Robert Walters returns to net fee growth in Q3

(Sharecast News) - Recruiter Robert Walters reported a return to net fee growth in the third quarter on Wednesday as it hailed another strong performance in the UK and said full-year results would be "at least" in line with market expectations.

In the quarter ended 30 September, group net fees ticked up 1% to £69.7m, which was an improvement on the 3% decline for the first half. Net fees in the UK grew 10% to £13.2m, while Asia Pacific and Europe saw falls of 1% and 7% to £32.8m and £17.7m, respectively. Rest of World net fees rose 6% to £6m.

In specialist recruitment - which encompasses permanent and temporary recruitment, executive search and interim management - UK net fees were up 14%, driven by a continued good performance in the permanent segment.

Chief executive Toby Fowlston said: "We delivered a good trading performance in the third quarter - made possible by great contributions from all our people. Among our largest specialist recruitment markets, the UK delivered another strong performance, while Japan, Spain and New Zealand were also up on the prior year. Over half of our specialist recruitment portfolio grew on the prior year and recruitment outsourcing also delivered another very good quarter.

"We are seeing continued evidence that the changes we are making within the business are having a positive impact, from strengthening leadership in key markets to improving net fee productivity. We also have much better data visibility across the Group, allowing us to identify opportunities and address areas of underperformance more quickly.

"Whilst global macroeconomic and geopolitical conditions remain volatile, we remain focused on delivering our growth, cost and cash actions. There is more to do, but our momentum means we expect the financial result for the full year to be at least in line with current market expectations."

At 1410 BST, the shares were 5.6% higher at 137.48p.

Russ Mould, investment director at AJ Bell, said: "Robert Walters has shown that all is not lost in the recruitment industry. It has reported decent net fee growth in the UK, driven by success in placing candidates into permanent roles.

"This is interesting because other recruiters such as Hays have talked about struggles in that part of the market, no doubt because companies aren't feeling overly optimistic about the future and are being cautious about investing in their business with extra permanent staff. Many companies continue to seek flexibility with their labour force, preferring to take on contractors rather than commit to permanent employees.

"Temporary job placements in Japan and New Zealand were another strong spot for Robert Walters in its third quarter, with success also seen in places like Spain and pockets of the Americas. These helped to prop up the business which is important given weakness elsewhere. The Middle East has been problematic for the group, and France and the Netherlands have been disappointments. It just goes to show the importance of recruiters having geographically diverse operations."

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