
Transfer from reserve for shares held in
the employee benefit trust
Credit in respect of share schemes
Credit in respect of tax on share schemes
–
–
–
–
–
–
2
–
–
–
–
2
–
–
–
–
–
–
1,005
–
–
–
–
1,005
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(14,842)
(14,842)
–
–
(14,842)
(14,842)
–
–
(939)
(939)
103,445
103,445
(14,842)
102,506
87,664
(10,000)
–
13,011
–
–
–
3,011
–
–
–
–
–
–
–
–
(10,000)
6,236
7,243
(13,011)
–
5,790
5,790
28
28
(83,469)
(83,469)
(84,426)
(80,408)
3,286
99,507
932
(47,662)
19,375
248,949
324,387
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
57
–
–
–
57
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,945
5,945
–
–
–
(5,742)
5,945
5,945
(5,742)
5,945
(5,742)
203
(14,369)
–
6,533
–
–
(7,836)
–
–
–
–
–
–
–
(14,369)
330
387
(6,533)
5,275
18
(910)
–
5,275
18
(8,689)
Balance at 31 December 2020
3,286
99,564
932
(55,498)
25,320
242,297
315,901
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 116
Retained
earnings
£’000
150,634
Total equity
£’000
253,352
(2,364)
(2,364)
(2,364)
–
5,790
(83,469)
(77,679)
(2,364)
1,007
5,790
(83,469)
(76,672)
STATEMENT OF CHANGES IN EQUITY – PARENT COMPANY
For the year ended 31 December 2020
Note
Called-up
share capital
£’000
3,284
Share
premium
£’000
98,502
Capital
redemption
reserve
£’000
932
–
–
2
–
–
2
–
–
1,005
–
–
1,005
–
–
–
–
–
–
Company
Balance at 1 January 2019
Loss for the year
Total comprehensive income for
the year
Exercise of share plans
Credit in respect of share schemes
Dividends
8
Balance at 31 December 2019
and 1 January 2020
2020
Profit for the year
Total comprehensive income for
the year
Exercise of share plans
Credit in respect of share schemes
3,286
99,507
932
70,591
174,316
–
–
–
–
–
–
–
57
–
57
–
–
–
–
–
137,101
137,101
137,101
137,101
–
5,275
5,275
57
5,275
5,332
Balance at 31 December 2020
3,286
99,564
932
212,967
316,749
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 117
CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS
For the year ended 31 December 2020
Group
Company
2020
£’000
137,101
2019
£’000
(2,364)
2020
£’000
15,544
61,782
262
5,275
1,484
2019
£’000
144,245
57,500
21
5,790
2,424
84,347
209,980
137,101
124,370
(39,760)
168,957
(31,747)
137,210
(37,934)
(201,452)
22,036
194,082
(36,960)
157,122
64,294
(57)
–
(57)
Profit/(loss) before tax
Note
2
Depreciation and amortisation charges
10/11/12
Loss on sale of property, plant and
equipment, and computer software
Share scheme charges
Net finance cost
Operating cash flow before changes in working
capital
Decrease/(Increase) in receivables
(Decrease)/Increase in payables
Cash generated from operations
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of intangibles
Proceeds from the sale of property, plant and
equipment, and computer software
Interest received
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Interest paid
Lease liability principal repayment
Issue of own shares for the exercise of options
Purchase of shares held in the employee benefit trust
Net cash used in financing activities
10
12
(4,892)
(17,770)
(9,615)
(16,735)
918
588
1,740
494
(21,156)
(24,116)
–
(83,469)
(413)
(953)
(39,234)
(38,215)
387
7,243
(14,369)
(53,629)
(10,000)
(125,394)
Net increase in cash and cash equivalents
62,425
7,612
Cash and cash equivalents at the beginning
of the year
Exchange gain/(loss) on cash and cash equivalents
Cash and cash equivalents at the end of the year
20
97,832
5,730
165,987
97,673
(7,453)
97,832
–
–
–
–
–
–
–
–
–
–
–
57
–
57
–
–
–
–
–
–
–
–
(2,364)
35,696
49,130
82,462
–
82,462
–
–
–
–
–
(83,469)
–
–
1,007
–
(82,462)
–
–
–
–
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 118
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2020
1. SIGNIFICANT ACCOUNTING POLICIES
The adoption of these accounting standards or interpretations
did not have any impact on the accounting policies, financial
position or performance of the Group.
Statement of compliance
Standards issued but not yet effective
PageGroup plc is a company incorporated in the United
Kingdom under the Companies Act.
The Group financial statements have been properly prepared
in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006
and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No.1606/2002 as it applies in the
European Union.
The Parent company financial statements have been properly
prepared in accordance with International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 as applied in accordance with section
408 of the Companies Act 2006
Basis of preparation
The financial statements of PageGroup plc consolidate the
results of the Company and all its subsidiary undertakings.
As permitted by Section 408 of the Companies Act 2006, the
profit and loss account of the Company has not been included
as part of these financial statements. The Company’s profit for
the financial year amounted to £137.1m (2019: £2.4m loss).
The increase in the Company’s profit this year is as a result of
increased dividend income. The prior year comparator also
included a £52.3m impairment charge to the intercompany
receivable from the Employee Benefit Trust. This was to impair
the receivable to the market value of the PageGroup Plc
shares the Employee Benefit Trust held.
Basis of consolidation
(i) Subsidiaries
The consolidated financial statements comprise the financial
statements of the Group and its subsidiaries as at 31
December 2020. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee.
(ii) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or
income and expenses arising from intragroup transactions, are
eliminated in preparing the consolidated financial statements.
Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of
impairment.
(iii) Employee Benefit Trust
Shares in PageGroup plc held by the trust are shown as a
reduction in shareholders’ funds.
(iv) Changes in accounting policy – new accounting
standards, interpretations and amendments
The accounting policies adopted are consistent with those
of the previous financial years except for the following
amendments to IFRS effective as of 1 January 2020:
• Amendments to IFRS 3: Definition of a Business;
• Amendments to IAS 1 and IAS 8: Definition of Material
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Group’s financial
statements are disclosed below. The Group intends to adopt
these standards, if applicable, when they become effective.
•
IBOR Reform and its Effects on Financial Reporting -
Phase 2; effective date 1 January 2021
• Reference to the Conceptual Framework - Amendments
to IFRS 3; effective date 1 January 2022
• Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16; effective date
1 January 2022
• Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to IAS 37; effective date 1 January 2022
•
•
•
IFRS 1 First-time Adoption of International Financial
Reporting Standards – Subsidiary as a first-time adopter;
effective date 1 January 2022
IFRS 9 Financial Instruments – Fees in the ’10 per cent’
test for derecognition of financial liabilities; effective date
1 January 2022
IFRS 17 Insurance Contracts; effective date
1 January 2023
• Amendments to IAS 1: Classification of Liabilities as
Current or Non-current; effective date 1 January 2023
The amendments are not expected to have a material impact
on the Group.
Going concern
The Board has undertaken a review of the Group’s forecasts
and associated risks and sensitivities, considering the
expected impact of COVID-19 on trading in the period
from the date of approval of these financial statements to
31 March 2022 (the review period).
Following the reduction in activity starting in February 2020,
the Group adopted a number of cost control and cash
conservation measures. Through the second quarter and
continuing through the second half of the year, activity levels
started to pick up in several of the Group’s markets. The
activity improvements are reflected in KPIs, such as new
opportunities, candidates sent to clients, interviews and offers
in several of our markets. This trend has continued in line with
the Group’s Base Case forecast, as described below.
The Group had £166m of cash at 31 December 2020, with
no debt except for IFRS 16 lease liabilities of £103.5m. Debt
facilities relevant to the period comprise a committed £30m
RCF with BBVA (facility expiring in May 2022 with all covenants
waived until the expiry of the facility), an uncommitted £300m
government CCFF (available to March 2022 if drawn in March
2021), an uncommitted UK trade debtor discounting facility
(up to £50m depending on debtor levels) and an uncommitted
£20m UK bank overdraft facility.
The Group has developed Base Case and Downside scenarios
that demonstrate the Board’s best estimate and severe but
plausible downside scenarios respectively for the review
period. The Downside scenario is based on assumptions for
gross profit and costs that take account of the possibility of
further COVID lockdowns and further recessionary pressures,
at similar levels to that experienced in 2020.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 119
These are mitigated by the reduction in fee earner headcount
as a result of natural attrition to some extent, but does not take
account of all the other cost containment or cash preservation
measures available to the Group if required. All scenarios
demonstrate significant cash headroom, with no requirement to
utilise any of the facilities.
Having considered the Group’s forecasts, the level of cash
resources available to the business and the Group’s borrowing
facilities, the Group’s geographical and discipline diversification,
limited concentration risk, as well as the ability to manage the
cost base, the Board has concluded that the Group has adequate
resources to continue in operational existence for the period
through to March 2022.
a) Revenue and income recognition
Revenue, which excludes value added tax (VAT), constitutes
the value of services undertaken by the Group from its principal
activities, which are recruitment consultancy and other ancillary
services. These consist of:
•
•
revenue from temporary placements, which represents
amounts billed for the services of temporary staff, including
the salary cost of these staff. This is recognised when the
service has been provided;
revenue from permanent placements is typically based on a
percentage of the candidate’s remuneration package and is
derived from both retained assignments (income recognised
on completion of defined stages of work) and non-retained
assignments (income recognised at the date an offer is
accepted by a candidate and where a start date has been
determined). The latter includes revenue anticipated, but not
invoiced, at the balance sheet date, which is correspondingly
accrued on the balance sheet within accrued income. A
provision is made against accrued income for possible
cancellations of placements prior to, or shortly after, the
commencement of employment; and
•
revenue from amounts billed to clients for expenses incurred
on their behalf (principally advertisements) is recognised when
the expense is incurred.
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable.
b) Cost of sales
Cost of sales consists of the salary cost of temporary staff and
costs incurred on behalf of clients, principally advertising costs.
c) Gross profit
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.
d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional
currency”). The consolidated financial statements are presented
in Sterling, which is the Company’s functional and presentation
currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the respective
functional currency using the exchange rates prevailing at the
dates of the transactions.
Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the income statement.
(iii) Group companies
The results and financial position of all the Group entities (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
•
•
•
assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
income and expenses for each income statement are
translated at average exchange rates; and
all resulting exchange differences are recognised in other
comprehensive income.
e) Intangible assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary at the date of acquisition. Goodwill
on the acquisition of subsidiaries is included in intangible assets.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash-generating units and is not
amortised, but is tested at least annually for impairment (see
accounting policy h). Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
(ii) Computer software
Computer software acquired separately is measured on initial
recognition at cost. Computer software developed by the Group
is measured at the cost incurred in relation to the development of
software and related applications. Costs are capitalised when they
fulfil the criteria in IAS 38 regarding internally developed intangible
assets. The Group applies judgement, which is not considered as
significant, in capitalising the development cost by assessing if it
will generate probable future economic benefits. Costs which are
incurred after the release of software or costs which are incurred in
order to enhance existing products are expensed in the period in
which they are incurred.
(iii) Software under construction
Software under construction relates to cost capitalised in relation
to the development of a new operating system and related
applications. Costs are capitalised when they fulfil the criteria in
IAS 38 regarding internally developed intangible assets. While still
under construction, assets are tested for impairment annually.
Assets are moved from software under construction to computer
software when they become available for use.
(iv) Trademark
Acquired trademarks are stated at cost and are written down over
five years on a straight-line basis, which represents the estimated
useful life of the intangible.
(v) Amortisation
Amortisation is charged to the income statement on a straight-
line basis over the estimated useful lives of intangible assets
unless such lives are indefinite. Goodwill has an indefinite useful
life. Computer software is amortised at 20% per annum unless
it is considered to have a shorter life, in which case the period
of amortisation is reduced. The cumulative amount of goodwill
written off directly to retained earnings in respect of acquisitions
prior to 31 December 1997 is £311.7m (2019: £311.7m)
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 120
f) Property, plant and equipment
Property, plant and equipment are stated at original cost less
accumulated depreciation. Depreciation is calculated to write
off the cost less estimated residual value of each asset evenly
over its expected useful life at the following rates:
Leasehold improvements 10% per annum or period of lease if
shorter
Furniture, fixtures and equipment 10-20% per annum
Motor vehicles 25% per annum
g) Investments
Fixed asset investments are stated at cost less provision for
impairment.
h) Impairment of assets
Non-financial assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment. An
impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value
less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows
(cash-generating units).
Financial assets
The Group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract
and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective
interest rate.
ECLs are recognised in two stages. For credit exposures for
which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next
12 months (a 12 month ECL). For those credit exposures for
which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a
simplified approach in calculating ECLs. Therefore, the Group
does not track changes in credit risk, but instead recognises a
loss allowance based on lifetime ECLs at each reporting date.
