PageGroup plc (PAGE) Earnings Call Transcript & Summary

Hello all, and a warm welcome to the PageGroup Q2 2022 Trading Update. My name is Lidiya, and I'll be your operator today. [Operator Instructions]. It's my pleasure to now hand you over to our host, Kelvin Stagg, CFO. Please go ahead when you're ready.

Good morning, everyone, and welcome to the PageGroup's Second Quarter and First Half Trading Update. I'm Kelvin Stagg, Chief Financial Officer; and on the call with me is Steve Ingham, Chief Executive Officer. Although I will not read it through, I'd just like to make reference to the legal formalities that are covered in the cautionary statement in the appendix to this presentation and which will also be available on our website following the call. The strong trading conditions we experienced in Q1 2022 continued into the second quarter. Consequently, the group delivered gross profit of GBP 280.9 million, a record quarter for the group. We grew 25.5% in constant currencies against Q2 2021, which was lower than our Q1 growth rate of 43%, was against the 12% tougher comparator. Against the pre-pandemic levels in 2019, we were up 28% in both Q1 and Q2. For the first half, we delivered gross profit of GBP 539 million, a record, up 33.3% on H1 2021. Reflecting the continued strong trading conditions, in Q2, we increased our fee earner headcount by 307. The majority of these were non-experienced hires, as the availability of experienced hires has become increasingly limited. This was broadly in line with the level of quarterly investments that we have made since Q3 last year. To support this growth, our operational support headcount rose by 73. And as such, our ratio of fee earners to nonoperational staff remained at 78:22. Overall, the group had 6,734 fee earners and a total headcount of 8,668. We have a strong balance sheet with net cash at the end of June of around GBP 135 million. This compares to GBP 122 million at the end of Q1 and is after payment of the final dividend for 2021 in June of GBP 33 million. I'll now give a brief financial review. It was broadly similar growth in both permanent and temporary recruitment. Overall, permanent recruitment grew 25.7% against Q2 2021, with temporary up 24.5%. Reflecting this, our ratio of permanent to temporary gross profit was 78:22, in line with Q1 2022. In Michael Page, permanent recruitment represented 85% of gross profit, while in Page Personnel, it was less at 59%. Michael Page continued to be more resilient across temporary recruitment, although performance in Page Personnel improved significantly, and the permanent business delivered consistent growth across both brands. In our temporary business, Michael Page delivered particularly strong growth, up 31%, driven by our contracting business in Germany. Page Personnel temporary growth was behind us at 18% due to slower growth in France and the impact of the Queen's Jubilee in the U.K. We continue to focus on our 5 large high potential geographic markets of Germany, Greater China, Latin America, Southeast Asia, and the U.S. Collectively, they represented 39% of the group in Q2, marginally below the peak of 40% in Q3 2021. We now have 2,715 fee earners in these 5 markets, which compares to around 800 in 2010 as we recovered from the global financial crisis. Together they delivered a record gross profit in Q2 with record performances in all markets outside of Greater China, which was impacted by COVID-19 lockdowns and restrictions. In Q2, our large high potential markets grew 23%, and excluding Greater China, growth was 33%. Our high potential disciplines of Technology and Healthcare and Life Sciences continued to be amongst the strongest performing and Technology remains our second largest discipline, representing around 14% of the group. We have successfully established the infrastructure and are building revenue in our newest brand, Page Outsourcing, which continues to exceed our plan. Reflecting the continued improvement in trading conditions, in Q2 we increased our fee earner headcount by 307. The majority of these were nonexperienced hires as the availability of experienced hires has become increasingly limited. To support this growth, our operational support headcount rose by 73, and as such our ratio of fee earners to nonoperational staff remained at 78:22. Our attrition rate currently remains relatively low with no indication of slowdown in any of our forward-looking KPIs. We remain confident in our ability to adjust the headcount down, if needed, with our flexible business model and natural staff attrition. This fee earners headcount and gross profit chart shows the unprecedented scale of the decline in group gross profit in 2020 due to COVID-19 and the comparison to the global financial crisis in 2008. It also shows how we chose strategically to maintain and invest in our platform, which has driven the sharp recovery seen throughout 2021 and the first half of 2022. I will now hand you over to Steve for a regional review and a summary.

