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UK - Robert Walters' PBT up +39% due to European and Asian performance

04 August 2011

Revenue was up by +28% from 188.8 million Pounds in H1 2010 to 241.6 million Pounds in H1 2011 at staffing group Robert Walters Plc (RWA:LSE). In constant currency revenue was up by +25%.

Interim results for the six months ended 30 June 2011 reveal that gross profit (net fee income) was up by +23% from 72.3 million Pounds in H1 2010 to 89.1 million Pounds in H1 2011. In constant currency it was up by +21%, resulting in an operating profit of 7.2 million Pounds (7 million Pounds in constant currency) (2010: 5.2 million Pounds).

Profit before taxation (PBT) was up by +39% from 5.1 million Pounds in H1 2010 to 7.1 million Pounds in H1 2011. In constant currency it was up by +34%.

The group has maintained a strong cash position with net cash of 10.7 million Pounds as at 30 June 2011 (30 June 2010: 12.9 million Pounds).

Net fee income and operating profit growth was largely driven by international businesses, which now represents 74% (2010: 70%) of the group's net fee income. Permanent recruitment represents 71% (2010: 70%) of the group's recruitment net fee income.

Headcount stands at 1,932 (2010: 1,539) and the group has 44 offices in 21 countries.

In the United Kingdom (26% of net fee income) revenue was 86.2 million Pounds (2010: 69.5 million Pounds) and net fee income increased by +6% to 22.9 million Pounds (2010: 21.6 million Pounds) delivering an operating profit of 300,000 Pounds (2010: 100,000 Pounds).

The UK business grew net fee income and operating profit against a difficult economic backdrop and cautious client and candidate sentiment. Across the financial and commercial sectors, recruitment was largely centred on replacement rather than new hires, however, pockets of strong demand were evident across the risk, governance, compliance and legal disciplines. 

The Resource Solutions business continued to grow net fee income through the retention of existing clients and the winning of a number of new client engagements across both the commercial and financial sectors.

In Europe (22% of net fee income) revenue was 42.9 million Pounds (2010: 33 million Pounds) and net fee income increased by +34% to 19.4 million Pounds both as reported and in constant currency (2010: 14.4 million Pounds) delivering an operating profit of 1million Pound (1 million Pound in constant currency) (2010: operating loss of -100,000 Pounds).

The group's performance across Europe was underpinned by strong growth in France, the region's largest business. Walters People, the junior clerical recruitment business continued to perform well, particularly in France and the group has consolidated two satellite offices in Paris into a significantly larger office to facilitate further growth. 

Spain and Switzerland both more than doubled net fee income and the group plans the opening of an office in Frankfurt during the second half of the year in its new market Germany.

In Asia Pacific (50% of net fee income) revenue was 109.9 million Pounds (2010: 84.5 million Pounds) and net fee income increased by +29% (+24% in constant currency) to 44.5 million Pounds (2010: 34.4 million Pounds) delivering an operating profit of 5.8 million Pounds (5.6 million Pounds in constant currency) (2010: 5.3 million Pounds).

In the Americas and South Africa (2% of net fee income) revenue was 2.5 million Pounds (2010: 1.8 million Pounds) and net fee income increased by +31% (+36% in constant currency) to 2.4 million Pounds (2010: 1.8 million Pounds) delivering an operating profit of 100,000 Pounds (100,000 Pounds in constant currency) (2010: operating loss of 100,000 Pounds).

In New York, recruitment activity levels in the first quarter were muted particularly in the financial services market. However, business recovered well during the second quarter. In South Africa, the group moved into new, larger premises to support local expansion.

The group has recently established a new business in São Paulo, its first office in South America and plans to build on this foundation to grow its presence both within Brazil and other South American markets over the course of the next few years.

Robert Walters, Chief Executive, commented "the group performed well during the first half of the year with growth largely driven by our international businesses which now represent 74% of the group's net fee income."

"We are committed to expanding in those markets offering the best prospects for growth and our future investment plans reflect this. Further offices in Indonesia, Taiwan and Germany are planned during the second half of the year."

In early trading Robert Walters' shares were down by -0.16% to 313 Pence.

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