Someone has benefited from all those human resources departments getting ideas above their station and wanting to become “strategic” and to deal with the “personal development” of the rest of the people in their company who actually earn the money.
The personnel department as was once looked after the bread and butter of workers’ needs. It made sure they got paid on time and, with luck, the correct amount. And when those members of staff decided they’d had it because the pay was not good enough or because they really could not stand another day with the boss, personnel would step in to provide the black bin liner and get on with the recruitment of a replacement.
Now that they are called human resources executives, the more mundane part of the job is regarded as beneath them and larger corporations have been persuaded to outsource these process functions. Any old outsourcer, the likes of Capita et al can do this. Interestingly, recruitment agencies have woken up to the fact that this isn’t a million miles from what they do already.
One such is Robert Walters. In a pretty moribund UK recruitment market, Robert Walters has just posted 16 per cent income growth here. Most of that has come from its relatively new, horribly named Resource Solutions operation, which is sending its professionals into HR departments at the big banks and the like. Given that agencies such as Robert Walters are full of bright young things (who really should get themselves a proper job), these big clients are now getting smart advice on how to utilitise social media to recruit. All for a fee.
No one can claim that as ancient a trade as recruitment can be reinvented, but what is happening at Robert Walters feels a bit like it. Traditional recruitment is growing in all global regions and has been more than helped by forex translation on the devaluation of the pound. That the performance of the UK, still about one third of the group, surprised to the upside in its latest trading update shoved the shares close to 15-month highs.
At 362¼p, 5¼p better on the session, Robert Walters shares are trading at more than 15 times’ earnings. The only downside to the story is that a 50 per cent increase in the share price since the Brexit vote indicates that investors are already up with events.
MY ADVICE Hold
WHY Recruitment is a hardy perennial made glossier by HR outsourcing. Robert Walters is on to it. So are investors, who have already bought in
H&T Group
Britain’s foremost quoted pawnbroker is a curiosity among UK-facing stocks. When share prices all about it were crashing in the days after the referendum decision, for the stock of H&T Group the only way was up. You could see that as the cynical response of City traders who thought that times would be getting tougher, traditionally meaning rich pickings for the brokers of pawn.
So it has proved. Yesterday H&T said that its pledge book (the value of goods left to redeem at a later date) had grown by 6 per cent over the past year. Its personal loan book has more than doubled, as those who find themselves in the land of alternative lending are prepared to fork out 180 per cent of their original loan on a short-term deal or are prepared to pay 3 per cent a month on large sums over longer terms.
Brexit has been still kinder to H&T by making gold sharply appreciate in sterling terms, enabling pawnbrokers to make a smart turn on the 15 per cent of pledged gold that punters do not come back for.
Yesterday’s figures pushed H&T shares up nearly 5 per cent. At 278p, it is trading on a little more than 12 times’ earnings. Yesterday’s buyers are not the only ones to believe that there is more to come from H&T.
MY ADVICE Buy
WHY Alternative lenders are back in their element
Just Eat
The takeaway is as much at the core of British culture as, well, chicken tikka masala. Of an evening, if folk aren’t chowing down on something out of a box, then their finger is hovering over the smartphone waiting to tap the app and get that mini-fist-pump feeling.
Or so we are told by the people at Just Eat. Latest figures, with sales up 31 per cent, indicate that more and more people are deciding to get in touch with Just East on their mobile rather than being all analogue and 20th century and phoning their local purveyor of throwaway food.
There is no pleasing some people, though, and yesterday that included much of the City. Shares in Just Eat crashed nearly 7 per cent. A victim of its own success, Just Eat didn’t upgrade profit projections and growth is a little slower, which may merely be the mathematics of the pace of what has gone before.
Or maybe investors are taking a second look in the Just Eat leftovers and wondering whether, in this economic climate of cautious spending of cyber fivers, we may be reaching peak takeaway.
Just Eat has a simple business model. It charges restaurants £700 to install its technology and then charges 13 per cent of every order. It doesn’t even get involved in the messy job of delivering.
All this has given it the air of a disruptor and a technology business, which in turn has given it a full fat £3.7 billion market value. It is, in fact, an online aggregator. Nothing wrong with that, but at 542½p do the shares warrant a rating of ten times’ annual sales and 45 times’ earnings?
MY ADVICE Avoid
WHY A brilliant business but hopelessly overvalued
And finally . . .
Putting a value on airport take-off and landing slots has always been tricky. There is no formal market. The value depends on the time of day and where an airline might want to fly. Something trickier, then, must be to borrow money on the value of those slots. That is what Virgin Atlantic has done to the tune of £252 million, based on its presence at Heathrow. This securitisation is being hailed as innovative. Which it is. But innovative securitisations got themselves a bad name for good reason during the financial crisis.
