Robert Walters PLC Final Results (4813Z)

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Robert Walters Plc	LSE:RWA	London	Ordinary Share	GB0008475088	ORD 20P

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-5.00	-1.35%	366.00	360.00	379.00	385.00	360.00	368.00	12,093	16:35:07

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
Employment Agencies	1.06B	13.4M	0.1831	19.66	263.43M

Robert Walters (LSE:RWA)
Historical Stock Chart

From May 2019 to May 2024

Click Here for more Robert Walters Charts.

TIDMRWA

RNS Number : 4813Z

Robert Walters PLC

15 March 2017

ROBERT WALTERS PLC

(the "Company", or the "Group")

Results for the year ended 31 December 2016

RECORD RESULTS

Robert Walters plc (LSE: RWA), the leading international recruitment group, today announces its results for the year ended 31 December 2016.

Financial and Operational Highlights

 
                                    2016       2015      % change  % change (constant currency*) 
-------------------------------  ----------  ---------  ---------  ----------------------------- 
 Revenue                          GBP998.5m  GBP812.7m     23%                  15% 
-------------------------------  ----------  ---------  ---------  ----------------------------- 
 Gross profit (net fee income)    GBP278.3m  GBP234.4m     19%                  8% 
-------------------------------  ----------  ---------  ---------  ----------------------------- 
 Operating profit                 GBP26.2m   GBP23.1m      14%                  4% 
-------------------------------  ----------  ---------  ---------  ----------------------------- 
 Profit before taxation           GBP28.1m   GBP22.4m      26%                  16% 
-------------------------------  ----------  ---------  ---------  ----------------------------- 
 Basic earnings per share           27.7p      20.6p       34%                  n/a 
-------------------------------  ----------  ---------  ---------  -----------------------------

* Constant currency is calculated by applying prior period exchange rates to local currency results for the current and prior periods.

-- Record performance with profit before taxation increasing by 26% (16%*) year-on-year. Net fee income grew across all of the Group's regions and 15 countries delivered record performances.

-- Opened in four new countries - Canada, India, the Philippines and Portugal. Three new offices also opened in existing markets - Antwerp, Penang and Toulouse.

-- 69% of Group net fee income generated outside of the UK.

-- Asia Pacific net fee income up 22% (6%*) to GBP117.6m (GBP101.8m*) (2015: GBP96.3m) and operating profit up 13% (0%*) to GBP14.7m (GBP12.9m*) (2015: GBP12.9m).

-- Japan, our largest business in the region, delivered a record performance with bilingual professionals in high demand and short supply.

-- Australia delivered solid net fee income growth and New Zealand produced a record result.

-- Market conditions in Greater China remained challenging.

-- Thailand, Indonesia and Taiwan delivered particularly strong performances.

-- UK net fee income up 8% to GBP86.7m (2015: GBP80.4m) and operating profit up 4% to GBP6.4m (2015: GBP6.2m).

-- Candidate and client confidence impacted by EU referendum however activity levels remained positive across commerce finance and the UK regions.

-- Resource Solutions produced strong net fee income growth benefiting from the significant investment made during the first half of the year.

-- Europe net fee income up 30% (15%*) to GBP60.1m (GBP53.2m*) (2015: GBP46.3m) and operating profit up 27% (19%*) to GBP4.2m (GBP3.9m*) (2015: GBP3.3m).

-- France, the region's largest business, the Netherlands and Belgium all had record years with contract and interim recruitment delivering particularly strong results.

-- Spain, Switzerland and Germany produced the strongest growth rates, all increasing net fee income in excess of 40%.

-- Other International (North America, Brazil, the Middle East and South Africa) net fee income up 22% (3%*) to GBP14.0m (GBP11.8m*) (2015: GBP11.5m) and operating profit up 36% (16%*) to GBP1.0m (GBP0.8m*) (2015: GBP0.7m).

-- Group headcount of 3,229 (2015: 2,916).

-- Final dividend increased by 21% to 6.2p per share (2015: 5.13p).

-- 7.3m shares purchased in 2016 for GBP22.6m at an average price of GBP3.10. Since 31 December 2016, a further 2.1m shares have been purchased and cancelled at an average price of GBP3.79 for GBP8.0m.

-- Strong cash generation with net cash of GBP22.5m as at 31 December 2016 (31 December 2015: GBP17.8m).

Robert Walters, Chief Executive, said:

"I am very pleased to report a record set of results for the Group with profit before tax increasing by 26% to GBP28.1m. We grew net fee income across all of the Group's regions and opened offices in four new countries; Canada, India, the Philippines and Portugal.

"Looking ahead, we remain mindful of the unpredictable geopolitical environment, however, the Group's global footprint coupled with the range of recruitment services we provide positions us well to maximise opportunities for growth as they arise."

