Among the key news on UK stocks, Robert Walters (GB:RWA) reported a 12% year-over-year decline in its gross profit (net fee income) on a constant currency basis to £84.8 million in Q2 2024. The company mentioned that it continues to struggle with the ongoing slowdown in the global recruitment industry and warned that that recovery may not occur before 2025. Following the update, Robert Walters’ shares have lost 3% as of writing.
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Robert Walters is a British recruitment company offering services across 31 countries globally.
Recruitment Sector Faces Headwinds
Globally, employers have trimmed their hiring budgets amid difficult economic conditions. Moreover, employees keep a cautious approach towards a job switch, leading to a slow hiring process.
Last week, Robert Walters’ competitors PageGroup PLC (GB:PAGE) and Hays PLC (GB:HAS) also reported similar updates and issued profit warnings for 2024. PageGroup expects its full-year operating profit to decline to £60 million in 2024, compared to £118.8 million in 2023. Meanwhile, Hays now forecasts an annual pre-exceptional operating profit of £105 million, which falls below the market consensus range of £106 million to £113 million.
Key Insights from Robert Walters’ Trading Update
Regionally, the company’s net fee income was hit the hardest in the UK, with an 18% year-over-year decline in the second quarter. This was followed by a decrease of 15% in the Asia Pacific and 14% each in Europe and the Rest of the World.
In the first half of 2024, the company’s net fee income declined by 14% to £166.1 million compared to the same period last year. Meanwhile, the company reduced its headcount by 15% year-on-year, to 3,625 as of June 30, to adjust to the current demand conditions.
Looking ahead, the company stated that the recovery is progressing slower than anticipated, emphasizing effective cost management.
The company will publish its first-half results for 2024 on August 1.
What is the Share Price Forecast for Robert Walters?
According to TipRanks’ consensus, RWA stock has received a Moderate Buy rating based on two Buy and one Hold recommendation. The Robert Walters share price forecast is 523.3p, which is 34% above the current trading level.
