SThree plc, a UK-based global staffing firm focused on STEM skills, reported net fees (gross profit) fell 2% on a constant currency basis to £208.6 million (US$258.4 million) in the first half of its fiscal year ended May 31. Gross profit for contract staffing rose by 3%, but permanent placement gross profit fell by 19%.

Though gross profit was down, Chief Executive Timo Lehne noted a tough comparison to a particularly strong first half of 2022. Looking ahead, he also cited extensions in the company’s contract business.

“The macroeconomic environment has remained uncertain with varied effects across our markets impacting new placements,” Lehne said. “However, a continued healthy extensions performance has seen our contract business (now representing 81% of group net fees) grow 3% as our clients remain committed to retaining highly sought after skills.”

The decline in permanent placement gross profit in the first half reflects global market conditions and a continuing strategic transition to contract staffing from permanent placement in several markets, according to the company. Its average headcount in perm placement was down 10% in the first half.

In SThree’s US operations, gross profit fell 11% year over year on a constant currency basis in the first half to £49.4 million (US$61.2 million). Perm placement gross profit declined 43%; it was impacted by the firm’s life sciences business and an accelerated transition toward contract staffing.

Contract staffing gross profit in the US fell 2%, with engineer staffing gross profit rising 23% as demand increased for roles within project management and electrical engineering, though life sciences contract staffing gross profit fell 16%.

Gross profit by region

Share price and market cap

Shares in SThree closed down 0.95% today in London to £363.50 (US$465.39); they were 11.7% above their 52-week low, according to FT.com The company had a market cap of £493.6 million (US$632.0 million).