Financial Summary of a Recruitment Company by ukp10564

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									                                                                                     16 AUGUST 2010 | PAGE 1 OF 22




                            MICHAEL PAGE INTERNATIONAL PLC
                     Half Year Results for the Period Ended 30 June 2010
Michael Page International plc (“Michael Page”), the specialist professional recruitment company, announces its half year
results for the period ended 30 June 2010.

 Financial summary (6 months to 30 June 2010 )                           2010      2009    Change        Change CER*
 Revenue                                                              £393.5m   £364.7m       +8%                  +6%
 Gross profit                                                         £209.6m   £178.8m      +17%                 +15%
 Operating profit before NRI †                                        £32.5m      £5.6m     +479%               +450%
 Profit before tax before NRI                                         £33.0m      £6.2m     +436%
 Basic earnings per share before NRI                                     6.6p      0.5p   +1,220%
 Diluted earnings per share before NRI                                   6.5p      0.5p   +1,200%


 Operating profit                                                     £49.6m     £32.2m      +54%
 Profit before tax                                                    £61.4m     £43.2m      +42%
 Basic earnings per share                                               13.1p      8.8p      +49%
 Diluted earnings per share                                             12.8p      8.7p      +47%


 Interim dividend per share                                             2.88p     2.88p         -%


*Constant Exchange Rates         † Non-recurring Items (see note 4)

Highlights

    •    Strong first half benefiting from geographic and discipline diversification
    •    Improved productivity and utilisation of spare capacity driving profit recovery
    •    Asia Pacific, Latin America and newer developing countries growing at 43%* year-on-year
    •    All regions growing sequentially in first half of 2010
    •    71% of gross profit generated from outside the UK
    •    53% of gross profit generated from non Finance and Accounting disciplines
    •    Roll-out of Page Personnel continues with 5 new countries, now in 17 countries
    •    Gross profit from permanent placements growing at 31% (28%*)
    •    Share repurchases of £61.8m during the first half of 2010
    •    Strong balance sheet with net cash at 30 June 2010 of £65.7m (2009: £99.2m)
    •    Interim dividend maintained at 2.88p

Current trading and outlook

    •    Well positioned in underdeveloped markets
    •    Numerous opportunities for growth
    •    Group headcount at 30 June 2010 3,860, up by 311 since start of year
    •    Continuation of recent trends in trading throughout July
    •    Mindful of risks to recovery, quick to react when necessary
                                                                                        16 AUGUST 2010 | PAGE 2 OF 22


Commenting on the results, Steve Ingham, Chief Executive of Michael Page, said:

“We delivered a strong performance in the first half of 2010, driven largely by greater permanent recruitment activity as
confidence levels improved, leading to higher rates of job churn. While we are now entering the seasonally quieter holiday
period, we have seen a continuation of these trends in the Group’s performance during July.

“We are benefiting from our investment in diversifying the Group internationally, with over 70% of our gross profit in the first
half derived from areas outside of the UK and more than 50% of our gross profit generated from non-Finance and
Accounting disciplines. Over 40% of our fee earners are located in developing recruitment markets, where prospects for
long-term growth are strong. We have market-leading positions in specialist recruitment in Asia and Latin America and are
particularly optimistic about the opportunities available to us in these regions, where we will continue to invest in additional
headcount. In the UK, Continental Europe and North America, we have experienced improvements in job flow in virtually all
markets.

“It is the nature of our business that visibility is short and the general level of business confidence and economic activity
may be threatened by fiscal consolidation in the UK and Europe, however, we remain quick to react to changing market
conditions. Having maintained our presence in all our markets, the strength of our geographic discipline and industry sector
diversification, combined with our operational gearing, means that our profitability is much improved over last year.”



Analyst meeting

The company will be presenting to a meeting of analysts at 9.00am today. The presentation and a
recording of the meeting will be available on the company’s website later on today at:
http://investors.michaelpage.co.uk/presentations

Enquiries:

 Michael Page International plc                                             01932 264144
 Steve Ingham, Chief Executive
 Stephen Puckett, Finance Director

 Financial Dynamics                                                         020 7269 7291
 Richard Mountain/Susanne Yule
                                                                                        16 AUGUST 2010 | PAGE 3 OF 22


INTERIM MANAGEMENT REPORT

To the members of Michael Page International plc

Cautionary Statement

This Interim Management Report (“IMR”) has been prepared solely to provide additional information to shareholders to
assess the Group’s strategies and the potential for those strategies to succeed. The IMR should not be relied on by any
other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by
the directors in good faith based on the information available to them up to the time of their approval of this report and such
statements should be treated with caution due to the inherent uncertainties, including both economic and business risk
factors, underlying any such forward-looking information.

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are
significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

STRATEGY

The Group’s strategy is to expand and diversify the business by industry sectors, by professional disciplines, by geography
and by level of focus be it Page Personnel, Michael Page or Michael Page Executive Search, with the objective of being the
leading specialist recruitment consultancy in each of our chosen markets. As recruitment activity is dependent upon
economic cycles, by being more diverse, the dependency on individual businesses or markets is reduced, making the
overall Group more resilient. This strategy is pursued entirely through the organic growth of existing and new teams, offices,
disciplines and countries with a consistent team and meritocratic culture.

Our organic growth is achieved by drawing upon the skills and experiences of proven Michael Page management, ensuring
we have the best and most experienced, home-grown talent in each key role. When we invest in a new business, we do so
only with a long-term objective and in the knowledge that at some point there will be periods when economic activity slows.
While it is difficult to predict accurately when these slowdowns will occur and how severe they will be, it has been our
practice in the past and our intention in the future to maintain our presence in our chosen markets, but with close control
over our cost base.

Our team-based structure and profit share business model is scalable. The small team size also means that we can rapidly
increase our headcount 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, but having invested years in training and
developing our highly capable management resources, our objective is to retain this expertise within the Group. By following
this course of action, we typically gain market share during downturns and position our businesses for leading rates of
growth when economic conditions improve.

Pursuing this approach does mean that in an economic downturn our profitability declines as, in addition to the lower
productivity levels that come with a slowdown, we also carry spare capacity. However, when market conditions improve, the
Group’s profitability recovers quickly as spare capacity is utilised. Adopting this strategy of toughing-out economic
slowdowns also drives our financing strategy and balance sheet position. In slowdowns, the business continues to produce
strong cash flows, as working capital requirements reduce. With uncertainty around the length and depth of economic
slowdowns, a strong balance sheet is essential to support the businesses through tougher periods and, when conditions
improve and the businesses start growing, to fund increased working capital requirements.

