MARKET REPORT: Recruiters hit by Robert Walters profit warning

Recruitment firms had nearly £300million wiped off their value after Robert Walters issued a profit warning on the back of hiring delays.

In an unscheduled update, it said net fee income in April and May fell 9 per cent compared to the same two months a year ago, and profit for 2023 will be ‘significantly lower than expectations’.

Analysts had pencilled in a profit of around £43million. Shares, down nearly a quarter this year, fell 13.7 per cent, or 64p, to 402p. 

It sparked a sell-off across the industry, with PageGroup down 6.2 per cent, or 27.2p, to 415p, while Hays slumped 6.3 per cent or 6.9p, to 102.1p and SThree shed 5.7 per cent, or 22.5p, to 372.5p.

Victoria Scholar, head of investment at Interactive Investor, said: ‘A lot of companies are carrying out either hiring freezes or job cuts to combat macroeconomic uncertainty, which has been weighing on recruitment.’

Robert Walters said net fee income in April and May fell 9% compared to last year, and profit for 2023 will be ‘significantly lower than expectations’

Monthly GDP figures showing the UK economy grew by 0.2 per cent in April – recovering from a 0.3 per cent fall in March – failed to stoke much excitement in equity markets.

Spending in bars and pubs helped fuel the rebound but Britain faces a ‘Catch-22 situation’ according to Danni Hewson, head of financial analysis at AJ Bell.

That is because, while growth is welcome, rising demand must be cooled to tame inflation.

The FTSE 100 rose 0.1 per cent, or 7.96 points, to 7602.74 while the FTSE 250 was down 0.1 per cent, or 13 points, at 19,175.50.

Miners enjoyed another positive session following higher metal prices. Antofagasta added 3.5 per cent, or 52.5p, to 1560p, Anglo American was up 4 per cent, or 99.5p to 2582.5p, Glencore gained 2.3 per cent, or 10.35p, to 470.35p and Rio Tinto rose 2.6pc, or 135p, to 5338p.

Aston Martin revved up after Jefferies declared the luxury car maker is in ‘M&A territory’ after China’s Geely last month doubled its stake to 17 per cent. 

Stock Watch – Aptamer

Aptamer rose 94.4 per cent, or 8.5p, to 17.5p, on news the biotech firm’s tech will be used for a lateral flow test to diagnose Alzheimer’s disease.

The York-based group, whose scientists create fragments of artificial DNA to diagnose illnesses such as the Omicron Covid variant, has teamed up with a privately owned biotech firm at Oxford University.

Together with Neuro-Bio, the nose swab test could diagnose the disease as early as 10 to 20 years before the symptoms appear.

Jefferies lifted its rating to ‘hold’ from ‘underperform’ and the target price to 300p from 160p. Shares gained another 7.1 per cent, or 19.8p, to 298.6p.

Asia-focused insurer Prudential also benefited from a Jefferies upgrade, hiking the target price to 2020p from 1900p. It climbed 1.8 per cent, or 20.5p, to 1136p.

Results from Severfield, the engineering and steel group which is helping to build Everton’s football stadium, scored after lifting revenue and profits by more than a fifth in the year to March 25. It gained 10.5 per cent, or 6.4p, to 67.6p.

But advertising group M&C Saatchi said trading has remained tough since January and warned revenue for 2023 will be slightly lower than a year earlier. Shares fell 8.4 per cent, or 14.5p, to 159p.

Marks Electrical posted record sales as consumers splashed out on energy-efficient items to save money on bills.

The online white goods retailer’s revenue shot up 21.5 per cent to £97.8million for the year to the end of March.

Revenue grew 30 per cent in April and May, with a ‘very strong start to June’. The stock rose 2.8 per cent, or 2.5p, to 93.5p.

Self-storage firm Safestore, owner of 185 UK stores, saw revenues rise 9 per cent to £110.1million in the six months to the end of April but profit fell 63.7 per cent to £103million. Shares dipped 1.9 per cent, or 18p, to 913.5p.

Shares in Ladbrokes owner Entain tanked 8.7 per cent, or 115p, to 1206.5p, after the gambling giant raised £600million from investors to buy Poland’s biggest betting operator STS in a £750million acquisition, using its joint venture with Czech investment firm EMMA Capital.

A sharp fall in the price of secondhand electric cars hit dealership Motorpoint which crashed to a loss of £300,000 for the year to the end of March compared to a profit of £21.5million the year before – despite an 8.9 per cent rise in sales to £1.4billion. It fell 4 per cent, or 5p, to 120p.

This post first appeared on Dailymail.co.uk