The Group has established a provision matrix that is based
on its historical credit loss experience, adjusted for forward-
looking factors specific to the debtors and the economic
environment.
i) Taxation
Income tax expense represents the sum of the current tax and
deferred tax charges. The tax currently payable is based on
taxable profit for the year. Taxable profit differs from profit as
reported in the income statement because it excludes items
of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet
liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor
the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except
where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. The
carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the asset
realised.
Deferred tax is charged or credited to the income statement,
except when it relates to items charged or credited directly
to equity, in which case the deferred tax is also dealt with
in equity. Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net
basis.
j) Pension costs
The Group operates defined contribution pension schemes.
The assets of the schemes are held separately from those
of the Group in independently administered funds. The
pension costs charged to the income statement represent the
contributions payable by the Group to the funds during each
period.
k) Leases
i) Right-of-use assets
The Group recognises right-of-use assets at the
commencement date of the lease (i.e., the date the underlying
asset is available for use). Right-of-use assets are measured
at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less
any lease incentives received. Unless the Group is reasonably
certain to obtain ownership of the leased asset at the end
of the lease term, the recognised right-of-use assets are
depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. Right-of-use assets
are subject to impairment.
ii) Lease liabilities
At the commencement date of the lease, the Group
recognises lease liabilities measured at the present value of
lease payments to be made over the lease term.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 121
The lease payments include fixed payments (including in-
substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the
Group and payments of penalties for terminating a lease, if the
lease term reflects the Group exercising the option to terminate.
The variable lease payments that do not depend on an index
or a rate are recognised as expense in the period on which the
event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the
Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is
not readily determinable. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change
in the in-substance fixed lease payments or a change in the
assessment to purchase the underlying asset.
iii) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption
to its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It
also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value
(i.e., below $5,000). Lease payments on short-term leases and
leases of low-value assets are recognised as expense on a
straight-line basis over the lease term.
iv) Judgement in determining the lease term of contracts with
renewal options
The Group determines the lease term as the non-cancellable
term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be
exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease
the assets for additional terms of three to ten years. The Group
applies judgement in evaluating whether it is reasonably certain
to exercise the option to renew. That is, it considers all relevant
factors that create an economic incentive for it to exercise the
renewal. After the commencement date, the Group reassesses
the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to
exercise (or not to exercise) the option to renew (e.g., a change
in business strategy).
l) Segment reporting
IFRS 8 requires operating segments to be identified on the
basis of internal reports about components of the Group that
are regularly reviewed by the Board to allocate resources to
the segments and to assess their performance. Information
provided to the Board is focused on regions and as a result,
reportable segments are on a regional basis. Transactions
between segments are recorded and allocated on an arms-
length basis.
m) Dividend distribution
Dividend distribution to the Company’s shareholders is
recognised as a liability in the Group’s financial statements in
the period in which the dividends are approved by (for final
dividends) or paid to (for interim dividends) the Company’s
shareholders.
n) Share-based compensation
The Group operates a number of equity-settled, share-based
compensation plans. The accounting treatments for the Group
and parent company are described below:
(i) Share option schemes
The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense in
the income statement of the Group with a corresponding
adjustment to equity. In the parent company, it is capitalised
as an investment, with a corresponding adjustment to equity.
The total amount to be expensed over the vesting period is
determined by reference to the fair value of the options granted,
excluding the impact of any non-market vesting conditions (for
example, earnings per share). Non-market vesting conditions
are included in assumptions about the number of options that
are expected to become exercisable.
At each balance sheet date, the estimate of the number
of options that are expected to become exercisable is
revised. The Group recognises the impact of the revision of
original estimates, if any, in the income statement, and the
corresponding adjustment to equity over the remaining vesting
period.
(ii) Management Incentive Plan and Long-Term Incentive Plan
Where deferred awards are made to Directors and senior
executives under either the Management Incentive Plan or the
Long-Term Incentive Plan, to reflect that the awards are for
services over a longer period, the value of the expected award
is charged to the income statement of the Group on a straight-
line basis over the vesting period to which the award relates.
In the Parent Company, it is capitalised as an investment in
the subsidiary that is receiving the employee service, with a
corresponding adjustment to equity.
(iii) Employee Single Incentive Plan (ESIP)
Awards under the ESIP are paid in cash (40%) and Shares
(60%), which vest in 3 tranches over a 3 year period. The value
of expected award is charged to the income statement of the
Group relative to these vesting periods.
iv) Tax on share schemes
Where options or shares are net settled in respect of
withholding tax obligations, these are accounted for as
equity settled transactions. Payments to local tax authorities
are accounted for as a deduction from equity for the shares
withheld.
o) Deferred cash bonus
The Group operates a bonus scheme for some members of
staff whereby bonuses are deferred for three years from date
of award. The bonuses are paid in full if the employee remains
employed for the entire three-year period.
p) Repurchase of share capital
When share capital recognised as equity is repurchased,
the amount of the consideration paid, including any directly
attributable costs, is recognised as a change in equity.
q) Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of
a past event, and it is probable that an outflow of economic
benefits will be required to settle the obligation. Provisions are
measured at the Directors’ best estimate of the expenditure
required to settle the obligation at the balance sheet date, and
are discounted to present value where the effect is material.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 122
r) Financial assets and liabilities
t) Critical accounting estimates and judgements
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through
profit or loss.
The classification of financial assets at initial recognition
depends on the financial assets’ contractual cash flow
characteristics and the Group’s business model for managing
them. With the exception of trade receivables that do not
contain a significant financing component or for which the
Group has applied the practical expedient, the Group initially
measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain
a significant financing component or for which the Group
has applied the practical expedient are measured at the
transaction price determined under IFRS 15.
The Group’s financial assets at amortised cost includes trade
and other receivables.
In order for a financial asset to be classified and measured
at amortised cost or fair value through OCI, it needs to give
rise to cash flows that are ‘solely payments of principal and
interest (SPPI)’ on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at
an instrument level.
The Group’s business model for managing financial assets
refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows,
selling the financial assets, or both.
Cash and cash equivalents includes cash-in-hand, deposits
held at call with banks, and other short-term highly liquid
investments with original maturities of three months or less.
Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as
a component of cash and cash equivalents for the purpose
of the statement of cash flows. Prepayments and Accrued
Income are held at amortised cost.
All financial liabilities are recognised initially at fair value and, in
the case of loans and borrowings and payables, net of directly
attributable transaction costs.
The Group’s financial liabilities include trade and other
payables and derivative financial instruments.
Financial liabilities are classified, at initial recognition, as
financial liabilities through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.
The Group has derivative contracts at the balance sheet
date that have been valued at fair value through the income
statement.
s) Hedge accounting
Hedges of a net investment in a foreign operation, including a
hedge of a monetary item that is accounted for as part of the
net investment, are accounted for in a way similar to cash flow
hedges. Gains or losses on the hedging instrument relating
to the effective portion of the hedge are recognised as Other
Comprehensive Income while any gains or losses relating to
the ineffective portion are recognised in the statement of profit
or loss. On disposal of the foreign operation, the cumulative
value of any such gains or losses recorded in equity is
transferred to the statement of profit or loss.
The preparation of financial statements in conformity with
IFRS requires the use of certain critical accounting estimates
and judgements. It also requires management to exercise
judgement in the process of applying the Company’s
accounting policies.
Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances.
There are no accounting areas which require significant
judgements. Information about significant areas of estimation
uncertainty in applying accounting policies that have the most
significant effect on the amount recognised in the financial
statements are described in the following notes:
Note 13 – Trade and other receivables
There is uncertainty regarding customers who may not be
able to pay as their invoices fall due as at 31 December 2020.
In total the Group holds £197.2m of Gross Trade Receivables.
A provision for £11.1m has been recognised based on the
expected credit losses, revenue reversals or balances which
are in litigation.
In reviewing the appropriateness of the provisions in respect
of recoverability of trade receivables, consideration has been
given to the economic climate in the respective markets,
the ageing of the debt and the potential likelihood of default.
Whilst no debtor constitutes more than 3% of the total
balance there is a risk that if the economic climate were to
deteriorate across a number of countries the portfolio could
be impaired by an amount greater than materiality. This
scenario is however considered sufficiently remote such that
no reasonably possible changes in assumptions are likely to
cause material further impairment next year. Please see note
21 for an analysis of expected credit losses and revenue
reversals.
Deferred Tax
At 31 December 2020, PageGroup’s deferred tax assets are
£17.7m (2019: £18.9m). The ultimate realisation of deferred
tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary
differences become deductible or in which tax losses can be
utilised. The tax effect of deductible temporary differences
and unused tax losses are recognised as a deferred tax asset
when it becomes probable that the tax losses and deductible
temporary differences will be utilised. In making assessments
regarding deferred tax assets, management considers the
scheduled reversal of deferred tax liabilities, projected future
taxable income, the availability to carry back losses and tax
planning strategies.
At 31 December 2020, based upon the projections for
future taxable income over the periods in which deferred
tax assets are deductible, management believes that it is
more likely than not that PageGroup will realise the benefits
of these deductible differences. The amount of deferred tax
assets considered realisable could however be reduced in
subsequent years if estimates of future taxable income during
their carry forward periods are reduced, or rulings by the tax
authorities are unfavourable. Estimates are therefore subject
to change due to both market-related and government related
uncertainties, as well as PageGroup’s own future decisions.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 123
Uncertain tax positions
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the balance sheet date, and any adjustments to tax payable in
respect of previous years.
Uncertain tax positions are assessed and measured on an issue
by issue basis within the jurisdictions that we operate using
management’s estimate of the most likely outcome. Where
management determines that a greater than 50% probability
exists that the tax authorities would accept the position taken
in the tax return, amounts are recognised in the consolidated
financial statements on that basis. Where the amount of tax
payable or recoverable is uncertain, the Group recognises a
liability or asset based on either: management’s judgement of the
most likely outcome; or, when there is a wide range of possible
outcomes, a probability weighted average approach. The
Group recognises interest on late paid taxes as part of financing
costs. The Group recognises penalties, if applicable, as part of
administrative and other expenses.
These estimates include significant management judgements
about the probable outcome of uncertain tax positions.
Management base their judgements on the latest information
available about the positions expected to be taken by each
tax authority. Actual outcomes and settlements may differ
significantly from the estimates recorded in these consolidated
2. SEGMENT REPORTING
All revenues disclosed are derived from external customers.
financial statements. This may affect income tax expense
reported in future years’ consolidated income statements.
The uncertain tax position provision recognised as at
31 December 2020 is £2.3m.
u) Exceptional items
Exceptional items are those items the Group considers to
be one-off or material in nature that should be brought to
the reader’s attention in understanding the Group’s financial
performance.
v) Employee Benefit Trust
The Employee Benefit Trust is considered a separate legal entity
and not an extension of the parent company. It is included in the
consolidated results of the Group as it is deemed to have control
of the entity.
w) Government grants
Government grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis
over the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset,
it is recognised as income in equal amounts over the expected
useful life of the related asset.
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 1. 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 Board, the chief operating decision maker, for the purpose of resource allocation and assessment of segment
performance. Segments are aggregated in accordance with management ownership, determined by the possession of similar
characteristics such geography, market maturity and economic environment. No judgements were applied to identify the reportable
segments.
(a) Revenue, gross profit and operating profit by reportable segment
2020
EMEA
Asia Pacific
Americas
United Kingdom
Operating profit
Financial expense
Revenue
2020
£’000
717,294
215,959
154,257
217,281
–
–
Gross
profit
2020
£’000
319,360
121,113
88,791
80,985
–
–
Revenue/gross profit/profit before tax
1,304,791
610,249
2019
EMEA
Asia Pacific
Americas
United Kingdom
Operating profit
Financial expense
Revenue
2019
£’000
861,827
273,437
205,074
313,610
–
–
Gross
profit
2019
£’000
418,328
163,255
138,791
135,076
–
–
Revenue/gross profit/profit before tax
1,653,948
855,450
The above analysis by destination is not materially different to the analysis by origin.
Operating
profit
2020
£’000
30,605
3,789
(7,021)
(10,345)
17,028
(1,484)
15,544
Operating
profit
2019
£’000
90,333
19,810
19,268
17,258
146,669
(2,424)
144,245
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 124
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, non-current assets and capital expenditure by reportable segment
EMEA
Asia Pacific
Americas
United Kingdom
Segment assets/liabilities
Income tax
Total assets
Total liabilities
2020
£’000
230,350
111,090
80,662
190,838
612,940
16,889
629,829
2019
£’000
294,597
119,110
111,649
163,207
688,563
13,008
701,571
2020
£’000
2019
£’000
163,961
196,473
54,899
41,071
41,632
301,563
12,365
313,928
45,832
53,288
62,481
358,074
19,110
377,184
The analyses in notes (d) revenue and gross profit by discipline (being the professions of candidates placed) and (e) revenue and
gross profit by strategic market have been included as additional disclosure over and above the requirements of IFRS 8 “Operating
Segments”. Strategic markets are defined in the Strategic Review on pages 15 and 16.
