29 AUGUST 2008

ROBERT WALTERS PLC

Half-Yearly Financial Results for the 6 months ended 30 June 2008

FINANCIAL HIGHLIGHTS

• Net fee income (gross profit) up 17% to £71.7m (2007: £61.5m):

• • 68% (2007: 61%) of the Group's net fee income generated outside of the UK.

• Continued investment in overseas development in the first half of 2008:
• • Headcount investment focused largely in Europe and Asia Pacific. The Group now employs 1,687 people worldwide (2007: 1,382).
  • New offices opened in Bangkok, Kowloon, Paris and Strasbourg.
  • Two new offices acquired in China, in Shanghai and Suzhou.
• Operating profit down 8% to £10.6m (2007: £11.5m).
• Profit before taxation down 15% to £9.8m (2007: £11.4m).
• Basic earnings per share down 12% to 9.2p (2007: 10.4p).
• Interim dividend increased 4% to 1.40p per ordinary share (2007: 1.35p).
• Strong balance sheet with £18.3m cash as at 30 June 2008 (30 June 2007: £13.4m).
• £9.5m of the Company's own shares purchased through share buy-back programme. The Group intends to continue with this policy.

Robert Walters, Chief Executive, commented:

"The international diversity and multi-disciplined nature of the Group has enabled us to deliver a solid performance. The results also reflect the investment made in the business, which was weighted towards the first half of the year. Our businesses in Europe and Asia Pacific continue to grow and perform strongly, whilst in the UK we have implemented management and structural changes to improve future performance." 

OUTLOOK

• Extended geographic reach, with 37 offices in 16 countries.
• China acquisition now fully integrated.
• Our growing contract businesses in Europe and Asia Pacific continue to contribute strongly to growth. Contract now represents 32% (2007: 30%) of the Group's recruitment net fee income.
• The Group is well positioned, with a strong international footprint and a diversity of disciplines.
• The prevailing economic climate shows little sign of improving and we therefore remain cautious with regard to the short term outlook.

  ENQUIRIES:

ROBERT WALTERS - A SNAPSHOT

Robert Walters is a leading specialist professional recruitment consultancy, which focuses on placing high calibre professionals into permanent, contract and temporary positions at all levels of seniority.  The Group specialises in the accounting, finance, banking, IT, management consultancy, legal, sales and marketing, human resources, secretarial and support fields.  Robert Walters' blue-chip client base ranges across multi-national corporations covering all market sectors.

Established in 1985, Robert Walters has built a global presence, with 37 offices now spanning 16 countries across 5 continents.

  Robert Walters plc

Half-Yearly Financial Results for the six months ended 30 June 2008

Interim Management Report

We are pleased to report the results for the Group for the six months ended 30 June 2008. Revenue increased by 13% to £169.8m (2007: £150.8m) generating a 17% increase in gross profit ("net fee income") to £71.7m (2007: £61.5m). Operating profit decreased by 8% to £10.6m (2007: £11.5m) whilst profit before taxation fell by 15% to £9.8m (2007: £11.4m).

We have delivered strong growth in Europe and Asia Pacific with net fee income increasing by 31%. These regions accounted for 66% (2007: 59%) of the Group's net fee income. In the UK, which has been impacted by adverse economic conditions, we have implemented corrective measures, leaving it better positioned for the second half of the year.

We continue to invest in our contract businesses which now represent 32% (2007: 30%) of the Group's recruitment net fee income.

Over the last 12 months, headcount has increased to 1,687 (2007: 1,382), focusing on Europe and Asia Pacific where the Group continues to see opportunities for profitable growth. The Group now has 57 employees in mainland China, which we entered by way of acquisition earlier this year. 

Asia Pacific (42% of net fee income)

Revenue was £68.7m (2007: £56.2m) and net fee income increased by 26% to £30.2m (2007: £23.9m). Operating profit increased by 6% to £7.4m (2007: £6.9m).

We continue to invest in Asia, with two new offices in mainland China, one in Hong Kong and one in Thailand further strengthening our presence in this region. The Osaka office which opened in the second half of 2007, shows great promise and our contract business in Tokyo is beginning to deliver a return on investment.

