(Adds CEO comments, peer performance, share movement)
By Esha Vaish
Dec 9 Recruiter SThree said annual
profit would exceed market expectations as strong growth in the
United States and Europe more than made up for a slowdown in
hiring in its domestic business following Britain's vote to
leave the European Union.
SThree, which makes three quarters of its gross profit from
outside Britain and Ireland, said it expected pretax profit for
the year to the end of November to be slightly above the top end
of market guidance of 37.3 million to 39 million pounds.
Strong demand for temporary workers in continental Europe
and an improvement in U.S. conditions meant the staffing company
generated a 2 percent rise in gross profit for the year, it said
in a trading statement, sending its shares up 3.6 percent to 285
pence by 1110 GMT.
Staffing firms such as SThree, PageGroup, Hays
and Robert Walters are seen as gauges of wider
economic health because people tend to switch jobs more often
when confidence rises. SThree is the first of the UK recruiters
to report results spanning October and November.
Although most British staffing companies have been hit by
uncertainty following the surprise Brexit vote in June, their
international businesses have continued to offer protection.
SThree, which places staff with financial, energy, banking
and pharmaceutical firms, said it would focus on hiring people
for temporary jobs in Britain and Ireland.
The company was seeing fewer British jobs coming on to the
market and companies hiring temporary staff for slightly shorter
durations, depressing profitability for Britain and Ireland.
It noted a slowdown in finance and the public sector hiring
after the Brexit vote and public sector reforms.
"Our effort and focus is on our contract business, which is
generally more resilient in a downturn, but just as profitable
in a good market," Chief Executive Gary Elden told Reuters.
"People are still not making decisions and until the issue
around the Brexit is resolved, I think we're not going to have a
clear sight of where the market is going," he said.
Gross profit in constant currency for the UK and Ireland
fell 12 percent in the fourth quarter ended Nov. 30, marking the
biggest quarterly drop for the year.
Larger rival Hays has said companies are still cautious
about adding to staff levels because of uncertainty over Brexit,
while PageGroup has said confidence among employers was
"fragile" following the vote, with finance firms particularly
holding off from hiring.
(Reporting by Esha Vaish in Bengaluru; Editing by Keith Weir)