Robert Walters’s gross profit comes in 33% lower as COVID-19 freezes hiring in Q2

Robert Walters plc (LON: RWA) revealed an about 33% decline in its gross quarterly profit on Thursday. The company attributed the decline to the Coronavirus pandemic that raised novel challenges in recent months as companies postponed hiring amidst the countrywide lockdown that started in March.

Shares of the company opened more than 2% up on Thursday but jumped roughly 5% on market open. At 400 pence per share, Robert Walters is a little under 25% down year to date in the stock market after recovering from an even lower 237 pence per share in March. Learn more about stocks and the stock market.

Robert Walters prints £71.1 million in gross quarterly profit

At £71.1 million, the British recruitment company said that its gross profit in the second quarter came in significantly lower than £106.4 million in the same quarter last year. On constant-currency basis, Walters registered a 34% year over year decline in its gross profit in Q2. Its competitor, PageGroup, also reported a slump in quarterly profit on Thursday.

According to Walters, a similar decline in profit was noted across all of its segments in the recent quarter. As of July, the specialist professional recruitment group has slashed its costs by 19%. It also suspended its dividend to shore up finances amidst the ongoing health crisis and laid off 5% of its consultants (compared to the end of March) at the end of Q2. Walters rival, SThree, also recorded a 7% decline in H1 net fees in June.

The company also highlighted on Thursday that it has now reopened the majority of its offices after months of inactivity due to COVID-19 that has so far infected a little under 300,000 people in the United Kingdom and caused more than 44,500 deaths. Its offices, however, are functioning with reduced capacities.

Robert Walters has £119.3 million in net cash

As of 30^th June, the London-based company boasted £119.3 million in net cash that was stronger than £54.5 million that it had at the same time in 2019. CEO Robert Walters commented on the company’s report on Thursday and said:

“Given the fluid and volatile nature of the global pandemic including the inherent risk of infection spikes and localised lockdowns, our forward visibility remains limited. That said, current trading is in line with market consensus for the full year.”

At the time of writing, the British recruitment group currently has a market cap of £304.27 million and a price to earnings ratio of 8.90.