TIDMPAGE
RNS Number : 9929K
PageGroup plc
27 April 2020
27 April 2020
PageGroup plc ("PageGroup" or the "Company")
Annual Report and Accounts and Notice of Annual General
Meeting
PageGroup's Annual General Meeting will be held at 9:30am on
Thursday 4 June 2020 at Page House, 1 Dashwood Lang Road, The
Bourne Business Park, Addlestone, Weybridge, Surrey, KT15 2QW.
In connection with this, the following documents are being
posted or made available to shareholders:
- Annual Report and Accounts for the year ended 31 December
2019;
- Notice of Annual General Meeting; and
- Proxy form for the Annual General Meeting.
The Annual Report and Accounts and the Notice of Annual General
Meeting are now available to view or download from the following
webpage: www.page.com . Copies of these documents have also been
submitted to the National Storage Mechanism ("NSM") and will
shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism . The
Company has also filed with the NSM a copy of its current Articles
of Association which details the rights attaching to its
shares.
A condensed set of the Company's financial statements and
relevant extracts of the Company's management report were included
in the Company's preliminary results announcement for the year
ended 31 December 2019 which was published on 5 March 2020. That
information, together with the additional information contained in
the Appendix to this announcement (which has been extracted from
the Annual Report and Accounts) constitutes the material required
to be communicated to media in unedited full text through a
Regulatory Information Service for the purposes DTR 6.3.5R. This
announcement should be read in conjunction with, and is not a
substitute for, reading the full Annual Report and Accounts.
For further information contact:
Kaye Maguire
General Counsel & Company Secretary
+44(0)20 3077 8069
Appendix
Principal risks and uncertainties
Strategic Risks
Shift in Business Model
The emergence of new technology platforms and providers offering
HR solutions and consulting may lead to increased competition and
pressure on margins which may adversely affect the Group's results
if it is unable to respond effectively.
We fail to take advantage of technology opportunities to support
our drive on productivity and customer and candidate
experience.
Actions to mitigate risk
-- We actively monitor developments in new technologies and
their use in the recruitment sector.
-- As well as our ongoing day-to-day interaction with clients
and candidates we conduct formal surveys through our Exact Target
programme which we have standardised across the Group to understand
how candidate and client needs are developing.
-- We have established an innovation infrastructure with
Executive Board Governance and regional innovations groups embedded
globally. These teams continually generate ideas that are evaluated
and those that pass our criteria are developed and piloted through
an externally managed innovations lab. The team is focused on
driving both productivity and provision of new services.
-- We partner with the large media providers, such as LinkedIn
and Facebook, to ensure that we use this form of 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.
-- 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 strategy and organisation structure enables us
to act rapidly in rolling out new technologies across the
Group.
-- We are driving improved quality and use of data including
accessibility to enable greater insights. Improvements in data,
tools and processes will enable increased sales performance.
Transformation and change
The Group continues to invest in new systems and processes.
These are required to support our capabilities to continue to
deliver appropriate services to our clients and candidates in a
cost effective, flexible manner.
These investments bring inherent change risks of quality, cost
or time.
Having delivered a Global Finance System, Shared Service Centres
and transformed our IT capability into a global service, the key
programme in progress is the change of our global front end systems
which commenced in 2019 and has so far been successfully
implemented in two countries.
Actions to mitigate risk
-- We have a COO function that ensures effective Governance of
our programmes which are reviewed by our Executive management team
on a regular basis to ensure delivery to plan.
-- This is supported by a Group Programme Management Office,
PMO, which defines policies and processes to deliver programme
change activities.
-- We establish and resource business change programmes for each
of our major initiatives. Each has a dedicated management team
working across all areas of the business to ensure effective
planning implementation and decision making. A team led by
experienced operations personnel has been established to lead the
change to our front end systems.
-- We support our programmes with third party systems implementation expertise.
-- We have selected best in class software that has a global
capability and can be rolled out to all our operating units.
-- A global finance structure with Global Process Owners, shared
service centres and a technical Hub has been established to ensure
our processes support the Global Finance System across all
regions.
PageGroup brands and services
As the way clients and candidates source information changes,
the awareness of the PageGroup brand and services for clients and
candidates could deteriorate.
The quality and relevance of service we provide to both clients
and candidates, could have a significant impact on how our brand is
viewed.
An event such as a failure to comply with legislation, or other
regulatory requirements, or confidential data lost or stolen could
cause reputational damage to the Group. Use of new social media
network sites has increased the speed of communication and reach,
increasing the impact of any such event.
