PageGroup Regulatory News (PAGE)

8 August 2022

Half Year Results for the Period Ended 30 June 2022

Record Financial and Operational Performance

PageGroup plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2022.

H1 Summary

· Group operating profit of £115.3m (H1 2021: £64.3m)

· Conversion rate** increased to 21.4% (H1 2021: 15.9%)

· Gross profit per fee earner up 9.2% on H1 2021 to £82.8k (H1 2021: £75.8k)

· Total headcount increased by 830 (10.6%) to 8,668 at the end of June

· Strong Balance Sheet, with net cash of £136.2m (H1 2021: £163.8m)

· Interim dividend up 4.5% to 4.91 pence per share, totalling £15.6m

· Special dividend of 26.71 pence per share, totalling £84.9m

· Outlook unchanged: Full year operating profit expected to be in line with company compiled consensus of £206m

* in constant currencies

** operating profit as a percentage of gross profit

Commenting, Steve Ingham, Chief Executive Officer, said:

"We achieved a strong H1 performance across our geographies, disciplines and brands, and delivered Group operating profit up nearly 80% and an underlying conversion rate*** of 22.1%. This was particularly pleasing given that 2021 had been a record year for gross profit and operating profit.

"This performance was achieved despite the backdrop of macro-economic and geo-political uncertainty as well as continued COVID-19 restrictions in certain markets. We believe that our strategy of maintaining and investing in our platform throughout the pandemic by investing in experienced hires and focusing on technology and innovation, has been key to us achieving these outstanding results.

"Gross profit per fee earner, our measure of productivity, reached a new record level, up 9% on H1 2021. The Group continued to benefit from favourable trading conditions, including wage inflation and increased fee rates resulting from the high demand and short supply of candidates, in addition to a shorter time to hire facilitated by video interviewing and investments in new systems.

*** Underlying conversion rate is an alternative performance measure, calculated as conversion rate (as defined above) excluding the one-off expense of certain software licenses previously capitalised of c. £4m.

"We continued to invest in headcount, adding 652 fee earners (10.7%) during the first half of the year. The largest headcount investments were made in the markets where we saw the strongest growth and with the highest growth potential, including Germany, the US and India. This investment has driven record performances in four of our five large, high potential markets and both of our high potential disciplines. Our operational support staff headcount increased by 178 (10.1%) and our fee earner to support staff ratio remained at 78:22. The implementation of our global operating system, Customer Connect, was completed in H1, with the final roll outs in France and Latin America.

"We are announcing today an interim dividend of 4.91 pence per share, an increase of 4.5% over 2021. In addition, in line with our policy of returning surplus capital to shareholders, we are also announcing a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

"Looking forward, we recognise the heightened degree of global macro-economic and geo-political uncertainty, particularly with regards to increasing inflation around the world. In July, we noted a slight slowing in time to hire in some of our markets, and we continue to closely monitor our forward-looking KPIs. However, at this point, our expectations for 2022 full year operating profit remain in line with the company compiled consensus of £206m."

INTERIM MANAGEMENT REPORT

GROUP RESULTS

Revenue for the six months ended 30 June 2022 increased 27.5% to £977.3m (2021: £766.4m) and gross profit increased 33.3% to £538.9m (2021: £404.2m). In constant currencies, the Group's revenue increased 28.1% and gross profit increased 33.3%. The Group's revenue mix between permanent and temporary placements was 44:56 (2021: 41:59) and for gross profit was 78:22 (2021: 77:23). Revenue from temporary placements comprises the salaries of those placed, together with the margin charged.

Fee earner productivity increased by 9.2% vs H1 2021 due to video interviewing reducing time to hire, wage inflation and improvements in fee rates from candidate shortages, alongside the strategic decisions and investments made by the Group in recent years. This contributed to the strong business performance, with gross profit increasing 33.3%, whilst fee earner headcount has increased 23.7% from 5,443 in H1 2021 to 6,734 in H1 2022.

