TIDMRWA
RNS Number : 8141H
Robert Walters PLC
01 August 2023
1 August 2023
ROBERT WALTERS PLC
(the "Company" or the "Group")
Half-yearly financial results for the six months ended 30 June
2023
CANDIDATE AND CLIENT CONFIDENCE MUTED AGAINST RECORD PRIOR
YEAR
Robert Walters plc (LSE: RWA), the leading international
recruitment group, today announces its half-yearly financial
results for the six months ended 30 June 2023.
Financial and Operational Highlights
H1 2023 H1 2022 % change % change (constant currency*)
Revenue GBP548.3m GBP538.6m 2% 1%
---------- --------- --------- -----------------------------
Gross profit (net fee income) GBP202.3m GBP210.5m (4%) (5%)
---------- --------- --------- -----------------------------
Operating profit GBP11.2m GBP27.7m (60%) (57%)
---------- --------- --------- -----------------------------
Profit before taxation GBP8.1m GBP26.4m (70%) (67%)
---------- --------- --------- -----------------------------
Basic earnings per share 7.8p 27.5p (72%) n/a
---------- --------- --------- -----------------------------
Interim dividend per share 6.5p 6.5p 0% n/a
---------- --------- --------- -----------------------------
* Constant currency is calculated by applying prior period
exchange rates to local currency results for the current and prior
periods.
Group Highlights
-- Group net fee income (gross profit) down 4% (5%*) to
GBP202.3m (GBP199.7m*) (2022: GBP210.5m) against a record prior
year. Candidate and client confidence levels have yet to show
sustained improvement across many of the Group's markets and
specialist disciplines.
-- Contract and interim recruitment have outperformed permanent,
as organisations increasingly sought more flexible solutions to
their hiring needs.
-- Contract and interim recruitment now represent 33% of the
Group's net fee income (2022: 29%).
-- 84% of the Group's net fee income (2022: 82%) now derived
from our international businesses.
-- Our Europe and Asia Pacific regions, which together account
for 76% of Group net fee income have proven to be most resilient,
with the adverse impact most acutely felt in our UK, US and
Mainland China businesses.
-- Group headcount is up 6% year-on-year to 4,280 (30 June 2022:
4,051) but down 3% quarter-on-quarter, largely due to natural
attrition, in line with more challenging trading conditions.
-- Over the last two years, the Group has invested in attracting
and developing our people and in evolving our global infrastructure
and intends to continue to protect our strategic core whilst
sensibly managing our cost base.
-- Strong balance sheet with net cash of GBP69.8m as at 30 June
2023 (30 June 2022: GBP81.8m).
-- Interim dividend maintained at 6.5p per share (2022:
6.5p).
-- Current trading remains in line with Board expectations.
Regional Highlights
-- Asia Pacific (43% of Group net fee income)
-- Net fee income down 7% (6%*) to GBP87.2m (GBP87.9m*) (2022:
GBP93.7m) and operating profit down 47% (44%*) to GBP8.6m
(GBP9.1m*) (2022: GBP16.2m).
-- Europe (33% of Group net fee income)
-- Net fee income up 9% (5%*) to GBP66.5m (GBP63.9m*) (2022:
GBP61.1m) and operating profit down 41% (45%*) to GBP4.3m
(GBP4.0m*) (2022: GBP7.3m).
-- UK (16% of Group net fee income)
-- Net fee income down 15% to GBP32.3m (2022: GBP38.0m)
producing an operating profit of GBP0.1m (2022: GBP3.6m).
-- Rest of World (the Americas, Middle East and South Africa)
(8% of Group net fee income)
-- Net fee income down 8% (12%*) to GBP16.3m (GBP15.5m*) (2022:
GBP17.7m) producing an operating loss of GBP1.8m (operating loss of
GBP1.3m*) (2022: operating profit of GBP0.6m).
Toby Fowlston, Chief Executive Officer, said:
"The reduced client and candidate confidence levels that the
Group first signalled during the second half of last year have yet
to show sustained signs of improvement across many of the Group's
markets and specialist disciplines. As a result, Group net fee
income for the first half of 2023 declined 5% in constant currency
against a record prior year comparative. Contract and interim
recruitment have outperformed permanent, as organisations
increasingly sought more flexible solutions to their hiring
needs.
"Our Europe and Asia Pacific regions, which together account for
76% of Group net fee income have proven to be most resilient, with
the impact more acutely felt in our UK, US and Mainland China
businesses, particularly across permanent recruitment, where
confidence to hire and confidence to move jobs has been most
noticeably affected.
"In the face of current trading pressures, we intend to protect
the Group's strategic core, focus on consultant productivity and
sensibly manage our cost base whilst continuing to prudently invest
in attracting and developing our people and our global
infrastructure for the long-term.
"We have a strong global brand and balance sheet, a diverse
international footprint, a healthy blend of revenue streams across
all forms of recruitment and talent advisory solutions, all of
which ensure we are very well placed to swiftly capitalise on a
return of market confidence over the longer term."
The Company will publish a trading update for the third quarter
ending 30 September 2023 on 10 October 2023.
Further information
Robert Walters plc
Toby Fowlston, Chief Executive
Officer
Alan Bannatyne, Chief Financial
Officer +44 (0) 20 7379 3333
Williams Nicolson
Steffan Williams +44 (0) 77 6734 5563
About Robert Walters Group
The Robert Walters Group is a market-leading international
specialist professional recruitment group. With over 4,200 staff
spanning 31 countries, we deliver specialist recruitment
consultancy, staffing, recruitment process outsourcing and managed
services across the globe. We match highly skilled professionals to
permanent, contract and interim roles across the disciplines of
accountancy & finance, banking, engineering, HR, healthcare,
technology, legal, sales, marketing, secretarial & support, and
supply chain, logistics & procurement. Our client base ranges
from the world's leading blue-chip corporates and financial
services organisations through to SMEs and start-ups.
