Robert Walters PLC - Annual Financial Report
Annual Financial Report
Copies of the Annual Report & Accounts of the Company for the year ended
The Board are reviewing the date of the Annual General Meeting in the light of ongoing Coronavirus government restrictions and a further notification will be made prior to 23 April.
The Annual Report & Accounts 2019 is now available on the Company's website at:
The AGM Notice and Proxy Voting Form is also available on the Company's website at:
In accordance with Disclosure and Transparency Rule 6.3.5, the information in the attached Appendix consisting of a Directors' Responsibility Statement, principal risks and uncertainties and related party transactions has been extracted unedited from the Annual Report and Accounts for the year ended
Directors' Responsibility Statement
We confirm that to the best of our knowledge:
− The Group financial statements, have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the
− The Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and the parent Company together with a description of the principal risks and uncertainties that they face.
By order of the Board,
Chief Financial Officer
Principal risks and uncertainties
The Board considers the full range of business risks affecting the Group on a regular basis, and takes action to address such risks. The perceived key risks are as follows:
(i) Political factors, economic, environmental and market uncertainty
The level of candidate confidence in the employment market and job availability are important factors in determining the total number of recruitment transactions in a given year. Candidates are less inclined to move jobs when the number of jobs available is in decline or stagnant, which could lead to a deterioration in the Group's financial performance. The impact of Brexit and increased level of uncertainty could have a negative outcome on the job market and result in a reduction in hiring volumes.
The Group is geographically diversified, spanning 31 countries, which reduces the reliance on the success of any particular market. The Group also continues to develop its contract and
The Board's strategy when facing a slowdown in a market is to balance the cost base, such that the impact on profit is mitigated, against the perceived future benefit from the retention of key staff. Historically, the Group has benefited substantially from increased operational gearing as a result of its policy of deliberately retaining key staff through economic downturns.
Although the Group does not operate in a sector with a significant environmental impact, the Group recognises its requirements and embraces environmental stewardship. The Group already has in place numerous schemes to ensure it is carbon-balanced on an annual basis and for 2020 has committed to an additional tree planting programme to achieve a net carbon reducing result. Our disaster recovery processes, which are regularly reviewed, ensure the Group is able to mitigate natural disaster risks (e.g. floods, earthquakes). In addition, the 2019 completion of the roll out of Microsoft Surfaces to all front office staff ensures consultants have the flexibility to work remotely as required.
(ii) Talent attraction and retention
The Group relies heavily on recruiting and retaining talented individuals with the right skill sets to grow the business. In addition, as the Group expands its operations in emerging markets the supply of people with the required skills in specific geographic regions may be limited. Failure to attract and retain key employees with the required sales, management and leadership skills may adversely affect the Group's financial results.
The Group's policy of linking bonuses to profitability in discrete operating units has a high correlation to the retention of efficient and effective members of staff.
The long-term incentive schemes that are detailed in note 18 to the accounts form a key part of a wider strategy to improve levels of staff retention, particularly of the Group's senior employees.
Other elements of the strategy to improve staff retention and maximise career opportunities include significant investment of time and financial resources in employee training and development including regular appraisals, aimed at core consultant competencies and focused on enhancing management potential. The Group culture and the associated processes help to increase productivity and also improve employee alignment to the business. A comprehensive approach to succession planning is also in place across the Group.
Diversity and inclusion and gender pay initiatives are in place, including improvements to maternity and adoption policies, with target setting and committed actions to close gaps to mitigate the impact over time.
The Group offers international career opportunities and actively encourages the redeployment of existing talent to international offices and also to establish new offices.
(iii) Competition and emerging technologies
Competition risk varies in each of the Group's main regions depending on the maturity of the client and candidate market. The emergence of new technology platforms such as web-based applications and artificial intelligence for recruitment purposes may also lead to increased competition.
The development of strong commercial relationships with clients has enabled the Group to win and then maintain its contracts with large global organisations and the Group also has a significant and diverse income stream across the SME marketplace.
The Group reviews and monitors changes in technology and social media trends to ensure that it evolves appropriately. The Group continues to promote itself as a relationship recruiter operating in specialised markets, ensuring its online presence is competitive and provides a high-quality customer experience.
Through our innovation and technology and transformation teams, we continue to identify, trial and adopt new technology to both enhance and augment the service our consultants can provide and to drive efficiencies across our business.
(iv) Brand, reputation and business strategy
There is an inherent risk that the brand and reputation of the Group could be impacted by a failure to maintain high-quality service levels to both candidates and clients.
The Group strategy and objectives could either be ineffective, or damaging to the Group, by failing to deliver improved performance and achieve the Group's long-term strategy for growth.
Quality control standards are maintained and reviewed for each stage of the recruitment cycle.
A 'contact us' email address is available on the Group's website so any negative feedback or improper conduct can be acted upon swiftly by the Chief Marketing Officer and local senior management.