Both Australia and New Zealand have shown double digit growth in net fee income. Singapore and Malaysia produced good results, whereas Hong Kong has been impacted by the uncertainties surrounding the financial services sector.

United Kingdom (32% of net fee income)

Revenue in the UK was £68.4m (2007: £73.2m) and net fee income decreased by 3% to £23.4m (2007: £24.1m). Operating profit decreased by 77% to £0.6m (2007: £2.4m). 

The decrease in operating profit was due to a downturn in city-related permanent business. Despite our exposure to the banking sector being more limited than in previous years, there was still a material impact on our UK business. As a consequence, we have made some significant changes to our permanent business units, streamlining the management structure and resulting in cost savings going forward. All costs relating to this initiative have been taken in the first half.

The contract and regional businesses proved to be solid performers in the first half of the year and Resource Solutions, our recruitment process outsourcing business, continued to win new client engagements particularly in the commercial sector.

Europe (24% of net fee income)

Revenue was £31.5m (2007: £19.9m) and net fee income increased by 40% to £16.9m (2007: £12.0m). Operating profit increased by 26% to £2.6m (2007: £2.1m).

Europe continued to perform ahead of our expectations with particularly strong trading in the Netherlands and France.

Our investment in contract recruitment in the region, particularly in France, has contributed significantly to overall growth. We now have three Walters Interim offices in France and have opened a new office in Strasbourg to further strengthen our network across the country.

In the Netherlands, our Eindhoven and Rotterdam offices exceeded expectations and complemented growth in our well established Amsterdam office. Walters Interim in Belgium is growing strongly and our Madrid office continues to make progress with an encouraging performance towards the end of the first half.

Other International (2% of net fee income)

Other International comprises South Africa and the USA. Revenue and net fee income were £1.2m (2007: £1.5m) and operating profit was £nil (2007: £0.1m).

Growth in our South Africa operation was more than offset by a weak performance from our New York office.

Cash flow

The Group ended the period with £18.3m of cash (30 June 2007: £13.4m, 31 December 2007: £24.0m).

Operating activities generated £10.9m (2007: £9.2m) reflecting strong control over working capital during the period, with 103% of operating profit converted into cash. £9.5m was used to purchase 5,725,000 of the Company's own shares, £4.9m tax; £2.3m dividend; and £2.0m capital expenditure.

Dividend

The Board has decided to increase the interim dividend to 1.40p per share (2007: 1.35p) reflecting our long term confidence in the business. The interim dividend will be paid on 24 October 2008 to those shareholders on the Company's register on 12 September 2008.

Treasury Management, Currency Risk and Other Principal Risks and Uncertainties affecting the Business

The Group does not have material transactional currency exposures although is exposed to translation differences on the profits and cash flows generated by its overseas operations, the main functional currencies of the Group being Sterling, the Euro, the Australian dollar and the Japanese Yen.

The £0.7m loss on foreign exchange in the period was a non cash item arising primarily on the retranslation of a £5m intercompany Japanese loan, which has now been repaid. The net assets of the Group were not impacted as there was a corresponding increase in the overseas assets of the Group, evidenced by the foreign exchange translation gain of £2.2m reflected in the consolidated balance sheet.

The other principal risks and uncertainties affecting the business activities of the Group remain those detailed within the Operating and Financial Review section of the Annual Report for the year ended 31 December 2007, namely the employment market, employment law and staff retention across the Group. The Board does not foresee a material change in respect of these factors for the remainder of the year.

Outlook

The Group is well positioned, with a strong international footprint and a diversity of disciplines. The prevailing economic climate shows little sign of improving and we therefore remain cautious with regard to the short term outlook.

Philip Aiken                                Robert Walters

Chairman                                Chief Executive

28 August 2008

ROBERT WALTERS PLC

Half-yearly Financial Results

Condensed consolidated income statement

Condensed consolidated statement of recognised income and expense

ROBERT WALTERS PLC

Half-yearly Financial Results

Condensed consolidated balance sheet