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.
Robert Walters plc
Half-yearly financial results for the six months ended 30 June
2023
Half-yearly Management Report
Candidate and client confidence has been muted throughout the
first half of 2023 in a continuation of the trend we first
experienced during the second half of last year. Whilst recruitment
market fundamentals such as vacancy levels, candidate shortages and
wage inflation have remained relatively solid, job churn has
reduced, and time-to-hire has lengthened and been compounded by a
noticeable increase in buybacks as organisations fight to retain
their top talent. Group net fee income for the half year was down
5%* (4%) year-on-year to GBP202.3m (2022: GBP210.5m), operating
profit was GBP11.2m (2022: GBP27.7m) and profit before taxation was
GBP8.1m (2022: GBP26.4m).
Permanent recruitment activity levels have declined during the
period in line with confidence, with interim and contract growing
as organisations look to more short-term solutions to meet their
immediate resourcing challenges. Permanent recruitment now
represents 67% (2022: 71%) of the Group's net fee income.
The technology and financial services sectors have been
particularly volatile during the period. Large-scale technology
layoffs have continued right across the globe, a rightsizing of the
industry following the high volume of hiring to underpin the global
digital transformation that has taken place over recent years. The
collapse and merger of several banks during the first half also
served to affect confidence levels across the financial services
market worldwide.
On a regional basis, Europe and Asia Pacific, which together
account for 76% of the Group's net fee income, proved to be most
resilient with our blend of permanent, interim and contract
recruitment underpinning growth in net fee income across Europe in
particular. Our UK, US and Mainland China businesses have been most
significantly impacted by the lack of client and candidate
confidence and we have been and are acting in each market to
mitigate the short-term pressure but with a sensible lens to ensure
we are still able to quickly take advantage of any return in
confidence.
Group headcount currently stands at 4,280 which whilst up by 6%
year-on-year (2022: 4,051) represents a decline of 3%
quarter-on-quarter, reflecting the tightening of market
conditions.
Purpose, Engaging our People and ESG
The Group's purpose is to power people and organisations to
fulfil their unique potential and it is the foundation that
underpins what we do as a business. During the first half of the
year, we helped over 22,000 people and 8,000 organisations fulfil
that unique potential through providing new careers and valued team
members.
Our people are the lifeblood of our business, and we recognise
the importance of continually listening to feedback to ensure we
are positioned as an employer of choice across not only the
recruitment market but the wider business community. During the
period, the Group conducted its second global employee engagement
survey, and we are delighted to report that we achieved an 86%
completion rate, up 4% year-on-year, and despite the tough market
conditions, 79% of employees feel engaged and aligned with the
Group's purpose, an increase of 1% on the prior year.
ESG remains a core priority for the Group, and we continue to
work towards the targets we published in our recent 2022 Annual
Report and Accounts. Highlights from the first half of 2023
include:
Being a responsible business
-- Joined the UN Global Compact in January 2023 aligning our ESG
strategy with the UN's Sustainable Development Goals. Invited over
200 of our suppliers to the UN Global Compact's online training for
SMEs on how to drive sustainability and business growth.
Enhancing our Equity, Diversity and Inclusion (ED&I)
initiatives
-- Won 'Product Innovation of the Year' at the 2023 edie Awards
for our Recruitment Inclusivity Audit which helps clients remove
bias from their hiring processes.
-- Celebrated over 25 cultural awareness moments across a broad
range of topics including Pride, Ramadan, International Women's Day
and Mental Health Awareness Week.
-- Established a partnership with the Business Disability Forum
to support us with our disability inclusion agenda.
Responding to a sustainable world of work
-- The Group's ESG for Hiring Audit service was shortlisted for
Innovation of the Year at the Firm Awards 2023 and for Innovation
of the Year and ESG Initiative of the Year at the TIARA Talent
Solutions Awards 2023.
Reducing our environmental impact
-- 45% reduction in business travel emissions per head against our 2019 base year.
-- 37% of company cars are now hybrid or electric vehicles in the UK and EU.
Supporting our communities
-- Partnered with The Change Foundation on the launch of On
Drive - a women's leadership programme using the power of sport to
develop young leaders and drive sustainable social development in
rural India.
-- Continued to fully fund one of our consultants to run
goodjob, a platform co-founded to help Ukrainians displaced by the
conflict find new jobs, access mentoring and connect to a community
and network of global professionals.
-- Provided vital employment to a small team of developers in
Ukraine who are working for one of our partners on our Technology
and Transformation projects.
Technology, Insights and Advisory
The ongoing functional development and roll out of Zenith, the
Group's new customer relationship management system, continued
during the first half with successful deployments across the
Group's South-East Asia footprint. The roll out in South-East Asia
represented a milestone for the Group, given the existence of
significant permanent and temporary recruitment operations across
the region. The Group remains on target to complete the global roll
out to all markets worldwide during 2024.
The Group's market intelligence products and services continue
to be in strong demand right across the Group's international
footprint and client base - from large corporates through to
smaller start-ups and SMEs. Our blend of internal and external
market insights and data is a powerful tool to drive more informed
hiring decisions and the products are being consumed on both a
stand-alone product and licenced basis.
