Text size
The hot jobs market has helped boost British recruiter
Robert Walters
as companies bounce back from the pandemic and hire more workers.
Shares (ticker: RWA.UK) in the employment group, which places accountants, legal, and technology staff, have jumped almost 68% in the past 12 months to 7.60 pounds sterling ($10.11). A shortage of white-collar workers in some of Robert Walters’ 31 markets means companies have hiked salaries to woo the best talent.
The company in October said in its third-quarter update through Sept. 30 that “profit for the full year is expected to be comfortably ahead of current market expectations.” Group profit was up 26% from the year-ago quarter to £91.8 million. Rivals
SThree
(STEM.UK),
PageGroup
(PAGE.UK), and
Hays
(HAS.UK) each raised earnings guidance as well.
But there’s another macro issue that has the potential to drive productivity and profit higher at Robert Walters: a digital transformation fueled by the pandemic. The company has developed an artificial-intelligence tool with a third-party technology party called Broadbean that matches suitable candidates with clients faster.
The company took an early leadership role during the pandemic to train clients to use technology to conduct virtual interviews, and hire and review employees remotely. More than 150 webinars produced by the company have been viewed almost 30,000 times, and 3,800 podcasts have been downloaded.
Other innovations include Gem, a customer-service management tool that helps headhunters track and manage passive contacts and future prospects. Gem generated a 30% response rate from potential job candidates compared with a 21% response rate on LinkedIn, according to the annual report.
Sanjay Vidyarthi, an analyst at broker Liberum, forecasts that the stock could rise 28.2% to £9.75. The investment in technology will drive productivity and margins over time, he wrote in a note, adding that the company has “stuck to its knitting and has plenty of longer-term growth potential across a broad range of markets.”
Asia-Pacific generates just under half of the profit, with Europe around 25%, the U.K. 20%, while North America, lumped into “other international” as a potential growth area, comprises the rest.
Robert Walters has a market value of £513 million, fetches a multiple of 15.9 times this year’s expected earnings, and trades at a 10% premium to its peers. The company employs 3,598, and hired 146 new consultants during the third quarter.
In 2020, pretax profit fell to £12.1 million on sales of £938.4 million, down from £47.4 million and £1.2 billion, respectively, in 2019.
Research presented at the company’s capital markets event pointed to the opportunity ahead—there are a record number of unfilled positions, with 10 million in the U.S. and 1.7 million in the U.K. On top of that, 41% of workers who have jobs are looking to make a change in the next 12 months.
Among the regional opportunities: In Asia, the company is recruiting talent to address the shortage in semiconductors. In Australia and New Zealand, the lack of job candidates has been exacerbated by a lack of immigration and professionals who are migrating overseas.
“The acceleration of candidate and client confidence, combined with a shortage of candidates, is leading to increased competition and wage inflation,” CEO Robert Walters told Barron’s. “We expect the market to continue to improve into next year with demand outstripping supply.”
Read More: Hot Jobs Market Is Boosting This U.K. Recruiter. The Stock Is Up More Than 60%.