PageGroup Regulatory News (PAGE)

20 Aug 2007 07:01

Michael Page International PLC20 August 2007 20 August 2007 MICHAEL PAGE INTERNATIONAL PLC Half Year Results for the Period Ended 30 June 2007 Michael Page International plc ("Michael Page"), the specialist professionalrecruitment company, announces its half year results for the period ended 30June 2007. Financial Highlights (6 months to 30 June ) 2007 2006 Increase Turnover £395.8m £312.0m 26.8%Gross profit £226.5m £166.6m 36.0%Operating profit £69.8m £45.1m 54.9%Profit before tax £69.2m £45.2m 53.1%Basic earnings per share 14.3p 9.1p 57.1%Interim dividend per share 2.4p 1.8p 33.3% Key Points • Record results with all regions growing operating profits organically in excess of 25% • Internationalisation of business continues; 60% of gross profits generated from outside the UK • Over 1,000 staff added in last 12 months • Group gross profit increased by 38.7% in constant currency • Conversion rate of operating profit from gross profit increased to 30.8% (2006: 27.1%) and before share based charges to 32.7% (2006: 30.2%) • £58.8m of cash generated from operations (2006: £26.7m) • 8.4m shares repurchased at a cost of £45.0m • Interim dividend increased by 33.3% Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said: "The quality of our staff, strength of the brand and our unique business modeland strategy have all contributed to our achievement of another record set ofresults in the first half of 2007 outperforming the generalist and specialistrecruitment sector. The investments we have made over the past 12 months areproducing strong returns and our strategy of geographic diversification isprogressing well with 60% of our gross profits being generated from outside theUK. "There is a shortage of good quality candidates in virtually all the markets inwhich we operate and Michael Page's ability to generate candidates for ourclients is a key factor in our success. There remain numerous opportunities forfurther expansion in both our existing and new businesses in the second half ofthis year and beyond." Analyst Meeting The company will be presenting to a meeting of analysts at 9.30am today. Thepresentation and a recording of the meeting will be available on the company'swebsite later on today at: http://investors.michaelpage.co.uk/ir/mpi/ir.jsp?page=presentations Investor Day The Group is holding an investor day in London on 12 September 2007. If youwould like to attend please register at: http://c.fw-reply.com/mail/15veMq/s6gv6l/S6gb52/view?contentpart=6gv6p Enquiries: Michael Page International plc 01932 264144Steve Ingham, Chief ExecutiveStephen Puckett, Finance Director Financial Dynamics 020 7269 7121David Yates/Susanne Yule CHAIRMAN'S STATEMENT The Group continues to perform well, with our unique operating model andstrategy producing a record set of results with growth rates that exceed thegeneralist and specialist recruitment sector. The growth, which is all organic,is largely due to a number of key factors. The strength and retention of ourmanagement teams, with our expansion being led by experienced Michael Pagemanagers and directors. Our drive for greater diversification of earnings fromgeographic and discipline expansion. The strength of our brand for attractingclients, candidates and consultants and our global candidate database to servicea growing trend for global sourcing of candidates. The addition of over 1,000people to the organisation in the past 12 months largely to capitalise on theopportunities in our existing businesses. There remain numerous opportunitiesfor further expansion in both our existing and new businesses in the second halfof this year and beyond. The Group's turnover for the six months ended 30 June 2007 increased by 26.8% to£395.8m (2006: £312.0m) and gross profit increased by 36.0% to £226.5m (2006:£166.6m). At constant exchange rates, the Group's gross profit increased by38.7%. While continuing to invest for future top line growth, the Group's businessmodel which has inherently high operational gearing has resulted in operatingprofit increasing by 54.9% to £69.8m (2006: £45.1m). The Group's conversion rateof operating profit from gross profit, increased to 30.8% (2006: 27.1%). Profitbefore tax increased by 53.1% to £69.2m (2006: £45.2m). At 30 June 2007 our staff numbers had increased to 4,323 (2006: 3,230) operatingfrom 141 offices in 24 