A major UK recruiter's shares pop as Asia buoys its outlook

Recruitment firms, including Page Group and Robert Walters, have seen their profits fall sharply as the COVID-19 pandemic has taken a toll on their businesses. (Source: Getty Creative)

Recruitment firm Robert Walters (RWA.L) said it is optimistic about the future, particularly in its Asia Pacific business, despite reporting on Tuesday that group profit fell 24% in the fourth quarter amid COVID-19 losses.

Shares were trading up 5% at around 8.47am in London.

Robert Walter's shares were boosted after it shares a rosy outlook for its business, particularly in its Asia Pacific business. Chart: Yahoo Finance

Profit for the fourth quarter came in at £71.4m ($98.22m), compared to £94.2m in the same period last year for the FTSE 250 (^FTMC) business.

Despite the losses, the business’ fourth quarter performance represents an improvement on the last two quarters, when profit fell even further.

A cost reduction strategy has been key to the business’ survival amid the COVID-19 pandemic slowing down recruitment efforts globally. Some firms have been forced to undergo dramatic cost-cutting efforts, including Page Group, which laid off more than 100 workers in Australia, China and Britain among its 7,500 global staff.

Amid the coronavirus pandemic, Robert Walters also said it was forced to cut its headcount by 5%, including operating the majority of its offices at reduced capacities.

READ MORE: European stocks flat amid soaring COVID-19 cases and vaccination campaigns

Despite the losses, the recruitment firm added that profit was likely to come in ahead of market expectations for the full-year.

“Market conditions do still remain challenging however there were signs of improvement in forward-looking indicators, particularly in Asia Pacific, the Group's largest region,” the firm said in a trading statement.

The firm also highlighted its strong balance sheet in its latest update, with net cash of £154.8m as at 31 December 2020, compared to £85.8m over the same period in 2019.

“Once again I would like to begin by thanking all of our people across the globe, whose wellbeing remains our number one priority, for the incredible durability and commitment they have shown during this most unprecedented and difficult of years,” said Robert Walters, chief executive. “It's their drive, passion for the business and singular focus on helping our clients and candidates that has enabled the Group to deliver such a resilient performance.”

A recent Grant Thornton report also highlighted that the impact of COVID-19 on recruitment firms “has been significant, affecting business’ entire operations from financial planning and cashflow management to people management, communications and technology.”

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