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Key Points:
- Robert Walters reported a 12% decline in group net fee income for Q3 2024, reflecting ongoing market challenges.
- Headcount decreased by 4% quarter-on-quarter and 17% year-on-year, with a focus on maintaining fee earner tenure amid attrition.
- The company's balance sheet remains strong, with net cash increasing to £50 million as of September 30, 2024.
Robert Walters PLC (LSE:RWA) has released its trading update for the third quarter ended September 30, 2024, revealing a challenging landscape for the recruitment sector. The company reported a 12% decline in group net fee income, a trend that reflects persistent difficulties in the market, with little indication of improvement in client and candidate confidence.
During the third quarter, the specialist recruitment segment generated net fee income of £65.5 million, also down 12%. The decline in this area was consistent across both permanent and temporary placements, with permanent recruitment (which accounted for 66% of total fees) seeing a 12% decrease, while temporary recruitment (representing 34% of fees, including contract and interim roles) similarly fell by 12%.
In the recruitment outsourcing segment, net fee income dropped by 14%, totaling £14.4 million. Although non-permanent hiring showed slightly better resilience compared to permanent placements, overall performance remained subdued.
The company also reported a reduction in headcount, which decreased by 4% quarter-on-quarter and 17% year-on-year, bringing the total number of employees down to 3,466 as of September 30, 2024. This figure is down from 3,625 as of June 30, 2024, and significantly lower than the 4,200 reported on September 30, 2023. The decline in headcount included a 3% reduction in fee earners and a 7% decrease in non-fee earners. Robert Walters continues to be selective in its approach to replacing fee earners who leave naturally, aiming to maintain a stable average tenure among fee earners in preparation for eventual market recovery.
Despite the downturn in income and headcount, the company reported a solid balance sheet, with net cash of £50 million as of September 30, 2024, slightly up from £49 million as of June 30, 2024. This strong financial position will provide Robert Walters with the resilience to navigate the ongoing challenges in the recruitment market.
