Lockdown causes fee income to tumble at Robert Walters
By Abigail Townsend
Date: Thursday 09 Jul 2020
(Sharecast News) - Robert Walters reported a slump in fee income on Thursday after the Covid-19 pandemic and subsequent lockdown weighed heavily on the recruiter.
Net fee income in the three months to 30 June was £71.1m, a slide of 33%, or 34% on on a constant currency basis, compared to the same period a year earlier. All global regions reported falls in net income of more than 30%.
For the six months to 30 June, group net fee income fell 34%.
Chief executive Robert Walters said: "As I indicated in the first quarter, we expected the second quarter to be more challenging as periods of prolonged lockdown were instigated across the globe.
"Given the fluid and volatile nature of the global pandemic, including the inherent risk of infection spikes and localised lockdowns, our forward visability remains limited. That said, current trading is in line with market consensus for the full year."
However, Walters added that the company - which specialises in professional and white collar placements - had a strong balance sheet and cash position and a £60m committed loan facility. Net cash as at 30 June stood at £119.3m.
The group also cut costs during the quarter, with the headcount decreasing 5% to 3,734.
"I remain confident that we will emerge from this period of uncertainty with increased market share and very well placed to benefit from operational gearing to quickly take advantage of the inevitable market opportunities," said Walters.
As at 1245 BST, the shares were ahead 1% at 400.0p.
Russ Mould, investment director at AJ Bell, said: "Management believes the company is on track to meet forecasts for the year, especially as most of the group's offices are now open again.
"The shares are up because the figures are no worse than a low set of expectations, and [it has a net cash position on its balance sheet. Unlike a lot of other companies, it was therefore prepared for tougher times, in the knowledge that the job market can turn very quickly."
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