Robert Walters Share Discussion Threads

[imastu pidgitaswell] 05/7/2012 09:09

I did run away again, for a few percent gain, and thankfully so. Not a pretty picture, especially news on Asia Pacific. Cash now very low, a high earnings multiple, no growth - not a lot to recommend it.

MPI also down (in sympathy?)

I did find this funny:

Three new offices opened during the period - Milton Keynes, Parramatta and Rio de Janeiro

Something a bit Del-boy about it...

[imastu pidgitaswell] 15/6/2012 10:50

Taken first dip in these for a long time - mainly on the back of MPI appearing to be bottoming out. Very poor liquidity though, not easy to buy or sell in any volume.

We'll see - the hard bit will be adding as it rises (if it does), as opposed my usual approach of throwing more at it is it falls...

[gswredland] 06/6/2012 17:29

Wouldn't mind some more below 150 but bit unlikely!

[imastu pidgitaswell] 06/6/2012 16:35

Nah, not really - it went too high on the swing up for me, 160-260 was too big a move given the economic position.

Time to wait for the drop to stop and not get tempted in too soon.

[yewtrees] 06/6/2012 16:23

Strange how RW share price is going down. Michael Page have declared a share repurchase programme.

[imastu pidgitaswell] 02/3/2012 08:43

I always miss out on this when it rises - always.

Watched it do its cyclical thing a number of times over the past 10 years - but every time it looks like the floor, I still think it is potentially overvalued - the share price precedes the trading results by a good 18 months. As it does on the way down.

Looking at the results just out, it says to me that RWA is overvalued, certainly in earnings, cashflow and risk terms. But it'll most probably carry on up and I'll watch it and scratch my head and regret it. And then I'll watch it fall and do the cycle all over again.

Really should have taken the plunge below 200, and was prepared to, just didn't have the fund thanks to TW.'s valuation at the time. Now that I do, well I've missed out on 50%,I think it's a bit overvalued and it's risky considering the wider economy, so I'm leaving it.

[abcd1234] 02/3/2012 08:16

From the Independent:

........................
recruiters were on the rise after Goldman Sachs' analysts raised their forecasts across the business services sector, citing their "more positive outlook". Hays pushed up 4.7p to 85.25p, while Michael Page was 24.1p better off at 477.7p, with the two also helped by a positive reaction to results from both Swiss rival Adecco and small-cap peer Robert Walters (up 9.75p to 239p).
..........................

[abcd1234] 01/3/2012 09:43

Good solid results today.. ;o)

[abcd1234] 24/2/2012 09:28

the 50 and 200 m.a's are about to cross ....very bullish if they do.
Especially if 225 is firmly cleared. :o))

[imastu pidgitaswell] 06/2/2012 13:58

Hmmm, wondering. Usual takes the 50 day and the 200 day to cross, with both heading up at the time, to make it push on up.

200 day is still (just) moving down. But much more of a rise and it won't be.

Painful experience tells me to await developments. But it also tells me that I'll miss the boat...

'twas ever thus...

[abcd1234] 02/2/2012 16:12

now broken up through the 200 day moving av. :o))))

[abcd1234] 02/2/2012 11:31

it's doing well :)

[imastu pidgitaswell] 01/2/2012 13:31

For those who hold - those of us who had been awaiting a pullback are a bit grumpier...

Now just under the 200 day moving average - which may or may not be significant (Michael Page just popped above it)?

[abcd1234] 01/2/2012 11:32

breakout over 200p .... nice ;o)

[abcd1234] 25/1/2012 13:51

if this breaks through 200 shortly, then 225 and 250 seem to be on the cards ;o)

[gswredland] 20/1/2012 08:19

Tempted to add but will there be a pull back as you say

[imastu pidgitaswell] 19/1/2012 10:02

Noticed that - but only freed up funds today. Tempted to wait until a pull-back, but will we get one?



Edit - pretty good analysis above, highlights potential negatives, as well as the important balance sheet and cash detail.

[abcd1234] 19/1/2012 10:01

..............................

Stock to Watch: Robert Walters
Fri, 13/01/2012 - 00:00

At 177p the FTSE Small Cap shares in international professional recruitment group Robert Walters (RWA) are worth watching this year, now the price is well down on the chart - amid cautionary noises from the recruitment industry.

Robert Walters tends to get traded both ways and a relatively thin market applies. Prospects will improve in due course and Walters' shares recover, it is just a matter of timing. Meanwhile the risk/reward profile looks interesting for long-term investors.

RWA has halved from levels near 350p in the first half of last year - back to where it was trading in the second half of 2009. Showing how recruiters can get hit by recession, normalised pre-tax profit plunged from £18.2 million to £1.6 million in 2009, yet recovered strongly to £13.2 million in 2010. This is why RWA's forward price-earnings multiple initially appears quite high, in the mid-teens, because the market is confident the business can in future years do better than the outlook for 2012.

A 6 January update cited "weaker client and candidate confidence... we therefore enter 2012 with caution", however the shares have edged up from 162p a few days before.

By way of comparison, Michael Page (MPI) said in an 11 January review for 2011 that its Asia Pacific segment grew by 23.3% like-for-like in the fourth quarter of 2011. Asia, however, saw an overall 28% growth rate "slow towards the end of the quarter, as international clients in particular became more cautious, deferring or reducing their recruitment needs." This is the issue investors worry may spread.

