SThree (LON:STHR) reported an increase in interim profits, however, shares in the recruitment specialist fell as it revealed that profit growth slowed in the second quarter as the market became more challenging.
For the six months to May 27, the group posted a gross profit of £99.9 million, up 12 percent from the same period of the previous year, while profit growth in the second quarter reached nine percent.
The increase in profits came as placement fees climbed despite weakness in the banking and finance markets with particularity strong performances from energy and resources and biotech sectors.
Profits from permanent placements, which now account for 51 percent of total group profits, rose 14 percent from a year earlier to £50.8 million and permanent deal pipeline rose 11 percent from a year earlier.
“The group has traded satisfactorily in the half year, given the deteriorating macro economic situation during the second quarter,” said chief executive of SThree Russell Clements.
“Demand in certain sectors such as energy & resources remains strong but in overall terms the market is becoming more challenging.
“In this respect we see our balanced business mix between contract and permanent as a strength given that contract tends to be relatively more resilient in weaker market conditions.”
The group also said its financial position was strong and it had £30 million in the bank at the end of the period before paying an £11 million dividend this month.
Shares in the group dropped six percent to 263 pence in early trade, giving it a market cap of £317.3 million.