Recruitment firm SThree PLC (LON:STHR) posted a 9% increase in gross profit for the first half as growth in its international business offset a weak performance in the UK arm.
The specialist science, technology, engineering and mathematics (STEM) recruiter said net fees, a key measure of gross profit for staffing firms, rose to £163.0mln in the half-year to May 31, up from £148.4mln a year earlier.
READ: Recruitment firm SThree posts gross profit growth despite Brexit-driven drop in UK unit
The UK and Ireland business saw net fees drop 9% to £23.8mln as Brexit uncertainty hurt business sentiment and delayed hiring decisions, particularly in the banking and finance sector and permanent job placements.
SThree said its UK-focused restructuring led to a 1% drop in permanent net fees to £41.9mln. Contract job placements made up the majority of total net fees, rising 12% to £121.1mln.
The group’s biggest market, Continental Europe, delivered a 13% increase in net fees to £93.9mln, driven by growth in the Netherlands and the DACH region, which includes Germany, Austria and Switzerland.
In the US, net fees gained 13% to £35.5mln, while the Asia Pacific and Middle East grew by 13% to £9.8mln.
SThree said average group sales headcount rose 7% with Continental Europe up 9%, the US up 8%, Japan up 62% and UK and Ireland down 2%.
In a note to clients, analysts at Liberum Capital said: "Whilst the UK performance was weaker, the strength in the group's core STEM markets suggests that the outlook for FY19 remains encouraging.
"We continue to see SThree as well positioned to capitalise on long term trends within the professional recruitment space, given its contract bias and geographic exposures."
Liberum maintained a 'buy' rating and 450p target price on SThree shares, which were up 3.5% to 286p in morning trading.
-- Adds analyst comment, share price --