The Group's long-term strategy for growth is founded on the two pillars of organic international expansion and discipline diversification. It is a testament to this strategy and underlying strength of the Group's brand and management team that we have delivered a significant increase in profitability over the last five years whilst continuing to invest for the future.
(v) Candidate risk
A negative candidate experience as a result of poor candidate service, data breach or other candidate dissatisfaction, could result in candidate complaints, loss of quality candidate base or loss of referrals.
Candidate satisfaction surveys are carried out on a regular basis, with Directors addressing any negative feedback directly with the candidate.
Clear policies and processes are in place around candidate engagement and active candidate management. Quality control standards are maintained and reviewed for each stage of the recruitment cycle with all new employees receiving appropriate levels of training applicable to their role.
We monitor consumer trends outside of the recruitment industry and analyse how consumers' changing expectations could drive the imperative for change within our industry.
(vi) Non-compliance with laws, regulations and contractual obligations
The Group operates in a number of diverse jurisdictions and has to comply
with numerous domestic and international laws and regulations and other specific contractual obligations. Any non- compliance with legislation, regulatory requirements or contractual obligations may result in legal penalties or financial loss which could have a detrimental effect on the Group's financial performance and reputation.
To ensure compliance, our legal department works with leading external advisers as required to monitor potential changes in employment legislation across the markets in which we operate.
Contractual terms and conditions are thoroughly reviewed before signing to ensure contract provisions are fully understood and risks are fairly allocated between parties.
An escalation process exists such that contracts with non-standard terms are reviewed and approved by the Chief Legal Officer and Chief Financial Officer as appropriate.
(vii) Regulatory environment
The Group operates in a number of diverse jurisdictions and has to comply with numerous domestic and international regulations. Any change in the regulatory environment, particularly impacting employment legislation for both candidates and clients, could have a detrimental effect on the Group's financial performance.
The Group's legal department, together with local legal expertise, remains up to date with any proposed regulatory changes, allowing the Group sufficient time to assess the impact and implement processes to minimise the exposure and maximise opportunity.
A log of licences and renewals is maintained. There is formalisation of regulatory reporting and escalations with legal oversight of licensing processes, and the Group makes use of external counsel where necessary.
(viii) Data breach and cyber security
A data breach, cyber attack or loss of confidential and competitive information could have a material impact on the Group's financial results, an adverse impact on operations and the reputation of the Group.
The Group maintains an IT security policy, which is comprehensive but not able to eliminate all risk, which is reviewed on a regular basis, covering all areas of IT security from user access through to server access. Third-party advisers are used to perform penetration tests on major systems and operations.
All candidate and client information is held securely with restricted access and with data protection rules in place.
Appropriate guidance and training on the security and handling of both manual and electronic documents including confidential and sensitive data is available to all staff.
The Group has a dedicated Chief Technology Architect and Group Information Security Officer with specific remits to consider and ensure that appropriate and reasonable controls are put in place, particularly in respect of cyber-related threats and data breach. The Group has appointed a Data Protection Officer to oversee the handling of personal data and compliance with Data Protection laws.
(viiii) Reliance on technology infrastructure
The Group is reliant on its technological infrastructure for day-to-day operations and for delivering client and candidate services. A critical infrastructure or system disruption could have a material impact on the Group's financial results and an adverse impact on operations and the reputation of the Group.
The Group continues to review and improve its business continuity and disaster recovery plans to mitigate against any critical infrastructure disruptions.
Remote IT access is available for performing both critical business functions and operational continuity and is assessed as part of scheduled business continuity simulations.
Third-party advisers are used to perform penetration tests on major systems and operations.
A change management team is in place to ensure that appropriate consideration is given to all change requirements, including a risk analysis of the requirement, and appropriate plans are developed to deal with any potential critical disruptions.
The Group operates under a number of functional currencies. Any unfavourable movements in the foreign exchange rates may have an adverse effect on translation of overseas operations, and subsequently the Group's Pounds Sterling financial results.
An adverse cash position, or the inability to access capital/funding, could result in an inability to pay creditors and to fulfil day-to-day operations and requirements.
The potential impact and uncertainty around Brexit increases the level of risk of an adverse affect on Pounds Sterling and client payment risk profile. The future success of the Group could be affected if the Group fails to align its capital planning with its business strategy.
Revenues and costs are in their functional currencies in the local entities, which minimises the Group's transactional exposure. Additionally, there are no material net foreign exchange exposures to monetary assets and monetary liabilities.
Credit worthiness and client risk profiles are monitored, with prompt escalation procedures for disputes and instances of slow payment.
The Group continues to monitor the sensitivity to foreign currency fluctuations through performing regular sensitivity analysis and reducing exposure wherever possible.
Cash flow and working capital forecasts are prepared and reviewed regularly and a detailed plan for any acquisition or growth opportunities is created before any deal is executed to ensure that the appropriate finance is in place.
Related party transactions
During the year, there were related party transactions totalling
This information is provided by RNS, the news service of the
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