Robert Walters (RWA: LSE), the International recruitment firm, reported revenue today for the six months ended 30 June 2022 of £538.6 million, up 16% in constant currency, when compared to the previous year.

The group said it saw acute talent shortages and wage inflation across all geographies and specialist professional disciplines. Furthermore, it saw fierce competition for talent as demand continued to outstrip supply.

Recruitment activity levels were strong across all forms of recruitment, including permanent, contract, interim and recruitment process outsourcing, it added.

Robert Walters, Chief Executive, said, "The group delivered a record first half performance with all regions growing both net fee income and operating profit. An acute shortage of professionals coupled with growing wage inflation has resulted in a significant increase in job churn and a fierce competition for talent across all of the group's geographies and specialist disciplines.”

"We have continued to invest in additional headcount during the first half to ensure we are able to further capitalise on the current demand for talent that exists across the globe,” Walters added.

Revenue by Geography

Unless otherwise noted, all growth rates below are in constant currency.

All markets across the Asia Pacific region delivered double-digit growth in net fee income year-on-year. Net fee income in the region was up 27%. In Japan, the group's largest and most profitable business, net fee income increased by 25% year-on-year driven by the ongoing demand for bilingual professionals, digital transformation, and the recovery of Covid-impacted sectors.

Elsewhere across Asia, Korea, Malaysia and Thailand all delivered record performances in terms of both net fee income and operating profit. Activity levels in Mainland China were however negatively impacted by the prolonged period of Covid-enforced lockdown with operating profit remaining flat year-on-year.

Skill shortages remain particularly acute across both Australia and New Zealand, a situation exacerbated by the re-opening of international borders and the negative net migration that exists. While permanent recruitment activity remained solid, contract recruitment activity increased during the period as the shortage of permanent talent began to bite. Net fee income in Australia grew by 17% year-on-year and in New Zealand net fee income increased by 36% year-on-year. 

Resource Solutions, the recruitment process outsourcing business, delivered a strong performance in the first half as a number of recent new client wins came fully on stream. The business has a broad range of clients spanning multiple markets across the Asia Pacific region and is well positioned to deliver long-term growth.

In the UK, recruitment volumes across both London and the regions accelerated through the first half of the year, with live job numbers increasing month-on-month. Wage inflation further fuelled candidate confidence to move roles with activity levels across the disciplines of commerce finance, banking, legal and technology particularly strong. Net fee income was up by 8% on a reported basis.

Financial services recruitment in the UK bounced-back particularly strongly during the second quarter, the group noted. To counter the premiums on offer for job movers, many organisations have been forced to implement blanket pay rises in the battle to retain existing staff.

Net fee income in Resource Solutions in the UK declined by 8% year-on-year. Recruitment activity levels improved as the period progressed however placement rates were impacted by candidate shortages and delays in the time taken to onboard new hires. A number of new client wins and extensions were secured during the first half across a range of sectors including mining, healthcare, technology and insurance which will deliver returns in the second half of the year and beyond.

Net fee income across the Europe region increased by 39%. In France, the largest business in the Europe region, net fee income increased by 26% year-on-year as permanent and interim recruitment continued to bounce-back well.

The group’s operations in the Netherlands and Belgium delivered record levels of net fee income, further cementing the group’s market-leading position across this region. Spain also produced record net fee income and during the period. The business in Germany built upon its strong 2021 performance and delivered a record first half performance in terms of both net fee income and operating profit.

The Other International region comprises the Americas, Middle East and South Africa.  Net fee income was up 46% on a reported basis and 38% in constant currency. The group invested significantly during the period to grow scale in many of the newer businesses across the Americas. Chile and Mexico produced record performances in terms of both net fee income and operating profit.

In the US net fee income, whilst up by 4% year-on-year, was impacted by large-scale lay-offs in the tech start-up space. The business in the Middle East continued to perform very strongly aided by a post-Covid normalisation of the region's economies, high oil prices and the breadth and strength of the Robert Walters brand.

“During the period, we continued to invest in growing the business to capitalise on the acute talent shortages that exist right across both our international footprint and our range of specialist disciplines,” the company stated. “We have grown our headcount by 16% since the beginning of the year and also opened our first office in Italy, in Milan, and are excited about the opportunity to develop a thriving business in one of Europe's largest economies.”

Walters said, "Looking ahead, we are yet to see signs of any slowdown in job market activity despite the volatile macro-economic backdrop and inflationary pressure that is being experienced across global markets. Current trading remains in line with the recently upwardly revised market expectations."

The company will publish a trading update for the third quarter ending 30 September 2022 on 11 October 2022.

Shares in Robert Walters last traded at £536.60, up 3.19% on the day and 20.65% above the 52 week low of £444.75 set on 20 June 2022. The company has a market cap of £399.73 million.