Robert Walters H2 profits hiked on higher UK hirings - UPDATE

12th Jul 2013 11:54

Recruiter Robert Walters has generated increased net fee income across all regions in the second quarter but continued to retain its cautious outlook. Brokers were greatly encouraged by the statement and felt it hinted at a recovery for the sector if not the economy. The Covent Garden headquartered group drove group net fee income up 10% in the three months to June 30th compared to the previous quarter and 7.0% compared to the same period in 2012. Net fee income, or gross profit, increased across all regions, with UK net fee income up 16% to £13.9m as regional offices began to flourish.The Asia Pacific arm, the largest by some margin, was up just 1% however to £24.3m, with Europe ahead by a more encouraging 7.0% to £10.7m.Recruitment outsourcing business Resource Solutions won a pair of new contracts in the UK and three in Asia Pacific during the quarter.Eponymous Chief Executive Robert Walters said: "The group continues to trade in line with expectations and delivered a solid performance in the second quarter. "In the UK, we have seen improved activity particularly in our regional offices and have grown our market share, placing an increased number of candidates in sectors such as commerce, HR, legal and IT."The balance sheet showed net cash of £6.9m at the period end, up from £2.4m at the end of the previous quarter and £4.5m at the same point in 2012. Walters concluded: "While the first half results are encouraging, we remain cautious about the overall global macroeconomic outlook and continue to manage our cost base accordingly."Investec, which has a buy stance, said: "There are certainly signs that market conditions are stable, if not improving and, if so, we see Robert Walters as the UK listed recruitment stock to own."Panmure Gordon analyst Paul Jones retained his sell recommendation on the stock but said the update contained "a number of indications that underlying markets may be over the worst"."We are gently warming to recruiters, and early signals that things may beimproving give us some cause for optimism," he said. While market share gains suggested the company was getting its offer right, Jones noted that rates remain competitive and a lack of visibility meant the market could take "little confidence that there is any consistency to trading". Shares in Robert Walters remained up 4.0% at 221p by 15:05 on Friday.OH