The Group's organic growth model and profit-based team bonus ensures costs remain tightly controlled. 78% of first half costs were employee related, including salaries, bonuses, share-based long-term incentives, and training and relocation costs.

In total, administrative expenses in the first half increased 24.6% in reported rates compared to 2021, to £423.6m (2021: £339.9m), driven largely by the increase in headcount. In constant currencies, administrative expenses were up 24.5% and operating profit increased by 79.4% to £115.3m (2021: £64.3m), an increase of 79.3% at reported rates.

In the first half, the Group incurred costs of c. £4m relating to the one-off expense of software licenses previously capitalised. We currently expect an additional one-off cost of c. £3m in H2 relating to the consolidation of our London offices.

The Group's conversion rate, which represents the ratio of operating profit to gross profit, was 21.4% (2021: 15.9%) driven by the strong business performance across all regions, as well as Q1 of the prior year still being impacted by COVID-19 as well as the repayment of £3.4m of furlough monies to HMRC. Excluding the one-off expense of software licenses previously capitalised, as mentioned above, the Group's underlying H1 2022 conversion rate was 22.1%.

OTHER ITEMS

Net interest expense of £0.8m was broadly consistent with H1 2021. The effective tax rate for the first half was 28.8% (H1 2021: 39.4%), which is in line with the 2021 full year effective tax rate of 29.0%.

For the six months ended 30 June 2022, basic earnings per share and diluted earnings per share were 25.6p and 25.5p, respectively, representing growth of more than 100% on 2021 (2021: basic earnings per share 12.2p; diluted earnings per share 12.1p).

CASH FLOW

The Group started the year with net cash of £154.0m. In H1, £92.5m was generated from operations due to strong trading conditions, offset by an increase in debtors across both permanent and temporary recruitment. Tax paid was £30.0m and net capital expenditure was £18.9m. During the first half, £0.3m was received from exercises of share options (2021: £6.9m), £14.8m was spent on the purchase of shares into the Employee Benefit Trust (2021: £10.4m) and dividends of £32.7m were paid to shareholders. As a result, the Group had net cash of £136.2m at 30 June 2022, compared with the prior year of £163.8m.

CAPITAL ALLOCATION POLICY

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to maintain a strong balance sheet position.

The Group's first use of cash is to satisfy operational and investment requirements, as well as to hedge its liabilities under the Group's share plans. The level of cash required for this purpose will vary depending upon the revenue mix of geographies, permanent and temporary recruitment, and point in the economic cycle.

Our second use of cash is to make returns to shareholders by way of an ordinary dividend. Our policy is to grow the ordinary dividend over the course of the economic cycle in a way that we believe we can sustain the level of ordinary dividend payment during downturns, as well as increasing it during more prosperous times.

Cash generated in excess of these first two priorities will be returned to shareholders through supplementary returns, using special dividends and/or share buybacks.

The Board has announced an interim dividend of 4.91 pence per share, an increase of 4.5% over last year. In addition, in line with our policy of returning surplus capital to shareholders, the Group is pleased to announce today a special dividend of 26.71 pence per share (2021: 26.71 pence per share) totalling £84.9m. Taking these two dividend payments together, this amounts to a cash return to shareholders of £100.5m. This is in addition to the 2021 final dividend paid in June of £32.7m, meaning a total of £133.2m, or 41.92 pence per share, returned to shareholders in 2022.

The special dividend will be paid, as in previous years, at the same time as the interim dividend on 14 October 2022 to shareholders on the register as at 2 September 2022.

During the first half, the Group made purchases of £14.8m of shares into the Employee Benefit Trust to hedge its exposure under the Group's share plans (2021: £10.4m).

