UK – Robert Walters H1 revenue rises 16% in constant currency as earnings show improvement


July 28, 2022

Robert Walters (RWA: LSE), the global recruitment firm, today announced revenue for the six months ended 30 June 2022 of £538.6 million, up 16% in constant currency, compared to the previous year.

The group said it has seen severe talent shortages and wage inflation across all geographies and specialist professional disciplines. Additionally, it has seen fierce competition for talent, with demand continuing to outstrip supply.

Recruitment activity levels were high across all forms of recruiting, including permanent, contract, interim and recruitment process outsourcing, he added.

million £) S1 2022 H1 2021 % change % change (constant currency)
Revenue 538.6 468.2 15% 16%
Gross profit (net commission income) 210.5 166.2 27% 27%
Operating result 27.7 24.1 15% 17%
Profit before tax 26.4 22.1 19% 22%

Robert Walters, Chief Executive, said: “The group delivered a record performance in the first half, with all regions increasing both net commission income and operating profit. An acute shortage of professionals coupled with rising salary inflation has led to a significant increase in fierce competition to attract talent across all of the Group’s geographies and specialist disciplines.

“We have continued to invest in additional headcount in the first half to ensure that we are able to further capitalize on the current demand for talent that exists across the world,” added Walters.

Revenue by geography

(in millions of £) S1 2022 H1 2021 % change
Asia Pacific 240.1 194.0 23.7%
UK 141.2 159.2 -11.3%
Europe 136.6 100.8 35.5%
Other internationals 20.7 14.2 45.7%

Unless otherwise stated, all growth rates below are in constant currency.

All markets in the Asia-Pacific region recorded double-digit growth in net fee income year-over-year. Net commission income in the region increased by 27%. In Japan, the group’s largest and most profitable business, net commission income increased 25% year-on-year, driven by continued demand for bilingual professionals, digital transformation and the recovery of the sectors affected by the Covid.

Elsewhere in Asia, Korea, Malaysia and Thailand all posted record performances in terms of net commission income and operating profit. Activity levels in mainland China were, however, negatively impacted by the prolonged period of Covid-imposed lockdown, with operating profit remaining stable year-on-year.

Skills shortages remain particularly acute in Australia and New Zealand, a situation exacerbated by the reopening of international borders and the negative net migration that exists. While permanent recruiting activity remained strong, contract recruiting activity increased during the period as the shortage of permanent talent began to be felt. Net commission income in Australia increased 17% year-on-year and in New Zealand net commission income increased 36% year-on-year.

Resource Solutions, the recruitment process outsourcing business, performed strongly in the first half, with a number of new clients recently won. The company has a wide range of customers spanning multiple markets in the Asia-Pacific region and is well positioned for long-term growth.

In the UK, recruitment volumes in London and the regions accelerated in the first half of the year, with the number of actual jobs increasing month on month. Wage inflation has further fueled the confidence of candidates to change roles with particularly strong levels of activity in the trade finance, banking, law and technology disciplines. Net commissions increased by 8% on a reported basis.

Financial services recruitment in the UK particularly rebounded in the second quarter, the group noted. To counter the bonuses offered to movers, many organizations have been forced to implement blanket salary increases in the battle to retain existing staff.

Resource Solutions UK net commission income was down 8% year-on-year. Recruitment activity levels improved over the period, but placement rates were affected by the shortage of applicants and delays in the time required to onboard new hires. A number of new contracts and customer extensions were secured during the first half of the year in various sectors, including mining, healthcare, technology and insurance, which will generate returns in the second half and beyond.

Net commission income in the Europe region increased by 39%. In France, Europe’s largest business, net commissions increased 26% year-on-year as permanent and interim hires continued to rebound well.

The group’s operations in the Netherlands and Belgium generated record levels of net commission income, consolidating the group’s market leadership position in this region. Spain also produced record net commission income and during the period. The business in Germany built on its strong performance in 2021 and delivered a record first half performance in terms of net fee income and operating profit.

The Other International region includes the Americas, the Middle East and South Africa. Net commissions increased by 46% on a reported basis and by 38% at constant exchange rates. The group invested significantly during the period to expand into many newer ventures across the Americas. Chile and Mexico delivered record performances in terms of both net commission income and operating income.

In the United States, net commission income, although up 4% year-on-year, was impacted by large-scale layoffs in the technology start-up sector. Business in the Middle East continued to perform very well, helped by the post-Covid normalization of economies in the region, high oil prices and the breadth and strength of the Robert Walters brand.

“During the period, we continued to invest in business growth to capitalize on acute talent shortages that exist across both our international footprint and our range of specialist disciplines,” the company said. “We have increased our headcount by 16% since the start of the year and also opened our first office in Italy, in Milan, and we are delighted with the opportunity to develop a thriving business in one of the world’s largest economies. from Europe.

Walters said: “Looking ahead, we have yet to see signs of a slowdown in labor market activity despite the volatile macro backdrop and inflationary pressure plaguing global markets. remain in line with recently upgraded market expectations.”

The Company will issue a business update for the third quarter ending September 30, 2022 on October 11, 2022.

Robert Walters shares last traded at £536.60, up 3.19% on the day and 20.65% above the 52-week low of £444.75 set on the 20th June 2022. The company has a market capitalization of £399.73 million.

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