8th Oct 2019 09:35
(Alliance News) - Recruitment firm Robert Walters PLC said Tuesday net fee income growth slowed to 2% at constant currency in the third quarter, as international growth offset a weak UK market.
Shares in Robert Walters were 6.7% lower at 457.32 pence in London on Tuesday.
For the three months ended September, net fee income rose 4.3% to GBP105.6 million from GBP101.2 million a year prior. In constant currency, net fee income rose 2%.
In the first half, Robert Walters reported net fee income jumped 8.6% on a reported and 7% on a constant currency basis after all of its regions delivered growth.
In the third quarter, however, net fee income shrank 11% within its home UK market after client and job candidate confidence weakened during ongoing Brexit uncertainty. Certain sectors have proven more resilient in the UK, including IT.
Elsewhere, growth remained robust in the third quarter despite "significant political uncertainty" in some of its core markets. As well as Brexit in the UK, the ongoing trade war between the US and China as well as the Hong Kong protests were hindering performance.
At its largest Asia Pacific unit, net fee income grew 9% on a reported and 3% on a constant currency basis to GBP44.8 million. Strongest performances were delivered in Japan, Malaysia, Vietnam and New Zealand - all of which grew net fee income more than 15%.
Strongest growth, meanwhile, was from Other International, where net fee income grew 18% at reported and 12% at constant currency. Europe also experienced 10% reported growth and 9% constant currency net fee income helped by "good" growth in Robert Walters's large French business.
Net cash levels at the end of the period doubled to GBP81.6 million from GBP41.3 million the year prior.
"The group delivered net fee income growth of 2% (4% actual) during the third quarter as trading conditions softened across a number of markets," Chief Executive Officer Robert Walters said. "The ongoing uncertainty surrounding Brexit, the US-China trade tariff standoff and Hong Kong protests, coupled with the significant impact of the gilets-jaunes protests experienced earlier this year have combined to create a unique set of cumulative headwinds.
"As a result of these macro uncertainties, the group now anticipates delivering annual profits in line with the prior year," Walters added. "Whilst visibility is limited, the group's international footprint and diverse blend of revenue streams covering permanent, contract, interim and recruitment process outsourcing ensures we are well positioned to respond to any market opportunities as and when they arise whilst also having the agility to closely manage our cost base."
The firm now expects 2019 annual pretax profit to be "in line" with the GBP49.1 million reported the year prior. Robert Walters will release fourth-quarter trading figures on January 9.
By Ahren Lester; [email protected]
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