SThree recruitment firm down but upbeat

A bounce-back in the London and New York banking sectors failed to stop profits sinking at recruitment specialist SThree.

Third-quarter gross profits fell 2%  as a result of fewer permanent placements in Europe. However, chief executive Gary Elden said he was seeing green shoots in the sector, which has been hit by the economic crisis.

“North America has been our fastest-growing region,” he added. “We are still positive about the rest of the world. But the UK and Europe, excluding Germany, is still pretty challenging.”

SThree said its number of permanent placements fell 10% to 1644 year on year although this was partly offset by an 8% rise in contract positions. The group has 58 offices in 20 countries, with 41 outside the UK.

SThree shares lost 4.3% on the back of the update.

“Overall, while we have seen some improvement in economic confidence in a number of our markets... the picture remains mixed, and it is too early to call a broadly based recovery,” Elden said. “We’ve started to see a good performance in our banking businesses in the UK and in America.

“As we enter our final and most significant trading quarter, we are continuing to take a balanced approach — investing selectively in our teams where there are opportunities for growth, focusing on improving productivity and controlling costs tightly where market conditions remain challenging.”