Robert Walters expecting to break even in 2024
By Michele Maatouk
Date: Tuesday 14 Jan 2025
(Sharecast News) - Robert Walters said on Tuesday that it expects only a break-even result for the year at the pre-tax profit level as trading conditions remained challenging in the fourth quarter.
In a trading update in October last year, the recruiter had said it was still aiming for a profitable full-year outcome despite tough market conditions.
In an update for the quarter to the end of December on Tuesday, it said group net fee income fell 14% to £75.5m. This was consistent with the year as a whole. While fees were slightly weaker than expected, activity levels were broadly stable in most regions in October and November versus the third quarter, it said.
Net fee income in specialist professional recruitment was 14% lower at £62.1m, with permanent down 18% and temporary down 10%. Recruitment outsourcing net fee income declined 14% to £13.4m.
By region, net fee income fell 11% in Asia-Pacific, 17% in Europe, 15% in the UK and 19% in Rest of World.
Robert Walters said the balance sheet "remains strong", with net cash of around £53m as at 31 December 2024, versus £50m at the end of September.
Chief executive Toby Fowlston said: "As seen throughout the year, 2024 closed with conditions in global hiring markets remaining challenging - marked by muted client and candidate confidence. Fourth quarter fee income was slightly weaker than expected, and in addition further actions were taken on the cost base. As a result, we now expect a broadly breakeven position at the profit before tax level for the full year.
"Notwithstanding the market backdrop, we remain focused on our initiatives to strengthen the business. Consistent with the disciplined entrepreneurialism strategy set out at last year's Capital Markets Event, we are rigorously focused on improving fee earner productivity across our markets, driving efficiencies in our front and back-office teams, optimising our office network and leveraging more co-ordinated procurement."
At 1245 GMT, the shares were up 0.3% at 306p.
Russ Mould, investment director at AJ Bell, said: "Shares in recruitment specialist Robert Walters were already trading close to their Covid-inspired lows of five years ago, so the shares have managed to shrug off a weak fourth-quarter update, thanks in part to how a £53 million net cash pile on the balance sheet represents a quarter of the company's stock market valuation.
"That provides some degree of downside protection and ballast, while chief executive Toby Fowlston's forecast of a broadly break-even year in 2024 at the pre-tax level compares to a consensus forecast of a £2.5 million profit, so the downgrade to forecasts is not a big one.
"Nor is it a great surprise to investors that 2024 was a tough year that ended amid great uncertainty, especially as recruitment sector peer PageGroup steered expectations to the low end of the forecast profit range for the year on Monday."
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