10th Oct 2023 15:21
(Alliance News) - Robert Walters PLC on Tuesday hailed a "resilient" third-quarter, though the numbers suggested just how tough the market is for recruitment companies.
The London-based firm said net fee income totalled GBP93.4 million in the third quarter ended September 30, down 17% from GBP112.0 million a year before.
The company said that macroeconomic conditions remained "uncertain" during the quarter but noted that client and candidate confidence levels were unchanged from the second quarter.
Contract and interim recruitment outperformed permanent recruitment in the recent quarter, now representing a third of net fee income.
Activity levels were strongest across the UK regions, but Robert Walters emphasised the impact of high inflation and interest rates, affecting confidence in the technology and financial services sectors.
Challenges remain in the US recruitment market, the company said, but it reported growth in the Middle East, South Africa and in Latin America, with net fee income in Mexico jumping by 78% in the third quarter annually.
Looking ahead, Chief Executive Toby Fowlston said the firm is well-positioned for when the market recovers. Robert Walters left full-year expectations unchanged.
AJ Bell analyst Russ Mould commented: "It's a tough time to be a recruitment consultant given so many firms are unwilling to commit to hiring amid the uncertain economic outlook. Robert Walters declared its performance to be 'resilient' but the numbers tell a different story. A 17% decline in third quarter gross profit suggests life is tough for anyone trying to earn their crust placing individuals into vacant roles."
Liberum analyst Sanjay Vidyarthi expects to see little change to consensus expectations for the stock, despite a tricky third-quarter.
The analyst added: "Client and candidate confidence are unchanged across markets. Management's expectations for the FY are unchanged."
Vidyarthi added that pretax profit consensus ranges from GBP19 million to GBP26 million, with Liberum itself sitting at the top end.
"Shares are cheap and geared into the cycle, but not quite at the inflection point yet," Vidyarthi added.
The stock traded 3.5% higher at 367.50 pence each in London on Tuesday afternoon.
By Eric Cunha, Alliance News news editor
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