REG - Robert Walters PLC - Q2 2024 Trading Update

Robert WaltersAnnouncement

15/07/2024 07:00

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RNS Number : 3078W  Robert Walters PLC  15 July 2024

15 July 2024

 

ROBERT WALTERS PLC

(the 'Company' or the 'Group')

 

Trading update for the second quarter ended 30 June 2024

 

Focused on being optimally positioned amidst muted client and candidate
confidence

 

Q2 Gross profit (net fee income, "NFI")

                Q2 2024  Q2 2023  % change  % change (constant currency(*))

                £m       £m
 Group          84.8     99.9     (15%)     (12%)

 Asia Pacific   37.1     43.8     (15%)     (9%)
 Europe         27.8     32.3     (14%)     (13%)
 UK             13.2     16.0     (18%)     n/a
 Rest of World  6.7      7.8      (14%)     (12%)

 

H1 Gross profit (NFI)

                                  H1 2024  H1 2023  % change  % change (constant currency(*))

                                  £m       £m
 Group                            166.1    202.3    (18%)     (14%)

 Asia Pacific (42% of Group NFI)  70.0     87.2     (20%)     (13%)
 Europe (34% of Group NFI)        56.5     66.5     (15%)     (13%)
 UK (16% of Group NFI)            26.3     32.3     (19%)     n/a
 Rest of World (8% of Group NFI)  13.3     16.3     (18%)     (14%)

 

*Unless stated otherwise, all net fee income growth rates are versus 2023 and
in constant currencies. Constant currency is calculated by applying prior
period average exchange rates to local currency results for the current and
prior years.

 

Group summary

§ Q2 Group net fee income down 12%*, reflecting the continued rebasing in
market conditions relative to the post-pandemic peak. Fees were down 18%* in
June, whilst new job flow in the month was also weaker than expected.

o  Specialist professional recruitment net fee income of £71.8m down 10%*,
with permanent (68% of fees) down 11%* and temporary (32% of fees, being
contract and interim) down 9%*.

o  Recruitment outsourcing net fee income of £13.0m down 23%*, with ongoing
fragile confidence amongst financial services clients impacting volumes.

§ Headcount down 5% quarter-on-quarter and down 15% year-on-year to 3,625 (31
March 2024: 3,812, 30 June 2023: 4,280). The Group continues to appropriately
tailor headcount to current demand conditions, and is being highly selective
on replacing fee earner natural attrition.

§ Balance sheet remains strong, with net cash of c.£49m (excluding IFRS 16
leases) as at 30 June 2024 (31 March 2024: c.£54m).

 

Regional summary

§ Asia-Pacific: net fee income down 9%* (down 6%* excluding Recruitment
outsourcing). Strong performance in Japan (+7%*) underpinned by Robert
Walters' market leadership, whilst conditions continued to improve in Greater
China (+5%*). Australia & New Zealand (-19%*) remained tough. In
South-East Asia (-17%*), fee earner productivity was broadly stable, however
time-to-hire increased.

§ Europe: net fee income down 13%* (down 12%* excluding Recruitment
outsourcing). Netherlands (-5%*) year-on-year performance improved slightly
versus the first quarter, whilst Belgium performance (-8%*) reflects tough
2023 comparative. Conditions remain soft in France (-20%*), where recent
policital uncertainty has added to already muted client and candidate
confidence.

§ UK: net fee income down 18% (down 14% excluding Recruitment outsourcing).
London (-6%) delivered further sequential improvement, whilst conditions were
more challenging in the Regions (-21%). Over half of UK fee income year to
date came through Recruitment outsourcing (-19%).

§ Rest of World: net fee income down 12%* (down 10%* excluding Recruitment
outsourcing). The Middle East (+6%*) returned to growth, with a resilient
performance also seen in Mexico (flat*). USA (-21%*) remains challenging
whilst Recruitment outsourcing, contributing around a third of Rest of World
fee income year to date, was down 16%*.

 

Toby Fowlston, Chief Executive, commented:

 

"Fee income for the first half of 2024 continued to reflect the rebasing in
market conditions relative to the post-pandemic peak. This period of market
adjustment is now longer in duration than previously expected, with
macroeconomic turbulence and political uncertainty restraining client and
candidate confidence in certain geographies.

 

Our near-term planning now assumes that any material improvement in confidence
levels will be gradual, and likely not occur before 2025. In this environment,
we remain focused on being positioned to deliver the best outcomes for our
clients and candidates, whilst maintaining tight cost discipline. These
actions do not fully offset the first-half fee income reduction, but they
position us well going into the second half of the year.

 

Though current market conditions suggest a wider range of potential outcomes
for the full-year than seen historically, I have high confidence in our
experienced leadership team, which has successfully navigated many challenging
market cycles. We are committed to our medium-term plan to further strengthen
the business, details of which will be shared at our capital markets event in
September."

 

Conference call

The Company will host a conference call for analysts and investors at 8:30am
today. To register for the conference call please contact
rw@williamsnicolson.com (mailto:rw@williamsnicolson.com) .

 

Next news flow

The Company will publish its half-year financial results for the period ended
30 June 2024 on Thursday 1 August 2024.

 

Capital Markets Event

The Company will host a capital markets event for investors and analysts on
Thursday 26 September 2024 at its central London offices.

 

- Ends -

Enquiries

 

 Robert Walters plc

 Toby Fowlston - Chief Executive Officer

 David Bower - Chief Financial Officer

 Dami Tanimowo - Head of Investor Relations                                 +44 7340 660 425

 dami.tanimowo@robertwalters.com (mailto:dami.tanimowo@robertwalters.com)

 Williams Nicolson (Media enquiries)

 Ashia Razzaq                                                               +44 7979 324 998

 William Barker                                                             +44 7534 068 657

 rw@williamsnicolson.com (mailto:rw@williamsnicolson.com)

About Robert Walters

Established in 1985, Robert Walters is a global talent solutions business
operating in 31 countries across the globe. We support organisations to build
high-performing teams, and help professionals to grow meaningful careers. Our
client base ranges from the world's leading blue-chip corporates through to
SMEs and start-ups.

 

We deliver three core services:

 

·      Specialist professional recruitment - encompassing permanent and
temporary recruitment, executive search and interim management.

·      Recruitment outsourcing - enabling organisations to transfer all,
or part of, their recruitment needs to us either through recruitment process
outsourcing (RPO) or contingent workforce solutions (CWS).

·      Talent Advisory - supporting the growth of organisations through
market intelligence, talent development, and future of work consultancy.

 

Our 3,600 employees are passionate about powering people and organisations to
fulfil their unique potential. We take the time to listen to, and fully
connect with, the people and organisations we partner with. Our ability to
truly understand them and create and share their compelling stories is what
sets us apart.

www.robertwalters.com (http://www.robertwalters.com)

 

Forward looking statements

This announcement contains certain forward-looking statements.  These
statements are made by the directors in good faith based on the information
available to them at the time of their approval of this announcement and such
statements should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any such
forward-looking information.

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