SThree PLC on Tuesday reported increased profit for its latest half year, despite revenue declining amid a ‘challenging backdrop’.

SThree was among Tuesday’s best FTSE 250 performers, with shares rising 2.0% to 426.50 pence that morning in London.

The London-based recruitment company said that for the six months ended May 31, revenue decreased 7.5% to £763.4 million from £825.2 million the prior year.

Pretax profit, however, edged up 1.3% to £39.0 million from £38.5 million. SThree said this was ‘due to lower average headcount for the half, tight cost control and the benefit of higher interest income’.

Basic earnings per share also rose slightly, by 1.0% to 21.2p from 21.0p, while diluted EPS rose 2.0% to 20.8p from 20.4p.

Net fees meanwhile decreased 10% to £188.7 million from £208.6 million, although SThree noted this was ‘despite the ongoing challenging backdrop and against a strong prior year performance’.

SThree’s impairment losses on financial assets narrowed significantly, dropping 56% to £987,000 from £2.2 million. Administrative expenses also decreased, by 11% to £150.1 million from £168.2 million.

SThree declared an interim dividend of 5.1p per share, up from 5.0p the year before.

The firm also noted its ‘strong balance sheet’, with net cash totalling £90.0 million at May 31 compared with £72.4 million one year prior.

‘Given the challenges faced across the sector, our resilient performance in the first six months of the financial year has been pleasing,’ commented Chief Executive Officer Timo Lehne. ‘Strong contract extensions have continued to underpin performance despite subdued new business activity.

‘Our unique business model focused on specialist STEM skills and flexible talent solutions, continues to power our performance, supported by global megatrends driving long-term demand for the skills we place.’

Lehne continued: ‘As we enter the second half of the year, market sentiment remains largely unchanged. Contract extensions continue to be robust...and we are well covered in our focussed skills specialism and markets for when macroeconomic conditions ease.

‘Through this, we remain laser focussed on executing our vision and we continue to be bold in our ambition. With our people, position and processes coming together in line with our digital-first vision, the long-term future is bright.’

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