STHR.L Share News (STHR)

LONDON (Alliance News) - SThree PLC said Friday it had an "encouraging" start to the new financial year after strong growth in continental Europe offset weak performances in UK & Ireland in the first quarter.

For the three months ended February, the science, technology and engineering-focused recruitment firm reported gross profit rose 8.0% to GBP70.3 million from GBP65.1 million the year prior, the growth at constant currency also was 8%.

Growth was primarily driven by continental Europe - SThree's largest region - which saw gross profit grow 19% to GBP40.3 million from GBP34.0 million, or 15% at constant currency.

In contrast, gross profit for its UK & Ireland operations fell to GBP12.7 million from GBP13.0 million.

"While Q1 is our least significant quarter, we've made an encouraging start to the new financial year", SThree Chief Executive Officer Gary Elden said.

"Our Contract business continues to go from strength to strength," Elden added, "with gross profit increased by 11% in Q1, driven by continued strong growth in Continental Europe, especially key markets such as the Netherlands and Germany. Growth in Contract gross profit from our Life Sciences, ICT and Energy businesses has also been particularly pleasing."

"As anticipated," Elden continued, "the growth rate in our US business reflected the tough prior year comparatives from Q1 2017. The market opportunity in the USA remains very strong and we expect to see an improving performance from this business."

In the US, gross profit was just 1% higher in constant currencies, but US contract gross profit was 10% higher. On a reported basis, US gross profit fell to GBP13.1 million from GBP14.2 million the year before.

"Our Permanent gross profit increased by 2%, driven by strong performances in Germany up 13% and in Japan up 75%", Elden said.

"Looking ahead," Elden explained, "we will continue to invest in our highest performing teams, consistent with our vision to be the number one STEM talent provider in the best STEM markets. Our focus on Contract and the continued strength of our performance in Continental Europe and across key sectors leave us confident that there are good growth opportunities available for us this year."

Shares in SThree were 0.4% higher at 351.50 pence on Friday.