EMEA
Asia Pacific
Americas
United Kingdom
EMEA
Asia Pacific
Americas
United Kingdom
Capital expenditure
EMEA
Asia Pacific
Americas
United Kingdom
Property, plant and
equipment
Intangible assets
2020
£’000
10,810
4,451
6,052
5,088
2019
£’000
12,732
5,560
7,471
6,162
26,401
31,925
2020
£’000
2,666
371
120
38,648
41,805
2019
£’000
2,818
495
162
35,579
39,054
Right-of-use assets
Lease liabilities
2020
£’000
47,941
13,924
14,862
18,687
95,414
2019
£’000
63,270
11,981
20,878
24,117
2020
£’000
51,070
14,532
17,590
20,277
2019
£’000
65,676
13,027
23,725
26,184
120,246
103,469
128,612
Property, plant and
equipment
2020
£’000
2019
£’000
1,341
1,558
1,107
886
4,892
3,760
1,270
2,500
2,085
9,615
Intangible assets
2020
£’000
40
36
206
17,488
17,770
2019
£’000
458
166
91
16,020
16,735
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 125
The below analysis in note (c) relates to the requirement of IFRS 15 to disclose disaggregated revenue streams.
(c) Revenue and gross profit generated from permanent and temporary placements
Permanent
Temporary
(d) Revenue and gross profit by discipline
Accounting and Financial Services
Legal, Technology, HR, Secretarial and other
Engineering, Property & Construction, Procurement & Supply Chain
Marketing, Sales and Retail
(e) Revenue and gross profit by strategic market
Large, Proven markets
Large, High Potential markets
Medium and Small, High Margin markets
3. PROFIT FOR THE YEAR
Profit for the year is stated after charging:
Employment costs (Note 4)
Net exchange losses
Depreciation of property, plant and equipment – owned (Note 10)
Amortisation of intangibles (Note 12)
Expected credit losses and provision for revenue reversals (Note 21)
Loss on sale of property, plant and equipment and computer software
Depreciation of right-of-use assets (Note 11)
Revenue
Gross profit
2020
£’000
441,467
863,324
2019
£’000
649,948
1,004,000
1,304,791
1,653,948
2020
£’000
436,689
173,560
610,249
2019
£’000
643,787
211,663
855,450
Revenue
2020
£’000
528,202
374,406
273,771
128,412
2019
£’000
662,458
442,648
359,216
189,626
1,304,791
1,653,948
Revenue
2020
£’000
728,736
397,166
178,889
2019
£’000
962,424
478,950
212,574
1,304,791
1,653,948
Gross profit
2020
£’000
2019
£’000
212,243
298,648
166,249
141,829
89,928
610,249
Gross profit
2020
£’000
289,202
218,196
102,851
610,249
212,244
203,275
141,283
855,450
2019
£’000
426,178
298,139
131,133
855,450
2020
£’000
2019
£’000
438,111
545,872
4,937
9,864
1,764
10,316
14,653
10,594
27,773
24,068
262
21
37,265
36,600
Fees payable to the Company’s auditor:
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
463
226
Fees payable to the Company’s auditor and associates for other services:
– The audit of the Company’s subsidiaries pursuant to legislation
Total audit fees
– Audit related assurance services
– Other non-audit services
Total non-audit fees
Total fees
755
1,218
52
32
84
558
784
52
7
59
1,302
843
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 4. EMPLOYEE INFORMATION
The average number of employees (including Executive Directors) during the year and total number of employees (including Executive
Directors) at 31 December 2020 were as follows:
126
Management
Client services
Administration
Employment costs (including Directors’ emoluments) comprised:
Wages and salaries
Social security costs
Pension costs – defined contribution plans
Share-based payments and deferred cash plan
2020
Average
No.
2019
Average
No.
At 31 Dec
2020
No.
At 31 Dec
2019
No.
341
5,030
1,559
6,930
332
5,764
1,699
7,795
339
4,806
1,549
6,694
334
5,693
1,671
7,698
2020
£’000
2019
£’000
364,686
464,880
48,816
52,828
16,731
17,312
7,878
10,852
438,111
545,872
During the year the Group utilised various Government support schemes around the world in response to the COVID-19 pandemic.
In accordance with IAS 20 - Government Grants and Disclosure of Government Assistance, the income received from these grants
is presented net against the payroll expenses within wages and salaries in the Consolidated Income Statement. The total income
recognised in the year was £11.2m.
No staff are employed by the parent company (2019: none) hence no remuneration has been disclosed for the Company.
Remuneration for Directors for their services on behalf of the parent company are included in the Directors’ Remuneration Report on
pages 83 to 104.
5. FINANCIAL INCOME/(EXPENSES)
Financial income
Interest receivable
Financial expenses
Interest payable
Interest on lease liabilities
2020
£’000
588
588
(413)
(1,659)
(2,072)
6. INCOME TAX EXPENSE
The charge for taxation is based on the effective annual tax rate of 136.9% on profit before tax (2019: 28.3%).
Analysis of charge in the year
UK income tax at 19.00% (2019: 19.00%) for year
Overseas income tax
Adjustments in respect of prior years
Deferred tax
Adjustment in respect of prior years
Origination and reversal of temporary differences
Recognition of previously unrecognised losses and other tax attributes
Impact of tax rate changes
Deferred tax income
Total tax expense in the income statement
2020
£’000
(3,897)
25,290
(164)
21,229
2,823
(6,908)
3,480
662
57
21,286
2019
£’000
494
494
(953)
(1,965)
(2,918)
2019
£’000
9,064
35,382
(2,808)
41,638
1,402
(1,646)
(329)
(265)
(838)
40,800
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 127
The amounts disclosed in 2019 for the analysis of the tax charge have been represented to align with the presentation followed in the
current year. A similar change in the presentation was made in respect of the deferred tax reconciliation.
Reconciliation of effective tax rate
Profit before taxation
2020
£’000
15,544
%
2019
£’000
144,245
Profit before tax multiplied by the standard rate of corporation tax in the UK
2,952
19.0
27,406
Effects of:
Disallowable items and other permanent differences
Unrelieved overseas losses
Derecognition/(recognition) of overseas losses and other tax attributes
Other tax movements
Higher tax rates on overseas earnings
Other tax overseas
Movement of rate difference
Adjustment to tax charge in respect of prior periods
Tax expense and effective rate for the year
Tax recognised directly in equity
Relating to settled transactions
1,947
1,954
1,525
694
2,038
6,855
662
2,659
21,286
12.5
12.5
9.8
4.5
13.1
44.1
4.3
17.1
136.9
2,094
2,292
(35)
(26)
4,239
6,501
(265)
(1,406)
40,800
2020
£’000
18
%
19.0
1.5
1.6
-
-
2.9
4.5
(0.2)
(1.0)
28.3
2019
£’000
28
We have generated profits in overseas countries which have higher rates and we have been subject to additional taxes on profits
which have contributed 61.7% to the tax rate in 2020. Losses arose in the year that we could not recognise due to the requirement
to have profits against which to offset in the foreseeable future. In addition, we wrote off deferred tax assets on losses which expired
in the period as well as deferred tax assets on deductible temporary differences and losses where we do not consider it probable
that there will be taxable profits to support their recovery in future periods. Together, these two categories increased the tax rate by
22.4%. Disallowable and other permanent differences are broadly in line with 2019, though with the significant reduction in PBT, the
impact on the rate has been much greater. Similarly to 2019, adjustments in respect of prior periods were one-off in nature, and again
have a higher impact on the rate due to the lower PBT in 2020. Finally there have been changes to the substantively enacted tax rates
which apply to the calculation of deferred tax, predominantly in the UK (moving from 17% to 19%). Collectively, these two categories
increased the tax rate by 33.9%.
These factors add to the basic UK rate of 19% to give the total effective tax rate of 136.9%.
7. CURRENT TAX ASSETS AND LIABILITIES
The current tax asset of £16.9m (2019: £13.0m), and current tax liability of £12.4m (2019: £19.1m) for the Group, and current tax
asset and liability of £nil (2019: £nil) for the parent company, represent the amount of income taxes recoverable and payable in respect
of current and prior periods. The Group maintains a provision in relation to disputes and uncertain tax positions, including transfer
pricing, which is included in the current tax liability.
8. DIVIDENDS
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2019 of 0.00p per Ordinary share (2018: 9.00p)
Interim dividend for the year ended 31 December 2020 of 0.00p per Ordinary share (2019: 4.30p)
Special dividend for the year ended 31 December 2020 of 0.00p per Ordinary share (2019: 12.73p)
Amounts proposed as distributions to equity holders in the year:
Proposed final dividend for the year ended 31 December 2020 of 0.00p per Ordinary share (2019: 9.40p)
2020
£’000
2019
£’000
–
–
–
–
28,978
13,759
40,732
83,469
30,154
The proposed final dividend for 2019 of 9.40p per ordinary share, or £30.2m, which was due for payment in June 2020, was
cancelled as a result of the ongoing uncertainty as a result of the COVID-19 pandemic.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 9. EARNINGS PER ORDINARY SHARE
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
Earnings for basic and diluted earnings per share (£’000)
Number of shares
Weighted average number of shares used for basic earnings per share (‘000)
Dilutive effect of share plans (‘000)
Diluted weighted average number of shares used for diluted earnings per share (‘000)
Basic earnings per share
Diluted earnings per share
The above results relate to continuing operations.
Basic
128
2020
£’000
2019
£’000
(5,742)
103,445
number
number
319,664
320,789
925
375
320,589
321,164
pence
pence
(1.8)
(1.8)
32.2
32.2
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average
number of Ordinary shares in issue during the year, excluding unallocated Ordinary shares purchased by the Employee Benefit Trust
and held in the reserve.
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares outstanding to assume
conversion of all dilutive potential Ordinary shares. This calculation determines the number of shares that could have been acquired
at fair value (determined as the average market price of the Company’s shares) based on the monetary value of the subscription
rights attached to the outstanding share options. The number of shares calculated in the basic earnings per share is then adjusted
to reflect the number of shares deemed to be issued for nil consideration as a result of the potential exercise of existing share
options.
The remaining share options that are currently not dilutive and hence excluded from the dilutive earnings per share calculation
remain potentially dilutive until they are either exercised or they lapse.
10. PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 January
Additions
Disposals
Effect of movements in foreign exchange
At 31 December
Depreciation
At 1 January
Charge for the year
Disposals
Effect of movements in foreign exchange
At 31 December
Net book value
At 31 December
2020
Leasehold
improve-
ments
£’000
Furniture,
fixtures and
equipment
£’000
Motor
vehicles
£’000
46,953
2,579
(1,721)
314
48,191
1,568
(9,523)
814
48,125
41,050
28,932
5,153
(1,306)
276
34,642
4,333
(9,206)
620
33,055
30,389
1,428
745
(489)
(45)
1,639
1,073
378
(423)
(59)
969
Total
£’000
96,572
4,892
(11,733)
1,083
90,814
64,647
9,864
(10,935)
837
64,413
15,070
10,661
670
26,401
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 129
Group
Cost
At 1 January
Additions
Disposals
Effect of movements in foreign exchange
At 31 December
Depreciation
At 1 January
Charge for the year
Disposals
Effect of movements in foreign exchange
At 31 December
Net book value
At 31 December
11. LEASES
Group
Right-of-use assets
At 1 January 2019
Additions
Disposals
Depreciation expense
Effect of movements in foreign exchange
At 31 December 2019 and 1 January 2020
Additions
Disposals
Depreciation expense
Effect of movements in foreign exchange
At 31 December 2020
Lease liabilities
As at 1 January
Additions
Disposals
Interest expense
Payments
Effect of movements in foreign exchange
As at 31 December
2019
Leasehold
improve-
ments
£’000
Furniture,
fixtures and
equipment
£’000
Motor
vehicles
£’000
45,020
5,474
(1,817)
(1,724)
46,953
26,682
4,896
(1,657)
(989)
28,932
49,441
3,701
(2,918)
(2,033)
48,191
33,230
4,941
(2,142)
(1,387)
34,642
2,102
440
(967)
(147)
1,428
1,087
479
(416)
(77)
1,073
Total
£’000
96,563
9,615
(5,702)
(3,904)
96,572
60,999
10,316
(4,215)
(2,453)
64,647
18,021
13,549
355
31,925
Property
£’000
Motor Vehicles
£’000
Other assets
£’000
Total
£’000
110,558
27,866
(577)
(27,639)
(4,440)
105,768
13,377
(3,947)
(28,969)
1,370
87,599
15,192
7,034
–
(8,545)
–
13,681
3,412
(3,281)
(7,678)
583
6,717
439
774
–
(416)
–
797
919
–
(618)
–
1,098
2020
£’000
(128,612)
(17,794)
7,467
(1,659)
39,234
(2,105)
126,189
35,674
(577)
(36,600)
(4,440)
120,246
17,708
(7,228)
(37,265)
1,953
95,414
2019
£’000
(134,479)
(35,768)
667
(1,965)
38,215
4,718
(103,469)
(128,612)
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 12. INTANGIBLE ASSETS
2020
130
Group
Cost
At 1 January
Additions
Disposals
Effect of movements in
foreign exchange
At 31 December
Amortisation
At 1 January
Charge for the year
Disposals
Effect of movements in
foreign exchange
At 31 December
Net book value
At 31 December
Group
Cost
At 1 January
Additions
Disposals
Transfers
Effect of movements in
foreign exchange
At 31 December
Amortisation
At 1 January
Charge for the year
Disposals
Effect of movements in
foreign exchange
At 31 December
Net book value
At 31 December
Computer
software,
assets under
construction
£’000
Computer
software
£’000
Subtotal
£’000
Goodwill
£’000
Trademark
£’000
Subtotal
£’000
Total
£’000
106,029
15,163
(62,210)
151
498
106,527
1,539
2,460
(131)
(40)
17,623
(62,341)
111
–
–
–
1,313
147
2,852
109,379
147
17,770
–
–
–
–
(62,341)
111
59,133
2,787
61,920
1,539
1,460
2,999
64,919
69,560
14,516
(61,959)
95
22,212
–
–
–
–
–
69,560
14,516
(61,959)
95
22,212
–
–
–
–
–
765
137
–
–
765
137
–
–
70,325
14,653
(61,959)
95
902
902
23,114
36,921
2,787
39,708
1,539
558
2,097
41,805
2019
Computer
software,
assets under
construction
£’000
Computer
software
£’000
Subtotal
£’000
Goodwill
£’000
Trademark
£’000
Subtotal
£’000
Total
£000
89,105
16,463
(2,137)
3,183
(585)
106,029
61,344
10,488
(1,862)
(410)
69,560
3,616
98
–
(3,183)
(33)
498
92,721
16,561
(2,137)
–
(618)
1,539
–
–
–
–
1,139
174
2,678
95,399
174
16,735
–
–
–
–
–
–
(2,137)
–
(618)
106,527
1,539
1,313
2,852
109,379
–
–
–
–
–
61,344
10,488
(1,862)
(410)
69,560
–
–
–
–
–
659
106
–
–
659
106
–
–
62,003
10,594
(1,862)
(410)
765
765
70,325
36,469
498
36,967
1,539
548
2,087
39,054
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 131
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the country of operation. A summary of the
goodwill allocation is presented below:
UK
USA
Singapore
2020
£’000
1,274
214
51
1,539
2019
£’000
1,274
214
51
1,539
In assessing value in use, the estimated future cash flows are calculated by preparing cash flow forecasts derived from the most recent
financial budget, management projections for five years, followed by an assumed growth rate of 0%, which does not exceed the long-
term average growth rate of the relevant markets and reflects long-term wage inflation fee growth. Management applied a discount rate
of 8%, representing the weighted average cost of capital for the Group, to the estimated future cash flows to calculate the terminal value
of those cash flows. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount. An impairment loss is recognised as an expense. Management believes that no reasonably
possible change in any of the above key assumptions would cause the carrying value of goodwill allocated to any CGU to materially
exceed its recoverable amount.
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired. It is the
opinion of the Directors that at 31 December 2020 there was no impairment of goodwill.
13. INVESTMENTS
Company
Cost at 1 January 2020
Transactions relating to share plans for subsidiaries’ employees
Cost at 31 December 2020
Subsidiary undertakings
£’000
529,520
5,275
534,795
The Company’s subsidiary undertakings at 31 December 2020, their principal activities and countries of incorporation are set
out below:
Name of undertaking
Michael Page International
Argentina SA
Page Personnel Argentina Servicios
Eventuales SA
Michael Page International (Australia)
Pty Limited
Country of
incorporation
Principal
activity
Argentina
Recruitment Consultancy
Argentina
Recruitment Consultancy
Registered office
Carlos Pellegrini 1265, Piso 12, Ciudad de
Buenos Aires, C1009ABY, Argentina
Carlos Pellegrini 1265, Piso 12, Ciudad de
Buenos Aires, C1009ABY, Argentina
Australia
Recruitment Consultancy
Level 32, 225 George Street, Sydney, NSW
2000, Australia
Michael Page International (Austria) GmbH
Austria
Recruitment Consultancy
Michael Page International (Belgium) NV/SA
Belgium
Recruitment Consultancy
Page Interim (Belgium) NV/SA
Belgium
Recruitment Consultancy
Second floor, Gumpendorfer Strauße 72, Wien,
Austria
Place du Champ de Mars 5 , 1050 Brussels,
Belgium
Place du Champ de Mars 5 , 1050 Brussels,
Belgium
Michael Page International Do Brasil -
Recrutamento Especializado Ltda
Page Interim Do Brasil - Recrutamento
Especializado Ltda
Brazil
Recruitment Consultancy
Rua Funchal 375, 7th Floor Vila Olimpia, CEP
04551-060, Sao Paulo, Brazil
Brazil
Recruitment Consultancy
Page Personnel Do Brasil - Recrutamento
Especializado e servicos corporativos Ltda
Brazil
Recruitment Consultancy
Michael Page International Canada Limited
Canada
Recruitment Consultancy
Av. das Nações Unidas, 10.989 - 4º Andar ,
Conjunto 41 - Edifício Mendes Caldeira, CEP
04578-900, São Paulo - SP, Brazil
Av. Engenheiro Luis Carlos Berrini, 716, 1º
andar - CJ.12 - Cidade Monções, CEP 04571-
000, São Paulo - SP, Brazil
130 Adelaide Street West, 21st Floor, Toronto,
Ontario, M5H 1J8, Canada
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 Name of undertaking
Michael Page International Chile Ltda
Page Personnel International
Chile Ltda
Page Consulting Chile Ltda
Empresa de Servicios Transitorios Page Interim
Chile Limitada
Michael Page (Beijing)
Recruitment Co., Ltd
132
Country of
incorporation
Principal
activity
Registered office
Chile
Chile
Chile
Chile
Recruitment Consultancy
Magdelan 181, Piso 16, Las Condes, Santiago
7550055, Chile
Recruitment Consultancy
Magdalena 181, Piso 1, Las Condes, Santiago
7550055, Chile
Recruitment Consultancy
Magdalena 181, Piso 16, Las Condes, Santiago
7550055, Chile
Recruitment Consultancy
Magdalena 181, Piso 1, Las Condes, Santiago
7550055, Chile
China
Recruitment Consultancy
Room 1009 1012, 10/F, West Tower, World
Financial Centre, No.1 East 3rd Ring Middle Road,
Chaoyang District, Beijing, China 100020
Level 18, HKRI Taikoo Hui Tower2, 288 Shimen Yi
Road, JingAn District, Shanghai 200041, China
Michael Page (Shanghai) Recruitment Co., Ltd
China
Recruitment Consultancy
Michael Page International (Shanghai) Consulting
Limited
China
Non-Trading
Suite 1010, Shanghai Kerry Centre, 1515 Nanjing
West Road, Shanghai, China
Page Contracting (Shanghai) Co. Ltd
China
Recruitment Consultancy
Room 20108, 20/F, No.288 Shimen Yi Road,
Shanghai, 200041, China
Michael Page International Colombia SAS
Colombia
Recruitment Consultancy
Av. Calle 82 No. 10-33 - Oficina 801, Colombia
Page Interim Colombia SAS
Colombia
Non-Trading
Av. Calle 82 No. 10-33 - Oficina 801, Colombia
Michael Page Czech Republic s.r.o
Czech Republic Recruitment Consultancy
Pobřežní 249/46, Karlín, Praha 8, Czech Republic
Michael Page Partnership Limited
Michael Page Employment
Services Limited
LPM (Professional Recruitment) Limited
Accountancy Additions Limited
Slamway Limited
(The) Assessment Centre Limited
LPM (Group Services) Limited
(The) Page Partnership Limited
Sales Recruitment Specialists Limited
Michael Page International Limited
Michael Page International
1982 Limited
Michael Page International Investment Limited
Michael Page International
Finance Limited
Page Personnel (UK) Limited
Michael Page Holdings Limited
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
Non-Trading
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Recruitment Consultancy
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Holding company
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Non-trading
Support services
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne
Business Park, Weybridge, Surrey KT15 2QW, UK
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 133
Name of undertaking
Michael Page International
Holdings Limited
Michael Page International
Recruitment Limited*
Country of
incorporation
Principal
activity
England and Wales
Holding company
England and Wales
Recruitment Consultancy
Michael Page Limited
England and Wales
Non-trading
Registered office
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
Michael Page International
Southern Europe Limited*
England and Wales
Holding company
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
Michael Page UK Limited
England and Wales
Non-trading
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
Michael Page Recruitment
Group Limited
Michael Page International
(France) SAS
England and Wales Holding company
Page House, 1 Dashwood Lang Road, Bourne Business
Park, Weybridge, Surrey KT15 2QW, UK
France
Recruitment Consultancy
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
MP Financial Services France SAS France
Support services
Page Personnel SAS
France
Recruitment Consultancy
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
Michael Page Business
Services SARL
Michael Page Ingenieurs et
Informatique SARL
France
Recruitment Consultancy
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
France
Recruitment Consultancy
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
Page Formation SARL
France
Support Services
Michael Page Tertiaire EURL
France
Recruitment Consultancy
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
Michael Page Nord SARL
France
Recruitment Consultancy
1, Rue Esquermoise, 59800 Lille, France
Michael Page Sud SARL
France
Recruitment Consultancy
48, Rue de la République, 69002 Lyon, France
MP Advertising SAS
France
Support Services
Page Consulting SARL
France
Recruitment Consultancy
Michael Page EDP SARL
France
Support Services
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
164 Avenue Achille Peretti, 92522 Neuilly-sur-Seine, Paris,
France
Michael Page Monaco SARL
France
Recruitment Consultancy
7 Rue de l’Industrie, 98000 Monaco
Michael Page International
(Deutschland) GmbH
Germany
Recruitment Consultancy
Carl Theodor Strasse 1, 40213 Dusseldorf, Germany
Page Personnel Services GmbH
Germany
Recruitment Consultancy
Carl Theodor Strasse 1, 40213 Dusseldorf, Germany
Page Personnel (Deutschland)
GmbH
Germany
Recruitment Consultancy
Carl Theodor Strasse 1, 40213 Dusseldorf, Germany
Michael Page Interim GmbH
Germany
Recruitment Consultancy
Carl Theodor Strasse 1, 40213 Dusseldorf, Germany
Michael Page International (Hong
Kong) Limited
Michael Page International
Recruitment Pvt Ltd
Hong Kong
Recruitment Consultancy
Suite 1701, 17F Central Tower, 28 Queen’s Road Central,
Central Hong Kong
India
Recruitment Consultancy
5th Floor, 2 North Avenue, Maker Maxity, Bandra-Kurla
Complex, Bandra (E), Mumbai 400051, India
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 Name of undertaking
Country of
incorporation
Principal
activity
Registered office
134
PT Michael Page Internasional Indonesia Indonesia
Recruitment Consultancy
Michael Page International
(Ireland) Limited
Michael Page International
Italia Srl
Page Personnel Italia SpA
Michael Page International
(Japan) K.K.
Ireland
Recruitment Consultancy
One Pacific Place, Suites B-F, Level 12, Sudirman
Central Business District, Jl. Jend. Sudirman Kav
52-53, Jakarta 12190, Indonesia
c/o Mason Hayes & Curran, Southbank House,
Barrow Street, Dublin 4, Ireland
Italy
Italy
Recruitment Consultancy
Via Spadari 1, 20123 Milan, Italy
Recruitment Consultancy
Via Spadari 1, 20123 Milan, Italy
Japan
Recruitment Consultan
6F Hulic Kamiyacho Building, 4-3-13 Toranomon,
Minato-ku, Tokyo 105-0001, Japan
Agensi Pekerjaan Michael Page
International (Malaysia) SDN BHD
Malaysia
Recruitment Consultancy
10th Floor, Wisma Hamjah-Kwong Hing, No.1
Leboh Ampang, 50100 Kuala Lumpur
Michael Page (Mauritius) Limited
Mauritius
Recruitment Consultancy
La Chaussee Office 530 & 531, Medine Mews,
Port-Louis, Mauritius
Michael Page International
(Mauritius) Limited
Mauritius
Recruitment Consultancy
Corner of Suffren and Eugene Laurent Streets, 5th
Floor, Atchia Building, Port-Louis, Mauritius
Michael Page International
Mexico Reclutamiento Especializado, S.A.
de C.V.