The Company will be holding a presentation for analysts at 10.30am today at Newgate Communications, Sky Light City Tower, 50 Basinghall Street, London EC2V 5DE.

The Company will publish an interim management statement for the first quarter ending 31 March 2017 on 11 April 2017.

Further information

 
 Robert Walters plc 
  Robert Walters, Chief 
  Executive 
  Alan Bannatyne, Chief 
  Financial Officer        +44 (0) 20 7379 3333 
 Newgate Communications 
  Steffan Williams 
  Charlotte Coulson        +44 (0) 20 7680 6550

About Robert Walters

Robert Walters is a market-leading international specialist professional recruitment group with over 3,200 staff spanning 28 countries. We specialise in the placement of the highest calibre professionals across the disciplines of accountancy and finance, banking, engineering, HR, IT, legal, sales, marketing, secretarial and support and supply chain and procurement. Our client base ranges from the world's leading blue-chip corporates and financial services organisations through to SMEs and start-ups. The Group's outsourcing division, Resource Solutions is a market leader in recruitment process outsourcing and managed services.

www.robertwalters.com

Forward looking statements

This announcement contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them at the time of their approval of this announcement and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Robert Walters plc

Results for the year ended 31 December 2016

Chairman's Statement

The Group performed strongly in 2016 with profit before taxation increasing by 26% (16%*) to GBP28.1m (2015: GBP22.4m). Net fee income and operating profit grew across all of the Group's regions despite a backdrop of political and economic uncertainty across a number of markets.

The strength of the Group lies in the blend of both the breadth of solutions we provide to clients and in our geographic spread. Our blend of specialist professional recruitment and recruitment process outsourcing solutions is a key differentiator in an evolving recruitment industry, whilst our geographic footprint covering 28 countries including fast-growing emerging recruitment markets and mature well-established markets provides a well-balanced platform for growth.

Revenue was up 23% (15%*) to GBP998.5m (2015: GBP812.7m) and gross profit (net fee income) increased by 19% (8%*) to GBP278.3m (2015: GBP234.4m). Operating profit was up 14% (4%*) to GBP26.2m (2015: GBP23.1m) and earnings per share increased by 34% to 27.7p per share (2015: 20.6p per share). The Group has further strengthened its balance sheet with net cash of GBP22.5m as at 31 December 2016 (31 December 2015: GBP17.8m). Permanent recruitment represents 69% (2015: 69%) of recruitment net fee income.

During the year, headcount increased by 11% to 3,229 (2015: 2,916) with the majority of the uplift within Resource Solutions, our recruitment process outsourcing business.

The Board will be recommending a 21% increase in the final dividend to 6.2p per share which combined with the interim dividend of 2.3p per share would result in a total dividend of 8.5p per share (2015: 7.08p).

I would like to take this opportunity to extend a warm welcome to Tanith Dodge who joined the Board as a Non-Executive Director in February 2017. Her HR expertise and experience working within international organisations will be a valuable asset to the Board.

In 2016, 6.3m shares were purchased at an average price of GBP3.04 for GBP19.2m through the Group's Employee Benefit Trust. The Group also purchased 1m shares at an average price of GBP3.44 for GBP3.4m, which were subsequently cancelled. A further 2.1m shares have been purchased and cancelled at an average price of GBP3.79 for GBP8.0m since 31 December 2016. The Board is authorised to re-purchase up to 10% of the Group's issued share capital and will be seeking approval for the renewal of this authority at the Annual General Meeting on 25 May 2017.

Finally, on behalf of the Board, I would like to thank all of our staff across the globe for their continued hard work and dedication. These results are a fitting testament to their efforts in delivering a high quality service to our clients and candidates.

Leslie Van de Walle

Chairman

14 March 2017

Chief Executive's Statement

Review of Operations

The Group's strong performance in 2016 is a testament to the success of our strategy for growth which is founded on the two pillars of international expansion and discipline diversification.

During the year, we further expanded our international footprint into four new countries, Canada, India, the Philippines and Portugal and strengthened existing businesses with new offices in Antwerp, Toulouse and Penang. The Group now has over 3,200 staff spanning 28 countries including some of the world's fastest growing and emerging recruitment markets, particularly in the Asia Pacific region. 69% of the Group's net fee income is now generated outside of the UK.

In discipline terms, our core specialist professional recruitment business continues to evolve through growth in emerging disciplines such as technology, digital, healthcare and fintech whilst retaining our leading positions in the more traditional disciplines of finance, banking, HR and legal. In addition, the Group, through our market-leading Resource Solutions offering, is at the forefront of the growth of the recruitment process outsourcing industry which we believe to be the most influential trend impacting today's global recruitment market.

