Last checked at 8 Apr 2020 07:00
8 April 2020
ROBERT WALTERS PLC
(the 'Company' or the 'Group')
Trading update for the first quarter ended 31 March 2020
FIRST QUARTER IMPACTED BY COVID-19.
SECOND QUARTER WILL BE MORE CHALLENGING.
Financial and operational highlights
Gross profit (Net fee income) | Q1 2020
| Q1 2019
| % change | % change (constant currency*) |
Group | £87.4m | £98.6m | (11%) | (11%) |
Asia Pacific | £34.5m | £36.4m | (5%) | (5%) |
Europe | £25.4m | £26.2m | (3%) | (2%) |
UK | £19.7m | £27.7m | (29%) | (29%) |
Other International | £7.8m | £8.3m | (6%) | (6%) |
* Constant currency is calculated by applying prior period average exchange rates to local currency results for the current and prior years.
§ Group net fee income for the first quarter impacted by ongoing Covid-19 global pandemic.
§ Home-working is now in practice across the whole of the Group's international footprint with the exception of Mainland China and Taiwan where, positively, there has been a return to office-based working as infection rates have reduced.
§ Our previous investment in technology, particularly in tablets for all consultants globally, has ensured the transition to home-working has been seamless without adversely disrupting service levels to clients and candidates or internal working practices and communications.
§ Strong but sensible cost reduction measures (Group's cost base reduced by 15% as of 1 April) are in place across the Group, including:
o Reduction in all discretionary spend.
o Executive PLC Board Directors have elected to take a 20% salary reduction; and
o Voluntary schemes for employees to adopt reduced working hours have proven successful across the globe - a testament to the strength of the Group's culture and unity of purpose.
§ The Group is in close contact with a number of national governments across the globe to ensure employment protection schemes are utilised for relevant employees.
§ Asia Pacific net fee income down 5% (down 5% actual).
o Japan, the Group's most profitable country, South Korea, Malaysia and Vietnam have proven extremely resilient, all increasing net fee income by 10% or more year-on-year. Greater China significantly impacted.
o Activity levels in Australia and New Zealand slowed significantly during the last two weeks of March as infection rates increased.
§ Europe net fee income down 2% (down 3% actual).
o Benelux, Switzerland and Portugal performed well all increasing net fee income year-on-year despite the impact of Covid-19 in March.
o France and Spain experienced slowdowns in March as lockdowns were instigated, resulting in single digit declines in net fee income for the quarter.
§ UK net fee income down 29%.
o Candidate and client confidence, in both specialist recruitment and recruitment process outsourcing, declined across the UK during March with the phased government moves towards lockdown.
o Technology, supply chain and logistics sectors have proven more resilient.
§ Other International (the Americas, Middle East and South Africa) net fee income down 6% (down 6% actual).
o Strong performance across North America particularly across technology and digital disciplines. Middle East also performed very well increasing net fee income significantly year-on-year.
§ Group headcount decreased by 2% to 3,935 (31 December 2019: 4,027).
§ Strong balance sheet with net cash of £109.8m as at 31 March 2020 (31 March 2019: £59.5m). The Group also has a £60m committed loan facility due for renewal in 2023. The cash position has benefited from a strong focus on cash collection and the ability to defer cash outflows in some countries.
Robert Walters, Chief Executive, commented:
"First and foremost, I would like to publicly thank all of the Group's employees across the globe for the incredible resilience and unity of purpose they have shown in the face of the events experienced during the quarter. Our previous investment in technology, particularly in tablets for all consultants globally, has ensured the transition to home-working has been seamless without adversely disrupting service levels to clients and candidates or internal working practices and communications.
"Trading for the first quarter was negatively impacted by the Covid-19 pandemic. With Europe and the Americas recently following much of the Asia Pacific region into varying stages of lockdown, we are expecting the second quarter to be more challenging. The picture across the globe is changing hour to hour and day to day, so it would be imprudent to attempt to give accurate forward guidance on expected full year trading at this stage.
"The Group has a strong balance sheet, strong cash position and an experienced management team who have navigated the business through various international crises over our 35-year history. I am confident that we will emerge from this period of uncertainty very well placed to benefit from operational gearing to quickly take advantage of the inevitable market opportunities."
The Group will publish a trading update for the quarter ending 30 June 2020 on 9 July 2020.
- Ends -
Further information
Robert Walters plc Robert Walters, Chief Executive Alan Bannatyne, Chief Financial Officer
| +44 20 7379 3333 |
Portland Communications Steffan Williams Simon Hamer
| +44 7766 901 802 |
About Robert Walters Group
The Robert Walters Group is a market-leading international specialist professional recruitment group with over 3,900 staff spanning 31 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups. The Group's outsourcing division, Resource Solutions is a market leader in recruitment process outsourcing and managed services.
www.robertwaltersgroup.com
Forward looking statements
This announcement contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them at the time of their approval of this announcement and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.