UPDATE 1-SThree first-half profit boosted by higher contract hires

Fri Jun 13, 2014 3:07am EDT

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June 13 (Reuters) - White-collar recruiter SThree Plc on Friday posted a 10 percent rise in first-half gross profit, as signs of a recovery in the UK as well as the United States nudged firms to bring more temporary employees on board.

The London-listed company said gross profit or net fee income - a relevant performance indicator for recruitment companies - rose to 100.9 million pounds ($169.4 million) in the six months ended June 1 from 91.6 million pounds a year earlier.

Excluding the impact of currency movements, gross profit was up 13 percent.

Hiring across SThree's markets saw an uptick, with firms stepping up their intake of recruits as the economic recovery, particularly in the Americas and the UK, gained steam.

Gross profit from temporary hires, which accounts for 60 percent of SThree's earnings, grew 22 percent at constant currency.

While it was wary of extrapolating the trend for the full year from the seasonally less significant first half, SThree Chief Executive Gary Elden said its "contract book and the slowly improving outlook for permanent underpins our confidence in the medium term prospects for the business."

SThree, whose brands include Huxley Associates, Progressive and Computer Futures, recruits for a range of sectors such as information technology, financial, energy and pharmaceuticals.

The staffing company also said that gross profit from placements made for banking and financials clients increased by 20 percent, at constant currency.

The latest numbers make SThree the first among peers such as Hays Plc, Michael Page International Plc and Robert Walters Plc to report a pickup in the banking sector.

Demand for accountants and financial graduates was on the rebound in the UK, outranking the need for IT and computing as well as medical professionals, according to a report released by the Recruitment and Employment Confederation (REC) and KPMG last Friday.

SThree's shares closed at 394.50 pence on the London Stock Exchange on Thursday.

($1 = 0.5956 British pounds) (Reporting By Esha Vaish in Bangalore; Editing by Sunil Nair)

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