Mexico
Recruitment Consultancy
Michael Page International Mexico
Servicios Corporativos SA de CV
Mexico
Recruitment Consultancy
Page Interim Mexico Servicios
SA de CV
Mexico
Recruitment Consultancy
Michael Page International (Maroc)
SARL AU
Morocco
Recruitment Consultancy
Michael Page International (Nederland)
B.V.
Netherlands
Recruitment Consultancy
Page Interim B.V.
Netherlands
Recruitment Consultancy
Michael Page International (NZ) Limited New Zealand
Recruitment Consultancy
Michael Page International Panama S.A. Panama
Recruitment Consultancy
Av. Paseo de la Reforma, No. 115, Piso 10,
Col. Lomas de Chapultepec, Z.C. 11000,
CDMX, Mexico
Av. Paseo de la Reforma, No. 115, Piso 10,
Col. Lomas de Chapultepec, Z.C. 11000,
CDMX, Mexico
Av. Paseo de la Reforma, No. 115, Piso 10, Col.
Lomas de Chapultepec, Z.C. 11000, CDMX,
Mexico
Residence Plein Ciel 9, Angle rue Mahassine
Arrouyani et Ali Abderrazak, Quartier Racine-20,
100 Casablanca, Morocco
World Trade Center, Strawinskylaan 421, 107XX,
Amsterdam, Netherlands
World Trade Center, Strawinskylaan 421, 107XX,
Amsterdam, Netherlands
Part Level 6, 41 Shortland Street, Auckland, New
Zealand 1010
Punta Pacifica, Blvrd Pacifica Oceania Business
Plaza, Torre 2000, Piso 43, Panama
Michael Page International
Peru SRL
Page Personnel Services Temporales
Peru S.R.L.
Peru
Peru
Recruitment Consultancy
Calle Las Orquídeas 665 esq. Andrés Reyes - Piso
2, Oficina 201 San Isidro, Peru
Recruitment Consultancy
Calle Las Orquídeas 665 esq. Andrés Reyes - Piso
2, Oficina 201 San Isidro, Peru
Michael Page International Recruitment
(Philippines) Inc.
Philippines
Recruitment Consultancy
20th Floor, Citibank Center Building, 8741 Paseo
de Roxas, Bel-Air, City of Makati, NCR, Fourth
District, Philippines
Michael Page International
(Poland) Sp.z.o.o
Michael Page International Empressa
de Trabalho Temporário e Serviços de
Consultadoria Lda
Poland
Recruitment Consultancy
ul. Zlota 59, 00-120 Warsaw, Poland
Portugal
Recruitment Consultancy
Avenida da Liberdade n 180A, 1250-146 Lisboa,
Portugal
MICPAGE Services Lda
Portugal
Recruitment Consultancy
Avenida da Liberdade n 180A, 1250-146 Lisboa,
Portugal
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 135
Name of undertaking
Michael Page International
(UAE) Limited – QFC Branch
Michael Page International Pte
Limited*
Country of
incorporation
Principal
activity
Registered office
UAE
Recruitment Consultancy
Qatar Financial Centre, Office 2, Ground Floor, Tornado Tower,
West Bay, PO Box 23153, Doha, Qatar
Singapore
Recruitment Consultancy
One Raffles Place, #09-61 Office Tower Two, Singapore
048616
Page Personnel Recruitment Pte Ltd Singapore
Recruitment Consultancy
One Raffles Place, #09-61 Office Tower Two, Singapore
048616
Michael Page International (SA)
(Pty) Limited
Michael Page Africa (SA) (Pty)
Limited
South Africa
Recruitment Consultancy
PO Box 653555, Benmore 2010, South Africa
South Africa
Non-trading
PO Box 653555, Benmore 2010, South Africa
Michael Page Holding (España) SL Spain
Holding company
Paseo de la Castellana 28 -3ª, 28046 Madrid, Spain
Michael Page AD SL
Spain
Recruitment Consultancy
Paseo de la Castellana 28 -3ª, 28046 Madrid, Spain
Page Group Europe SL
Spain
Support Services
Plaza Europa 21-23 5ª, 08908 Hospitalet de Llobregat
(Barcelona), Spain
Page Group Spain Recursos
Humanos ETT SA
Michael Page International
(Sweden) AB
Michael Page International
(Switzerland) SA
Spain
Recruitment Consultancy
Calle Julian Camarillo 42-4, 28037 Madrid, Spain
Sweden
Recruitment Consultancy Master Samuelsgatan 42, l4tr 111 57 Stockholm, Sweden
Switzerland
Recruitment Consultancy
Quai de la Poste 12, CH-1204 Geneva, Switzerland
Taiwan Michael Page International
Co Ltd
Taiwan
Recruitment Consultancy
8F-1 Shin Kong Xin Yi Financial Building,
36-1 Songren Road Xin-Yi District, Taipei City, Taiwan 110
Michael Page Limited
Thailand
Holding company
17th Floor, ITF Tower, No 140/36-37 Silom Road, Kwaeng
Suriawong, Khet Banrak, Bangkok, Thailand
Michael Page International
Recruitment (Thailand) Limited
Thailand
Recruitment Consultancy
Unit 3076, 30th Floor Bhiraji Tower, EmQuartier, 689 Sukhumvit
Road, Klongton Nuea, Vadhanna, Bangkok 10110, Thailand
Michael Page International NEM İst.
Dan. Ltd. Şti
Turkey
Recruitment Consultancy
Buyukdere Caddesi, Kanyon Ofis, Binasi No. 185, Kat 5 34394
Levent, Istanbul, Turkey
MPI Yönetim Servisleri ve Dan. Ltd.
Şti.
Turkey
Recruitment Consultancy
Buyukdere Caddesi, Kanyon Ofis, Binasi No. 185, Kat 5 34394
Levent, Istanbul, Turkey
Michael Page International (Vietnam)
Co. Limited
Vietnam
Recruitment Consultancy
Level 9, Saigon Centre, Tower 2, 67 Le Loi Street, Ben Nhge
Ward, District 1, Ho Chi Minh City, Vietnam
Michael Page International (UAE)
Limited
United Arab
Emirates
Recruitment Consultancy
No. 202, Al Fattan Currency House, Tower 1, Dubai
International Finance Centre (DIFC), PO Box 506702, Dubai,
United Arab Emirates
Michael Page International Inc.*
United States
Recruitment Consultancy
622 Third Avenue, 29th Floor, New York, NY10017, USA
*The equity of these subsidiary undertakings is held directly by PageGroup plc. All companies have been included in the consolidation
and operate principally in their country of incorporation.
The percentage of the issued share capital held is equivalent to the percentage of voting rights held. The Group holds 100% of all
classes of issued share capital. The share capital of all the subsidiary undertakings comprise Ordinary shares.
The following subsidiaries are exempt from the requirements of the Companies Act 2006 relating to the audit of accounts under
section 479A of the Act:
• Michael Page International Southern Europe Limited
• Michael Page Partnership Limited
• Michael Page International Holdings Limited
• Michael Page Employment Services Limited
•
LPM (Professional Recruitment) Limited
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 136
14. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less allowance for expected credit losses and revenue reversals
Net trade receivables
Amounts due from Group companies
Other receivables
Accrued Income (net of revenue reversals)
Prepayments
Non-current
Other receivables
Group
2020
£’000
2019
£’000
Company
2020
£’000
2019
£’000
197,195
281,176
(11,061)
(10,081)
186,134
271,095
–
–
–
–
–
–
–
4,393
51,282
10,667
–
808,610
607,159
10,643
70,421
13,396
–
–
–
–
–
–
252,476
365,555
808,610
607,159
13,169
15,036
–
–
The fair values of trade and other receivables are not materially different to those disclosed above.
The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in Note
21.
All amounts due from Group undertakings are unsecured, interest-free and repayable on demand.
15. TRADE AND OTHER PAYABLES
Current
Trade payables
Amounts owed to Group companies
Other tax and social security
Other payables
Accruals
Non-current
Accruals
Other tax and social security
Group
2020
£’000
Company
2019
£’000
2020
£’000
2019
£’000
3,993
6,702
–
–
–
44,890
35,664
99,475
–
1,026,516
962,221
51,687
31,216
126,206
–
–
–
–
140
142
184,022
215,811
1,026,656
962,363
11,836
647
12,483
10,330
1,283
11,613
–
–
–
–
–
–
The fair values of trade and other payables are not materially different to those disclosed above.
All amounts due to Group undertakings are unsecured, interest-free and repayable on demand.
The total liability relating to other tax and social security includes a balance of £0.6m (2019: £1.3m) relating to social charges on
share-based payments.
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 21.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 137
16. BANK OVERDRAFTS
No bank overdrafts were utilised in respect of the year ended 31 December 2020 (2019: £Nil).
At 31 December 2020, the Group had available £20m (2019: £20m) of undrawn uncommitted overdraft facility with HSBC, £1m
elsewhere in the Group, £30m of committed RCF facility with BBVA and £300m available through the “Covid Corporate Financing
Facility” commercial paper programme. There is also £2.46m of undrawn borrowing facilities under the Invoice Discounting
arrangement with HSBC. Under the terms of the Invoice Discount Facility we are able to borrow up to £50m depending on the level
of UK trade receivables held at any one time. Based on the carrying amount of trade receivables at the year-end we were able to
borrow £2.46m of the £50m and hence no actual amount was drawn down on the facility at the year end. The Group utilised the
facilities during the year on an ad-hoc basis.
All other bank overdrafts and facilities are repayable on demand. The Group’s exposure to interest rate, foreign currency and liquidity
risk for financial assets and liabilities is disclosed in Note 21.
17. DEFERRED TAX
The following are the major deferred tax (assets)/liabilities recognised by the Group, and the movements thereon, during the current
and prior reporting periods.
At 1 January 2020
Recognised in equity for the year
Recognised in profit or loss for the year
Exchange differences
At 31 December 2020
At 1 January 2019
Recognised in equity for the year
Recognised in profit or loss for the year
Exchange differences
At 31 December 2019
Share-based
payments
£’000
Tax losses
£’000
Provisions
£’000
Related party
transactions
£’000
1,150
67
(728)
1
490
2,258
(240)
(869)
1
1,150
1,940
–
495
(247)
2,188
2,794
–
(657)
(197)
1,940
5,345
–
(664)
21
4,702
5,015
–
608
(278)
5,345
4,730
–
(2,024)
40
2,746
4,540
–
226
(36)
4,730
Other
£’000
3,712
–
2,864
(603)
5,973
2,250
264
1,541
(343)
3,712
Total
£’000
16,877
67
(57)
(788)
16,099
16,857
24
849
(853)
16,877
The amounts disclosed in 2019 for the analysis of the deferred tax assets and liabilities have been represented to align with the
presentation followed in the current year. Certain deferred tax assets and liabilities have been offset in accordance with the Group’s
accounting policy. The following is the analysis of the deferred tax balances (after offset) for balance sheet purposes:
Deferred tax assets
Deferred tax liabilities
2020
£’000
17,688
(1,589)
16,099
2019
£’000
18,915
(2,038)
16,877
No deferred tax liability has been recognised in respect of £149.7m (2019: £129.3m) of unremitted earnings of subsidiaries because
the Group is in a position to control the timing of the reversal of the temporary difference and it is not probable that such differences
will materialise in the foreseeable future. The potential deferred tax liability not recognised is £1.2m (2019: £0.1m).
The timing differences shown under “Other” predominantly includes such differences in relation to fixed assets, differences between
the Group GAAP, IFRS, and the local GAAP of each country in which PageGroup operates and differences between recognition of
income and expense for accounting and tax purposes.
The realisation of the deferred tax asset in respect of losses is dependent upon generating future taxable profits in the territories
in which the deferred tax assets has arisen. At 31 December 2020, £27.4m (2019: £14.9m) of deductible temporary differences,
unused tax losses and tax credits have not been recognised due to uncertainty over the taxable profits available to support the
realisation of these attributes. The tax effected balances are £8.1m (2019: £4.5m).
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 138
18. CALLED-UP SHARE CAPITAL
Allotted, called-up and fully paid Ordinary shares of 1p each
At 1 January
Shares issued
At 31 December
Shares issued in the year related to the Executive Share Option Scheme.
