President Donald Trump warned his supporters during the 2016 presidential campaign they would get tired of winning under his leadership. Investors in Robert Walters (RWA) may be starting to feel the same way, with four profit upgrades last year and record income for the first half of 2018. But as Mr Trump seeks now to start and win a trade war, how long can RWA and peers continue to grow if the global economy turns fearful?
The answer might be found in the UK, where uncertainty surrounding what Brexit entails has led it to lag behind the rest of the world. Tellingly, the recruiter highlights its lack of dependence on the UK – 72 per cent of gross profit now comes from abroad – as one of its salient highlights for the half year. Nevertheless the group’s resource solutions business, which provides outsourced human resources services, has bolstered its UK operations and helped it towards 9 per cent gross profit growth, aided by robust demand in the regions.
Trade wars aside, the group looks confident in its future. Changes in headcount are a key indicator of expected future performance given the correlation between staff numbers and gross profit – RWA increased headcount 14 per cent to 3,996 in the period.
Broker Panmure Gordon is forecasting pre tax profit of £45.5m, giving EPS of 43.1p in 2018 (from £41.4m and 39.8p in 2017).
| ROBERT WALTERS (RWA) | ||||
| ORD PRICE: | 780p | MARKET VALUE: | £ 589m | |
| TOUCH: | 766-790p | 12-MONTH HIGH: | 794p | LOW: 442p |
| DIVIDEND YIELD: | 1.7% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 176p | NET CASH: | £24.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 563 | 15.6 | 16.3 | 2.75 |
| 2018 | 626 | 20.6 | 21.2 | 4.00 |
| % change | +11 | +32 | +30 | +45 |
| Ex-div: | 06 Sep | |||
| Payment: | 19 Oct | |||