Our Group diverse hiring consultancy solutions have now received
five awards across the globe as well as being shortlisted for many
more and are proving a source of competitive advantage through
engagement with Board-level decision makers in both large
corporates and smaller businesses. Our newly developed ESG for
Hiring advisory offering is also generating good early traction
with clients and adds yet further breadth to our talent solutions
offering across the globe.
Group Financials
Revenue was up 2% (1%*) to GBP548.3m (GBP544.4m*) (2022:
GBP538.6m) and gross profit (net fee income) decreased by 4% (5%*)
to GBP202.3m (GBP199.7m*) (2022: GBP210.5m). Operating profit
decreased by 60% (57%*) to GBP11.2m (GBP11.8m*) (2022: GBP27.7m).
Profit before taxation decreased by 70% (67%*) to GBP8.1m
(GBP8.7m*) (2022: GBP26.4m).
The Group has a strong balance sheet with net cash (cash and
cash equivalents less amounts drawn down under the committed
financing facility) of GBP69.8m as at 30 June 2023 (30 June 2022:
GBP81.8m). The Group's committed facility of GBP60.0m is due for
renewal in 2026. At 30 June 2023, GBP19.1m (2022: GBP26.6m) was
drawn down under this facility.
Asia Pacific - 43% of Group net fee income (2022: 45%)
Revenue was GBP253.0m (2022: GBP240.1m) and net fee income
decreased by 7% (6%*) to GBP87.2m (GBP87.9m*) (2022: GBP93.7m),
delivering an operating profit of GBP8.6m (GBP9.1m*) (2022:
GBP16.2m).
The anticipated bounce-back of the Mainland China economy post
the release of Covid restrictions has yet to materialise and has
had a knock-on effect on market confidence across the wider Asia
Pacific region, particularly in the economies of large trading
partners such as Japan and Australia.
Net fee income in Mainland China was down 40%* year-on-year,
with the Group's largest markets in the region, Japan and
Australia, down 2%* and 10%* respectively.
Elsewhere across the region, net fee income in New Zealand
increased by 12%* year-on-year. Our sponsorship of the All Blacks
and Black Ferns is already proving successful from a brand
engagement perspective further cementing our dominant position in
the market. In South-East Asia, Malaysia and Indonesia held up
relatively well, with net fee income broadly flat year-on-year
although profitability in both markets was impacted and declined by
16%* and 24%* respectively. South Korea delivered a record
performance in terms of net fee income.
Net fee income in Resource Solutions, our recruitment process
outsourcing business, declined 3%* year-on-year as a result of a
reduction in client hiring volumes, particularly across the
financial services sector. Encouragingly, the business secured a
number of new client deals and existing client extensions during
the period.
Europe - 33% of Group net fee income (2022: 29%)
Revenue was GBP147.2m (2022: GBP136.6m) and net fee income
increased by 9% (5%*) to GBP66.5m (GBP63.9m*) (2022: GBP61.1m),
delivering an operating profit of GBP4.3m (GBP4.0m*) (2022:
GBP7.3m).
A resilient performance across the region with eight out of nine
markets delivering net fee income growth year-on-year. Our blend of
permanent, interim and contract revenue streams has enabled us to
continue to meet the varying needs of our clients despite the more
challenging market conditions.
France, our largest business in the region, performed solidly
increasing net fee income by 3%* year-on-year underpinned by a good
performance from our interim and contract businesses. Operating
profit was hit however, declining by 14%* year-on-year. Our
business in Belgium delivered record levels of net fee income, up
14%* year-on-year, with operating profit also increasing by
7%*.
Spain experienced a tougher first half, with both net fee income
and operating profit impacted by a slowdown in permanent hiring
across the technology and engineering sectors, and Ireland, a
technology and financial services hub, has also been negatively
affected with net fee income declining 32%* year-on-year. Net fee
income in Germany was up 10%* year-on-year, a net fee income
record, and our newest business in Italy is progressing well.
United Kingdom - 16% of Group net fee income (2022: 18%)
Revenue in the UK was GBP126.0m (2022: GBP141.2m) and net fee
income decreased by 15% to GBP32.3m (2022: GBP38.0m), delivering an
operating profit of GBP0.1m (2022: GBP3.6m).
Candidate and client confidence in the UK has been significantly
impacted by the knock-on macro-economic effects of a high inflation
and high interest rate environment. Job churn has declined
year-on-year and time to hire has lengthened. Layoffs across the
technology sector and volatility in financial services have also
served to further disrupt market confidence across both London and
the regions. More positively, legal recruitment activity levels
remained relatively robust year-on-year.
Net fee income in Resource Solutions was down year-on-year as
clients reduced hiring volumes in line with the more challenging
market conditions. Our Workforce Consultancy business, which
focuses on supporting clients with transformation and change
projects, has however proven a bright spot, delivering strong
growth through the period. In addition, it's been positive to see
market intelligence, ED&I and ESG consultancy services gaining
traction across both existing and new clients.
Rest of World - 8% of Group net fee income (2022: 8%)
Rest of World comprises the Americas, Middle East and South
Africa. Revenue was GBP22.1m (2022: GBP20.7m) and net fee income
was down 8% (12%*) to GBP16.3m (GBP15.5m*) (2022: GBP17.7m),
delivering an operating loss of GBP1.8m (operating loss of
GBP1.3m*) (2022: operating profit of GBP0.6m).
Our business in the US has been significantly impacted by the
ongoing layoffs across the technology sector and the volatility and
disruption in financial services. Net fee income for the half year
was down 42%* year-on-year following a tough period in the last six
months of 2022. We have undertaken a management and office lease
restructure during the period and downsized our operations to
reflect the prevailing market conditions. We are confident that
these changes will flow through to a more positive performance
long-term.
