Robert Walters (LON:RWA) said its first-half 2026 performance was in line with expectations as the recruitment firm reduced costs, continued cash-management actions and reported improving trends in parts of its specialist recruitment and outsourcing operations.
Net fees totaled £135 million in the first half, down 3% year over year on a constant-currency basis. Interim Chief Financial Officer Jonathan Solesbury said the result represented a sequential improvement from the trend seen during 2025, although the year-over-year decline in second-quarter fees was 4%, compared with a 2% decline in the first quarter, reflecting a tougher comparison period.
The board did not declare an interim dividend, citing its focus on maintaining a strong balance sheet to support operational and strategic objectives.
Cost reductions and cash measures
Solesbury said average group headcount declined 11% from a year earlier, contributing to a £4.5 million reduction in staff costs. Non-staff costs fell by £4 million as teams limited spending to activities that generate fees, reduce costs or meet regulatory obligations.
Since 2023, Robert Walters has removed approximately £83 million of annualized underlying costs, according to the company. Management said it has sought to preserve the experience of its fee earners while reducing the cost base, with average fee-earner tenure at the end of the first half nearly one-quarter higher than at the end of 2021.
The group remains on track to deliver at least £12 million in annual structural savings compared with its 2023 cost base, with the full profit-and-loss benefit expected in 2027. It expects to exit 2026 with an underlying monthly cost base of roughly £22 million.
Free-cash outflow improved from the prior year, supported by cost controls. However, working capital produced a £6.3 million outflow during the first half. While receivable days declined year over year, the benefit was offset by a rebuilding of temporary recruitment volumes, particularly in Australia and New Zealand, and timing effects around revenue earned but not yet invoiced.
The company has also strengthened day-to-day cash forecasting through an upgraded treasury function and said efforts to establish local financing facilities in certain non-U.K. markets were at an advanced stage. Robert Walters expects net cash at the end of 2026 to be broadly stable compared with its closing 2025 position.
Specialist recruitment actions
Chief Executive Toby Fowlston said the company’s strategy remains centered on geographic expansion in key markets and broadening its service offerings, including interim management, consultancy and outsourcing. He said the company believes it can return its specialist recruitment business to growth faster than the broader market despite continued uncertainty in global hiring conditions.
About half of the specialist recruitment portfolio was in growth during the first half, compared with around one-tenth a year earlier. Fowlston said the company believes market-share gains contributed to the improvement in several markets, including the U.K., Spain and New Zealand, where its trading performance improved despite relatively stable job-advertising demand.
In Malaysia, investment in executive search helped lift the average permanent-placement fee by 6% in the first half. In Japan, the company focused on profitability and sales-funnel management, with permanent-placement volume productivity rising 12% year over year. Fowlston said competition for high-performing consultants in Japan remained an area being monitored.
In the U.K., permanent-placement volumes increased 18% from a year earlier, while average permanent fees and headcount were broadly flat. In France, where the company has installed new leadership, interim-management volumes exceeded prior-year levels in the second quarter for the first time since early 2025. Management also recently hired an executive from a competitor to improve performance in the more junior temporary staffing segment.
The company continued to review businesses in markets with weaker structural conditions and where execution has historically required improvement. Fowlston said Robert Walters is applying stricter criteria to determine whether it remains the best owner of those operations and expects to conclude the review later this year.
Outsourcing and consultancy growth
Robert Walters said its recruitment process outsourcing, or RPO, and managed service provider, or MSP, operations returned to net-fee growth in the first half after a turnaround effort involving new leadership, a more focused service range and changes to improve competitiveness in tenders.
RPO, which supports permanent hiring at scale for enterprise clients, accounted for about two-thirds of outsourcing net fees in the period. The company said its outsourcing client book now largely consists of retained clients, reducing the drag from contracts that were being wound down. Management also cited an expanded partnership with financial institution MUFG secured in the fourth quarter of the prior year.
The consultancy business, launched in late 2022, generated around £4 million of net fees in the first half, or approximately one-sixth of outsourcing fees. Consultancy net fees rose 41% year over year, aided by work for a U.K. government department responsible for digital services. The company said the arrangement involved providing an end-to-end solution for technology-project requirements rather than simply supplying workers.
During the analyst question-and-answer session, Fowlston said RPO margins are typically in the low double digits and MSP margins are generally more likely to be single digit, while consultancy offers stronger margins. He said the company continues to target a medium-term group drop-through margin of 16% to 19%, but does not have a predetermined view of the revenue mix two to three years ahead.
Outlook
Robert Walters expects its full-year financial result to be toward the upper end of current market expectations. It continues to expect 2026 group net fees to be slightly below 2025, reflecting differing conditions across hiring markets. Management expects recruitment outsourcing net-fee growth recorded in the first half to be broadly sustained in the second half and anticipates a further reduction in the underlying cost base.
Fowlston said the group entered the second half with “good trading momentum” in a number of markets, while maintaining its focus on cost, cash and growth initiatives.
About Robert Walters (LON:RWA)
Established in 1985, Robert Walters is a global talent solutions business operating in 31 countries across the globe. We support organisations to build high-performing teams, and help professionals to grow meaningful careers. Our client base ranges from the world’s leading blue-chip corporates through to SMEs and start-ups.
We deliver three core services:
• Specialist recruitment – encompassing permanent and temporary recruitment, executive search and interim management.
• Recruitment outsourcing – enabling organisations to transfer all, or part of, their recruitment needs to us either through recruitment process outsourcing (RPO) or contingent workforce solutions (CWS).
• Talent Advisory – supporting the growth of organisations through market intelligence, talent development, and future of work consultancy.
Our employees are passionate about powering people and organisations to fulfil their unique potential.
