Robert Walters plc

Good morning, everyone. Welcome to the Robert Walters 2024 Half Year Results presentation webcast. I'm Toby Folsom, Chief Executive, and joining me today is David Bower, Chief Financial Officer. In terms of our agenda today, I'll shortly hand over to David to walk you through the financial and trading performance of the business over the first half. I'll then give an update on our operational focus areas, before moving on to give an overview of some of the key areas in which we see the greatest opportunity to strengthen our medium-term performance, as well as the flavour of the actions that we're already taking to deliver on this. And as usual, we'll leave plenty of time to then open up for Q&A. So as we begin, here are my key messages for today. Firstly, conditions were challenging during the first half of the year, We continue to see hiring markets globally rebase relative to the post-pandemic peak of 2022 and early 2023. And then within certain geographies, more recent macroeconomic turbulence and political uncertainty has dampened client and candidate confidence. This impacted our financial performance during the first half with lower net fee income, predominantly driven by lower volumes. That being said, the value of the service we provide our clients and candidates continue to be seen, with average fees remaining strong across all of our markets. Secondly, whilst our near-term planning assumes any material improvement in client and candidate confidence levels will be gradual and likely not occur before 2025, we are not looking at 2024 as a lost year. Far from it. We took the right actions during the first half for our clients, candidates, and wider stakeholders. We managed our cost base tightly, continued to pursue operational excellence, and we expect further progress in the second half. And thirdly, though the current trading backdrop is challenging, it has only served to deepen our conviction in our plans to further strengthen the medium-term performance of the business. We are looking forward to our capital markets event in September, where we will provide further detail on our activities. But I will say today that the self-help actions we are progressing will be additive to improvement in our end markets when that arrives. The actions that we are taking will continue to differentiate Robert Walters on the quality of its service, drive higher penetration in our existing markets, improve tech enabled productivity and people efficiency, and ultimately enable us to win as one Robert Walters. On that note I'll hand you over to David.