Elsewhere, our smaller businesses in South Africa and Mexico
have performed well, delivering record net fee income and
increasing operating profit year-on-year albeit from a lower
base.
Cash flow
The Group maintained a strong net cash position of GBP69.8m as
at 30 June 2023 (30 June 2022: GBP81.8m). Working capital in the
period has decreased by GBP7.3m in line with the economic
challenges seen in the period. Notable cash outflows included a
dividend payment of GBP11.5m, GBP9.3m of lease liabilities, GBP4.3m
of corporation tax payments and GBP8.5m of capital expenditure. On
behalf of global governments, the Group has collected and paid
GBP144.3m in payroll taxes, GBP53.7m in net sales and VAT taxes and
GBP4.3m in corporation taxes, totalling GBP202.3m.
Dividend and Share Buybacks
The interim dividend will remain flat at 6.5p per share (2022:
6.5p) and will be paid on 29 September 2023 to those shareholders
on the Company's register as at 1 September 2023.
During the first half of the year, the Group purchased 818,000
shares at an average price of GBP4.15 per share for GBP3.4m and
cancelled those shares. Subsequently in July, the Group purchased
595,000 at an average price of GBP4.13 per share for GBP2.5m and
cancelled those shares.
Treasury management and currency risk affecting the business
The Group does not have material transactional exposures,
although it is exposed to translation differences on the profits
and cash flows generated in its overseas operations. Overseas
currency balances that are surplus to local working capital
requirements are converted on a regular basis to Pounds Sterling.
The main functional currencies of the Group's operating divisions
are Pounds Sterling, the Euro, the Australian Dollar and the
Japanese Yen.
Principal risks and uncertainties
The Board recognises the importance of identifying and actively
monitoring the full range of financial and non-financial risks
facing the business, at both a local and Group level. Since the
year-end, the Board has assessed the Company's risk profile and the
likely consequences of any decision in the long term, and
inherently do not believe the principal risks for the business are
different in nature overall as those detailed within the Principal
Risks and Uncertainties section of the Annual Report and Accounts
for the year ended 31 December 2022. The Group continues to
navigate challenging macro-economic conditions and has implemented
appropriate risk mitigation strategies to address those risks. The
Board continues to monitor the ongoing impact on the business,
including the identification and consideration of emerging risks
such as climate-related and cyber-related risk.
Related party transactions
There were no related party transactions in the period to 30
June 2023 (30 June 2022: none), other than employment and
share-based remuneration payments to key management personnel and
receipt of dividends for key management shareholders. There were no
outstanding balances as at 30 June 2023.
Board
CFO Alan Bannatyne will retire and step down from the Board on 1
September 2023. On behalf of the Board, and all the Group's
employees, we would like to thank Alan for the contribution he has
made to the success of the Group over the last 21 years and wish
him all the very best for the future. David Bower will join the
Group and the Board as CFO on 4 September 2023. David was most
recently CFO at Homeserve plc, a FTSE100 services company.
Steven Cooper stepped down from his role as a Non-executive
Director on 1 June 2023. On behalf of the Board, we would like to
thank Steven for his many years of wise counsel and his
contribution to the development of the Group. It is our pleasure to
formally welcome Michaela Tod and Jane Hesmondhalgh to the Board;
both of whom joined as Non-executive Directors during the second
quarter.
Outlook
Over the last two years, the Group has invested in attracting
and developing our people and in evolving our global infrastructure
and intends to continue to protect our strategic core whilst
focusing on productivity and sensibly managing our cost base in the
face of short-term trading pressures.
We have a strong global brand and balance sheet, a diverse
international footprint, a healthy blend of revenue streams across
all forms of recruitment and talent advisory solutions, all of
which ensure we are well placed to swiftly capitalise on a return
to market confidence over the longer-term. Current trading remains
in line with Board expectations.
Leslie Van de Walle Toby Fowlston
Chair Chief Executive Officer
31 July 2023
*Constant currency is calculated by applying prior period
exchange rates to local currency results for the current and prior
period.