GEOGRAPHICAL ANALYSIS (All growth rates given below are in constant currency vs. H1 2021 unless otherwise stated)

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

EMEA is the Group's largest region, contributing 50% of Group first half gross profit. Against 2021, in reported rates, revenue in the region increased 27.9% to £523.0m (2021: £408.9m) and gross profit increased 31.0% to £266.7m (2021: £203.5m). In constant currencies, revenue increased 31.6% on the first half of 2021 and gross profit increased by 34.9%.

The improvement in trading conditions seen through 2021 continued in H1 2022, and the region delivered a record first half. Against 2021, Michael Page grew 39%, whilst our more temporary focused Page Personnel business was up 28%. France, 13% of the Group and around a quarter of the region, delivered record gross profit, up 25% on 2021. Germany, the Group's third largest market, also delivered a record first half, up 43%. This was driven by a standout performance from our Technology focused Interim business, which grew 51%. Southern Europe grew 40%, with Italy up 32% and Spain up 40%. Benelux was up 42% for the first half, with the Netherlands up 45% and Belgium up 36%. The Middle East and Africa grew 21%.

Productivity for the first half was up 11.5% on 2021, to a new record level. H1 operating profit was £65.3m (2021: £35.9m) with a conversion rate of 24.5% (2021: 17.6%). Profitability improved significantly on 2021 due to the improvement in trading conditions, with Q1 2021 still being impacted by COVID-19 restrictions. Headcount across the region increased by 368 (10.7%) in the first half, to 3,815 at the end of June 2022 (3,447 at 31 December 2021).

ASIA PACIFIC

In Asia Pacific, representing 19% of Group first half gross profit, revenue increased 23.3% in reported rates to £159.3m (2021: £129.2m) and gross profit increased 24.8% to £102.0m (2021: £81.8m), against 2021. In constant currencies, revenue increased 21.1% in the first half and gross profit increased by 21.9%.

Greater China overall grew 4%. In Mainland China, gross profit was flat on 2021, with the country being heavily impacted in H1 2022 by COVID-19 lockdowns and restrictions, particularly in Q2. Hong Kong, which was also impacted by COVID restrictions, grew 11% in H1. South East Asia, one of our Large High Potential markets, delivered a record performance, up 42%. Singapore was up 24%, whilst the other five countries in the region grew 54%, collectively. India delivered a record first half, up 61%, with strong growth across all offices. Japan also delivered a record, growing 29%, with particularly strong performances from both our contracting business and the Technology discipline. Overall, for the first half, Australia grew 23%.

First half productivity was down slightly, by 1.1% on 2021, due to the tougher trading conditions in Greater China. Operating profit increased to £20.9m (2021: £15.3m) and our conversion rate increased to 20.5% (2021: 18.8%). Despite the impact of COVID-19 lockdowns on Greater China in H1 2022, the business performance remained strong and the conversion rate was only marginally behind full year 2021 of 21.8%. Headcount across the region increased by 133 in the first half (7.8%) to 1,842 at the end of June 2022 (1,709 at 31 December 2021).

THE AMERICAS

In the Americas, representing 17% of Group first half gross profit, revenue increased 33.8% in reported rates against 2021, to £137.3m (2021: £102.6m), while gross profit increased 53.7% to £94.2m (2021: £61.3m). In constant currencies against 2021, revenue increased by 26.3% and gross profit increased by 44.1%.

North America delivered a record first half, with the US up 43%. Property and Construction, our largest discipline in the US, delivered growth of 53%, albeit against a weak comparator as H1 2021 was still recovering from pre-pandemic levels. The US also saw strong growth in Technology and Healthcare & Life Sciences.

For the first half, Latin America delivered a record performance, up 45%. Mexico, our largest country in the region, grew 47% and Brazil grew 38%. Elsewhere in Latin America, our other five countries in the region together grew 49%.

Productivity in H1 increased 10.6% compared with H1 2021, with increases across both North America and Latin America. Operating profit was £13.8m (2021: £8.8m), with a conversion rate of 14.7% (2021: 14.3%). Trading conditions were strong in the first half throughout the region, due primarily to the increase in productivity. Our conversion rate was up marginally on H1 2021, with the productivity improvements largely offset by a significant investment in headcount, up 252 (18.3%) in H1, to 1,633 at the end of June 2022 (1,381 at 31 December 2021).

