Robert Walters shares sink on likely coronavirus hit
3 March 2020, 12:14
The group reported 2019 pre-tax profits of £47.4 million – down 6% on a constant currency basis.
Recruitment giant Robert Walters has seen shares come under pressure after it warned the coronavirus outbreak is likely to impact 2020 profits.
The group – which operates worldwide – said the spread of the virus is adding further uncertainty to an “unpredictable” global recruitment market.
Shares fell 10% on the warning and as the group reported 2019 pre-tax profits of £47.4 million – down 6% on a constant currency basis.
Founder and chief executive Robert Walters told the PA news agency that coronavirus had slowed recruitment activity across all major markets worldwide, not just in China, where it started.
He said: “Everything has stopped, everywhere. It’s a global phenomenon.”
But he said the firm and many of its clients and candidates were prepared to work remotely and flexibly to cope with the disruption caused by the outbreak and measures to contain it.
It follows a difficult last year for the group amid Brexit and election uncertainty in the UK, political protests in Hong Kong and global economic worries caused by the US-China trade war.
In the UK – which accounts for around 24% of group net fee income – underlying earnings fell 7% to £11.5 million after net fee income dropped 9% to £98.4 million
Mr Walters said: “The global recruitment market remains unpredictable at present with the coronavirus outbreak, which is likely to negatively impact full-year profit expectations, adding a further layer of uncertainty.
“We will continue to monitor the coronavirus situation and update the market as appropriate.”
Robert Walters makes more than 40% of its group net fee income from the Asia Pacific region.
The Asia Pacific business grew underlying earnings by 7% to £22.6 million last year despite a significant hit to Hong Kong due to the political protests.
Overall group-wide net fee income lifted 2% to £405.5 million.
“2019 was a year of unprecedented political and economic turbulence fuelled by the US-China trade war, Brexit, protests in Hong Kong and Gilets-Jaunes disruption in France,” said Mr Walters.
Analysts at Liberum said they expected Robert Walters’ full-year profit expectations to be cut by around £2 million or 15% after the group’s likely coronavirus hit.