Thank you, Kelvin. The strong growth we saw in Q1 2022 continued into Q2. Overall, for the quarter, we grew 25.5% against 2021, and delivered a record quarter for the group. We saw strong double-digit growth in all 4 regions, with the Americas being our fastest growing. 25 individual countries delivered record quarters and 14 countries exited the record month in June. June was also a record month for the group and our second month with a gross profit in excess of GBP 100 million. The recent weakening of sterling has had a favorable impact on the quarter's growth rate compared to the prior year, increasing the reported gross profit growth rate by 2.3 percentage points or GBP 5.1 million. Compared to the Q2 2019 pre-pandemic gross profit, the group delivered growth of 28%, in line with our growth rate in Q1. In our largest region, Europe, Middle East and Africa, which represented 49% of the group, we grew 29.4% on Q2 2021. Overall conditions continue to be more favorable in Michael Page, which is focused on higher income permanent recruitment and was up 34% for the quarter. Conditions were more challenging in Page Personnel, which is focused on lower level recruitment with a higher proportion of temporary and was up 22% overall. France grew 21%, delivering a record quarter. Page Personnel, representing approximately 60% of France, was up 17%. Michael Page, which had been more resilient throughout the pandemic, grew 26%. Germany, the group's third largest market, representing 11% of the group, delivered another record quarter, up 32%, with strong growth in all 3 brands. Our primarily technology-focused Michael Page interim business was the best performing, up 40%. We now have around 650 fee earners in Germany, having added over 100 in the past 12 months. We believe this positions us well for ongoing growth in this large high potential market. Belgium, the Netherlands, Italy and Spain all delivered strong growth and 11 countries in the region delivered record quarters. In Asia Pacific, representing 19% of the group, Q2 gross profit grew 11.7% on 2021. In Asia, 15% of the group, we grew 9% with strong double-digit growth in all markets outside of Greater China. In Greater China, 6% of the group, we declined 11%. Mainland China was down 13%, driven by the recent COVID-19 lockdowns and restrictions. Hong Kong was also impacted by these restrictions and declined 8% in the quarter. Southeast Asia, our other large high potential market in the region, delivered strong growth of 33% with record performances in 5 markets, including our largest, Singapore. India, which represents 11% of Asia, delivered another record quarter, up 47%. We now have over 220 fee earners in this highly profitable market. Japan also delivered a record quarter, growing 15% on a tough comparator, driven by a strong performance in contracting. Australia grew 24%. The Americas, representing 18% of the group, was our fastest-growing region and delivered a record quarter in Q2 with growth of 34.1%. North America grew 31%, where in the U.S., the consistently strong trading conditions seen since 2021 continued into Q2, and we delivered growth of 30%. This represented a record quarter with strong results in all offices, but most significantly in Boston, Chicago and Houston. Growth was strong across all disciplines with good performances from Property & Construction, our largest discipline in the U.S., as well as Technology and Engineering. In Latin America, gross profit grew 40%, delivering a record quarter. Mexico, our largest country region, delivered a record quarter, up 43%, and Brazil grew 28%. The remaining countries in the region were up 45% collectively, with record quarters for Argentina, Colombia and Panama. Our global operating system, Customer Connect, went live in the remaining markets of Brazil, Mexico and Panama during Q2, completing our global rollout. In the U.K., which represented 14% of the group, gross profit grew 22.6%. Page Personnel, which operates at lower salary levels and had been slower to recover from the pandemic, was up 56%, delivering a record quarter. Michael Page grew 13%. The U.K. is seeing good results across all regions, with particularly strong performances from our Finance and Technology disciplines. I'll now provide a summary of our results. The strong growth we saw in Q1 2022 continued into Q2. Group gross profit in constant currencies was up 25.5% against 2021, with a good broad-based performance across all our geographies, disciplines and brands. We delivered a record quarter for the group with record performances in 25 countries. We exited the quarter strongly, delivering a record month in June and our second month of gross profit in excess of GBP 100 million. This performance was achieved despite the backdrop of macroeconomic and geopolitical uncertainty as well as continued COVID-19 restrictions in Greater China. We believe that our strategy of maintaining and investing in our platform throughout the pandemic by investing in experienced hires and focusing on technology and innovation has been key to us delivering these outstanding results. We delivered increased levels of productivity with the group continuing to benefit from the favorable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates, as well as a shorter time to hire, facilitated by video interviewing and investments in new systems. We continue to invest in headcount to enable us to capitalize on future growth opportunities. We added 307 fee earners in Q2, broadly in line with recent quarters, with the most significant increases in the market where we saw the strongest performances and highest potential for future growth. The implementation of our global operating system, Customer Connect, was completed in May, following the successful rollouts in the remaining countries of Brazil, Mexico and Panama. We remain highly cash generative, having paid out the final 2021 dividend of GBP 33 million in June and ended the quarter with net cash of around GBP 135 million. Looking forward, we're clearly aware of the heightened degree of macroeconomic and political uncertainty that exists globally, particularly with regards to increasing inflation in the majority of markets in which we operate. We're monitoring all KPIs in the business regularly. But to date, we've seen no significant changes apart from the usual seasonal movement. Given our highly diversified and adaptable business model with a cost base that can be adjusted rapidly, we will look to progress towards our strategic goals while remaining highly vigilant. We're pleased with the group's performance in the first half of the year and currently expect 2022 full year operating profit to be in line with company compiled consensus of GBP 205 million. Kelvin and I will now be happy to take any questions you may have.

