Resilient UK economy pushes up profits at recruiter Robert Walters

UK recruiter Robert Walters has reported a 16 per cent constant currency rise in profits before taxation to £28.1m, boosted by its international diversification.

Uncertainty immediately before and after the Brexit vote led to a slow down in recruitment activity in Britain, as employers and employees held off making staffing decisions.

But several recruiters have since reported an uptick in UK hiring activity towards the end of 2016, as business confidence soon rebounded following the referendum.

Robert Walters, whose market capitalisation is shy of £300m, saw UK operating profit grow 4 per cent year on year to £6.4m.

Despite a soft performance in London, Robert Walters said the rest of the UK had been more resilient: “There were areas of notable activity with commerce finance across the UK performing well and our regional recruitment businesses in Manchester, Milton Keynes and St. Albans benefiting from their focus on SMEs to deliver record performances.”

The UK business comprises 31 per cent of the group’s net fee income, and was supported by its outsourcing division.

Robert Walters’ home market is now dwarfed by its overseas ventures. It opened in four new countries last year – Canada, India, the Philippines, Portugal – and 69 per cent of net fee income now comes from outside the UK, helping to boost profits thanks to the translation into weak sterling.

Asia Pacific comprises 42 per cent of net fee income, with profit before tax up from £12.9m to £16.7m – although constant currency operating profit was flat. While market conditions in China “remained challenging”, other Far East territories did well.

The group also reported good growth in Europe and other international territories, despite tough financial services markets in the USA.

Robert Walters, the group’s eponymous chief executive, said he remained “mindful of the unpredictable geopolitical environment, however, the Group’s global footprint coupled with the range of recruitment services we provide positions us well to maximise opportunities for growth as they arise.”