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Robert Walters under pressure

RESULTS: Tough times in such sectors as global banking and resources are proving painful for recruiter Robert Walters - yet the shares trade on a toppy 24 times expected earnings
February 26, 2013

Recruiter Robert Walters (RWA) saw profits slide last year - driven by such factors as a decline in permanent global financial services recruitment and a near halt in growth at the group's Asia Pacific operations.

IC TIP: Sell at 207p

In fact the difficulties in global banking, combined with a slowdown in the resources sector in Australia, has hit Robert Walters' Asia Pacific operations hard. That region generates half of group net fee income (NFI), which edged up a mere 0.8 per cent in the year to £93.4m, while profits here slumped from £12.3m to £7.2m. In the UK, meanwhile, tough conditions meant that profits dropped £100,000 to £400,000, although NFI rose 6 per cent to £49.7m. In Europe profits fell from £2.8m to £1.2m with NFI up just 1.3 per cent to £39.6m. Still, the Americas and South America unit offered a glimmer of hope for the group and NFI there rose 24 per cent to £5.7m, although that business remains loss-making.

The group's cash pile fell £5.6m, too, while headcount rose by 186 to 2,233. Broker Panmure Gordon expects pre-tax profit of £9.7m for 2013, giving EPS of 8.47p, for 2013 (2012: 6.2p).

ROBERT WALTERS (RWA)

ORD PRICE:207pMARKET VALUE:£159m
TOUCH:202-206p12-MONTH HIGH:265pLOW: 176p
DIVIDEND YIELD:2.5%PE RATIO:30
NET ASSET VALUE:93pNET CASH:£11.5m

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
200833718.217.24.75
20093001.30.34.75
201042413.112.54.90
201152815.114.15.15
20125687.736.805.15
% change+8-49-52-

Ex-div: 22 May

Payment: 14 Jun