Recruiter Robert Walters' half-year net fee income (NFI) may have risen 4 per cent year on year to £92.4m, but soaring costs - average headcount rose 15 per cent - helped force a sharp profit slide. And while eponymous chief executive, Robert Walters, says that he's not afraid to cut costs, he'd prefer to retain and redeploy staff to position the group for recovery - so don't expect dramatic cost-cutting. Add that to the hefty share price rating and caution looks wise.
Unfortunately, recovery looks like a distant prospect. Take the core Asia Pacific business, for example, which generates 50 per cent of NFI - half-year NFI there rose just 3 per cent year on year as the banking sector slowdown struck, compared with 13 per cent growth in the first quarter. Similarly, the UK operation grew NFI just 5 per cent to £23.9m after 9 per cent first-quarter growth, and the European operation saw NFI rise by a mere 3 per cent to £19.9m. Moreover, the cash pile fell by £6.1m in the period as a significant increase in contractor numbers strained working capital.
Broker Canaccord Genuity expects full-year adjusted EPS of 6.7p (14.1p in 2011) and a flat dividend payout.
ROBERT WALTERS (RWA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 185p | MARKET VALUE: | £142m | |
| TOUCH: | 176-185p | 12-MONTH HIGH: | 322p | LOW: 157p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 92p | NET CASH: | £4.6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 242 | 7.09 | 6.50 | 1.47 |
| 2012 | 275 | 3.07 | 2.90 | 1.47 |
| % change | +14 | -57 | -55 | - |
Ex-div: 5 Sep Payment: 19 Oct | ||||
