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World – Protiviti sustains Robert Half growth but international staffing still suffers

23 October 2013

Yesterday, US-based recruitment firm Robert Half (RHI: NYSE) reported revenue of USD 1.07 billion for the third quarter ending 30 September 2013, an increase of +10.4% compared with USD 1.03 billion for the same period last year.

Net income for Q3 2013 was USD 66.4 million, a rise of +15.7% from USD 57.7 million during Q3 2012. Gross profit of the period was USD 437.5 million, an increase of +5.3% compared with USD 415.3 million last year. Gross margin also increased, from 40.2% to 40.7%, year-on-year.

Harold M. Messmer Jr., Chairman and CEO of Robert Half, commented: “Demand for our professional staffing and consulting services remained strong in the third quarter, led by Protiviti and our technology and permanent placement staffing divisions, particularly in the United States. For the 14th consecutive quarter, the company grew net income and earnings per share in excess of +15% on a year-over-year basis.”

Protiviti, the company’s specialist business consulting and internal audit segment, reported the biggest year-on-year revenue increase of +16.3%. Revenues rose from USD 119.5 million during Q3 2012 to USD 139 million this year. Protiviti accounts for 12.9% of company revenue, up from 11.6% last year.

Segmentally, the company’s largest and most well-known business Accountemps reported revenue of USD 378.1 million, a marginal decline of -0.8% compared with USD 381.3 million last year. The Accountemps business contributed 35.2% of total company revenue for the quarter.

Temporary staffing revenues increased by +1.9% during the period accounting for 79% of Q3 2013 revenue, to USD 847.9 million, below the company’s estimate of USD 858.5 million. All four temporary business reported revenue below expectations. Robert Half Technology saw the largest deviation from company estimates with revenue of USD 135.3 million, down from an expected USD 140.3 million.

International revenue accounted for 23% of total company revenue, a fall of -6% to USD 248 million. In contrast, revenue from North America increased by +4% to USD 827 million, accounting for 77% of total company revenue. The decline in International business has narrowed slightly with some markets doing better than others. The UK has now turned slightly positive, Germany remains solid, Belgium is becoming less bad, while France and Australia show no signs of improvement.

International temporary revenue decreased by -5.9%. Temporary recruitment gross margin remained flat, year-on-year, at 36.2% and was in-line with company expectations.

Permanent placement growth accelerated materially on a reported basis, from +0.6% in Q1 2013, to +1.4% in Q2 213, to +7.9% in Q3. Permanent revenue was above expectations at USD 88.2 million, compared with an expected USD 83 million.

Robert Half’s management has suggested that the company is now at an inflection point and is poised for modest year-on-year revenue growth reacceleration in Q4 2013. Looking ahead the company is projecting annual revenue of USD 4.6 billion in 2015, which would equate to +8% growth, year-on-year.  

In trading yesterday, the company’s share price closed up at +0.5% at USD 40.72, an increase of +54.6% compared with a year ago. Based on its current share price, the company has a market value of USD 5.65 billion.

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