Robert Walters shares plunge after profit warning
The recruitment firm said net fee income plunged 10% over April and May as the global jobs market remained under pressure.
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Your support makes all the difference.Recruitment firm Robert Walters has warned over full-year profits after seeing fee income tumble amid a weakening jobs market.
The group saw shares plunge as much as 20% at one stage, before settling about 15% down on Wednesday morning after it said 2023 profit was set to come in “significantly lower” than market expectations.
It saw net fee income fall 10% on a constant currency basis in the first two months of the second quarter, after fee income flatlined in the first three months of the year.
Robert Walters cautioned it was not seeing the expected sustained improvement in the recruitment sector after flagging lower candidate confidence and longer hire times at the end of last year.
The profit alert comes after it downgraded guidance in January for last year’s result, blaming a “difficult” jobs market due to economic worries.
In its latest update, the group said “recruitment market fundamentals such as job flow, candidate shortages and wage inflation remain solid, suggesting that when market confidence recovers there will likely be a return to meaningful growth”.
It is looking to take “appropriate” cost-cutting action, but suggested it would not look to trim jobs aggressively, saying it would protect its “strategic core” after investing heavily in expanding its workforce and global operations in the past two years.
It said it hopes this will “ensure we can fully benefit from future growth opportunities as they arise”.
Analysts at Liberum said they believe the market may look to cut Robert Walter’s expected pre-tax profits to £25 million less than half the £55.6 million notched up in 2022.