UK – Robert Walters H1 sales up 16% currency-neutral as earnings improve

July 28, 2022

Robert Walters (RWA: LSE), the international recruitment firm, today reported revenue of £538.6 million for the six months ended 30th June 2022, an increase of 16% at constant exchange rates compared to the same period last year.

The group said it sees acute talent shortages and wage inflation across geographies and disciplines. Additionally, there was stiff competition for talent as demand continued to outstrip supply.

The level of recruitment activity has been strong across all forms of recruitment, including outsourcing of permanent positions, contracts, interim and recruitment processes, it added.

£ million) H1 2022 H1 2021 % change % change (constant currency)
revenue 538.6 468.2 fifteen% 16%
Gross Profit (Net Fee Income) 210.5 166.2 27% 27%
operating result 27.7 24.1 fifteen% 17%
profit before taxes 26.4 22.1 19% 22%

Robert Walters, Chief Executive, said: “The Group has delivered a record first half performance with all regions increasing both net fee income and operating profit despite stiff competition for talent across the Group’s regions and disciplines.”

“We continued to invest in additional employees during the first half of the year to ensure we are able to continue to capitalize on the current global demand for talent,” added Walters.

Sales by Geography

(million pounds) H1 2022 H1 2021 % change
Asia Pacific 240.1 194.0 23.7%
United Kingdom 141.2 159.2 -11.3%
Europe 136.6 100.8 35.5%
Other International 20.7 14.2 45.7%

Unless otherwise indicated, all growth rates below are in constant currency.

All markets in Asia Pacific delivered double-digit year-over-year growth in net fee income. Net fee income in the region increased by 27%. In Japan, the group’s largest and most profitable business, net fee income grew 25% year-on-year, driven by continued demand for bilingual professionals, digital transformation and the recovery of Covid-hit sectors.

Elsewhere in Asia, Korea, Malaysia and Thailand delivered record performances in terms of both net fee income and operating income. However, activity levels in mainland China were negatively impacted by the prolonged period of Covid-enforced lockdown, with operating profit flat year-on-year.

Skills shortages remain particularly acute in both Australia and New Zealand, a situation exacerbated by the reopening of international borders and existing negative net migration. While permanent hiring activity remained solid, contract recruitment activity increased during the period as the shortage of permanent talent began to take hold. Net fee income in Australia increased 17% year-on-year and in New Zealand net fee income increased 36% year-on-year.

Resource Solutions, the recruitment process outsourcing business, delivered a strong performance for the first half as a number of recently acquired customers became fully operational. The company has a diverse customer base spanning multiple markets in the Asia Pacific region and is well positioned to deliver long-term growth.

In the UK, hiring accelerated in both London and the regions in the first half of the year, with active vacancies increasing month on month. Wage inflation bolstered candidates’ confidence to move jobs, with activity levels being particularly strong in the disciplines of trade finance, banking, law and technology. Net fee income increased 8% on a reported basis.

Financial services recruitment in the UK rebounded particularly strongly in the second quarter, the group noted. In order to counteract the bonuses offered for job changes, many companies have been forced to implement blanket salary increases in the fight to retain existing employees.

Resource Solutions UK commission income declined 8% year-on-year. Recruitment activity improved over the period, but placement rates were impacted by a lack of candidates and delays in onboarding new employees. A number of new clients were acquired and renewed in the first half across a range of sectors including mining, healthcare, technology and insurance, which will generate returns in the second half of the year and beyond.

Net fee income in the Europe region increased by 39%. In France, the largest company in the Europe region, net fee income rose 26% year over year as permanent and temporary hiring continued to recover strongly.

The Group’s operations in the Netherlands and Belgium generated record net fee income, further consolidating the Group’s market leadership in this region. Spain also achieved record net fee income over the period. The business in Germany built on its strong performance in 2021 and delivered a record first half performance in terms of both net fee income and operating income.

The Other International region includes the Americas, the Middle East and South Africa. Net fee and commission income increased 46% on a reported basis and 38% in constant currencies. The group made significant investments during the period to grow many of the newer businesses across America. Chile and Mexico achieved record performances in both net fee income and operating profit.

In the US, while net fee income grew 4% year over year, it was impacted by large-scale layoffs in the tech start-up space. Business in the Middle East continued to perform very strongly, supported by a post-Covid normalization of the region’s economies, high oil prices and the breadth and strength of the Robert Walters brand.

“During the period, we continued to invest in the growth of the business to capitalize on the acute talent shortage that exists both in our international footprint and in our range of specialty disciplines,” the company said. “We have increased our headcount by 16% since the beginning of the year and also opened our first office in Italy, in Milan, and we are excited about the opportunity to build a thriving business in one of Europe’s largest economies.”

Walters said: “Looking ahead, we see no signs of a slowdown in labor market activity yet, despite the volatile macroeconomic backdrop and inflationary pressures prevailing in global markets. Current trading remains in line with recently revised upwards market expectations.

The Company will release trading update on October 11, 2022 for the third quarter ended September 30, 2022.

Shares of Robert Walters were last traded at £536.60, up 3.19% on the day and 20.65% above the 52-week low of £444.75 set on June 20, 2022 . The company has a market capitalization of £399.73 million.

Comments are closed.