countries. During the period we started operating inLuxembourg and opened offices in Leicester, London's West End, Hamburg,Valencia, Bordeaux, Atlanta and Hartford. We estimate that we will increase ourheadcount by a further 500 in the second half and that our full year pre bonuscost base will be in the region of £275m. We generated significantly higher growth in gross profit from permanentplacements (+41.0%) than from temporary placements (+20.9%). In the first halfof 2007 the mix of the Group's turnover and gross profit between permanent andtemporary placements was 47:53 (2006: 42:58) and 78:22 (2006: 75:25)respectively. The gross margin on temporary placements increased to 24.1%(2006: 23.2%). UNITED KINGDOM Turnover of UK operations increased by 15.3% to £176.6m (2006: £153.1m), grossprofit increased by 21.0% to £92.0m (2006: £76.0m) and operating profitincreased by 46.2% to £28.6m (2006: £19.6m). Excluding our Scottish operations,which are managed separately from the rest of the UK, gross profit from Financeand Accounting increased by 14%, Marketing, Sales and Retail increased by 21%and the other disciplines increased by 35%. In Scotland we had a very successfulfirst half with gross profit up by 49%. During the first half, staff numbersincreased by 78 to 1,615 at the end of June. EUROPE, MIDDLE EAST AND AFRICA (EMEA) Turnover of Europe, Middle East and Africa (EMEA) operations increased by 43.0%to £149.2m (2006: £104.4m), gross profit increased by 52.5% to £90.4m (2006:£59.3m) and operating profit increased by 76.5% to £28.5m (2006: £16.1m). Inconstant currency, turnover grew by 46.0%, gross profit by 55.9% and operatingprofit by 81.8%. Our largest business in this region is France, which currentlycontributes 33% of the region's gross profit. Gross profit in France increasedby 26% (29% in constant currency) in the first half of 2007. Elsewhere in theregion our businesses all performed well and together grew gross profits by 70%. We continue to invest in all our businesses in the region as we expandexisting teams and offices and roll-out new disciplines. Since the beginning ofthe year we have added 347 staff making the region's headcount 1,785 at the endof June 2007. ASIA PACIFIC Turnover of Asia Pacific operations increased by 14.4% to £46.9m (2006: £41.0m),gross profit increased by 25.2% to £27.0m (2006: £21.6m) and operating profitincreased by 26.4% to £9.8m (2006: £7.8m). In constant currency, turnover grewby 18.5%, gross profit by 31.5% and operating profit by 30.0%. At the end ofJune we had 501 staff in the region, an increase of 60 since the start of theyear. Our largest business in the region, Australia, continued its progress with firsthalf gross profits increasing by 19% (20% in constant currency). Our offices inHong Kong, Shanghai, Tokyo and Singapore have had a strong first half growinggross profits collectively by 35% (49% in constant currency). THE AMERICAS In the Americas, turnover increased by 70.8% to £23.1m (2006: £13.5m), grossprofit increased by 76.1% to £17.1m (2006: £9.7m), and operating profitincreased by 83.4% to £2.9m (2006: £1.6m). In constant currency, turnover grewby 83.5%, gross profit by 87.9% and operating profit by 99.6%. In the USA, inaddition to opening our first office in Atlanta in the South East Region, wehave added a further office into the East Coast Region in Hartford. We have alsoinvested heavily in new staff into the existing offices. In Brazil we achievedstrong growth benefiting from further investment in new staff. In the region wenow have 422 staff, an increase of 80 since the start of the year. TAXATION AND EARNINGS PER SHARE The charge for taxation is based on the expected effective annual tax rate of31.5% (2006: 32.5%) on profit before taxation. Basic earnings per share for the six months ended 30 June 2007 was 14.3p (2006:9.1p) and diluted earnings per share was 14.0p (2006: 8.8p). CASH FLOW The Group started the year with net debt of £3.6m. In the first half, wegenerated £58.8m from operations after funding a £17.6m increase in workingcapital reflecting the increased activity. Tax paid was £13.2m and net capitalexpenditure was £5.4m. During the first half £45.0m was spent repurchasing 8.36mshares at an average price of 534.5p and dividends of £14.0m were paid. 5.0mshare options were exercised during the first half generating £7.7m. The Grouphad net debt of £15.5m at 30 June 