International recruitment firm Robert Walters (RWA: LSE) provided a trading update for the fourth quarter ended 31 December 2019. Group net fee income was down 7% in constant currency against a backdrop of significant political and economic uncertainty, particularly in the UK.

Group Net Fee Income by region was as follows.

Robert Walters, Chief Executive, commented: "Trading conditions in the fourth quarter proved challenging with client and candidate confidence impacted by political turbulence around Brexit, the UK General Election, Hong Kong protests and the US/China trade standoff. Whilst Group net fee income for the fourth quarter was down 7% (8% actual), net fee income for the full year was up 2% (3% actual) year-on-year. We expect profit for the full year to be in line with market expectations."

78% (2018: 74%) of Robert Walters’ net fee income is now derived from overseas businesses with Asia Pacific the largest region. Asia Pacific net fee income was down 4% in constant currency during the fourth quarter of 2019. Japan, Korea, New Zealand and the Philippines delivered the strongest rates of growth but market conditions in Hong Kong were extremely challenging given the ongoing protests. The company described its Australian performance as ‘robust’.

In Europe, net fee income increased by 4% in constant currency. The Netherlands and Spain delivered record results and, in France, the region's largest business, net fee income grew 6%.  However, UK net fee income was down 23% and candidate confidence deteriorated across both recruitment and recruitment process outsourcing due to the political uncertainty related to Brexit and the General Election. Trading conditions in Germany and Switzerland were also more challenging.

In other International markets (the Americas, Middle East and South Africa) net fee income was down 7% in constant currency.

The company’s specialist RPO and MSP division, Resource Solutions, was impacted by the hiring slowdown across a number of financial services clients.

Given worsening market conditions, Group headcount decreased by 5% to 4,027 (30 September 2019: 4,258) with reductions focused in the Resource Solutions business.

In early trading today, Robert Walters share price was GBP 536.80 down GBP 45.20 (-7.77%), but , 25.36% above the 52 week low of GBP 428.20 set on 8 October 2019. The current market cap is GBP 442.54 million.