Half-year Report

26 July 2017

ROBERT WALTERS PLC

(the "Company", or the "Group")

Half-yearly financial results for the six months ended 30 June 2017

RECORD PROFITS

Robert Walters plc (LSE: RWA), the leading international recruitment group, today announces its half-yearly financial results for the six months ended 30 June 2017.

Financial and Operational Highlights

* Constant currency is calculated by applying prior period exchange rates to local currency results for the current and prior periods.

§ Record first half performance with operating profit increasing by 62% (44%*) to £16.2m (2016: £10.1m) and profit before tax increasing by 39% (46%*) to £15.6m (2016: £11.2m).

§ 71% of the Group's net fee income derived from our international businesses.

§ All regions delivered increases in both net fee income and operating profit.

§ Asia Pacific net fee income up 25% (10%*) to £67.4m (£59.3m*) (2016: £54.0m) and operating profit up 22% (3%*) to £7.7m (£6.5m*) (2016: £6.4m).

§ Strong performance in Asia across both established and emerging markets with Japan, Korea, Hong Kong, Indonesia, Thailand and Vietnam all delivering record performances.

§ Good first half in Australia with growth strongest in Queensland and South Australia. Recent sponsorship of the British & Irish Lions further cemented our market-leading position in New Zealand.

§ Resource Solutions won a number of new client deals across the region; requiring significant investment in upfront implementation costs.

§ UK net fee income up 20% to £48.3m (2016: £40.2m) producing a substantial uplift in operating profit to £4.0m (2016: £1.8m).

§ Activity levels strongest in London in financial services, commerce finance and technology.

§ Broad-based growth across the UK regions with Manchester, Milton Keynes and St. Albans the standout performers.

§ Resource Solutions performed strongly winning several new client deals and continued to benefit from the investment made in 2016.

§ Europe net fee income up 34% (22%*) to £38.0m (£34.4m*) (2016: £28.2m) and operating profit more than doubled to £4.4m (£3.7m*) (2016: £2.1m).

§ Strong growth across permanent, contract and interim recruitment.

§ France, Belgium, the Netherlands and Spain all delivered record performances with the latter increasing net fee income in excess of 70%.

§ Other International (North America, Brazil, the Middle East and South Africa) net fee income up 93% (67%*) to £10.9m (£9.4m*) (2016: £5.6m) producing an operating profit of £0.1m (£0.3m*) (2016: operating loss of £0.2m).

§ Group headcount increased by 20% to 3,495 (30 June 2016: 2,902).

§ Interim dividend increased by 20% to 2.75p per share (30 June 2016: 2.30p).

§ 2.1m shares have been purchased and cancelled at an average price of £3.79 for £8.0m. A further 0.4m shares were purchased at an average price of £4.03 for £1.7m through the Group's Employee Benefit Trust.

§ Strong balance sheet with net cash of £18.4m as at 30 June 2017 (30 June 2016: £10.2m).

Robert Walters, Chief Executive, said:

"The Group delivered a record performance in the first half increasing profit before tax by 39% (46%*) year-on-year. We continue to benefit from both our international footprint which now spans 28 countries, including many of the world's fastest growing and emerging recruitment markets, and the breadth of recruitment solutions we provide to our clients.

"We enter the second half of the year with confidence that the Group's platform for growth is strong and that we are well positioned to further capitalise on market opportunities as they arise."

The Company will be holding a presentation for analysts at 10.30am today at Newgate Communications, Sky Light City Tower, 50 Basinghall Street, London EC2V 5DE.

The Company will publish an interim management statement for the third quarter ending 30 September 2017 on 10 October 2017.

