Robert Walters delivers in-line 2023, but outlook cautious

Annual results from Robert Walters were more or less as expected on Thursday after a detailed trading update after year-end, with the recruitment company reporting a 10% drop in net fee income and sharp decline in profits.

Net fee income totalled £386.8m for 2023, down from £428.2m in 2022, which the company blamed on tough comparatives with the prior record year, along with softening macro conditions in many markets.

Temp fee income rose 2% at constant currency, and now accounts for 27% of total fees, compared with 24% the year before, while permanent fee income was down 10% which Robert Walters said was due to companies wanting "greater flexibility in their talent needs". Outsourcing fee income also fell 15% reflecting account losses as a greater focus was applied to driving required financial returns, the company said.

Meanwhile, pre-tax profit slumped by 63% to £20.8m, which was a result of the operating leverage impact of lower net fee income.

The company, which cut its headcount by 9% over the year to 3,980, ended 2023 with net cash of £79.9m, down from £97.1m at the end of 2022 after returning £26m to shareholders during the year in ordinary dividends and share buybacks.

The total dividend was held stable at 23.5p per share.

"In what was a challenging year right across our industry, I'm very proud of the contributions of our people over the last 12 months," said chief executive Toby Fowlston.

Looking ahead, Fowlston said trading conditions have remained muted since the start of 2024 – "albeit with some isolated pockets of growth". He said: "We have begun to undertake initiatives to significantly strengthen our business, which we expect to gain further traction over the medium-term and which we will set out in more detail at a Capital Markets Day in the autumn."

Analysts at Numis Securities said, overall, the results and outlook statement from the company was consistent with that provided at the fourth-quarter trading update in January

"Job registrations and interviews have improved, but with candidate confidence remaining low the time to hire remains extended. March is the key month for activity in Q1, and a clearer outlook will be available at that point," Numis said.

The stock was up nearly 2% at 421p by 1043 GMT.