2007. DIVIDENDS As previously stated, it is the Board's intention to pay dividends at a levelwhich it believes is sustainable throughout economic cycles and to continue touse share repurchases to return surplus cash to shareholders. The Board hasdecided to increase the interim dividend by 33% to 2.4p (2006: 1.8p) per share.The interim dividend will be paid on 12 October 2007 to shareholders on theregister at 14 September 2007. CURRENT TRADING AND FUTURE PROSPECTS The first half of the year produced record results for the Group with a numberof excellent performances around the world. We have invested significantly innew staff during the first half of the year and there remain tremendousopportunities for continuing our growth as we expand existing and open newoffices. We believe we are well placed to make further good progress and willissue our third quarter trading update on 5 October 2007. Sir Adrian Montague CBE Chairman 20 August 2007 Unaudited Consolidated Interim Income Statement for the six months ended 30 June2007 Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 Note £'000 £'000 £'000 Turnover 3 395,782 312,017 649,060 Cost of sales (169,238) (145,429) (300,243) Gross profit 3 226,544 166,588 348,817 Administrative expenses (156,713) (121,511) (251,450) Operating profit 3 69,831 45,077 97,367 Financial income 466 376 821 Financial expenses (1,108) (255) (1,229) Profit before tax 69,189 45,198 96,959 Income tax expense 4 (21,795) (14,690) (31,512) Profit for the period 47,394 30,508 65,447 Attributable to: Equity holders of the parent 47,394 30,508 65,447 Earnings per share Basic earnings per share (pence) 7 14.3 9.1 19.6 Diluted earnings per share (pence) 7 14.0 8.8 19.0 The above results relate to continuing operations. Unaudited Consolidated Interim Statement of Changes in Equity at 30 June 2007 Called-up Capital Reserve Currency share Share redemption for own translation Retained Total capital premium reserve shares reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 3,326 - 424 (9,871) 304 74,713 68,896 Currency translation - - - - (811) - (811)differences Net expense recognised - - - - (811) - (811)directly in equity Profit for the six months - - - - - 30,508 30,508ended 30 June 2006 Total recognised (expense)/ - - - - (811) 30,508 29,697income for the period Purchase of own shares for (113) - 113 - - (39,656) (39,656)cancellationIssue of share capital 205 33,001 - - - - 33,206Transfer to reserve for own - - - 970 - (970) -sharesCredit in respect of share - - - - - 7,856 7,856schemesDividends - - - - - (12,100) (12,100) 92 33,001 113 970 - (44,870) (10,694) Balance at 30 June 2006 3,418 33,001 537 (8,901) (507) 60,351 87,899 Balance at 1 July 2006 3,418 33,001 537 (8,901) (507) 60,351 87,899 Currency translation - - - - (2,305) - (2,305)differences Net expense recognised - - - - (2,305) - (2,305)directly in equityProfit for the six months - - - - - 34,939 34,939ended 31 December 2006 Total recognised (expense)/ - - - - (2,305) 34,939 32,634income for the period Purchase of own shares for (119) - 119 - - (43,707) (43,707)cancellationIssue of share capital 33 4,951 - - - - 4,984Credit in respect of share - - - - - 4,569 4,569schemeDividends - - - - - (5,988) (5,988) (86) 4,951 119 - - (45,126) (40,142) Balance at 31 December 2006 3,332 37,952 656 (8,901) (2,812) 50,164 80,391 Balance at 1 January 2007 3,332 37,952 656 (8,901) (2,812) 50,164 80,391 Currency translation - - - - 13 - 13differences Net income recognised - - - - 13 - 13directly in equityProfit for the six months - - - - - 47,394 47,394ended 30 June 2007 Total recognised income for - - - - 13 47,394 47,407the period Purchase of own shares for (84) - 84 - - (44,985) (44,985)cancellationIssue of share capital 50 7,611 - - - - 7,661Transfer to reserve for own - - - 1,048 - (1,048) -sharesCredit in respect of share - - - - - 5,557 5,557schemesDividends - - - - - (13,979) (13,979) (34) 7,611 84 1,048 - (54,455) (45,746) Balance at 30 June 2007 3,298 45,563 740 (7,853) (2,799) 43,103 82,052 Unaudited Consolidated Interim Balance Sheet at 30 June 2007 30 June 30 June 31 December 2007 2006 2006 Note £'000 £'000 £'000Non-current assetsProperty, plant and equipment 23,597 19,649 21,550Intangible assets - Goodwill 1,539 1,539 1,539 - Computer software 1,983 2,082 2,059Deferred tax assets 10,306 7,289 9,447Other receivables 1,931 1,907 1,927 39,356 32,466 36,522 