Daily News

View All News

UK – Robert Walters: European growth tempered by Asia Pacific

01 August 2014

International recruitment firm Robert Walters (RWA: LSE) reported revenue of £310 million for the six months ending 30 June 2014, an increase of +14% in constant currency compared with £288.8 million last year.

Gross profit for the period increased by +12% in constant currency to £101.9 million, up from £97.8 million a year ago. Operating profit grew by +57% in constant currency, rising from £3.8 million last year to £5.3 million this year.

Robert Walters’ eponymous Chief Executive commented: "This performance highlights the Group's strength, depth, and diversity, and is testament to our strategic decision to invest in the business throughout the downturn. This is encouraging, particularly given the challenging market conditions that continued to prevail in France and Australia.”

"It is pleasing to see our larger and more mature businesses in markets, such as Japan, Hong Kong, and the UK, performing strongly. I am also very encouraged that our newer operations in emerging recruitment markets such as Thailand, Malaysia, Vietnam and Taiwan have performed well. Resource Solutions, our recruitment process outsourcing division continued to deliver strong net fee income growth and expand its client base across the UK, Europe and Asia. Trading since the half year has been in line with our expectations and the Group remains confident of its prospects for the full year," he added.

According to the company’s financial statement: “Whilst client and candidate confidence remains some way short of the highs seen prior to the downturn, candidate shortages are beginning to emerge in some markets and disciplines. The Group is already performing strongly, continues to take market share, and is well positioned to further leverage our operational gearing as confidence levels improve and candidate shortages become more widespread and acute. ”

Revenue across Asia Pacific decreased by -15.4% to £113.3 million, down from £133.9 million in H1 2013. Gross profit for the period also declined, falling by -6.9% to £43.3 million from £46.5 million a year ago.

Japan, Hong Kong, and Malaysia produced the strongest performances in the region. With Japanese organisations continuing to internationalise and an acute shortage of bilingual professionals, the opportunity for further growth is significant. In Australia, market conditions remained challenging particularly in the major metropolitan hubs of Sydney, Melbourne, Brisbane and Perth. However a number of the company’s smaller satellite offices, which typically service the corporate and SME markets, returned to growth. Robert Walters’ New Zealand continued to perform well across both Auckland and Wellington.  

Elsewhere across the region, Singapore and China produced solid results with recent investments in some of the region's emerging recruitment markets beginning to bear fruit. The company’s operations in Thailand, Taiwan and Vietnam all delivered good net fee income growth. Resource Solutions in Asia continued to win new business and to extend engagements with existing clients.

In Robert Walters’ home market, the UK, revenue for the half year was £140.3 million, equating to year-on-year growth of +33.4% from £105.1 million in 2013. Gross profit for the region increased by +20.9% to £32.2 million, up from £26.7 million last year.

The UK business performed well, benefiting from a broad-based recovery in most disciplines with accountancy, finance, and legal the standout performers across both London and the regions. The company is yet to see a meaningful recovery in the financial services recruitment market. 

Resource Solutions in the UK delivered a strong performance during the first half of the year, growing net fee income across both the financial services and corporate sectors.

Across Europe, revenue during H1 2014 was £51.9 million, an increase of +12.6% from £46.1 million in H1 2013. Gross profit increased by +4.6% to £21.9 million, compared with £20.9 million a year ago.

In France, Robert Walters’ largest market, permanent recruitment activity remained subdued but contract grew strongly. Operations across Benelux continued to perform well, with Belgium in particular delivering strong results across both the permanent and contract markets. Germany produced a robust performance, while activity in Spain continued to see a rebound in activity with net fee income doubling year-on-year.

The company’s other International revenue for the period was £4.6 million, up by +21.4% from £3.8 million a year ago. Gross profit for the region increased by +21.7%, rising from £3.7 million last year to £4.5 million this year.

Robert Walters’ recently opened offices in San Francisco and Dubai produced encouraging performances, both more than doubling net fee income, year-on-year. San Francisco's results combined with those of the New York office, delivered a strong H1 result across the US. South Africa delivered another strong performance, while Brazilian market conditions remained very tough.

Broken down by business segment, the company’s Resource Solutions business accounted for 30.5% of total revenue during H1 2014, compared with 20.9% of revenue in H1 2013. Year-on-year, revenue derived from Resource Solutions increased by +56.1% to £94.4 million, compared with £60.5 million last year.

Revenue from Robert Walters’ core recruitment business in H1 2014 was £215.6 million, a decrease of -5.7% from £228.4 million last year. 

Looking forward, the company advised that trading in the first half of the year was in line with expectations and the group remains confident of its prospects for the full year.

In trading today, the company’s share price fell by -1.7% to £3.13, an increase of +29.1% compared with a year ago. Based on its current share price, the company has a market value of £241.1 million.