Robert Walters returns to growth as permanent hiring improves

By Nithyashree R B

Oct 14 (Reuters) - Robert Walters became the second British recruiter this week to return to gross profit growth, signalling a recovery from a slump of more than three years, while its CEO said recruitment activity for permanent staff was starting to pick up.

The London, England-based company's net fees rose 1% in the quarter ended September 30, helped by growth in permanent hiring in the UK, where it serves both large companies running big transformation programs and smaller firms, and temporary hiring in Japan.

Permanent hiring, for which recruiters earn a higher fee, has been hit hardest by employer and candidate caution linked to economic, geopolitical and AI uncertainties.

"It's a really important piece of the puzzle," Robert Walters CEO Toby Fowlston told Reuters. "This is not some sort of snap back," he said.

"This is going to be, in my opinion, market by market. I think it will be gradual and I think that's what we're starting to see."

Shares in Robert Walters, which have fallen 85% from record highs in 2022, climbed 5% on Wednesday. The company expects full-year results to be at least in line with market expectations.

POSITIVE PROSPECTS

European-listed recruitment firms started the week on a downbeat note after Hays on Monday reported a 14th consecutive quarterly fall in net fees due to weakness in Germany, its largest market.

But signs of strength in the US and Japan helped rival Michael Page on Tuesday end a nearly four-year run of quarterly declines.

Recruitment firms have cut consultant headcount and other costs during the prolonged slump in permanent staff hiring to protect profits.

Robert Walters' higher net fees, along with the company's cost-saving actions, mean there is a prospect of a return to profitability for fiscal 2027, analysts at Panmure Liberum said in a note.

(Reporting by Nithyashree R B in Bengaluru; Writing by Yadarisa Shabong; Editing by Ronojoy Mazumdar and Tasim Zahid)