Current assetsTrade and other receivables 174,581 131,758 143,813Current tax receivable - 27 213Cash and cash equivalents 10 47,111 25,846 35,587 221,692 157,631 179,613 Total assets 3 261,048 190,097 216,135 Non-current liabilitiesOther payables (1,397) (599) (1,130)Provisions for liabilities - (96) -Deferred tax liabilities - (230) - (1,397) (925) (1,130) Current liabilitiesTrade and other payables (96,467) (76,511) (83,525)Bank overdrafts 10 - (18,300) (43)Bank loans 10 (62,634) - (39,150)Current tax payable (18,402) (6,174) (11,704)Provisions for liabilities (96) (288) (192) (177,599) (101,273) (134,614) Total liabilities 3 (178,996) (102,198) (135,744) Net assets 82,052 87,899 80,391 Capital and reservesCalled-up share capital 3,298 3,418 3,332Share premium 45,563 33,001 37,952Capital redemption reserve 740 537 656Reserve for own shares (7,853) (8,901) (8,901)Currency translation reserve (2,799) (507) (2,812)Retained earnings 43,103 60,351 50,164 Total equity 82,052 87,899 80,391 Unaudited Consolidated Interim Statement of Cash Flows for the six months ended30 June 2007 Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 Note £'000 £'000 £'000 Cash generated from operations 9 58,785 26,660 78,827Income tax paid (13,168) (10,548) (21,705) Net cash from operating activities 45,617 16,112 57,122 Cash flows from investing activitiesPurchases of property, plant and equipment (5,421) (3,103) (9,167)Purchases of computer software (367) (251) (737)Proceeds from the sale of property, plant and 342 311 1,210equipment, and computer softwareInterest received 466 376 821 Net cash used in investing activities (4,980) (2,667) (7,873) Cash flows from financing activitiesDividends paid (13,979) (12,100) (18,088)Interest paid (1,058) (249) (1,209)Proceeds from bank loan 62,634 - 39,150Repayment of bank loan (39,150) (6,700) (6,700)Issue of own shares for the exercise of options 7,661 33,206 38,190Purchase of own shares (44,985) (39,656) (83,363) Net cash used in financing activities (28,877) (25,499) (32,020) Net increase/(decrease) in cash and cash equivalents 11,760 (12,054) 17,229Cash and cash equivalents at the beginning of the 35,544 19,779 19,779periodExchange losses on cash and cash equivalents (193) (179) (1,464) Cash and cash equivalents at the end of the period 10 47,111 7,546 35,544 Notes to the unaudited consolidated interim financial information 1. Corporate information Michael Page International plc is a limited liability company incorporated anddomiciled within the United Kingdom whose shares are publicly traded. Theconsolidated interim financial statements of the Company as at and for the sixmonths ended 30 June 2007 comprise the Company and its subsidiaries (togetherreferred to as the "Group"). The consolidated interim financial statements of the Group for the six monthsended 30 June 2007 were authorised for issue in accordance with a resolution ofthe directors on 20 August 2007. 2. Basis of preparation and accounting policies Basis of preparation These consolidated interim financial statements have been prepared in accordancewith the recognition and measurement criteria of IFRS and the disclosurerequirements of the Listing Rules. The consolidated interim financial statementsare unaudited but have been reviewed by the auditors and their report isincluded. Nature of financial information The financial information set out above does not constitute the Group's auditedstatutory accounts within the meaning of Section 240 of the Companies Act 1985.The financial information for the year ended 31 December 2006 has been extractedfrom the statutory accounts for that year which have been delivered to theRegistrar of Companies. The report of the auditors on those accounts wasunqualified and did not contain a statement under Section 237 (2) or (3) of theCompanies Act 1985. Significant accounting policies The accounting policies applied by the Group in these consolidated interimfinancial statements are the same as those applied by the Group in itsconsolidated financial statements as at and for the year ended 31 December 2006. 