SThree PLC on Tuesday said ‘challenging market conditions’ have softened its third-quarter results, as net fees and net cash both fall.
The London-based recruitment company said its third-quarter group net fees for the three months from June 1 to August 31 fell 10% on-year to £92.7 million from £103.0 million. This included contract net fees, which fell 9.4% to £78.1 million from £86.2 million.
The group’s balance sheet has net cash of £45 million at August 31, down 46% from £83 million at the same time last year, which it said was ‘reflective of the timing of certain client payments, with net cash expected to return towards normalised levels over the coming months’.
SThree said it still expects full-year performance to be in line with market expectations, citing a company-compiled consensus for full-year pretax profit of £69.4 million, which would be down 11% from £77.9 million reported for the financial year ended November 30, 2023.
Chief Executive Timo Lehne said: ‘Despite the challenging conditions in the market, which have extended beyond our industry’s expectations, our strategic focus on contract continues to underpin the group’s competitive positioning. The contract order book, down 6%, reflects protracted soft new placement activity partially offset by ongoing strong contract extensions.
‘Supported by a robust financial position, we continue to invest for the future, with the phased implementation of our technology improvement programme being a core element. This is progressing to plan, providing a clear pathway to significant operational enhancements over the mid-to-long term and enabling us to lead the way in our industry.
‘We are ideally positioned at the heart of global STEM secular trends, and we have the right platform for when the market recovers to enable the delivery of long-term sustainable growth.’
Shares in SThree were down 2.8% at 384.50 pence each in London on Tuesday morning.
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