UK recruiter SThree warns of profit slump amid tough market conditions, shares tumble
Shares slump as much as 36.3% to more than four-year low
Companies pause hires during times of uncertainty
Sees FY25 pre-tax profit of about 25 mln pounds
Market view was for 66.6 mln pounds
Adds share move in paragraph 2, sector context in paragraph 3, CEO comment in paragraph 4
Dec 12 (Reuters) -British recruiter SThree STEMS.L on Thursday warned its2025 fiscal year profit would badly miss forecasts, citing tough market conditions amid politicaland macro-economic uncertainty in Europe, sending its sharessharply lower.
Shares in the FTSE 250 .FTMC firm, which have fallen about 14% so far this year, slumped as much as 36.3% to a more thanfour-year low of 230 pence in early trade.
Recruiting firms suffer during periods of uncertainty when companies delay new hires and employees think twice before jumping into new jobs. Recentgovernment collapses in Germany and France have added to the worries in Europe.
"The anticipated easing of market conditions has not yet materialised, with delayed decision-making continuing to impact new placement activity," CEO Timo Lehne said in a statement.
SThree, which hires employees for the finance, energy, banking, pharmaceutical, engineering and tech sectors, operates across Europe, North America, the MiddleEast and Asia. Its largest single market by net fees is Germany.
Its major business comes from hiring people on limited-term contracts, which many employers prefer during challenging times. Thathas helped it avoid some of the weakness experienced by its London-listed peers Hays HAYS.L, Pagegroup PAGE.L and Robert Walters RWA.L.
SThree said it now expects pre-tax profit for the 2025 fiscal year, which started on Dec. 1, to be about 25 million pounds ($32 million) - less than half thecompany-compiled analysts' consensus estimates of 66.6 million pounds.
The recruiter said its fiscal year 2025 earnings would include up to 7 million pounds of one-off costs.
SThree said it intends to launch a share buyback programme of up to 20 million pounds, to be completed over the next six months.
Group net fees for the year ended Nov. 30 fell 9% and the company said the fiscal year 2024 performance is expected to be in line with market expectations.
($1 = 0.7825 pounds)
Reporting by Aby Jose Koilparambil and Prerna Bedi in Bengaluru; Editing by Eileen Soreng and Andrew Heavens
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