3. Segment reporting The consolidated entity operates in one business segment, being that ofrecruitment services, and this is the Group's primary segment. As a result, noadditional business segment information is required to be provided. The Group'ssecondary segment is geography. The segment results by geography are shownbelow: a) Turnover, gross profit and operating profit by geographic region Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2007 2006 2006 2007 2006 2006 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 176,556 153,120 312,408 92,023 76,027 155,811 EMEA 149,244 104,392 222,993 90,446 59,301 126,577 Asia Pacific Australia 34,449 31,604 63,208 15,286 12,874 26,017 Other 12,440 9,378 20,370 11,696 8,677 18,944 Total 46,889 40,982 83,578 26,982 21,551 44,961 Americas 23,093 13,523 30,081 17,093 9,709 21,468 395,782 312,017 649,060 226,544 166,588 348,817 Operating Profit Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 United Kingdom 28,607 19,568 44,270 EMEA 28,450 16,122 34,171 Asia Pacific Australia 5,087 4,018 8,982 Other 4,761 3,774 8,077 Total 9,848 7,792 17,059 Americas 2,926 1,595 1,867 69,831 45,077 97,367 The above analysis by destination is not materially different to analysis byorigin. The analysis below is of the carrying amount of segment assets, segmentliabilities and capital expenditure. Segment assets and liabilities includeitems directly attributable to a segment as well as those that can be allocatedon a reasonable basis. The individual geographic segments exclude income taxassets and liabilities. Capital expenditure comprises additions to property,plant and equipment, motor vehicles and computer hardware/software. b) Segment assets, segment liabilities and capital expenditure by geographic region Total Assets Total Liabilities Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2007 2006 2006 2007 2006 2006 £'000 £'000 £'000 £'000 £'000 £'000 United Kingdom 95,132 76,267 88,364 101,972 52,344 73,228 EMEA 114,770 79,858 91,281 46,647 34,535 39,734 Asia Pacific Australia 19,510 13,619 14,592 6,547 5,116 5,457 Other 13,293 9,215 10,165 1,955 1,712 2,251 Total 32,803 22,834 24,757 8,502 6,828 7,708 Americas 18,343 11,111 11,520 3,473 2,317 3,370 Segment assets/liabilities 261,048 190,070 215,922 160,594 96,024 124,040 Income tax assets/ - 27 213 18,402 6,174 11,704liabilities 261,048 190,097 216,135 178,996 102,198 135,744 Capital Expenditure Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 United Kingdom 2,023 947 3,113 EMEA 2,790 1,332 3,899 Asia Pacific Australia 120 229 958 Other 125 204 386 Total 245 433 1,344 Americas 730 642 1,548 5,788 3,354 9,904 c) Turnover and gross profit by discipline Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2007 2006 2006 2007 2006 2006 £'000 £'000 £'000 £'000 £'000 £'000 Finance and Accounting 240,760 197,083 408,250 125,336 97,361 202,542 Marketing, Sales and 56,413 48,765 100,153 42,377 32,642 67,863Retail Legal, Technology, HR, 62,015 45,284 96,595 33,604 21,537 46,655Secretarial and Other Engineering, Property & 36,594 20,885 44,062 25,227 15,048 31,757Construction, Procurement& Supply Chain 395,782 312,017 649,060 226,544 166,588 348,817 d) Turnover and gross profit generated from permanent andtemporary placements Turnover Gross Profit Six months ended Year ended Six months ended Year ended 30 June 30 June 31 December 30 June 30 June 31 December 2007 2006 2006 2007 2006 2006 £'000 £'000 £'000 £'000 £'000 £'000 Permanent 186,218 132,419 276,346 176,131 124,896 261,000 Temporary 209,564 179,598 372,714 50,413 41,692 87,817 395,782 312,017 649,060 226,544 166,588 348,817 The above analyses in notes (a) operating profit by geographic region, (b)segment liabilities by geographic region, (c) turnover and gross profit bydiscipline (being the professions of candidates placed) and (d) turnover andgross profit generated from permanent and temporary placements have beenincluded as additional disclosure over and above the requirements of IAS 14 "Segment Reporting". 4. Taxation The Group's consolidated effective tax rate in respect of continuing operationsfor the six months ended 30 June 2007 was 31.5% (30 June 2006: 32.5% , 31December 2006: 32.5%) Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Tax chargeUnited Kingdom 10,357 8,102 17,046Overseas 11,438 6,588 14,466 Income tax expense reported in the consolidated 21,795 14,690 31,512income statement 5. Dividends Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Amounts recognised as distributions to equity holders in the period:Final dividend for the year ended 31 December 2006 of 4.2p per 13,979 12,100 12,100ordinary share (2005: 3.5p)Interim dividend for the period ended 30 June 2006 of 1.8p per - - 5,988ordinary share 13,979 12,100 18,088 Amounts proposed as distributions to equity holders in the period:Proposed interim dividend for the six months ended 30 June 2007 of2.4p per ordinary share (2006: 1.8p) 7,864 6,092 - The proposed interim dividend had not been approved by the Board at 30 June 2007and therefore has not been included as a liability. The comparative interimdividend at 30 June 2006 was also not recognised as a liability in the priorperiod. The proposed interim dividend of 2.4 pence (2006: 1.8 pence) per ordinary sharewill be paid on 12 October 2007 to shareholders on the register at the close ofbusiness on 14 September 2007. 