[Operator Instructions] Our first question today comes from Anvesh Agrawal of Morgan Stanley.

I got three questions, if I may. First, just on China, if you can provide a little bit more color on how sort of it went during the quarter, sort of April, May, June. Were the trends any different? And any signs of the business sort of getting better in July or what you're looking forward? Then second, just how you're thinking from a headcount perspective from here on? I mean, there is obviously increased uncertainty. Are you still looking to sort of add on the headcount or you've got enough capacity in the business to also maintain the run rate on the fees. And then finally, any sort of comment around the capital allocation? I mean, are we still expecting a special divi as usual or your thinking has changed given the macroeconomic uncertainty?

Let me answer the first two and then Kelvin can come around on the third question. Look, in China, it's difficult. We're highly profitable, first of all, and the business is very strong. We've built a great platform that we're very proud of. However, it has become increasingly difficult. And what we've found is that, particularly with a lot of the multinationals, there has been quite a big exodus of expats out of the market. So for example, in Shanghai, roughly 50% of expats have left. And there is an expectation of further 50% of the 50%. So another 25% will leave as well over the remaining part of the year. So that's had an impact. So whilst multinationals are not necessarily growing headcount, they are having to replace that headcount, and we're involved in doing that. So there is a natural element of business to what we're doing in China. Our ratio last year between domestic and multinationals was around 50:50. That has slightly changed in favor of multinationals as we've had to replace those vacancies that are being created by exodus. So look, business has continued. You asked whether it's different in June to the other 2 months of the quarter. No, not particularly. It seems to be fairly consistent with where we're at. Our intention is to keep the platform that we've got and that means replacing those that leave, but we won't expand our headcount there until we see a change in the environment. We're also, I would add, very fortunate that across China, in terms of our own dependence on expats, it's relatively limited. And whilst we've got several very strong expats in that market, they are few in number, and at the moment are committed to the region and staying there. So all good, highly profitable. Clearly, we're very vigilant at the moment, but there's a reasonable activity and no further trend downwards or upwards. In terms of headcount, look, we can't be unaware of the outlook and the analyst notes that you guys are all writing and the press and so on, it's pretty downbeat at the moment, obviously. So I've asked all of the regional managing directors around the world to only add headcount where it is absolutely necessary. You're right, we've added quite a bit of headcount, and a lot of that headcount as yet will not be productive. Some of it will have only just arrived, the 300 or so that arrived in the quarter, and will have yet to have made a placement. So clearly, we should be able to take up a significant amount of the growth that we hopefully will see in Q3 and Q4 using what we've already hired. So we will only grow our headcount in the second half where we really need to, in markets where our growth rate is particularly high, the potential is particularly good, and we see it as more sustainable than perhaps other markets. But I'd be very surprised if it was 300. Naturally, as well, I would add that, particularly in Europe, for obvious reasons, it doesn't appear to be a big quarter, Q3, where we hire a lot of people into our own business. So there will be a natural breadth, if you like, in our own hiring over the next quarter. So I suspect a significantly lower number when we're doing our Q3 trading update. Kelvin?

