International recruitment firm, SThree (STHR: LSE) issued a trading update for the first quarter ended 28 February 2019 with group gross profit increasing by 9% year-on-year in constant currency.

Growth in Continental Europe and the USA offset a decrease in the UK and Ireland.

85% of Group gross profit in Q1 was generated from markets outside the UK and Ireland.

SThree reported group gross profit for Q1 was as follows.

On 14 December 2018, SThree announced that CEO Gary Elden would step down. On 28 February the group announced the appointment of Mark Dorman as CEO of the group with effect from 18 March 2019. Elden will be stepping down from his role and the Board on that date, and will remain with the Company until the Annual General Meeting on 24 April 2019 in order to ensure a smooth and orderly handover.

Gross Profit by Region

 Gross Profit by Sector

Growth in Continental Europe was driven by Benelux and DACH (Germany, Austria and Switzerland) up 11% and 12%, respectively. UK and Ireland gross profit was down 7%, although productivity in the region improved by 2%.

Contract gross profit was up 12%, with strong performances across ICT, Life Sciences, Energy and Engineering, and double-digit growth in all regions outside of UK and Ireland.

Continental Europe and USA combined now represent 79% of the group’s Contract gross profit (Q1 2018: 76%).

Permanent gross profit was up 1%, driven by DACH up 7% and Japan up 38%, both against tough comparatives. This progress was offset by USA which was down 1%, and by UK and Ireland which, as expected, was down 16% reflecting the previously reported restructuring. Permanent productivity across the group improved by 5% over last year, as a result of the group's strategy to focus on the best performing permanent markets.

Elden commented, "We have made an encouraging start to the year, with robust Group GP growth in what is our seasonally least significant quarter. It is pleasing to see growth in both Contract and Permanent, with a particularly strong performance in Contract, driven by continued progress in our key markets, Continental Europe and the USA.”

"Looking ahead, SThree will continue to invest in our teams to drive growth, consistent with our vision to be the number one STEM talent provider in the best STEM markets,” Elden said. “Our focus on Contract and the continued strength of our performance across key regions and sectors provides resilience in today's more turbulent market conditions. Set against this context, we remain confident in achieving good growth in the current year."

As of last trade, SThree traded at £301.00, up 3.08% on the day and 22.86% above the 52 week low of £245.00 set on 28 December 2018. Based on its current share price the company has a market value of £382.17 million.