Sthree bucks recruitment sector struggles and hikes dividend
City recruiter Sthree's focus on industries where talent is in high demand helped it to outperform many of its peers in a half year earnings update in which it posted rising profit and earnings per share despite falling fees and revenue.
Sthree has bucked wider troubles in the recruitment sector to post profit growth in the first half of its financial year.
The FTSE 250 constituent, which claims to be the only recruiter to specialise in science, technology, engineering and mathematics (STEM) roles, saw its like-for-like revenue fall by five per cent in the six months to May 31, down from £825.2m last year to £763.4m.
Like-for-like fees fell more dramatically, dropping from £208.6m to £188.7m; a decrease of seven per cent.
However, its bottom line remained strong, with like-for-like operating profit actually rising by three per cent and profit before tax up by five per cent.
And basic earnings per share rose by five per cent to 21.2p, prompting it to recommend a dividend of 5.1p; a two per cent increase on the same period in 2023.
The company’s net cash balance stood at £90m at the end of the period, up 24 per cent compared to the end of the same period in 2023.
The results looked far better than those of the company’s peers.
Earlier this month the London-listed Pagegroup was forced to issue a profit warning. It predicted earnings would fall by as much as 50 per cent.
And last week, Robert Walters reported a decline in profit of 18 per cent in its half-year earnings.
Timo Lehne, Sthree’s chief executive, said: “Given the challenges faced across the sector, our resilient performance in the first six months of the financial year has been pleasing.
“Strong Contract extensions have continued to underpin performance despite subdued new business activity.
“Our unique business model focused on specialist STEM skills and flexible talent solutions, continues to power our performance, supported by global megatrends driving long-term demand for the skills we place.”
The recruiter’s renewables and and engineering divisions performed especially well, up 8 per cent and 15 per cent respectively on H1 23, while its life sciences division weighed on the company, down 16 per cent.
