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Recruiter SThree sees UK profits fall post-Brexit, but US and Europe provide a positive boost

The small cap staffing firm said its overall gross profit was up 2% year-on-year in constant currency

SThree PLC saw profits from its UK recruitment business drop due to Brexit worries and public sector reforms, but strong performances in the US and Europe helped to improve the overall gross profit.

In the UK and Ireland, SThree’s gross profit fell by 16% with its performance, as expected, adversely impacted by the decision of the Britain to leave the EU and Public Sector reforms.

However, the group noted, 80% of its gross profit was generated outside the UK in the first-half of 2017, up from 73% a year previously.

SThree said gross profit in its Contract business was up 8%, driven by strong growth across Engineering, up 17%, Life Sciences, up 15% and Energy, up 9%.

Gary Elden, SThree’s chief executive, said: “Looking ahead, the continued momentum of our Contract business and improved Permanent yields give us a solid base from which to grow in a macro-economic environment which remains uncertain.”

In a note to clients, they said: “With an encouraging outlook for both the US and Continental Europe in 2H17, it would appear that the risks to our FY17 estimates lie firmly to the upside.

“This potential momentum alongside the group’s attractive geographic and discipline exposure and its contract bias leaves the company relatively well placed to navigate through these uncertain times.”

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