Asia Pacific (42% of net fee income)

Revenue was GBP348.6m (2015: GBP285.1m) and net fee income increased by 22% (6%*) to GBP117.6m (GBP101.8m*) (2015: GBP96.3m) and operating profit increased by 13% (0%*) to GBP14.7m (GBP12.9m*) (2015: GBP12.9m).

Japan, the Group's largest business in the region, had a record year across both Tokyo and Osaka with bilingual professionals remaining in strong demand and short supply. Our emerging market strategy in Asia has continued to pay dividends with Thailand, Indonesia and Taiwan in particular delivering excellent growth and record performances. We have also further extended our footprint in Asia with the opening of our first office in the Philippines. For these emerging markets, the Group's ability to attract overseas professionals back to their home countries is a particular source of competitive advantage.

Market conditions in Greater China, particularly in financial services in Hong Kong, remained challenging whilst Singapore and Malaysia delivered robust performances.

Australia delivered solid net fee income growth with Sydney, Brisbane and Adelaide delivering the strongest results. In New Zealand, our business goes from strength to strength and produced a record performance. 2017 promises to be a particularly exciting year for our New Zealand business with the Group having renewed its sponsorship of the British & Irish Lions who tour the country in June and July.

Resource Solutions in Asia continued to deliver strong rates of net fee income growth winning a number of new clients in new territories and extending existing deals. To support this growth, we opened a new client service centre in Hyderabad, India.

UK (31% of net fee income)

Revenue was GBP480.6m (2015: GBP403.4m), net fee income increased by 8% to GBP86.7m (2015: GBP80.4m) and operating profit increased by 4% to GBP6.4m (2015: GBP6.2m).

2016 was a year dominated by the run-up to and fall-out from the EU referendum. Candidate and client confidence levels were negatively impacted and activity levels, particularly in financial services in London, declined. However, despite this general backdrop there were areas of notable activity with commerce finance across the UK performing well and our regional recruitment businesses in Manchester, Milton Keynes and St. Albans benefiting from their focus on SMEs to deliver record performances.

Resource Solutions has won a number of large new client accounts over the last 15 months which necessitated a significant investment in both staff numbers and infrastructure particularly during the first half of the year. I am pleased to report that Resource Solutions has benefited from this investment and delivered excellent year-on-year net fee income growth and we expect this to continue into 2017.

Europe (22% of net fee income)

Revenue was GBP147.0m (2015: GBP112.7m) and net fee income increased by 30% (15%*) to GBP60.1m (GBP53.2m*) (2015: GBP46.3m) producing a 27% (19%*) increase in operating profit to GBP4.2m (GBP3.9m*) (2015: GBP3.3m).

Our European business delivered a strong performance resulting in significant increases in both net fee income and operating profit. Spain, Germany and Switzerland delivered the strongest rates of growth, all increasing net fee income in excess of 40% year-on-year.

France, our largest business in the region, had a record year growing across permanent, contract and interim and a new regional office was opened in Toulouse. The Benelux region also had a record year with our contract and interim businesses in particular delivering standout performances. A new office was opened in Antwerp to further develop our regional office network in Belgium.

During the fourth quarter, the Group entered a new European market with the opening of our first Portuguese office in Lisbon.

Other International (5% of net fee income)

Other International comprises the USA, Canada, Brazil, the Middle East and South Africa. Revenue was GBP22.3m (2015: GBP11.5m) and net fee income increased by 22% (3%*) to GBP14.0m (GBP11.8m*) (2015: GBP11.5m) producing a 36% (16%*) increase in operating profit to GBP1.0m (GBP0.8m*) (2015: GBP0.7m).

Performance was mixed across the region. In the USA, New York was impacted by a decline in activity in financial services whereas our office in San Francisco continued to perform well and grew net fee income. We extended our North American footprint with the opening of our first office in Canada in Toronto at the beginning of the fourth quarter. Challenging market conditions continued to prevail in both Brazil and South Africa.

The Middle East had a record year and grew strongly benefiting from our continued diversification into new recruitment disciplines.

Outlook

Looking ahead, we remain mindful of the unpredictable geopolitical environment, however, the Group's global footprint coupled with the range of recruitment services we provide positions us well to maximise opportunities for growth as they arise.

Robert Walters

Chief Executive

14 March 2017

INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ROBERT WALTERS PLC ON THE PRELIMINARY ANNOUNCEMENT OF ROBERT WALTERS PLC

We confirm that we have issued an unqualified opinion on the full financial statements of Robert Walters plc.