Yes. So capital allocation, nothing's really changed. So we would normally announce any supplementary return at the same time as we announce the interim dividend at the interims announcement. So we have GBP 135 million of net cash in the bank at the moment. I think we proved our cash flow model through the pandemic, as indeed we did back in 2009, that particularly the temp working capital unwinds. And therefore, I would expect, if things continue to go well, we'll have additional cash that will come in the second half of the year. If they don't, we'll probably have more cash. We've said previously, we look to have a low point at the end of January in terms of net cash, which is after paying out annual bonuses to senior staff and the fourth quarter profit-related bonuses to all of our consultants of about GBP 50 million. And therefore, that GBP 30 million bonus number means we aim to turn the year at about GBP 80 million, and we make a bit of a guess therefore between where we are in August and where we think we're going to be at the end of the year. I expect the interim dividend, which is of the order of about GBP 16 million, GBP 17 million we would increase that by 4% to 5%, which is what we've done in many of the recent years. And therefore, there will be a capital return. Whether we return by dividend or whether we do share buyback, we would have to discuss that as a Board, and actively, we have been. And I think we've talked to a number of our shareholders recently about the choice that we make. But we will try to continue to be consistent in our capital allocation policy and apply it accordingly.

The next question today comes from James Rose of Barclays.

When we look at the pre-pandemic rate of plus 28%, could you help us think about that in terms of volume of placements versus all the other components, so wage mix and fees? And then on wage inflation overall, and I appreciate your thoughts on how that's tracking, whether between jobs or on underlying salaries, is that still accelerating sequentially?

Sorry, I didn't understand the first question. The 28% of what, sorry?

So in constant currency growth, I think the business is 28% larger than it was pre-pandemic. Within that, can you give us a sense of how much of it is due to wage inflation? How much of it is due to volume of placements overall in the business?

Yes, difficult to proportionate, to be honest. But what I would say is that I haven't seen it this busy in terms of job activity in 37 years. So in terms of job count at the moment, it's way above where we were. So there's a significant element of that growth created by job count. Clearly, we have seen some wage inflation, particularly in areas like Technology and Healthcare and Life Sciences. It does vary by market considerably. So interestingly, wage inflation or inflation generally in the market is lower in Asia than it was at the beginning of the year. But there are other markets like, the one I can think of actually is Poland, it was a country where -- I mean, it's significantly up across Europe, but Poland is the highest of the markets we're in, where we're seeing inflation at the moment, at the end of June, of around 12%. So it varies. In terms of what we actually measure, it's the gap between the salary that somebody comes to us on when they're looking for a job and the salary we place them on. And that's often a bigger gap. It would have been a significant gap even in 2019, because generally speaking, whilst people move for a variety of reasons, they also tend to expect a salary increase when they move as well. So there would always be a sort of element of between 5% and 15%, depending on which discipline you're talking about, which would be, I guess, what you would call wage inflation. Finally, on fees. I mean there's no doubt about it, our fees have strengthened around the world. I suppose probably the most significant would be our third and fourth largest markets, where our average fee was just above 24% of an annual salary, and it would be now around 29%. So again, that shows supply and demand, 20% increase in our fee rate. And that is, clients saying, look, we need this candidate. We've got an important vacancy to fill. And therefore, we know what your standard fees are, we're going to pay closer or we're going to pay your full fee on that salary. So that's clearly helped as well. So it's a mixture of the 3, and I would say all have contributed significantly to that 28% growth.