Share option plans
2020
2019
£’000
Number of
shares
£’000
Number of
shares
3,286
328,603,774
3,284
328,339,724
–
15,000
2
264,050
3,286
328,618,774
3,286
328,603,774
The Group has share option awards currently outstanding under an Executive Share Option Scheme (ESOS) and a Share Option
Scheme (SOS). These plans are described below.
At 31 December 2020 the following options had been granted and remained outstanding in respect of the Company’s Ordinary
shares of 1p under both the Michael Page Executive Share Option Scheme and the Share Option Scheme. The Group has no legal
or constructive obligation to repurchase or settle the options in cash.
Year of grant
Balance at
1 January
2020
2010 (Note 1)*
15,427
2011 (Note 2)
1,535,952
2012 (Note 2)*
2013 (Note 2)*
2014 (Note 2)*
504,013
563,149
933,333
2015 (Note 2)*
1,040,000
2016 (Note 2)*
687,915
2017 (Note 2)*
1,580,000
2018 (Note 2)
1,615,000
2019 (Note 2)
1,835,000
Granted
in year
Exercised
in year
Lapsed
in year
No. of
options
outstand-
ing at 31
December
2020
Base EPS/
OP range†
Exercise price
per share
Exercise period
–
–
–
–
–
–
–
–
–
–
(15,000)
(427)
–
6.6
381.5p-383.0p March 2013 – March 2020
–
–
–
–
–
(30,000)
(30,000)
–
–
–
(105,162)
1,430,790
OP range
491.0p-492.9p March 2014 – March 2021
(2,160)
501,853
OP range
477.0p March 2015 – March 2022
(17,500)
545,649
OP range
442.0p March 2016 – March 2023
(45,000)
888,333
OP range
484.0p March 2017 – March 2024
(135,000)
905,000
OP range
526.0p-534.0p March 2018 – March 2025
(30,000)
627,915
OP range
406.0p-427.0p March 2019 – March 2026
(136,795)
1,413,205
OP range
435.44p March 2020 – March 2027
(95,135)
1,519,865
OP range
529.0p March 2021 – March 2028
(75,000)
1,760,000
OP range
458.2-473.80p March 2022 – March 2029
(10,000)
1,840,000
OP range
332.0-387.47p March 2023 – March 2030
2020 (Note 2)
– 1,850,000
Total 2020
10,309,789 1,850,000
(75,000)
(652,179)
11,432,610
Weighted
average
exercise price
2020 (£)
4.77
3.37
4.13
4.81
4.55
Total 2019
10,596,497 1,900,000
(1,710,597)
(476,111)
10,309,789
Weighted
average
exercise price
2019 (£)
4.70
4.60
4.21
4.52
4.77
* These options have fully vested
† The Operating Profit ranges for each award are fully disclosed in Note 2 of this Note. 5,329,575 options were exercisable at the end of 2020 at a weighted average exercise
price of £4.65 (2019: £4.76). The weighted average share price at the date of exercise was £4.13.
Note 1
Executive Share Option Scheme
Using the ESOS, awards of share options can be made to key management personnel and senior employees to receive shares in
the Company.
No awards have been made under the ESOS since 2010 and this award has fully vested.
For grants under the ESOS, the performance condition is tested on the third anniversary and no retesting will occur thereafter. These
options were granted subject to a performance condition requiring that an option may only be exercised, in normal circumstances, if
there has been an increase in base earnings per share of at least 3% per annum above the growth in the UK Retail Price Index. The
respective base earnings per share for each grant are shown in the table above.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 139
Note 2
Share Option Scheme
Executive Directors of the Company are not eligible to participate in this plan. Any exercises of awards made under this plan are
settled by shares held in the Employee Benefit Trust.
This share option scheme was created in 2009 to provide an effective plan under which to grant awards from 2009 onwards. It was
the Board’s view that grants made under the existing ESOS, which would have required an increase over the 2008 base earnings
per share of at least 3% per annum above the growth in the UK Retail Price Index by 2011, would not be achievable due to the
impact of the global downturn on the Group’s EPS and thus would not provide the required retention incentive. Further grants
under the SOS have been made in each year from 2011. The performance conditions for these grants are also directly linked to the
Group’s Operating Profit.
For the 2011 grant, if Operating Profit is in excess of £100m, 1% of the award will vest for every additional £1m of Operating Profit
achieved, up to a maximum of 100% at Operating Profit of £200m or more. No additional amount of this scheme will vest based on
2020 Operating Profit. The final vesting is 47% based on 2019 Operating Profit.
For grants between 2012 and 2015, if Operating Profit is in excess of £50m, a proportion of the award equivalent to the amount
of Operating Profit achieved will vest up to a maximum of 100% if the Operating Profit is £100m or more. As Operating Profit of
£118.3m was achieved in 2017, the performance criteria have been fully achieved and these awards have fully vested.
For the 2016 grant, if Operating Profit is in excess of £75m, 2% of the award will vest for every additional £1m of Operating Profit
achieved, up to a maximum of 100% at Operating Profit of £125m or more. As Operating Profit of £142.5m was achieved in 2018,
the performance criteria have been fully achieved and these awards have fully vested.
For the 2017 grant, if Operating Profit is in excess of £50m, 25% of the award will vest, 1% of the award will vest for every additional
£1m of Operating Profit achieved, up to a maximum of 100% at Operating Profit of £125m or more. As Operating Profit of £146.7m
was achieved in 2019, the performance criteria have been fully achieved and these awards have fully vested.
For the 2018 grant, if Operating Profit is in excess of £75m, 25% of the award will vest. 1% of the award will vest for every additional
£1m of Operating Profit achieved, up to a maximum of 100% at Operating Profit of £150m or more. Based on 2020 Operating
Profit, the performance criteria of this scheme has not yet been achieved.
For the 2019 grant, if Operating Profit is in excess of £100m, 1% of the award will vest for every additional £1m of Operating Profit
achieved, up to a maximum of 100% at Operating Profit of £200m or more.
For the 2020 grant, if Operating Profit is in excess of £100m, 1% of the award will vest for every additional £1m of Operating Profit
achieved, up to a maximum of 100% at Operating Profit of £200m or more.
Other share-based payment plans
The Company also operates a Management Incentive Plan for the Executive Directors and senior employees and a Long-Term
Incentive Plan for the Chief Executive Officer, Chief Financial Officer and other senior employees. Details of these plans are disclosed
in the Directors’ Remuneration Report and are settled by the physical delivery of shares, currently satisfied by shares held in the
Employee Benefit Trust, to the extent that service and performance conditions are met. Movements on these plans are shown
below:
As at 1 January 2020
Granted
Lapsed
Exercised
As at 31 December 2020
Share option valuation and measurement
LTIP/ESIP
1,050,888
480,370
(18,193)
(649,545)
863,520
MIP
1,926,490
1,108,112
(138,521)
(656,034)
2,240,047
In 2020, options were granted on 13 March with the estimated fair value of the options granted on that day in the range of £0.91 to
£1.07. In 2019, options were granted on 12 March with the estimated fair value of the options granted on that day of £0.68. Share
options are granted under service and non-market performance conditions. These conditions are not taken into account in the fair
value measurement at grant date. There are no market conditions associated with the share option grants. The options outstanding
at 31 December 2020 have an exercise price in the range of 332p to 529p and a weighted average contractual life of 4.55 years.
The fair values of options and other share awards granted during the year were calculated using the Black-Scholes option pricing
model. The inputs into the model were as follows:
Share price (£)
Average exercise price (£)
Weighted average fair value (£)
Expected volatility
Expected life
Risk free rate
Expected dividend yield
Share Option Plans
Management Incentive Plan
2020
3.32
3.32
0.91
35.84%
5 years
0.26%
1.30%
2019
4.58
4.58
0.68
23.20%
5 years
1.16%
2.86%
2020
3.49
Nil
3.36
35.84%
3 years
0.26%
1.30%
2019
4.55
Nil
4.55
23.20%
3 years
1.16%
2.86%
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 140
Expected volatility was determined by reference to historical volatility of the Company’s share price in the last 12 months. The
expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations. Expectations of early exercise are incorporated into the Black-Scholes option
pricing model.
The Group recognised total expenses of £4.3m, including social security, (2019: £6.8m) related to share-based payment
transactions during the year.
19. RESERVES
Share premium
The share premium account has been established to represent the excess of proceeds over the nominal value for all share issues,
including the excess of the exercise share price over the nominal value of the shares on the exercise of share options.
Capital redemption reserve
The capital redemption reserve relates to the cancellation of the Company’s own shares.
Reserve for shares held in the Employee Benefit Trust
At 31 December 2020, the reserve for shares held in the employee benefit trust consisted of 12,795,658 Ordinary shares (2019:
10,433,864 Ordinary shares) held for the purpose of satisfying awards made under the Management Incentive Share Plan, the ESIP
and the SOS, representing 3.9% of the called-up share capital with a market value of £57.2m (2019: £54.6m).
There are 11,249,646 (2019: 7,960,864) of these shares held in the trust on which dividends are waived.
Currency translation reserve
Since first-time adoption of the International Financial Reporting Standards, the currency translation reserve comprises all foreign
exchange differences arising from the translation of the financial statements of foreign operations that are integral to the operations
of the Company.
20. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Short-term deposits
Cash and cash equivalents
Cash and cash equivalents in the statement of cash flows
Net funds
Group
2020
£’000
108,849
57,138
165,987
165,987
165,987
2019
£’000
90,856
6,976
97,832
97,832
97,832
Company
2020
£’000
2019
£’000
–
–
–
–
–
–
–
–
–
–
The Group operates multi-currency cash concentration and notional cash pools, and an interest enhancement facility. The Eurozone
subsidiaries and the UK-based Group Treasury subsidiary participate in the cash concentration arrangement, the Group Treasury
subsidiary retains the notional cash pool and the Asia Pacific subsidiaries operate the interest enhancement facility. The structures
facilitate interest compensation of cash whilst supporting working capital requirements.
21. FINANCIAL RISK MANAGEMENT
The Group has exposure to the following risks from its use of financial instruments:
(i) credit risk
(ii) liquidity risk
(iii) market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included
throughout these consolidated financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures
and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Audit Committee
is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 141
(i) Credit risk
Credit risk is the risk of financial loss to the Group if a client or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from clients. Management has a credit policy in place and the
exposure to credit risk is monitored on an ongoing basis.
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset in the balance sheet.
Trade and other receivables
Total trade receivables (net of allowances) held by the Group at 31 December 2020 amounted to £186.1m (2019: £271.1m).
An initial credit period is made available on invoices. No interest is charged on trade receivables from the date of the invoice during
this credit period. An impairment analysis is performed at each reporting date using a provision matrix to measure the expected
credit losses. The Group has established a provision matrix that is based on its historical credit loss experience adjusted for
forward-looking factors specific to the debtors and the economic environment. If there has been a significant increase in credit
risk in a customer or group of customers the loss is recognised immediately based on the future credit losses over the life of the
contract.
Included in the Group’s trade receivables balance are debtors with a carrying amount of £66.7m (2019: £138.1m) that are past due
at the reporting date for which the Group has not provided as the amounts are still considered recoverable. The Group does not
hold any collateral over these balances. The days’ sales of these receivables at the year end is 38 days in excess of the initial credit
period (2019: 52 days).
In the table below, the provision includes expected credit losses and provision for revenue reversals.
The ageing of trade receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 31-150 days
More than 150 days
Gross trade
receivables
2020
£’000
120,214
40,663
22,955
13,363
Provision
2020
£’000
(764)
(259)
(146)
(9,892)
Net trade
receivables
2020
£’000
Gross trade
receivables
2019
£’000
119,450
133,281
40,404
22,809
3,471
76,682
56,546
14,667
Provision
2019
£’000
(259)
(152)
(112)
(9,558)
Net trade
receivables
2019
£’000
133,022
76,530
56,434
5,109
197,195
(11,061)
186,134
281,176
(10,081)
271,095
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each client. The demographics of the
Group’s client base, including the country in which clients operate, also has an influence on credit risk. Less than 3% of the Group’s
revenue is attributable to sales transactions with a single client. The geographic diversification of the Group’s revenue also reduces
the concentration of credit risk.
The majority of the Group’s clients have been transacting with the Group for several years, with losses rarely occurring. In monitoring
client credit risk, clients are grouped according to their credit characteristics, including geographic location, industry, ageing profile,
maturity and existence of previous financial difficulties.
Movement in the allowance for expected credit losses and revenue reversals:
Balance at beginning of the year
Expected credit losses and provision for revenue reversals recognised on receivables
Amounts written off as uncollectable
Amounts recovered/reversed during the year
Balance at end of the year
2020
£’000
10,081
27,773
(285)
(26,508)
11,061
2019
£’000
9,174
24,068
(923)
(22,238)
10,081
The allowance for expected credit losses represents a provision for debts which the Group estimate may be irrecoverable, including
£6.3m (2019: £4.7m) of debts in litigation.