Incidents such as the outbreak of the COVID-19 virus could
impact on our ability to deliver services to our clients and
candidates.
Actions to mitigate risk
-- We actively monitor media online through Brandwatch to
identify where there are unusual references to the PageGroup,
Michael Page, Page Personnel, Page Executive and Page Outsourcing
trademarks.
-- Our marketing strategy recognises the need to engage with
candidates and clients using the latest media available in a way
that reflects changing behaviours. We conduct ongoing surveys of
clients and candidates to ensure that we understand requirements
and can adapt our processes and procedures accordingly.
-- Our innovations process enables ongoing development of our
proposition from idea generation and piloting through to
industrialisation, which is effective at filtering innovations to
focus on higher quality ideas.
-- We have a programme of activity which ensures that we
communicate effectively the Page brands, keeping awareness high
among both current and potential clients and candidates.
-- We train our consultants to use new media effectively, making
the channels available to them as part of their day-to-day
activity.
-- We have centralised and developed a comprehensive brand
management policy which includes key areas such as social media,
data protection and information security.
-- We are supported by external advisers who provide ongoing
advice on the protection and management of our brand.
-- We have in place a tested incident response process with
clear escalation and activity guidelines to ensure any incidents
are managed effectively.
People
People attraction, development and retention
PageGroup needs to hire, train and retain a large number of
appropriately skilled people across the Group to achieve its
vision.
The factors that motivate, encourage and enable individuals to
perform to their best have and will continue to evolve with an
emphasis on work life balance, flexibility and the working
environment.
Diversity is a key enabler to any successful business. A lack of
diversity in our people will impact on the achievement of our
objectives.
Our biggest challenge is still to address attrition levels
during the first year of training. The wellbeing of our people is
an important aspect of our business.
The recent outbreak and uncertainty around the COVID-19 virus
has put this clearly into focus.
Actions to mitigate risk
-- We promote the Group's purpose through our value proposition
to ensure we can attract the right quality of individual and retain
our current people.
-- We continue to make significant investment in HR resources at
Group and Regional levels. These all support our HR programmes
which are focused on addressing issues around attraction,
development and retention.
-- We are also addressing issues such as work-life balance,
flexible working, benefits schemes and equality that are seen to
have a positive impact on employees. Our Page programmes covering
these areas have been rolled out around the Group. We conduct exit
interviews to ensure that we are aware of any underlying issues
that need to be addressed.
-- We have invested in online learning capabilities. BOOST!, our
Global training application is incorporated into a blended learning
experience for our people.
-- We have a truly Global talent, succession and development
process that ensures a strong talent pipeline and addresses any
gaps at senior management level.
-- We have Group-wide initiatives which look at the issues
around achieving diversity. These are part of our wider PageGroup
programmes which combined will ensure we create an open environment
where working practices suit and encourage diversity in all its
aspects.
-- We conduct regular employee surveys, the latest in 2019. This
helps us to see how our people view working at PageGroup and
provides feedback to enhance areas we do well and address areas for
improvement.
-- We have in place both a Group-wide health and safety policy,
which places the health and safety of our people and the wider
community involved with Page at the heart of our business. It also
defines operational requirements which when combined with a tested
incident response process enables us to effectively manage
incidents which impact on our personnel.
Operational Risks
Information Systems
Our systems are an integral part of our operations. A major loss
of systems' capability would have a high impact on our performance,
impacting the quality of service we provide to clients and
candidates and our ability to deliver our financial
performance.
Failure of our IT systems to adapt to levels of business
activity could result in lost opportunity during periods of rapid
expansion or excessive costs during periods of contraction.
The move to the delivery of IT as a flexible service increases
our reliance on third party vendors for service delivery. Should
one of these vendors fail we are at risk of a service
disruption.
Our systems must be able to adapt to the evolving technologies
around Cloud to allow faster implementation of innovation or we
could miss business opportunities.
Actions to mitigate risk
-- We have aligned our IT management structure to meet business
requirements with a focus on demand management and the processes to
manage the delivery of IT change.
-- We have increased the quality of support services
implementing self service capabilities, simplifying and
standardising our technology including the user desktop
experience.
-- Focus is given to programmes delivering the greatest benefits
with greater engagement with business users to ensure that we build
relevant IT systems.
-- We have transitioned our activities to a Cloud based service
model providing scalable and resilient services.
-- Our central procurement team, in addition to supporting
management in commercial negotiations, ensures that relationships
with third parties are appropriately defined and managed. This
includes strategic reviews, service delivery, compliance and
process resilience.
