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Robert Walters surges as full year profit tops expectations

The recruitment firm reported a pre-tax profit for the year of £49.1mln, up 21% on the prior year while revenues rose 6% to £1.23bn
Candidates
The company's net fee income was up 14% in the year at £392mln

Robert Walters PLC (LON:RWA) shares surged in early deals on Friday after it posted a record performance for the full year with profits coming in ahead of expectations.

The recruitment firm reported a pre-tax profit for the year ended 31 December of £49.1mln, up 21% on the prior year while revenues rose 6% to £1.23bn.

READ: Robert Walters reports record quarter as Asia Pacific and Europe drive growth

Net fee income (NFI) (money recruiters are paid to match people with jobs) was up 14% in the year at £392mln.

The growth in NFI was driven mainly by the company’s Asia Pacific (APAC) and European businesses, which reported increases of 13% to £154.1mln and 25% to £100.8mln respectively.

The company’s other segments, the UK, and Rest of World rose 7% to £107.5mln and 10% to £29.7mln respectively in the year.

The group’s final dividend was also hiked 15% to 10.7p per share, taking the total dividend for 2018 22% higher to 14.7p.

Looking ahead, chief executive Robert Walters said it was “inevitable” that Brexit uncertainty would continue to affect client and candidate confidence in the UK, but added that as 73% of its NFI came from outside the country the company “might benefit from any potential movement of businesses and key staff from the UK”.

Trading for the current year had “started well” and was in line with expectations, with the firm well placed to take advantage of opportunities.

In a separate announcement, the company also said that its deputy chief executive, Giles Daubeney, would step down from his role on 17 May 2019 after 30 years at the firm.

In a note to clients, analysts at broker Liberum said the momentum reflected “an improvement in productivity in the core business” that was expected to continue going forward.

The broker added that they expected consensus estimates to rise 3%-5% based on the strong 2018 performance.

Regarding Daubeney’s departure, Liberum said while his experience would be “hard to replace”, the company had a detailed succession plan and “the tenure of the other members of senior management should help reduce any risk associated with his departure”.

“We continue to see the shares as well positioned to benefit from a number of structural opportunities across a number of its key regions as well as its attractive outsourcing exposure.”

Shares were up 6.8% at 562p.

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