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UK — Recovery in Asia Pacific returns Robert Walters to profit in H1 2010

26 August 2010

Revenue was up by from 141.7 million Pounds in H1 2009 to 188.8 million Pounds in H1 2010 at Robert Walters Plc (RWA:LSE), the staffing and Recruitment Process Outsourcing (RPO) group.

Half yearly financial results for the six months ended 30 June 2010 published today reveal that net fee income (gross profit) was up by +45% from 50 million Pounds in H1 2009 to 72.3 million Pounds in H1 2010 at. Net fee income in constant currency was up by +39%.


Operating profit was up from an operating loss of -2.3 million Pounds in H1 2009 to a profit of 5.2 million Pounds in H1 2010. Profit before tax was up from a loss of -2.6 million Pounds in H1 2009 to a profit of 5.1 million Pounds in H1 2010.

In the United Kingdom (30% of net fee income), revenue was 69.5 million Pounds (2009: 55.7 million Pounds) and net fee income increased by +29% to 21.6 million Pounds (2009: 16.7 million Pounds) producing an operating profit of +0.1 million Pounds (2009: operating loss of -0.8 million Pounds). The UK business experienced increased levels of activity most notably in the financial services sector. City-based recruitment was cited as being particularly active especially across the areas of finance, IT and legal. Outside of financial services conditions remained challenging, with both the London commerce and regional businesses delivering comparatively modest net fee income growth during the first six months of the year.

Resource Solutions, the RPO business, grew net fee income and won a number of new client engagements during the period.

In Europe (20% of net fee income), revenue was 33.0 million Pounds (2009: 31.1 million Pounds) and net fee income increased by +8% (+11% in constant currency) to 14.4 million Pounds (2009: 13.4 million Pounds) producing an operating loss of -0.1 million Pounds (operating loss of -0.1 million Pounds in constant currency) (2009: operating loss of -0.7 million Pounds). Europe delivered a small increase in net fee income against a backdrop of continuing economic uncertainty. The business in the Netherlands, which performed well throughout 2009, has been hit hard during the first half of the year. However, France and Belgium achieved a slight improvement in permanent net fee income and benefited from previous investment in the contract business over the last five years. Whilst market conditions remain challenging in both Ireland and Spain, the small businesses in these countries have shown signs of recovery.

In Asia Pacific (48% of net fee income), revenue was 84.5 million Pounds (2009: 53.9 million Pounds) and net fee income increased by +81% (+64% in constant currency) to 34.4 million Pounds (2009: 19.0 million Pounds) producing an operating profit of +5.3 million Pounds (4.4 million Pounds in constant currency) (2009: operating loss of -0.5 million Pounds). , Hong Kong, Thailand and mainland China all more than doubled net fee income. The businesses in Japan and Malaysia also produced significant increases in both net fee income and operating profit. The group plans to build further on its position in the region with the opening of the first office in South Korea and a third mainland China office in Beijing during the second half of the year. The group continues to research other territories and is actively investigating new markets in South East Asia. The operation in Australia, the largest in the region, produced strong net fee income and operating profit growth, driven by increased hiring activity across all areas. New Zealand delivered a solid performance in the first half, with demand levels more muted than those experienced in Australia.

In the Americas and South Africa (2% of net fee income), revenue was 1.8 million Pounds (2009: 0.9 million Pounds) and net fee income increased by +105% (+102% in constant currency) to 1.8 million Pounds (2009: 0.9 million Pounds) producing an operating loss of -0.1 million Pounds (operating loss of -0.1 million Pounds in constant currency) (2009: operating loss of -0.2 million Pounds).

Robert Walters, Chief Executive, commented "these are very strong results on the back of a very difficult year in 2009. Our strategy of maintaining our global network of offices and minimising headcount reductions has paid off and we are already benefiting from the improved economic environment in many of our key markets."

"Our forward strategy is clear. Keep a watchful eye on our cost base given economic conditions remain uncertain, but extend the Robert Walters footprint and brand in obvious growth markets such as Asia and South America. We believe this strategy will generate growth and offset any slowdown in other markets."

In early trading Robert Walters's shares were unchanged at 235 Pence.

 

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