GROUP RESULTS

As economic conditions improved during the first half of 2010, the Group produced a strong performance, growing revenue
and substantially increasing profitability. The Group’s revenue for the six months ended 30 June 2010 increased by 7.9% to
£393.5m (2009: £364.7m) and gross profit increased by 17.2% to £209.6m (2009: £178.8m). At constant exchange rates,
the Group’s revenue increased by 6.3% and gross profit by 15.1%. In the first half, the mix of the Group’s revenue and
gross profit between permanent and temporary placements was 43:57 (2009: 36:64) and 78:22 (2009: 70:30) respectively.
As expected when economic conditions improve, permanent recruitment is recovering faster, with temporary recruitment
only starting to grow sequentially in the second quarter of 2010. This movement in the mix towards permanent is
compounded by our faster growing regions being predominantly permanent rather than temporary recruitment in the
specialist sectors. The gross margin on temporary placements in the first half of 2010 has decreased to 20.7% (2009:
23.2%), largely as a consequence of pressure on pricing, but as we started to see gross profit stabilise in the first half of
2010, we have also seen gross margin on temporary placements stabilise as well.
                                                                                         16 AUGUST 2010 | PAGE 4 OF 22


In reaction to the extremely difficult market conditions caused by the global financial crisis, the Group lowered its cost base
during both 2008 and 2009 by reducing headcount and, while ensuring we maintained our presence in all geographies, we
also consolidated some of our smaller offices where we had more than one in a city. As market conditions in each of the
geographic regions in which we operate stabilised and then started to improve, the increased activity levels were first
serviced by utilising spare capacity. As spare capacity, which is not easily moved between disciplines or locations is used
up and new investments are made for future growth, an additional 311 staff were added in the first half of 2010. Headcount
at 30 June 2010 was 3,860 operating from 135 offices in 28 countries.

New investments in the first half of 2010 included the launch of Page Personnel in Hong Kong, Mexico, Russia, Singapore
and the USA.

When the demand for recruitment services increases, the number of positions to be filled rises, candidate shortages begin
to emerge, the time-to-hire period starts to reduce and there is less pressure on pricing. All of these factors trended
positively in the first half, creating an environment for increased productivity and the generation of more gross profit per fee
earner. The Group’s strategy of only growing organically using home-grown talent, maintaining market presence and
maintaining spare capacity means that the Group is highly operationally geared. This was reflected in the near six-fold
increase in operating profit, before non-recurring items, from £5.6m in the first half of 2009 to £32.5m in the first half of 2010
and the Group’s conversion rate of operating profit from gross profit increasing to 15.5% (2009: 3.1%).

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

Europe, Middle East and Africa (EMEA) is the Group’s largest region, contributing 44% of Group gross profit. Revenue in
the region decreased by 2.3% to £161.3m (2009: £165.2m), but gross profit increased by 6.4% to £91.3m (2009: £85.8m)
due to increased activity, primarily in permanent placements. In constant currency, revenue was flat on the first half of 2009,
but gross profit increased by 8.6%. The increase in gross profit, combined with a lower cost base, resulted in an operating
profit for the first half of 2010 of £9.6m (2009: loss of £1.5m).

In all countries in the region, market conditions have gradually improved throughout the first half apart from in the
Netherlands, which appears to be one of the last economies to start to recover. Whilst headcount was reduced across the
region in 2009, we maintained the platform of businesses and held spare capacity in the larger more established countries.
As this spare capacity is utilised and the newer and smaller countries invest for growth, headcount has increased by 73
across the region in the first half of 2010.

UNITED KINGDOM

In the UK, representing 29% of the Group’s gross profit, revenue increased by 3.6% to £142.8m (2009: £137.8m), gross
profit increased by 7.3% to £61.2m (2009: £57.0m) and operating profit increased by 58.5% to £9.6m (2009: £6.1m).

In the UK, market conditions stabilised in the latter part of 2009 and there is growing evidence of a gradual recovery in the
first half of 2010. This recovery first became evident in our Financial Services, Sales and Retail disciplines and now virtually
all disciplines are showing an improving trend. Headcount across the UK has remained largely flat over the last 12 months
and stands at 1,218 at the end of June 2010 (1,220 at 30 June 2009), with the increased productivity from fee earners being
the main driver of the increase in operating profit.

ASIA PACIFIC

In Asia Pacific, now representing 15% of the Group’s gross profit, revenue increased by 48.4% to £53.5m (2009: £36.1m)
and gross profit increased by 62.5% to £31.2m (2009: £19.2m). In constant currency, revenue increased by 28.7%, gross
profit by 45.3% and operating profit by 310.5%. Operating profit rose to £9.5m (2009: £2.0m), with the high operational
gearing and productivity increases driving the conversion rate to over 30% (2009: 11%).

In Australia, our largest business in the region, market conditions began to improve in the latter part of 2009, with quarterly
gross profits growing sequentially from the fourth quarter of 2009 and for the first half of 2010 increasing by 26% in constant
currency. In Asia, where the business is almost entirely permanent placements, activity levels are recovering the fastest,
with gross profits 73% higher in constant currency. At the end of June we had 501 staff in the region, an increase of 98
(24%) since the start of the year and assuming market conditions continue to strengthen, further headcount will be added
during the second half of 2010.

THE AMERICAS

In the Americas, representing 12% of the Group’s gross profit, revenue increased by 39.9% to £35.8m (2009: £25.6m) and
gross profit increased by 54.5% to £25.9m (2009: £16.8m). In constant currency, revenue increased by 29.8% and gross
profit by 40.2%. The increased gross profit, through utilisation of surplus capacity, produced an operating profit of £3.8m
(2009: loss of £1.0m).
                                                                                        16 AUGUST 2010 | PAGE 5 OF 22


In North America, while market conditions remained challenging, there is evidence of a steadily improving level of
recruitment activity, with gross profit growing in the first half of 2010 by 29%. In Latin America, where gross profits grew in
the first half of 2010 by 50% in constant currency, the impact of the global slowdown was sudden, but the market is
recovering quickly and we are again investing for further growth. In Brazil, a business that we established in 2000, we are
the clear market leader, with the newer businesses in Mexico and Argentina also continuing to develop well. We now have
496 staff in the region, an increase of 101 (26%) since the start of the year.

NON-RECURRING ITEMS (NRI)

In 2003, the Group submitted an initial claim to Her Majesty’s Revenue and Customs (HMRC) for overpaid VAT which was
rejected. The Group appealed and subsequently filed amended claims for £26.5m, net of fees, covering the period from
1980 to 2004. In March 2009, the Group filed amended claims for a further refund of an additional £80m, net of fees, of
overpaid VAT covering the same period.

In June 2009, the Group received a payment from HMRC of £26.5m, net of fees, as part settlement of these claims and in
July 2009 received £10.5m, net of fees, of statutory interest. As a result, the principal and interest amounts were recognised
in the prior year June 2009 half year results, with the interest receivable being recorded within working capital in the cash
flow statement.

On 25 September 2009, the Group received a letter from HMRC which stated that, ‘HMRC have reviewed the recent
payment and are now of the view that the claim in whole or in part should not have been paid’.

