SThree says recruitment market is still some way off full recovery

In its H1 results, SThree (LON:STHR) told investors that whilst its markets are “still some way from being fully recovered”, the company’s performance in the first half of 2010 was “very creditable”. The specialist recruiter reported a 20% decline in year-on-year gross profit to £74.3m (2H109:£93.3m).

In the six-months ended 30th May 2010, SThree’s permanent placements were down by 13.9% to 2,842 (H109: 3,302), and the number of active contractors, as at 30th May, was 12.1% lower year-on-year, at 3,952 (H109: 4,494). The company closed the first half with £31.6m (H109:43.9m) net cash position strong.

Basic earnings per share before exceptional items (EPS) fell 36.5%, to 4p (H109:6.3p). However when considered in relation to H1-2009’s final EPS – which resulted in final EPS of 1.1p after exceptional items – the company today reports a 254.5% increase in diluted EPS after exceptional items, with 3.9p in H1 2010.

“Our year on year comparatives remain challenging given our average consultant headcount during H1 is still some way down on the same period last year. However, the fact that our current consultant headcount is 11% up on the end of 2009 reflects both the sequential improvements seen in recent months...as well as the staffing of our new international offices and teams addressing new market segments.”

On a sequential quarter-on-quarter basis, the company reported a 7.8% improvement in gross profit over Q1, with profits from the ‘Permanent’ sector up 11% and ‘Contract’ profits up 4.4%.

“Having a strong sense of where the market is heading remains difficult, but on the basis of the currently available data we remain cautiously optimistic."

http://www.proactiveinvestors.co.uk/companies/news/18997/sthree-says-recruitment-market-is-still-some-way-off-full-recovery-18997.html