July 22, 2019 / 6:29 AM / a month ago

Profits rise at recruiter SThree, UK revenue drops

(Reuters) - Recruiter SThree Plc (STHR.L) posted an 18% rise in pretax profit in the first half of the year, bolstered by strong international hiring as it battles a significant slowdown in a British home market whose influence on its overall performance is declining fast.

The company, which hires employees for financial, energy, banking and pharmaceutical companies, said adjusted pretax profit for the half year ended May 31 rose to 24 million pounds ($30.00 million) from 20.3 million pounds a year ago.

Net fees in its two biggest markets - continental Europe and the United States, grew 13%, raising group revenue to 653.3 million pounds from 585.9 million pounds a year ago.

However, similarly to rivals Robert Walters and Hays, SThree reported a 9% slump in fees generated in a UK and Ireland market which now accounts for just 14% of its overall net fee revenue.

Recruiters have become important barometers of the UK economy, as doubts on the time and shape of the country’s departure from the European Union cast a shadow over decision making by companies and workers.

Contract hiring in the UK market, to which the recruiter is trying to pivot as it bids to ride out the Brexit nerves, fell 6% in the half year while permanent hiring plummeted 25%.

Recruitment industry group REC said earlier this month that the number of people hired for permanent jobs via recruitment firms in Britain fell for a fourth month in a row in June.

SThree, like other recruiters, has been latching on international growth as the job market at home remains cool due to low unemployment rate and uncertainty surrounding Brexit.

Reporting by Sangameswaran S in Bengaluru; editing by Patrick Graham

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