SThree sees continued "soft" conditions as full-year net fees fall

STEM-focused recruitment firm SThree said it expects a continuation of "soft" trading conditions in the new financial year after a 4% drop in group net fees in the 12 months to 30 November.

In a pre-close trading update ahead of its annual report in January, the company said group fees totalled £418.8m over the year, down from £430.6m previously, as annual growth in the first quarter was followed by declines in the subsequent three quarters.

The company blamed a "challenging global macro-economic backdrop" as well as a record performance last year.

SThree, which continues to shift its business towards contract work over permanent placements, said contract net fees were up 1% year-on-year and now represent 82% of group net fees, up from 78% at the end of last year.

However, permanent net fees were down 22% year-on-year with tough trading conditions seen across all regions, the company said. It also cut headcount in the permanent division by 17% over the year.

"Following a record prior year, the Group has delivered a consistently robust performance within a challenging macro-economic environment," said chief executive Timo Lehne.

"As we enter the start of the new financial year, we haven't yet seen an easing of the macro-economic environment, which continues to drive soft trading conditions."

The stock was down 1% at 412.97p in early deals on Thursday.