Interim profits tumble at SThree as Covid-19 curtails recruitment

SThree said on Monday that first half profits had nearly halved, after the Covid-19 pandemic curtailed hiring and dented fee income at the specialist STEM recruiter.

Revenues for the six months to 31 May were off 8% at £602.2m while net fees fell 7% to £151.2m. Pre-tax profits tumbled 48% to £13.0m.

The firm, which specialises in roles in science, technology, engineering and mathematics, said Covid-19 was “the primary driver” of the fall in profits, as lockdown measures halted recruitment. “The group’s robust performance in the first quarter was outweighed by the impact of the Covid-19 pandemic in the second quarter across all our territories and sectors,” it noted.

In the first quarter, net fees were in line with expectations at £75.3m, but fell 12% year-on-year on a constant currency basis in the final three months, to £75.9m.

“These results are a story of two very different quarters,” said Mark Dorman, chief executive, said. “It has been a time of much change and volatility.”

Dorman said the pandemic had turned working practices “on their head and accelerated trends such as flexible working”. But he insisted: “While times ahead remain uncertain, we have a strong financial position, a great opportunity and we are united behind our strategy, which will guide us through the second half and beyond.”

As at noon, shares in SThree were off 3% at 263.5p.