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World – Robert Walters reports revenue growth across all regions

30 July 2015

International recruitment firm Robert Walters (RWA: LSE) reported revenue of £377.6 million for the six months ending 30 June 2015, an increase of +25% in constant currency compared with £310.0 million last year.

Revenue and Gross Profit during H1 2015 was as follows:

  H1 2015 H1 2014 % Change Change (CC)
Revenue £377.6 million £310.0 million +22% +25%
Gross Profit £113.9 million £101.9 million +12% +15%

Robert Walters’ eponymous Chief Executive commented: "The Group has produced a strong first half performance delivering a substantial 74% increase in profit before taxation despite foreign exchange headwinds. All of the Group's regions performed well with both client and candidate confidence improving across most of our markets. Particularly encouraging is the impressive growth we are seeing from our newer businesses in emerging markets in Asia and further signs of a recovery in financial services.

"The Group's excellent trading performance, underpinned by our ongoing focus on consultant productivity has enabled us to continue to deliver strong operational gearing during the first half. Current trading is in line with our expectations and the Group remains confident of its outlook for the full year.

According to the company’s financial statement: “All of the Group's regions performed well with both client and candidate confidence growing across most of our markets. Particularly encouraging is the impressive growth we are seeing from our newer businesses in emerging markets in Asia and ongoing signs of a recovery in financial services.”

“The Group's excellent trading performance, underpinned by our ongoing focus on consultant productivity has enabled us to continue to deliver strong operational gearing. In parallel, we have also continued to invest for the future, growing front office staff numbers in high performing businesses. Group headcount now stands at 2,728.”

  H1 2015 H1 2014 % Change % Change (CC)
Asia Pacific £133.211 million £113.266 million +18% N/A
UK £184.325 million £140.268 million +31% N/A
Europe £54.195 million £51.902 million +4% N/A
Other International £5.877 million £4.552 million +29% N/A
Total £377.606 million £309.998 million +22% +25%

Revenue across Asia Pacific increased by 18.0% to £113.3 million, up from £113.2 million in H1 2013. Net fee income in the region increased by 9% to £47.0m delivering a 37% increase in operating profit to £4.7m.

The Australian business continues to perform well, reporting its third successive quarter of single digit growth. Despite this, the Australian market (which is Robert Walters’ largest business in the region) remains challenging. Permanent hiring activity has increased but is unpredictable whilst contract has performed well.

In Asia, businesses in emerging markets continued to deliver excellent results with Indonesia, Korea, Taiwan and Vietnam all growing net fee income in excess of 100% year-on-year. Business in Thailand also performed extremely well whilst the company’s larger more established businesses in Hong Kong, Japan, Malaysia and Singapore produced solid performances consolidating our market-leading position across the region.  

In Robert Walters’ home market, the UK, revenue for the half year was £184.3 million, equating to year-on-year growth of +31% from £140.2 million in H1 2013. Gross profit for the UK increased by +20.9% to £32.2 million, up from £26.7 million last year.

Candidate and client confidence in the UK has continued to improve with recruitment activity levels showing broad-based growth across both London and the regions. In London, financial services, commerce finance and sales & marketing were the strongest performers in the first half, with Manchester and Milton Keynes the standouts at a regional level. A new office was opened in St. Albans in the first half to further build on the company’s strong UK performance.

Resource Solutions continued to produce strong growth in net fee income across both existing and new clients.

Across Europe, revenue during H1 2015 was £54.2 million, an increase of +4% from £51.9 million in H1 2014. Gross profit increased by +4.6% to £21.9 million, compared with £20.9 million a year ago.

Business in the Netherlands enjoyed a very strong first half across both permanent and contract recruitment whilst both Spain and Ireland continued to grow, a continuation of the trend seen over the last two years. Belgium delivered solid net fee income growth as did the French contract business, however the permanent recruitment market in France remained challenging throughout the first half of the year. The company believes it is well positioned to benefit from any recovery in French permanent hiring activity.

The company’s ‘Other International’ revenue for the period was £5.9 million, up by +29% from £4.6 million a year ago. The US, South Africa and the Middle East all delivered record performances, with the office in Dubai delivering the strongest year-on-year growth. The US has benefited from a recovery in financial services in New York to complement the long-term growth in the digital space in California, whilst in South Africa multinationals in particular are now recruiting for growth. The company reports that market conditions in Brazil remain challenging although the business has delivered an increase in net fee income year-on-year.

Broken down by business segment, the company’s Resource Solutions business accounted for 36.7% of total revenue during H1 2015, compared with 30.5% of revenue in H1 2014. Year-on-year, revenue derived from Resource Solutions increased by +46.9% to £138.7 million, compared with £94.4 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 the outlook for the second half of the year is generally positive with candidate and client confidence improving across all of the Group's regions. Trading since the half year has been in line with our expectations and the Group remains confident of its prospects for the full year.

In trading today, the company’s share price increased by 0.34% to £4.41, an increase of 38.4% compared with a year ago. Based on its current share price, the company has a market value of £334.2 million.