The next question today comes from Rory McKenzie of UBS.

It's Rory here. Just 2, please. Firstly, coming back to this outlook statement where you've not seen any change in trends yet. But can you talk about which KPIs you're most closely watching or maybe nervously watching at the moment? As you said, there's a lot written about falling business sentiment. Of course, financial markets and analysts can be known to overreact. But just wondered what intelligence your teams collect on your clients' own outlook and budgets, and whether you think that's kind of actually been adjusted yet as we've gone through this year? And then secondly, just on the U.S., within North America. Just talk about maybe your market share there at the moment? And what your team's objectives have been and how that's been going kind of relative to market in the U.S.?

Sure. Well, first on KPIs, I mean somewhat flippantly, of course, the first one we look at is the share price, which gives us an indication probably of what the expectation for the future looks like. But no, in terms of what consultants, managers, directors and so on are measuring and watching across all 37 markets, team by team, and a team is typically 5 or 6 people, the first thing they would look at is job count. Every week, they'll expect a certain number of new vacancies to be working on. And that would include quality of those jobs as well. Are they the clients we've worked with before? Significant clients, clients that are likely to actually see the recruitment through. So if it's a speculative approach, then clearly, we don't count it the same as we need to fill this job by the end of the week or by the end of the month. So job count is the first one. Clearly, we also then send CVs out to those in response. And we measure the number of interviews that we get. So the clients' appetite to respond to the CVs we've sent and the number they want to interview and the speed that they're interviewing them. So if they sort of go, yes, there was two that were vaguely interesting, we'll see them at the end of the month. Then again, we take that as a sign. The things people are getting more nervous and slowing. And then we look at the conversion rates of those interviews from first to second and so on depending on which brand we're talking about, typically Michael Page or even Page Executive, the process can be more interviews than it would be in Page Personnel, where it can be a one interview process sometimes. And then we look at either a client sort of not making a decision or a candidate turning around where the candidate getting nervous about the market and the outlook and deciding that actually maybe thinking about it, I'm better off with the job I've got. I've been here a number of years and so on. I have to say that's a thought that sort of used to happen 20, 30 years ago. I see it less and less. Maybe that's because COVID, the pandemic in 2020 took care of a lot of the fag end businesses, and now a lot of the roles that we are filling are critical hires and therefore, important. And also with high employment amongst professional people, particularly, I do think there is an element of confidence, which says, look, if I'm an accountant or a technology expert or whatever, looking for a job, I don't need to worry about whether I'll find one or not. There's plenty out there. And at the moment, there certainly seems to be. So we monitor all of that activity right way through to not only verbally accepting, but obviously starting in a new job and buybacks and so on. And also the enthusiasm by the client to make sure that they take it over the line and offer what's necessary. So it really is a lot of detail. I mean -- but this is our day job, and this is what we do. And clearly, I've got a lot of very experienced operators that have been doing this for over 20 years, and we're very much used to watching the signs. But of course, we are mindful of what the press is saying and the news and, like I said earlier, what everyone's writing at the moment. In terms of North America, our market share is not measurable. I mean, it is so small in terms of where we're at. I mean it's a huge market, the biggest recruitment market in the world by some way. We're a predominantly perm business, almost entirely perm. And we've got small offices in -- bigger than they've ever been, but small offices in comparison to the size of the cities that we're in. So market share is really not an issue. Again, we're measuring the same KPIs across that market at the moment and they remain healthy. It's a market with particularly high salaries and particularly high fee rates. And at the moment, it seems to be in a good state. Again, we're watching very carefully, and we're reading as well the press. And so there's an element of caution in our approach at the moment. But as we see it today, and it's difficult to predict the future, but as we see it today, it remains very, very positive. But in terms of market share, that really is not a concern. We're a multi-disciplined, multi-office business. We have a national footprint there. There's more than we could ever imagine to go for. And therefore, in terms of size of business, I'm sure one day maybe it will be competing with Germany, but it will probably be one of our two biggest markets globally.

