Growth in outsourcing boosts Robert Walters

UK recruiter Robert Walters reported a robust third quarter, as strong performance from its outsourcing business in the UK and international geographical diversification offset uncertainty in the aftermath of the Brexit vote.

In a trading update on Monday, the company said its net fee income had risen 8 per cent in the three months to the end of September. In the UK, net fee income was up 9 per cent.

“A lot of that growth in the UK is a reflection of the outsourcing business, Resource Solutions,” said Robert Walters, chief executive and founder of the group. “Winning contracts tends to be non-cyclical. We won two deals at the end of last year and while we had to spend quite a lot of money putting the people in place, now those have been flowing through with income.”

He said that while there was a “relatively subdued” market in financial services, there were “signs of a pick-up in activity levels towards the end of the quarter”.

The group has diversified its revenue streams geographically and now over two-thirds of net fee income comes from outside the UK.

In Europe, the recruiter’s net fee income rose more than 20 per cent in the Netherlands, Spain, Germany and Switzerland. Overall, business in the continent was up 8 per cent compared with the same period last year. The Asia-Pacific business grew 4 per cent.

Mr Walters has previously said there are opportunities for the company post-Brexit, in growth areas such as cyber security and legal services. The group also expects to pick up business in some of its other European offices if international banks expand their presence in cities such as Paris, Frankfurt or Dublin.

Robert Walters has received a boost from the drop in sterling, something that is also benefiting UK exporters and FTSE 100 companies with large international businesses.

Last week rival PageGroup reported a slide in UK gross profit in the third quarter, citing “fragile” market conditions after the Brexit vote. The company, previously known as Michael Page International, said gross profit in the UK fell 4.7 per cent year on year to £37.8m, in the three months to September 30. However, weak sterling boosted its international business and its total group gross profit rose 1.3 per cent on a constant currency basis to £158.6m.

Robert Walters said it continued to strengthen its balance sheet and now had £18.6m in net cash.

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