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UK – Robert Walters sees strong international growth

02 March 2011

Revenues were up by +41% from 300.4 million Pounds in 2009 to 424.2 million Pounds in 2010 at Robert Walters Plc (RWA:LSE), the staffing and Recruitment Process Outsourcing (RPO) group. In constant currency, revenues were up by +34%.

Results for the year ended 31 December 2010 show that net fee income (gross profit) was up by +49% from 104.4 million Pounds in 2009 to 155.4 million Pounds in 2010. At constant currency, net fee income was up by +43%.

Operating profit was up by +737% from 1.6 million Pounds in 2009 to 13.2 million Pounds in 2010. In constant currency, operating profit was up by +643%.

Profit before tax was up by +900% from 1.3 million Pounds in 2009 to 13.1 million Pounds in 2010. In constant currency, profit before tax was up by 786%.

In the United Kingdom (29% of net fee income), revenue was 157.9 million Pounds (2009: 116.6 million Pounds) and net fee income increased by +36% to 45.8 million Pounds (2009: 33.8 million Pounds), producing an operating profit of 1.3 million Pounds (2009: operating loss of -800,000 Pounds).

The UK business performed satisfactorily, delivering solid net fee income and operating profit growth. Activity levels were strong in both commerce and financial services, particularly across the disciplines of finance, IT and legal. Against a potentially uncertain economic backdrop, exposure to the public sector represents less than 1% of UK net fee income.

Resource Solutions, the recruitment process outsourcing business, grew net fee income and was successful in further diversifying its client base through a number of commercial sector client wins.

In Continental Europe and Ireland (20% of net fee income), revenue was 71.3 million Pounds (2009: 59.4 million Pounds) and net fee income increased by +19% (+23% in constant currency) to 30.4 million Pounds (2009: 25.7 million Pounds), producing an operating profit of 800,000 Pounds (900,000 Pounds in constant currency) (2009: operating loss of -700,000 Pounds).

Recruitment activity levels across Europe were stronger during the second half of the year. France and Belgium continued to benefit from growth in Walters Interim, the junior clerical recruitment business whilst business in The Netherlands, which was the last to recover, delivered a strong performance towards the end of the year. Operations in Ireland have recovered well whilst the small business in Spain continued to experience challenging market conditions.

During the year, the group opened its first office in Germany, in Düsseldorf and a fourth office in Belgium.

In Asia Pacific (49% of net fee income), revenue was 191.3 million Pounds (2009: 122.5 million Pounds) and net fee income increased by +76% (+58% in constant currency) to 75.6 million Pounds (2009: 43.0 million Pounds), producing an operating profit of 11.3 million Pounds (9.7 million Pounds in constant currency) (2009: 3.3 million Pounds).

The Asia Pacific region delivered very strong net fee income and operating profit growth, with China, Hong Kong and Singapore the stand-out performers, all more than doubling net fee income. Japan also performed strongly and continues to benefit from favourable demographic trends and the internationalisation of the recruitment market. During the year, the group opened a third mainland China office in Beijing and its first office in South Korea in Seoul.
 
Australia remains a key market for the group and has built strong momentum through the year. In February 2011, the group opened its sixth office in Australia, in Chatswood, Sydney.

In the Americas and South Africa (2% of net fee income), revenue was 3.7 million Pounds (2009: 2.0 million Pounds) and net fee income increased by +84% (+77% in constant currency) to 3.6 million Pounds (2009: 2.0 million Pounds), producing an operating loss of -100,000 Pounds (-100,000 Pounds loss in constant currency) (2009: operating loss of -200,000 Pounds).

The group opened its first office in South America, in Sao Paulo, which will function as a bridgehead to further penetrate other markets across the region. In New York the group continued to expand its offering outside of financial services and grew both net fee income and operating profit.
 
South Africa remains a territory in which the group maintains a small presence. However, its role as a sourcing ground of candidates for other businesses across the globe remains very important. 

Robert Walters, Chief Executive, commented "performance across the group has been strong, resulting in increased net fee income year-on-year with our Asia Pacific operations in particular delivering significant growth."

"The outlook for the year remains broadly positive. Our long-term investment in our international network has enabled us to build market share across the globe with 71% of the group's net fee income now generated outside of the UK. We intend to continue with this strategy and will seek to reinforce our established businesses, whilst identifying and investing in those regions providing the strongest opportunities for growth."

In early trading Robert Walter's shares were down by -0.30% to 335 Pence.

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