Further information

About Robert Walters

Robert Walters is a market-leading international specialist professional recruitment group with over 3,400 staff spanning 28 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups. The Group's outsourcing division, Resource Solutions is a market leader in recruitment process outsourcing and managed services.

www.robertwalters.com

Forward looking statements

This announcement contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them at the time of their approval of this announcement and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Robert Walters plc

Half-yearly financial results for the six months ended 30 June 2017

Interim Management Report

The Group delivered a record performance in the first half benefiting from both our international footprint which now spans 28 countries, including many of the world's fastest growing and emerging recruitment markets, and the breadth of recruitment solutions we provide to our clients.

Revenue was up 25% (17%*) to £562.7m (£529.4m*) (2016: £451.4m) and gross profit (net fee income) increased by 28% (18%*) to £164.5m (£151.4m*) (2016: £128.1m). Operating profit increased 62% (44%*) to £16.2m (£14.5m*) (2016: £10.1m) and profit before taxation increased by 39% (46%*) to £15.6m (£13.9m*) (2016: £11.2m). The Group has maintained a strong balance sheet with net cash of £18.4m as at 30 June 2017 (31 December 2016: £22.5m).

Permanent recruitment currently represents 69% (2016: 69%) of the Group's recruitment net fee income. Group headcount now stands at 3,495 (30 June 2016: 2,902).

Asia Pacific (41% of net fee income)

Revenue was £185.3m (2016: £154.9m) and net fee income increased by 25% (10%*) to £67.4m (£59.3m*) (2016: £54.0m) delivering a 22% (3%*) increase in operating profit to £7.7m (£6.5m*) (2016: £6.4m).

In Asia, performance was strong across both our established and emerging markets. Japan, the region's largest market had a record first half as did our business in Hong Kong whilst Malaysia also delivered an excellent performance across both Kuala Lumpur and our newer office in Penang. Our emerging market footprint in Asia covering Indonesia, Korea, Taiwan, Thailand, Vietnam and most recently, the Philippines, is unrivalled and it is very pleasing to report that all markets continued to deliver year-on-year operating profit growth thus providing the Group with a strong platform for the future. Elsewhere in the region, Singapore and Mainland China delivered robust performances against a backdrop of more challenging market conditions.

Australia had a good first half with growth strongest in Queensland and South Australia whilst New Zealand delivered strong double-digit growth in both net fee income and operating profit. The Group's recent sponsorship of the British & Irish Lions tour of New Zealand has further enabled us to cement our leadership position in this market.

Resource Solutions continued to grow its client portfolio across the region during the period. Significant upfront investment has been required to implement these new wins.

United Kingdom (29% of net fee income)

Revenue in the UK was £278.1m (2016: £220.6m) and net fee income increased by 20% to £48.3m (2016: £40.2m) delivering a more than doubling of operating profit to £4.0m (2016: £1.8m).

Whilst the UK has had a mixed and volatile economic backdrop for the first six months of the year, we were still able to deliver good growth across several recruitment disciplines and locations. In London, we saw strong growth in the financial services space, whilst both our commerce finance and technology teams also performed well. Regional growth was broad-based with Manchester, St. Albans and Milton Keynes the standout performers.

Resource Solutions continued to perform strongly, winning a number of new client deals and successfully expanding its service range within existing clients.

Europe (23% of net fee income)

Revenue was £88.4m (2016: £69.3m) and net fee income increased by 34% (22%*) to £38.0m (£34.4m*) (2016: £28.2m) delivering a substantial increase in operating profit to £4.4m (£3.7m*) (2016: £2.1m).

Europe delivered an excellent first half performance and, very encouragingly, activity was strong across permanent, contract and interim recruitment.

France, the region's largest business, the Netherlands, Belgium and Spain all delivered record performances with the latter increasing net fee income by more than 70% year-on-year. Germany was also a strong performer, increasing net fee income in excess of 30%, whilst Ireland delivered double-digit growth.

Other International (7% of net fee income)

Other International comprises North America, Brazil, the Middle East and South Africa. Revenue was £11.0m (2016: £6.7m), net fee income was up 93% (67%*) to £10.9m (£9.4m*) (2016: £5.6m) producing an operating profit of £0.1m (£0.3m*) (2016: operating loss of £0.2m).

