SThree expects fall in full-year profits

6th Dec 2013 12:44

International specialist staffing business SThree said it expects full-year gross profit to fall five per cent to 200m pounds, reflecting lack of demand for permanent employees.In a trading update for the year ended December 1st, the company said permanent gross profit was down 14% year-on-year. Contract work gross profit was up 4% year-on-year as growth across Europe and the Rest of the World offset a decline of 4% in the UK. Contract accounts for 56% of total group profit.Permanent headcount has increased by 8% and contract headcount is up by 9% since the half year."Contract continued to benefit from a greater strategic focus and our investment in headcount, with encouraging growth in contract runners and gross profit," said Chief Executive Officer (CEO) Gary Elden."Our Permanent business continued to feel the effects of the resourcing issues that we highlighted at the interims, but with Permanent consultant headcount up 8% since the half year, we expect to see an improved performance from this business in 2014."He said overall the market saw improvement in a number of markets during the second half of the year but the "picture remains mixed and it is still too early to call a broadly-based recovery". Looking ahead, the CEO said the strength the contract book and an improving permanent pipeline point to a more encouraging picture. The restructuring undertaken in the second half provides the group with a solid platform for growth as we head in to the new financial year, he added. Full year profit before tax and exceptional items is expected to be between £21m-£22m.Shares rose 2.7% to 323.50p at 13:05 on Friday.RD