Robert Walters soars to multi-year highs as profits forecasts are upgraded

The release of positive news has helped improve investor confidence around the recruitment sector. The PageGroup share price rocketed to two-and-a-half-year peaks last year on strong first-quarter numbers. And industry cousin Robert Walters (LSE: RWA) has since followed the FTSE 250 share northwards after releasing excellent trading numbers of its own.

The Robert Walters share price has soared as high as 690p per share in Wednesday trading. This is the recruiter’s most expensive level since September 2018 and represents a 9% daily improvement.

Robert Walters hikes its profit guidance

In its latest statement Robert Walters said that positive trading momentum continued during the first quarter. The business said that this was underpinned “by further signs of improving market conditions” in its major regions.

At constant currencies, net fee income at the UK share fell 11% year on year during the three months to March, to £77.3m. This is better than the 26% drop it endured during the fourth quarter of 2020. It marks a vast improvement from the 30% drop it saw in Q3, too. As a result, the recruitment play has upgraded its profit forecasts for the full year.

Chief executive Robert Walters said that “whilst it is still difficult to be certain that there will be no further globally disruptive events ahead”, the board is “currently confident that profit for the year is likely to be comfortably ahead of market expectations.”

Hiring for growth

Walters said “the positive momentum in the group’s performance since quarter two 2020 has continued through the first quarter of 2021.” He added that candidate and client confidence “has been sequentially improving across most of [our] global footprint.”

Improving market confidence has led the company to increase its headcount during the first quarter. And “hiring [has been] focused in those geographies and disciplines showing the strongest signs of growth” it commented. Robert Walters added 74 employees during the first quarter to take the total to 3,221.

Asia leads the way

The firm said that activity across permanent, contract, interim and recruitment process outsourcing “all trended positively” in the first quarter. In Asia Pacific, net fee income fell 3% at stable exchange rates in the first quarter, to £32.8m. This is better than the drops of 23% and 30% the region experienced during quarters four and three of 2020 respectively.

Asia Pacific is now its single largest territory and responsible for 42% of group net fee income. Elsewhere the company saw net fee income in Europe and the UK fall 15% and 12% respectively in the first three months of 2021. And net fee income in the company’s other territories also improved in Q1. These were down 25% year-on-year.

Finally, Robert Walters hailed its “strong” balance sheet, which had £139.1m of net cash on it as of March. This was better than the £109.8m cash pile that was reported the same time a year ago.