MARKET REPORT: Recruiter hit as inflation rocks client confidence

Shares in Robert Walters suffered another dip yesterday after the recruiting firm warned that economic turmoil was weighing on candidate and client confidence.

Inflation has forced companies to cut jobs and halt hiring.

That hurt the company as net fee income fell 11 percent to £99.9 million in the three months to the end of June.

The UK division, which saw fees fall 21 per cent to £16 million, took a hit amid layoffs in the tech sector and volatility in the financial services sector.

The mood in Europe was better – thanks to record profits in Belgium.

But trading elsewhere remained difficult, with hiring disruptions in the US and a slow recovery from Covid in China.

Chief executive Toby Fowlston, who took over from founder Robert Walters in April, said: “Candidates’ confidence and time to hire have not yet shown the expected signs of sustained improvement.”

Victoria Scholar, head of investment at Interactive Investor, said: ‘High job vacancies and labor shortages in the UK are driving up labor costs, which also discourages companies from taking on additional staff.’

The group warned last month that passing delays meant earnings for 2023 will be “significantly lower” than analysts had expected at £43m.

Shares of Robert Walter fell 1.2 percent, or 5 pence, to 420 pence.

Ferrexpo, the Ukrainian iron ore miner, was also in the picture when its interim chairman warned it does not have “sufficient availability” in alternative Black Sea ports to export more. Lucio Genovese’s comments came as the company said the war in Ukraine remained “very challenging.”

Despite this, Ferrexpo’s second pellet line was operational again, increasing iron ore production by 18 percent in the three months to the end of June compared to the previous quarter.

Stock Watch – Net Zero

Shares in investment company I(x) Net Zero skyrocketed after Wastefuel, its largest holding company, was awarded £8 million by BP to develop plants around the world to convert waste into bio-methanol, which could help decarbonise the shipping sector .

As a result, the value of his stake in Wastefuel nearly tripled to £104 million.

The portfolio is now worth £117m – up from £50m at the end of December last year.

Shares, which floated at 76p last year, rose 91.4 percent, or 12.8p, to 26.8p.

Shares fell 4.7 percent, or 4.4 pence, to 89.7 pence.

Elsewhere, it was a disappointing start to the £851 million IPO of UK-based fintech CAB Payments in the London stock market.

Shares fell 9.5 percent, or 32 pence, to 303 pence on the first day of trading.

The group, which specializes in foreign exchange and helps companies send money to emerging markets, was at 335p.

The listing was announced last month and the group is expected to join the FTSE 250, which fell 2.6 percent or 476.87 points to 17,916.46. The FTSE 100 closed 2.2 percent or 161.60 points lower at 7280.50.

United Utilities was one of three blue-chip gainers on a volatile day ahead of the rest of the index. Shares rose 1.5 percent, or 14.4 pence, to 947.2 pence after investment bank Morgan Stanley upgraded the water company’s rating from equal-weight to overweight and raised its price target from 1,040 pence to 1,220 pence.

Man Group strengthened its position on the other side of the Atlantic after the asset manager agreed to buy a controlling interest in US fund Varagon. It rose 0.1 percent, or 0.2 pence, to 218.2 pence.

Pod Point, the electric vehicle charging provider, saw its shares fall 11.1 percent, or 8 pence, to 64 pence after founder and CEO Erik Fairbairn stepped down after 14 years at the helm.

Fairbairn, who founded the company in 2009, will be temporarily replaced by interim boss Andy Palmer, the former CEO of luxury car maker Aston Martin who also sits on Pod Point’s board of directors.

Pod Point said Palmer would “outline actions to address the challenging current market conditions and position Pod Point for long-term profitability” later this month.

Additional reporting by Cameron Buchanan