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Robert Walters - Leadership Through Experience

Robert Walters PLC (LON:RWA) shares have gained 79% in the last 12m, 219% in the last 5 years, strongly outperforming peers. We argue this is driven by growth in NFI (Net Fee Income), up 18% like-for-like in H1 2017, or 11.5% overall NFI CAGR in the last 15 years, with only one down year.
Robert Walters - Leadership Through Experience

In this report we examine some of the drivers which underpin this sustained organic growth trend.

We believe that the growth dynamics which have driven the share price in recent years will continue over the coming years. Furthermore we believe that the drop-through of NFI to operating profit will continue to push margins higher in the coming years, giving further leverage to earnings growth.

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November 22 2017

Empresaria released a trading update on November 21st, lowering the expected growth rate for FY2017 PBT. This was due to the weak market conditions in the Mideast which were flagged in the H1 results, and also to changes in legislation in Germany. The German issue, also previously know, relates to rules restricting the length of tenure for contract workers (Empresaria’s main focus) and the introduction of equal pay after 9 months. These rules take full effect in 2018, but employers appear to be adjusting their behaviour ahead of implementation

August 22 2017


Empresaria’s H1 results confirm the message of July’s trading update, and the outlook for the full year – continued growth in Net Fee Income (NFI) and EPS. Net Fee Income was up 26% (17% at constant FX), adj. Operating Profit +23% (9% at constant FX).

This has been delivered against a mixed background for the wider peer group. The big generalists such as Hays or Randstad have maintained growth, but some of the specialist peers (notably Impellam plc.) have encountered headwinds. Empresaria has benefitted, in our view, from a balanced geographic footprint and from its multi-niche customer industry base.

The company has noted that there has been a slowdown in hiring processes in the UK post-election, but overall the group is on track, and we maintain our FY forecast of 19.5% earnings growth, well ahead of the sector trend.


The biggest driver of H1 Net Fee Income and Operating profit was the contribution from the major investments made during 2016 - Rishworth Aviation and ConSol. We believe that the strategy of targeted external investments remains a key value driver going forward.

It is important to note that the operating profit growth has been achieved in spite of charges (£0.5m) for integration and growth enhancement, within the newer investments and also the existing portfolio. This is one of the reasons for the reduction in the conversion ratio (Net Fee Income into Operating Profit) to 14.2% from 14.8% a year earlier. We expect this conversion ratio to resume an upward trend as the benefits of these above-the-line investments feed through.

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