But doomsters are keeping a low profile as 2012 starts, with positive news from the US economy and as the eurozone muddles along; the predicted debacle is at least deferred. This helps explain why Page's FTSE 250 shares have jumped from about 350p to 375p after the update. More liquid than Walters' shares, they are likely to gain more attention first, although the key macroeconomic issues affecting recruiters are quite similar.

If you believe in eurozone disorder exporting uncertainty to the rest of the world, and companies postponing decisions, you would avoid cyclicals like recruiters for the time being. Yet it was just such a fear that depressed share prices in late summer 2011 and to an extent remains factored in. So any easing of fears can improve cyclical shares even if their commercial outlook is little changed.

Walters has also been doing well in France and Germany, despite the economic uncertainty across Europe. Net fee income during the final quarter of 2011 rose best of all in continental Europe, up 24% to £10.5 million, whereas the UK barely kept pace with inflation, up just 3% to £12.0 million. Overall, the group achieved 14% growth in net fee income, or 18% for 2011 as a whole - 15% in constant currency terms, anyway very good progress.

The company looks to be evolving well internationally, it's just that sentiment has been hit by another bout of uncertainty. In the first half of last year, a sixth office was opened in Australia, a fourth in China and the first in Vietnam. New offices were planned for Indonesia, Taiwan and Germany for the second half of 2011 and it will be interesting to track how all this is coming together.

With net fee income split 71% to permanent and 29% to contract professionals, the group should not be too exposed to the vagaries of short-term employment - which tends to be exposed most of all in a downturn. Last August's interims cited China and Thailand both more than doubling net fee income - easier done from a relatively low base, however Walters is positioning itself astutely for long-term growth.

The board has also ensured a dividend policy, albeit a flat payout of 4.75p a share over 2008-10 which is projected to rise to about 5.2p for 2011 and possibly 5.3p in 2012, although analysts differ.

The 2011 interim dividend rose by 5% to 1.47p, so things really depend on the outlook by prelims in early March. Anyway it implies an approximate 3% yield, if supported by balance sheet cash than cash flow. Note eight to the interim cash flow statement shows that after £10.1 million operating cash flow, an £11.4 million increase in receivables left this level of cash flow £2.2 million negative.

Additionally there was nearly £4 million investment and a net £9.5 million decrease in cash - although the period had begun with £31.9 million cash anyway, so the cash comparative edged up. Anyway the dynamics need to weigh more to net cash generation to see much expansion in the dividend; and anyway most investors may approach this share for capital growth.

The mid-2011 balance sheet looked well able to withstand a downturn. Debt involves just £9.9 million drawn down under a three-year, £20 million facility, with net finance costs of £148,000 versus £7.2 million operating profit in the first half.

Unlike many "people businesses" this one does not have a lot of capitalised intangibles/goodwill. Of £64 million net assets, just £9 million comprised intangibles and there was no capitalised goodwill. Cash edged up to £22.4 million and the ratio of current assets to current liabilities was a comfortable 1.4 times. The latest update cited over £17 million net cash at the year-end, i.e. some likely being used in respect of investment and the dividend.

Although visibility is notoriously low for a recruiter like this, Walters is nevertheless weighted to more dynamic countries - implying that the inevitable weak periods for its shares, being cyclical, should offer good opportunities for long-term investors to accumulate.

My essential reading of the share is reflected by the top two directors' trading, if prematurely. Last August the chief operating officer added 21,455 shares at 233p, to own over 1.6 million; also Robert Walters himself, as chief executive, bought 61,223 shares at 245p jointly with his wife, and she bought an additional 20,407 shares, also at 245p. Robert Walters owns nearly 2.2 million shares so should be incentivised for growth and to limit downside.

.....................................

[abcd1234] 19/1/2012 09:52

These have been ticking up with buying every day since last week.....

[yewtrees] 12/1/2012 16:07

Michael Page up again today. Better sentiment in the recruitment sector.

[yewtrees] 11/1/2012 19:53

Michael Page share price up today. Good results although UK flat.

[imastu pidgitaswell] 06/1/2012 10:34

Those broker targets quoted from only 6 months ago - highlights (again) what a pathetic racket they are in - at least 50% lower, sometimes a lot more:



nellie1973 - 6 Jul'11 - 13:20 - 544 of 559



Broker note out-Buy target price 343p

matt123d - 6 Jul'11 - 18:14 - 545 of 559


The following updated today after results

Investec - Buy - 430p

Numis - Buy - 500p

Altium - Buy - 343p

Collins Stewart - Buy - 355p

[imastu pidgitaswell] 06/1/2012 10:29

Yes, it is quite positive - a little surprising after MPI's recent statement.

Given that statement and the levels to which it has fallen, plus the appearance of the chart (always the risk that may be temporary, but c'est la vie) I would be dipping a toe - if I wasn't underwater elsewhere. If I took a loss there and bought here, I am pretty sure I would see my other stuff go up and this fall further...

[yewtrees] 06/1/2012 09:46

Good to see confidence coming back into RWA. Certainly the pessimism was way over done.

[imastu pidgitaswell] 05/12/2011 08:37

MPI warning today - much slower growth rates, not just the UK, but Asia-Pac and Europe. All in the space of 6-7 weeks.

Not that surprising, and the absolute growth rates, even at the lower rates are still sizeable, but it's certain the RWA will be impacted similarly.

Cyclical, and best to buy before the turn is reported, but we're not at the bottom yet.