The impairment recognised represents the difference between the carrying amount of these trade receivables and the present value
of the expected liquidation proceeds. The Group does not hold any collateral over these balances.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 Exposure to credit risk
The maximum exposure to credit risk for net trade receivables at the reporting date by geographic region was:
142
EMEA
United Kingdom
Asia Pacific
Americas
Carrying amount
2020
£’000
2019
£’000
118,327
165,081
21,805
23,159
22,843
37,426
33,333
35,255
186,134
271,095
The maximum exposure to credit risk for net accrued income at the reporting date by geographic region was:
EMEA
United Kingdom
Asia Pacific
Americas
Carrying amount
2020
£’000
19,591
7,173
14,746
9,772
51,282
2019
£’000
15,789
11,034
17,081
26,517
70,421
The entire accrued income balance is not past due. The fair values of trade and other receivables are not materially different to
those disclosed above and in note 14. There is no material effect on pre-tax profit if the instruments are accounted for at fair value
or amortised cost.
(ii) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board, which has built an appropriate liquidity risk management
framework that aims to ensure that the Group has sufficient cash or credit facilities at all times to meet all current and forecast
liabilities as they fall due. It is the Directors’ intention to continue to finance the activities and development of the Group from
retained earnings.
Cash surpluses were 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 also operates a multi-currency notional cash pool to facilitate
interest and balance compensation of cash and bank overdrafts.
The following are the contractual maturities of financial liabilities:
2020
Lease liabilities*
Trade payables
Less than
1 month
£’000
2,298
3,738
1-3 months
£’000
3-12 months
£’000
More than
12 months
£’000
5,990
111
24,423
70,758
144
Accruals and other payables
87,597
15,591
31,046
2019
Lease liabilities*
Trade payables
Less than
1 month
£’000
2,262
6,037
1-3 months
£’000
3-12 months
£’000
More than
12 months
£’000
5,173
602
23,390
102,950
63
Accruals and other payables
102,344
20,254
34,824
*The above lease liabilities are the contractual undiscounted cashflows before discounting at the incremental borrowing rate.
–
905
–
–
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 143
Capital is equity attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to
ensure that it maintains a strong credit rating and healthy capital ratios to support its business and maximise shareholder value. The
Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust
the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders through share
repurchases with subsequent cancellation, or issue new shares. No changes were made in the objectives, policies or processes for
managing capital during the years ended 31 December 2020 and 31 December 2019.
(iii) Market risk and sensitivity analysis
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates,
but these risks are not deemed to be material. However, a sensitivity analysis showing hypothetical fluctuations in Pounds Sterling
against the Group’s main exposure currencies is shown on the next page. There has been no material change in the Group’s
exposure to market risks or the manner in which it manages and measures the risk.
Interest rate risk management
Borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk. The Group does not consider this
risk as significant. The benchmark rates for determining floating rate liabilities are based on relevant national LIBOR equivalents.
The Group’s only interest bearing assets and liabilities at 31 December 2020 relate to cash and bank overdrafts. The average
interest rate payable on bank overdrafts was 2.51% (2019: 3.00%).
Currency rate risk
The Group publishes its results in Pounds Sterling and conducts its business in many foreign currencies. As a result, the Group is
subject to foreign currency exchange risk due to exchange rate movements. The Group is exposed to foreign currency exchange
risk as a result of transactions in currencies other than the functional currencies of some of its subsidiaries and the translation of the
results and underlying net assets of foreign subsidiaries.
The main functional currencies of the Group are Sterling, Euro, Chinese Renminbi, Swiss Franc, Singapore Dollar, Hong Kong
Dollar, Australian Dollar and US Dollar. The Group does not have material transactional currency exposures. The Group is exposed
to foreign currency translation differences in accounting for its overseas operations. The Group policy is not to hedge translation
exposure.
In certain cases, where the Company gives or receives short-term loans to and from other Group companies with different reporting
currencies, it may use foreign exchange rate derivatives to manage the currency exposure that arises on these loans. It is the
Group’s policy not to seek to designate these derivatives as hedges.
All derivative financial instruments are classified as derivatives at fair value through the income statement. The Group does not use
derivatives for speculative purposes. All transactions in derivative financial instruments are undertaken to manage the risks arising
from underlying business activities.
Information on the fair value of derivative financial instruments held at the balance sheet date is shown in the table below.
Fair values are not adjusted for credit risk, as required by IFRS 13, because credit impact is not material given the low fair value
levels. All derivative instruments are classified as level 2 instruments.
Derivative financial instruments
Derivative assets
Derivative liabilities
Net derivative (liabilities)
Sensitivity analysis – currency risk
Derivatives at fair value
2020
£m
0.3
(2.0)
(1.7)
2019
£m
2.3
(4.3)
(2.0)
A 10% strengthening of Sterling against the following currencies at 31 December 2020 would have increased/(decreased) equity
and profit or loss by the amounts shown over the page. This is reflective of the exchange rates movements experienced by the
Group over the last 3 years. This analysis is applied currency by currency in isolation, i.e. ignoring the impact of currency correlation,
and assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for
2019. The amounts generated from the sensitivity analysis are forward-looking estimates of market risk assuming certain adverse
market conditions occur. Actual results in the future may differ materially from those projected, due to developments in the global
financial markets which may cause fluctuations in interest and exchange rates to vary from the hypothetical amounts disclosed in
the table over the page, which therefore should not be considered a projection of likely future events and losses.
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 Euro
Australian Dollar
Swiss Franc
Chinese Renminbi
Hong Kong Dollar
Singapore Dollar
United States Dollar
Other
Euro
Australian Dollar
Swiss Franc
Chinese Renminbi
Hong Kong Dollar
Singapore Dollar
Other
144
2020 equity
£’000
2020 PBT
£’000
(12,877)
(1,238)
(350)
(658)
(851)
(1,488)
(1,065)
(1,663)
2019 equity
£’000
(12,399)
(1,514)
(1,825)
(927)
(930)
(1,496)
(4,342)
(470)
199
67
55
27
(23)
(143)
535
2019 PBT
£’000
(1,451)
(118)
75
12
403
(14)
(284)
A 10% weakening of Sterling against the above currencies at 31 December would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that all other variables remain constant.
22. COMMITMENTS AND CONTINGENT LIABILITIES
Capital Commitments
The Group had nil contractual capital commitments as at 31 December 2020 relating to property, plant and equipment (2019 nil).
The Group had contractual capital commitments of nil as at 31 December 2020 relating to computer software (2019: nil).
Guarantees
The Company has provided guarantees to other Group undertakings amounting to £4.0m (2019: £1.0m) in the ordinary course of
business. It is not anticipated that any material liabilities will arise from the contingent liabilities.
VAT Group registration
As a result of Group registration for VAT purposes, the Company is contingently liable for VAT liabilities arising in other companies
within the VAT group which at 31 December 2020 amounted to £6.8m (2019: £4.3m).
23. EVENTS AFTER THE BALANCE SHEET DATE
There were no shares options exercised from 31 December 2020 to 2 March 2021.
24. RELATED PARTY TRANSACTIONS
Identity of related parties
The Company has a related party relationship with its Directors and members of the Executive Committee, and subsidiaries
(Note 12).
Transactions with key management personnel
Key management personnel are deemed to be the Directors and members of the Executive Committee as detailed in the
biographies on pages 61 to 66. The remuneration of Directors and members of the Executive Committee is determined by the
Remuneration Committee having regard to the performance of individuals and market trends. The transactions for the year were:
FINANCIAL STATEMENTSAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 145
Related party transactions
Wages and salaries
Social security costs
Short-term benefits
Pension costs – defined contribution plans
Share-based payments and deferred cash plan
Company
2020
£’000
3,270
232
432
231
2,464
6,629
2019
£’000
5,448
467
682
231
4,225
11,053
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on
consolidation. Details of transactions between the parent company and subsidiary undertakings are shown below.
Transactions
144,312
49,927
808,610
607,159
1,026,512
962,221
Dividends received
Amounts owed
by related parties
Amounts owed
to related parties
2020
£’000
2019
£’000
2020
£’000
2019
£’000
2020
£’000
2019
£’000
FIVE-YEAR SUMMARY
Revenue
Gross profit
Operating profit
Profit before tax
Profit attributable to equity holders
Conversion†
Basic earnings per share (pence)
* Includes exceptional items.
† Operating profit before exceptional items as a percentage of gross profit.
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
1,196,125
1,371,534
1,549,941
1,653,948 1,304,791
621,034
100,952
99,996
72,096
16.3%
23.1
711,568
118,322
118,162
83,080
16.6%
26.5
814,902
142,463
142,275
103,703
17.5%
32.5
855,450
610,249
146,669
17,028
144,245
103,445
17.1%
32.2
15,544
(5,742)
2.8%
(1.8)
FINANCIAL STATEMENTSAnnual Report and Accounts 2020 146
SHAREHOLDER INFORMATION AND ADVISERS
Annual General Meeting
To be held on 3 June 2021 at 9.30am at Page House, 1 Dashwood Lang Road, The Bourne Business Park, Addlestone, Surrey,
KT15 2QW.
General Counsel & Company Secretary
Kaye Maguire
Company number
3310225
Registered office, domicile and legal form
The Company is a limited liability company incorporated and domiciled within the United Kingdom.
The address of its registered office is:
Page House,
1 Dashwood Lang Road,
The Bourne Business Park,
Addlestone,
Surrey, KT15 2QW.
Auditor
Ernst & Young LLP
1 More London Place
London SE1 2AF
Solicitors
Herbert Smith LLP
Exchange House
Primrose Street
London EC2A 2EG
Bankers
HSBC Bank plc
60 Queen Victoria Street
London EC4N 4TR
Joint corporate brokers
Citigroup
33 Canada Square
Canary Wharf
London E14 5LB
HSBC Bank plc
8 Canada Square
Canary Wharf
London E14 5HQ
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Financial PR
FTI Consultancy
200 Aldersgate
Aldersgate Street
London EC1A 4HD
ADDITIONAL INFORMATIONAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 147
ARTICLES OF ASSOCIATION
The following summarises certain provisions of the Company’s
Articles of Association (as adopted on 21 May 2010) and
applicable English Law. The summary is qualified in its entirety by
reference to the Companies Act 2006 of Great Britain (the “Act”),
as amended, and the Company’s Articles of Association. Under
the Act, the Memorandum of Association of the Company has
now become a document of record, and no longer contains any
operative provisions.
Incorporation
The Company is incorporated under the name PageGroup plc
and is registered in England and Wales with registered number
3310225.
Share capital
The Act abolished the concept of, and requirement for a
company to have, an authorised share capital. As such, the
Company no longer has an authorised share capital.
If a member or any person appearing to be interested in shares
held by a member has been duly served with a notice under the
Act and is in default for the prescribed period in supplying to
the Company information thereby required, unless the Directors
otherwise determine, the member shall not be entitled in respect
of the default shares to be present or to vote (either in person
or by representative or proxy) at any general or class meeting
of the Company or on any poll or to exercise any other right
conferred by membership in relation to such meeting or poll. In
certain circumstances, any dividend due in respect of the default
shares shall be withheld and certain certificated transfers may be
refused.
A member entitled to more than one vote need not, if he votes,
use all his votes or cast all the votes he uses in the same way.
A member is entitled to appoint another person as his proxy to
exercise all or any of his rights to attend and speak and vote
at a meeting of the Company. A proxy need not be a member.
A member may appoint more than one proxy to attend on
the same occasion. This does not preclude the member from
attending and voting at the meeting or at any adjournment of it.
Alteration of capital
Limitations and non-resident or foreign shareholders
The Company may from time to time by ordinary resolution:
(a) consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
English law treats those persons who hold the shares and
are neither UK residents nor nationals in the same way as UK
residents or nationals. They are free to own, vote on and transfer
any shares they hold.
(b) sub-divide its shares, or any of them, into shares of a smaller
amount than its existing shares; and
Variation of rights
(c) determine that, as between the shares resulting from such
a sub-division, any of them may have any preference or
advantage as compared with the others.
Subject to the provisions of the Act, the Company may by
special resolution reduce its share capital, any capital redemption
reserve and any share premium account, in any way.
Purchase of own shares
Subject to the provisions of the Act, the Company may purchase
its own shares, including redeemable shares. The Company
proposes to renew its authority to purchase its own shares for
another year in item 17 of the Annual General Meeting notice.