Thanks Toby and good morning everyone. So I'll begin with the group financial summaries. Reflective of the conditions in global hiring markets which Toby touched on a moment ago, group net fee income in the first half of 166 million pounds was down 14% year-on-year in constant currency terms. In reported terms, Group B income declined by 18%, reflecting the foreign exchange impact of the strengthening pound year-on-year against the Group's primary overseas functional currencies, most notably the Japanese yen. The actions we have taken to control our operating costs resulted in a decrease of 13% year-on-year. which has mitigated around two-thirds of the £36 million reduction in first-half fee income, with a break-even position at the operating profit level as a result. Net cash finished the period at around £49 million. Notwithstanding the challenging high-end market conditions, we continue to have a strong balance sheet and given the actions taken today to ensure the business is well positioned for an improvement in end markets, the Board has declared an interim dividend of 6.5 pence per share in line with the prior year. Let's now turn to a review of trading during the first half in each of our segments. Throughout my remarks, all references to net fee income year-on-year percentage movements are in constant currency terms. Asia-Pacific specialist recruitment net fee income was down 10% year-on-year, principally driven by volumes, with average fees holding broadly stable. Whilst we continue to see a strong performance in Japan, up 2%, and an improved performance in Greater China, Australia and New Zealand both remain challenging, driven by reduced levels of temp worker demand in those markets. In Europe, specialist recruitment fee income was down 13%, with PERM down 17%, while TEMP held up better and was down 7%. In both cases, the fee income reduction was volume-driven, as again, average fees were stable. Low client and candidate confidence in France was further impacted by political uncertainty as the half closed. Meanwhile, the Netherlands was more resilient and has now been broadly stable for the last few quarters. And we also saw a solid performance in Belgium against a record first half last year. In the UK, specialist recruitment net fee income was down 20%, again volume driven, while average fees increased, principally due to favourable mixed effects. In London, we saw fee income down 16%, though momentum did improve across the half with two consecutive quarters of sequential growth. Conditions were, however, softer in the regions year over year. In the rest of the world, specialist recruitment fee income was down 9%, almost wholly reflecting permanent performance and again volume driven, in part offset by growth in average fees. our largest rest of world market of the middle east was sequentially stable across the first half there was also a solid performance in mexico meanwhile in the usa hiring conditions in the technology sector remain tough in recruitment outsourcing net fee income declined by 23 reflecting lower volume hiring requirements from the predominantly financial services sector client base and the exit of certain clients during the second half of 2023 Finally, and while still at a low base, workforce consultancy, which operates within our outsourcing offering, continued to perform well, and indeed was ahead of our expectations. Turning now to look at group operating costs, where we have continued to tightly manage all aspects of our cost base. Period end headcount of 3,625 was down by 15% on the first half last year, driving a reduction in staff costs of £11.8 million. Headcount is now 18% below the peak we reached in the first quarter of last year, as you can see in the chart on the right-hand side. This decrease has been achieved predominantly through being very selective about replacing natural attrition. In addition, we took the decision to remove a limited number of roles at a cost of around £2 million, which is absorbed in our reported operating costs in the period. Reflecting the reduced trading performance, available compensation fell by £10 million, while the close control of other direct operating costs, such as marketing and travel, resulted in a further reduction of £3.9 million. Turning now to cash flow and our period and net cash position, which remains strong. The trading performance drove lower operating cash flows in the prior year, with the increase in working capital of £9 million, reflecting the usual working capital cycle of the Group in the first half of the year. Capital expenditure in the period was £4.8 million, lower than the prior year, with reduced spend on the Group's office estate more than offsetting slightly higher intangible spend principally related to the final development phases of Zenith, the Group's in-house CRM system. period end net cash of around £49 million continues to give us a strong balance sheet. Finally, turning to guidance. As noted in this morning's statement, current trading remains unchanged from that reported at our second quarter update a couple of weeks ago. Notwithstanding the still challenging markets, We have made good progress on cost reduction actions during the first half, where we mitigated around two thirds of the impact of profit of the year on year fee income reduction. We expect further progress on our cost reduction actions during the second half, and these will clearly further mitigate the year on year impact of any reduced fee income driven by market conditions. As a result, on a full year basis, we expect to offset a greater proportion of the year over year reduction in fee income than the two thirds we achieved during the first half. I'd also draw your attention to the other elements of technical guidance detailed on the bottom of the slide, which I trust are self explanatory. So with that, I'll hand you back over to Toby.