A number of discussions and meetings with HMRC followed and on 5 March 2010, the Group announced that an
agreement had been reached in principle, subject to legal contract, for the Group to retain £28.5m (net of fees). However,
given the background to the initial receipt, the subsequent review and reversal of HMRC’s position, together with the
remaining uncertainty pending formal contractual agreement, the Group reversed out the amounts originally recorded in the
2009 half year results and as such did not recognise any amount in the income statement, nor any interest received in the
cash flow statement, for the full year.

On 30 April 2010, a formal agreement was signed with HMRC. As a result, of the £50.0m originally received from HMRC,
the Group retained £38.1m and returned £11.9m in May 2010. Accordingly, after fees, the Group has recognised £28.5m as
non-recurring income in its 2010 income statement, of which £17.1m is in respect of refunded VAT and is included in
operating profit and £11.4m is in respect of interest and is included in financial income.

In respect of the amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT there have been
no discussions or meetings with HMRC and the Group are continuing to pursue this further claim. None of this additional
claim has been recognised.

TAXATION AND EARNINGS PER SHARE

The charge for taxation is based on the expected effective annual tax rate of 32.5% (2009: 34.5%) on profit before taxation.
The expected effective annual tax rate on profit before tax and before NRI is 36.4% (2009: 73.2%).

After NRI, basic and diluted earnings per share for the six months ended 30 June 2010 were 13.1p (2009: 8.8p) and 12.8p
(2009: 8.7p) respectively. Before NRI, basic and diluted earnings per share for the six months ended 30 June 2010 were
6.6p (2009: 0.5p) and 6.5p (2009: 0.5p) respectively.

CASH FLOW

The Group started the year with net cash of £137.2m. In the first half, we generated £14.5m from operations after NRI, after
an increase in working capital of £15.9m, reflecting increased activity and cash outflows relating to the VAT claim of
£12.6m. Tax paid was £5.3m and net capital expenditure was £4.5m, with net interest received of £0.5m. During the first
half, £61.8m was spent repurchasing shares into the employee benefit trust to satisfy employee share schemes and
dividends of £16.1m were paid. The Group had net cash of £65.7m at 30 June 2010.

DIVIDENDS AND SHARE REPURCHASES

It is the Board’s intention to pay dividends at a level that it believes is sustainable throughout economic cycles and to
continue to use share repurchases to return surplus cash to shareholders. Reflecting the Group’s first half performance and
the Board’s confidence in the longer term prospects for the Group, it has decided to maintain the interim dividend at 2.88p
per share. The interim dividend will be paid on 8 October 2010 to shareholders on the register at 10 September 2010.

In the first half, the Group’s employee benefit trust purchased 15m shares for £61.8m to satisfy employee share plan
awards.
                                                                                         16 AUGUST 2010 | PAGE 6 OF 22


KEY PERFORMANCE INDICATORS

Financial and non-financial key performance indicators (KPIs) used by the Board to monitor progress are listed in the table
below. The source of data and calculation methods year-on-year are on a consistent basis.

 KPI                                H1 2010   H1 2009     Definition, method of calculation and analysis
 Gross margin                       53.3%     49.0%       Gross profit as a percentage of revenue. Gross margin has increased
                                                          largely as a result of the mix of permanent and temporary placements.
                                                          In improving trading conditions, there tends to be a swing to higher
                                                          margin permanent placements. Source: Condensed consolidated
                                                          income statement in the financial statements.
 Conversion before NRI              15.5%     3.1%        Operating profit as a percentage of gross profit showing the Group’s
                                                          effectiveness at controlling the costs and expenses associated with its
                                                          normal business operations and the level of investment for future
                                                          growth. Conversion has increased compared to last year reflecting the
                                                          improvement in productivity and the utilisation of a proportion of the
                                                          spare capacity created during the downturn.
                                                          Source: Condensed consolidated income statement in the financial
                                                          statements.
 Productivity (gross profit per     £80.5k    £57.6k      Represents productivity of fee earners and is calculated by dividing the
 fee earner)                                              gross profit for the period by the average number of fee earners and
                                                          directors. The higher the number, the higher their productivity.
                                                          Productivity is a function of the numbers and experience of fee earners,
                                                          the impact of pricing and the general conditions of the recruitment
                                                          market. The increase in productivity this period is as a result of the
                                                          experienced consultants remaining in the business after the downturn
                                                          and a general improvement in market conditions.
                                                          Source: Internal data.
 Fee earner : support staff ratio   71:29     71:29       Represents the balance between operational and non-operational staff.
                                                          The balance in the period reflects the need to continue to provide the
                                                          infrastructure to maintain market presence.
                                                          Source: Internal data.
 Debtor days (30 June)              47        51          Represents the length of time before the Group receives payments
                                                          from its debtors. Calculated by comparing how many days’ billings it
                                                          takes to cover the debtor balance. The decrease in the period reflects a
                                                          continued increased focus on cash collections and improvements in
                                                          economic conditions.
                                                          Source: Internal data.

The movements in KPIs are in line with expectations.

OPERATING PROFIT AND CONVERSION RATES

As a result of the Group’s organic long-term growth strategy, tight control on costs and profit-based bonuses, we have a
business model that is operationally geared. The majority of our cost base, around 75%, relates to our staff, with the other
main components being property and information technology costs. With a strategy of organic growth, the Group incurs
start-up costs and operating losses as investments are made to grow existing and new businesses, open new offices and
launch new countries. Furthermore, significant increases in headcount mean that it takes time to train staff before they
become fully productive. These characteristics of our growth strategy and the levels of investment impact on the conversion
rates in any one reporting period.

Generally, in years when economic conditions are benign, revenue and gross profit grow, with operating profit growing at a
faster rate due to a combination of higher productivity, stronger pricing and greater utilisation of infrastructure. In order to
grow, we need to increase our headcount and ensure that we have infrastructure to house and support them. When
economic conditions weaken and recruitment activity slows, these factors work in reverse and are compounded by a
shortening of earnings visibility.
                                                                                        16 AUGUST 2010 | PAGE 7 OF 22


The majority of our permanent placement activity is undertaken on a contingent basis, which means on those assignments
we only generate revenue when a candidate is successfully placed in a role. Our short-term visibility on these earnings is
provided by the number of assignments we are working on, the number of candidates we have at interview and the stage
they are at in the interview process. The average time to complete a placement, from taking on an assignment to
successfully placing a candidate, tends to lengthen in a downturn, reducing productivity and the risk of the candidate being
rejected or the assignment being cancelled increases, thereby further reducing our earnings visibility.

In a downturn, activity levels can slow quickly and revenue can decline even faster due to the contingent nature of a large
proportion of our placements. The main opportunity for reducing our own cost base is headcount, but these reductions tend
to lag the declines in revenue due to the shortening visibility. The majority of the initial reductions in our headcount occur
through natural attrition, without incurring significant restructuring charges. However, as greater reductions become
necessary, such charges may be incurred, but these are treated as a component of our normal operating expenses.

