Specialist recruiter SThree PLC (LON:STHR) reported a slowdown in gross profit growth for the third quarter amid Brexit uncertainty and concerns about the global economic outlook.
The company said net fees – a measure of recruiters’ gross profit – rose 4% to £87.8mln in the three months to the end of August after a 9% increase in both the first and second quarters.
The UK and Ireland unit saw net fees fall 7% to £12.1mln with SThree blaming a “challenging macro-economic backdrop” as fears of a no-deal Brexit continued to weigh on business confidence. However, that compared to a 12% drop in the second quarter.
The group’s largest market of Continental Europe grew net fees by 5% to £50.1mln, easing back from the 14% jump achieved in the second quarter. SThree said the weaker growth was due to an extra public holiday in the region this year and a poor performance in permanent placements as Germany teeters on the brink of recession.
In the US, net fees edged up 5% to £20.4mln compared to 10% in the previous quarter as growth in contract placements was offset by a decline in permanent net fees amid worries about a tarrifs war between Washington and Beijing.
Net fees in the Asia Pacific and Middle East gained 14% to £5.2mln after a 14% increase in the last quarter.
SThree, which specialises in recruitment for the science, technology, engineering and mathematics sectors (STEM), said net debt at the end of August halved to £12mln compared to last year.
"Our robust financial position, specialised STEM and contract focus with international reach provides the group with a well-established and resilient platform as we enter the final quarter of the year,” said chief executive Mark Dorman.
“Whilst we remain cognisant of significant macro market uncertainties, we remain confident that we have the right niche focus, vision and teams to deliver continued growth, and our expectations for the full year remain unchanged."
Shares rose 2% to 300p in morning trading.