Thanks, David. And I want to take a few moments to update you on our operational focus areas. So in doing so, it's worth just quickly taking stock of where we are in terms of the market conditions that we see at present. My time in this industry has encompassed the dot-com crash at the turn of the millennium, the 2008-9 global financial crisis, and of course, the COVID pandemic. Now, the current challenging market conditions have brought their own unique challenges. We've come through a high inflation period, which has given rise now to a higher interest rate environment. As the charts show, we've seen levels of labour demand fall relative to peak, and also seen candidates' inclination to move jobs, as shown through indicators like the quit rate, reduce relative to the great resignation of the peak. With hiring processes that do get off the ground, we have seen, as you know, an uptick of candidates being counter-offered by their existing employer and then not moving as a result. That context of lower but stabilising client demand and candidate inclination informs our working assumption that any material improvement in confidence levels will be gradual and likely not occur before 2025. But that being said, we are not looking at 2024 as a lost year where we simply hunker down. To make the most of the available job flow, our team are focused on doing the basics brilliantly. So let me just bring this to life for you in the form of our specialist professional recruitment offering. Firstly, job qualification remains key. Ascertaining as far as possible that clients who start a process are indeed motivated to actually bring new talent into their business. This is a key skill of our consultants. Doing so helps them be as efficient as possible in how they devote their time. Secondly, on the other side of the equation, thorough candidate assessment, engaging commitment to want to move is also hugely important. For example, many are recognizing the additional complexities or by matching client and candidate expectations regarding time spent in the office versus working remotely. Increasing visibility on this earlier on in the process is something our specialist consultants are ideally placed to do. Thirdly, staying close to our clients and candidates. The quality of service our consultants deliver is most significantly influenced by two things. The quality of relationships they have with clients and candidates and their level of industry knowledge. To continue enhancing both, our consultants are focused on spending time face to face, wherever possible, with their clients and candidates. And our regional MDs have been making the point well to me in saying that they're enjoying seeing our offices emptying out. Not because consultants are working from home or on vacation, but because they're out spending time with clients and candidates. and fourthly remaining agile staying close to our markets enables us to pivot as and when we see opportunities developing in adjacent verticals for example in some financial hubs in southeast asia while certain pockets of financial services remain subdued others are showing more signs of activity and we are pivoting in response you can see the fruits of this in thailand where our teams have been actively diversifying their client focus As a result, they recently pitched and won a mandate for a client looking to strengthen their senior ranks ahead of bidding for a digital banking license. Similarly, in New Zealand, where we remain as the market leader, we're building capability in private sector verticals, such as energy and telcos, to hedge the continued tough conditions we see in the public sector. So conditions do remain challenging. However, we know very clearly what is in our control. And we know the key levers to ensure operational excellence. This approach is why we've historically exited market troughs in a stronger position than we entered them. And I'm confident we will do so again in the current cycle. I now want to spend a bit of time looking at our plans to further strengthen the business over the medium term. Having been chief executive for over a year now and being with Robert Walters for 25 years, I know what a fantastic business this is. However, I also know we have an opportunity to be even better for our clients, candidates, and wider stakeholders. We are evolving from an historically federalized business to one where there is greater global consistency centered on what I call disciplined entrepreneurialism. And we look forward to sharing fuller details on our activities at our Capital Markets event in September. for today though i want to give some flavor of what has already happened and what excites us about the opportunity ahead there are four areas that i'd like to touch on as set out on the slide so firstly let's look at people a key element of harnessing people leadership to underpin our performance over the medium term has been having the right people in the right roles within my immediate team From the slide, you can see that within the executive team, there is now a great combination of decades worth of experience in talent solutions, alongside some recent hires who have brought a fresh perspective and complementary business experience. As well as my immediate team, our regional MDs across our specialist recruitment and recruitment outsourcing offerings will be at our capital markets event next month, and I look forward to introducing them then. People leadership is, of course, something we must get right at all levels of our organisation. This includes creating an environment