As economic conditions begin to improve, confidence levels of both candidates and clients also increases and the churn
rate of people moving jobs starts to increase. This increase in activity is serviced from the spare capacity we maintained
during the downturn and therefore profits can increase rapidly. The Group’s conversion rate before NRI for the period is
15.5% (2009: 3.1%). The movement in the conversion rates of the four regions and the levels of conversion now being
achieved reflects the pace of recovery in those regions and the levels of spare capacity still available to be utilised.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

It is the Directors’ intention to continue to finance the activities and development of the Group from retained earnings and to
operate the Group’s business while maintaining a strong balance sheet position. When there is a generally benign
economic outlook, this equates to maintaining the Group’s net cash/debt position within a relatively narrow band, with cash
generated in excess of these requirements being used to buy back the Group’s shares. In an economic downturn a more
cautious funding position is adopted, with the Group being managed in a net cash position.

Cash surpluses are 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 has a multi-currency notional cash pool between the
Euro-zone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance
compensation of cash and bank overdrafts.

The Group has an undrawn £50m, three-year multi-currency, committed revolving credit facility with Deutsche Bank that
expires in June 2012.

The main operational currencies of the Group are Sterling, Euro and Australian Dollar. The Group does not have material
transactional currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities.
The Group is exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not
to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different
reporting currencies, it may use foreign exchange swap derivative financial instruments to manage the currency and interest
rate exposure that arises on these loans. It is the Group’s policy not to seek to designate these derivatives as hedges.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Company’s strategy are subject to a number of risks. The
following section comprises a summary of what the Group believes are the main risks that could potentially impact the
Group’s operating and financial performance.

People

The resignation of key individuals and the inability to recruit talented people with the right skill-sets could adversely affect
the Group’s results. This is further compounded by the Group’s organic growth strategy and its policy of not externally hiring
senior operational positions. Mitigation of this risk is achieved by succession planning, training of staff, competitive pay
structures linked to the Group’s results and career progression.

Macro economic environment

Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board looks to reduce
the Group’s cyclical risk by expanding geographically, by increasing the number of disciplines, by building part-qualified and
clerical businesses and by continuing to build the temporary business.
                                                                                      16 AUGUST 2010 | PAGE 8 OF 22


A substantial portion of the Group’s gross profit arises from fees which are contingent upon the successful placement of a
candidate in a position. If a client cancels the assignment at any stage in the process, the Group receives no remuneration.
As a consequence, the Group’s visibility of gross profits is generally quite short and tends to reduce further during periods
of economic downturn.

Competition

The degree of competition varies in each of the Group’s main regions. In the UK, Australia and North America, the
recruitment market is well developed, highly competitive and fragmented. The characteristics of a developed market are
greater competition for clients and candidates, as well as pricing pressure. In EMEA, Latin America and Asia, the
recruitment market is generally less developed, with a large proportion of all recruitment being carried out by companies’
internal resources, rather than through recruitment specialists. This is changing rapidly due to changes in legislation,
increasing job mobility and the difficulty internal resources face in sourcing suitably qualified candidates and managing
compliance.

If the Group does not continue to compete in its markets effectively, by hiring new staff, opening and expanding offices and
continuing the discipline roll-outs, there is a risk that competitors may beat us to key strategic opportunities, which may
result in lost business and a reduction in market share. This risk is mitigated by meetings of the Main Board, Executive
Board and Regional and Country Management Boards where Group strategy is continually reviewed and decisions made
over the allocation of the Group’s resources, principally people.

Technology

The Group is reliant on a number of technology systems to provide services to clients and candidates. These systems are
dependent on a number of important suppliers that provide the technology infrastructure and disaster recovery solutions.
The performance of these suppliers are continually monitored to ensure business critical services are available and
maintained as far as practically possible. Due to the rapid advancement of technology, there is a risk that systems could
become outdated with the potential to affect efficiency and have an impact on revenue and client service. This risk is
mitigated by regular reviews of the Group’s technology strategy to ensure that it supports the overall Group strategy. The
Group has invested in a new generation of technology systems, which will begin to be implemented in our operating
businesses from later this year. The systems implementation risks are being managed by staged roll-outs, generally
increasing the size and complexity of the businesses transitioning to the new systems.

Legal

The Group operates in a large number of jurisdictions which have varying regulatory environments. As the employment
laws are changed and harmonised in certain geographies, they bring with them new risks and opportunities. The temporary
market is heavily regulated, and changes in legislation, which have the effect of increasing the cost or restricting the
flexibility of movement of temporary workers, could, other things being equal, have a detrimental effect on the Group’s
financial performance. The Group takes its obligations and responsibilities seriously and ensures that its policies, systems
and procedures are continually upgraded to reflect best practice and to comply with the legal requirements in all of the
markets in which it operates. In order to reduce the legal and compliance risks, fee earners and support staff receive regular
training and updates of changes in legal and compliance requirements.

Financial

The Group has a risk management process to assess risks and places emphasis on maintaining adequate financial and
management controls. The risk management process is viewed as a dynamic part of operations and is assessed globally on
an annual basis. The Group has developed a framework to manage risk and respond to the global financial crisis, with
emphasis upon credit exposure, management of currency risk and business and operational continuity.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group’s forecasts and associated risks and sensitivities.
Despite the significant uncertainty in the economy and its inherent risk and impact on the business, the Board has
concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline
diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate
resources to continue in operational existence for the foreseeable future being a period of at least 12 months.
                                                                                        16 AUGUST 2010 | PAGE 9 OF 22


CURRENT TRADING AND FUTURE PROSPECTS

We delivered a strong performance in the first half of 2010, driven largely by greater permanent recruitment activity as
confidence levels improve, leading to higher rates of job churn. While we are now entering the seasonally quieter holiday
period, we have seen a continuation of these trends in the Group’s performance during July.

We are benefiting from our investment in diversifying the Group internationally, with over 70% of our gross profit now
derived from areas outside of the UK and more than 50% of our gross profit generated from non-Finance and Accounting
disciplines. Over 40% of our fee earners are located in developing recruitment markets, where prospects for long-term
growth are strong. We have market-leading positions in specialist recruitment in Asia and Latin America and are particularly
optimistic about the opportunities available to us in these regions, where we will continue to invest in additional headcount.
In the UK, Continental Europe and North America, we have experienced improvements in job flow in virtually all markets.

It is the nature of our business that visibility is short and the general level of business confidence and economic activity may
be threatened by fiscal consolidation in the UK and Europe, however, we are quick to react to changing market conditions.
Having maintained our presence in all our markets, the strength of our geographic discipline and industry sector
diversification, combined with our operational gearing, means that our profitability is much improved over last year.