6. Share-based payments In accordance with IFRS 2 "Share-based Payment", a charge of £2.0m has beenrecognised for share options (including social charges) (30 June 2006: £3.2m, 31December 2006: £4.6m), and £2.3m has been recognised for other share-basedpayment arrangements (including social charges) (30 June 2006: £2.0m, 31December 2006: £3.7m). 7. Earnings per ordinary share The calculation of the basic and diluted earnings per share is based on thefollowing data: Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 EarningsEarnings for basic earnings per share (£'000) 47,394 30,508 65,447 Number of sharesWeighted average number of shares used for basic earnings per share (' 330,317 336,276 334,744000)Dilution effect of share plans ('000) 7,044 8,839 8,888Diluted weighted average number of shares used for diluted earnings per 337,361 345,115 343,632share ('000) Basic earnings per share (pence) 14.3 9.1 19.6Diluted earnings per share (pence) 14.0 8.8 19.0 The above results relate to continuing operations. 8. Property, plant and equipment Acquisitions and disposals During the six months ended 30 June 2007 the Group acquired property, plant andequipment with a cost of £5.4m (30 June 2006: £3.1m, 31 December 2006: £9.2m). Property, plant and equipment with a carrying amount of £0.3m were disposed ofduring the six months ended 30 June 2007 (30 June 2006: £0.3m, 31 December 2006:£1.2m), resulting in a gain on disposal of £0.1m (30 June 2006: loss of £0.4m,31 December 2006: neither a gain nor a loss). Capital commitments The Group had contractual capital commitments of £1.1m as at 30 June 2007 (30June 2006: £1.3m, 31 December 2006: £0.6m) relating to property, plant andequipment. 9. Cash flows from operating activities Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Profit before tax 69,189 45,198 96,959Depreciation and amortisation charges 3,646 3,041 6,445(Profit) / loss on sale of property, plant and equipment, and (76) 359 (48)computer softwareShare scheme charges 3,048 2,045 4,168Net finance cost / (income) 642 (121) 408 Operating cashflow before changes in working capital and 76,449 50,522 107,932provisionsIncrease in receivables (30,642) (28,357) (42,376)Increase in payables 13,074 4,687 13,655Decrease in provisions (96) (192) (384) Cash generated from operations 58,785 26,660 78,827 10. Cash and cash equivalents Six months ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Cash at bank and in hand 38,365 16,654 23,355Short term deposits 8,746 9,192 12,232 Cash and cash equivalents 47,111 25,846 35,587Bank overdrafts - (18,300) (43) Cash and cash equivalents in the statement of cash flows 47,111 7,546 35,544Bank loans (62,634) - (39,150) Net (debt) / funds (15,523) 7,546 (3,606) INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprise the consolidated incomestatement, the consolidated statement of changes in equity, the consolidatedbalance sheet, the consolidated statement of cash flows and related notes 1 to10. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone other thanthe company, for our review work, for this report, or for the conclusions wehave formed. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures are consistent withthose applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin1999/4 issued by the Auditing Practices Board for use in the United Kingdom. Areview consists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with International Standards on Auditing (UK andIreland) and therefore provides a lower level of assurance than an audit.Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. Deloitte & Touche LLP Chartered Accountants London 20 August 2007 This information is provided by RNS The company news service from the London Stock Exchange