which allows all of our people, whatever their background, to perform to the best of their ability. Something of vital importance in a business like ours, where over 70 different nationalities are represented. Let me briefly mention two things we're focused on. Firstly, we have distilled our leadership behaviours framework, the DNA of what it means to be a leader at Robert Walters, This places a real emphasis on authenticity, care, and an entrepreneurial mindset. Our ACE framework is geared to enable our leaders to get the most from their teams and to do it in the right way. Secondly, we're embedding a culture where all our people are doing the very best for their customers, be that our fee-earners with clients and candidates or non-fee-earners in their interactions with other Robert Walters colleagues. A great example of how we're driving this has been our move to skills-based hiring for our fee-earning population. We have defined what being a great consultant at Robert Walters looks like, and we've done that consistently across all of our global markets. That helps us at the talent acquisition stage by enabling us to more successfully bring into our organization those most likely to succeed. And as you can see from the chart, on average, our Fiona population is more experienced now than at the peak. We want that to remain strong. Being laser focused on what good looks like and supporting our people to consistently meet and exceed will help us achieve that. Having considered people, let's turn now to geographical penetration. At Rubber Walters, we have well-scaled businesses with leading positions in some of the largest and most exciting RE markets in the world. However, we also have businesses where we are not yet a top three competitor in that market. We want to move more of our businesses from the second category to the first. In terms of what we can achieve when we get this right, Japan is perhaps the standout example. We launched in Tokyo in 1999, and today we have over 70 teams covering not just Tokyo, but now also Osaka. Those 70 plus teams are highly specialist, serving increasingly focused sub verticals, allowing us to go an inch wide, but a mile deep. Now, not all of the hiring markets in which we're present are as large as Japan. But we still see the opportunity to build further scale getting to a level of around 50 fee earners in a market with teams that have specialised verticals on which they're focused, at which point the flywheel really begins to turn. At present, we're at or above that level of 50 fee earners in just a third of our markets, demonstrating the opportunity we still have ahead of us. Getting to scale in country markets isn't rocket science. We know that the essential ingredients are about having the right leaders who can instill the right performance culture. It's then about making sure that performance is sustained over the long term with good succession planning, helping us to win in both favorable and tough end markets. Our focus on replicating this in each of the markets has historically been too easily lost. We are fixing that by pursuing geographical penetration with more confidence in our know-how and more rigor in our evaluation. Thirdly, let's look at tech-enabled fee-earner productivity and wider people efficiency. Fee-earner productivity is critical for us. It gives rise to higher organic growth in fees when end markets are supported. It also helps drive the operating leverage in our model for growth in fees to drop through appreciably to operating profit. taking a step back then and looking at where we are now relative to the recent peak in hiring markets in the second quarter of 2022 our regions are at different levels today relative to peak productivity as you can see from the chart on the left hand side we are being more robust on incorporating fear and productivity into our decisions to make sure we're well matched with demand in our local markets Looking at our non-fielder population, we are striving for people efficiency here too. In particular, we are reviewing the best operating model for our central support or business partner functions, such as finance, HR, legal and marketing. In some cases, we need certain support capabilities onshore in many of our trading markets. However, often it can make more sense for those roles to be based remotely to the markets they're serving in global service centres. and we are reviewing our operating model to drive further efficiencies for our business. Now, I said fee-owner productivity would be tech-enabled, so let me tell you what I mean by that. Productivity is underpinned by our technology. Our fee-owners are seeing the biggest benefit of this as we continue the rollout of Zenith, our custom-built CRM. During the first half, Zenith went live with our teams in the UK, Ireland, and South Africa, meaning that our people in over 60% of our markets are now benefiting from a more improved and intuitive user experience, more sophisticated functionality, global visibility, and greater capacity for collaboration. One of our senior accounting and finance fee owners in London put it more succinctly still when he remarked to David the other day that he wished he'd had Zenith the week before the launch, as he then would have made an extra 15,000 pounds in fees. Why? for that extra layer of visibility that he's getting. One of the great benefits we see from having built our own CRM is to allow for ease of integration with other applications as these become relevant for our business over time. And we've already done this, for example, for job