ROBERT WALTERS PLC
Half-yearly Financial Results 2023
CONDENSED CONSOLIDATED INCOME STATEMENT
2023 2022 2022
6 mths 6 mths 12 mths
to to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
Note GBPs millions GBPs millions GBPs millions
--------------------------------- ----- --------------------- --------------------- ---------------------
Continuing operations
Revenue 4 548.3 538.6 1,099.6
Cost of sales (346.0) (328.1) (671.4)
--------------------------------- ----- --------------------- --------------------- ---------------------
Gross profit (net fee income) 4 202.3 210.5 428.2
Administrative expenses (191.1) (182.8) (370.0)
--------------------------------- ----- --------------------- --------------------- ---------------------
Operating profit 4 11.2 27.7 58.2
Finance income 0.2 0.1 0.4
Finance costs (2.4) (1.6) (3.5)
(Loss) gain on foreign exchange (0.9) 0.2 0.5
--------------------------------- ----- --------------------- --------------------- ---------------------
Profit before taxation 4 8.1 26.4 55.6
Taxation 5 (2.8) (7.0) (16.5)
--------------------------------- ----- --------------------- --------------------- ---------------------
Profit for the period 5.3 19.4 39.1
--------------------------------- ----- --------------------- --------------------- ---------------------
Earnings per share (pence): 7
--------------------------------- ----- --------------------- --------------------- ---------------------
Basic 7.8 27.5 56.2
Diluted 7.4 26.0 53.4
--------------------------------- ----- --------------------- --------------------- ---------------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND
EXPENSE
2023 2022
6 mths
to 6 mths to 2022
12 mths
30 June 30 June to 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
--------------------------------------------- -------------- -------------- --------------
Profit for the period 5.3 19.4 39.1
--------------------------------------------- -------------- -------------- --------------
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation
of overseas operations (10.7) 4.7 6.0
--------------------------------------------- -------------- -------------- --------------
Total comprehensive income and expense
for the period (5.4) 24.1 45.1
--------------------------------------------- -------------- -------------- --------------
ROBERT WALTERS PLC
Half-yearly Financial Results 2023
CONDENSED CONSOLIDATED BALANCE SHEET
2023 2022 2022
30 June 30 June 31 December
Unaudited Unaudited Audited
Note GBPs millions GBPs millions GBPs millions
-------------------------------- ----- -------------- -------------- --------------
Non-current assets
Intangible assets 30.9 27.2 29.3
Property, plant and equipment 15.7 10.1 14.3
Right-of-use assets 71.9 61.2 71.6
Deferred tax assets 9.9 10.5 10.0
-------------------------------- ----- -------------- -------------- --------------
128.4 109.0 125.2
-------------------------------- ----- -------------- -------------- --------------
Current assets
Trade and other receivables 202.2 236.8 221.4
Corporation tax receivables 5.9 4.0 4.3
Cash and cash equivalents 88.9 108.4 123.2
-------------------------------- ----- -------------- -------------- --------------
297.0 349.2 348.9
-------------------------------- ----- -------------- -------------- --------------
Total assets 425.4 458.2 474.1
-------------------------------- ----- -------------- -------------- --------------
Current liabilities
Trade and other payables (155.8) (180.5) (179.6)
Corporation tax liabilities (3.4) (6.6) (5.0)
Bank overdrafts and borrowings 8 (19.1) (26.6) (26.1)
Lease liabilities (17.6) (15.6) (18.3)
Provisions (1.0) (1.1) (0.8)
(196.9) (230.4) (229.8)
-------------------------------- ----- -------------- -------------- --------------
Net current assets 100.1 118.8 119.1
-------------------------------- ----- -------------- -------------- --------------
Non-current liabilities
Deferred tax liabilities (2.0) (0.1) (0.2)
Lease liabilities (58.9) (49.7) (58.1)
Provisions (2.0) (1.8) (2.1)
-------------------------------- ----- -------------- -------------- --------------
(62.9) (51.6) (60.4)
-------------------------------- ----- -------------- -------------- --------------
Total liabilities (259.8) (282.0) (290.2)
-------------------------------- ----- -------------- -------------- --------------
Net assets 165.6 176.2 183.9
-------------------------------- ----- -------------- -------------- --------------
Equity
Share capital 15.6 16.2 15.8
Share premium 22.6 22.6 22.6
Other reserves (71.2) (71.8) (71.4)
Own shares held (39.6) (41.0) (40.5)
Treasury shares held (9.1) (9.1) (9.1)
Foreign exchange reserves 0.4 9.8 11.1
Retained earnings 246.9 249.5 255.4
-------------------------------- ----- -------------- -------------- --------------
Equity attributable to owners of
the Company 165.6 176.2 183.9
--------------------------------------- -------------- -------------- --------------
ROBERT WALTERS PLC
Half-yearly Financial Results 2023
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
2023 2022 2022
6 mths 6 mths 12 mths
to to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
-------------------------------------------- -------------------- --------------------- --------------------
Operating profit for the period 11.2 27.7 58.2
Adjustments for:
Depreciation and amortisation charges 11.8 10.4 21.7
Impairment of right-of-use assets 0.2 - -
(Gain) loss on disposal of property,
plant and equipment and computer software (0.1) 0.3 0.4
Charge in respect of share-based payment
transactions 2.2 1.6 2.5
Unrealised foreign exchange (gain)
loss (3.1) 1.5 3.8
--------------------------------------------- --------------------- --------------------
Operating cash flows before movements
in working capital 22.2 41.5 86.6
--------------------------------------------- -------------------- --------------------- --------------------
Decrease (increase) in receivables 10.8 (42.6) (25.0)
(Decrease) increase in payables (18.1) 3.1 (2.0)
Cash generated from operating activities 14.9 2.0 59.6
--------------------------------------------- -------------------- --------------------- --------------------
Income taxes paid (4.3) (11.0) (21.5)
--------------------------------------------- -------------------- --------------------- --------------------
Net cash generated from (used in)
operating activities 10.6 (9.0) 38.1
--------------------------------------------- -------------------- --------------------- --------------------
Investing activities
Interest received 0.2 0.1 0.4
Investment in intangible assets (2.7) (3.9) (7.1)
Purchases of property, plant and equipment (5.8) (3.0) (8.8)
--------------------------------------------- -------------------- --------------------- --------------------
Net cash used in investing activities (8.3) (6.8) (15.5)
