Shares in professional recruitment group Robert Walters (RWA) are up 5.6% to 675.6p as the company registers a second consecutive quarter of record net fee income over £100m.
Growth was solid again last quarter, especially in Asia Pacific up 18% compared with 8% in the first half of the year.
The region now accounts for 41% of group net fee income with broad-based growth in emerging and established markets and across permanent and temporary hiring.
Growth in Europe was equally impressive with net fees up 22% despite a strong increase in the same quarter a year ago (39%).
Europe now accounts for 24% of group net fees and again growth was broad-based across the region and across permanent and temporary recruitment.
The weak spot was the UK, which accounts for 28% of group net fees. Net fee income grew just 4% compared with 9% in the first half and 15% last year.
Hiring in the regions and especially Manchester and Birmingham remains strong which is attracting graduates and professionals who might previously have trudged south.
In the capital meanwhile hiring has slowed, particularly in finance, although there are 'glimmers of growth' according to the group's eponymous CEO Robert Walters. Also its recruitment outsourcing division Resource Solutions is helping to smooth revenues.
The group confirmed that full-year pre-tax profit would be in line with current market expectations, which are in the region of £47m compared with £40.6m last year.
With a current net cash position of over £40m against £12.6m at the same stage last year it’s probably reasonable to expect the final dividend to be raised at least in line with the interim payment (which was up 45%).
GROWTH OPPORTUNITIES IN ASIA AND EUROPE, CHALLENGES IN THE UK
The CEO sees the best growth opportunities at present in Japan, where the firm is already the market leader in professional recruitment, and in Germany where it is something of a late entrant.
Japan, the company’s most profitable market in Asia, continues to grow net fee income at more than 25% per annum. Germany is a high-growth market where the company is rolling out more offices as it plays catch-up.
In the UK, where unemployment hit a 45-year low of 4% in June and July according to the ONS, aside from the slowdown in the capital there seem to be a couple of broader issues.
Job vacancies are at a record high with a growing number of companies reporting difficulty in hiring staff. As well as a lack of medium-skilled workers, employers are struggling to hire workers with the relevant technology skills.
One major driver of labour supply has been the inflow of EU nationals. In the first quarter of the year the number of EU-born workers in the UK rose by just 7,000 compared with 148,000 in the first quarter of 2017.
The combination of record low unemployment, a skills shortage and almost no growth in labour supply from EU-born nationals means that job vacancies continue to rise, pushing up starting salaries and average wages.
This week also sees trading updates from UK recruiters PageGroup (tomorrow) and Hays (Thursday).
