Shares of specialist staffing business SThree Plc (STHR.L) fell about 5 percent Friday morning, after the firm reported 6 percent decline in gross profit for the first half, reflecting weak performance in UK&Ireland.
In a trading update for the half year ended May 26, 2013, the permanent and contract staffing services company posted gross profit of 94 million pounds, lower than 99.9 million pounds in the previous year.
Gross profit from Permanent placements fell 15 percent at constant currency to 43.4 million pounds, driven by continued weakness in the UK& Ireland. Meanwhile, gross profit from Contract services improved 3 percent to 50.6 million pounds. The company noted that contract gross profit grew across all regions apart from UK& Ireland, which decreased by 5 percent from a year ago.
Average contractor gross profit per day rates declined by 6 percent during the period, due to fee pressure in its more mature markets and certain sectors, notably banking, SThree said.
In UK and Ireland, gross profit was 30.5 million pounds, down 12 percent from last year. SThree stated that it currently generates 68 percent of gross profit from markets outside UK& Ireland, compared to 65 percent in the year 2012.
The company added that it is currently completing a review of its property portfolio and support infrastructure.
The board also intends to declare an unchanged interim dividend of 4.7 pence per share.
The firm opened new offices in Tokyo, Calgary and Berlin during the first half of the year, expanding its network to 67 offices in 20 countries, of which 45 are outside the UK.
Gary Elden, chief executive of the company stated, "Against a backdrop of weaker macroeconomic conditions, we have had a satisfactory first half. Strategically, our focus remained on contract, international and sector diversification during the period."
SThree is scheduled to issue its interim results for the first half on July 15, 2013.
STHR.L is currently trading at 338.56 pence, down 16.44 pence or 4.63 percent.
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