SThree (LON:STHR) reported an increase in profits today, but shares in the group as it warned investors it is entering the most important quarter of the year amid a deteriorating macroeconomic backdrop.
In today’s interim management statement, the IT focused recruitment specialist said its gross profit climbed 18 percent to £50.2 million in the period from 30 May to date compared to a year earlier.
It added that its current pipeline shows improvements across most markets with the number of deals agreed during the period with candidates due to start in the future up 15 percent from a year ago.
At the end of August, SThree had 4,474 contract runners, an increase of 9 percent year on year and the highest level since the third quarter of 2009.
A total of 1,895 permanent placements were made during the quarter, an increase of 12 percent compared to the same period last year.
The share of permanent placement revenues rose from 49 percent in the first half of 2010 to 52 percent.
The group’s profits were driven by its international business, which saw profits soar 26 percent compared to 5 percent profit growth in the UK.
SThree now has broader international presence after opening offices in Zurich, Luxemburg and Mumbai during the quarter with further offices due to open in Chicago, Boston and Moscow later this year or in early 2012.
Cash balance was “strong” with £40 million in the bank at the end of August following the payment of the final dividend and the purchase of £3 million of shares during the quarter.
SThree, however, noted that the broader economic environment remains challenging.
“Seen in the context of strengthening comparatives and the fact that macroeconomic sentiment deteriorated over the quarter, the group delivered a positive performance,” said chief executive of SThree Russell Clements.
“Our current deal pipeline reflects a healthy level of demand in most of our markets but we remain mindful of the state of the broader economic backdrop as we enter our final and traditionally, most important quarter.”
Shares in the recruiter slipped 4.5 percent to 229.6 pence this morning, valuing the company at £280 million.