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Robert Walters growth slows as UK recruitment turns negative and Brexit uncertainty lingers

UK gross profit in the second quarter was down 8%, but the recruiter now generates three-quarters of its net fee income from overseas businesses.

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Asia is Robert Walters' largest region, where Japan and New Zealand had record quarters

Specialist recruiter Robert Walters PLC (LON:RWA) reported a slower rate of growth in the second quarter, dragged down as the UK turned negative. 

Group net fee income came out at £106.4mln in the three months to end-June, up 7% on the same period last year, or 5% at constant currency rates. The group had reported 11% growth in the first quarter.

READ: Robert Walters delivers 'solid' first quarter despite political uncertainty in UK and France

UK gross profit in the second quarter was down 8% to £25.2mln, but Robert Walters now generates 76% of its net fee income from overseas.  

This was assisted by a first office opened in Mexico and a fourth office opened in the Netherlands during the period. 

Eponymous chief executive Robert Walters said: “The UK has been impacted by Brexit-related uncertainty, however the group's diverse geographic footprint and blend of revenue streams ensures we are well positioned for the future.”

The largest geographic segment is Asia Pacific, where net fee income grew 7% at constant currency rates to £44.2mln thanks to record performances in Japan and New Zealand, while Hong Kong was hit by the recent political unrest.

Europe 'swells'

European net fee income swelled 13% to £27.7mln, with an “encouraging” bounce-back in France, the group's largest business in the region, following the impact of the gilets jaunes demonstrations during the first quarter, and 15%-plus growth in Germany, Netherlands and Portugal.

At the end of the half-year, there was net cash of £53.2mln in the bank.

"The UK is the main surprise," said broker Liberum. "We understand that the regions remain resilient, as do manufacturing businesses - the weakness is big businesses in London where hiring decisions are on hold."

Robert Walters shares were up 0.75% to 604.5p in early trading on Tuesday.

Quick facts: Robert Walters

Price: 524 GBX

LSE:RWA
Market: LSE
Market Cap: £398.09 m
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