REFILE-SThree 1st-quarter profit falls as permanent hiring remains low in Europe

Fri Mar 8, 2013 2:34am EST

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March 8 (Reuters) - Staffing company SThree Plc said first-quarter profit fell 3 percent as employers in Britain and continental Europe continued to shy away from recruiting permanent hires.

SThree, which recruits information technology staff for the financial, energy and pharmaceutical industries in continental Europe and the UK, said its permanent hiring deal pipeline was down 13 percent.

Gross profit fell to 45.5 million pounds ($68.5 million) in the first quarter ended Feb. 24 from 47.7 million pounds a year earlier.

Gross profit in the permanent hiring business fell 12 percent to 20.9 million pounds, offsetting the 6 percent growth in contract hiring to 24.5 million pounds. The permanent hiring business contributes about half of overall gross profit.

Profit in the UK and Ireland fell 12 percent to 14.6 million pounds while the rest of the world rose 2 percent. The recruiter's international operations account for 68 percent of its gross profit.

Last month, 29.7 million people had jobs in the UK - the highest employment level ever, driven by contract and part-time hires. However, permanent placements have been declining due to low business confidence.

On Tuesday, British recruitment firm Pagegroup, formerly known as Michael Page International Plc, reported a 24 percent fall in profit and forecast a challenging 2013 after recession-weary employers in Europe cut back on permanent staff.

After posting a 17 percent decline in full-year pretax profit in January, SThree warned that macro-economic conditions remained uncertain in 2013.

SThree's shares closed at 367.25 pence on the London Stock Exchange on Thursday.

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