--------------------------------------------- -------------------- --------------------- --------------------
Financing activities
Equity dividends paid (11.5) (10.6) (15.2)
Interest paid (0.7) (0.4) (1.0)
Interest on lease liabilities (1.7) (1.2) (2.5)
Principal paid on lease liabilities (7.6) (7.0) (16.8)
Proceeds from financing facility 6.5 18.1 37.1
Repayment of financing facility (13.5) (7.2) (26.7)
Proceeds from issue of equity 0.2 - 0.1
Share buy-back for cancellation (1.9) - (10.0)
Proceeds from exercise of share options - 0.1 0.2
Purchase of own shares - (12.7) (12.7)
Net cash used in financing activities (30.2) (20.9) (47.5)
--------------------------------------------- -------------------- --------------------- --------------------
Net decrease in cash and cash equivalents (27.9) (36.7) (24.9)
-------------------- --------------------- --------------------
Cash and cash equivalents at beginning
of the period 123.2 142.3 142.3
Effect of foreign exchange rate changes (6.4) 2.8 5.8
--------------------------------------------- -------------------- --------------------- --------------------
Cash and cash equivalents at end of
the period 88.9 108.4 123.2
--------------------------------------------- -------------------- --------------------- --------------------
ROBERT WALTERS PLC
Half-yearly Financial Results 2023
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Own Treasury Foreign
Share Share Other shares shares exchange Retained Total
capital premium reserves held held reserves earnings equity
GBPs GBPs GBPs GBPs GBPs GBPs GBPs GBPs
millions millions millions millions millions millions millions millions
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Balance at 1
January 2022 16.1 22.6 (71.8) (29.9) (9.1) 5.1 241.8 174.8
Profit for the
period - - - - - - 19.4 19.4
Foreign
currency
translation
differences - - - - - 4.7 - 4.7
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Total
comprehensive
income
and expense
for the period - - - - - 4.7 19.4 24.1
Dividends paid - - - - - - (10.6) (10.6)
Credit to
equity for
equity-settled
share-based
payments - - - - - - 1.6 1.6
Tax on
share-based
payment
transactions - - - - - - (1.1) (1.1)
Transfer to
own shares
held
on exercise
of equity
incentives - - - 1.6 - - (1.6) -
New shares
issued and own
shares
purchased 0.1 - - (12.7) - - - (12.6)
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Unaudited
balance at 30
June 2022 16.2 22.6 (71.8) (41.0) (9.1) 9.8 249.5 176.2
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Profit for the
period - - - - - - 19.7 19.7
Foreign
currency
translation
differences - - - - - 1.3 - 1.3
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Total
comprehensive
income
and expense
for the period - - - - - 1.3 19.7 21.0
Dividends paid - - - - - - (4.6) (4.6)
Credit to
equity for
equity-settled
share-based
payments - - - - - - 0.9 0.9
Tax on
share-based
payment
transactions - - - - - - 0.2 0.2
Transfer to
own shares
held
on exercise
of equity
incentives - - - 0.3 - - (0.3) -
Share
repurchased
for
cancellation (0.4) - 0.4 - - - (10.0) (10.0)
New shares
issued and own
shares
purchased - - - 0.2 - - - 0.2
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Balance at 31
December 2022 15.8 22.6 (71.4) (40.5) (9.1) 11.1 255.4 183.9
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Profit for the
period - - - - - - 5.3 5.3
Foreign
currency
translation
differences - - - - - (10.7) - (10.7)
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Total
comprehensive
income
and expense
for the period - - - - - (10.7) 5.3 (5.4)
Dividends paid - - - - - - (11.5) (11.5)
Credit to
equity for
equity-settled
share-based
payments - - - - - - 2.2 2.2
Tax on
share-based
payment
transactions - - - - - - (0.4) (0.4)
Transfer to
own shares
held
on exercise
of equity
incentives - - - 0.7 - - (0.7) -
Shares
repurchased
for
cancellation (0.2) - 0.2 - - - (3.4) (3.4)
New shares
issued and own
shares
purchased - - - 0.2 - - - 0.2
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
Unaudited
balance at 30
June 2023 15.6 22.6 (71.2) (39.6) (9.1) 0.4 246.9 165.6
---------------- --------- --------- --------- ------------ --------- --------- --------------- ---------------------------
ROBERT WALTERS PLC
Half-yearly Financial Results 2023
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
1. Statement of accounting policies
Basis of preparation
These condensed set of interim financial statements for the six
months ended 30 June 2023 have been prepared in accordance with IAS
34 'Interim Financial Reporting' and in compliance with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority.
They do not include all of the information required for full
annual financial statements and should be read in conjunction with
the 2022 Annual Report and Accounts, which were prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and in accordance
with UK adopted international accounting standards (IFRS).
The accounting policies applied by the Group are as set out in
detail in the Annual Report and Accounts for the year ended 31
December 2022. The Group has applied the same accounting policies
and methods of computation in its interim consolidated financial
statements as in its 2022 annual financial statements, accounting
which is consistent with the Group's current accounting policies
except for amendments which applied for the first time in 2023,
none of which are expected to impact the Group as they are either
not relevant to the Group's activities or require accounting which
is consistent with the Group's current accounting policies.
There are a number of standards and interpretations which have
been issued by the International Accounting Standards Board that
are effective for periods beginning subsequent to 31 December 2023
that the Group has not adopted early and which the Group does not
believe will have a material impact on the financial statements
when adopted.
Going concern
The Group's performance in the first half of 2023 has been
negatively impacted by macro-economic uncertainty and volatility
and the ripple effect on candidate and client confidence. The Group
has considerable financial resources, including GBP69.8m of net
cash at 30 June 2023, together with a healthy blend of revenue
streams across all forms of recruitment and talent advisory
services and a diverse range of clients across different geographic
locations and sectors. As a consequence, the Directors believe the
Group is well placed to manage its business risks successfully.
The Directors have assessed the long-term prospects of the
Company and the Group based upon business plans, cash flow
projections for the remaining six months ending 31 December 2023,
the three-year period ending 31 December 2026, and consideration of
the uncertainties arising in the current economic environment.