UNITED KINGDOM

In the UK, representing 14% of Group first half gross profit, revenue increased 25.4% vs. 2021 to £157.7m (2021: £125.7m) and gross profit increased 31.9% to £76.0m (2021: £57.6m).

Our Michael Page business was up 24% in the first half. Page Personnel, which operates at lower salary levels and had been slower to recover from the pandemic, was up 62% and delivered a record month in June.

First half productivity increased significantly, up 16.8% on 2021. Operating profit was £15.3m (2021: £4.3m) and our conversion rate was 20.1% (2021: 7.5%). This significant improvement was partially due to the one-off furlough repayment of £3.4m to HMRC made in H1 2021. Excluding this one-off item, the prior year conversion rate was 13.3%. The remaining increase was due to the improved trading conditions. Headcount was up by 77 (5.9%) during the first half to 1,378 at the end of June 2022 (1,301 at 31 December 2021).

KEY PERFORMANCE INDICATORS ("KPIs")

We measure our progress against our strategic objectives using the following key performance indicators:

The source of data and calculation methods year-on-year are on a consistent basis. The movements in KPIs are in line with expectations. Disclosure for GHG emissions and People KPIs is provided annually.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks.

The main risks that PageGroup believes could potentially impact the Group's operating and financial performance for the remainder of the financial year remain those as set out in the Annual Report and Accounts for the year ending 31 December 2021 on pages 51 to 60.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

The Group operates multi-currency cash concentration and notional cash pools, and an interest enhancement facility. The Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in the cash concentration arrangement. The Group Treasury subsidiary and UK business utilise the notional cash pool and the Asia Pacific subsidiaries operate the interest enhancement facility. The structures facilitate interest compensation for cash whilst supporting working capital requirements.

The Group maintains a Confidential Invoice Facility with HSBC whereby the Group has the option to discount receivables in order to advance cash. The Group also has a Revolving Credit Facility with BBVA, expiring in May 2024, with a total drawable amount of £30m. Neither of these facilities were in use as at 30 June 2022. These facilities are used on an ad hoc basis to fund any major Group sterling cash outflows.

The main functional currencies of the Group are Sterling, Euro, Chinese Renminbi, US Dollar, Singapore Dollar, Hong Kong Dollar and Australian Dollar. The Group does not have material transactional currency exposures. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. The Group's policy is not to hedge translation exposures.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies that differ from the Group's reporting currency, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans.

ESG

Our ESG strategy drives purposeful impact today and will expand as our businesses grow in the future. In April 2022, we published our second sustainability report outlining progress towards our ten-year sustainability vision, which includes ambitious targets. H1 2022 has delivered continued and strong progress against all key targets.

From a social perspective, we continue to make progress towards our target of changing over a million lives within ten years. The number of lives changed each year continues to increase, through growing candidate placements along with the expansion of PageGroup's social impact programmes such as webinars, CV and interview writing workshops with charities.

From an environmental perspective, carbon emissions are likely to increase year-on-year as our regular business activities, including travel, return following the impacts of COVID-19. However, we remain focused on reducing our emissions compared to pre-COVID levels and reaching operational net zero by 2026. We are retaining the lessons learnt during the pandemic, such as conducting meetings and interviews virtually where appropriate. We continue to transition our offices to renewable energy, provide electric options for company cars and reduce waste.

For further information on our sustainability efforts, please refer to https://www.page.com/sustainability.

GOING CONCERN

The Board has undertaken a review of the Group's forecasts and associated risks and sensitivities, in the period from the date of approval of the interim financial statements to August 2023 (review period).

The Group had £136.2m of cash as at 30 June 2022, with no debt except for IFRS 16 lease liabilities of £101.6m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2024 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m UK bank overdraft facility.