General meetings and voting rights
The Directors may call general meetings whenever and at
whatever time and location they so determine. Subject to the
provisions of the Act, an annual general meeting and all general
meetings (which shall be called extraordinary general meetings)
shall be called by at least 21 clear days’ notice. Subject to the
provisions of the Act, the Company may resolve to reduce the
notice period for general meetings (other than annual general
meetings) to 14 days on an annual basis. The Company
proposes to renew its authority to hold general meetings on 14
days’ notice for another year in item 18 of the Annual General
Meeting notice. Two persons entitled to vote upon the business
to be transacted shall be a quorum.
The Articles of Association provide that subject to any rights or
restrictions attached to any shares, on a show of hands every
member and every duly appointed proxy present shall have
one vote. Every corporate representative present who has been
duly authorised by a corporation has the same voting rights as
the corporation would be entitled to. On a poll every member
present in person or by a duly appointed proxy or corporate
representative shall have one vote for every share of which he
is a holder or in respect of which his appointment as proxy or
corporate representative has been made. No member shall be
entitled to vote in respect of any share held by him if any call or
other sum payable by him to the Company remains unpaid.
If at any time the capital of the Company is divided into different
classes of shares, the rights attached to any class may be varied
either:
(a)
(b)
in such manner (if any) as may be provided by those
rights; or
in the absence of any such provision, with the consent
in writing of the holders of three-quarters in nominal
value of the issued shares of the class (excluding any
shares of that class held as treasury shares) or with the
sanction of a special resolution passed at a separate
general meeting of the holders of the shares of the
class,
but not otherwise, and may be so varied either whilst the
Company is a going concern or during, or in contemplation
of, a winding-up. At every such separate general meeting the
necessary quorum shall be at least two persons together holding
or representing by proxy at least one-third in nominal value of
the issued shares of the class (excluding any shares of that class
held as treasury shares), save that at any adjourned meeting any
holder of shares of the class (other than treasury shares) present
or by proxy shall be a quorum. Unless otherwise expressly
provided by the rights attached to any class of shares, those
rights shall be deemed not to be varied by the purchase by the
Company of any of its own shares or the holding of such shares
as treasury shares.
Dividend rights
Holders of the Company’s ordinary shares may by ordinary
resolution declare dividends but no such dividend shall exceed
the amount recommended by the Directors. If, in the opinion of
the Directors, the profits of the Company available for distribution
justify such payments, the Directors may, from time to time, pay
interim dividends on the shares of such amounts and on such
dates and in respect of such periods as they think fit. The profits
of the Company available for distribution and resolved to be
distributed shall be apportioned and paid proportionately to the
amounts paid up on the shares during any portion of the period
in respect of which the dividend is paid. The members may, at a
general meeting declaring a dividend upon the recommendation
ADDITIONAL INFORMATIONAnnual Report and Accounts 2020 148
of the Directors, direct that it shall be satisfied wholly or partly
by the distribution of specific assets.
No dividend shall be paid otherwise than out of profits available
for distribution as specified under the provisions of the Act.
Any dividend unclaimed after a period of twelve years from the
date of declaration of such dividend shall, if the Directors so
resolve, be forfeited and shall revert to the Company.
Calls on shares
Subject to the terms of allotment, the Directors may make
calls upon members in respect of any amounts unpaid on their
shares (whether in respect of nominal value or premium) and
each member shall pay to the Company as required by the
notice the amount called on his shares.
Transfer of shares
Any member may transfer all or any of his shares in certificated
form by instrument of transfer in the usual common form or in
any other form which the Directors may approve. The transfer
instrument shall be signed by or on behalf of the transferor
and, except in the case of fully-paid shares, by or on behalf of
the transferee.
Where any class of shares is for the time being a participating
security, title to shares of that class which are recorded as
being held in uncertificated form, may be transferred (to not
more than four transferees) by the relevant system concerned.
The Directors may in their absolute discretion refuse to register
any transfer of shares (being shares which are not fully paid or
on which the Company has a lien), provided that if the share is
listed on the Official List of the UK Listing Authority such refusal
does not prevent dealings in the shares from taking place on
an open and proper basis.
The Directors may also refuse to register a transfer of shares
(whether fully paid or not) unless the transfer instrument:
(a) is lodged at the registered office, or such other place as
the Directors may appoint, accompanied by the relevant
share certificate(s)
(b) is in respect of only one class of share
(c) is in favour of not more than four transferees
The Directors of the Company may refuse to register the
transfer of a share in uncertificated form to a person who
is to hold it thereafter in certificated form in any case where
the Company is entitled to refuse (or is excepted from the
requirements) under the Uncertificated Securities Regulations
2001 to register
the transfer.
Directors
The Company’s Articles of Association provide for a Board of
Directors, consisting of (unless otherwise determined by the
Company by ordinary resolution) not fewer than two Directors,
who shall manage the business of the Company. The Directors
may exercise all the powers of the Company, subject to the
provisions of the Articles of Association and any directions
given by special resolution. If the quorum is not fixed by the
Directors, the quorum shall be two.
Subject to the provisions of the Company’s Articles of
Association, the Directors may delegate any of their powers:
(a) to such person or committee
(b) by such means (including power of attorney)
(c) to such an extent
(d) in relation to such matters or territories
(e) on such terms and conditions
as in each case they think fit, and such delegation may include
authority to sub-delegate all or any of the powers delegated,
may be subject to conditions and may be revoked or varied.
The Directors may also, by power of attorney or otherwise,
appoint any person, whether nominated directly or indirectly
by the Directors, to be the agent of the Company for such
purposes and subject to such conditions as they think fit, and
may delegate any of their powers to such an agent.
The Articles of Association place a general prohibition on
a Director voting on any resolution concerning a matter in
which he has, directly or indirectly, a material interest (other
than an interest in shares, debentures or other securities of,
or otherwise in or through the Company), unless his interest
arises only because the case falls within one or more of the
following:
(a) the giving to him of a guarantee, security, or indemnity in
respect of money lent to, or an obligation incurred by him
for the benefit of, the Company or any of its subsidiary
undertakings
(b) the giving to a third party of a guarantee, security, or
indemnity in respect of an obligation of the Company or
any of its subsidiary undertakings for which the Director
has assumed responsibility in whole or in part and whether
alone or jointly with others under a guarantee or indemnity
or by the giving of security
(c) the giving to him of any other indemnity which is on
substantially the same terms as indemnities given or to be
given to all of the other directors and/or the funding by the
Company of this expenditure on defending proceedings
or the doing by the Company of anything to enable him to
avoid incurring such expenditure where all other directors
have been given or are to be given substantially the same
arrangements
(d) the purchase or maintenance for any director or directors
of insurance against liability
(e) his interest arises by virtue of his being, or intending
to become a participant in the underwriting or sub-
underwriting of an offer of any shares in or debentures or
other securities of the Company for subscription, purchase
or exchange
(f) any arrangement for the benefit of the employees and
directors and/or former employees and former directors of
the Company or any of its subsidiaries and/or the members
of their families or any person who is or was dependent
on such persons, including but without being limited to
a retirement benefits scheme and an employees’ share
scheme, which does not accord to him any privilege or
advantage not generally accorded to employees and/or
former employees to whom the arrangement relates
(g)any transaction or arrangement with any other company
in which he is interested, directly or indirectly (whether as a
director or shareholder or otherwise), provided that he is not
the holder of or beneficially interested in at least 1% of any
class of shares of that company (or of any other company
through which his interest is derived), and is not entitled to
exercise at least 1% of the voting rights available to members
of the relevant company
If a question arises at a Directors’ meeting as to the right of a
Director to vote, the question may be referred to the Chairman
of the meeting (or if the Director concerned is the Chairman, to
the other Directors at the meeting), and his ruling in relation to
any Director (or, as the case may be, the ruling of the majority
ADDITIONAL INFORMATIONAnnual Report and Accounts 2020FINANCIAL STATEMENTSCORPORATE GOVERNANCEADDITIONAL INFORMATIONSTRATEGIC REPORT 149
of the other Directors in relation to the Chairman) shall be final
and conclusive.
The Act requires a Director of a company who is in any way
interested in a proposed transaction or arrangement with the
company to declare the nature of his interest at a meeting of
the Directors of the company (save that a director need not
declare an interest if it cannot reasonably be regarded as giving
rise to a conflict of interest). The definition of “interest” includes
the interests of spouses, civil partners, children, companies and
trusts.
Borrowing powers of the Directors
The Directors shall restrict the borrowings of the Company
and exercise all powers of control exercisable by the Company
in relation to its subsidiary undertakings so as to secure (as
regards subsidiary undertakings so far as by such exercise they
can secure) that the aggregate principal amount (including any
premium payable on final repayment) outstanding of all money
borrowed by the Group (excluding amounts borrowed by any
member of the Group from any other member of the Group),
shall not at any time, save with the previous sanction of an
ordinary resolution of the Company, exceed an amount equal to
three times the aggregate of:
(a) the amount paid up on the share capital of the Company
(b) the total of the capital and revenue reserves of the Group,
including any share premium account, capital redemption
reserve, capital contribution reserve and credit balance on
the profit and loss account, but excluding sums set aside for
taxation and amounts attributable to outside shareholders in
subsidiary undertakings of the Company and deducting any
debit balance on the profit and loss account, all as shown
in the latest audited consolidated balance sheet and profit
and loss account of the Group, but adjusted as may be
necessary in respect of any variation in the paid up share
capital or share premium account of the Company since
the date of that balance sheet and further adjusted as may
be necessary to reflect any change since that date in the
companies comprising the Group
Director’s appointment, retirement and removal
At each annual general meeting, there shall retire from office
by rotation:
(a) all Directors of the Company who held office at the time of
the two preceding annual general meetings and who did not
retire by rotation at either of them
(b) such additional number of Directors as shall, when
aggregated with the number of Directors retiring under
paragraph (a) above, equal either one third of the number of
Directors, in circumstances where the number of Directors is
three or a multiple of three, or in all other circumstances, the
whole number which is nearest to but does not exceed one-
third of the number of Directors (the “Relevant Proportion”)
provided that:
(i) the provisions of this paragraph (b) shall only apply if the
number of Directors retiring under paragraph (a) above is
less than the Relevant Proportion
(ii) subject to the provisions of the Act and to the relevant
provisions of the Articles of Association, the Directors to
retire under this paragraph (b) shall be those who have
been longest in office since their last appointment or
reappointment, but as between persons who became
or were last reappointed Directors on the same day
those to retire shall (unless they otherwise agree among
themselves) be determined by lot
If the Company, at the meeting at which a director retires by
rotation, does not fill the vacancy the retiring Director shall, if
willing to act, be deemed to have been reappointed unless a
resolution not to fill the vacancy or not to reappoint that Director
is passed.
In addition to any power of removal under the Act, the Company
may, by special resolution, remove a director before the
expiration of his period of office (without prejudice to any claim
for damages for breach of any contract of service between
the director and the Company) and, subject to the Articles of
Association, may by ordinary resolution, appoint another person
who is willing to act as a director, and is permitted by law to do
so, to be a director instead of him. The newly appointed person
shall be treated, for the purposes of determining the time at
which he or any other director is to retire as if he had become a
director on the day on which the director in whose place he is
appointed was last appointed or reappointed as a Director.
A Director shall be disqualified from holding office as soon as:
(a) that person ceases to be a director under the provisions of
the Act or is prohibited by law from being a Director
(b) a bankruptcy order is made against that person
(c) a composition is made with that person’s creditors generally
in satisfaction of that person’s debts
(d) by reason of that person’s mental health, a court makes
an order which wholly or partly prevents that person from
personally exercising any powers or rights which that person
would otherwise have
(e) notification is received by the Company from that person that
he is resigning or retiring from his office as director, and such
resignation or retirement has taken effect in accordance with
its terms
(f) in the case of an Executive Director, his appointment as such
is terminated or expires and the Directors resolve that he
should cease to be a Director
(g) that person is absent from Directors’ meetings for more than
six consecutive months (without permission of the other
Directors) and the Directors resolve that he should cease to
be a Director
(h) a notice in writing is served on him signed by all the Directors
stating that that person shall cease to be
a Director with immediate effect
There is no requirement of share ownership for a Director’s
qualification.
Amendments to the articles of association
Subject to the Act, the Articles of Association of the Company
can be altered by special resolution of the members.
Winding-up
If the Company is wound up, the liquidator may, with the
sanction of a special resolution of the Company and any other
sanction required by law:
(a) divide among the members in kind the whole or any part of
the assets of the Company and, for that purpose, set such
values as he deems fair upon any property to be divided and
determine how the division shall be carried out between the
members
(b) vest the whole or any part of the assets in trustees upon
such trusts for the benefit of members as the liquidator shall
think fit, but no member shall be compelled to accept any
assets upon which there is a liability
ADDITIONAL INFORMATIONAnnual Report and Accounts 2020