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Robert Walters Q4 fees drop 14%, projects 2024 breakeven

Robert Walters Q4 fees drop 14%, projects 2024 breakeven

Danny Romero
| January 14, 2025
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UK-based recruitment firm Robert Walters (RWA: LSE) reported fourth quarter net fee income was down 14% in constant currency (CC).

In its trading update, the company said trading conditions remained challenging throughout the quarter, consistent with the year as a whole. While fees were slightly weaker than expected, activity levels were broadly stable in most regions during October and November versus Q3.

“As seen throughout the year, 2024 closed with conditions in global hiring markets remaining challenging - marked by muted client and candidate confidence,” Toby Fowlston, Chief Executive, of Robert Walters, said in a press release. “Fourth quarter fee income was slightly weaker than expected, and in addition further actions were taken on the cost base. As a result, we now expect a broadly breakeven position at the profit before tax level for the full year.”

Total headcount as of the end of the period stood at 3,294, down 5% quarter-on-quarter (30 September 2024: 3,466) and down 17% year-on-year (31 December 2023: 3,980).

Fee earner headcount fell by 7% quarter-on-quarter (down 17% year-on-year) to 1,964, while non-fee earner headcount fell by 2% quarter-on-quarter (down 18% year-on-year) to 1,330.

Robert Walters said it continues to be highly selective in replacing fee earner natural attrition and prioritises strong fee earner average tenure ready for when market conditions improve.

Group Net Fee Income by region was as follows.

(£ millions)

Q4 2024

Q4 2023

Change

Constant Currency (CC)

Asia Pacific

33.8

39.6

-15%

-11%

Europe

24.2

30.5

-21%

-17%

UK

11.7

13.8

-15%

N/A

Other International

5.8

7.5

-23%

-19%

Total

75.5

91.4

-17%

-14%

Specialist professional recruitment net fee income stood at £62.1 million, down 14% (CC), with permanent (63% of fees) down 18% (CC) and temporary (35% of fees, being contract and interim) down 10% (CC). Recruitment outsourcing Q4 net fee income stood at £13.4 million, down 14% (CC).

Unless otherwise noted, all changes below are in constant currency.

In Asia Pacific, Q4 net fee income was down 11%. Specialist recruitment was down 11% while recruitment outsourcing was down 9%. In North-East Asia (-4%), Japan (-5%) saw a slower end to the quarter. There were signs of conditions stabilising in Australia (0%), while New Zealand (-47%) remains challenging, particularly in the public sector. In Greater China (-15%), mainland China and Taiwan were more resilient, however softer conditions continued in Hong Kong. South-East Asia declined by 12%.

In Europe, Q4 net fee income is down 17% with specialist recruitment also down 17%. Challenging conditions persisted in France (-17%) and Spain (-34%), while Belgium (-17%) annualised a record prior year quarter. Political uncertainty impacted sentiment in Germany (-21%) while the Netherlands (-10%) continued to be somewhat more resilient.

In the UK, Q4 net fee income was down 15% on a reported basis. Specialist recruitment was down 23%, while recruitment outsourcing was down 12%, on a reported basis. London (up a reported 3%) continued to outperform the Regions (down a reported 45%), as the October UK Budget announcement impacted employer hiring plans.

In the Rest of World region, Q4 net fee income was down 19% (specialist recruitment was down 16% and recruitment outsourcing was down 23%). The group said there were challenging conditions in the USA (-32%) and LatAm (-29%), with the Middle East (-3%) more resilient.

“Notwithstanding the market backdrop, we remain focused on our initiatives to strengthen the business,” Fowlston said. “Consistent with the disciplined entrepreneurialism strategy set out at last year’s capital markets event, we are rigorously focused on improving fee earner productivity across our markets, driving efficiencies in our front and back-office teams, optimising our office network and leveraging more co-ordinated procurement.”

Fowlston also commented on the group’s brand unification.

“We have unified our brands under the single banner of Robert Walters to better serve our clients, and have further rolled out ‘Zenith’, our custom-built CRM (customer relationship management). We are confident our strategy will drive a conversion rate in excess of pre-pandemic levels in the medium term as market conditions improve,” Fowlston added.

Rival PageGroup yesterday published its Q4 trading update, reporting a decrease in gross profit of 13% on a constant currency basis to £196.7 million.

Robert Walters set a new 52-week low during today’s trading session when it reached £290.00. Over this period, the share price is down 27.34%. The company last traded at £312.44, up 2.44% on the day. The company has a market cap of 234.44 million.