SThree sees demand fall

5th Jun 2009 07:27

SThree, the specialist staffing business, experienced an overall decline in demand for its services in the six months to May, particularly for permanent placements with contract hiring proving somewhat more resilient in all territories. Group gross profit in the period declined by circa 9% year on year to £93m (2008: £102.5m), reflecting a significant decline in volume being partially mitigated by further value improvement.At 31 May 2009, SThree had 4,494 contract runners, a decrease of 21.8%. Total placements fell 34.1% to 3,302 permanent placements, while UK contract runners were down 28.2% versus the prior year.During the period, UK permanent placements were down 54.2%, reflecting a 60.8% reduction in UK ICT placements and a 37.8% reduction in UK non-ICT placements.The Non UK business slowed further in the period. Contract runners reduced versus last year by 7.4%, but this was offset by growth in gross profit per day rates. During the period, permanent placements declined by 7.5%, but again this was offset by strong growth in average fees. Due to the challenging conditions, the group reduced its headcount by around 25%, which will results in around £8m exceptional costs. "The Group believes that headcount is now at an appropriate level in light of the current market conditions and opportunities," it said.