SThree bounces back in quarter two but UK remains one big drag

Interim results from SThree showed the recruiter bounced back in recent months after two weak quarters.

Strong performances in Continental Europe and the USA helped the specialist staffing company lift group gross profit 2% to £134.3m, with a 4% bump in the second quarter.

SThree, which focuses on hiring for science, technology, engineering and mathematics (STEM) jobs, saw contract GP rise 9% in the second quarter and fall 6% for permanent jobs, both improving from the respective 7% growth and 14% decline in the first quarter.

UK and Irish performance remained weak in the second quarter, with GP down 14%, but this was up from -19% in the first quarter, meaning for the first half it was down 16% to £27m.

Continental Europe grew 7% in the half to £69m, USA by 16% to £29.7m and Asia Pacific and Middle East fell 4% to £8.6m as the first-quarter fall of 14% swung to a 5% gain in the second.

All in all, 80% of group GP is now generated outside the UK, up from 73%.

"We are encouraged by the improvement in momentum across the business in the period, particularly the strong performances in Continental Europe and the USA, which is now our second largest region," said chief executive Gary Elden.

He highlighted the good growth across almost all regions from the contract business, with Europe and the USA again sparkling, and said the permanent business benefited from a further improvement in productivity, of which more "remain the priority" for 2017.

"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."