Source - RNS
RNS Number : 9151K
Robert Walters PLC
13 April 2018
 

ROBERT WALTERS PLC (THE "COMPANY")

 

Annual Financial Report

 

Copies of the Annual Report & Accounts of the Company for the year ended 31 December 2017, the Circular to shareholders of the Company, including Notice of the Annual General Meeting of the Company to be held on Thursday, 17 May 2018, and the form of proxy for use at the Annual General Meeting (all of which documents were posted to shareholders on 12 April 2018), have been submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.morningstar.co.uk/uk/NSM

 

The Annual Report & Accounts 2017 is now available on the Company's website at:

 

https://www.robertwalters.com/content/dam/robert-walters/corporate/investors/files/financial-reports/RW_Annual_Report_2017_web_FINAL.pdf

 

In accordance with Disclosure and Transparency Rule 6.3.5, the information in the attached Appendix consisting of a Directors' Responsibility Statement, principal risks and uncertainties and related party transactions has been extracted unedited from the Annual Report and Accounts for the year ended 31 December 2017 and should be read in conjunction with the Company's final results for the year ended 31 December 2017 which were announced in unedited full text on Thursday, 1 March 2018.

 

Enquiries:

Alan Bannatyne, Chief Financial Officer & Company Secretary +44 (0) 20 7379 3333

 

 

APPENDIX

 

Directors' Responsibility Statement

We confirm that to the best of our knowledge:

 

·                 The financial statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and

 

·          The Strategic Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. 

 

By order of the Board

 

Alan Bannatyne

Group Finance Director

28 February 2018

 

 

Principal risks and uncertainties

The Board considers the full range of business risks affecting the Group on a regular basis, and takes action to address such risks. The perceived key risks are as follows:

 

(i) Economic environment

Job availability and the level of candidate confidence in the employment market are important factors in determining the total number of recruitment transactions in a given year. Candidates are less inclined to move jobs when the number of jobs available is stagnant or in decline, which could lead to a deterioration in the Group's financial performance.

The Group is geographically diversified, spanning 28 countries, which reduces the reliance on the success of any particular market. The Group also continues to develop its contract and Resource Solutions businesses, both of which provide more resilient revenue streams in the event of an economic downturn. Historically, the Group has successfully diversified into other sectors to reduce its concentration risk in the event of a downturn.

 

The Board's strategy when facing a slowdown in a market is to balance the cost base, such that the impact on profit is mitigated, against the perceived future benefit from the retention of key staff. Historically, the Group has benefited substantially from increased operational gearing as a result of its policy of deliberately retaining key staff through economic downturns.

 

(ii) People Management

The Group relies heavily on recruiting and retaining talented individuals with the right skill-sets to grow the business. In addition, as the Group expands its operations in emerging markets the supply of people with the required skills in specific geographic regions may be limited. Failure to attract and retain key employees with the required sales, management and leadership skills may adversely affect the Group's financial results.

The Group's policy of linking bonuses to profitability in discrete operating units has a high correlation to the retention of efficient and effective members of staff.

The long-term incentive schemes that are detailed in note 18 to the accounts form a key part of a wider strategy to improve levels of staff retention, particularly of the Group's senior employees.

Other elements of the strategy to improve staff retention and maximise career opportunities include significant investment of time and financial resources in employee training and development including regular weekly appraisals, aimed at core consultant competencies and focused on enhancing management potential. The Group's culture and the associated processes help to increase productivity and also improve the employee's alignment to the business. A comprehensive approach to succession planning is also in place across the Group.

The Group offers international career opportunities and actively encourages the redeployment of existing talent to international offices and also to establish new offices.

 

 (iii) Business Model

Competition risk varies in each of the Group's main regions depending on the maturity of the client and candidate market. The emergence of new technology platforms such as social media for recruitment purposes may also lead to increased competition.

The development of strong commercial relationships with clients has enabled the Group to win and then maintain its contracts with large global organisations and the Group also has a significant and diverse income stream across the SME marketplace.

The Group reviews and monitors changes in technology and social media trends to ensure that it evolves appropriately. The Group continues to promote itself as a relationship recruiter operating in specialised markets, ensuring its online presence is competitive and provides a high-quality customer experience.

 

(iv) Brand and reputation 

There is an inherent risk that the brand and reputation of the Group could be impacted by a failure to maintain high-quality service levels to both candidates and clients.

Quality control standards are maintained and reviewed for each stage of the recruitment cycle with all new employees receiving appropriate levels of training applicable to their role.

Candidate and client satisfaction surveys are carried out on a regular basis, with directors addressing any negative feedback directly with the client or candidate. A 'Contact us' email address is available on the Group's website so any negative feedback or improper conduct can be acted upon swiftly by the Chief Marketing Officer and local senior management.

 

 (v) Laws and regulations

The Group operates in a number of diverse jurisdictions and has to comply with numerous domestic and international laws and regulations, any change to which could have a detrimental effect on the Group's financial performance.

To ensure compliance, our legal department works with leading external advisors as required to monitor potential changes in employment legislation across the markets in which we operate.

Contractual terms and conditions are thoroughly reviewed before signing to ensure contract provisions are fully understood and risks are fairly allocated between parties.

An escalation process exists such that contracts with non-standard terms are reviewed and approved by the Chief Legal Officer and Chief Financial Officer as appropriate.

 

(vi) Technology

The Group is reliant on its technological infrastructure to maintain client and candidate data. A critical infrastructure or system disruption could have a material impact on the Group's financial results, whilst a loss of confidential and competitive information can have an adverse impact on operations and the reputation of the Group.

The Group maintains a comprehensive IT security policy, which is reviewed on a regular basis, covering all areas of IT security from user access through to server access.

All sensitive candidate and client information is held securely with restricted access.

Appropriate guidance and training on the security and handling of both manual and electronic documents including confidential and sensitive data is provided to all staff.

The Group has a dedicated Chief Technology Officer and Group Information Security Officer with specific remits to consider and ensure that appropriate and reasonable controls are put in place, particularly in respect of cyber-related threats and data breach.

The Group continues to review and improve its Business Continuity Plan to mitigate against any critical infrastructure disruptions.

 

(vii) Foreign exchange

The Group operates under a number of functional currencies. The main functional currencies of the Group are Pounds Sterling, the Euro, Australian Dollars and Yen. Any unfavourable movements in the foreign exchange rates may have an adverse effect on translation of overseas operations, and subsequently the Group's Pounds Sterling financial results.

Revenues and costs are in their functional currencies in the local entities, which minimises the Group's transactional exposure. Additionally, there are no material net foreign exchange exposures to monetary assets and monetary liabilities.

The Group continues to monitor the sensitivity to foreign currency fluctuations through performing regular sensitivity analysis and reducing exposure wherever possible.

 

Related party transactions

Transactions between Robert Walters plc and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The remuneration of key management personnel who are deemed to be Directors has been disclosed in the Report of the Remuneration Committee.

During the year, there were related party transactions totalling £77,000 (2016: £40,000) with Tay Associates Limited, a related party through a Director of Robert Walters plc. There were no outstanding balances at 31 December 2017. All transactions were undertaken on an arms-length basis.


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