Market conditions across this diverse set of territories was mixed. In Brazil and South Africa where macro-economic conditions are arguably most challenging, we bucked the market trend delivering net fee income increases of 59% and 16% respectively. Across North America, activity levels in New York were impacted by the tightening of the financial services market, in San Francisco demand in the digital and technology space remained strong whilst our new office in Toronto has shown promising early signs.

Cash flow

The Group maintained a strong net cash position of £18.4m as at 30 June 2017 (31 December 2016: £22.5m). Working capital in the period has increased by £3.7m resulting in £17.5m cash generated from operating activities. Notable cash outflows included a dividend of £4.2m, £3.4m of tax payments and capital expenditure of £4.0m. During the period, 2.1m shares have been purchased and cancelled at an average price of £3.79 for £8.0m. A further 0.4m shares were purchased at an average price of £4.03 for £1.7m through the Group's Employee Benefit Trust.

Dividend

The interim dividend will be increased by 20% to 2.75p per share (2016: 2.30p) and will be paid on 13 October 2017 to those shareholders on the Company's register as at 1 September 2017.

Treasury management, currency risk and other principal risks and uncertainties affecting the business

The Group does not have material transactional exposures although is exposed to translation differences on the profits and cash flows generated in its overseas operations. Overseas currency balances that are surplus to local working capital requirements are converted on a regular basis to Pounds Sterling. The main functional currencies of the Group's operating divisions are Pounds Sterling, the Euro, the Australian Dollar and the Japanese Yen.

The other principal risks and uncertainties affecting the Group's business activities remain those detailed within the Principal Risks and Uncertainties section of the Annual Report and Accounts for the year ended 31 December 2016, namely the economic environment, business model, people management, brand and reputation, laws and regulation and technology. The Board does not foresee a material change in respect of these factors for the remainder of the year.

Outlook

With full-year profit forecasts having been upgraded only a few weeks ago in response to our second quarter trading update, current trading is in line with current market expectations.

We enter the second half of the year with confidence that the Group's platform for growth is strong and that we are well positioned to further capitalise on market opportunities as they arise.

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

CONDENSED CONSOLIDATED INCOME STATEMENT

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENSE

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

CONDENSED CONSOLIDATED BALANCE SHEET

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

¹An immaterial adjustment of £1.25 million has been made to increase brought forward retained earnings. £0.195 million of this adjustment is related to the income statement for the 2015 financial year. The adjustment was made in order to recognise two changes in the current year in the application of the revenue recognition policy in part of the business (the impact on the equivalent balance sheet and income statement captions is similarly immaterial).

The first change relates to permanent placements. These were previously recognised by this part of the business when a candidate started a position. However, given the maturity of the market for this part of the business, the Group considers that it is more appropriate to recognise this revenue when the candidate accepts a position and the start date is determined, in line with the rest of the Group, as this reflects the underlying agreements. Provision is made for candidates who fail to start employment after accepting the offer and is based on the historic rate of "back-outs". The adjustment has not been treated as a change in accounting policy, under IAS 8, as it is not material.

The second change relates to temporary placements. The adjustment made is to recognise the impact of timesheets received after the year end date, where work was completed during the 2016 financial year. The adjustment has also not been treated as a change in accounting policy, under IAS 8, as it is not material.

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS

1. Statement of accounting policies 

Basis of preparation

The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements has been prepared in accordance with the International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

The accounting policies applied by the Group are as set out in detail in the Annual Report and Accounts for the year ended 31 December 2016.

The Group was profitable for the period and has considerable financial resources, including £18.4m of net cash at 30 June 2017, together with a diverse range of clients and suppliers across different geographic locations and sectors. As a consequence, the Directors believe the Group is well placed to manage its business risks successfully.