Despite the macroeconomic and political uncertainty that currently exists and its inherent risk and impact on the business, based on the analysis performed there are no plausible downside scenarios that the Board believes would cause a significant uncertainty over going concern. As a result, given the strength of performance in H1, the level of cash in the business and Group's borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, the Board has concluded that the Group has adequate resources to continue in operational existence for the period through to August 2023.

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 that are significant to PageGroup plc and its subsidiary undertakings when viewed as a whole.

Page House

Bourne Business Park

200 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2NX

By order of the Board,

PageGroup will host a conference call, with on-line slide presentation, for analysts and investors at 9.00am on 8 August 2022, the details of which are below.

Link:

https://www.investis-live.com/pagegroup/62d6a3b8299ad30e00dd0fe1/pgir

Please use the following dial-in number to join the conference:

Please quote participant access code 50 35 42 to gain access to the call.

A presentation and recording to accompany the call will be posted on the PageGroup website during the course of the morning of 8 August 2022 at:

https://www.page.com/presentations/year/2022

Enquiries:

INDEPENDENT REVIEW REPORT TO PAGEGROUP PLC

Conclusion

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 2022 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 the related notes 1 to 13. 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.

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 2022 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, 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 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.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

London

5 August 2022

Condensed Consolidated Income Statement

For the six months ended 30 June 2022

The above results all relate to continuing operations

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2022

Condensed Consolidated Balance Sheet

As at 30 June 2022

The Balance Sheet has been re-presented to provide separate disclosure for provisions within current and non-current liabilities which were previously disclosed within accruals. Further information is disclosed in Note 2.

Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2022

Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2022

Notes to the condensed set of interim results

For the six months ended 30 June 2022

1. General information

The information for the year ended 31 December 2021 does not constitute statutory accounts as defined in section 435 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.

The unaudited interim condensed consolidated financial statements of PageGroup plc and its subsidiaries (collectively, the Group) for the six months ended 30 June 2022 were authorised for issue in accordance with a resolution of the directors on 5 August 2022.

2. Accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2022 have been prepared in accordance with UK adopted IAS 34 'Interim financial reporting' and with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements. The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2021, were approved by the directors on 3 March 2022. The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2021, which have been prepared in accordance with UK-adopted international accounting standards ("IFRSs").

It is the Directors' view that provisions are sufficiently material to be separately disclosed within the balance sheet, where in previous years these were disclosed within accruals. Accordingly, comparatives have been represented on a consistent basis. No third balance sheet is presented because the representation at the beginning of the comparative period is not considered material. There is no impact on the income statement, cashflow or net assets in the balance sheet as a result of this representation.

As a result, the balance sheet for June 2021 includes provisions of £9.3m and an associated reduction in accruals.

Refer to Note 12 for disclosures in accordance with IAS 37.

Going concern

The Board has undertaken a review of the Group's forecasts and associated risks and sensitivities, in the period from the date of approval of the interim financial statements to August 2023 (review period).

The Group had £136.2m of cash as at 30 June 2022, with no debt except for IFRS 16 lease liabilities of £101.6m. Debt facilities relevant to the review period comprise a committed £30m BBVA RCF (May 2024 maturity), an uncommitted UK trade debtor discounting facility (up to £50m depending on debtor levels) and an uncommitted £20m UK bank overdraft facility.

Despite the macroeconomic and political uncertainty that currently exists and its inherent risk and impact on the business, based on the analysis performed there are no plausible downside scenarios that would cause an issue. As a result, given the strength of performance in H1, the level of cash in the business and Group's borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, the Board has concluded that the Group has adequate resources to continue in operational existence for the period through to August 2023.

New accounting standards, interpretations and amendments adopted by the Group

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

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 including allocation of central administration costs. This is the measure reported to the Group's Board, the chief operating decision maker, for the purpose of resource allocation and assessment of segment performance.

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