The three-year period was chosen as it is considered the longest
timeframe over which any reasonable view can be formed, given the
nature of the market in which the Group operates. Furthermore, the
nature of recruitment activity is highly reactive to market
sentiment and the forward visibility of permanent recruitment,
which represents 67% of the Group's net fee income, can be measured
in weeks, whilst temporary recruitment and recruitment process
outsourcing may be less affected.
The forecasts and cash flow projections used to assess going
concern have been comprehensively stress-tested by using simulation
techniques involving sensitivity analysis applying, in particular,
projections of reduced net fee income of up to 20% from forecasts
each year over a three-year period. In light of the current
economic uncertainties, the Directors have completed reverse stress
testing, designed to explore the resilience of the Group to the
potential impact of the principal risks using various downside
scenarios. The scenarios included but were not limited to
significant reductions in revenue, losses of key clients, losses of
key internal talent, reputation damage, technology
disintermediation, increases in debtor days, and limited cost
management. The Group also considered mitigating actions that could
be undertaken in the event of one or more of the scenarios
occurring, or an even more significant downturn, which included but
are not limited to, further reductions in capital expenditure,
further reductions in non-business critical expenditure as well as
the potential for headcount reductions. The scenarios were designed
to be impactful but at the same time realistic and the Group
remained viable throughout.
It should be noted that the Group has limited forward visibility
and consequently there is still a high degree of uncertainty in
respect of future outcomes, however, the various stress test
scenarios indicate that the Group still has a strong balance sheet
and cash resources and can continue to operate within its banking
covenants.
Historically, the Group has successfully managed its cost base
during economic downturns. The same policy and cost management
measures were put in place throughout the pandemic, with the Group
delivering two consecutive record performances in 2021 and 2022,
when Covid restrictions were still in place in many of the Group's
markets. The Directors remain confident of the Group's long-term
growth prospects, with structural recruitment market fundamentals
including job vacancy levels, salary inflation and candidate
shortages still holding strong which continues to suggest that when
market confidence recovers there will likely be an increase in
demand and candidate movement across all areas of recruitment.
As a consequence, the Directors have formed a judgement, at the
time of approving the condensed set of financial statements, that
there is a reasonable expectation that the Group has adequate
resources to continue in operational existence and meet its
liabilities as they fall due over the three-year assessment period.
For this reason, the Directors continue to adopt the going concern
basis in preparing the condensed set of financial statements.
Accordingly, the Group and the Company continues to adopt the going
concern basis in preparing its financial statements.
Cash management
At 30 June 2023, the Group has GBP69.8m of net cash, compared to
GBP81.8m in 2022. The Group has a committed financing facility of
GBP60.0m, which expires in March 2026 and at 30 June 2023, GBP19.1m
(2022: GBP26.6m) was drawn down under this facility.
Significant accounting judgements and estimates
Judgement and estimates are continually evaluated and are based
on historical experience and other factors, including expectation
of future events that are believed to be reasonable under the
circumstances. Due to inherent uncertainty involved in making
estimates and assumptions, actual outcomes could differ from those
assumptions and estimates.
In light of the ongoing impact of the Ukraine-Russia conflict
and the current economic uncertainties, further review of the
judgements and estimates have been performed when preparing the
half-yearly financial results. Following the review, it was
concluded that the significant accounting judgements and estimates
made by management were the same as those that applied in the
Group's Annual Report and Accounts for the year ended 31 December
2022.
2. Financial information
The financial information on pages 8 to 16 was formally approved
by the Board of Directors on 31 July 2023. The financial
information set out in this document does not constitute statutory
accounts within the meaning of section 434 of the Companies Act
2006.
Statutory accounts prepared in accordance with UK adopted
International accounting standards (IFRS) for the year ended 31
December 2022 for Robert Walters plc have been delivered to the
Registrar of Companies. The auditor's report on these accounts was
not qualified, did not draw attention to any matters by way of
emphasis and did not contain statements under section 498(2) or (3)
of the Companies Act 2006.
The financial information in respect of the period ended 30 June
2023 is unaudited but has been reviewed by the Company's auditor.
The financial information in respect of the period ended 30 June
2022 is also unaudited.
3. Currency conversion
The presentational currency of the Group is Pounds Sterling and
the condensed set of financial statements have been prepared on
this basis.
The Condensed Consolidated Income Statement for the period ended
30 June 2023 has been prepared using, among other currencies, the
average exchange rate of EUR1.1409 to the Pound (period ended 30
June 2022: EUR1.1874; year ended 31 December 2022: EUR1.1729);
Yen166.2789 to the Pound (30 June 2022: Yen159.3960; 31 December
2022: Yen161.7374) and AU$1.8243 to the Pound (30 June 2022:
AU$1.8060; 31 December 2022: AU$1.7793).
The Condensed Consolidated Balance Sheet as at 30 June 2023 has
been prepared using the exchange rates on that day of EUR1.1631 to
the Pound (30 June 2022: EUR1.1622; 31 December 2022: EUR1.1289);
Yen183.0240 to the Pound (30 June 2022: Yen165.3122; 31 December
2022: Yen158.5140) and AU$1.9064 to the Pound (30 June 2022:
AU$1.7621; 31 December 2022: AU$1.7727).