Page House
The Bourne Business Park
1 Dashwood Lang Road
Addlestone
Weybridge
Surrey
KT15 2QW

By order of the Board,



Steve Ingham                Stephen Puckett
Chief Executive             Group Finance Director

16 August 2010              16 August 2010
                                                                                       16 AUGUST 2010 | PAGE 10 OF 22


INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 June 2010 which comprises the condensed consolidated income statement, the
condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed
consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to
14. We have read the other information contained in the half-yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and
Ireland) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the
Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are
required to state to them in an independent review 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 company, for our review work, for this report, or for the
conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom’s Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements included in this half-yearly financial report has been
prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the
European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly
financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410,
"Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK
and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the half-yearly financial report for the six months ended 30 June 2010 is not prepared, in all material respects,
in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom's Financial Services Authority.




Deloitte LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
16 August 2010
                                                                             16 AUGUST 2010 | PAGE 11 OF 22


Condensed Consolidated Income Statement
Six months ended 30 June 2010

                                                                        Six months ended      Year ended
                                                                 30 June         30 June          31 Dec
                                                                    2010            2009            2009
                                                         Note      £’000            £’000           £’000

 Revenue                                                    3     393,515         364,688         716,722
 Cost of sales                                                  (183,961)       (185,877)       (365,028)
 Gross profit                                               3     209,554         178,811         351,694
 Administrative expenses                                        (177,034)       (173,192)       (331,491)
 Operating profit before non-recurring items                3      32,520            5,619         20,203
 Other income – non-recurring items                         4      17,125          26,544                -
 Operating profit                                           3      49,645          32,163          20,203
 Financial income                                           5          744           1,383           2,027
 Financial income – non-recurring items                     5      11,335          10,516                -
 Financial expenses                                         5        (290)           (846)         (1,162)
 Profit before tax                                                 61,434          43,216          21,068
 Income tax expense                                         6    (11,997)          (4,506)         (8,638)
 Income tax expense – non-recurring items                   4      (7,969)       (10,404)                -
 Profit for the period                                             41,468          28,306          12,430

 Attributable to:                                                 41,468          28,306          12,430
 Owners of the parent

 Earnings per share
 Basic earnings per share (pence)                           9        13.1             8.8             3.9
 Diluted earnings per share (pence)                         9        12.8             8.7             3.8

The above results all relate to continuing operations.




Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2010

                                                                       Six months ended       Year ended
                                                                30 June         30 June           31 Dec
                                                                   2010            2009             2009
                                                                  £’000            £’000            £’000

 Profit for the period                                           41,468          28,306           12,430

 Other comprehensive income for the period
                                                                   (747)        (14,788)         (11,978)
 Currency translation differences

 Total comprehensive income for the period                       40,721          13,518              452

 Attributable to:
 Owners of the parent                                            40,721          13,518              452
                                                                      16 AUGUST 2010 | PAGE 12 OF 22


Condensed Consolidated Balance Sheet
At 30 June 2010


                                                           30 June     30 June              31 Dec
                                                   Note       2010        2009                2009
                                                             £’000       £’000               £’000
 Non-current assets
 Property, plant and equipment                        3     27,795      33,978              31,432
 Intangible assets - Goodwill                                1,539       1,539               1,539
                   - Computer software                      21,125      14,739              18,512
 Deferred tax assets                                        11,136       9,207              10,179
 Other receivables                                   11      2,745       1,462               2,021
                                                            64,340      60,925              63,683

 Current assets
 Trade and other receivables                         11    152,301     150,482             133,402
 Current tax receivable                                     14,143       3,234              14,174
 Cash and cash equivalents                           14     67,177      99,243             137,228
                                                           233,621     252,959             284,804

 Total assets                                         3    297,961     313,884             348,487

 Current liabilities
 Trade and other payables                            12   (106,325)    (89,787)           (142,750)
 Bank overdrafts                                     14     (1,503)           -                (43)
 Current tax payable                                       (18,695)    (10,671)             (5,470)
                                                          (126,523)   (100,458)           (148,263)

 Net current assets                                        107,098     152,501             136,541

 Non-current liabilities
 Other payables                                      12     (2,267)     (2,284)             (2,881)
 Deferred tax liabilities                                     (324)       (210)               (327)
                                                            (2,591)     (2,494)             (3,208)

 Total liabilities                                    3   (129,114)   (102,952)           (151,471)

 Net assets                                                168,847     210,932             197,016

 Capital and reserves
 Called-up share capital                                     3,240       3,225               3,234
 Share premium                                              52,986      49,709              51,589
 Capital redemption reserve                                    838         838                 838
 Reserve for shares held in the employee benefit
                                                           (75,952)    (19,437)            (19,409)
 trust
 Currency translation reserve                               32,654      30,591              33,401
 Retained earnings                                         155,081     146,006             127,363
 Total equity                                              168,847     210,932             197,016
                                                                                     16 AUGUST 2010 | PAGE 13 OF 22


Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2010

                                                                        Reserve
                                                                               for
                                                                          shares
                                   Called-up                 Capital      held in      Currency
                                       share      Share redemption            the    translation   Retained     Total
                                     capital   premium      reserve    employee         reserve    earnings    equity
                                       £’000      £’000       £’000       benefit          £’000      £’000     £’000
                                                                            trust
                                                                           £’000
 Balance at 1 January 2009            3,220      48,856         838     (21,078)         45,379    133,449    210,664
 Currency translation                     -           -           -              -     (14,788)          -    (14,788)
 differences
 Net expense recognised                    -          -            -             -     (14,788)           -   (14,788)
 directly in equity
 Profit for the six months ended           -          -            -             -             -    28,306     28,306
 30 June 2009
 Total comprehensive                       -          -            -             -     (14,788)     28,306     13,518
 (loss)/income for the period
 Purchase of shares held in the            -          -            -      (1,903)              -          -    (1,903)
 employee benefit trust
 Issue of share capital                   5        853             -           -               -          -       858
 Reserve transfer when shares             -          -             -       3,544               -    (3,544)         -
 held in the employee benefit
 trust vest
 Credit in respect of share                -          -            -             -             -      4,282     4,282
 schemes
 Dividends                                -          -             -           -               -   (16,487)   (16,487)
                                          5        853             -       1,641               -   (15,749)   (13,250)

 Balance at 30 June 2009              3,225      49,709         838     (19,437)         30,591    146,006    210,932

 Currency translation                      -          -            -             -        2,810           -     2,810
 differences
 Net income recognised directly            -          -            -             -        2,810           -     2,810
 in equity
 Loss for the six months ended             -          -            -             -             -   (15,876)   (15,876)
 31 December 2009
 Total comprehensive                       -          -            -             -        2,810    (15,876)   (13,066)
 income/(loss) for the period
 Issue of share capital                   9       1,880            -            -              -          -     1,889
 Reserve transfer when shares             -           -            -           28              -       (28)         -
 held in the employee benefit
 trust vest
 Credit in respect of share                -          -            -             -             -      4,209     4,209
 schemes
 Credit in respect of tax on               -          -            -             -             -      2,418     2,418
 share schemes
 Dividends                                -           -            -            -              -    (9,366)    (9,366)
                                          9       1,880            -           28              -    (2,767)      (850)
 Balance at 31 December 2009
                                      3,234      51,589         838     (19,409)         33,401    127,363    197,016
 and 1 January 2010
                                                                                      16 AUGUST 2010 | PAGE 14 OF 22


Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2010 (continued)

 Balance at 31 December 2009
                                          3,234       51,589       838     (19,409)        33,401        127,363      197,016
 and 1 January 2010

 Currency translation differences              -            -          -          -         (747)               -        (747)
 Net expense recognised directly
                                               -            -          -          -         (747)               -        (747)
 in equity
 Profit for the six months ended
                                               -            -          -          -             -         41,468       41,468
 30 June 2010
 Total comprehensive
                                               -            -          -          -         (747)         41,468       40,721
 (loss)/income for the period
 Purchase of shares held in
                                               -            -          -   (61,757)             -               -     (61,757)
 employee benefit trust
 Issue of share capital                       6        1,397           -          -             -               -        1,403
 Reserve transfer when shares
 held in the employee benefit                  -            -          -      5,214             -         (5,214)            -
 trust vest
 Credit in respect of share
                                               -            -          -          -             -          5,216         5,216
 schemes
 Credit in respect of tax on share
                                               -            -          -          -             -          2,314         2,314
 schemes
 Dividends                                    -            -           -          -             -       (16,066)      (16,066)
                                              6        1,397           -   (56,543)             -       (13,750)      (68,890)

 Balance at 30 June 2010                  3,240       52,986       838     (75,952)        32,654        155,081      168,847

Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2010

                                                                                       Six months ended             Year ended
                                                                                                    30 June             31 Dec
                                                                           30 June 2010
                                                                Note                                   2009               2009
                                                                                   £’000
                                                                                                      £’000              £’000
 Cash generated from underlying operations                        13              27,073              28,737             73,759
 Net cash (paid) / received in respect of VAT claim                4            (12,558)              26,544             41,018
 Cash generated from operations                                   13              14,515              55,281           114,777
 Income tax paid                                                                 (5,326)            (20,136)           (28,196)
 Net cash from operating activities                                                9,189              35,145             86,581

 Cash flows from investing activities
 Purchases of property, plant and equipment                                      (2,556)             (3,292)            (5,757)
 Purchases of computer software                                                  (3,297)             (3,279)            (7,645)
 Proceeds from the sale of property, plant and equipment,
                                                                                   1,338                700              2,061
 and computer software
 Interest received                                                                   744               1,383              2,027
 Net cash used in investing activities                                           (3,771)             (4,488)            (9,314)

 Cash flows from financing activities
 Dividends paid                                                                 (16,066)            (16,487)           (25,853)
 Interest paid                                                                     (290)               (846)            (1,160)
 Issue of own shares for the exercise of options                                   1,403                 858              2,747
 Purchase of shares into the employee benefit trust                             (61,757)             (1,903)            (1,903)
 Net cash used in financing activities                                          (76,710)            (18,378)           (26,169)

 Net (decrease)/increase in cash and cash equivalents                           (71,292)             12,279             51,098
 Cash and cash equivalents at the beginning of the period                       137,185              94,283             94,283
 Exchange loss on cash and cash equivalents                                        (219)             (7,319)            (8,196)
 Cash and cash equivalents at the end of the period               14              65,674             99,243            137,185
                                                                                       16 AUGUST 2010 | PAGE 15 OF 22


Notes to the condensed set of interim financial statements
Six months ended 30 June 2010


1.       General information

The information for the year ended 31 December 2009 does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.
The auditors’ reported on those accounts: their report was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.


2.       Accounting policies

Basis of preparation

The annual financial statements of Michael Page International plc are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared
in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position
are set out in the interim management report. The interim management report also includes a summary of the Group's
financial position, its cash flows and its borrowing facilities.

The directors believe the Group is well placed to manage its business risks successfully, despite the current uncertain
economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading
performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date
of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

Changes in accounting policy

The same accounting policies, presentations and methods of computation are followed in the condensed set of financial
statements as applied in the Group’s latest annual audited financial statements, except as described below.

In the current financial year, the Group has adopted International Financial Reporting Standard 3 "Business Combinations"
(revised 2008) and International Accounting Standard 27 “Consolidated and Separate Financial Statements” (revised 2008).
The adoption of these standards has not resulted in any significant changes for the Group.

3.       Segment reporting

All revenues disclosed are derived from external customers

The accounting policies of the reportable segments are the same as the Group’s accounting policies. Segment operating
profit represents the profit earned by each segment without allocation of central administration costs including certain
recharges. This is the measure reported to the Group’s Chief Executive for the purpose of resource allocation and
assessment of segment performance.
                                                                                           16 AUGUST 2010 | PAGE 16 OF 22



a)       Revenue, gross profit and operating profit by reportable segment

                                                                      Revenue                                        Gross Profit
                                                                         Year                                               Year
                                              Six months ended                                    Six months ended
                                                                        ended                                             ended
                                       30 June         30 June          31 Dec              30 June        30 June        31 Dec
                                          2010            2009            2009                 2010           2009          2009
                                         £’000           £’000           £’000                £’000          £’000         £’000


 EMEA                                  161,343         165,221         311,070                91,314        85,829       163,729

 United
                                       142,807         137,790         274,599                61,168        57,026       110,784
 Kingdom

                   Australia
 Asia Pacific      and New              37,979          27,038           59,108               17,316        11,242        23,881
                   Zealand
                   Other                15,540           9,020           20,301               13,850         7,942        18,329
                   Total                53,519          36,058           79,409               31,166        19,184        42,210



 Americas                               35,846          25,619           51,644               25,906        16,772        34,971


                                       393,515         364,688         716,722              209,554        178,811       351,694

                                                                                                                Operating Profit
                                                                         Six months ended                           Year ended
                                                        30 June                        30 June                            31 Dec
                                                           2010                           2009                              2009
                                                          £’000                          £’000                             £’000


 EMEA                                                      9,628                        (1,533)                            1,055

 United Kingdom                                            9,623                         6,073                            11,275

                     Australia and
 Asia Pacific                                              4,787                         1,128                             4,287
                     New Zealand
                     Other                                 4,716                           909                             3,798
                     Total                                 9,503                         2,037                             8,085

 Americas                                                  3,766                         (958)                              (212)

 Operating profit before
                                                          32,520                         5,619                            20,203
 non-recurring items
 Non-recurring items (note 4)                             17,125                        26,544                                  -
 Operating profit after non-recurring items               49,645                        32,163                            20,203

The above analysis by destination is not materially different to analysis by origin.
                                                                                        16 AUGUST 2010 | PAGE 17 OF 22


The analysis below is of the carrying amount of reportable segment assets and 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 and goodwill.

