14 April 2021
ROBERT WALTERS PLC
(the 'Company' or the 'Group')
Trading update for the first quarter ended 31 March 2021
PROFIT AHEAD OF EXPECTATIONS
Financial and operational highlights
| Gross profit (Net fee income) | Q1 2021
| Q1 2020
| % change | % change (constant currency*) |
|
|
|
|
|
|
| Group | £77.3m | £87.4m | (12%) | (11%) |
|
|
|
|
|
|
| Asia Pacific | £32.8m | £34.5m | (5%) | (3%) |
| Europe | £21.8m | £25.4m | (14%) | (15%) |
| UK | £17.3m | £19.7m | (12%) | (12%) |
| Other International | £5.4m | £7.8m | (31%) | (25%) |
* Constant currency is calculated by applying prior period average exchange rates to local currency results for the current and prior years.
§ Positive trading momentum continued through the first quarter underpinned by further signs of improving market conditions across the Group's major regions.
§ Group net fee income for the first quarter was down 11% (12% actual) year-on-year representing a significant improvement on the 26% (24% actual), 30% (31% actual) and 34% (33% actual) declines of the preceding three quarters.
§ Activity levels across permanent, contract, interim and recruitment process outsourcing all trended positively through the quarter.
§ 78% (2020: 77%) of the Group's net fee income now derived from international operations.
o Asia Pacific, the Group's largest region, now accounts for 42% of Group net fee income (2020: 39%).
§ Asia Pacific net fee income down 3% (5% actual) to £32.8m (2020: £34.5m).
o Positive signs of an uptick in recruitment activity in Japan, the Group's most profitable business, with net fee income down just 5% (11% actual) year-on-year. Australia also delivered robust results with net fee income down 12% (4% actual). Encouragingly both New Zealand and Mainland China returned to growth increasing net fee income by 16% (22% actual) and 58% (57% actual), respectively.
§ Europe net fee income down 15% (14% actual) to £21.8m (2020: £25.4m).
o Two of the region's largest businesses, France (permanent and interim) and Spain, returned to growth during the quarter with the former delivering a 48% (49% actual) increase in net fee income year-on-year.
§ UK net fee income down 12% to £17.3m (2020: £19.7m).
o Despite a hard lockdown spanning the entire quarter, there were early signs of an improvement in client and candidate confidence, particularly in London and across the legal and technology disciplines. In Resource Solutions, our recruitment process outsourcing business, client volumes improved significantly as the quarter progressed.
§ Other International (the Americas, South Africa and the Middle East) net fee income down 25% (31% actual) to £5.4m (2020: £7.8m).
o Strong performance in Chile with net fee income increasing 41% (46% actual) year-on-year albeit from a small base. Difficult quarter in New York against tough comparatives.
§ The large majority of the Group's offices are open, however the picture remains volatile in line with local infection rates and government policies.
o Our pre-Covid investment in technology continues to enable our staff to seamlessly and productively work remotely where required without impacting service levels to our candidates and clients.
§ Investment in headcount to take advantage of opportunities in those markets and disciplines showing strongest growth. Headcount increased by 74 during the quarter to 3,221 (31 December 2020: 3,147).
§ Strong balance sheet with net cash of £139.1m as at 31 March 2021 (31 March 2020: £109.8m). The Group also has a £60m committed loan facility which expires in 2024.
Robert Walters, Chief Executive, commented:
"I am pleased to report that the positive momentum in the Group's performance since quarter two 2020 has continued through the first quarter of 2021, with candidate and client confidence sequentially improving across most of the Group's global footprint. As a reflection of the improving market sentiment, we increased headcount during the quarter, with hiring focused in those geographies and disciplines showing the strongest signs of growth.
"The improvement in market conditions has already enabled the Group to benefit from operational gearing. Whilst it is still difficult to be certain that there will be no further globally disruptive events ahead, the Board is currently confident that profit for the year is likely to be comfortably ahead of market expectations."
The Group will publish a trading update for the second quarter ending 30 June 2021 on 7 July 2021.
- Ends -
Further information
| Robert Walters plc Robert Walters, Chief Executive Alan Bannatyne, Chief Financial Officer
| +44 20 7379 3333 |
| Williams Nicolson Steffan Williams
| +44 7767 345 563 |
About Robert Walters Group
The Robert Walters Group is a market-leading international specialist professional recruitment group with over 3,200 staff spanning 31 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups. The Group's outsourcing division, Resource Solutions is a market leader in recruitment process outsourcing and managed services.
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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