Next, we have a question from Hans Pluijgers of Kepler Cheuvreux.

Hans from Kepler Cheuvreux. A few questions from my side. You indicated that you had a record end of the quarter with over GBP 100 million in fees. But maybe could you give us some feeling on how the trend was through the quarter. Do you anticipate, let's say, a slowdown for the quarter, and especially maybe also some indication by end market? So by client segment, is there anything changing there or anything material to report? Secondly, on productivity, you already mentioned that you will focus on or limit the hiring in the coming months. But what actually do you believe, let's say, is still the room for productivity gains? Do you see still quite some room to improvement there, if you could give maybe some feeling on that? And lastly, on the rollout of new specializations and activities. Could you give maybe some feeling where there's still some room to roll out or you have plans to roll out new specializations, in which countries, and also the potential there?

Sure. Look, in terms of what we saw in the quarter, I mean, it's not unusual that June is significantly bigger than April and May, and that was the case. So I mean, to give you a sort of flavor of what over GBP 100 million means to us internally, our record in September was just under GBP 90 million, and that was a record for the group in a month. So to be doing now over GBP 100 million in March and now June is a significant step and was significantly ahead of May and April. Did we see a trend of slowdown? No, we didn't, throughout the quarter. And we didn't see a trend of slowdown towards the end of June either. It was a good finish with most markets doing more than they expected at the mid-month of June. So like I say, we can tell you what we're seeing at the moment. And at the moment, it still remains healthy. In terms of end market, look, there are companies out there doing well and there are companies out there not doing very well, and I read about them as well. So you can imagine that sort of reflects what we're seeing. There are certain sectors like retail, which fortunately for us, we don't do a huge amount in, but leisure travel, which have clearly got loads of issues to deal with at the moment versus other markets that are particularly strong. What I would say is that in terms of types of jobs, we've had a very strong quarter and month in finance, which is still our largest discipline, but Technology still remains our fastest growing, and from a small base, as does Healthcare and Life Sciences. And to be honest, other technical disciplines as well as Engineering, Supply Chain, Logistics, they remain very strong, and it's good to be big in those markets as well. So again, nothing that we've really seen. And we are all over it, frankly, Hans. In terms of productivity gains, I mean, we're always going to push for more. But to remind you, last year, we had a very significant record for productivity in the business, partly because of the recovery and the speed of that recovery, particularly towards the end of last year, partly because of the experienced hires that we landed in the business. So the time it took them to become productive in the business was a lot faster than we can typically expect from a consultant who joins us who has no recruitment experience, clearly, and you'd expect that. So if we're hiring now 300 people in the quarter, most of whom have no recruitment experience, it will take time for them to become productive. And that's always a drag on our productivity. Clearly, if we slow down that investment in headcounts at any point, then productivity goes up because the tail, if you like, of those that are learning the job becomes shorter and you'd expect that. What we're particularly excited about, though, in terms of what we might be able to achieve, and this downside of the economic answer of where we're going and what happens to the economy for this year and next year and beyond, what structurally we're excited about is that we have rolled out now a global system, CRM system, which is a sales force-based CRM system and we believe there are some real efficiencies to be gained from that in terms of the speed that we can do certain activities as a consultant. There is a large element of the job, which I remember, which is very administrative, is very slow and very tedious, frankly. So there is an element of enjoyment as well, which we have to do, but it takes time. And it's part of the job and all the rest of it, but a good CRM system does for you. And also that CRM system working with various apps is helping us target candidates who are likely to want to move and also clients who are likely to be hiring. And I think that's very significant. So rather than literally cold calling, as I would have done 35 years ago, sort of randomly hoping I can hit on a client that happens to have a vacancy, we're a lot more targeted in the activity that we have as well. So all of those things, I would like to think structurally, aside from what's going on in the economy, that will help productivity in the future. And then finally, the other thing that is important is the mix. We've been targeting, as you know, certain markets, which we believe have a real high potential for the group. And they've significantly made progress over the last few years, a very significant proportion of the total group. Those markets, typically, higher salaries, higher fee rates than some of the markets that were up traditionally are big profit generators. So if you like, we've got U.S. and Germany, where the average fee rate is 29%, salaries, as we all know, reasonably high versus back in 2007, where 6%, 12% of our profit actually from Italy and Spain came from those 2 markets where our average fee rate would be less than 20%, and salaries would be a bit lower. So there is a mix impact here of what we're doing as well, and that's conscious, but it's also because -- not just because of fee rates, but also the size of those markets that we've been really focused on building a platform. In terms of the platform and expanding it into new disciplines and so on, honestly, Hans, yes, there will be, I'm sure, a new discipline that we want to do in the Philippines or some of the smaller markets that we've only launched in the last few years. Largely speaking, the platform is built. There are plenty of disciplines that we're too small in and we need to push ahead with market share gain. And we talked about scope a minute ago of the U.S., it's enormous, but it's enormous in Germany, it's enormous in Southeast Asia, Latin America, where we have very little competition, China and so on. And so it's more about building on what we've got than opening something or launching something significant that's new. So I think really the one sort of standout which certainly will impact the bottom line, which rollouts or new that we're doing, is Page Outsourcing. And that's a global project, as you know, which brings together the brands, all three of them, under one roof of Page Outsourcing, which is engagement with clients to outsource their recruitment either globally or regionally or over several countries or across a large project. And that is going particularly well, but it will cost us this year rather than make us profit. But we'd expect next year it to be starting to make a profit contribution and the year after sort of starting to move towards the same sort of conversion rates as the rest of the group. And that is going slightly ahead of plan.

