Robert Walters FY profit to miss market views, shares tumble

Robert Walters tumbled on Wednesday after the recruiter warned that full-year profit was set to be "significantly" lower than current market expectations, as it reported a drop in net fee income.

The firm said that in the first two months of the second quarter, net fee income was down by 10% year-on-year.

Robert Walters said that reduced levels of candidate confidence and lengthening time to hire - which were signalled in the second half of last year - are not yet showing sustained improvement.

"Conversely, recruitment market fundamentals such as job flow, candidate shortages and wage inflation remain solid, suggesting that when market confidence recovers there will likely be a return to meaningful growth," it said.

"The group has invested significantly in both headcount and its global infrastructure over the last two years, and whilst appropriate cost reduction is central to the management of the current short-term pressure, we will protect our strategic core to ensure we can fully benefit from future growth opportunities as they arise."

At 0835 BST, the shares were down 14% at 402p.

Victoria Scholar, head of investment at Interactive Investor, said: "Just this week, the latest UK labour market statistics pointed to a drop in job vacancies which fell for the eleventh consecutive period. With above-target inflation, sluggish growth, and rising interest rates, businesses have become increasingly cautious about their hiring plans.

"A lot of companies are carrying out either hiring freezes or job cuts to combat the macroeconomic uncertainty, which has been weighing on the recruitment industry, laid bare by the disappointing outlook for Robert Walters."