LONDON (ShareCast) - (Sharecast News) - Shares in Robert Walters slid in morning trading on Tuesday, after the recruiter warned that the coronavirus outbreak was likely to hit profits.
The firm said it had already faced global political and economic turbulence throughout 2019, and coronavirus now meant this uncertainly would continue in the current year.

Chief executive Robert Walters said: "The global recruitment market remains unpredictable at present, with the coronavirus outbreak - which is likely to negatively impact full-year profit expectations - adding a further layer of uncertainty."

Shares fell sharply as trading opened, initially hitting a low of 469p by 0830 GMT. They recovered slightly as the session wore on, however, and by 1000 GMT were down 9% at 484p.

Revenues for the year to 31 December came in at ?1.22bn, down 2% on a constant currency basis. Net fee income edged 2% higher, however, on the same basis, to a record ?405.5m. Operating profits were 1% higher at ?51.2m, while pre-tax profits slid 6% to ?47.4m.

Net fee income in the UK fell 9%, which Robert Walters attributed to both candidate and client confidence being "hit hard, particularly in the second half of the year, by Brexit-related uncertainty and the general election".

But outside of the UK, all regions saw an improvement in net fee income, with Asia Pacific ahead 4% and mainland Europe up 9%. Around 76% of group net fee income comes from international operations.

"2019 was a year of unprecedented political and economic turbulence, fuelled by the US-China trade war, Brexit, protests in Hong Kong and gilet jaunes disruption in France," said Walters.

Liberum analyst Sanjay Vidyarthi, said the 2019 numbers were in line with expectations, adding: "The company has not quantified the possible impact [of the coronavirus outbreak], but does expect a negative impact. At this stage, we expect consensus may settle around ?42m to ?44m full-year pre-tax profit (post IFRS 16), around a ?2m impact, so around a 15% cut."

Liberum has a 'buy' recommendation on Robert Walters with a price target of 655p.

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