Our audit report on the full financial statements sets out the following risks of material misstatement which had the greatest effect on our audit strategy; the allocation of resources in our audit; and directing the efforts of the engagement team, together with how our audit responded to those risks and the key observations arising from our work:

 
 Revenue Recognition 
  For permanent placements,          Our testing involved 
  which accounted for 17%            agreeing a sample of 
  of the revenue of the              permanent placement fees 
  Group in 2016 (2015:               earned but not invoiced 
  17%), the Group's policy           to written evidence of 
  (as detailed in the Accounting     candidate acceptance, 
  Policies note) is to               including confirmation 
  record revenue when specific       of start date. 
  recognition criteria 
  have been met, namely              We assessed the level 
  where a candidate accepts          of provision held at 
  a position in writing              the year-end against 
  and a start date is agreed.        the average level of 
  Accordingly revenue is             back-outs experienced 
  accrued in respect of              on a monthly basis during 
  permanent placements               the year. We also evaluated 
  meeting the above criteria         the back-outs following 
  but which remain unbilled.         the year end. 
 
  A provision is made for            We reviewed a sample 
  placements expected to             of timesheets received 
  be cancelled prior to              after the year end date, 
  the start date (back-outs)         to ensure that revenue 
  on the basis of past               in respect of these had 
  experience.                        been recorded in the 
                                     correct period. 
  Determining the level 
  of provision required              We recalculated the accrued 
  for back-outs involves             income balance relating 
  a significant degree               to temporary placements, 
  of management judgement.           and assessed the cut-off 
                                     applied to the receipt 
  For temporary placements,          of post year-end timesheets 
  which accounted for 83%            relating to services 
  of the revenue of the              provided before year 
  Group in 2016 (2015:               end. 
  83%), the Group's policy           Our testing also involved 
  (as detailed in the Accounting     a retrospective review 
  Policies note) is to               of timesheets submitted 
  record revenue as the              during 2016 which related 
  service is provided.               to 2015. This was done 
  Accordingly revenue is             to assess the likely 
  accrued in respect of              level of accrued income 
  temporary placements               required at 31 December 
  where temporary staff              2016 for 'missing' timesheets. 
  have provided a service 
  but which remain unbilled. 
 
  Whilst the calculation 
  of accrued income for 
  temporary placements 
  is not complex, management 
  judgement is required 
  in determining the amount 
  of accrued income to 
  recognise in respect 
  of placements where it 
  is believed that temporary 
  staff provided the service 
  before year end, but 
  where no timesheet had 
  been received at the 
  year-end date. 
--------------------------------  ----------------------------------- 
 Recoverability of trade 
  receivables and bad debt           We agreed a sample of 
  provisioning                       balances to subsequent 
  Gross trade receivables            cash receipts and other 
  at 31 December 2016 were           supporting documentation 
  GBP187.0m (2015: GBP140.7m).       (such as subcontractor 
                                     timesheets) which supported 
  Whilst historically the            the recoverability of 
  Group has not suffered             the balance. For certain 
  from a significant level           components, debtor confirmations 
  of write-offs, given               were also sent out for 
  the relatively small               a sample of balances. 
  balances due from a large 
  number of customers,               We have evaluated the

  significant management             diligence applied by 
  judgement is required              management in determining 
  in estimating the appropriate      the risk associated with 
  level of provision against         the recoverability of 
  trade receivables.                 the receivables balance 
                                     and tested the adequacy 
  The Group's policy is              of provisioning by recalculating 
  to record a provision              the provision for significantly 
  based on anticipated               aged balances, and considering 
  recoverable cash flows,            receivables where the 
  nature of counterparty,            ageing profile of debtors 
  past due date, geographical        has deteriorated or there 
  location, the costs of             is evidence that the 
  recovery and the fair              credit quality of the 
  value of any guarantee             debtor is considered 
  received, as detailed              a risk, and challenged 
  in the Accounting Policies         management to justify 
  note.                              why no provision is required. 
  In all full scope locations, 
  we evaluated the design            We analysed the make-up 
  and implementation of              of the year end provision 
  the internal controls              for bad debts and assessed 
  in place to ensure that            it against the bad debt 
  an appropriate provision           cost experienced in the 
  is recognised against              year. Additionally, we 
  trade receivables. In              evaluated post year-end 
  the UK we performed additional     developments to determine 
  testing to confirm whether         whether any provisions 
  these internal controls            required reversal or 
  were operating effectively.        further provision. 
                                     We did not identify any 
  We focussed our testing            misstatements or significant 
  on higher risk balances            deficiencies as a result 
  on the basis of the ageing         of our audit work. 
  profile, collection history 
  and the credit quality             We concluded that the 
  of the customer.                   provision for bad debts 
                                     was in the middle of 
                                     the acceptable range. 
--------------------------------  -----------------------------------

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we did not provide a separate opinion on these matters.

Our liability for this report, and for our full audit report on the financial statements is to the company's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for our audit report or this report, or for the opinions we have formed.

Deloitte LLP

Chartered Accountants and Statutory Auditor

Consolidated Income Statement