Non-recurring items (NRI) items relate wholly to the United Kingdom.

b)       Segment assets and liabilities and non-current assets by reportable segment
                                                                   Total Assets                                  Total Liabilities


                                       30 June         30 June           31 Dec          30 June       30 June            31 Dec
                                          2010            2009             2009             2010          2009              2009
                                         £’000           £’000            £’000            £’000         £’000             £’000


 EMEA                                  125,655          121,891         117,863           52,016         51,306           49,504

 United Kingdom                         88,770          121,826         161,653           41,692         30,417           83,341

                    Australia
 Asia Pacific       and New             22,669           20,009          18,025            7,853          5,819             6,622
                    Zealand
                    Other               18,904           13,658          13,025            3,124          1,187             2,322
                    Total               41,573           33,667          31,050           10,977          7,006             8,944



 Americas                               27,820           22,750          23,747            5,734          3,552             4,212

 Segment assets/liabilities            283,818          300,134         334,313          110,419         92,281          146,001

 Income tax                             14,143            3,234          14,174           18,695        10,671             5,470
 Non-recurring items (note 4)                -           10,516               -                -             -                 -
                                       297,961          313,884         348,487          129,114       102,952           151,471




                                                   Property, Plant & Equipment                              Intangible Assets

                                       30 June         30 June            31 Dec       30 June        30 June             31 Dec
                                          2010            2009              2009          2010           2009               2009
                                         £’000           £’000             £’000         £’000          £’000              £’000

 EMEA                                    10,755          14,043           13,016            899          1,201              1,166

 United Kingdom                           8,919          11,166            9,985         20,791        14,132              17,933

                    Australia and
 Asia Pacific                             2,042           2,496            2,411            204           313                 258
                    New Zealand
                    Other                   622             850              708            346           191                 310
                    Total                 2,664           3,346            3,119            550           504                 568

 Americas                                 5,457           5,423            5,312            424           441                 384

                                         27,795          33,978           31,432         22,664        16,278              20,051
                                                                                       16 AUGUST 2010 | PAGE 18 OF 22


The below analysis in notes (c) revenue and gross profit by discipline (being the professions of candidates placed) and (d)
revenue and gross profit generated from permanent and temporary placements, have been included as additional
disclosure over and above the requirements of IFRS 8 “Operating Segments”.

c)       Revenue and gross profit by discipline

                                                                  Revenue                                      Gross Profit
                                       Six months ended         Year ended             Six months ended         Year ended
                                   30 June      30 June             31 Dec         30 June      30 June             31 Dec
                                      2010         2009               2009            2010         2009               2009
                                     £’000         £’000              £’000          £’000         £’000              £’000

 Finance and Accounting             214,440       210,218           408,951         99,167         90,529          175,743

 Marketing, Sales and Retail         53,252        45,454            91,811         39,696         29,858            61,404

 Legal, Technology, HR,
                                     73,391        63,968           125,199         38,527         31,247            61,217
 Secretarial and Other

 Engineering, Property &
 Construction, Procurement &         52,432        45,048            90,761         32,164         27,177            53,330
 Supply Chain

                                    393,515       364,688           716,722        209,554       178,811           351,694


d)       Revenue and gross profit generated from permanent and temporary placements

                                                                       Revenue                                 Gross Profit
                                           Six months ended                Year          Six months ended             Year
                                             30                          ended                                      ended
                                                    30 June                          30 June       30 June
                                          June                          31 Dec                                     31 Dec
                                                       2009                             2010          2009
                                          2010                            2009                                        2009
                                                       £’000                           £’000         £’000
                                          £’000                           £’000                                      £’000

 Permanent                              169,127       130,283           260,161       163,006      124,374          249,387

 Temporary                              224,388       234,405           456,561        46,548       54,437          102,307

                                        393,515       364,688           716,722       209,554      178,811          351,694

4.       Non-recurring items (NRI)

In 2003, the Group submitted an initial claim to Her Majesty’s Revenue and Customs (HMRC) for overpaid VAT which was
rejected. The Group appealed and subsequently filed amended claims for £26.5m, net of fees, covering the period from
1980 to 2004. In March 2009, the Group filed amended claims for a further refund of an additional £80m, net of fees, of
overpaid VAT covering the same period.

In June 2009, the Group received a payment from HMRC of £26.5m, net of fees, as part settlement of these claims and in
July 2009 received £10.5m, net of fees, of statutory interest. As a result, the principal and interest amounts were recognised
in the prior year June 2009 half year results, with the interest receivable being recorded within working capital in the cash
flow statement.

On 25 September 2009, the Group received a letter from HMRC which stated that, ‘HMRC have reviewed the recent
payment and are now of the view that the claim in whole or in part should not have been paid’.
                                                                                       16 AUGUST 2010 | PAGE 19 OF 22


A number of discussions and meetings with HMRC followed and on 5 March 2010, the Group announced that an
agreement had been reached in principle, subject to legal contract, for the Group to retain £28.5m (net of fees). However,
given the background to the initial receipt, the subsequent review and reversal of HMRC’s position, together with the
remaining uncertainty pending formal contractual agreement, the Group reversed out the amounts originally recorded in the
2009 half year results and as such did not recognise any amount in the income statement, nor any interest received in the
cash flow statement, for the full year.

On 30 April 2010, a formal agreement was signed with HMRC. As a result, of the £50.0m originally received from HMRC,
the Group retained £38.1m and returned £11.9m in May 2010. Accordingly, after fees, the Group has recognised £28.5m
as non-recurring income in its 2010 income statement, of which £17.1m is in respect of refunded VAT and is included in
operating profit and £11.4m is in respect of interest and is included in financial income.

In respect of the amended claims for a further refund of an additional £80m, net of fees, of overpaid VAT there have been
no discussions or meetings with HMRC and the Group are continuing to pursue this further claim. None of this additional
claim has been recognised.

Taxation of £8.0m on non-recurring items, net of fees, has been provided representing an effective tax rate of 28.0%.

5.       Finance income/(expenses)

                                                                                     Six months ended          Year ended
                                                                                  30 June     30 June              31 Dec
                                                                                     2010        2009                2009
                                                                                    £’000        £’000               £’000
 Finance income
 Bank interest receivable                                                             744         1,383              2,027
 Interest on non-recurring items (note 4)                                          11,335        10,516                  -
                                                                                   12,079        11,899              2,027

 Finance expenses
 Bank interest payable                                                               (290)         (846)            (1,162)


6.       Tax

Taxation for the six month period is charged at 32.5% (six months ended 30 June 2009: 34.5%; year ended 31 December
2009: 41.0%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to
the pre-tax income of the six month period.


