Tough conditions continue for SThree as recruitment fees slump

Group net fees were 15% lower year-on-year in the three months to 28 February at £78.4m, with the rate of decline unchanged from the fourth quarter, as fees in the bigger contract division (84% of net fees) shrank 15% and permanent placements fees fell 13%.

Each one of its main trading regions reported declining fees, while its top three countries of Germany, the US and Netherlands saw fees drop 13%, 9% and 18% respectively.

"As we look ahead, business leaders are continuing to navigate an evolving macro-economic backdrop which is weighing on investment decisions," said chief executive Timo Lehne.

"New business continues to be soft, however extensions remain robust across our core STEM Contract service offering, providing sector-leading visibility,"

The contractor order book by period-end was £168m, falling 7% on last year but at a reduced rate of decline from the end of last financial year. Future visibility was the equivalent of around five months' net fees, it said.

In line with its guidance in December, SThree expects to book a pre-tax profit for the year ending 30 November of £25m, compared with £67.6m last year.