advert stats. Rather than having to go to a separate third party application, consultants are able to view key stats on live jobs like open rates within Zenith itself. This ease of integration has also supported our efforts in the second key area we're seeking to harness technology, that of artificial intelligence. I'm often asked what AI will mean for a business like ours in the future. And in response, I say that human relationships have always been the currency of the future. And our approach to AI, and indeed all technology, is framed by that. Where it helps us invest even more in the relationships that drive our business, it's got a real role to play. and our AI job advert writer is a great example of that. We enhanced it further during the first half. Now, as well as a compelling initial first draft of the job advert, it also enables consultants to draft social media posts, outreach emails, and complete language translation all at the click of a button. This is enabling our consultants to prepare the ads and communications they require for each new role in under just five minutes. compared to around 30 minutes that it would otherwise usually take. In the first three months of launching our AI ad writer in ANZ in Southeast Asia, our consultants used the tool to write over 4,000 job ads, saving around 2,000 hours in the process. The AI ad writer functionality is integrated into Zenit, and the initial feedback from our fee earners has been extremely positive, and it's easy to see why. all those minutes saved getting a new job live is more time to spend investing in client and candidate relationships finally let's turn to look at winning as one just after the end of the first half we launched our new brand identity externally bringing the multiple brands through which we have traded historically under the single banner of robert walters we did this in response to what we see from clients and candidates The talent requirements and hiring processes of clients have evolved rapidly over the last four years, arguably even more so than during the two decades prior. And similarly, the needs and expectations of today's professionals are changing just as quickly. Therefore, we have combined all of our expertise across specialist recruitment, recruitment outsourcing and talent advisory to go to market as one Robert Walters. This means clients can much more easily access from us the full suite of talent solutions they need to help address their hiring challenges. As a quick reminder, our specialist recruitment offering is where we have played since the business was started almost 40 years ago. And it encompasses permanent and temporary recruitment, executive search, and interim management. Our recruitment outsourcing offering enables organizations to transfer all or part of Their recruitment needs to us either through recruitment process outsourcing, RPO, or contingent workforce solutions like MSP or workforce consultancy. In talent advisory, the most recently developed of our service offerings, we are supporting the growth of organizations through market intelligence, talent development, and future of work consultancy. Historically, our multiple brands made telling our story to clients and candidates far too confusing for them and sometimes even for our own people. We know Robert Walters is, if you like, our power brand. So focusing here was compelling as we pursue our vision to be the world's most trusted talent solutions business. So what are we aiming to achieve in doing this? Well, right now, if I look at somewhere like our UK business, where fee income is broadly balanced between recruitment and outsourcing, our specialist professional recruitment teams are already focusing on helping their outsourcing colleagues in hiring on mandates where volumes are at the lower end of the typical spectrum that are outsourcing offering with service. Longer term, as our clients benefit from the solutions that we offer as one Robert Walters, we see a clear opportunity to introduce them to the full range of our service offerings where we currently only partner with them in one area. To take an example of this amongst our existing clients, their awareness of our recruitment process outsourcing or RPO offering is modest at just 11% compared to much higher levels of awareness for professional recruitment. So this opportunity to grow our share of wallet amongst existing clients is sizable. Going to market as one and then winning as one will help us convert it. So in conclusion, then, while market conditions continue to be challenging, which has impacted our fee income in the first half, 2024 is not a lost year. I'm very proud of how we took actions to tightly manage our cost base and pursue operational excellence to do the best for our clients, candidates and wider stakeholders. We have high conviction in the actions that we're taking to further strengthen this business over the medium term as we pursue disciplined entrepreneurialism. And I hope we've given you a sense of where the opportunity lies and how we're already starting to go about capturing it. Our Fiona base is even more experienced now than it was two years ago, with increasing global consistency on what good looks like. We're using our know-how and evaluating ourselves more rigorously to drive high penetration in our existing markets. We're giving our people the tools they need to be as productive as possible, and we're going to market as one Robert Walters, to help convert the sizeable market opportunity. So with that said, David and I would be very happy to take your questions.

