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SThree full-year profit rises, but UK growth stutters

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(Reuters) – Recruiter SThree Plc posted a 20 percent rise in full-year pretax profit on Monday as strong international hiring offset declines in Britain.

SThree, which earns 83 percent of its gross profit form outside the UK, said the increased economic uncertainty seen in the UK and Ireland continued to hurt, causing gross profit to fall 5 percent in the region.

Recruiters such as SThree have been in the limelight as the lack of clarity around Britain’s position when it exits the EU has led some companies to move jobs to other European countries to escape the looming uncertainty.

“The UK is a mature recruitment market and is seeing slower industry growth than other geographies, although it remains a strategic priority for the group,” SThree said in a statement.

SThree’s full-year EPS was 3 percent ahead of consensus expectations, analysts at Jefferies said.

The uncertain atmosphere has caused Britain’s job market to be shaky as a lot of companies are playing the wait-and-watch game on the politics surrounding the Brexit.

The company, which hires employees for financial, energy, banking and pharmaceutical companies, said overall revenue grew 13 percent to 1.26 billion pounds for 2018.

SThree, which aims to dominate the science, technology, engineering and mathematics hiring space in both Germany and the Netherlands, said gross profit from Continental Europe grew 20 percent in the period. The United States saw gross profit rising 8 percent from a year earlier.

SThree, which started as Computer Futures in 1986, said full-year profit before tax was 53.4 million pounds vs 44.5 million pounds a year earlier.

(Reporting by Sangameswaran S and Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty and Gopakumar Warrier)

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