Robert Walters shares drop on steeper fee decline in Q2

(Sharecast News) - Shares in Robert Walters sank on Tuesday after the recruiter reported a steeper decline in net fees over the second quarter, though the company did return to growth in the final month of the trading period.

The group reported a 2% fall in net fees at constant currency to �69.4m over the three months to 30 June, following a 3% decrease in the first quarter. Net fees did, however, grow by 1% year-on-year in June alone.

Over the second quarter, the smaller recruitment outsourcing business saw a 9% increase in fees, down from 13% growth in the first quarter, while declines in specialist recruitment worsened to -7% from -5%. Specialist recruitment accounts for 81% of group net fees.

Robert Walters' largest market, Asia Pacific (42% of group net fees), experienced a 3% decline in the second quarter following 4% growth in the first, while the Europe division (27% of group net fees) saw a 16% drop from last year, in line with the first quarter.

One bright spot was the UK (19% of group net fees), where growth accelerated to 6% from 1% three months earlier, though the Rest of World division (9% of group net fees) saw growth slow to just 8% from 23% previously.

"First half trading was in-line with the board's expectations - an encouraging performance against the backdrop of heightened geopolitical uncertainty," said chief executive Toby Fowlston.

"We begin the second half with good trading momentum in a number of our markets, accelerating progress on the cost base and improving fee earner productivity. Whilst mindful that hiring markets across the globe continue to move at different speeds, we remain focused on delivering the performance we expect for the year."

The stock, which received a big boost on Monday from positive readacross from sector peer PageGroup, which beat estimates with its profit guidance, retreated sharply after the update, dropping around 8% to 96.8p by 0922 BST.

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