4. Segmental information
2023 2022 2022
6 mths 6 mths 12 mths
to to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
------------------------------------- --------------- --------------- ---------------
i) Revenue:
Asia Pacific 253.0 240.1 519.6
UK 126.0 141.2 259.7
Europe 147.2 136.6 276.5
Rest of World 22.1 20.7 43.8
------------------------------------------ --------------- --------------- -------------------
548.3 538.6 1,099.6
------------------------------------------ --------------- --------------- -------------------
ii) Gross profit (net fee income):
Asia Pacific 87.2 93.7 193.8
UK 32.3 38.0 74.0
Europe 66.5 61.1 124.1
Rest of World 16.3 17.7 36.3
------------------------------------------ --------------- --------------- -------------------
202.3 210.5 428.2
------------------------------------------ --------------- --------------- -------------------
iii) Operating profit and profit before
taxation:
Asia Pacific 8.6 16.2 37.5
UK 0.1 3.6 3.4
Europe 4.3 7.3 17.6
Rest of World (1.8) 0.6 (0.3)
------------------------------------------ --------------- --------------- -------------------
Operating profit 11.2 27.7 58.2
Net finance costs (3.1) (1.3) (2.6)
------------------------------------------ --------------- --------------- -------------------
Profit before taxation 8.1 26.4 55.6
------------------------------------------ --------------- --------------- -------------------
The analysis of revenue by destination is not materially different to the analysis
by origin and the analysis of finance
income and costs are not significant.
The Group is divided into geographical areas for management purposes, and it is on
this basis that the segmental
information has been prepared.
iv) Revenue by business grouping:
Robert Walters(1) 430.8 406.4 868.5
Resource Solutions (recruitment
process outsourcing) 117.5 132.2 231.1
--------------------------------------- ------ ------ --------
548.3 538.6 1,099.6
--------------------------------------- ------ ------ --------
(1.) Walters People is included within Robert Walters
v) Revenue by service grouping:
Permanent 128.0 142.1 281.9
Temporary 330.3 325.8 670.5
Interim 65.2 58.7 119.9
Other 24.8 12.0 27.3
----------------------------------- ------ ------ --------
548.3 538.6 1,099.6
----------------------------------- ------ ------ --------
5. Taxation
2023 2022 2022
6 mths 12 mths
to 6 mths to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
--------------------------------- ---------------------- -------------------- ----------------
Current tax 1.3 7.5 15.7
Deferred tax 1.5 (0.5) 0.8
-------------------------------------- ---------------------- -------------------- ----------------
Total tax charge for the period 2.8 7.0 16.5
-------------------------------------- ---------------------- -------------------- ----------------
The tax charge is based on the expected annual effective tax
rate of 35.4% (2022: 26.5%) on profit before taxation. The
effective tax rate is higher than the standard UK rate of 25%,
primarily as a result of overseas taxation in Japan, the impact of
adjustments to accounting profit in the tax calculation and the
movement in deferred tax assets in relation to accruals and
provisions.
6. Dividends
2023 2022 2022
6 mths 12 mths
to 6 mths to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
------------------------------------- -------------- -------------- --------------
Amounts recognised as distributions
to equity holders in the period:
Final dividend for 2022 of 17.0p
per share (2021: 15.0p) 11.5 10.6 10.7
Interim dividend for 2022 of 6.5p
(2021: 5.4p) - - 4.5
------------------------------------------ -------------- -------------- --------------
11.5 10.6 15.2
------------------------------------------ -------------- -------------- --------------
Proposed interim dividend for 2023
of 6.5p (2022: 6.5p) 4.4 4.5 n/a
------------------------------------------ -------------- -------------- --------------
The proposed interim dividend was approved by the Board on 31
July 2023 and has not been included as a liability at 30 June
2023.
7. Earnings per share
The calculation of earnings per ordinary share is based on
the profit for the period attributable to equity holders of
the Parent and the weighted average number of shares of the
Company.
2023 2022 2022
6 mths 12 mths
to 6 mths to to
30 June 30 June 31 Dec
Unaudited Unaudited Audited
GBPs millions GBPs millions GBPs millions
------------------------------------ -------------- -------------- --------------
Profit for the period attributable
to equity holders of the Parent 5.3 19.4 39.1
----------------------------------------- -------------- -------------- --------------
Number Number of Number of
of shares shares shares
------------------------------------ -------------- -------------- --------------
Weighted average number of shares:
Shares in issue throughout the
period 78,928,095 80,689,295 80,689,295
Shares issued in the period - 146,996 203,095
Shares cancelled in the period (61,080) - (529,847)
Treasury and own shares held (11,112,624) (10,314,787) (10,784,800)
----------------------------------------- -------------- -------------- --------------
For basic earnings per share 67,754,391 70,521,504 69,577,743
----------------------------------------- -------------- -------------- --------------
Outstanding share options 3,885,704 4,068,262 3,687,416
----------------------------------------- -------------- -------------- --------------
For diluted earnings per share 71,640,095 74,589,766 73,265,159
----------------------------------------- -------------- -------------- --------------
8. Bank overdrafts and borrowings
The Group has a committed financing facility of GBP60.0m, which
expires in March 2026.
At 30 June 2023, GBP19.1m (2022: GBP26.6m) was drawn down under
this facility.
9. Related party transactions
There were no related party transactions in the period to 30
June 2023 (30 June 2022: none), other than employment and
share-based remuneration payments to key management personnel and
receipt of dividends for key management shareholders. There were no
outstanding balances as at 30 June 2023.
10. Registered office
The Company's registered office is located at 11 Slingsby Place,
St Martin's Courtyard, London, WC2E 9AB.
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END
IR KZGFNRMKGFZM
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August 01, 2023 02:00 ET (06:00 GMT)
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