White collar recruiter Robert Walters (RWA) says a swathe of one-off factors hurting its UK business in the first quarter mean a 2% growth rate in the country is encouraging.

Markets have been fretting over the impact Britain’s upcoming referendum on EU membership could have on corporate earnings as well as the highly cyclical recruitment market.

Trading at Walters through March provided some respite as it said year-over-year progress in UK net fee income (NFI), a key measure of performance, improved towards the end of the quarter.

NFI in the country, which measures fees earned less recruitment advertising costs, gained 2% in the UK at Walters, down from 5% in the final three months of 2015.

Reporting yesterday, Michael Page (MPI) reported no growth in the UK, down from 2% the quarter earlier, and also reported an improvement towards the end of the period.

Uncertainty over the referendum was not the only headwind faced in the period, adds chief executive Robert Walters, who founded the company.

‘There were certainly other factors involved in our 2% growth figure in the UK,’ says Walters in an interview with Shares.

‘It was quite a bad quarter in terms of what is happening. Yes, there is Brexit, there’s also a freeze on banking recruitment which started in the fourth quarter of 2015 and that has carried on.

‘But March was slightly improved year-on-year.

‘We also had banking bonuses deferred by one month, Easter was early and that impacts temporary worker numbers as well as hiring decisions in permanent placements.

‘So all-in-all it could not have been a worse set of circumstances in the first quarter and the fact we held it steady... it seems daft to say but it was good under those conditions.’

First quarter performance across the group, of which the UK contributes around one-third of NFI, was 8% in constant currencies, down from 10% in the prior three months.

Asia-Pacific, Walters’ largest geography which includes its market-leading Japanese operation, delivered NFI gains of 13% at constant currency.

Europe was also strong, delivering 12% NFI growth in constant currencies.

Other International, Walters’ smallest unit, declined 13% in NFI terms because of poor performance in Brazil, South Africa and Dubai.

Fee earner headcount across the group increased by 29, or 1%, from the year-end to 2,945

Chief financial officer Alan Bannatyne said headcount growth in 2016 would be roughly around 10% given current growth rates in Asia and Europe.

Shares in Walters trade 3.7% higher at 329p.

Issue Date: 13 Apr 2016