Thank you, sir. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. If you wish to cancel your request, please press star two. Again, it is star one to ask a question. I will pause for just a moment to assemble the queue. And we'll now take our first question from Tom Callan from Investec. Please go ahead.

Thanks. Morning, chaps. I've got three, please. So firstly, just on the capital markets event, not sure what granularity you're able to give at this stage, but maybe if you could perhaps expand a little bit on sort of what's in the announcement this morning in terms of what you might like and look to cover off in September. Second one is on Japan, you know, clearly an outstanding market for you. From memory, though, there's a sort of very high fee rate dynamic there with comparably lower consultant sort of placement levels. So given that dynamic long run, do you sort of foresee a scenario whereby, you know, fee rates remain elevated, but following a focus on driving improved productivity, placement activity levels could also tick up pretty meaningfully. And consequently, if that is the case, what might that do to P&L for Asia Pacific? And then just on mainland China as well, notice the pretty strong result there to double digit fee growth for H1. Can you give us a bit more color on what was behind that? and also what the market dynamic looks like on the mainland more broadly at the moment. Thanks.

Thanks, Tom. Let me try and answer those three questions. So maybe let me start with the capital markets day. I mean, I've talked a bit about the key areas of disciplined entrepreneurialism. So our intention is we want to get into a bit more about what we mean by geographic penetration. and the opportunity we see there, as well as our service line diversification. I've obviously referenced interim and workforce consultancies, just two examples. So we're going to look to broaden that out a little bit more. As well, of course, of giving investors, analysts an opportunity to come and meet the executive team and the regional MDs who will be over in London, because I think it's really important they get the opportunity to meet the leaders, the global leaders across our organisation. In terms of Japan, you're right, fee rates there are group leading, largely borne out by very low levels of churn, so it takes a bit more to get someone to move jobs. On the perm side, so our sort of perm placements for Fianna per month, you're also right, compared to some of our European markets, Japan is a bit lower. So that is absolutely probably the key opportunity actually in Japan, particularly when you think about the fee rates as well. I think the key thing is when you look at 2023, we were around £150,000 net fee income per fee earner. So when you look at even a marginal 10% increase in a market like Japan at scale with those fee rates, you're driving millions more in terms of fee income and obviously drop down. And then I think the final one was on mainland China. So we invested in the leadership of mainland China last year, and we've really certainly invested heavily in Shanghai in healthcare, and that's starting to show some rewards for us. If I look at somewhere like Shenzhen, so we're in Shenzhen, we're in Shanghai, and we're in Shuzhou. Shenzhen leaders, they have structured that business differently to be much more focused on the domestic Chinese employers. And as you know, sort of our China plus one strategy has meant some of the international enterprise businesses were picking up the benefit of that, particularly in places like Southeast Asia. So, as I say, look, it's a relatively low base. It's still a relatively small market for us. And we're focused on continued growth, certainly over the foreseeable future.

Thank you. We will now move to our next question from Sanjay Vidyakthi from Panmure Libero. Please go ahead.

Morning all. I'm interested in the chart in terms of the number of fee earners by country. I just wanted to understand a little bit better what that implies in terms of the pace of headcount growth when markets start to recover, if there are so many markets where fee earners are less than 50. And then also related to that, what that means in terms of relative levels of profitability with the 32% of markets with more than 50 fee earners, all be kind of double-digit margin markets, I guess, except for the UK maybe. And how should we think about the mix within the smaller scale markets as well? That's the first question.

Hi Sanjay, it's David. So yeah, I think in terms of B owners per country, obviously we've been very carefully managing B owner numbers with activity levels. I think if we look at productivity, it's off the peak of 2021-22. It's probably more in line with what we saw in 2019 or so. So I think as markets start to recover, I would like to think that we can close that gap between current productivity and the peak. Probably won't get back to the peak productivity when people were running really fast in 2021-22. I think as markets recover, we will be able to see the operating leverage of the model work really effectively. Yes, heads will start to tick up as we see the growth come back, but we will be carefully managing it and looking really on that productivity piece. In terms of the margins and number of heads, it does vary market by market, sector by sector. So there isn't a standard rule of thumb that says if we get to X number of heads, we suddenly become single digit to double digit margin. What we do know is when you start to get to you know having tens of fear and so 30 40 50 then we do know that the flywheel turns very rapidly that's when we can be genuinely profitable month in month out through you know in those businesses and that's where we're looking to try and and move but that as i say but it's not one size fits all and there certainly are some smaller offices smaller countries where we have a lot less than 50 fee earners, and they're still profitable. So it's a rule of thumb, not a hard and fast metric we follow.

Say, for example, with Johannesburg office being an example of that, where it's double digit profitable, but less than 50 fee earners.

Quite possibly, yeah. We don't talk about individual office profitability per se, but yeah, there's certainly our pockets where we've got small level of theories and we can still be very, very profitable based on the local dynamics of the market.

I think just to add to that as well, Johannesburg is a good example. We obviously cover quite a wide part of Africa from Johannesburg. And over the last two years coming out of the pandemic, we have probably seven or eight offices. We have... moved away from those premises and redeployed good people into a bigger office within that city so i think the reality is we used to have cities where we'd have two or three offices within that you know our view is is that we're probably better with one uh you've got flexible working to build into that and actually have concentrated effort with critical mass in one office and people not sort of driving around cities and real again real-time focus spent with clients and candidates

Okay, that's great. The second very quick question, just on the tax rate, you talked about it being higher than last year's rate, around 37%, or are we looking at higher than that?