7.       Dividends

                                                                                     Six months ended          Year ended
                                                                                 30 June      30 June              31 Dec
                                                                                    2010         2009                2009
                                                                                   £’000         £’000               £’000

 Amounts recognised as distributions to equity holders in the period:
 Final dividend for the year ended 31 December 2009 of 5.12p per ordinary
                                                                                  16,066          16,487            16,487
 share (2008: 5.12p)
 Interim dividend for the period ended 30 June 2009 of 2.88p per ordinary
                                                                                        -               -            9,366
 share
                                                                                  16,066          16,487            25,853

 Amounts proposed as distributions to equity holders in the period:
 Proposed interim dividend for period ended 30 June 2010 of 2.88p per
                                                                                    8,900          9,274                  -
 ordinary share (2009: 2.88p)
 Proposed final dividend for the year ended 31 December 2009 of 5.12p per
                                                                                        -               -           16,535
 ordinary share
                                                                                       16 AUGUST 2010 | PAGE 20 OF 22


The proposed interim dividend had not been approved by the Board at 30 June 2010 and therefore has not been included
as a liability. The comparative interim dividend at 30 June 2009 was also not recognised as a liability in the prior period.

The proposed interim dividend of 2.88 pence (2009: 2.88 pence) per ordinary share will be paid on 8 October 2010 to
shareholders on the register at the close of business on 10 September 2010.


8.       Share-based payments

In accordance with IFRS 2 “Share-based Payment”, a charge of £2.0m has been recognised for share options (including
social charges) (30 June 2009: £0.6m, 31 December 2009: £1.9m), and £3.3m has been recognised for other share-based
payment arrangements (including social charges) (30 June 2009: £3.9m, 31 December 2009: £8.7m).

During the period, options over 11,467,500 shares were granted at an average exercise price of £3.82p and 665,826 share
options were exercised, which has led to an increase in share capital of £6,000 and an increase in share premium of £1.4m.

9.       Earnings per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

                                                                                    Six months ended
                                                                                                              Year ended
                                                                                                                  31 Dec
                                                                               30 June         30 June
                                                                                                                    2009
                                                                                  2010            2009
 Earnings
 Earnings for basic and diluted earnings per share (£’000)                       41,468          28,306            12,430
 Non-recurring items (NRI) (£’000) (note 4)                                    (20,491)        (26,656)                 -
 Earnings for basic and diluted earnings per share before NRI (£’000)            20,977           1,650            12,430

 Number of shares
 Weighted average number of shares used for basic earnings per share
                                                                               316,596         321,455            321,643
 (‘000)
 Dilution effect of share plans (‘000)                                            7,490          3,974              7,412
 Diluted weighted average number of shares used for diluted earnings per
                                                                               324,086         325,429            329,055
 share (‘000)

 Basic earnings per share (pence)                                                  13.1             8.8                3.9
 Diluted earnings per share (pence)                                                12.8             8.7                3.8
 Basic earnings per share before NRI (pence)                                        6.6             0.5                3.9
 Diluted earnings per share before NRI (pence)                                      6.5             0.5                3.8

The above results all relate to continuing operations.

10.      Property, plant and equipment

Acquisitions and disposals
During the six months ended 30 June 2010 the Group acquired property, plant and equipment with a cost of £2.6m (30
June 2009: £3.3m, 31 December 2009: £5.8m).

Property, plant and equipment with a carrying amount of £1.4m were disposed of during the six months ended 30 June
2010 (30 June 2009: £0.9m, 31 December 2009: £2.4m), resulting in a loss on disposal of £42k (30 June 2009: loss of
£0.2m, 31 December 2009: loss of £0.4m).
                                                                                          16 AUGUST 2010 | PAGE 21 OF 22


11.      Trade and other receivables

                                                                    30 June               30 June                   31 Dec
                                                                       2010                  2009                     2009
                                                                      £’000                 £’000                    £’000
 Current
 Trade receivables                                                  122,737               111,042                  100,197
 Other receivables                                                    3,552                16,877                   13,102
 Prepayments and accrued income                                      26,012                22,563                   20,103
                                                                    152,301               150,482                  133,402


 Non-current
 Prepayments and accrued income                                         2,745                1,462                   2,021

12.      Trade and other payables

                                                                        30 June               30 June               31 Dec
                                                                           2010                  2009                 2009
                                                                          £’000                 £’000                £’000
 Current
 Trade payables                                                           3,505                 5,864                7,304
 Other tax and social security                                           32,670                28,056               75,262
 Other payables                                                          19,355                17,496               18,583
 Accruals                                                                49,476                38,152               40,223
 Deferred income                                                          1,319                   219                1,378
                                                                        106,325                89,787              142,750
 Non-current
 Deferred income                                                          1,972                 2,131                2,334
 Other tax and social security                                              295                   153                  547
                                                                          2,267                 2,284                2,881

13.      Cash flows from operating activities

                                                                                       Six months ended         Year ended
                                                                                  30 June       30 June             31 Dec
                                                                                     2010          2009               2009
                                                                                    £’000          £’000              £’000

 Profit before tax                                                                  61,434             43,216        21,068
 Non-recurring income                                                             (17,125)           (26,544)             -
 Profit before tax and non-recurring income                                         44,309             16,672        21,068
 Depreciation and amortisation charges                                               5,212              5,696        11,268
 Loss on sale of property, plant and equipment, and computer software                   42                160           383
 Share scheme charges                                                                5,216              4,085         8,491
 Net finance income – including NRI                                               (11,787)           (11,052)         (865)
 Operating cash flow before changes in working capital and NRI                      42,992             15,561        40,345
 (Increase)/decrease in receivables                                               (32,175)             51,087        70,911
 Increase/(decrease) in payables                                                    16,256           (37,911)      (37,497)
 Cash generated from underlying operations                                          27,073             28,737        73,759
 Decrease/(increase) in VAT related receivables                                      8,972                  -       (8,972)
 (Decrease)/increase in VAT related payables                                      (49,990)                  -        49,990
 Non-recurring income                                                               28,460             26,544             -
 Cash generated from operations                                                     14,515             55,281      114,777


14.      Cash and cash equivalents

                                                                            30 June             30 June             31 Dec
                                                                               2010                2009               2009
                                                                              £’000               £’000              £’000

 Cash at bank and in hand                                                       57,562           91,442            127,293
 Short-term deposits                                                              9,615           7,801              9,935
 Cash and cash equivalents                                                      67,177           99,243            137,228
 Bank overdrafts                                                                (1,503)               -                (43)
 Cash and cash equivalents in the statement of cash flows                       65,674           99,243            137,185
                                                                                       16 AUGUST 2010 | PAGE 22 OF 22


Responsibility statement:

The Directors confirm that, to the best of their knowledge:-

         a)   the condensed set of financial statements has been prepared in accordance with IAS 34
              ‘Interim Financial Reporting’;

         b)   the interim management report includes a fair review of the information required by DTR 4.2.7R
              (indication of important events during the first six months and description of principal risks and
              uncertainties for the remaining six months of the year); and

         c)   the interim management report includes a fair review of the information required by DTR 4.2.8R
              (disclosure of related parties’ transactions and changes therein).

On behalf of the Board


S Ingham                                                         S Puckett
Chief Executive                                                  Group Finance Director


16 August 2010

Copies of the Interim Report and Accounts are now available and can be downloaded from the Company’s website
http://investors.michaelpage.co.uk/annual_reports

								
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