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Profits at recruitment firm SThree hit by EU vote uncertainty

Published 11/07/2016

Revenues rose 10% to £443.5 million, with a 5% fall in UK gross profit offset by soaring profits in Europe, which grew 18%
Revenues rose 10% to £443.5 million, with a 5% fall in UK gross profit offset by soaring profits in Europe, which grew 18%

Recruitment firm SThree said it took a Brexit hit to profits after firms put hiring decisions on hold in the run-up to the EU referendum.

Profits fell 7% to £12.8 million for the first half of the year, with SThree flagging "uncertainty in the lead-up to the EU referendum" and a slowdown in the banking and finance sector.

Looking ahead, chief executive Gary Elden said: "While it is too early to assess the impact of the EU referendum result, the effect on client and candidate confidence in our UK business will become clearer as we trade through our seasonally more important second half."

Revenues rose 10% to £443.5 million, with a 5% fall in UK gross profit offset by soaring profits in Europe, which grew 18%.

Mr Elden added: "Continental Europe was once again our fastest growing region. However, slowdowns in the global banking market and in the UK, and the ongoing weakness in energy, all impacted on our first-half growth rate.

"Looking ahead, the group's weighting towards the more resilient contract market, where we continue to see good growth momentum."

Last week, a study by jobs site Adzuna showed vacancies in the financial services sector tumbled in June as fears increase that uncertainty sparked by the EU referendum outcome has resulted in a hiring slowdown.

A post-vote study found that finance vacancies across the UK dropped 14% in June compared with the same month last year. The number of advertised jobs in the sector fell from 92,186 to 79,693 year-on-year.

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