We haven't, you know, probably not going to get to a precise point. It will, you know, we've got a lot to do in the second half, obviously, with the current year with being breakeven at the half year, a slight loss before tax. And you can imagine that that means we've got profits and losses around the world in various jurisdictions. You know, it's not something I want to sort of precisely guide to in terms of the rate, but yeah, other than it is almost certainly going to be slightly higher than last year, given the trading that we're seeing in the first half.

Okay, understood. Thanks very much.

Thank you. As a reminder, to ask a question, please signal by pressing star one. Now, our next question comes from Steve Wolf from Deutsche Bank. Please go ahead.

Morning, guys. Just a couple from me. Just any changes in the fee rates you're seeing in the countries, particularly those where you've got a high counteroffer area. Secondly, the investment in headcount you're likely to put in in the second half of the year. I appreciate it's selective, but should we have those countries with less than 50 heads in them in mind? And then sort of additive onto that of the scale of the rule of 50 in the the loosest sense of that what time scale are you targeting to get um that head count up in some of those other regions and i'm thinking in particular of like you said the losses we've seen in the in the rest of the world um sort of past overall profitability in those some of those markets thanks

Hi Steve, Toby here. I'll take the first question and I'll pass it over to the second question. So we don't break out sort of individual countries and fee rates, but broadly fee rates have remained stable, actually very marginally up. Obviously the situation we're in is a little bit of a paradox in terms of low supply, but obviously there is a confidence challenge as well. But we feel there is opportunity in certain markets to increase that fee rate over time. So absolutely a focus point for us over the immediate to the longer term.

In terms of headcount through the second half, we'll continue to be incredibly data-led, looking at the job flow and productivity. So I imagine we will see some offices, some markets where we'll increase heads. as we are already, where we're seeing some good job flow, good productivity levels. We're not targeting, we will not be targeting getting a particular market to 50 heads. It will be, unless of course the productivity and the job flow warrants it. So it will be data-led to get to those numbers. And in terms of a timeline to target, again, each market has its own strategy as to how long we think it will take to get to 10 heads, 20 heads, 50 heads. I think all I'd say is, you know, what we are doing, you know, consistent with the overarching view of holding the muscle from a fear perspective, we continue to hold our muscle from our office perspective. So, you know, we are looking very carefully at all our offices and we continue to invest in those businesses. So we've got a strong balance sheet and we want to use it and that's to continue to make the investments for the future, whether it be the technology, the people or our geographical footprint.

That's great. I've got one follow-up as well in terms of the RPO business. What are you seeing now in terms of the outsourcing tenders? Have they slowed completely at this point? And is there any sort of more evidence we've seen elsewhere of contracts being effectively taken back in-house? Just any thoughts there? Thank you.

Yeah, certainly. So I mean, we've obviously done some work on the outsourcing business. We like the business. I've said before, the product range was too exhaustive. So we've been quite disciplined in reducing that. You're right, certainly within the RPO MSP, which is largely volume driven, you know, those volumes are clearly not where they have been historically. So that has been a challenge and we look very carefully at the client contracts that we are committed to in terms of what we believe are sort of long-term profitable outcomes. So, you know, obviously we've addressed some of the cost areas as well within the outsourcing business. So that's across the industry and that's not just us. We're seeing that with competitive. I think what is helpful and certainly where we are seeing real traction is that workforce consultancy business. and it's sort of more in line with what we're experiencing in the market clients want flexibility and that business has really shown some significant growth over the last 12 months so we are going to be absolutely investing in that business in time to come okay that's great thanks very much thank you it appears there are currently enough for the questions at this time

this i'd like to hand the call back over to toby for closing remarks over to you sir um thank you very much everybody for attending uh meets this morning and uh we look forward to seeing you all soon thanks for your time thank you this concludes today's conference call thank you for your participation ladies and gentlemen you may now disconnect