Recruitment company Robert Walters (RWA) saw profits tick up nicely in the first half of 2013, but the shares remain expensively rated given the fragility of the global economic recovery.
In 2012 difficulties in the global banking sector and the resources industry in Australia hit the company hard last year, as group-wide reported profits were sliced in half and top-line growth slowed to a trickle. Yet the first quarter of 2013 saw a return to modest growth and that positive momentum was sustained in the second quarter. Net fee income (NFI,) increased 6 per cent in the first half compared with last year, with foreign-exchange gains helping boost pre-tax profits further.
Nevertheless, the key Asia Pacific region, which accounts for nearly half of total NFI, saw constant currency profits drop from £3.5m to £3.3m on a NFI rise of just 1 per cent, reflecting persistent difficulties in Australia but better trading elsewhere in the region. Meanwhile the UK and Europe posted NFI gains of 12 per cent and 5 per cent, respectively.
Eponymous founder and chief executive Robert Walters says he sees "initial indications of recovery in some markets, but not in others". Broker Investec forecasts adjusted pre-tax profits of £9.7m in the current year, with adjusted EPS of 8.3p, rising to £11.2m and 9.7p in 2014 (2012: £7.7m/6.2p).
ROBERT WALTERS (RWA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 241p | MARKET VALUE: | £185m | |
| TOUCH: | 236-245p | 12-MONTH HIGH: | 241p | LOW: 176p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 95p | NET CASH: | £6.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 275 | 3.07 | 2.90 | 1.47 |
| 2013 | 289 | 3.65 | 3.30 | 1.54 |
| % change | +5 | +19 | +14 | +5 |
Ex-div: 4 Sep Payment: 18 Oct | ||||
