UK-based global recruiter Robert Walters Plc (RWA: LSE) reported revenue of £1.09 billion for the year ended 31 December 2022, an increase of 12% in constant currency when compared to the previous year.

The group cited a record group performance with profit before taxation increasing by 12% year-on-year (in constant currency, or CC) to an all-time high of £55.6 million.

Robert Walters reported growth across all forms of recruitment including permanent, contract, interim and recruitment process outsourcing.

The company also announced today that Robert Walters, Founder and Chief Executive Officer, has decided to retire as CEO and will step down from the Board with effect from 27 April 2023, the date of the group’s Annual General Meeting.

Following a succession process, the Nominations Committee and Walters have selected Toby Fowlston as Chief Executive Officer Designate. Fowlston will take over as Chief Executive Officer of Robert Walters Group and will join the Board on 27 April 2023.

Fowlston first joined the group as a consultant in London in 1999 and has since held senior positions leading the group’s recruitment operations in both the UK and Asia Pacific.

Walters said, “It has been an honour and privilege to have led the group over the last 38 years and to have such a worthy successor in place in Toby, who has been with the group since joining as a consultant in 1999, is a true testament to the group’s ability to grow our future leaders from within and is hopefully an inspiration to all our employees across the globe.”

“Having worked closely with Toby over the last few years in particular, I am confident that the group is in safe hands and will continue to go from strength-to-strength in the years to come,” Walters continued.

Fowlston added, “After 23 years with the group, it’s an absolute privilege to be appointed as the next CEO. I know first-hand what an incredible business this is and the opportunity we have to continue to lead the sector and drive further sustained and profitable growth. I would like to personally thank Rob for his support and guidance over the years and I know he will remain a valuable advisor to me in the future and a fabulous brand ambassador for the group.”

Robert Walters noted fierce competition for talent and significant wage inflation across all geographies and specialist disciplines during the first half of 2022.

According to Robert Walters, the global macro-economic backdrop became increasingly uncertain as the second half of the year progressed resulting in a softening of recruitment activity levels across many of the group’s markets. The Ukraine conflict, a high inflation and high interest rate environment, significant cutbacks across the global technology market and Covid-enforced lockdowns in Mainland China all had a cumulative effect on market confidence.

Activity levels were strongest across permanent and interim during the first half as organisations were confident to hire for the long-term. Contract recruitment activity increased more significantly during the second half as client and candidate confidence became more muted.

Revenue by Geography

Percentage changes below are in constant currency unless otherwise noted.

Asia Pacific net fee income increased by 16%. In Mainland China, the business was significantly impacted by extended periods of Covid-related lockdown and restrictions with operating profit declining by 45% year-on-year. The ripple effect of the slowdown of the Chinese economy and disruption to supply chains was felt right across the region particularly during the second half of the year.

Japan, the group’s largest and most profitable business where it has a market-leading position, proved resilient and still delivered a record performance increasing net fee income by 16%. Australia, the second largest business in the region, was also impacted by the slowdown in trade with China but nevertheless reported net fee income up 9%. The group’s business in New Zealand, also reported an increase in net fee income.

Resource Solutions had a record year across the region increasing net fee income by 31% year-on-year underpinned by a number of new client wins and extensions.

In Europe, net fee income rose by 31%. Seven out of nine markets reported record levels of net fee income.

France, the largest business in the region, performed strongly more than doubling operating profit year-on-year and the Netherlands and Belgium both delivered record levels of net fee income and operating profit.

Germany had a record year in terms of both net fee income and operating profit. Meanwhile, the group opened its first office in Italy.

In the UK, net fee income increased by 8% on a reported basis. Recruitment activity levels remained relatively strong throughout the year across the disciplines of financial services, legal and commerce finance with technology also holding up well despite the rightsizing trend seen across parts of the sector.

The group added that regulatory requirements are ever-changing and increasingly complex which bolstered demand for regulatory, risk and compliance professionals while the continued emergence of the UK as a fintech hub also served to boost demand for both banking and technology professionals.

Net fee income in Resource Solutions declined by 6% year-on-year with placement rates impacted in the first half of the year by candidate shortages and delays in the time taken to onboard new hires.

Other International encompasses the Americas, South Africa and the Middle East. Net fee income increased by 29%.

The business in the US, which is solely focused on permanent recruitment, has been significantly impacted by the large-scale technology layoffs that have hit corporate America and as a result was loss-making for the year. The effect of these layoffs has had a negative effect on candidate confidence and rippled into other specialist disciplines.

The group’s newer businesses in South America continued to perform well with both Chile and Mexico more than doubling operating profit year-on-year. The business in the Middle East continued to go from strength to strength with net fee income increasing by 28% and operating profit by 255%.

Walters said, “The market uncertainty we experienced during the second half of the year has tipped over into the early months of 2023. While it’s too early to tell whether this is a short-lived correction or a more prolonged economic slowdown, we have successfully managed the business through numerous economic cycles and I am confident that the group’s strong brand, experienced senior management team and diverse breadth of geographies, disciplines and revenue streams ensures we are well positioned to quickly respond to any further deterioration of market confidence or equally to rapidly capitalise on market opportunities as they arise.”

Robert Walters shares last traded at £504.98, up 2.64% on the day and 20.79% above the 52-week low of £418.08 set on 29 September 2022. The company has a market cap of £368.28 million.