Cyber Security
Confidential, sensitive and personal data is held across the
Group. Failure to secure and handle this data properly could result
in loss of data or impairment of data quality, exposing the Group
to loss of business, financial penalties and/or reputational
damage.
The business relies on the use of systems to operate our
activities effectively - any unauthorised access to these systems
could disrupt their operation.
Our migration to a Cloud based service model, significant use of
digital communications and the developing social media environment
has increased the Group's exposure to external threats. We operate
in an external environment that is seeing an increase in number and
sophistication of cyber attacks from sources including organised
crime and nation states.
Actions to mitigate risk
-- We have information security policies in place for the
management of confidential, sensitive and personal data. Security
risks are identified through a structured process of assessment and
a programme of remediation activities is executed with activities
prioritised according to the associated level of business risk.
-- We have a dedicated Global Information Security team that
ensures our information remains protected. This includes ensuring
appropriate multi-layered protection at network and system levels,
and regular monitoring and third party testing of our capabilities.
The team comprises Security Operations, Security Architecture and
Information Security Management. The team deals with IT security
matters and works directly with suppliers and key business
stakeholders to ensure everyone across the business protects the
data of our Group, our clients and our candidates.
-- We have technical security protections in place that mitigate
the risks posed by the use of modern communications media, Cloud
services and mobile devices. The threat landscape is under constant
review to ensure our technology provides the right level of
protection.
-- Supplier contracts are negotiated and reviewed to ensure data
protection and IT security obligations are included as a standard
requirement.
-- New IT projects and initiatives are reviewed for security
risk, to ensure new technologies are adopted safely.
-- Security vulnerabilities are assessed regularly and the
remediation of identified risks and alerts is tracked to
conclusion. Regular security assurance checks take place across all
regions and penetration testing is undertaken by specialist third
parties.
-- The Board and Audit Committee reviews data security on a
regular basis and receives updates on the status of our security
programme.
-- We run an employee security awareness programme which
includes training and security simulations.
Fiscal and legal compliance
The Group operates in a large number of legal jurisdictions that
have varying legal, tax and compliance requirements. Any
non-compliance with either client contract requirements or
legislation and regulatory requirements could have an adverse
effect on the Group's brands or financial results.
Actions to mitigate risk
-- The General Counsel & Company Secretary and local legal
and compliance teams are advised by leading external advisers, as
required, with regard to changes in legislation that affect the
Group's business, including employment, legislation, tax and
corporate governance.
-- Our staff receive induction training and regular updates
regarding the Group's policies and procedures and compliance with
relevant legislation covering, for example, discrimination,
anti-bribery and corruption, sanctions and pre-employment
checks.
-- The Group has central tax and treasury functions, which
support the management of the Group's tax and cash compliance
including sanctions.
-- The Group tax function regularly monitors transfer pricing
requirements and developments to ensure that appropriate actions
are being taken and appropriate documentation is being maintained
to meet local reporting and compliance requirements.
-- The Group holds all normal business insurance cover including
employers' liability, public liability and professional indemnity
insurance.
-- Sales and procurement contracts include clauses to ensure the
Group's rights are protected. All non standard contracts are
legally reviewed and where appropriate approved by senior
management.
Financial management and control
Failure to maintain adequate financial and management processes
and controls could lead to either poor quality management decisions
or errors in the Group's financial reporting.
Actions to mitigate risk
-- The Group has in place financial policies and procedures
which are reviewed on a regular basis.
-- Regional and local finance teams ensure that Group reporting
adheres to these policies as well as ensuring local statutory
requirements are met. The Group Finance function reviews
submissions to ensure policies are adhered to.
-- Monthly management information is produced that supports effective financial management
-- The Group operates regional shared service centres under a
Global reporting structure which, as well as driving efficiencies,
enables more effective control of activities through common
processes and segregation of control activities.
-- The Finance Structure supports local, regional and Group management structures.
-- There are compliance teams located in each region that
support the local, regional and Group management in ensuring
revenues are appropriately recognised.
-- Internal Audit regularly review local and regional financial
controls and report on the results to the Executive Board and the
Audit Committee.
Data Protection Regulations
A Global operating business which relies on effective management
of data needs to ensure it complies with the varying legislative
requirements. These requirements have evolved significantly.
New European data protection legislation which came into force
in May 2018 increased data governance and management requirements
significantly, as well as increasing the potential penalties for
non compliance or data breaches.
Legislation introduced in June 2017 in the People's Republic of
China, requires data of Chinese citizens to be held and processed
in Mainland China.
Change proposals are in process in countries such as Brazil
which will continue to change the requirements on how business
processes are operated.
