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ROBERT WALTERS PLC Preliminary Results

ROBERT WALTERS PLC Preliminary Results for the year ended 31 December 2009

Results ahead of expectations.
Net fee income (gross profit) down 25% (31% in constant currency*) to 104.4m (2008: 138.6m).
68% of the Group's net fee income now generated from outside of the UK (2008: 67%).
Operating profit of 1.6m (1.6m in constant currency) (2008: 18.6m).
Profit before taxation of 1.3m (2008: 18.2m).
Basic earnings per share of 0.3p (2008: 17.2p).
Final dividend maintained at 3.35p per share, giving a total dividend for the year of 4.75p per share (2008: 4.75p).
Strong cash position maintained, with 17.3m of net cash as at 31 December 2009 (31 December 2008: 22.2m).

Grew market share as clients gravitated to Robert Walters as one of the larger recruitment brands with a global presence.
Group has maintained its presence in all the markets in which it operates.
Took advantage of lease expiry dates and consolidated two offices in Hong Kong and two offices in Tokyo into single office locations.
Emerged from 2009 as a stronger, leaner business.

Entry into Latin American recruitment market, with new office opening in Sao Paulo.
Building on our established position in Asia Pacific:
- Office opening in Beijing.
- Actively assessing opportunities in other cities in mainland China and the Asia Pacific region.
Continued investment to grow our Walters Interim business across Continental Europe.
Strategic hiring activity across all regions.

Chairman's Statement

Despite the challenging economic environment that prevailed across the globe during 2009, the Group delivered a creditable performance and I would like to take this opportunity, on behalf of the Board, to thank all Robert Walters staff for their hard work, continued commitment and loyalty.


Revenue decreased by 11% to 300.4m (2008: 337.3m) and gross profit ('net fee income') by 25% (31% in constant currency) to 104.4m (2008: 138.6m). Operating profit decreased to 1.6m (1.6m in constant currency) (2008: 18.6m) whilst profit before taxation fell to 1.3m (2008: 18.2m). The Group maintained a strong cash position with net cash of 17.3m as at 31 December 2009 (2008: 22.2m).

In response to some of the toughest trading conditions experienced in the Group's history, action was taken to manage the cost base, principally by reducing headcount by 19% to 1,269 (2008: 1,571). As expected, our contract business proved more resilient than our permanent business and at the year-end had generated 40% of the Group's recruitment net fee income (2008: 35%).

The first half of the year was marked by a significant decline in hiring activity right across the globe.
Signs of market stabilisation did, however, emerge early in the second half of the year, driven by increases in permanent hiring activity, particularly in the financial services sector and Asia Pacific. As a result, we began selectively hiring to take advantage of these opportunities.

The Group now generates 68% (2008: 67%) of its net fee income from outside of the UK and has 37 offices in 17 countries.

The Board is recommending maintaining the final dividend at 3.35p per share (2008: 3.35p), which together with the interim dividend of 1.40p per share represents a total dividend of 4.75p per share (2008: 4.75p). The Board will be seeking shareholder approval for the renewal of the authority to repurchase shares of up to 10% of the Group's issued share capital at the Annual General Meeting on 21 May 2010.


Our strategy has been to streamline our business through sensible cost reductions and strong cash management. We have also taken steps to ensure that we retain the best talent. Most significantly though, the Group has successfully maintained its global presence and has not withdrawn from any markets in which it operates. As one of the leading global recruiters, with an internationally recognised brand, this has enabled the Group to grow its market share. We are now well placed to capitalise further as the global economy recovers.

The Group will continue to invest in areas where it sees the most opportunity. We have identified Latin America as a key new market and will be opening an office in Sao Paulo. We will also be building on our established positions in Asia and Europe.

Philip Aiken

Chief Executive Officer's Statement


During the year, we controlled our costs and managed our cash in the face of a global downturn that was unprecedented. In June we took the decision not to reduce headcount any further, nor to withdraw from any of our markets. This has enabled us to maintain a strong international presence and we are now well positioned to take advantage of any improvements in trading conditions.

Clients have continued to gravitate towards large, international recruitment brands, such as Robert Walters, with the ability to provide specialist recruitment solutions on both a global and local scale. The ability of the Group to also provide a full spectrum of complementary offerings such as recruitment process outsourcing, payroll, candidate assessments and reference checking has also been a significant competitive advantage.

Review of Operations

Asia Pacific (41% of net fee income)

Revenue was 122.5m (2008: 137.1m) and net fee income decreased by 26% (36% in constant currency) to 43.0m (2008: 58.1m) producing an operating profit of 3.3m (3.2m in constant currency) (2008: 12.3m).

Whilst trading conditions across the region were particularly difficult during the first half, markets stabilised and recovered towards the end of the year. All of our operations increased net fee income and profitability during the second half, with particularly strong performances delivered in Australia, Singapore, Malaysia and mainland China. The dates of the expiry of lease agreements in Tokyo and Hong Kong enabled the Group to consolidate its operations in both cities into single office locations.

The Group is widely recognised as one of the leading specialist professional recruitment businesses in Asia. With the region expected to continue to lead the world's markets out of recession, the Group will invest in developing both existing and new markets and is well positioned to grow both net fee income and profitability.

UK (32% of net fee income)

Revenue was 116.5m (2008: 133.2m) and net fee income decreased by 26% to 33.8m (2008: 45.4m) producing an operating loss of 0.8m (2008: profit of 1.9m).

Despite an increase in hiring activity in the financial services sector during the second half, market conditions remained generally weak across all sectors and disciplines. Resource Solutions, our recruitment process outsourcing business, proved the exception, successfully growing the scope of services delivered to existing clients and securing a number of new accounts.

Our contract divisions continued to provide some hedge against the decline in permanent hiring and our regional UK offices showed a degree of resilience with a relatively modest decline in net fee income.

With visibility limited, the outlook for the UK market remains uncertain.

Europe (25% of net fee income)

Revenue was 59.4m (2008: 64.9m) and net fee income decreased by 22% (31% in constant currency) to 25.6m (2008: 33.0m) producing an operating loss of 0.7m (0.6m in constant currency) (2008: profit of 4.5m).

Net fee income levels across the region stabilised in the second half of the year, after a decline during the first half. France was the region's strongest performer, benefiting from the investment made in the Walters Interim business over the last four years. We continued to invest in Walters Interim, opening a second office in Belgium during the first half. The Group also opened an office in Zurich, our first in Switzerland.

Whilst some markets in Europe have stabilised, the timing of a sustained recovery across the region is difficult to predict.

USA and South Africa (2% of net fee income)

Revenue was 2.0m (2008: 2.1m) and net fee income decreased by 8% (22% in constant currency) to 2.0m (2008: 2.1m) producing an operating loss of 0.2m (0.2m in constant currency) (2008: 0.1m).

Our office in Johannesburg benefited from a market shortage of high calibre candidates and delivered an increase in both net fee income and operating profit. Our New York office increased net fee income during the second half of the year as the local market began to stabilise, but still returned a small loss for the year.

Current Trading & Outlook

Net fee income for January and February is ahead of the equivalent period in 2009.

The Group's balance sheet remains strong and we have emerged from last year as a stronger, leaner business. We are selectively hiring, we are investing in those regions where growth prospects are most evident and we are actively assessing opportunities to grow our coverage in existing markets.

Robert Walters
Chief Executive


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