Shares digital

Following excellent results the ruling troika at recruitment specialist Robert Walters (RWA), founder and CEO Robert Walters, COO Giles Daubeney and finance director Alan Bannatyne all bought shares in the company. Walters acquired 458,332, Daubeney 282,000 and Bannatyne a more modest 43,333.

The 2007 results were well up on the previous year. Pre-tax profits grew by 25.1% to £24.9 million. EPS increased by 27.4% to 21.8p. The group’s operations outside the UK are the dominant force, generating 62% of trading profits. The Asia Pacific region, the most important profits centre, is responsible for 40% of overall profits. Last year the company saw especially strong growth in Japan and Australia. New offices were opened in Osaka and China.

The group has a strong balance sheet, with net cash of £15.6 million, which should fund further share buybacks and bolt-on acquisitions.

The company has less income visibility than many, but believes the geographical and skill variety of its markets makes it ‘well placed’ to face the uncertainties of 2008. House broker Investec is forecasting earnings of 19.7p rising to 22.7p next year.

Historically, Walters and Daubeney have read the market well. Last year Walters sold shares when they were over twice the current price (Shares 22 March, and 17 May), while Daubeney sold stock some 18 months ago ‘for personal reasons’ at 263p (Shares 14 Sep ’06). The fact that they are now both buying shares could encourage the market.

Shares says: At 155p the shares are selling on a PE of less than eight, falling below seven next year, and current boardroom enthusiasm should be taken as very encouraging.