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World – Robert Walters revenue and net fee income up for first six months

02 August 2013

Following a trading update on its Q2 results published on 12 July, UK-based recruitment firm Robert Walters (RWA: LSE) has now released its full half year results. Revenue increased in the half year to 30 June 2013 by +5%, rising to GBP 288.8 million from GBP 275 million during the same period last year. Net fee income also rose during the same period, from GBP 92.4 million to GBP 97.8 million, an increase of +6%. Operating profit increased during H1 2013 to GBP 3.8 million from GBP 3.4 million in H1 2012, a rise of +10%.

Robert Walters, company chief executive, said: “We have delivered a solid first half performance, achieving increased net fee income and market share across all of the Group’s regions. The first half results are encouraging and we are focused on generating increased productivity from our existing businesses across the globe, while continuing to carefully manage the Group’s cost base.”

“Global market conditions are mixed and visibility is limited, however, we are seeing positive signs across some markets. The Group’s market-leading international brand, diverse and robust blend of revenue streams, and strong balance sheet means that the Group is exceptionally well positioned to benefit from a sustained recovery,” he added.

The Asia-Pacific market accounts for 48% of total Group net fee income. During the first half of 2013, revenue dipped slightly by -0.6%; from GBP 134.7 million to GBP 133.9 million compared with the first half of 2012. Net income rose, however, by +1% to GBP 46.5 million from GBP 45.9 million a year ago.

Despite a slowdown in the Perth and Brisbane offices, Robert Walters claims that its share in the Australian market grew. Japanese and Malaysian businesses are reported to have performed well, with newer and smaller operations in Thailand, Vietnam, and Indonesia producing strong net fee income growth. The Singapore and Hong Kong businesses delivered strong first half performances, while recent restructure of the management team in China is reportedly beginning to show positive results.

The United Kingdom, accounting for 27% of total net fee income, reported revenue and net fee income growth during H1 2013. Revenue rose from GBP 93.4 million during the first half of 2012 to GBP 105.1 million this year, an increase of +11.1%. Net fee income grew by +12%, from GBP 23.9 million to GBP 26.7 million. Following zero operating profit last year, H1 2013 reported operating profit of GBP 400,000.

The UK business performed well, with regional offices delivering strong performances across Commerce Finance, HR, Legal, and IT.

European operations, accounting for 21% of net fee income, also reported revenue and net fee income. Revenue increased +4.6%, rising from GBP 44 million last year to GBP 46.1 million this year. Net fee income rose +5%; to GBP 20.9 million from GBP 19.9 million a year ago. Operating profit fell from GBP 300,000 during H1 2012 to GBP 200,000 in H1 2013.

Business in France, proved resilient against a backdrop of economic and political uncertainty and redundancy costs of GBP 500,000 were incurred during the period. Germany again delivered strong net fee income growth, Market conditions in the Benelux region have improved and a new office was opened in Ghent during Q1 2013. Ireland continues to perform well, however, elsewhere across the region activity levels remain muted.

The remaining 4% of net fee income is comprised of ‘Other International’. Revenue and net fee income both grew during the period, by +31% and +40% respectively. Revenue rose from GBP 2.9 million to GBP 3.8 million comparing the first halves of 2012 and 2013. Net fee income rose from GBP 2.7 million to GBP 3.7 million during the same period. Other International reported an operating loss of GBP 100,000, down from GBP 200,000 a year ago.

Improved confidence in the United States underpinned a solid performance in New York, while the new business in San Francisco continued to deliver strong net fee income growth. In Brazil, operations in Sao Paulo and Rio de Janeiro returned to growth. South African net fee income continued to grow strongly. During the period Robert Walters opened its first Middle East office located in Dubai.

Permanent recruitment now represents 70% of the Group’s recruitment net fee income; up by +1% from last year. The Group provides permanent, contract, and interim recruitment

Following on from the encouraging first half results, Robert Walters is focused on generating increased productivity from its existing businesses across the globe. In the past three years the company has opened 17 new offices and is focused on maximising the return from this investment. There are no plans for further expansion this year.
Following the release of the half year financial results, the company’s share price rose +4.79% to 246.25 pence, an increase of +36.5% from a year ago. Based on its share price, the company has a current market value of GBP 188.85 million.


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