Robert Walters reports continued weakness in third quarter

Robert Walters reported a 12% decline in third-quarter net fee income on Tuesday, as challenging market conditions persisted across all of its regions.

The London-listed recruitment specialist said group net fee income for the quarter stood at £79.9m, with both permanent and temporary recruitment fees down by 12%.

Recruitment outsourcing also faced pressure, with net fee income falling 14%.

Confidence levels among clients and candidates showed no significant signs of recovery, leading to a 13% decline in September alone.

Regionally, the Asia-Pacific division saw a 12% drop in net fee income, driven by weakness in Australia and New Zealand, where public sector hiring remained subdued.

However, Japan and southeast Asia showed more resilient performances, with modest growth in those markets.

In Europe, net fee income fell 13%, with countries like France and Belgium seeing softer demand, while the Netherlands and Germany fared better.

The UK market experienced a steeper decline, with net fee income down 19% as businesses delayed hiring decisions ahead of potential changes to employment legislation and fiscal policies.

In contrast, the rest of the world was relatively stable, down only 2%, with the Middle East showing growth that helped offset weaker performance in Latin America and the US.

Headcount at the company decreased 4% in the quarter and 17% year-on-year, reflecting a selective approach to recruitment as the company focussed on maintaining experienced fee earners ahead of an eventual market recovery.

Despite the decline in revenue, Robert Walters said it maintained a robust balance sheet, with £50m in net cash as of 30 September.

“Global hiring markets remained challenging during the third quarter, bringing the period of rebasing following the 2022 post-pandemic peak to around two years,” said chief executive officer Toby Fowlston.

“As set out at our half-year results in August, our assumption continues to be that material improvement in client and candidate confidence levels will be gradual and not likely to commence until 2025.

“Notwithstanding this, we are continuously taking actions to unlock more of the potential of Robert Walters through our 'disciplined entrepreneurialism' strategy - as set out at our recent capital markets event.”

Fowlston said that although market conditions meant second-half fee income was unlikely to exceed that seen during the first half, the programme of actions underway meant the firm could continue to aim for a profitable full-year outcome.

“As we approach the end of 2024, I am confident that we will close the year a stronger business than when we entered.

“Our refreshed strategy, dedicated people and strong balance sheet leave us well-positioned to continue to take the right actions for our clients, candidates and wider stakeholders.”

The company said it planned to release a trading update for the fourth quarter on 14 January.

At 0803 BST, shares in Robert Walters were down 2.28% at 343p.

Reporting by Josh White for Sharecast.com.