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Robert Walters profits nosedive

There are some signs of an uptick in demand in Europe
Robert Walters profits nosedive

Half-year operating profit at Robert Walters (RWA) plunged 81 per cent year on year, as coronavirus battered demand in all of the recruiter’s markets. 

IC TIP: Hold at 400p

In the Asia Pacific region operating profits slumped 71 per cent to £2.9m, as the impact of the pandemic was compounded by ongoing political protests in Hong Kong. Its businesses in Australia and New Zealand performed marginally better, where the virus was more effectively controlled, with net fee income down 19 per cent and 16 per cent, respectively. 

In the UK, net fee income fell by close to a third, as recovering client and candidate confidence in the first two months of the year was decimated by the pandemic. The group said however that there has been some activity in more sheltered sectors such as technology, logistics and healthcare. 

The recruiter also noted there were signs of an uptick in Europe in June – which according to chief financial officer Alan Bannatyne has been mirrored in the UK and continued into July. 

But given the persistent lack of visibility in the labour market, the company has passed on a half-year dividend. Indeed, it seems that management is shoring up cash wherever possible: in the past six months Robert Walters has pruned headcount, pulled back discretionary spending, cut management pay and asked employees to voluntarily reduce their working hours. 

The consensus forecast EPS for the full year is 9p, rising to 26.9p in 2021. 

ROBERT WALTERS (RWA)  
ORD PRICE:400pMARKET VALUE:£ 304.3m
TOUCH:405-406p12-MONTH HIGH:614pLOW: 237p
DIVIDEND YIELD:NILPE RATIO:13
NET ASSET VALUE:228p*NET CASH:£46.8m
Half-year to 30 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201963520.921.74.50
20204964.303.90nil
% change-22-79-82-
Ex-div:na   
Payment:na   
*Includes intangible assets of £15.4m or 20p a share