International diversification pays off for Robert Walters

Fears that a fourth quarter trading update by recruitment firm Robert Walters might include a profit warning proved unfounded, though the group concedes that conditions in the UK market remain difficult.

"Group net fee income for the year ended 31 December 2011 was up 18% [15% on a constant currency basis] to £183.6m (2010: £155.4m) and we expect a satisfactory outcome for 2011 as a whole," revealed Robert Walters, Chief Executive Officer of the company that bears his name.

Net fee income (NFI) for the group as a whole rose 14%, or 12% in constant currency (CC) terms, in the final three months of 2011 to £46.4m from £40.6m in the fourth quarter of 2010.

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Europe was the star performer, just beating NFI growth achieved by the Americas & South Africa. Net fee income in the former area rose 24% (CC:25%) to £10.5m from £8.4m the year before, with France and Germany performing especially well.

The nascent Americas & South Africa businesses combined saw an 18% (CC:22%) rise in NFI to £1.0m from £0.8m.

The group's biggest area of operations, Asia Pacific, saw NFI rise 16% (CC:12%) to £22.9m from £19.7m a year earlier. The UK market's NFI edged up 3% to £12.0m from £11.6m in the final quarter of 2010. The UK now accounts for only around 26% of net fee income.

"The group remains well positioned to meet the challenges ahead as a result of our strategy of geographic expansion and diversification," Walters claimed.

Group headcount increased to 2,042 at the end of the year from 2,001 at the end of September as a result of a major Resource Solutions client win.

The company's balance sheet remains in good nick, with net cash in excess of £17m as at 31 December 2011, though this was down from £24.9m at the end of 2010.

"We are very mindful of current market conditions and weaker client and candidate confidence and therefore enter 2012 with caution," Walters admitted.

"We will run the business as we have in previous times of economic uncertainty, through sensible cost management and long term investment in those markets offering strong growth opportunities," Walters pledged.

Shares in the recruitment firm rose 2p to 165p on the release of the trading update.

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