Maybe it’s because Gary Elden, CEO of UK-headquartered international recruitment group SThree, is still finding his feet in the role he took over in January that prompted his comment about the prospects for the UK ICT recruitment market, which “we would expect … to perform robustly when normal macroeconomic conditions return”. If so, he needs to get real very quickly as these are‘normal conditions’ for the foreseeable future.
Meanwhile, the key numbers from today’s H1 results (to 26th May) had been presaged in last month’s trading update (see 'Perm' squeeze tightens at SThree). Headline revenues grew by 5% to £292m against declining gross margins of 32.2% (H1 12: 35.9%) prompted by the continuing ‘softening’ of the permanent recruitment market. As a result, operating margins lost a point to 2.3%, pre-tax profit slumped 28% to £6.7m and EPS fell likewise to 3.4p.
But we hold to our view that SThree’s continued diversification of recruitment disciplines away from ICT, and geographical markets outside of the UK, stands it in the best possible stead to stabilise the business in the face of severe headwinds.