After making enquiries, the Directors have formed a judgement, at the time of approving the half-yearly financial results, that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. For this reason, the Directors continue to adopt the going concern basis in preparing the condensed set of financial statements.

2. Financial information

The financial information on pages 5 to 13 was formally approved by the Board of Directors on 25 July 2017. The financial information set out in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

Statutory accounts prepared under IFRSs for the year ended 31 December 2016 for Robert Walters plc have been delivered to the Registrar of Companies. The auditor's report on these accounts was not qualified, did not draw attention to any matters by way of emphasis and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

The financial information in respect of the period ended 30 June 2017 is unaudited but has been reviewed by the Company's auditor. Their report is attached on page 14. The financial information in respect of the period ended 30 June 2016 is also unaudited.

3. Currency conversion

The presentational currency of the Group is Pounds Sterling and the condensed set of financial statements has been prepared on this basis. The main functional currencies of the Group's operating divisions are Pounds Sterling, the Euro, the Australian Dollar and the Japanese Yen.

The condensed consolidated income statement for the period ended 30 June 2017 has been prepared using, among other currencies, the average exchange rate of €1.1625 to the Pound (period ended 30 June 2016: €1.2841; year ended 31 December 2016: €1.2181); ¥141.3893 to the Pound (30 June 2016: ¥160.0445; 31 December 2016: ¥146.7317) and AU$1.6681 to the Pound (30 June 2016: AU$1.9547; 31 December 2016: AU$1.8144).

The condensed consolidated balance sheet as at 30 June 2017 has been prepared using the exchange rates on that day of €1.1381 to the Pound (30 June 2016: €1.2058; 31 December 2016: €1.1722); ¥145.7482 to the Pound (30 June 2016: ¥137.7140; 31 December 2016: ¥144.2890) and AU$1.6914 to the Pound (30 June 2016: AU$1.7991; 31 December 2016: AU$1.7118).

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

*For the purposes of segmental analysis, unallocated corporate assets and liabilities include cash, bank loans, corporation and deferred tax balances.

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

The tax charge is based on the expected annual tax rate of 28.5% (2016: 29.3%) on profit before taxation.

The proposed interim dividend was approved by the Board on 25 July 2017 and has not been included as a liability at 30 June 2017.

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

9. Bank loans

In January 2017, the Group renewed and extended to four years its committed financing facility of £45.0m, which expires in December 2020. At 30 June 2017, £30.3m (2016: £25.2m) was drawn down under this facility.

The Group has a short-term facility of Renminbi 25m (£2.8m) of which Renminbi 5m (£0.6m) was drawn down as at 30 June 2017. The loan is secured against cash deposits in Hong Kong.

10. Related party transactions

During the first six months of the year, there were related party transactions totalling £77,000 (2016: £26,000) with Tay Associates Limited, a related party through a Director of Robert Walters plc.

There were no outstanding balances as at 30 June 2017.

All transactions were undertaken on an arms-length basis.

11. Registered office

The Company's registered office is located at 11 Slingsby Place, St Martin's Courtyard, London, WC2E 9AB.

RESPONSIBILITY STATEMENT 

We confirm to the best of our knowledge:

a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

b) the Interim Management Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) the Interim Management Report and note 10 includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

By order of the Board,

Alan Bannatyne

Chief Financial Officer

25 July 2017

ROBERT WALTERS PLC

Half-yearly Financial Results 2017

INDEPENDENT REVIEW REPORT TO ROBERT WALTERS PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the Condensed Consolidated Income Statement, the Condensed Consolidated Statement of Comprehensive Income and Expense, the Condensed Consolidated Balance Sheet, the Condensed Consolidated Cash Flow Statement, the Condensed Consolidated Statement of Changes in Equity, and related notes 1 to 11. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an Independent Review Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this R0eport, or for the conclusions we have formed.

Directors' responsibilities

The Half-Yearly Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Half-Yearly Financial Report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Half-Yearly Financial Report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Statutory Auditor

London, United Kingdom

25 July 2017