Failure to maintain compliance in this changing environment
could lead to increasing levels of penalty, legal consequences and
reputational damage.
Actions to mitigate risk
-- A data protection office has been created with resources at
Group and regional levels to ensure that processes continue to
deliver against compliance requirements.
-- The Group has engaged with external specialist providers of
DPO services in each region to support our processes and ensure
they continue to meet good practice requirements.
-- A review of our processes and procedures in China has been
conducted with the support of a third party specialist consultancy
to validate compliance with an action plan in place to address any
deficiencies.
-- A Privacy Director has been recruited to support local
management in developing plans to address new requirements in
Brazil and the USA.
-- Policies and processes such as crisis management, change
management, contracts, third party service providers and HR and
payroll policies have all been updated to reflect the additional
requirements from data protection legislation.
Financial Risks
Macro-economic exposure
Recruitment activity is driven largely by economic cycles and
the 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 market, so leading to reduced
recruitment activity.
A substantial proportion of the Group's profits arise from fees
that are contingent upon the successful placement of a candidate.
In these cases if the client cancels the assignment at any stage in
the process, the Group receives no remuneration.
The Geopolitical tensions around trade tariffs between the US
and China continue to drive uncertainty into the Global
economy.
In the UK, Brexit continues to create uncertainty, causing a
nervous trading environment impacting on the performance of the
economy.
The outbreak of the COVID-19 virus which has already impacted
economic activity in China could have further significant impact on
the economies in which we operate.
Actions to mitigate risk
-- We continue to diversify our business in terms of geography,
and our historic reliance on the UK. We now operate in 36 countries
with 84% of the Group's gross profit being generated outside of the
UK.
-- We also look for opportunities to diversify through the
brands and disciplines in which we operate. We have increased the
number of disciplines we support and continue to roll these out
through our current office network. We have established 4 brands to
address the different levels of the recruitment market, the
clerical professional sector, the qualified professional market and
the executive market, as well as project or volume recruitment
-- We have also diversified our offering through the mix of
permanent and temporary recruitment that we offer to the market.
Temporary recruitment now represents over a quarter of the Group,
and we are seeing new temporary markets start to emerge in places
such as Asia and Latin America, where historically for cultural
reasons one did not exist. The temporary business tends to be more
resilient in times of economic downturn.
-- We have also diversified by focusing on the local, domestic
markets in which we operate. When we first enter a market, our
brand awareness is stronger with multinational clients.
-- We continue to focus on our cost structures, ensuring that
costs are variable to levels of demand. As well as our variable
operational staffing costs, our move to an IT service based model
with our transition to the Cloud, enhances this capability. Our
regional Shared Service Centre approach to support activities also
gives us greater flexibility in resource allocations.
Foreign exchange translation
The majority of the Group's operating profit is derived from
operations outside of the UK, so material changes in the strength
of Sterling against the Group's main functional currencies could
have an adverse effect on the Group's reported Sterling profits in
the financial statements. The main functional currencies in
addition to Sterling are the Euro, Australian Dollar, Swiss Franc,
Chinese Renminbi, Hong Kong and US Dollars.
Actions to mitigate risk
-- We do not hedge our exposure to foreign exchange translation
risk, instead focusing on ensuring the market adjusts correctly for
any impact.
-- We repatriate funds converting them to Sterling to fund
returns to shareholders. Our Group Treasury function takes a lead
role in the management of our cash resources.
-- We have a negligible amount of cross border trading activity,
so the impact on transactions is limited.
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
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 53 to 57 of the Company's Annual Report and Accounts. 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:
2019 2018
Related party transactions GBP'000 GBP'000
---------------------------------------- --------- ---------
Wages and salaries 5,448 5,838
Social security costs 467 440
Short-term benefits 682 574
Pension costs - defined contribution
plans 231 226
Share-based payments and deferred cash
plan 4,225 3,981
---------------------------------------- --------- ---------
11,053 11,059
---------------------------------------- --------- ---------
Company
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.
Dividends received Amounts owed by related Amounts owed to
parties related parties
2019 2018 2019 2018 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ---------- --------- ------------ ------------ --------- ---------
Transactions 49,927 5,963 607,159 642,855 962,221 913,094
-------------- ---------- --------- ------------ ------------ --------- ---------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSFLFFLSVIDFII
(END) Dow Jones Newswires
April 27, 2020 07:31 ET (11:31 GMT)
Pagegroup (LSE:PAGE)
Historical Stock Chart
From Apr 2024 to May 2024
Pagegroup (LSE:PAGE)
Historical Stock Chart
From May 2023 to May 2024