[Operator Instructions] Our next question today comes from Thomas Truckle of Jefferies.

Congratulations on another set of good results. And fortunately, Anvesh and James both asked the questions I wanted to know.

Our next question comes from Pavel Kirjanovs of Credit Suisse.

I just had one question today. On U.K., it appears Page Personnel is now outperforming versus Michael Page if you look at levels sort of sequentially versus 2019. Is there a mix shift happening there? Can you talk about sort of the overall dynamics you're seeing in the market?

Yes, sure. Look, no, I don't think it's a mix thing. I think it's just a way that possibly the pandemic impacted those two brands in the U.K. As you know, we have fairly onerous lockdowns here, or most of us, maybe 1 or 2 politicians ignored it, but there were fairly onerous lockdowns here. Clearly, when offices are closed, that tends to impact Page Personnel more than Michael Page, because not only the temps, but even the perm, perhaps possibly with offices closed, do have the same level of appetite to hire what are relatively junior sub sort of 35,000 roles into the business, probably not. And so it's fair to say Page Personnel was hit harder than most other markets around the world. And now that our offices are open, and clearly, clients have the freedom, therefore, to be in the office, there is a big step-up in hiring, both in temp and perm. So I think it was hit harder during the pandemic. It's coming back off a lower base and recovering, both in temp and perm.

[Operator Instructions] We have no further questions in the queue. So I'll hand the call back over to Steve Ingham for closing remarks.

Thank you. As there are no other questions, thank you all for joining us this morning. Our next update to the meeting -- to the market will be our interim results on the 8th of August. Thank you, everyone, and enjoy the weather.