Robert Walters upgrades profit forecasts, Wincanton warns of driver shortages

Robert Walters has soared in Wednesday business whilst Wincanton has reversed from all-time highs. Here is why these UK shares are moving sharply.

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The Robert Walters (LSE: RWA) share price has soared 160% during the past 12 months. Investors have bought in anticipation of the re-opening of the global economy following the public health emergency. The recruiter has risen 7% in Wednesday business to 774p per share too, after the firm lifted its profit expectations.

Robert Walters had risen to its most expensive since August 2018, at 797.7p, earlier in the session.

Robert Walters’s profits jump

In a trading update covering the second quarter, Robert Walters said gross profits soared 31% at constant currencies to £89m. It commented that “trading momentum continued to accelerate through the second quarter,” and that activity in June was “particularly strong.”

Gross profits had fallen 11% during the first three months of 2021. But robust trading between April and June meant profits were up 8% year-on-year for the first half.

In its core Asia Pacific market, second quarter gross profit ballooned 48% at stable exchange rates to £40.9m. Each of its markets in the region enjoyed net fee growth above 25% in the period. And net fee income in Malaysia and Mainland China more than doubled year-on-year.

In Europe (excluding the UK) profits climbed 26% to £23.4m. Meanwhile, gross profits in Robert Walters’ other international markets rose 20% to £6.7m. In the UK, profits rose by a solid-if-unspectacular 9% to £18m.

A bright outlook

Chief executive Robert Walters said: “Due to a very strong close to the quarter… profit for the full year is expected to be significantly ahead of current market expectations”. He added that “we will be investing in additional headcount in those geographies and disciplines showing the strongest signs of sustained growth. We enter the second half of the year with cautious optimism and confidence that we are very well positioned to continue to take advantage of market opportunities as they arise.” 

Wincanton spooks over driver shortages

News coming out of Wincanton (LSE: WIN) wasn’t nearly as reassuring for UK share investors on Wednesday. Consequently the company has fallen 9% to 430p per share and away from yesterday’s record peaks.

Wincanton’s share price is still up nearly 140% over the last year. But it’s fallen today after the firm warned that while “positive momentum” has continued in the early part of the new financial year, it added that it is “mindful of the sector-wide pressures related to the availability of drivers.”

The logistics giant said that it is recruiting permanent employees and accelerating staff training to address the problem.

Significantly” higher profits

Strong trading during the final six months of its last fiscal year (to March 2021) continued into the first quarter of financial 2022. The business has enjoyed “sustained growth and an attractive pipeline of opportunities in each of [our] four sectors,” it noted.

Wincanton is thus trading in line with expectations, it said, with profits “significantly” higher than they were in the corresponding quarter last year.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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