- Double-digit fee declines
- UK market struggling
Shares in Robert Walters (RWA) wobbled after rival recruitment agency Hays (HAS) cut its profit forecasts by almost a fifth in its latest quarterly update. However, Robert Walters has reassured the market that its own guidance for 2023 is unchanged. This implies a year-on-year drop in pre-tax profit of 63 per cent, from £55.6mn to just £20.5mn.
Net fee income sank by 10 per cent at constant currency to £91.4mn in the final quarter of 2023, with Asia Pacific – Robert Walters’ biggest region – reporting a 9 per cent drop. A strong performance in Japan was more than offset by “muted” conditions in Australia, which saw fees fall by 27 per cent. The UK was the worst performing region, however, with fees decreasing by 19 per cent. Activity levels proved more resilient in the regions than in London.
Europe put in a slightly better performance, with net fees down by just 7 per cent. The region reported improvements on the previous quarter, and Belgium and Germany both achieved growth. However, the company's largest European markets of France and the Netherlands both saw fees fall.
Chief executive Toby Fowlston, who took the reins last year, said the group had “a healthy blend of income streams, a highly diversified international footprint, and a strong global brand and balance sheet”. However, the company remains exposed to the weak permanent recruitment market, with just a third of fees coming from contract work.
Shares in Robert Walters are down 14 per cent year on year and the agency currently trades on a forward price/earnings ratio of 12.7 compared with a five-year average of 14.6. The company plans to publish its results for the year ended 31 December 2023 on 7 March.
Last IC view: Hold, 400p, 1 Aug 2023
