Specialist recruiter SThree PLC (LON:STHR) posted a 10% increase in gross profit for the first half as growth in Continental Europe and the US offset challenging conditions in the UK and Ireland jobs markets.
Gross profit for the six months to the end of May rose to £148mln from £134.4mln a year ago, with the international operations accounting for 82% of the total. At constant exchange rates, gross profit increased 11%.
The Continental Europe division delivered an 18% constant currency rise in gross profit and accounted for 56% of the group total.
The US, which represents 20% of total gross profit, achieved 9% growth.
Brexit uncertainty weighs on UK and Ireland business
The UK and Ireland business, however, posted a 2% dip in gross profit as employers continued to take a cautious approach on hiring amid Brexit uncertainty. The region accounts for 18% of total gross profit.
Asia Pacific and the Middle East region, accounting for 6% of the total, saw gross profit edge up 8%.
Total gross profit in contract job placements gained 14% at constant currency while permanent was up 4%.
Information and communications technology remained the group’s biggest segment followed by life sciences, banking and finance, engineering and energy.
Profit before tax grew 6% to £17.8mln from £19.2mln on revenue of £585.9mln, up 12% on last year’s £521mln.
Liberum hikes price target as it points to positive post-period trading
Chief executive Gary Elden said the company delivered an “encouraging first half performance” and trading since the end of the period has continued the positive trend. He said this leaves the group “well-positioned as we enter our seasonally more significant second half”.
Shares rose 0.8% to 350p in late morning trading.
Liberum maintained a ‘buy’ rating on the stock and raised its target price to 430p from 425p.
“The key highlight from the 1H18 results was that the momentum delivered by the business has continued into the first weeks of 2H18,” the broker said.
“Although too early to drive material forecast upgrades, we take the opportunity to increase our FY18 EBIT estimate by 2%. We also see SThree as being well-positioned longer term, given its exposure to STEM markets and the more resilient contract business.”