Roberts Walters, a recruitment firm, posted a reduction in half year profit despite rising revenue as the cost of sales and administrative expenses overtook income growth.
Profit before tax more than halved to £7.1m (2011: £3.1m), on revenues of £275m (2011: £241.6m), after the cost of sales rose to £152.5m to £182.6m and administrative expenses increased from £81.9m to £88.9m.
Basic earnings per share fell from 6.5p to 2.9p.
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Robert Walters, Chief Executive, said: "Current trading remains difficult necessitating close management of the group's cost base, particularly in those locations where market conditions are most challenging. We will continue to selectively invest in the long-term geographic growth and diversification of the group and are confident that this strategy, combined with our strong balance sheet, market-leading global brand and experienced management team, will ensure that the group is well positioned for the future.
"Market conditions and client and candidate confidence levels remained fragile during the first half, with permanent recruitment within the banking sector most severely affected. Our long-term strategy of geographic and discipline diversification is providing the Group with resilience, competitive strength and opportunities for growth.
"Contract recruitment now represents 31% (2011: 29%) of the group's recruitment net fee income. The balance of contract and permanent recruitment provides greater resilience when market conditions are challenging and also positions us well to grow quickly and benefit from operational gearing when confidence returns."
Regionally, revenue from Asia Pacific was £134.7m (2011: £109.9m), net fee income increased by 3% (0% in constant currency) to £45.9m (2011: £44.5m), delivering an operating profit of £3.3m (£3.1m in constant currency) (2011: £5.8m).
UK revenue was £93.4m (2011: £86.2m) and net fee income increased by 5% to £23.9m (2011: £22.9m) delivering an operating profit of £0.0m (2011: £0.3m) after Resource Solutions performed strongly during the first half of the year.
In Europe, revenue was £44.0m (2011: £42.9m) and net fee income increased by 3% (8% in constant currency) to £19.9m (2011: £19.4m) giving an operating profit of £0.3m (£0.4m in constant currency) (2011: £1.0m), boosted by a good performance in France, its largest business in the region.
Revenue in the Americas and South Africa was £2.9m (2011: £2.5m) and net fee income increased by 11% (16% in constant currency) to £2.7m (2011: £2.4m), while the operating loss widened to £0.2m (2011: operating profit of £0.1m).
The firm maintained the dividend at 1.47p per share.
Cash at the end of the half year was £4.6m as at June 30th 2012 (30 June 2011: £10.7m).
The share price rose 0.9% to 183p by 10:25.
NR
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